tci finance ltd Directors report

To,

The Members of TCI Finance Limited,

Your Board takes pleasure in presenting the 49th Annual Report of the Company along with the Audited Accounts for the year ended March 31, 2023.

BUSINESS PERFORMANCE/FINANCIAL OVERVIEW

The highlights of the Financial Results are as follows: (Rs in Lakhs)

Particulars	F.Y. 2022-2023	F.Y. 2021-2022
Revenue from Operations	0.07	452.69
Profit/(loss)before Interest,Depreciation &Taxation	(96.52)	(3077.10)
Financial Charges	152.97	153.46
Depreciation	1.54	1.58
Profit/(Loss)before tax	(251.03)	(3232.14)
Exceptional Items	--	--
Provision for tax:
Current Tax		64.44
Deferred Tax	--	--
Tax relating to earlier years	--	--
Profit/(Loss)after tax	(251.03)	(3296.58)
Balance brought forward from previous year	(2158.73)	(703.42)
Transferred to Reserve Fund	-	-
Balance Carried forward	(2269.49)	(2158.73)

During the Financial Year 2022-23, the Company incurred a loss of Rs. (2.51) Cr as against the loss of Rs. (32.32) Cr in the previous year. The Loss after Tax is Rs. (2.51) Cr as against loss of Rs. (32.96) Cr in the previous year.

DIVIDEND

The Board has not recommended payment of dividend for the financial year ended March 31, 2023.

SHARECAPITAL

The authorized share capital of the Company is Rs. 20 Crore divided into 2,00,00,000 equity shares of Rs. 10/-each and paid-up equity share capital as on March 31, 2023 is 12.87 Crore consisting of 12,872,493 equity shares of Rs. 10/-each. There are 13,23,812 forfeited shares. Details of the same has been disclosed in Note No. 15 of financial statements. There was no public issue, rights issue, bonus issue or preferential issue, etc. during the year under review. The Company has not issued shares with differential voting rights or sweat equity shares.

HOLDING, SUBSIDIARY, ASSOCIATE COMPANIES

During the period under review, the Company has No subsidiary, holding or associate Company.

DEPOSITS

The Company is a Non-Banking Finance Company and therefore the Companies (Acceptance of Deposits) Rules, 2014 are not applicable to the Company. Further the Company is a Non Deposit taking NBFC and hence has not accepted any Deposits from its members or Public.

ANNUAL RETURN

In accordance with the provisions of Section 92 of the Companies Act, 2013, a copy of the Annual Return of the Company has been placed on the website of the Company and the same can be accessed at www.tcifl.in

RESERVE

No amount has been transferred to the Reserve Fund for the year ended as on 31st March, 2023. The details of reserves of the Company are disclosed under Note 16 of the financial statements.

NUMBER OF MEETINGS OF THE BOARD AND COMMITTEES

The Board met 5 times during the financial year. The meeting details are provided in Corporate Governance report that forms part of this Annual Report. All meetings were convened in compliance with the Companies Act and SEBI (LODR) Regulations.

During the year under review, there were 7 Audit Committee meetings, 1 Nomination and Remuneration committee meeting, 1 Stakeholder Relationship Committee meeting.

DIRECTORSRESPONSIBILITYSTATEMENT

As required under clause (c) of sub-section (3) of section 134 of the Act, directors, to the best of their knowledge and belief, state that: In the preparation of the Annual Accounts for the year ended March 31, 2023, the applicable accounting standards have been followed along with proper explanation relating to material departures; 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.

The directors had 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.

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

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.

the directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

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 Auditors to 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 required pursuant to section 149(7) of Companies Act, 2013, stating that they meet the criteria of Independence as provided in section 149(6) of the said Act and Regulation 25(8) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and that they are not aware of any circumstance or situation, which exist or may be reasonably anticipated, that could impair or impact their ability to discharge their duties with an objective independent judgment and without any external influence. The Board took on record the declaration and confirmation submitted by the independent directors regarding them meeting the prescribed criteria of independence, after undertaking due assessment of the veracity of the same as required under regulation 25 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

In accordance with the provisions of Section 150 of the Act read with the applicable Rules made thereunder, the Independent Directors of the Company have registered themselves in the data bank of Independent Directors maintained by the Indian Institute of Corporate Affairs, Manesar ["IICA"]. The Independent Directors unless exempted, are required to pass an online proficiency self assessment test conducted by IICA within two years from the date of their registration in the IICA databank with an extension of 1 year.

Pursuant to the above, the Company has received Declarations of compliance under Rules 6(1) and 6(2) of the Companies (Appointment and Qualification of Directors) Rules, 2014, from all the Independent Directors of the Company confirming that they have registered their names in the data bank of Independent Directors maintained with the IICA and unless exempted, also passed the online proficiency self assessment test conducted by IICA.

DIRECTORS REMUNERATION POLICY AND CRITERIA FOR MATTERS UNDER SECTION 178

The Company has in place a Policy on Remuneration of Directors and the Remuneration Policy for Key Managerial Personnel and Employees of the Company in accordance with the provisions of sub-section (4) of Section 178 of the Act. The criteria for determining qualifications, positive attributes and independence of a Director and the Remuneration Policies for Directors, Key Managerial Personnel and other employees have been discussed in detail in the Report on Corporate Governance.

PARTICULARS OF LOANS, GUARANTEES AND INVESTMENTS

The Company is a NBFC and therefore section 186 of Companies Act, 2013 are not applicable to the Company. The details of loans, Guarantees and investments are given in the Financial Statements.

RBI GUIDELINES

The Company continues to comply with all the applicable regulations prescribed by the Reserve 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 to related parties were in the ordinary course of business.

No new transactions with related parties were entered during the year pursuant to section 188 of the Companies Act, 2013.

In line with the recommendation of the Audit Committee, the Company has a policy to regulate transactions between the Company and its Related Parties, which is also in compliance with the applicable provisions of the Companies Act 2013, the Rules there under and the SEBI (Listing Obligations &Disclosure Requirements) Regulations, 2015. This Policy is available on the website of the Company at the following link: http://www.tcifl.in/pdf/RelatedPartyTransactionPolicy.pdf All related party transactions entered by the Company are disclosed in the note no. 41 of the financial statements. The same has been disclosed in the financial statement in compliance with Accounting Standard as applicable.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION & FOREIGN EXCHANGE EARNINGS AND OUT GO:

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.

FOREIGN EXCHANGE EARNINGS AND OUTGO

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

RISK MANAGEMENT POLICY

The Company recognizes that risk is an integral part of business and is committed to managing the risks in a proactive and efficient manner. The Board of the Company at regular intervals monitors the financial, operational, legal risk to the Company. There is no risk, which in the opinion of the Board 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 the Company

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 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 evaluation framework for assessing the performance of Directors comprises of various key areas such as attendance at Board and Committee Meetings, quality of contribution to Board discussions and decisions, strategic insights or inputs regarding future growth of the Company and its performance, ability to challenge views in a constructive manner, knowledge acquired with regard to the Companys business/ activities, understanding of industry and global trends, etc. 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.

A separate exercise was carried out by the Nomination and Remuneration Committee of the Board to evaluate the performance of individual Directors who were evaluated on several parameters such as level of engagement and contribution, independence of judgment safeguarding the interest of the Company and its minority shareholders and knowledge acquired with regard to the Companys business/activities.

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 for the evaluation of the performance of Non Independent Director, performance of the Chairman of the Company and the Board as whole, taking into account the views of executive and non-executives directors. The Meetings were conducted in an informal manner without the presence of the Whole-time Directors, the Non-Executive Non-Independent Directors, or any other Management Personnel.

DIRECTORS AND KEY MANAGERIAL PERSONNEL A.Change in Directorate i. Appointment/Re-appointment of Directors

The Board of Directors after taking into account the recommendation of the Nomination and Remuneration Committee, appointed Mr. Arun Kumar Agarwal (DIN: 01353240) as an additional Non-executive Non- Independent director of the Company w.e.f 19th September, 2022 and the same was approved by the shareholders in the 48th Annual General Meeting of the Company held on 20th October, 2022. ii. Retirement by Rotation

In accordance with the provisions of Section 152 of the Companies Act, 2013, Mr. Mahendra Kumar Agarwal, DIN: 00179779, retires by rotation and being eligible, has offered himself for re-appointment at the ensuing 49th Annual General Meeting of the Company.

Prescribed details of Mr. Mahendra Kumar Agarwal, DIN: 00179779,, who is seeking re-appointment is given in annexure to the Notice of AGM.

Mr. Mahendra Kumar Agarwal, DIN: 00179779, is not debarred or disqualified from holding the office of Director by virtue of any SEBI Order or any other such authority, pursuant to circulars dated 20th June, 2018 issued by BSE Limited and the National Stock Exchange of India Limited pertaining to enforcement of SEBI Orders regarding appointment of Directors by the listed companies.

Resignation of Director

Mr. Rajesh Sharma, Director of the Company (DIN-08589058) has resigned from the position of the director with effect from 2nd September, 2022

B. Change in KMP

No changes have occurred in the Key Managerial Personnel during the year under review.

DECLARATION BY DIRECTORS

All the Directors of the Company have confirmed that they satisfy the "fit and proper" 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 from being appointed/ continuing as Directors in terms of section 164(2) of the Companies Act, 2013.

During the year under review following significant and material orders passed by the regulators:

1. National Stock Exchange Ltd. has imposed a penalty of Rs. 9,44,000/- after partially waive off for the non-compliance under regulation 17(1)(c) of SEBI (Listing Obligations and Disclosure Requirement) Regulations, 2015.

In accordance with SOP circular, after giving required reminders to make the payment of penalty, debits in beneficial owner account-IN304295-51132144 standing in the name of Mr. Mahendra Agarwal were frozen on 3rd March, 2022.

2. Reserve Bank of India vide its letter dated 26th November, 2021 directed our company to surrender our Certificate of Registration for voluntary deregistration as NBFC. Because of the reason that we failed to keep the minimum mandatory Net owned fund (NOF). i.e Rs. Two crores. After our written request, vide letter dated 6th December, 2021 RBI granted us further time for augmenting the NOF of the Company as above mentioned. Our company is in continues correspondence with the regulatory authorities and has sought further time for making good all the compliances.

3. Further, a petition vide Petition No. CP NO. 810/241/HDB/2019 was filed by Mrs. Neera Agarwal and 2 others under Section 241 & 242 read with section 130, 213 and 244 of the Companies Act, 2013 before the National Company law Tribunal (NCLT) Hyderabad against our Company alleging oppression and mismanagement. This matter is coming for hearing on 04.09.2023.

4. The Company had received a notice (as a Promoter of Gati Limited along with other noticees) for non-compliance of provisions of Regulation 13(2)(a) read with Regulation 3(2) of SEBI (SAST) Regulations in FY 2014-15. Necessary representations were made before SEBI, subsequent to which a penalty of Rs. 10,00,000/- (Rupees Ten Lakh Only) was levied on all noticees to be paid jointly and severally. The said penalty has been paid by one of the Promoters on May 03, 2022.

5. An application U/s. 7 of the IBC, 2016 has been filed against Mahendra Investment Advisors Private Limited ("MIAPL") before NCLT, Hyderabad Bench on 28th April, 2021 vide No. CP (IB) No. 463/7/HDB/2019. The said application has been admitted and currently MIAPL is undergoing CIRP. The Company has a carrying value of advances given to MIAPL to the tune of Rs. 45.91 Cr as on 30th June, 2021 refer note no. 25 of Financial Statements.

The total claim lodged before IRP	: Rs. 45,91,63,203/-
Amount admitted	: Rs. 45,52,98,225/-
Difference	: Rs. 38,64,978/-
Reason for difference	: Belong to the IT Dept.

DELISTING

Earlier Board has decided and approved the proposal of Voluntary delisting of Equity Shares 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) Regulations, 2009 ("SEBI Delisting Regulations"). The application is still pending for delisting at the end of NSE on account of payment of penalty sought by NSE. The Company has requested for re-consideration of penalty before NSE.

Now, the board has decided and approved to continue the listing of Equity Shares of the Company in National Stock Exchange of India Limited ("NSE") as management is planning to revive the business.

The Equity shares of the Company are listed on and continue to listed on the BSE Limited ("BSE") and NSE Limited ("NSE")

RE-CLASSIFICTION

Company received the request from Gati Limited, Promoter Group Company for their re-classification as a Public shareholder in terms of Regulation 31A of SEBI (LODR) Regulations, 2015. The said request was approved by the Board in its meeting held on July 31, 2020 and subsequently by the shareholders in their EGM held on January 30, 2021. The company has made an application to BSE Limited ("BSE") and National Stock Exchange of India Limited ("NSE") and same is currently under process.

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 (wherever required) and their views considered by management team and the relevant Board Committees, including the Audit Committee, the Board is of the opinion that the Companys Internal Financial Controls with reference to the financial statements were adequate and effective during the financial year 2022-23 and your Company is constantly endeavouring to improve the standards of internal control in various areas and taking steps to strengthen the internal control system to make it commensurate and effective with the nature of its business.

Further, the statutory auditors of your Company have also issued an attestation report on internal control over financial reporting (as defined in section 143 of Companies Act, 2013) for the financial year ended March 31, 2023, which forms part to the Statutory Auditors Report.

MAINTENANCE OF COST RECORDS

The provisions of Cost records as specified by the Central Government under sub-section (1) of section 148 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 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 2022-23, percentage increase in remuneration of each Director, Chief Financial Officer, Manager and Company Secretary during the financial year 2022-23 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)	-	-
Ms. Meera Madhusudan Singh, Non Executive &
Non-Independent Director	-	-
Mr. Rajesh Kundra, 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. Amit Kumar Ray, Manager	1.50:1	7%
**Ms. Deeksha Verma, Company Secretary	0.84:1	6%
Mr. Santhosh Kumar Vohi, Chief Financial Officer	1.00:1	7%

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:-2% 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 financial year is not applicable as there are no non-managerial personnel whereas the increase in the percentage of managerial remuneration for the same financial year was 6.67%. The same is in line with the Industry Standards. v) It is hereby affirmed that the remuneration paid is as per the Remuneration Policy for Directors, Key Managerial Personnel and other Employees.

a) Name of the employee	Deeksha Verma	Amit Ray	V. Santosh Kumar
b) Designation of the employee	Company Secretary	Manager	CFO
c) Remuneration received; ( in lakhs)	5,72,400	10,26,343	6,82,044
d) Nature of employment, whether contractual or otherwise;	Permanent	Permanent	Permanent
e) Qualification and experience	CS	B.Com (Hons)	M.Com
of the employee;	Exp: 3.7 years	Exp: 19 years	Exp: 28 years
f) Date of commencement of employment;	14-Sept-21	03-Apr-2002	23-Aug-1994
g) Age of such employee;	30	44	56
h) Last employment held by such employee before joining the company	Assistant Company Secretary Prefcom Corporate Advisors LLP	Manager Accounts Gati Kausar India limited	Executive Accounts Gati Ltd.
i) % of equity shares held by the employee in the company;	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

CORPORATE GOVERNANCE

Pursuant to SEBI Listing Regulations, 2015, a separate chapter titled Corporate Governance has been included in this Annual Report, along with the reports on Management Discussion and Analysis and General Shareholders information. All the Board members and Senior Management Personnel have affirmed compliance with the Code of Conduct for the year 2022-23. 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 financial statements and other matters as required under regulation 17(8) of SEBI, Listing Regulations, 2015 The Certificate from the Practicing Company Secretary of the Company regarding compliance of conditions of Corporate Governance is annexed to this report.

HUMAN RESOURCES

Your Company considers its Human Resources as the key to achieve its objectives. Keeping this in view, your Company takes utmost care to attract and retain quality employees. The employees are sufficiently empowered and such work environment propels them to achieve higher levels of performance. The unflinching commitment of the employees is the driving force behind your Companys vision. Your Company appreciates the spirit of its dedicated employees.

AUDITORS a) Statutory Auditors

M/s G.D. Upadhyay & Co., Chartered Accountant, Hyderabad (FRN: 005834S) were appointed as the Statutory Auditors at the 48th AGM for a period of 5 years upto the conclusion of the 53rd AGM of the Company.

The Statutory Audit Report for the year 2022-23 contains the following remarks and the explanation of the management in response of the same. a. Auditor raised a concerned regarding claims on the Company by the lenders of Amrit Jal Ventures Private Limited and its subsidiary Gati Infrastructure Bhasmey Power Private Limited aggregating to Rs. 25619.80 Lakhs due to invocation of corporate gurantee given by the Company. Against the said liability, the Company during the financial year 2019-20, considering the disputed nature of claim and unlawful invocation of corporate guarantee made a provision of Rs. 7798.91 Lakhs. As at March 31, 2022, the Company has disclosed the balance amount of liability Rs. 17820.89 Lakhs as contigent liablity in its Financial Statements. In the absence of sufficient and appropriate audit evidence for the said treatment, in our opinion the Company ought to have recognised the lability in its books.

Had the liability been recognised, the loss for the year and accordingly the other equity will be higher by Rs. 17820.89 Lakhs.

Board Comment:

Response of the management is however given in note no. 29 of the financial statements. b. Further, regarding the invocation of Companys investment in equity shares of Gati Limited pledged as security for the credit facilities availed by Godavari Commercial Services Private Limited (Godavari), one of the lender to the Company. However, the Company continued to present the said equity shares as investment at fair value as at March 31, 2022 despite invocation for the reasons stated in the said note. Fair value of the invoked shares considered as an asset aggregates to Rs. 1,584.43 Lakhs. Considering that investments have been sold, the auditors have given a remark in their Audit report that they were unable to comment on the appropriateness of presentation of fair value of said equity shares as investments in the financial statements. Further in view of the uncertainity relating to recoverability of the said investment, auditors unable to comment on the impact, if any, on the loss for the year and other equity as at March 31, 2022.

Board Comment:

Response of the management is given in note no. 28(i) of the financial statement. c. The investment in Equity shares of a Company held in Gati Limited pledged as security for the credit facilities availed by Gati Infrastructure Private Limited (GIPL) on receipt of letter of comfort from Amritjal Ventures Private Limited. The lenders of GIPL have invoked the pledge and realized their dues in the year 2016-17. However, the Company continued to present the said equity shares as investment at fair value as at March 31, 2021 despite invocation for the reasons stated in the said note. During the year 2021-22, the Company has accounted for the invoked shares and value realised of Rs. 1875.03 Lakhs as receivable. However, the latest audited financial statements of GIPL which shows negative networth and there are substantial amount of borrowings in the Company. These circumstances raise a doubt on the realisability of the amounts receivable from GIPL. In the absence of adequate evidence with respect to realisation of Rs. 1875.03 Lakhs, auditors given a remark that they are unable to comment on the ultimate recovery and short fall, if any, as at the year end. Further, the accounting of sale transaction in the current financial year is not in accordance with Ind AS 8: Accounting Policies, Changes in Accounting Estimates and Errors. Auditors given the remark that they are unable to comment on effect of the accounting of sale on loss for the year, other comprehensive income and retained earnings had the Company accounted for the sale in accordance with Ind AS 8.

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 as security for facilities availed by Amritjal Ventures Private Limited (AJVPL). The lenders of AJVPL have invoked the pledge and the same were disclosed as "Investments" as at 31st March, 2023. as the management has taken necessary legal recourse for restoration of the invoked shares. The Auditors have given a remark in their Audit report that they were unable to comment on the impact, if any on the loss for the year and reserves and carrying value of investment at this stage, considering the uncertainty relating to recoverability of the said investment.

Board Comment:

For comment of the management refer note no. 28(iii) of financial statement. e. The preparation of financial statements by the management on a going concern basis for the reason stated therein.

In the absence of sufficient and appropriate evidence and the liabilities devolved on the Company upon invocation of guarantees by the lenders of other entities, preparation of financial statements on a going concern is not appropriate. The Auditors have given a remark in their Audit report that they were unable to comment on the effect on carrying value of assets and liabilities had the financial statements been prepared not as a going concern.

Board Comment:

Response of the management given in the note no. 33 of the financial statement. f. The company receipt a communication from the RBI regarding the non-compliance with the maintenance of minimum net owned funds as required under RBI Act 1934 advising the Company for surrender of certificate of registration.

Board Comment:

Response of the management given in the note no. 32 of the financial statement. g. The non-provision of current tax for the year ended March 31, 2023 in accordance with Ind AS 12: Income taxes considering the gain on the accounting of the investments pledged as security for the credit facilities availed by Gati Infrastructure Private Limited; amount not ascertained.

Board Comment:

Since there is no cash transaction involved, the company has not made provision for income tax on the Capital gain on Sale of Investments pledged as security for the credit facilities availed by Gati Infrastructure Private Limited and same was showed in receivable Refere case no [1997] 227 ITR 802 (Kerala) / [1997] 140 CTR 541 (Kerala), High Court of Kerala which substantiates the Companys Justification for Non Provision of Income Tax on Sale of Property Mortgaged b) Secretarial Auditors

Pursuant to the provisions of section 204 of the Act and the Rules made thereunder, the Board has appointed M/s Tapasvilal Deora & Associates, Practicing Company Secretary (M. No. 9813, CP No. 13087), to undertake the secretarial audit of the Company. The Secretarial Audit Report for the year 2021-22 as issued by him in the prescribed form MR-3 is annexed to this Report.

Pursuant to amendments under SEBI Listing Regulations, 2015 and SEBI circular dated 8 February 2019, a report on secretarial compliance as required under regulation 24A is being submitted to stock exchanges as obtained from M/s Tapasvilal Deora & Associates for the financial year 2022-23.

The Secretarial Auditors raised the following concerns in their report for the financial year 2022-23:

Secretarial Audit Report:

1. BSE Ltd. has levied a fine of Rs. 1,180/- for non-compliance of Regulation 13(1) of SEBI (LODR) Regulations, 2015 w.r.t delay in redressal of investor complaint. The Company is yet to make the payment.

Board Comment:

Our company and concerned department of Registrar of Transfer Agent (RTA), has not received any email/ communication from BSE ltd with regard to the complaint raised by the investors. As and when RTA received an email from BSE Ltd, it immediately took necessary steps and resolved investors complaint as per Regulation 13(1) of SEBI (LODR) Regulations, 2015.

 

2. The Company has not paid the annual listing fee to NSE for FY 2022-23 and FY 2021-22 which is a non-compliance under Regulation 14 of SEBI (LODR) Regulations, 2015

Board Comment:

Company has applied for the delisting of equity shares from NSE Ltd dated 8th September, 2020 which is still under process, therefore not paid annual listing fee to NSE Ltd. for the FY 2022-23 and FY 2021-22.

3. The Company has submitted prior intimation disclosures only in Pdf format and not in XBRL format which is a mandatory requirement under Regulation 29 of SEBI (LODR) Regulations, 2015 read with BSE Circular No. 20230127-37 dated 27.01.2023;

Board Comment:

Company inadvertently missed out to submit prior intimation in XBRL format under Regulation 29 of SEBI (LODR) Regulations, 2015.

4. The Company not in compliance with Regulation 30, Schedule III of SEBI (LODR) Regulations, 2015 read with SEBI Circular CIR/CFD/CMD/4/2015 dated 09.09.2015 on account of non-submission, delayed submissions and incomplete submissions of following disclosures: a. The Company has not submitted the disclosure pertaining to appointment of statutory auditors in the Board Meeting held on 12.08.2022; b. The Company has delayed in submission of disclosures pertaining to appointment of Mr. Arun Agarwal as Additional Director resignation of Mr. Rajesh Sharma as Director and disclosure of lender default; c. The Company has delayed submission of outcome of board meetings held for approval of financial results for the quarter ended June 30 2022, November 30 2022 and March 31, 2023 respectively (i.e. outcome submitted after 30 minutes of conclusion of Board Meeting); d. The Company has further not submitted additional disclosures as required under SEBI Circular CIR/CFD/CMD/4/ 2015 dated 09.09.2015 for certain items submitted under Regulation 30 as mentioned below: i) Appointment of statutory auditors, ii) appointment and resignation of Directors; and iii) Lender defaults

Board Comment:

Company is in process of devising proper checks and balances to avoid these lapses.

5. The Statutory Auditor of the Company is not a peer reviewed auditor which is not in accordance with Regulation 33(1)(d) of SEBI (LODR) Regulations, 2015;

Board Comment:

The said auditor has subjected himself for peer review, however is yet to receive the certificate from peer review board of the Institute of Chartered Accountants of India.

6. The Company did not submitted the Limited Review Report along with the Financial Results for the quarter and year ended 31.03.2023 which is not in accordance with Regulation 33 (3)(c) of SEBI (LODR) Regulations, 2015, the Limited Review Report was subsequently submitted to Stock Exchange.

Board Comment:

The company has submitted the results to stock exchanges and also attached the related documents. But inadvertently has omitted to attach limited review report. As soon as this came to the knowledge of the company, it has submitted the revised results along with all relevant documents/ attachments including Limited Review Report.

7. The Company is one of the Promoters of Gati Limited, 54,500 equity shares of Gati Limited held by the Company were invoked by a lender. The Company was required to submit necessary disclosures to Gati Limited in accordance with Regulation 7(2) of SEBI (PIT) Regulations, 2015, however, the Company has not submitted the same

Management inadvertently missed to intimate to stock exchanges regarding Regulation 7(2) of SEBI (PIT) Regulations, 2015, otherwise company intimated rest of the disclosures to the stock exchange timely as required under Regulation 7(2) of SEBI (PIT) Regulations, 2015.

8. The Company has not complied with Indian Accounting Standards w.r.t accounting of non-current investments, recognition of claims due to invocation of Corporate Guarantees and creation of provision of Income Tax considering the gain realized on the accounting of the investments pledged as security;

Board Comment:

Management has complied with the Indian Accounting Standard except w.r.t. accounting of non-current investments, recognition of claims due to invocation of Corporate Guarantees and creation of provision of Income Tax considering the gain realized on the accounting of the investments pledged as security;

9. The Company has not disclosed details of defaults made on loans taken as required under 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 under SEBI Circular SEBI/ HO/CFD/CMD1/CIP/P/2019/140 dated November 21, 2019 by oversight. Company is in process of devising proper checks and balances to avoid these lapses.

10. The structured digital database maintained by the Company does not have time stamp and audit trail function for the quarters ended on 31.03.2022, 30.06.2022 and 30.09.2022 which is not in accordance with Regulation 3(5) and 3(6) of SEBI (PIT) Regulations, 2015;

Board Comment:

The company has duly maintained the structured digital database. However, due to certain technical glitches in the software, audit trail and time stamp were not maintained in the proper manner. The Company has now as a preventive measure purchased a full fledged software, having features including maintenance of time stamp and audit trail in proper manner.

11. The Company has not created, modified and satisfied charges i.e. not filed e-forms CHG 1 & CHG 4 for pledge on the shares held by the Company and for certain loans availed in previous years;

Board Comment:

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

12. The Company has not obtained annual disclosures from Designated persons in terms of Clause 14 of Schedule B of SEBI (PIT) Regulations, 2015;

Board Comment:

Company is taking necessary steps to comply with the same and ensure that such kinds of lapses will not repeat in future.

13. The Company has filed Form DNBS-02 and DNBS – 10 for FY 2021-22 with a delay and not filed Form DNBS-10 for FY 2022-2023 with the Reserve Bank of India;

Board Comment:

The company delayed in filing DNBS-02 and DNBS-10 for FY 2021-22 and not filed Form DNBS-10 for FY 2022-23 with the reserve bank of India due to some unforeseen reasons.

14. The Company has not reported appointment/ changes in Directors/ Principal Officers with the Reserve Bank of India;

Board Comment:

Company inadvertently missed out to report the appointment/changes in Directors/ Principal Officers with the Reserve Bank of India. Henceforth, the Company will report within time to RBI.

15. The Board has passed a resolution by way of circulation on April 14, 2022 confirming non acceptance of public deposits within 30 days of the commencement of the financial year and not in a meeting of the Board of Directors as required under the Master Circular – "Non-Banking Financial Companies Acceptance of Public Deposits (Reserve Bank) Directions, 1998".

Board Comment:

The Board has passed a resolution via circular resolution - Henceforth, the Company shall pass the said resolution by way of a resolution passed in the meeting of board of directors. c) Internal Audit

Pursuant to the provision of section 138 of the Companies Act, 2013 read with rule 13 of the Companies (Accounts) Rules,2014, your Company has appointed M/s SVRJ & Co. LLP, Chartered Accountants as Internal Auditor to conduct the Internal Audit of the functions and activities of the Company 2022-23.

BOARD COMMITTEES

Detailed composition of the mandatory Board committees namely Audit Committee, Nomination and Remuneration 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.

WHISTLE BLOWER POLICY/ VIGIL MECHANISM

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

The Vigil Mechanism policy/Whistle Blower policy provides a mechanism for the Directors/employees of the Company to report, without fear of victimization any unethical behavior, suspected or actual fraud violation of the Code of Conduct, etc. which are detrimental to the organisations interest.

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

The mechanism protects the whistle blower from any kind of discrimination, harassment, victimization or any other unfair employment practice. The directors in all cases and employees in appropriate or exceptional cases have direct access to the chairman of the audit committee. The company affirms that no employee has been denied access to the Audit Committee. 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 the Company, their roles, rights, responsibilities in the Company, nature of the industry in which the Company operates, business model of the Company and related matters along with details of number of programmes and number of hours spent by each of the Independent Directors during the Financial Year 2022-23, in terms of the requirements of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 are available on the website of the Company and can be accessed at the web-link: https:// http:www.tcifl.in/investors/famailarisationProgramme.

ACCOUNTS OF SUBSIDIARY

The Company does not have any Subsidiary.

LISTING

The Companys shares are trading in the dematerialized form on BSE ltd and trading is suspended on NSE ltd, both having nationwide terminals. The particulars of Shareholding Pattern, Distribution of Shareholding and Share prices are mentioned separately in the Report on Corporate Governance.

MANAGEMENT DISCUSSION AND ANALYSIS (MDA)

MDA is provided as a separate in the annual report.

As per notification no.G.S.R.365(E) dated 30th March 2016,issued by Ministry of Corporate Affairs (MCA) in exercise of power conferred to it under section 133 read with section 469 of the Companies Act, 2013, NBFCs having net worth of Rupees five hundred crore or more are required to comply with the Indian Accounting Standards (Ind AS) in preparation of their financial statements and quarterly financial results for the accounting periods beginning on or after 1st April 2018 with effective transition date of 1st April 2017.

Further, MCA, in exercise of its power under sub-section (1) of section 467 of the Companies Act, 2013, amended Schedule III to Companies Act, 2013, vide the amendment, a new division,viz.Division III financial statement format was introduced for Non-Banking Financial Companies effective from 11thOctober 2018.

Accordingly, the financial statements of the Company are prepared as per IND AS.

COMPLIANCE OF SECRETARIAL STANDARDS

The Directors have devised proper systems to ensure compliance with the provisions of all applicable Secretarial Standards i.e. on meetings of the Board of Directors (SS-1) and general meetings (SS-2) read with the MCA circulars granting exemptions in view of the COVID -19 pandemic, issued by the Institute of Company Secretaries of India and that such systems are adequate and operating effectively.

Disclosure of agreements binding the Company- No agreements are there which binding on the Company. 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.

An application U/s. 7 of the IBC, 2016 has been filed against Mahendra Investment Advisors Private Limited ("MIAPL") before NCLT, Hyderabad Bench on 28th April, 2021 vide No. CP (IB) No. 463/7/HDB/2019. The said application has been admitted and currently MIAPL is undergoing CIRP. The Company has a carrying value of advances given to MIAPL to the tune of Rs. 45.91 Cr as on 30th June, 2021 refer note no. 25 of Financial Statements.

The total claim lodged before IRP	: Rs. 45,91,63,203/-
Amount admitted	: Rs. 45,52,98,225/-
Difference	: Rs. 38,64,978/-
Reason for difference	: Belong to the IT Dept.

iii) Your Company has adopted a policy against sexual harassment in line with the provisions of Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and the rules framed thereunder. During the year under review there were no cases filed under the Act. The Company is not required to form Internal Complaint Committee; iv) There is no proceeding pending against the Company under the Insolvency and Bankruptcy code, 2016; v) There was no instance of one-time settlement with any Bank or financial institution.

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
	Dhanpat Ram Agarwal
Hyderabad	Chairman
04th August, 2023	DIN: 00322861