Times Guaranty Ltd Directors Report.

Dear Members,

Your Directors are pleased to present the 29th Annual Report together with the Audited Statement of Accounts for the year ended 31st March, 2019.

MANAGEMENT DISCUSSION AND ANALYSIS REPORT Overview

Times Guaranty Limited (‘TGL) is registered with the Reserve Bank of India (‘RBI) as a Non-Deposit

Accepting, Non-Banking Financial Company and is an Investment Company.

Macro Overview of the Indian Economy

India continues to remain the fastest growing major economy in the world in FY 2018- 19, despite a slight moderation in its GDP growth from 7.2 per cent in 2017-18 to 6.8 per cent in FY 2018-19. On the other hand, the world output growth declined from 3.8 per cent in FY 2017-18 to 3.6 per cent in FY 2018-19.

Indias growth of real GDP has been high with average growth of 7.5 per cent in the last 5 years (2014-15 onwards). The Indian economy grew at 6.8 per cent in FY 2018-19, thereby experiencing some moderation in growth when compared to the previous year. This moderation in growth momentum is mainly on account of lower growth in ‘Agriculture & allied, ‘Trade, hotel, transport, storage, communication and services related to broadcasting and ‘Public administration & defence sectors. Stress in Non- Banking Financial Companies (NBFC) sector also contributed to the slow down by adversely impacting consumption finance.

Industry Overview

The performance of banking sector has improved as bad loans declined in the FY 2018-19, but financial flows are constrained due to fall in money raised from capital markets and stress in the non-banking financial sector.

The performance of the banking system has improved as non-performing asset (NPA) ratios declined and credit growth accelerated. However, financial flows to the economy remained constrained because of decline in the amount of equity finance raised from capital markets and stress in Non-Banking Financial Companies (NBFC) sector.

Capital mobilized through public equity issuance declined by 81 per cent in FY 2018-19. Credit growth rate of the NBFCs declined from 30% in FY 2017-18 to 9% in FY 2018-19.

Financial Highlights of the Company

The Companys financial performance, for the year ended

31st March, 2019 is summarized as below:

(Rs. in Lakhs)

Financial Financial
Particulars year ended 31st March, 2019 year ended 31st March, 2018
Total Income 421.28 111.20
Less: Total Expense 57.00 47.03
Profit / (Loss) before Tax 364.28 64.17
Less: Tax Expense
Current Tax 74.11 11.00
Short / (Excess) Provision for earlier years 0.00 5.06
Profit / (Loss) for the year after Tax 290.17 48.11

 

Key Financial Financial Financial Change
Ratios year ended 31st March, 2019 year ended 31st March, 2018
Current Ratio 261 15 17 times
Operating 86% 57% 51%
Profit Margin
Net Profit 68% 43% 58%
Margin

Current Ratio was significantly high in this year as compared to the previous year due to regrouping of Investments in Current Assets.

Operating Profit margin and Net Profit Margin ratios were significantly high in this year due to shifting of long-term investment of the Company into liquid funds which resulted in higher profits in the FY 2018-19. Since your Company is a Non-deposit Accepting Non-Banking Financial Company and is engaged only in Investment activity of its owned funds, Debtors Turnover Ratio, Inventory Turnover Ratio, Interest Coverage Ratio and Debt Equity Ratio are not applicable to the Company.

DIVIDEND

Your Directors do not recommend any dividend on the Share Capital of the Company for the year under review.

RESERVES

During the year, the Company has transferred Rs. 58.03 Lakhs (Rupees Fifty-eight lakhs three thousand only) to the statutory reserve created under Section 45 IC of the Reserve Bank of India Act, 1934.

State of Company Affairs and Outlook

During the year under review, your Company has earned a profit of Rs. 290.17 Lakhs as against Profit of Rs. 48.11 Lakhs for the previous year.

The main source of income during the year was out of profit on the sale of investments.

Your Company intends to aggressively pursue the bright prospects and enormous opportunities towards the objects of the Company. Your Company is examining various options of commencing new activities. Your Company continuously reviews the internal control systems and thereby ensures adequate and appropriate checks and balances in transaction risk management.

Internal Control Systems and their Adequacy

The Company has in place adequate internal financial controls with reference to Financial Statements. During the year, such controls were tested and no reportable material weaknesses in the design or operation were observed.

Risk Management System

The Company has processes in place to identify, assess and monitor various business, financial and operational risks. Major risks identified by the functions are systematically addressed through mitigating actions on a continuous basis. These are also discussed at the meeting of the Audit Committee of the Company.

The Companys internal control systems and the audit processes are commensurate with the nature of business, the size and complexity of its operations.

Risks and Concerns

Any adverse change in the business or negative policy of Government will affect the NBFC sector adversely.

Opportunities

The success of NBFCs can be clearly attributed to their better product lines, lower cost, wider and effective reach, strong risk management capabilities to check and control bad debts, and better understanding of their customer segments.

Threats

Growth of the Companys asset book, quality of assets and ability to continue the business depends significantly on the economy. Unfavourable events in the Indian economy can affect consumer sentiment and in turn impact consumer decision to purchase financial products. Competition from a broad range of financial services providers, unstable political environment and changes in Government policy / regulatory framework could impact the Companys operations.

Human Resource

Human Resource is the most vital factor of any organization. Your Company has well experienced personnel. The employees work in line with the organizational goal.

CORPORATE GOVERNANCE AND SHAREHOLDERS INFORMATION

Your Company has always taken adequate steps to adhere to all the requirements as laid down in SEBI (Listing Obligations and Disclosures Requirements)

Regulations, 2015 as amended (‘SEBI LODR).

A Report on Corporate Governance is included as a part of the Annual Report. The certificate received from Mehta & Mehta, Practicing Company Secretaries confirming the compliance with the conditions of Corporate Governance as laid down in SEBI LODR is also included as a part of the Annual Report.

MATERIAL CHANGES AND COMMITMENTS, IF ANY, AFFECTING THE FINANCIAL POSITION OF THE COMPANY WHICH HAVE OCCURRED BETWEEN THE END OF THE FINANCIAL YEAR OF THE COMPANY TO WHICH THE FINANCIAL STATEMENTS RELATE AND THE DATE OF THE REPORT

No material changes and commitments have occurred after the close of the year till the date of this Report, which affects the financial position of the Company.

SUBSIDIARY, ASSOCIATES AND JOINT VENTURES

The Company has no subsidiary, associate and joint ventures and hence requirements under the provisions of Section 129(3), 134 and Rule 8 of Companies (Accounts) Rules, 2014 are not applicable to your Company.

DIRECTORS AND KEY MANAGERIAL PERSONNELS

Directors

As on date, the Board of Directors of the Company comprises of the following:

NAME DESIGNATION
1. Mr. Sivakumar Sundaram Chairman & Non-Executive
(DIN: 00105562) Director
2. Dr. Arun Arora Non-Executive,
(DIN: 00172044) Independent
Director
3. Ms. Mitu Samar Nath Non-Executive,
(DIN: 07244627) Independent
Director
4. Ms. Anita Malusare Executive Director
(DIN: 07773062) (ED) & Chief
Executive Officer
(CEO)
5. Mr. Gopalkrishnan Additional Director
Ramaswamy* (Non-Executive)
(DIN: 02712174)
6. Mr. Sameer Additional Director
Karulkar* (Non-Executive)
(DIN: 08250235)

* Mr. Gopalkrishnan Ramaswamy and Mr. Sameer Karulkar were appointed as an Additional Non-Executive Directors w.e.f. 30th October, 2018. The year under review saw the following changes to the Board of Directors:

Induction to the Board:

On the recommendation of the Nomination & Remuneration Committee (NRC), the Board appointed Mr. Gopalkrishnan Ramaswamy and Mr. Sameer Karulkar as Additional (Non-Executive) Directors of the Company w.e.f. 30th October, 2018.

The resolutions for obtaining shareholders approval for the appointments of Mr. Gopalkrishnan Ramaswamy and Mr. Sameer Karulkar as Directors of the Company forms part of the Notice convening the Annual General Meeting (AGM) scheduled to be held on 26th September, 2019. Brief profile of the proposed appointees together with other disclosures in terms of Regulation 36 (3) of the SEBI LODR are mentioned in the Notice which is part of this Annual Report.

Cessation

Ms. Aashu Madhan stepped down as a member of the Board w.e.f. 22nd October, 2018. The Board of Directors placed on record its appreciation towards

Ms. Aashu Madhans contributions during her term as

Director of the Company.

Retirement by Rotation

In accordance with the provisions of Section 152 of the Act, Ms. Anita Malusare (DIN: 07773062) retires by rotation at the ensuing AGM and being eligible, offers herself for re-appointment. Brief profile of the proposed appointee together with other disclosures in terms of Regulation 36 (3) of the SEBI LODR is mentioned in the Notice which is part of this Annual Report.

Declaration of Independence

The terms and conditions of appointment of Independent Directors are as per Schedule IV of the Act. The Independent Directors have submitted a declaration that each of them meets the criteria of independence as provided in Sections 149(6) of the Act and there has been no change in the circumstances which may affect their status as Independent Director during the year.

Key Managerial Personnel (KMP)

As on the date, following are the Key Managerial Personnel of the Company as per Section 203 of the Act:

1. Ms. Anita Malusare, Executive Director & Chief Executive Officer (ED & CEO)

2. Ms. Shweta Chaturvedi, Company Secretary (CS)

3. Mr. Pramod Karmarkar, Chief Financial Officer (CFO)

MEETINGS

During the financial year 2018-19, four Board Meetings were convened and held, the details of which are given in the Corporate Governance Report. The intervening gap between the meetings was within the period prescribed under the Act, the revised Secretarial Standards-1 (SS-1) issued by the Institute of Company Secretaries of India and SEBI LODR.

AUDIT COMMITTEE (AC)

As on the date, following is the composition of the Audit Committee;

1. Ms. Mitu Samar Nath - Chairperson

2. Mr. Sivakumar Sundaram-Member

3. Dr. Arun Arora - Member

During the financial year 2018-19, four (4) meetings of Audit Committee of the Company were held on 30th April, 2018; 26th July, 2018; 30th October, 2018 and 29th January, 2019. All recommendations made by the Audit Committee during the year were accepted by the Board.

NOMINATION AND REMUNERATION COMMITTEE (NRC)

As on the date, the following is the composition of Nomination and Remuneration Committee:

1. Ms. Mitu Samar Nath - Chairperson

2. Mr. Sivakumar Sundaram-Member

3. Dr. Arun Arora - Member

During the financial year 2018-19, two (2) meeting of NRC of the Company were held on 26th July, 2018 and 30th October, 2018.

The Nomination and Remuneration policy of the Company, specifying therein the appointment and remuneration of the Directors, Key Managerial Personnel and Senior Executives of the Company including criteria for determining qualifications, positive attributes, independence of a Director and other related matters may be referred to at the Companys website at www.timesguarantylimited.com under the web link as provided in Corporate Governance Report which is the part of the Annual Report.

STAKEHOLDERS RELATIONSHIP COMMITTEE (SRC)

As on the date, Stakeholders Relationship Committee of the Company comprises of the following:

1. Mr. Sivakumar Sundaram - Chairman

2. Ms. Mitu Samar Nath Member

3. Mr. Gopalkrishnan Ramaswamy- Member

During the year under review, Mr. Gopalkrishnan Ramaswamy and Ms. Mitu Samar Nath were inducted as the members of SRC w.e.f. 30th October, 2018 and Ms. Aashu Madhan stepped down as the member of SRC w.e.f. 22nd October, 2018.

During the financial year 2018-19, seventeen (17) meetings of SRC were held on 4th May, 2018; 21st May, 2018; 8th June, 2018; 11th June, 2018; 28th June, 2018; 27th August, 2018; 27th September, 2018; 5th October, 2018; 30th October, 2018; 26th November, 2018; 16th January, 2019; 4th February, 2019; 14th February, 2019; 26th February, 2019; 7th March, 2019; 18th March, 2019 and 29th March, 2019.

PERFORMANCE EVALUATION OF THE BOARD, COMMITTEES AND DIRECTORS

This part is covered under the Corporate Governance Report.

PARTICULARS OF EMPLOYEES

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 in Annexure 1.

During the year under review, no employee of the Company was in receipt of remuneration exceeding the sums prescribed in Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014.

AUDITORS Statutory Auditors

At the Annual General Meeting held on 27th September, 2017, V.B. Goel & Co., Chartered Accountants, were appointed as Statutory Auditors of the Company to hold office till the conclusion of the 30th Annual General Meeting (AGM).

Auditors Report

The Report given by the Statutory Auditors on the Financial Statements of the Company is part of the Annual Report. The notes on Financial Statements referred to in the Auditors Report are self-explanatory and do not call for any further explanation. There has been no qualification, reservation, adverse remark or disclaimer given by the Statutory Auditor in their Report. No instance of fraud has been reported by the Auditors under Section 143(12) of the Act.

Secretarial Auditor

Mehta & Mehta, Practicing Company Secretaries were appointed as Secretarial Auditor to conduct the Secretarial Audit of the Company for the financial year 2018-19, as required under Section 204 of the Act and Rules made thereunder. The secretarial audit report for financial year 2018-19 forms part of this Report as Annexure 2.

There has been no qualification, reservation, adverse remark or disclaimer given by the Secretarial Auditor in their Report.

PARTICULARS OF CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

Particulars concerning energy conservation, technology absorption and foreign exchange earnings and outgo as required by Section 134(3)(m) of the Act read with Rule 8(3) of the Companies (Accounts) Rules, 2014 are given in Annexure 2 to the Directors Report.

DISCLOSURES Secretarial Standards

The Company complies with all the applicable provisions of Secretarial Standards.

Particulars of loans, guarantees and investments:

During the year under review, the Company has not made any loans, guarantee or investments under Section 186 of the Act.

Deposits:

During the year under review, your Company did not accept any deposits within the meaning of provisions of Chapter V- Acceptance of Deposits by Companies, of the Act read with the Companies (Acceptance of Deposits) Rules, 2014.

Transactions with Related Parties:

All contracts/arrangements/transactions entered by the Company during the financial year with Related party were on arms length basis and were in the ordinary course of business except one transaction which was not at arms length as disclosed in Form

AOC 2 appended as Annexure 3 to this report.

There were no material contracts or arrangements or transactions at arms length basis during the period under review.

Sexual Harassment

Your Company has zero tolerance towards sexual harassment at work place and has adopted a policy on prevention, prohibition & redressal of sexual harassment at work place in line with the provisions of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and the rules made there under. There was no complaint on sexual harassment during the year under review.

Annual Return

The extract of the Annual Return in Form No. MGT 9 for the financial year 2018-19 has been disclosed separately and forms part of the Directors report as

Annexure 4.

In accordance with recent amendments to the Companies Act, 2013, Annual Return of the Company for the financial year ended 31st March, 2019, as required, under Section 92 of the Act, will be available on the website of the Company www.timesguarantylimited.com.

Material orders passed by the Regulators or Courts or Tribunals impacting the going concern status of the Company

There are no significant or material orders passed by the Regulators or Courts or Tribunals which would impact the going concern status of the Company.

Whistle Blower Policy & Vigil Mechanism:

The Company has implemented the Whistle Blower Policy pursuant to which Whistle Blowers can raise concerns relating to Reportable Matters (defined in the policy) such as breach of Code of Conduct, fraud, bribery, corruption, employee misconduct, illegality, health & safety, environmental issues and wastage/ misappropriation of bank funds/assets etc. Further, the mechanism adopted by the Company encourages the Whistle Blower to report genuine concerns or grievances and provides for adequate safeguards against victimization of Whistle Blower who avail of such mechanism and also provides for direct access to the Chairperson of the Audit Committee, in exceptional cases. None of such cases were reported to the Audit Committee during the financial year 2018-19.

Non-Banking Financial Companies Auditors Report (Reserve Bank) Directions, 1998:

Pursuant to the Non-Banking Financial Companies

Auditors Report (Reserve Bank) Directions, 1998, a report from the Statutory Auditors to the Board of Directors, has been received by the Company. The said report confirms compliance by the Company during the financial year ended 31st March, 2019 of all the directions and Prudential Norms as prescribed by Reserve Bank of India under the Reserve Bank of India Act, 1934.

DIRECTORS RESPONSIBILITY STATEMENT

PursuanttoSection134(5)oftheCompaniesAct,2013(the Act) and based on the frame work of internal control systems and compliance system maintained by the Company and the work performed by the Statutory Auditors, Secretarial Auditors and the reviews performed by the Audit Committee, the Directors confirm that:

a. In the preparation of the annual accounts, the applicable accounting standards have been followed and that no material departures have been made from the same.

b. They have selected such accounting policies and applied them consistently and have made judgments and estimates that are reasonable and prudent to give a true and fair view of the Company at the end of financial year 2018-19 and of the profits of the Company for the said year.;

c. They 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.;

d. They have prepared the annual accounts on a going concern basis.

e. They have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and are operating effectively; and f. They have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

ACKNOWLEDGEMENT

The Board of Directors is thankful to the Companys promoters and shareholders, customers, bankers and employees for their continued support.

For and on behalf of Board of Directors
Sivakumar Sundaram
Registered Office: Chairman
5th Floor, Times Tower, (DIN:00105562)
Kamala Mills Compound,
Senapati Bapat Marg,
Lower Parel, Mumbai-400013.
Dated: 14th August, 2019