Annual report 2005-2006.pmd

TCFC FINANCE LIMITED
15th Annual Report
2005-2006
TCFC FINANCE LIMITED
TCFC FINANCE LIMITED
BOARD OF DIRECTORS
ANNUAL GENERAL MEETING
3.30 p.m. at Ashoka Hall,Arcadia, NCPA Marg, COMPANY SECRETARY
AUDITORS
LAKHANI & COMPANYCHARTERED ACCOUNTANTS CONTENTS
REGISTERED OFFICE
Notice ------------------------------------------------------------------------------------- Directors’ Report ----------------------------------------------------------------------- Report of the Directors’ on Corporate Governance -------------------------- Auditors’ Certificate on Corporate Governance ------------------------------- Code of Conduct ----------------------------------------------------------------------- Auditors’ Report ------------------------------------------------------------------------ Balance Sheet -------------------------------------------------------------------------- Profit & Loss Account ----------------------------------------------------------------- Schedules & Notes -------------------------------------------------------------------- Cash Flow Statements --------------------------------------------------------------- Balance Sheet Abstract and Company General Business Profile ------ TCFC FINANCE LIMITED
NOTICE is hereby given that the 15th Annual General Meeting A member entitled to attend and vote is entitled to appoint of the members of TCFC Finance Limited will be held on a proxy to attend and vote instead of himself and the proxy Thursday, August 17, 2006, at 3.30 p.m. at Ashoka Hall, Arcadia, need not be a member of the Company. Proxies, in order NCPA Marg, Nariman Point, Mumbai - 400 021 to transact the to be effective, should be duly completed, stamped and signed and must be deposited at the Registered Office of ORDINARY BUSINESS:
the Company not less than 48 hours before thecommencement of the meeting.
To consider and adopt the Audited Balance Sheet as atMarch 31, 2006 and the Profit and Loss Account for the The Register of Members and the Share Transfer Books of period ended on that date and the Reports of the Directors the Company shall remain closed from August 11, 2006 to August 17, 2006 (both days inclusive) to ascertain the To declare dividend on Equity Shares.
shareholders entitled to receive dividend, if approved, onequity shares, for the year ended March 31, 2006. In To appoint a Director in place of Mr. Atul Desai, who retires respect of shares held in electronic form, the dividend will by rotation and being eligible, offers himself for re- be paid on the basis of particulars of beneficial ownership furnished by the depositories for this purpose.
To appoint auditors and fix their remuneration.
The dividend on equity shares, if declared at the Annual SPECIAL BUSINESS :
General meeting will be paid on or after August 28, 2006.
To consider and, if thought fit, to pass, with or without The relative Explanatory Statement pursuant to Section modification, the following resolution as an OrdinaryResolution: 173 of the Companies Act, 1956, in relation to the SpecialBusiness of the meeting is annexed hereto. The relevant “RESOLVED THAT Mr. Vickram Ahuja, in respect of whom details of directors seeking appointment under item Nos.
the Company has received a notice u/s 257 of the 3, 5 & 6 above, as required by Clause 49 of the Listing Companies Act, 1956 from a member signifying their Agreements entered into with the Stock Exchanges are intention to propose the candidature of Mr. Vickram Ahuja given in the Corporate Governance Report.
to the office of Director, be and is hereby appointed as aDirector liable to retire by rotation.” All documents referred to in the accompanying notice are To consider and, if thought fit, to pass, with or without open for inspection at the Registered Office of the Company modification, the following resolution as an Ordinary on all working days except Saturday between 11.00 a.m and 1.00 p.m. upto the date of the Annual General Meeting.
“RESOLVED THAT Mr. V S Srinivasan, in respect of whom Members are requested to intimate change in address, the Company has received a notice u/s 257 of the change in bank accounts etc. Members may avail Companies Act, 1956 from a member signifying their Electronic Clearing Service (ECS) for receipt of dividend intention to propose the candidature of Mr. V S Srinivasan by intimating their bank account details to the Company if to the office of Director, be and is hereby appointed as a shares are in physical form or to their respective Depository Director liable to retire by rotation.” Participant in case of shares in dematerialized form.
Any member seeking further information on the Accounts For TCFC Finance Limited
at the meeting is requested to send their queries in writingto the Company so as to reach at least one week in advance Ayan Chakraborty
to enable the Management to keep the information ready.
Company Secretary
Replies will be provided only at the meeting.
Members/proxies should bring their Attendance slip dulyfilled in for attending the meeting.
TCFC FINANCE LIMITED
ANNEXURE TO THE NOTICE
upto the date of the ensuing Annual General Meeting. Pursuantto Section 257 of the Companies Act, 1956 a notice in writing Explanatory Statement pursuant to Section 173 of the along with a deposit of Rs. 500/- has been received from a Member of the Company signifying his intention to propose Mr.
ITEM NO. 5
V S Srinivasan as a candidate for the office of Director.
Mr. Vickram Ahuja was appointed as an Additional Director of None of the other Directors of the Company are in any way the Company at the meeting of the Board of Directors of the concerned or interested in the Resolution proposed at item no.
Company held on July 26, 2005. Pursuant to Section 260 of the Companies Act, 1956 Mr. Vickram Ahuja will hold office Your Directors recommend the resolution at item no. 6 for your upto the date of the ensuing Annual General Meeting. Pursuant to Section 257 of the Companies Act, 1956 a notice in writingalong with a deposit of Rs. 500/- has been received from a Member of the Company signifying his intention to propose For TCFC Finance Limited
Mr. Vickram Ahuja as a candidate for the office of Director.
Mr. D Ahuja, Managing Director of the Company being relative, Ayan Chakraborty
may be deemed to be interested in the resolution.
Company Secretary
Your Directors recommend the resolution at item no. 5 for your ITEM NO. 6
Registered Office:
Mr. V S Srinivasan was appointed as an Additional Director of the Company at the meeting of the Board of Directors of the Company held on February 6, 2006. Pursuant to Section 260 of the Companies Act, 1956 Mr. V S Srinivasan will hold office TCFC FINANCE LIMITED
DIRECTORS’ REPORT
share on 1,04,82,129 equity share of Rs. 10/- each for thefinancial year ended March 31, 2006. Dividend, if approved by the Members at the ensuing Annual General Meeting will be TCFC FINANCE LIMITED
paid to the Equity shareholders whose names appear in the The Directors have pleasure in presenting the 15th Annual Register of Members as on August 17, 2006 and to those whose Report of the Company together with the Audited Annual names appear as beneficial owners as furnished by National Accounts for the year ended March 31, 2006.
Securities Depository Limited and Central Depository Services(India) Limited.
FINANCIAL RESULTS
MANAGEMENT DISCUSSION AND ANALYSIS
Year ended
March 31,
During the year the Company carried out capital market operations at a moderate level. The growth in the Indian (Rs. in lacs)
economy together with the boom in the capital markets resultedin a better year for the Company. Due to the current uncertain capital market situation where the risk factors appear to be very high the Company is taking a cautious view and will formulate its investment policies accordingly.
EVENTS AFTER BALANCE SHEET
The Company sold 8,25,000 equity shares of Rs.10/- each of Lakshmi Ganesha Textiles Ltd. to its Promoters at a price of Rs.
5.50 per share aggregating to Rs. 45.37 lacs.
The Company is taking a number of initiatives to consolidateand improve margins and return on capital which will in turn CORPORATE GOVERNANCE
Corporate Governance Report is annexed to this report.
AUDITORS
Lakhani & Company, Chartered Accountants, Auditors of the Company hold office until the conclusion of the ensuing Annual OPERATIONS
General Meeting, and are eligible to offer themselves for re-appointment. The Company has received a certificate from the During the year under report, the Company has performed Auditors to the effect that their re-appointment, if made, would better than the previous year. The Company has made a net be in accordance with the provisions of section 224 (1B) of the profit of Rs.599.41 lacs in the year under report as against Companies Act, 1956. The Directors recommend their re- Rs.382.56 lacs in the previous year. Earning per share has appointment as the Auditors till the conclusion of the Annual increased from Rs. 3.65 in the previous year to Rs.5.72 in the General Meeting for the year ended 31st March 2007 on current year. The Company has been able to take advantage remuneration to be decided by the Board of Directors of the of the growth in the economy and the consequent boom in the Company. Notes forming part of accounts which are specifically secondary markets. Due to the above and the cost cutting referred to the Auditors in their report are self-explanatory and measures adopted, the Company made reasonable profits in therefore, do not call for any further comments.
DEPOSITS
DIVIDEND
The Company has not accepted any deposits from public during In view of the improved working, the directors are pleased to recommend a dividend of 12% amounting to Rs.1.20 per equity TCFC FINANCE LIMITED
DIRECTORS’ RESPONSIBILITY STATEMENT
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION
& FOREIGN EXCHANGE EARNINGS AND OUTGO
The Company has no activities relating to conservation of in preparation of the Annual Accounts, the applicable energy, technology absorption and foreign exchange earnings Accounting Standards have been followed along with proper explanation relating to material departures, if any; PARTICULARS OF EMPLOYEES
(ii) they have selected the accounting policies and applied The information on employees’ remuneration as per Section them consistently and made judgments and estimates that 217 (2A) of the Companies Act, 1956 read with the Companies are reasonable and prudent so as to give a true and fair (Particulars of Employees) Rules, 1975 as amended till date, view of the state of affairs of the Company at the end of the forms part of this Report. However, as per the provisions of financial year under review and for the profit or loss of the Section 219(1)(b)(iv) of the Companies Act, 1956, the Report and Accounts are being sent to all the Members excluding thestatement containing the particulars of Employees to be (iii) they have taken proper and sufficient care for the provided under Section 217 (2A) of the Act. Any Member maintenance of adequate accounting records in interested in obtaining such particulars may inspect the same accordance with the provisions of the Companies Act, 1956 at the Company’s Registered Office between 11.00 am to 1.00 for safeguarding the assets of the Company and for pm on all working days till the date of the 15th Annual General preventing and detecting fraud and other irregularities; Meeting . Further, those seeking a copy of the said statementmay write to the Company Secretary at the Registered Office.
(iv) they have prepared the Annual Accounts on a going ACKNOWLEDGMENT
The Board of Directors thanks Reserve Bank of India, Banks DIRECTORS
and Shareholders for their continued support besidesemployees at all levels.
During the year under review Mr. Atul Desai, Director retires byrotation and being eligible offers himself for re-appointment.
Mr. Shaunak Dalal and Mr. Arun Sawhney have ceased to be For TCFC FINANCE LIMITED
Directors of the Company on July 26, 2005 and on February 1,2006 respectively. Mr. Vickram Ahuja and Mr. V S Srinivasan Atul Desai
have been appointed Directors of the Company on July 26, Chairman
2005 and on February 6, 2006 respectively.
TCFC FINANCE LIMITED
CORPORATE GOVERNANCE REPORT
Company’s philosophy
In compliance with the provisions of Clause 49 of the Listing Agreement with Stock Exchanges and applicable provisions ofthe Companies Act, 1956, your Directors submit their report on the matters mentioned in the said Clause and practicefollowed by the Company.
Board of Directors
The composition of Board of Directors is in compliance with provisions of Listing Agreement with the Stock Exchange and theCompanies Act, 1956. As on March 31, 2006, the Board comprises of a Non Executive Chairman and four other Directors. Outof these, two members are Independent Directors. None of the Directors is member of more than 10 committees andChairman of more than 5 committees across all the companies in which he is director. All the Directors have made necessarydisclosures regarding committee positions occupied by them The independent Directors are professionals drawn fromamongst persons with experience in business, finance and law. The composition of the Board during the Year ended March31, 2006 is as under: Category
Attendance
Number of other directorship and
particulars
Committee Membership/ Chairmanship
Committee
Committee
AGM Directorship
Membership Chairmanship
During the year, the Board of Directors of the Company have approved and laid down a Code of Conduct applicable for all theBoard Members and the Employees of the Company. This Code of Conduct is given in the Annual Report.
Further, all Board members and the Employees of the Company have affirmed their adherence to the Code. The Company’sManaging Director’s declaration to the effect forms a part of this report.
Board Meetings and attendance
The Corporate Governance policy requires the Board to meet atleast 4 times in a year with a maximum gap of 4 monthsbetween any two meetings. The details of the Board Meetings held during the year are as under: Date of Board Meeting
Board’s Strength
No. of Directors present
TCFC FINANCE LIMITED
Board’s Processes
It has always been the Company’s policy and practice that apart from matters requiring the Board’s approval by statute, allmajor decisions including quarterly results of the Company are regularly placed before the Board. This is in addition toinformation with regard to actual operations, major litigation, feed back reports and minutes of all Committee Meetings.
COMPOSITION OF COMMITTEES OF DIRECTORS AND THEIR ATTENDANCE AT THE MEETING
The Board has constituted committees of Directors to take informed decisions in the best interest of the Company. Thesecommittees monitor the activities falling within their terms of reference. The Board Committee’s are as follows: Audit Committee
The Audit Committee of the Board comprises of three qualified Directors with majority being independent viz. Mr. V SSrinivasan, Mr. Davendra Ahuja, Mr. Atul Desai. During the year, Mr. Arun Sawhney and Mr. Shaunak Dalal who were partof the Board as well as the Audit Committee have resigned from the Board and consequently the Audit Committee. Mr.
Vickram Ahuja who was appointed a member of the Audit Committee has also resigned from the Committee. Mr. V SSrinivasan is the Chairman. Two of the members are having finance and accounting knowledge. The Company Secretaryis the Secretary to the Committee. The Audit Committee of the Company, inter alia, provides reassurance to the Board onthe existence of an effective internal control environment.
The Committee has powers similar to that stated in the listing agreements and Companies Act and exercises most of thefunctions as per the terms of reference in line with the requirements of the Code of Corporate Governance. The Auditcommittee has reviewed the Annual Accounts for the year 2005-2006.
The details of Audit Committee meetings held during the year 2005 –2006 are as under: Audit Committee Meetings
Date of Audit Committee
Committee Strength
No. of Members present
Audit Committee Attendance
Directors
No. of Meetings attended
* Ceased to be committee member w.e.f. July 26, 2005** Ceased to be committee member w.e.f. February 1, 2006+ Ceased to be committee member w.e.f October 24, 2005 $ Appointed on the Committee w.e.f. February 6, 2006 Statutory Auditors, executives responsible for finance and accounts functions are permanent invitees to the Audit committee.
Remuneration Committee
The Company has one Managing Director who is paid remuneration while the remaining directors are non - executivedirectors who are paid only sitting fees. The remuneration paid to the Managing Director has already been approved bythe Committee.
The Committee has powers similar to that stated in the listing agreements and schedule XIII to the Companies Act, 1956.
The Remuneration Committee of the Board comprises of three Non-Executive Directors viz. Mr. V S Srinivasan,Mr. Vickram Ahuja, and Mr. Atul Desai. During the year, Mr. Arun Sawhney and Mr. Shaunak Dalal who were part of theBoard as well as the Remuneration Committee have resigned from the Board and consequently the Remuneration TCFC FINANCE LIMITED
Committee. Mr. Atul Desai is the Chairman. The Company Secretary is the Secretary to the Committee. The RemunerationCommittee, inter alia, approves the remuneration of the top tier management of the Company including the ManagingDirector. The remuneration of the employees largely consists of basic remuneration, perquisite and other incentives.
Details of Remuneration for 2005-06
Name of Director
Sitting fees
Salaries and Perquisites
Commission
Shareholders / Investors Grievance Committee
The Shareholders / Investors Grievance Committee looks after the transfer of shares, split of shares, issue of duplicateshares, transmission etc. In addition to above, the Committee is authorised to look into shareholders complaints likedelay in transfer, non receipt of securities, balance sheet, dividend etc. During the year no complaints were received fromThe Stock Exchange/ Securities and Exchange Board of India/ The Registrar of Companies. All the correspondence/queries from the members were replied to the satisfaction of the members. No transfer/complaints are pending at theclose of the financial year.
The Committee consists of Mr. Venkatesh Kamath, Mr. Atul Desai and Mr. Davendra Ahuja. Mr. Venkatesh Kamath, nonexecutive director, is the Chairman of the committee. Mr. Ayan Chakraborty, Company Secretary is the Complianceofficer and is also the secretary to the committee.
Director who are seeking appointment / re-appointment at the ensuing Annual General Meeting.
Name of the Director
Date of Birth
Date of Appointment /
Re appointment as Director /
non executive director non executive director Qualification
Experience and Expertise in
Specific functional area
Other Directorship : Atul Desai
Name of the Company
Position
Committee
Membership Status
Shareholder/ InvestorGrievance CommitteeShare Transfer Committee Other Directorship : Vickram Ahuja
Other Directorship : V S Srinivasan
TCFC FINANCE LIMITED
Means of Communications
The quarterly results, notice of the meeting and book closure dates etc. are widely circulated in leading English (Free PressJournals) and regional language newspapers (Navshakti). Results are also given to The Stock Exchange, Mumbai and SEBIfor publication. Management Discussion & Analysis forms part of the Director’s Report.
Details of last three Annual General Meetings
Location
Jai Hind College Auditorium, A Road, Churchgate,Mumbai 400020 Ashoka Hall, Arcadia, NCPA Marg, Nariman Point,Mumbai – 400 021 Ashoka Hall, Arcadia, NCPA Marg, Nariman Point,Mumbai – 400 021 None of the special resolutions were put through vote by postal ballots during the last three AGMs.
Disclosures
There has been no non-compliance penalties / strictures imposed on the Company by Stock Exchange(s) or SEBI or anyother statutory authority, on any matter related to capital markets, during the last three years.
There are no materially significant related party transaction other than those disclosed in the notes to accounts.
General Shareholder Information
Venue: Ashoka Hall, Arcadia, NCPA Marg, Nariman Point, Mumbai 400021 Book Closure Date : August 11, 2006 to August 17, 2006 Payment of dividend : 28th August 2006 onwards.
Tentative calendar of events for the financial year 2006-2007 (April- March) is given below.
Adoption of Quarterly Results ended
In the month of
Name of Stock Exchange in which the shares of the Company are listed for trading with stock code.
Stock Exchange
The listing fee for the financial year has been paid TCFC FINANCE LIMITED
Shareholding Pattern of the Company as on March 31, 2006 Category
No. of Shares held
% of shareholdings
A. Promoter’s Holding
Sub Total
B. Non Promoting Holdings
Sub Total
Sub Total
Grand Total
10482129
There are no shares/securities/warrants/instruments due for conversion.
Distribution of Shareholding as on March 31, 2006
Share Holders
No. of shares
% to total holders
% of Total Capital
10482129
Share transfer system
Share transfers are registered by the share department of the Company and returned to the respective transferees withina period ranging from fifteen days to one month, provided the documents lodged with the Registrars / Company are clearin all respects.
TCFC FINANCE LIMITED
Dematerialisation of shares
As per notifications issued by the Securities and Exchange Board of India (SEBI), the trading in Company’s shares ispermitted only in dematerialized form. In order to enable the shareholders to hold their shares in electronic form and tofacilitate scripless trading, the Company has enlisted its shares with National Securities Depository Limited and CentralDepository Services (India) Limited.
ISIN for the Company’s equity shares: INE389D01013 Share Dematerialisation record: The following data indicates the extent of Dematerialisation of Company’s shares as onMarch 31, 2006 No of Shares Dematerialised
No. of shareholders in Demat form
Address for Correspondence
TCFC Finance Limited502, Raheja Chambers, Nariman Point, Mumbai 400 021Tel: 022-22844701Fax: 022-22819237Email: [email protected] Market Price Data (Rs.) Bombay Stock Exchange Limited
Company price
BSE Sensex
k) Depository services
For guidance on depository services, Shareholders may write to the Company or to the respective Depositories: National Securities Depository Services LimitedTrade World, 4th Floor, Kamala Mills Compound,Senapati Bapat Marg, Lower Parel,Mumbai 400 013Tel. 0091-022-24972964-70Email. : [email protected]: www.nsdl.co.in TCFC FINANCE LIMITED
Central Depository Services (India) Limited Nomination Facility
Shareholders holding shares in physical form and desirous of making a nomination in respect of their shareholding in theCompany, as permitted under Section 109A of the Companies Act, 1956 are requested to submit to the Company theprescribed Form 2B for this purpose.
AUDITOR’S REPORT ON CORPORATE GOVERNANCE
We have examined the compliance of conditions of Corporate Governance by TCFC Finance Ltd (the Company) for the yearended March 31, 2006, as stipulated in clause 49 of the Listing Agreement of the Company with the stock exchange.
The compliance of conditions of Corporate Governance is the responsibility of the Management. Our examination was limited toprocedures and implementation thereof, adopted by the Company for ensuring the compliance of the conditions of CorporateGovernance. It is neither an audit nor an expression of opinion on the financial statements of the Company.
In our opinion and to the best of our information and according to the explanations given to us, we certify that the Company hascomplied with the conditions of Corporate Governance as stipulated in the above mentioned Listing Agreement.
We have been explained that no investor grievances are pending for a period exceeding one month against the company as perthe records maintained by the Company.
We further state that such compliance is neither an assurance as to the future viability of the Company nor the efficiency oreffectiveness with which the management has conducted the affairs of the Company.
For Lakhani & Co.
Parag Modi
DECLARATION
It is hereby declared that all the Board members and Employees of the Company have affirmed adherence to and compliance withthe ‘Code of Conduct’ laid down by the Company, as on March 31, 2006.
For TCFC Finance Limited
Davendra Ahuja
TCFC FINANCE LIMITED
CODE OF CONDUCT FOR THE BOARD OF DIRECTORS AND SR. MANAGEMENT
I. Introduction
This Code of conduct is for the Board of Directors and the sr. management personnel (hereinafter referred to as “officers”) tomaintain the standards of business conduct for the Company and ensure compliance with legal requirements. The code woulddeter wrong doing, promote ethical conduct and conduct business with values.
Ethical business conduct is critical to our business. Officers are expected to read and understand this code, uphold thesestandards in day to day activities and comply with all the policies and procedures. Nothing in this code creates or implies anemployment contract or term of employment.
The code would be circulated to all the officers each year. All are requested to read, understand and agree to comply with thecode.
II. Honest and ethical conduct
We expect all the officers to act in accordance with the highest standards of personal and professional integrity, honesty andethical conduct while working for the Company. We consider honest conduct to be conduct that is free from fraud or deception.
Ethical conduct means ethical handling of actual or apparent conflict of interest between personal and professional relationships.
III. Conflict of interest
Officers are duty bound to avoid and disclose actual and apparent conflict of interest. A conflict of interest exists where the interestor benefits of the officers conflict with the interest or benefits of the Company. Officers are prohibited from engaging in any activitythat interferes with the performance or responsibilities to the Company or is otherwise in conflict with or prejudicial to theCompany. Our policies prohibit officers from accepting simultaneous employment with suppliers, customers, developers orcompetitors of the Company. Officers must disclose to the company’s audit committee any interest that they have that may conflictwith the business of the Company. Conflict of interest would also include accepting directorship in competing company. Investingin any customer, supplier, developer or competitor company the officer should take care to see that it does not compromise withthe responsibilities to the Company. Under no circumstances officers may accept any offer, payment, gift or any thing of value fromcustomers, vendors, consultants, etc that is perceived to influence any business decision. Inexpensive gifts, business meals,events and entertainment do not violate this policy. Gifts given by the Company to its suppliers, customers, or received from themshould be accurately recorded. It is impractical to list all possible situation of conflict of interest. If a proposed transaction orsituation raises any question of doubts, officer must consult the Company’s audit committee.
IV. Disclosure to The Stock Exchange and public
The Company’s policy is to provide full, fair, accurate, timely and understandable disclosure in reports and documents filed withthe exchange and other public communications. Officer should ensure that they comply with all disclosure norms and proceduresand other financial reporting.
V. Compliance with governmental laws, rules and regulations
Officers must comply with all applicable government laws, rules and regulations. Officers must acquire appropriate knowledge ofall legal requirements relating to their duties. Violation of laws rules and regulations may subject officers to individual criminal orcivil liability, as well as disciplinary action by the Company. It may also lead the Company to civil or criminal liability or loss ofbusiness.
VI. Violation of code
Officer’s job is to help Company to enforce this code. Violations should be reported to Audit Committee. Officer must cooperatewith internal or external investigations for any violations. The Company will take appropriate action against the officer whoseactions are found to violate the code or any other policy of the Company. Disciplinary action would include termination ofemployment. Where the Company suffers a loss it may purse its remedies against the individuals responsible.
VII. Waivers and amendments to the code
Company would review and update the policies and procedures. The code is subject to modification. Any amendment to the codeis subject to the approval of the Board of Directors and disclosed to all the officers and is pursuant to the applicable laws andregulations.
VIII. Acknowledgement
All employees shall declare that they have received and read the Company’s code and understand the standards and policiescontained in the code and shall agree to comply with the code.
If they have any questions concerning the meaning or application of the code the same be consulted to the Audit committee. Allquestions or reports will be confidential.
TCFC FINANCE LIMITED
AUDITORS’ REPORT
TO THE MEMBERS OF TCFC FINANCE LIMITED
We have audited the attached Balance Sheet of TCFC FINANCE LTD. (the ‘Company’) as at 31st March 2006, the Profit andLoss Account and also the Cash Flow Statement for the year ended on that date annexed thereto. These financial statementsare the responsibility of the company’s management. Our responsibility is to express an opinion on these financial statementsbased on our audit.
We conducted our audit in accordance with the auditing standards generally accepted in India. Those Standards require thatwe plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of materialmisstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financialstatements. An audit also includes assessing the accounting principles used and significant estimates made by management,as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis forour opinion.
As required by the Companies (Auditor’s Report) Order, 2003 as amended by the Companies (Auditor’s Report) (Amendment)Order, 2004 (together the ‘Order’) issued by the Central Government of India in terms of sub section (4A) of section 227 of theCompanies Act, 1956 (the ‘act’) and on the basis of such checks of the books and records of the Company as we consideredappropriate and according to the information and explanations given to us, we enclose in the Annexure a statement on thematters specified in paragraphs 4 and 5 of the said Order.
Further to our comments in the Annexure referred to above, we report that : We have obtained all the information and explanations, which to the best of our knowledge and belief were necessary forthe purposes of our audit; (ii) In our opinion, proper books of account, as required by law, have been kept by the company so far as appears from our (iii) The Balance Sheet, Profit and Loss Account and Cash Flow Statement dealt with by this report are in agreement with the (iv) In our opinion, the Balance Sheet, Profit and Loss Account and Cash Flow Statement dealt with by this report comply with the accounting standards referred to in sub section (3C) of section 211 of the Companies Act, 1956; (v) On the basis of written representations received from the directors, as on 31st March 2006 and taken on record by the Board of Directors, we report that none of the directors is disqualified as on 31st March 2006 from being appointed as adirector in terms of clause (g) of sub section (1) of section 274 of the Companies Act, 1956; (vi) In our opinion and to the best of our information and according to the explanations given to us, the said financial statements together with the notes thereon and attached thereto give the information required by the Companies Act,1956, in the manner so required and give a true and fair view in conformity with the accounting principles generallyaccepted in India: (a) in the case of the Balance Sheet, of the state of affairs of the company as at 31st March 2006; (b) in the case of the Profit and Loss Account, of the profit of the Company for the year ended on that date; and (c) in the case of the Cash Flow Statement, of the cash flows for the year ended on that date.
For M/s. Lakhani & Co.
(Parag Modi)
TCFC FINANCE LIMITED
ANNEXURE TO THE AUDITOR’S REPORT
[Referred to in paragraph 3 of our report of even date to the members of TCFC FINANCE LTD. on the financial statements for theyear ended 31st March, 2006] The company has maintained proper records The company has not taken any loan, secured or showing full particulars including quantitative unsecured from companies, firms or other parties details and situation of fixed assets.
covered in the register maintained under section301 of the Companies Act, 1956. Accordingly sub- According to the information and explanations clauses (e), (f), and (g) of clause 4(iii) of the Order given to us, all the assets have been physically verified, at intervals, by the management duringthe year, which in our opinion is reasonable, having In our opinion and according to the information and regard to the size of the company and the nature of explanations given to us, there are adequate internal its assets. No material discrepancies were noticed control system commensurate with the size of the Company and the nature of its business with regard topurchases of inventory and fixed assets and for sale of In our opinion and according to the information and inventory. The activities of the Company do not involve explanations given to us, the company has not sale of services. Further, on the basis of our examination disposed a substantial part of fixed assets during of the books and records of the Company, and according to the information and explanations given to us, we have The securities held as stock-in-trade and in custody neither come across nor have been informed of any of the company have been physically verified by instance of major weaknesses in the aforesaid internal the management at reasonable intervals.
Statements have been obtained on a regular basis In our opinion and according to the information and in respect of securities held with the custodian and explanations given to us, there are no contracts or arrangements referred to in the section 301 of the act The procedures of physical verification of during the year that need to be entered into the register inventories followed by the management are maintained under that section. Accordingly clause 4(v)(b) reasonable and adequate in relation to the size of the company and the nature of its business.
The Company has not accepted any deposits from public The company is maintaining proper records of within the meaning of the provisions of Sections 58A and inventory. No material discrepancies have been 58AA or any other relevant provisions of the act, and the noticed on verification between the physical stocks, stocks with the depository participants and the book In our opinion, the company has an internal audit system commensurate with its size and nature of its business.
The company has granted an unsecured loan, to a (viii) According to the information and explanations given to company covered in the register maintained under us, the Central Government has not prescribed the section 301 of the Companies Act, 1956. The maintenance of cost records under clause (d) of sub- maximum amount involved during the year was section (1) of section 209 of the Companies Act, 1956 in Rs. 3,85,00,000/- and the year end balance is Nil.
respect of services carried by the Company.
In our opinion, the rate of interest and other terms According to the information and explanations and conditions in respect of unsecured loans given to us and the records of the Company granted by the Company to a Company (referred examined by us, in our opinion, the Company is to in (a) above) is not prima facie prejudicial to the generally regular in depositing the undisputed statutory dues including provident fund, investor The company has received principal amount and education and protection fund, employee’s state insurance, income tax, sales tax, wealth tax, servicetax, custom duty, excise duty, cess and other material statutory dues as applicable, with the TCFC FINANCE LIMITED
appropriate authorities. Based on our audit According to the information and explanation given to procedure and according to the information and us, the company has not given any guarantee for loans explanations given to us, no undisputed dues taken by others from bank or financial institutions.
payable in respect of provident fund, investor Accordingly clause 4(xv) of the Order is not applicable.
education and protection fund, employee’s state (xvi) The company has not obtained any term loan during the insurance, income tax, sales tax, wealth tax, service said period. Accordingly clause 4(xvi) of the Order is not tax, customs duty, excise duty and cess were in arrears, as at 31st March, 2006 for a period of morethan six months from the date they became payable.
(xvii) According to the information and explanations given to us and on an overall examination of the balance sheet of According to the information and explanations the company, in our opinion, the company has not raised given to us, there are no dues in respect of income any funds on short term basis. Accordingly clause 4(xvii) tax, wealth tax, service tax, sales tax, customs duty, excise duty and cess which have not beendeposited on account of any dispute.
(xviii) According to the information and explanations given to us, the company has not made any preferential allotment The Company does not have any accumulated losses at of shares to parties and companies covered in the register the end of the financial year and has not incurred cash maintained under section 301 of the Act. Accordingly losses in the financial year and in the immediately clause 4(xviii) of the Order is not applicable.
(xix) The company has not issued any debentures.
The Company has not taken any loans from a financial Accordingly clause 4(xix) of the Order is not applicable.
institution, nor issued any debentures. However, theCompany has taken a hire purchase loan from a bank The company has not raised any money by public issue and in our opinion and according to the information and during the period. Accordingly clause 4(xx) of the Order explanations given to us, the company has not defaulted (xxi) During the course of our examination of the books of The Company has not granted loans and advances on account and records of the Company, carried out in the basis of security by way of pledge of shares, accordance with the generally accepted auditing debentures and other securities. Accordingly clause 4(xii) practices in India, and according to the information and explanations given us, we have neither come across anyinstance of material fraud on or by the Company, noticed (xiii) The Company is not a chit fund, nidhi or mutual fund or a or reported during the year, nor have we been informed society. Accordingly clause 4(xiii) of the Order is not (xiv) The Company has maintained proper records of For M/s. Lakhani & Co.
transactions and contracts in respect of trading in shares and other securities and that timely entry have beenmade therein. All shares and other securities have been (Parag Modi)
held by the Company in its own name, except those which are kept as margin with the brokers and as disclosed in TCFC FINANCE LIMITED
BALANCE SHEET AS AT MARCH 31, 2006
As at 31.03.2006
SOURCES OF FUNDS
APPLICATION OF FUNDS
For M/S LAKHANI & CO
Chartered Accountants
Davendra Ahuja
Venkatesh Kamath
(Parag Modi)
Ayan Chakraborty
TCFC FINANCE LIMITED
PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED MARCH 31, 2006
Year Ended
31.03.2006
(12 Months)
EXPENDITURE
Provision/Written off of Investments/Advances Transfer to:Proposed Dividend on Equity Shares Surplus balance carried to Profit and Loss Account Number of Shares used in computing earning per shareBasic For M/S LAKHANI & CO
Chartered Accountants
Davendra Ahuja
Venkatesh Kamath
(Parag Modi)
Ayan Chakraborty
TCFC FINANCE LIMITED
Schedules forming part of the Balance Sheet
As at 31.03.2006
Schedule ‘A’: Share Capital
Authorised
108,500,000.00
108,500,000.00
Issued, Subscribed & Paid-up
10,482,129 Equity Shares of Rs 10/- each fully paid up 104,821,290.00
104,821,290.00
Schedule ‘B’: Reserves & Surplus
Capital Reserve
Statutory Reserve as per section 45IC of RBI Act 1934 73,812,952.02
Add: Transfer from Profit and Loss Account 11,988,266.85
85,801,218.87
561,918,628.63
Add: Transfer from Profit and Loss Account 5,994,133.42
Less: Set off against Profit & Loss Account (per contra) 318,566,539.62
249,346,222.43
335,147,816.30
Schedule ‘C’: Secured Loans
Note: Hire Purchase Loan is secured by hypothecation of specific owned vehicles Schedule ‘D’: Fixed Assets
G R O S S B L O C K
D E P R E C I A T I O N
N E T B L O C K
31.03.2006 0 1 . 0 4 . 2 0 0 5
31.03.2006
31.03.2006 3 1 . 0 3 . 2 0 0 5
20,194,991.00 1,910,379.33
2,239,557.68
17,955,433.32 18,284,611.67
361,593.34
67,954.75
293,638.59
1,928,016.00
1,100,865.56
827,150.44
1,879,741.27
623,852.40
1,255,888.87 1,132,643.46
- 6,246,624.45
24,364,341.61 3,379,186.33 1,292,860.04
4,032,230.39
20,332,111.22 26,973,813.28
30,352,999.61 2,559,887.44
3,379,186.33
26,973,813.28
TCFC FINANCE LIMITED
Schedules forming part of the Account
Schedule ‘E’: Investments
(Rupees)
Value as on
31.03.2006
Long Term Investments
Aggregate Market Value of Quoted Investments is Rs 9,653,881/- (Previous Year: Rs 7,306,976/-) Less: Provision for Diminution in value of Investments ** As per the Schemes of arrangement with erstwhile 20th Century Finance Corporation Limited (TCFC) the Company hasreceived 533334 shares of TCFC Finance Ltd. which are held by a nominee of the company of Rs 10/- each fully paid up withthe beneficial interest vesting with the company.
TCFC FINANCE LIMITED
Schedules forming part of the Balance Sheet
As at 31.03.2006
Schedule ‘F’: Current Assets Loans & Advances
Current Assets
Sundry Debtors(Unsecured, considered good) Stock-in-trade (at lower of cost or market value) Sub-Total
355,750,020.64
363,242,666.02
Loans & Advances
446,191,146.43
377,333,421.64
*Note: There is no amount due and outstanding to be credited to Investor Education and Protection Fund.
Schedule ‘G’: Current Liabilities & Provisions
(a) Current Liabilities
Sub-Total
4,797,400.18
3,304,739.36
(b) Provisions
Sub-Total
25,296,957.97
17,347,828.40
30,094,358.15
20,652,567.76
TCFC FINANCE LIMITED
Schedules forming part of the Profit & Loss Account
Year Ended
31.03.2006
Schedule ‘H’: Other Income
Interest earned (Tax Deducted at Source Rs 3,01,219 /-) Income from Rent (Tax Deducted at Source Rs 4,82,952 /-) Schedule ‘I’: Interest & Bank charges
Schedule ‘J’: Cost of Sales
Schedule ‘K’: Administration & General Expenses
Contribution to Provident and other funds 11,978,210.31
6,813,826.49
TCFC FINANCE LIMITED
Schedules forming part of the Profit & Loss Account
Year Ended
31.03.2006
Schedule ‘L’: Non-Cash charges
SCHEDULE ‘M’ : NOTES FORMING PART OF THE ACCOUNTS
Of the Financial Statements for the year ended March 31, 2006 SIGNIFICANT ACCOUNTING POLICIES
The financial statements have been prepared on the historical cost basis and are in conformity with the statutoryprovisions and practices prevailing in the industry and are in accordance with generally accepted accounting principles.
Income and Expenses
The Company recognises income and expenditure on an accrual basis except as stated otherwise.
The Company accounts for derivative transactions in futures and options in accordance with the “GuidanceNote on Accounting for Equity Index and Equity Stock Futures and Options “ issued by the Institute of CharteredAccountants of India.
The provision for gratuity is made on the basis of full provision for those employees who have completed morethan 5 years and pro-rata for employees who have completed over two and half years of service.
Fixed Assets
In respect of fixed assets, the assets are valued as per Accounting Standard 10 prescribed by the Institute ofChartered Accountants of India.
The depreciation in respect of these assets is provided on a Straight Line Method (SLM) at the rates and in themanner specified in Schedule XIV to the Companies Act, 1956.
Stock-in-trade and Investments
The securities acquired with the intention of short-term holding and trading positions are considered as stock-in-trade and shown as current assets. Other securities acquired with the intention of long-term holdings areconsidered as ‘Investments’.
In respect of investments as well as stock-in-trade, brokerage and stampduty payable are considered to arriveat the cost.
The securities held as stock-in-trade under current assets are valued at cost or market, whichever is lower.
The provision for dimunition in the value of long-term quoted investments is made only if such a declineis other than temporary in the opinion of the management.
Unquoted investments have been valued at cost and provision for diminution in the value of investmentshas been made based on the guidelines prescribed by the Reserve Bank of India or based on thejudgement of the management, whichever provision is higher.
Provision for current tax is made, based on the tax payable under the Income Tax Act, 1961.
Deferred tax on timing differences between taxable income and accounting income is accounted for, using thetax rates and the tax laws enacted or substantially enacted as on the balance sheet date. Deferred tax assetsare recognized only to the extent that there is a reasonable certainty of realization.
TCFC FINANCE LIMITED
Miscellaneous Expenditure is amortised over a period of ten years.
Provision for doubtful Loans and Advances The policy of provisioning for Non Performing Loans and Advances has been decided by the management consideringPrudential Norms prescribed by the Reserve Bank of India.
Quantitative details of Securities held as Stock-in trade:
Opening Stock
Purchases
Current Year
Current Year
Rs. in Lacs
N o s . Rs. in Lacs
22106566
86851294
10263.80
Closing Stock
Current Year
Current Year
Rs. in Lacs
N o s . Rs. in Lacs
93720956
10808.81
15236904
Closing Stock
Quoted Shares
Name of the Co.
No. of Shares
Name of the Co.
No. of Shares
market value
market value
whichever
whichever
is lower)
is lower)
(Rs. in lacs)
(Rs. in lacs)
Note : Aggregate market value of quoted shares is Rs. 1838.79 lacs against cost of Rs. 1571.59 lacs.
TCFC FINANCE LIMITED
Units of Mutual Funds (Growth Scheme)
Name of the
No. of Units
Name of the
No. of Units
Mutual fund
(Rs. in lacs)
Mutual fund
(Rs. in lacs)
Note : Aggregate market value of units of Mutual Fund schemes is Rs. 2223.03 lacs.
Details of futures contracts outstanding as at March 31, 2006
Name of Equity Futures
No of Contracts
Underlying No of Shares
In view of unabsorbed losses as per the Income Tax Act, Provision for Tax has been computed on the basis of book profits inaccordance with section 115JB of the Income Tax Act, 1961.
No Deferred tax asset has been recognised considering the uncertainity of sufficient future taxable income.
31.03.2006
31.03.2005
Associates and Joint Venture
Key Management Personnel
Significant Influence
TCFC FINANCE LIMITED
Associates &
Key managerial
Significant
Joint Venture
Personnel
Influence
*Figures given in italics are previous year figures There are no creditors in the nature of small scale industrial undertakings existing as on the balance sheet date.
Vehicles forms part of fixed assets and includes vehicle purchased, costing Rs.Nil (Previous year Rs 63.36 Lacs) under hirepurchase arrangement. The carrying amount of the said vehicle in the Balance sheet as at 31.03.2006 is Rs. Nil (PreviousYear Rs 62.46 Lacs). The total minimum lease payments (MLP) in respect thereof and the present value of the future leasepayments, discounted at the interest rates implicit in the lease are: Particulars
March 31, 2006
March 31,2005
Particulars
Total MLP(Rs.)
Principal(Rs.)
63,17,360
Foreign Exchange outgo on account of travelling expenses is Rs 8.29 lacs (Previous Year: Rs Nil) (10) The Company has only one business i.e. Investments, hence “Segment Reporting” as defined in Accounting Standard 17 is TCFC FINANCE LIMITED
Schedule to the
Balance Sheet for the year ended 31st March 2006
(as required in terms of Paragraph 9BB of Non-Banking Financial Companies Prudential Norms (Reserve Bank) Directions, 1998 Particulars
Liabilities :
Loans and advances availed by the NBFCs inclusive of interest
accrued thereon but not paid:
(other than falling within the meaning of publicdeposits*) Break-up of (1)(f) above (Outstanding public deposits inclusive of
interest accrued thereon but not paid):
In the form of partly secured debentures i.e. debentures where there isa shortfall in the value of security Break-up of Loans and Advances including bills receivables [other than
those included in (4) below] :
Break up of Leased Assets and stock on hire and hypothecation loans
counting towards EL/HP activities
Lease assets including lease rentals under sundry debtors : Stock on hire including hire charges under sundry debtors: Hypothecation loans counting towards EL/HP activities TCFC FINANCE LIMITED
Break-up of Investments :
TCFC FINANCE LIMITED
Borrower group-wise classification of all leased assets, stock-on-hire and loans and advances :
Investor group-wise classification of all investments (current and long term) in shares and securities (both quoted
and unquoted):
Other information
Particulars
TCFC FINANCE LIMITED
Particulars
31.3.2006
31.3.2005
(12) Previous year’s figures have been regrouped / rearranged wherever necessary.
For M/S LAKHANI & CO
Chartered Accountants
Davendra Ahuja
Venkatesh Kamath
(Parag Modi)
Ayan Chakraborty
TCFC FINANCE LIMITED
CASH FLOW STATEMENT FOR THE PERIOD FROM 01.04.2005 TO 31.03.2006
31-03-2006
(Amount in Rs.)
Net Profit for the year
59,941,334
Add : Adjustments for
Dividend Income
(2,673,890)
(1,426,447)
(2,152,200)
1,292,860
(1,051,250)
5,184,745
(4,155,250)
Increase / (Decrease) in Current Liabilities 9,441,790
(8,575,951)
CASH FLOW FROM OPERATING ACTIVITIES - I
55,971,016
CASH FLOW FROM INVESTING ACTIVITIES
Rent from property
2,152,200
(Increase) / Decrease in Other Current Assets(Purchase) / Sale of Fixed Assets 5,203,567
12,370,000
(Increase) / Decrease in Loans & Advances (76,350,370)
1,426,447
1,051,250
2,673,890
NET CASH FROM INVESTING ACTIVITIES - II
(51,473,016)
CASH FLOW FROM FINANCING ACTIVITIES
Interest expense
(5,184,745)
(14,342,698)
(5,194,404)
NET CASH FROM FINANCING ACTIVITIES - III
(24,721,847)
NET INCREASE / (DECREASE) IN CASH ( I + II + III)
(20,223,847)
OPENING BALANCE OF CASH & CASH EQUIVALENTS
21,570,898
CLOSING BALANCE OF CASH & CASH EQUIVALENTS
1,347,051
INCREASE IN CASH & CASH EQUIVALENTS
(20,223,847)
Cash and cash equivalents consists of cash on hand and balances with banks.
Figures in brackets represents outflow of cash.
Figures for the last year have been regrouped, wherever considered necessary.
For M/S LAKHANI & CO
Chartered Accountants
Davendra Ahuja
Venkatesh Kamath
(Parag Modi)
Ayan Chakraborty
TCFC FINANCE LIMITED
BALANCE SHEET ABSTRACT AND COMPANY’S GENERAL BUSINESS PROFILE AS PER SCHEDULE VI, PART (IV) OF
THE COMPANIES ACT, 1956
CAPITAL RAISED DURING THE YEAR (AMOUNT RS. IN THOUSANDS) POSITION OF MOBILISATION AND DEPLOYMENT OF FUNDS (AMOUNT RS. IN THOUSANDS) IV. PERFORMANCE OF COMPANY (AMOUNT RS. IN THOUSANDS) GENERIC NAMES OF PRINCIPAL PRODUCT/SERVICES OF THE COMPANY (as per monetary terms) TCFC FINANCE LIMITED
TCFC FINANCE LIMITED
TCFC FINANCE LIMITED
Registered Office : 501-502, Raheja Chambers, Free Press Journal Marg, Nariman Point, Mumbai 400 021
ATTENDANCE SLIP
15th Annual General Meeting
NAME AND ADDRESS OF THE REGISTERED SHAREHOLDER * Applicable if shares are held in electronic form.
Name of the attending member (in Block Letters) : ______________________________________________________________________ Name of Proxy (in Block Letters to be filled in by the ___________________________________________________________________proxy attending instead of the Member) No. of Shares held : ______________________________________ I hereby record my presence at the 15th Annual General Meeting on Thursday, August 17, 2006 at 3.30 p.m.
__________________________________________ ____________________________________________ Member’s Signature
Proxy’s Signature
Note : Shareholders/proxies are requested to bring the attendance slip with them, Duplicate slips will not be issued and handed overat the entrance of the Meeting Venue.
TCFC FINANCE LIMITED
Registered Office : 501-502, Raheja Chambers, Free Press Journal Marg, Nariman Point, Mumbai 400 021
PROXY FORM
I/We ______________________________________________________ of _________________________________ being a Member/ Members of the abovementioned Company hereby appoint _______________________________________ of ________________________ or failing him _____________________________________________ of _________________________________________________ asmy/our proxy to attend and vote for me/us on my/our behalf at the 15th Annual General Meeting of the Company to be held on Thursday,August 17, 2006 at 3.30 p.m. at Ashoka Hall, Arcadia, NCPA Marg, Nariman Point, Mumbai 400 021 and at any adjournment thereof.
Signed of this _______________ day of __________________________________ 2006.
* Applicable if shares are held in electronic form.
Note : The Proxy Form duly completed must be returned so as to reach the Registered Office of the Company not less than 48 hours before 16 the time for holding the aforesaid meeting.
TCFC FINANCE LIMITED
BOOK-POST
TCFC FINANCE LIMITED
501-502, Raheja Chambers
Free Press Journal Marg
Nariman Point
Mumbai 400 021
Orient Press Limited

Source: http://www.tcfcfinance.com/AnnualReport0506.pdf