REPORT ON CORPORATE GOVERNANCE
Corporate Governance is the application of best management practices, compliances of laws, rules, regulations and adherence to standards to achieve the objects of the Company, enhancing shareholder/investor value and discharging of social responsibility. The Company does not view Corporate Governance principles as set of binding obligations, but believes in using it as a framework to be followed in spirit.
Corporate governance is based on principles such as conducting the business with all integrity and fairness, being transparent with regard to all transactions, making all the necessary disclosures and decisions, complying with all the laws of the land, accountability and responsibility towards the stakeholders and commitment to conducting business in an ethical manner.
The Companies Act, 2013 and SEBI Listing Regulations have strengthened the governance regime in the country. Your Company is in compliance with the governance requirements provided under the new law and listing regulations
TCI Finance Limited (TCIF or the ‘Company’) believes that timely disclosures, transparent accounting policies and a strong and independent Board go a long way in maintaining good corporate governance, preserving shareholders’ trust and maximizing long-term corporate value.
The Company’s philosophy on Corporate Governance focuses on the attainment of the highest standards of transparency, accountability, ethics and equity with management flexibility, empowerment and responsiveness in the interest of shareholders, customers, employees, business associates and the society at large.
Board of Directors
The Board of Directors at present comprises of 6 directors out of which 2 are Independent Directors. The Board’s actions and decisions are aligned with the Company’s best interests. It is committed to the goal of sustainably elevating the Company’s value creation. The Board critically evaluates the Company’s strategic direction, management policies and their effectiveness.
The Chairman being non-executive Director, one third of the strength of the Board comprises of the Independent Directors.
The composition of the Board is in conformity with the SEBI (LODR) Regulations, 2015.
The number of other directorships, committee chairmanships/memberships held in other companies by each of the Directors is tabled below:
The composition of Board/Committees is available on the website of the Company i.e. http://www.tcifl.in
Each Director informs the Company on an annual basis about the Board and Board Committee positions he occupies in other companies including Chairmanships and notifies changes periodically and regularly during the term of their directorship in the Company. None of the Directors on the Board are Members of more than ten Committees or Chairman of more than five Committees across all the public companies in which they are Directors.
Meetings of the Board
The Board of Directors must meet at least four times a year, with a maximum time gap of 120 days between two Board meetings. During the financial year 2015-16, the Board met Four times: April 29, 2015, July 28, 2015, November 3, 2015 and January 21, 2016. The necessary quorum was present at all the meetings The below table gives the composition of the Board, their attendance at the board meetings held during the year and at the previous Annual General Meeting held on July 28, 2015 and also the shareholding.
The Companies Act, 2013 read with relevant Rules made there under, facilitates the participation of the Director in the Board/ Committee meetings through video conferencing or other audio mode. However none of the Directors have availed such a facility.
Information given to the Board:
The Company provides the following information to the Board and the Board Committees. Such information is submitted either as part of the agenda papers in advance of the meetings or by way of presentations and discussion materials during the meetings.
• Inter corporate Loans & Deposits
• Quarterly, Half yearly and Annual results of the Company and its subsidiaries
• Detailed presentations on the business performance of the Company.
• Minutes of meetings of the Audit Committee and other Committees
• Statutory payment and related party transaction
• Internal Audit Report
• Subsidiary companies minutes, financial statements and significant investments
Declaration by Independent Directors
The independent directors of the Company have submitted the declaration satisfying all criteria of Independent Director under the Companies Act, 2013 and SEBI Regulation.
During the year 2015-16, information as mentioned in Schedule II Part A of the SEBI Listing Regulations, has been placed before the Board for its consideration.
The terms and conditions of appointment of the Independent Directors are disclosed on the website of the Company.
Disclosure of relationships between directors inter-se
None of the above Directors are related to each other.
Familiarisation programmes to Independent directors
The web link where details of familiarisation programmes imparted to Independent directors as disclosed in the website of the Company is: http://www.tcifl.in/pdf/ProgrammesforIDs21012016.pdf
Separate meetings of the Independent Directors
During the year under review, the Independent Directors met on January 21, 2016, inter alia, to discuss:
• Evaluation of the performance of Non-Independent Directors and the Board of Directors as a whole;
• Evaluation of the Performance of the chairman of the company, taking into account the views of the Executive and Non-Executive Directors.
• Evaluation of the quality, content and timelines of flow of information between the Management and the Board that is necessary for the Board to effectively and reasonably perform its duties.
All the Independent Directors were present at the Meeting.
Committees of the Board
The Board Committees focus on specific areas and make informed decisions within the authority delegated. Each such Committee is guided by its Charter, which defines the composition, scope and powers. The Committees also make specific recommendations to the Board on various matters whenever required. All observations, recommendations and decisions of the Committees are placed before the Board for information or for approval.
The Company has five Board-level Committees, namely:
1. Audit Committee
2. Nomination & Remuneration Committee
3. Stakeholders Relationship Committee
4. Corporate Social Responsibility Committee
5. Credit Investment Committee
The management is responsible for the Company’s internal controls and the financial reporting process while the statutory auditors are responsible for performing independent audits of the Company’s financial statements in accordance with generally accepted auditing practices and for issuing reports based on such audits. The Board of Directors has constituted and entrusted the Audit Committee with the responsibility to supervise these processes and thus ensure accurate and timely disclosures that maintain the transparency, integrity and quality of financial control and reporting.
The constitution of the Audit Committee also meets with the requirements of Section 177 of the Companies Act, 2013 and SEBI Regulations/Listing regulations with the Stock Exchanges.
The primary responsibilities of the Audit Committee are to:
1. Supervise the financial reporting process
2. Review the quarterly and annual financial results before placing them to the Board along with related disclosures and filing requirements
3. Review the plan, scope and performance of the internal audit function
4. Discuss with management, the Company’s major policies with respect to risk assessment and risk management.
5. Hold discussions with statutory auditors on the nature and scope of audits and any views that they have about the financial control and reporting processes
6. Ensure compliance with accounting standards and with listing requirements with respect to the financial statements
7. Recommend the appointment and removal of statutory auditors and their fees
8. Review related party transactions
All members of the Audit Committee are financially literate and bring in expertise in the fields of finance, economics, strategy and management. The Audit Committee invites such of the executives, as it considers appropriate Statutory Auditors and Internal Auditors to be present at its meetings. The Company Secretary acts as the Secretary to the Audit Committee.
The Chairman of the Audit Committee was present at Annual General Meeting to answer shareholder queries. The Company Secretary acts as the secretary to the committee.
During the financial year 2015-16, the Audit Committee met four times viz., on April 29, 2015, July 28, 2015, November 3, 2015 and January 21, 2016. The below table gives the composition and attendance record of the Audit Committee.
Nomination & Remuneration Committee:
The Board has constituted Nomination & Remuneration Committee consisting of 2 Independent Directors. The terms of reference of the Committee cover evaluation of compensation and benefits for Executive Director(s), Non-Executive Director(s), KMP, framing of policies and looking after the issues relating to major HR policies.
Performance evaluation criteria of Independent Directors
The performance evaluation criteria of Independent Directors forms part of Directors report.
The Nomination and Remuneration (N&R) Committee has adopted a policy which, inter alia, deals with the manner of selection of Board of Directors and CEO & Managing Director and their remuneration.
1. Criteria of Selection of Non-Executive Directors
a. The Non-Executive Directors shall be of high integrity with relevant expertise and experience so as to have a diverse Board with Directors having expertise in the fields of manufacturing, marketing, finance, taxation, law, governance and general management.
b. In case of appointment of Independent Directors, the N&R Committee shall satisfy itself with regard to the criteria of independence of the Directors vis-à-vis the Company so as to enable the Board to discharge its function and duties effectively.
c. The N&R Committee shall ensure that the candidate identified for appointment as a Director is not disqualified for appointment under Section 164 of the Companies Act, 2013.
d. The N&R Committee shall consider the following attributes/criteria, whilst recommending to the Board the candidature for appointment as Director.
a) Qualification, expertise and experience of the Directors in their respective fields;
b) Personal, Professional or business standing;
c) Diversity of the Board.
e. In case of re-appointment of Non-Executive Directors, the Board shall take into consideration the performance evaluation of the Director and his engagement level.
The Non-Executive Directors shall be entitled to receive remuneration by way of sitting fees, reimbursement of expenses for participation in the Board / Committee., of such sum as may be approved by the Board of Directors within the overall limits prescribed under the Companies Act, 2013 and The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014.
3. Criteria for selection/appointment of CEO & Managing Director
For the purpose of selection of the CEO & MD, the N&R Committee shall identify persons of integrity who possess relevant expertise, experience and leadership qualities required for the position and shall take into consideration recommendation, if any, received from any member of the Board.
The Committee will also ensure that the incumbent fulfils such other criteria with regard to age and other qualifications as laid down under the Companies Act, 2013 or other applicable laws.
4. Remuneration for the CEO & Managing Director
i. At the time of appointment or re-appointment, the CEO & Managing Director shall be paid such remuneration as may be mutually agreed between the Company (which includes the N&R Committee and the Board of Directors) and the CEO & Managing Director within the overall limits prescribed under the Companies Act, 2013.
ii. The remuneration shall be subject to the approval of the Members of the Company in General Meeting.
iii. The remuneration of the CEO & Managing Director is broadly divided into fixed and variable components. The fixed component comprises salary, allowances, perquisites, amenities and retrial benefits. The variable component comprises performance bonus.
iv. In determining the remuneration (including the fixed increment and performance bonus) the N&R Committee shall ensure / consider the following:
a) the relationship of remuneration and performance benchmarks is clear;
b) balance between fixed and incentive pay reflecting short and long term performance objectives, appropriate to the working of the Company and its goals;
c) responsibility required to be shouldered by the CEO & Managing Director, the industry benchmarks and the current trends;
d) the Company’s performance vis-à-vis the annual budget achievement and individual performance vis-à-vis the KRAs / KPIs.
5. Remuneration Policy for the Senior Management Employees
I. In determining the remuneration of the Senior Management Employees (i.e. KMPs and Executive Committee Members) the N&R Committee shall ensure / consider the following:
i. the relationship of remuneration and performance benchmark is clear;
ii. the balance between fixed and incentive pay reflecting short and long term performance objectives, appropriate to the working of the Company and its goals;
iii. the remuneration is divided into two components viz. fixed component comprising salaries, perquisites and retirement benefits and a variable component comprising performance bonus;
iv. the remuneration including annual increment and performance bonus is decided based on the criticality of the roles and responsibilities, the Company’s performance vis-à-vis the annual budget achievement, individuals performance vis-à-vis KRAs / KPIs, industry benchmark and current compensation trends in the market.
In accordance with HR recommendation N&R Committee will carry out the individual performance review based on the standard appraisal matrix and shall take into account the appraisal score card and other factors mentioned herein-above, whilst recommending the annual increment and performance incentive to the N&R Committee for its review and approval.
Non-Executive Directors: -
The Sitting fee and commission payable to the Non-Executive Directors during the year under review is in conformity with the applicable provisions of the Companies Act, 2013, and duly considered and approved by the Board and the shareholders.
Stakeholders Relationship Committee (Investors' Grievance Committee):
The Stakeholders Relationship Committee is empowered to perform the functions of the Board relating to handling of stakeholders’ queries and grievances. It primarily focuses on:
1. Review of investor complaints and their redressal
2. Review of queries received from investors
3. Review the performance of the share transfer agent
4. Review of corporate actions related to shareholder issues
5. Review of stakeholders’ queries & grievances
The Committee consists of two Directors, headed by Mr. S M Jalan, Chairman of the Committee, who is an Independent Director. During the financial year 2015-16, the Investors’ Grievance Committee met four times viz., on April 29, 2015, July 28, 2015, November 3, 2015 and January 21, 2015 and all the members were present for the meeting.
Ms.Lakshmi Sharma, Company Secretary of the Company, officiates as secretary of the Committee and is also designated as Compliance Officer in terms of the Listing Agreement with the Stock Exchanges.
In order to expedite the process of share transfers, the Board has delegated the powers to officers of the Company.
The delegated authority attends to share transfer formalities at least once a fortnight, as required.
An analysis of the investor complaints received and redressed during the financial year 2015-16 is given below:
Name, designation and address of Compliance Officer:
Ms. Lakshmi Sharma
Investor Relations & Compliance Officer
Address for correspondence
Regd. & Corporate Office:
Plot no.20, Survey no.12, 4th Floor, Kothaguda, Kondapur, Hyderabad – 500 084
Tel: +91 040 7120 4284 Fax: +91 040 2311 2316
The Committee comprises of the following directors as members viz.,
Mr R S Agarwala Chairman
Mr. S M Jalan Member
Terms of reference
The committee was constituted to look into the terms, conditions and other details of the loans rendered to the other companies.
Corporate Social Responsibility
The new Act has mandated the Corporate Social Responsibility to the applicable Companies. To be in conformity with the new Companies Act, 2013 and as a step towards the transformation, a CSR policy is framed.
During the financial year the committee met once i.e., on January 21, 2016.
The below table gives the composition and attendance record of the Corporate Social Responsibility Committee:
Code of Conduct
The Board of Directors of the Company has laid down a code of conduct for all Board Members and designated senior management of the Company. The Code of Conduct has also incorporated the duties of Independent Directors as laid down in the Companies Act; 2013. The code of conduct is available on the website of the Company (www.tcifl.in). All Board members and senior management personnel have affirmed compliance with the code of conduct. A declaration signed by the Manager to this effect is enclosed at the end of this report.
i. The Reserve Bank of India vide its circular dated September, 2008 issued guidelines for all NBFCs to adopt Fair Practice Code. Your Company adopted the same and is available on the website of the Company (www.tcifl.in).
Further, as per recent circular issued by RBI to incorporate suitable amendments in Fair Practice Code, the Board of Directors in their meeting adopted the amended Fair Practice Code and the same is available on the website of the Company.
During the yearand last year the Company has not transacted any business through postal ballot. Further, as on date of the report, no special resolution is proposed to be conducted through postal ballot.
Means of Communication Results
The quarterly and half yearly un-audited and annual results were published in a National level English newspaper(s) as well as regional language newspaper circulating in the state of Telangana. The results are also displayed on the Company's website (www.tcifl.in).
News releases and presentation to Institutional Investors: Nil
NSE Electronic Application Processing System (NEAPS):
The NEAPS is a web-based application designed by NSE for corporates. All periodical compliance filings like shareholding pattern, corporate governance report, media releases, among others are filed electronically on NEAPS.
BSE Corporate Compliance & Listing Centre (the ’Listing Centre‘):
BSE’s Listing Centre is a web-based application designed for corporates. All periodical compliance filings like shareholding pattern, corporate governance report, media releases, among others are also filed electronically on the Listing Centre.
Pursuant to the requirements of the Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, company is providing e-voting facility to its shareholders, in respect of all shareholders’ resolutions, to be passed at the General Meetings.
Additional Shareholders’ Information
Annual General Meeting:
Date: August 5, 2016
Time: 11.00 a.m
Venue: Plot no.20, Survey no.12, Near Rainbow Children Hospital, Kothaguda, Kondapur, Hyderabad-500084
Tentative calendar for declaration of financial results in FY 2016-17
Results for the quarter ended June 30, 2015 July /on or before 14th August, 2016
Results for the quarter ended September 30, 2015 October /on or before 14th November, 2016
Results for the quarter ended December 31, 2015 January / on or before 14th February, 2017
Results for the year ended March 31, 2016 April / on or before 30th May, 2017
Book Closure dates:
The dates for book closure are from July 29, 2016 to August 5, 2016 (both days inclusive).
Listing on Stock Exchanges
The Company's shares are listed on BSE Limited, Mumbai and the National Stock Exchange of India Limited, Mumbai.
The listing fee for the year 2015-16 has been paid to all the above stock exchanges.
a) Trading scrip code on Bombay Stock Exchange : 501242
b) Trading scrip code on National Stock Exchange : TCIFINANCE
International Securities Identification Number (ISIN):
ISIN is a unique identification number of traded scrip. The Company’s’ ISIN for equity shares is INE 911B01018.
Share Transfer System
All queries and requests relating to share/debenture transfers/transmissions may be addressed to our Registrar and Transfer Agent:
Karvy Computershare Private Limited
(Unit: TCI Finance Limited)
Karvy Computershare Private Limited
Karvy Selenium Tower B, Plot 31-32, Gachibowli Financial District, Nanakramguda, Hyderabad – 500 032
Tel. No: 040 44655000-152 E-mail: firstname.lastname@example.org
Share transfers, if documents are found to be in order, are registered and returned in the normal course within two weeks from the date of receipt of the documents.
Dematerialization of Shares
The Company’s scrip forms part of the compulsory dematerialization segment for all investors with effect from August 28, 2000. To facilitate easy access of the dematerialized system to the investors, the Company has signed up with both the depositories namely the National Securities Depository Limited (NSDL) and the Central Depository Services (India) Limited (CDSL)and has established connectivity with the depositories through its Registrar and Transfer Agent, Karvy Computershare Private Limited.
91.24% of the total shares have been dematerialized upto March 31, 2016. Dematerialization of shares is done through Karvy Computershare Private Limited and on an average the dematerialization process is completed within 7 days from the date of receipt of a valid dematerialization request along with the relevant documents.
As stipulated by SEBI, a Qualified Practicing Company Secretary carries out Reconciliation of Share Capital Audit to reconcile the total admitted capital with National Securities Depository Limited (NSDL) and Central Depository Services (India) Limited (CDSL) and the total issued and listed capital. This audit is carried out every quarter and the report thereon is submitted to the Stock Exchanges. The Audit confirms that the total Listed and Paid-up capital is in agreement with the aggregate of the total number of shares in dematerialized form and in physical form.
Outstanding GDRs / ADRs / Warrants or any convertible instruments, conversion date and likely impact on equity-
The Company is in the process of sending reminders to the shareholders whose shares were lying with the Company unclaimed/undelivered. These will be transferred to the Demat Suspense Account /unclaimed suspense account as required in accordance with the procedural requirements of the SEBI (LODR) Regulations, 2015.
For queries relating to shares:
For queries relating to Financial Statements and other contents of Annual Report:
Karvy Computershare Pvt. Ltd.
(Unit TCI Finance Limited)
Karvy Selenium Tower B Plot 31-32, Gachibowli Financial District, Nanakramguda Hyderabad – 500 032
Tel: +91 040 4465 5000- 152 Fax: +91 040 4465 5024 E-mail: email@example.com
TCI Finance Limited
Plot no.20, Survey no.12, 4th Floor, Kothaguda, Kondapur Hyderabad – 500 084.
Tel: +91 040 7120 4284 Fax: +91 040 2311 2316 Email: firstname.lastname@example.org
i) During the financial year under review, there were no materially significant related partÿ transactions made by the company of material nature, with its promoters, the directors or the management, their subsidiaries or relatives, etc. that may have potentially conflict with the interest of the Company at large. Disclosures regarding related party transaction are disclosed in Note No. 25.2 of notes to accounts published elsewhere in this Annual Report.
ii) There are no instances of non-compliance by the Company, penalties, and strictures imposed on the company by the Stock Exchanges or SEBI, or any statuary authority, on any matter related to capital markets, during the last three years
(iíí) The Company has complied with all mandatory requirements of SEBI LODR Regulations, 2015.
(ív) The Company is preparing its financial statements in line with the accounting standards issued by the Institute of Chartered Accountants of India and the company has not raised any fresh funds from the public or through Right or Preferential Issue.
The Company has put in place a mechanism of reporting illegal or unethical behaviour. Employees are free to report violations of laws, rules, regulations or unethical conduct to their immediate supervisor/notified persons. The reports received from any employee will be reviewed by the audit committee A Policy of vigil Mechanism is available on the website of the Company http://www.tcifl.in/pdf/VigilMechanismPolicy.pdf The Directors and senior management are to maintain confidentiality of such reporting and ensure that the whistle blowers are not subjected to any discriminatory practice.
The Company affirms that no personnel have been denied access to the audit committee during the financial year 2015- 16.
Disclosure of commodity price risks and commodity hedging activities:
CEO and CFO Certification:
The Chief Executive Officer and the Chief Financial Officer of the Company give certification on financial reporting and internal controls to the Board as required under regulation 17(8) of SEBI LODR Regulations, 2015.
Code of Conduct for prohibition of Insider trading
Your company had adopted a Code of conduct as per SEBI (Prohibition of Insider Trading) Regulations, 2015 as amended from time to time. All Directors, Designated Employees who could have access to the Unpublished Price Sensitive Information of the Company are governed by this Code. During the year under review, the Company had made due compliance with SEBI (Prohibition of Insider trade) Regulations, 2015.
The details of Risk Management as practiced by the company are provided as part of Management Discussion and Analysis Report which forms part of this Annual Report.
Details of compliance with mandatory requirements
The Company has complied with all mandatory requirements specified in regulation 17 to 27 and clause(b) to (i) of sub regulation (2) of regulation 46 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.
Company has also ensured implementation of non mandatory items such as :
• Separate posts of Chairman and Managing Director/CEO and reimbursement of expenses in the performance of duties.
• Unmodified audit opinion/ reporting.
INTENTIONALLY LEFT BLANK
• The Internal auditor reports directly to the Audit Committee
Details of the shareholders’ rights in this regard are given in the section ‘General Shareholder information’.
Observance of the Secretarial Standards issued by the Institute of Company Secretaries of India.
The Institute of Company Secretaries of India (ICSI), one of the India’s premier professional bodies has issued Secretarial Standards on important aspects like Board Meetings, and General Meetings under series SS-1 and SS-2 which came into force from 1st July, 2015 upon endorsement of the same by Ministry of Corporate Affairs by notification and your company adheres to these standards where ever applicable. The other standards like , Maintenance of Registers an Records, Transmission of Shares, Passing of resolutions by Circulation, Affixing of Common Seal and Board’s report which are as on date of report Recommendatory in nature are also adhered to voluntarily.