DIRECTORS' REPORT TO, THE MEMBERS Your Directors are pleased to present their Twentieth Report together with the audited accounts of your Company for the Financial Year ended 31st March, 2015. Performance Review The highlights of the financial performance of the Company per Share for the year stood at Rs. 10.5. during Financial Year ended 31st March, 2015 are as under: On Consolidated Basis, revenues increased by 8.5% to On Standalone Basis, revenues grew by 8.7% to Rs. 2,2091.3 Mn Rs. 24,257.8 Mn while Profit before tax increased by 15.1% while profit before tax increased by 22.0% to Rs. 1,011.9 Mn. to Rs. 1,142.1 Mn. Profit after tax for the year grew by 13.7 % to The consolidated financial statements of your Company are prepared in compliance with the Accounting Standards and Listing Agreement as prescribed by the SEBI and include financial information of its subsidiaries, joint venture companies & associates. Dividend Your Directors are delighted to recommend for approval of the shareholders final dividend of Rs. 0.90 per share @45% for the year ended 31st March, 2015. This is in addition to the Interim Dividend of Rs. 0.60 per equity share @30% declared by the Board of Directors on 29th January, 2015 & paid on 5th February, 2015. Thus, the total dividend for the year ended 31st March, 2015 would accordingly be Rs. 1.50 per equity shares of Rs. 2/- each @75% (Previous year Rs. 1.30 per share @65%). The final dividend, subject to the approval of Members at the Annual General Meeting, will be paid to the Members whose names appear in the Register of Members, as on the date of Book closure, i.e. from Saturday, the 25th July, 2015 to Saturday, 1st August, 2015 (inclusive of both dates). Transfer of Unclaimed Dividend to IEPF As per Section 205C of the Companies Act, 1956, any amount in the unpaid dividend account of the Company, which has remained unclaimed and unpaid for a period of seven years from the date they become due for payment, needs to be transferred to 'Investor Education and Protection Fund' (IEPF) established by the Central Government. Transfer to Reserves The Board proposes to transfer Rs. 450 Mn to the General Reserve out of the amount available for distribution. Subsidiaries, Joint Ventures & Associate Companies As on 31st March, 2015, your Company has 17 subsidiaries & Joint ventures, out of which 03 are India based & rest are situated overseas. During the year, Transport Corporation of India (Mauritius), the wholly owned subsidiary of the Company was liquidated. Shareholders interested in obtaining a copy of the audited annual accounts of the above subsidiaries and joint ventures of the Company may write to the Company Secretary. All of the subsidiaries, associates & joint ventures are involved the business of transportation, freight or logistics. A report on the performance and financial position of each of the subsidiaries, associates and joint venture companies as per the Companies Act, 2013 is provided in the consolidated financial statement and hence not repeated here for the sake of brevity. The Policy for determining material subsidiaries as approved by the Board of Directors may be accessed on the Company's website at the link <http://www.tcil.com/tcil/pdf/Material_Subsidiary_Policy-> TCI.pdf Abridged Annual Accounts Having regard to the provisions of the first proviso to Section 136(1) of the Act, the abridged Standalone and Consolidated annual report is being sent to the members of the Company. The said information is available for inspection at the Registered Office of the Company during working hours and any member interested in obtaining such information may write to the Company Secretary and the same will be furnished on request. The full Annual Report including the aforesaid information is being sent electronically to all those members who have registered their email addresses and is also available on the Company's website www.tcil.com Deposits During FY 2014-15, the Company has repaid fixed deposit aggregating Rs. 2.68 Mn of 08 deposit holders and has not accepted any fresh public deposits during year. Hence, as on 31st March, 2015, the Company has no fixed deposits. Conservation of energy, technology absorption and foreign exchange earnings and outgo The particulars relating to energy conservation, technology absorption, foreign exchange earnings and outgo, as required to be disclosed under section 134(3) (m) of the Companies Act, 2013 read with Rule 8 of the Companies (Accounts) Rules, 2014 is annexed herewith as Annexure A. Changes in Share Capital Employee Stock Options During the year, your Company allotted 325,320 Equity Shares upon exercise of stock options by eligible employees under employee stock option scheme 2006 Part-IV, V & VI. On the allotment of Equity Shares, the issued, subscribed and paid up Share Capital of the Company stood increased from Rs. 145,896,360 to Rs. 146,547,000. Further, on 24th May, 2014, the Compensation/Nomination & Remuneration Committee granted 530,000 options to eligible employees under Employee Stock Option Scheme-Part VII. The disclosures as required under the Securities and Exchange Board of India (Share Based Employee Benefits) Regulations 2014 & SEBI (Employee stock option scheme & Employee stock purchase scheme) Guidelines, 1999 are set out in the Annexure B of the Report. Preferential Issue During the year, your Company issued 2,400,000 Equity Shares to IDFC Premier Equity Fund on preferential basis. The Issue was approved by the Shareholders in the Extraordinary General Meeting of the Company held on 29th January, 2015. After the preferential issue, the paid up capital increased from Rs. 146,547,000 to Rs. 151,347,000. Extract of Annual Report The Extract of Annual Return is set out in the Annexure C of this Report. Directors and Key Managerial Personnel Changes in Directors & Key Managerial Personnel During the year under review, there was no new appointment or resignation from the Board of the Company. Further, pursuant to applicable provisions of Companies Act, 2013 and in accordance with Articles of Association of the Company, Mr. M P Sarawagi & Mr. Chander Agarwal, Directors of the Company, are liable to retire by rotation and being eligible, offer themselves for re-appointment at this Annual General Meeting. A brief resume of the Directors, being re-appointed, has been incorporated in the notice of the Annual General Meeting forming part of this Annual Report. It is further confirmed that none of the above directors are disqualified under Section 164 (2) of the Companies Act, 2013 (corresponding Section 274 (1) (g) of the Companies Act, 1956). Your directors recommend their re-appointment. Furthermore, during the year, Mr. A K Bansal, the Group CFO & Company Secretary of the Company retired from the services of the Company. In his place, Mr. Ashish Tiwari was appointed as the Group CFO of the Company and Ms. Archana Pandey was appointed as the Company Secretary & Compliance Officer of the Company with effect from 1st June, 2014. Besides, effective from 29th January, 2015, the Company has designated Mr. Ishwar Singh Sigar, CEO-TCI Freight Division, Mr. P C Sharma, CEO-TCI XPS Division and Mr. Jasjit Singh Sethi, CEO-TCI Supply Chain Solutions Division as Key-Managerial Personnel as per Companies Act 2013 & Rules made thereunder. Declaration by Independent Director(s) All Independent Directors have given declaration that they meet the criteria of Independence as laid down under section 149(6) of the Companies Act, 2013 & Rules made thereunder and Clause 49 of the Listing Agreement. Annual Evaluation Pursuant to the provisions of the Companies Act, 2013 & Rules made thereunder and the Listing Agreement, the Board has carried out annual performance evaluation of its own performance, the directors individually as well as the evaluation of the working of its Committees. The manner in which the evaluation has been carried out has been explained in the Corporate Governance Report. Number of Board Meetings Your Board met 06 (Six) times during the year under review.The details of the Board meetings and attendance of Directors are provided in the Corporate Governance Report. Audit Committee Details about the composition of the Audit Committee is given in the Corporate Governance Report. Vigil Mechanism/ Whistle Blower Policy Pursuant to Section 177(9) & (10) of the Companies Act, 2013 and Clause 49 of the Listing Agreement, the Company has a Whistle Blower Policy for establishing a vigil mechanism for directors and employees to report genuine concerns regarding unethical behaviour, actual or suspected fraud or violation of the Company's Code of Conduct and Ethics policy. The said mechanism also provides for adequate safeguards to the whistle blowers from victimization, harassment or disciplinary proceedings. Directors Responsibility Statement To the best of our knowledge and based on the representation received from the Management, your Directors make the following statements in terms of Section 134(3) (c) of the Companies Act, 2013: • That in the preparation of the annual financial statements for the year ended 31st March, 2015, all the applicable accounting standards have been followed alongwith proper explanation relating to material departures, if any; • That the directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit and loss of the Company for that period; • The directors 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; • The directors have prepared the annual accounts on a going concern basis; • The directors 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 • The directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively. Auditors Statutory Auditors The Company's Auditors M/s R S Agarwala & Co., Chartered Accountants, Kolkata who retire at the ensuing Annual General Meeting of the Company are eligible for re-appointment. They have confirmed their eligibility under section 141 of the Companies Act, 2013 and the Rules framed thereunder for reappointment as Auditor of the Company. Therefore, it is proposed to appoint M/s R S Agarwala & Co. Chartered Accountant as statutory Auditors of the Company from the conclusion of the forthcoming Annual General Meeting till the conclusion of next Annual General Meeting. Further, M/s R S Agarwala & Co., Chartered Accountants, Bangalore, Branch Auditor for TCI Seaways Division of the Company are retiring at this Annual General Meeting and being eligible, offer themselves for re-appointment. They have confirmed their eligibility under section 141 of the Companies Act 2013 and Rules framed thereunder for reappointment as Auditor of the Company. Further, M/s. K B Chitracar & Co., Chartered Accountants, Kathmandu, the Branch Auditors for branches situated in Federal Democratic Republic of Nepal are retiring at this Annual General Meeting and being eligible, offer themselves for re-appointment. They have confirmed their eligibility under section 141 of the Companies Act 2013 and the Rules framed thereunder for reappointment as Auditor of the Company. Your Directors recommend their re-appointment. Secretarial Auditors Pursuant to the provisions of Section 204 of the Companies Act, 2013 & Rules made thereunder, the Company had appointed Ms. Nishi Talwar, Practising Company Secretary to undertake the Secretarial Audit of the Company for the financial year 2014-15. The Report of the Secretarial Audit is annexed herewith as Annexure D. Explanation or comments on qualifications, reservations or adverse remarks or disclaimers made by the Statutory Auditors and the Secretarial Auditor in their reports There were no qualifications, reservations or adverse remarks made either by the Statutory Auditors or the Secretarial Auditor in their reports. Related Party Transactions All related party transactions that were entered during the financial year were on arm's length basis and were in the ordinary course of business. There are no materially significant related party transactions i.e. transactions exceeding 10% of the annual consolidated turnover as per last audited financial statement, entered by the Company. Accordingly, the disclosures of related party transactions as required under section 134(3) (h) of the companies Act, 2013 in form AOC-2 is not applicable. The policy on related party transactions as approved by the Board is uploaded on the Company's website at the web link: <http://www.tcil.com/tcil/pdf/FINAL_RPT_POLICY-TCI.pdf> Particulars of loans, guarantee or investments under section 186 of the Companies Act, 2013 & Rules made thereunder The details of loans, investments, guarantees and securities under Section 186 of the Companies Act 2013 and Rules made thereunder are provided in the financial statements. (Please refer to Note 10, 11 and 30 to the standalone financial statements). Corporate Governance Report Pursuant to Clause 49 of the Listing Agreement entered into with Stock Exchanges, Corporate governance Report with Auditors Certificate thereon & Management Discussion & Analysis Report are attached hereto & forming part of this Report. Risk Management Policy Pursuant to the requirement of the Companies Act, 2013 & Rules made thereunder & Clause 49 of the Listing Agreement, the Company has adopted a well defined Risk Management Policy. Your Company recognizes risk management as an integral component of good corporate governance and fundamental in achieving its strategic and operational objectives. It improves decision-making, defines opportunities and mitigates material events that may impact shareholder value. The policy covers various risks facing the business, their attributes, the mitigation steps required to minimize the risks involved & the monitoring & reporting of risks. The risk management framework adopted by the Company is discussed in detail in the Management Discussion and Analysis section of this Annual Report. Internal Control Systems and Internal Financial Control The Company has an internal control system including financial controls, appropriate with the size, scale and complexity of its operations for ensuring the orderly and efficient conduct of its business, including adherence to Company's policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records and the timely preparation of reliable financial information & these are sufficient and are functioning efficiently. Corporate Social Responsibility Initiatives In accordance with the requirements laid down in Section 135 of the Companies Act, 2013 and Rules made thereunder, the Company has adopted a Corporate Social Responsibility (CSR) Policy. The CSR initiatives taken by the Company are discussed in detail in the Management Discussion and Analysis chapter of this Annual Report. Further, the Annual Report on CSR Policy & the CSR activities undertaken during the year is annexed herewith as Annexure E. Prevention of Sexual Harassment at Workplace The Company has in place an anti-harassment policy in line with the requirements of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. An Internal Complaint Committee has been set up to receive & redress complaints received. All employees (permanent, contractual, temporary, trainees) are covered under the policy. No complaints were received from any employee during the financial year 2014-15. Human Resources Your Company has taken many initiatives to support business through organizational efficiency, process optimization and various employee engagement programs which have helped the Organization achieve higher productivity levels. The main focus of the Company is the development of employees in various areas with specific focus on customer service and technical & managerial capacity building in order to meet the future talent requirement. The Company has a conducive work atmosphere and there is constant effort to improve the same, thus encouraging innovation and productivity. The Company has the policy that attracts high-skilled employees from the Industry and also retains them by providing them appropriate growth opportunities. Remuneration Policy Your Company has adopted a policy recommended by the Compensation/Nomination & Remuneration Committee relating to the appointment and remuneration for the Directors, Key Managerial Personnel and Senior Management Personnel. The Remuneration Policy is stated in the Corporate Governance Report. Remuneration Disclosures As required under the Companies Act, 2013 & Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the disclosures are forming part of this report as Annexure F. Acknowledgment The Directors wish to convey their thanks to various Central and State Government departments, Organizations and Agencies for the continued help and co-operation extended by them. The Directors would also like to thank the shareholders, customers, bankers and all other stakeholders for their continuous support given by them to the Company and their confidence in its management. The Directors place on record their sincere appreciation to all employees of the Company for their unstinted commitment and continued contribution to the Company. For & on behalf of the Board S M Datta Chairman Date: 25th May, 2015 Place: Gurgaon |