TCI Directors Report

Boards’ Report


The Directors are pleased to present the 22nd Annual Report on the business and operations of the Company together with the Audited Accounts for the Financial Year ended 31st March, 2017.


Financial Highlights


(Amount in Mn.)



































































Particulars



Consolidated



Standalone



2016-17



2015-16



2016-17



2015-16



Income



19,547.0



17,348.4



18,219.7



16,140.1



Less: Provision for Tax-Current



119.0



288.0



111.5



83.9



- Deferred



72.1



69.4



73.5



67.4



Add: Profit from JV



154.7



118.6



0.0



0.0



Profit for the year from continuing operations



812.6



565.3



702.6



595.6



Profit for the year from discontinued operations



0.0



311.0



0.0



311.0



Profit for the year



812.6



876.3



702.6



906.6



Overview of Company''''s operational performance


The above financial results of the Company for the year ended 31st March, 2017 are not comparable with the financial results for the year ended 31st March, 2016 as the financial results for FY 2016-17 exclude the financials pertaining to TCI Express Ltd. (erstwhile TCIXPS, a division of the Company) which has been demerged from the Company vide Scheme of arrangement between Transport Corporation of India Ltd. and TCI Express Ltd. and their respective creditors and shareholders, approved by the Hon''''ble High Court, Hyderabad for the state of Telangana and for the state of Andhra Pradesh, vide its order dated 14th June, 2016. The Scheme has become effective from 11th August, 2016, post necessary filing of the order of Hon''''ble High Court on the even date.


The shares of TCI Express Ltd, the Resultant Company have since got listed and admitted for dealings on National Stock Exchange of India Ltd. (NSE) and BSE Ltd. (BSE) w.e.f. 15th December, 2016.


Standalone Performance


During the Financial Year ended 31st March, 2017, on Standalone basis, your Company earned revenues ofRs,18,219.7 Mn from operations as againstRs,16,140.1 Mn in the previous year, thereby showing a marginal increase of 12.9%. The profit for the year wasRs,702.6 Mn as againstRs,595.6 Mn in the previous year, registering an improvement of 18.0%. Consolidated Performance


During the Financial Year ended 31st March, 2017, on Consolidated basis, your Company earned revenues ofRs,19,547.0 Mn from operations as againstRs,17,348.4 Mn in the previous year recording a growth of 12.7%. The Profit for the years stood atRs,812.6 Mn as againstRs,565.3 Mn in the previous year, recording an improvement of 43.8%.


Dividend


The Board of Directors in their meeting held on 4th November, 2016 has approved the Dividend Distribution Policy of the Company. In line with the Policy, your Board declared Interim Dividend twice during the Year ended 31st March, 2017 @30% (Re. 0.60/-) and @25% (Re. 0.50) respectively, aggregating to 55% i.e.Rs,1.10 per equity share ofRs,2/- each.


Since the total dividend outflow has met the targets in line with the Dividend Policy, your Board does not recommend any final dividend for the Financial Year 2016-17.


Transfer to General Reserve


For the Financial Year ended 31st March, 2017, the Company has transferredRs,500 Mn towards general reserves.


Transfer of Unpaid & Unclaimed dividend Amount to IEPF


Pursuant to the provisions of the Companies Act, 2013, all dividend(s), remaining unpaid or unclaimed for a period of 7 years from the date they became due for payment, have been transferred to the Investors Education and Protection Fund (IEPF) established by the Central Government.


The details of unpaid or unclaimed dividend(s) transferred to IEPF during the year and the dividend(s) which are due for transfer to IEPF in the forthcoming years, are provided in the Corporate Governance Report forming part of this report.


Share Capital


Pursuant to Employee Stock Option Scheme-2006, the Share Transfer Committee of the Board in its meeting held on 16th May, 2016 has allotted 503,850 equity shares to the eligible employees of the Company, due to which the paid up share capital has increased fromRs,152,147,200 divided into 76,073,600 shares ofRs,2/- each to 153,154,900 divided into 76,577,450 shares ofRs,2/- each.


The details of options granted and exercised are as below:






























Employee Option Scheme



Exercise Price



Options



2006 (ESOS 2006)



(In '''')



Exercised



ESOS Part-VI



30



162,600



ESOS Part-VII



60



341,250



Total



503,850



With regard to Employees Stock Option Scheme, the disclosures stipulated under the SEBI Regulations as on 31st March, 2017 are provided in "Annexure A" to this report.


Subsidiaries, Joint Ventures & Associate Companies


With an ambition to diversify and expand its operations, your Company has incorporated/formed various Subsidiary(ies)/Joint Ventures Companies. The Company does not have any Associate Company in terms of the provisions of the Companies Act, 2013.


A separate statement containing the salient features of the financial statements of subsidiaries of the Company in form AOC-1 has been disclosed in the Consolidated Financial Statements.


The table below gives the details of subsidiary companies incorporated and liquidated / struck off during the Financial Year 2016-17.


































Sl.


No.



Name of the Subsidiary Company



%age of shareholding



Status



Subsidiary/ Step down subsidiary



1



TCI Ventures Ltd.



100



Incorporated



Subsidiary



2



TCI Bangladesh Ltd.



100



Incorporated



Subsidiary



3



TCI Global Logistik GmbH



100



Liquidated



Step down Subsidiary



As required under Section 136 of the Companies Act, 2013, the financial statements of the subsidiaries and related information are open for inspection by the members at the Registered Office of the Company during business hours on all working days. Any member desirous of obtaining a copy of the said financial statements may write to the Company Secretary at the Registered Office of the Company.


The financial statements including the consolidated financial statements, financial statements of subsidiaries and all other documents required to be attached to this report have also been uploaded on the website of your Company www.tcil.com. The Company''''s Policy on Material Subsidiaries may be accessed on the website at the following link: http://www.tcil. com/tcil/tci-policies.html.


Abridged Annual Report


In accordance with the provisions of the Companies Act, 2013, the Abridged Annual Report is being sent to all shareholders who have not registered their email address(es). The complete Annual Report for the year 2016-17 is being sent via email to all shareholders who have provided their email address(es) and is also available at the Company''''s website www.tcil.com and is available for inspection at the Registered Office of the Company during working hours upto the date of ensuing Annual General Meeting. Any member desirous of obtaining the full Annual Report may write to the Company Secretary and the same will be provided on request.


Directors And Key Managerial Personnel (KMPs)


During the period under review, Mr. Chander Agarwal was re-designated as Non-Executive Director w.e.f 18th August, 2016. Mr. Phool Chand Sharma, CEO-TCI XPS Division, one of the KMPs, was transferred to TCI Express Ltd. upon coming into effect of the Scheme of Arrangement on 11th August, 2016 between Transport Corporation of India Ltd. and TCI Express Ltd. and their respective creditors and shareholders.


Further, the Board has appointed Mr. Vijay Sankar as an Additional Director on the Board, in the capacity of Non-Executive Independent Director w.e.f. 4th November, 2016, who shall hold office upto the date of the ensuing Annual General Meeting (AGM). As prescribed under the Companies Act,


2013, the Board of Directors propose to appoint Mr. Vijay Sankar as an Independent Director on the Board for a period of 5 (Five) consecutive years subject to the approval of shareholders in the ensuing AGM. Pursuant to the Companies Act, 2013 and Rules made thereunder, Mr. Chander Agarwal and Mr. M.P. Sarawagi, Directors, retire by rotation at the ensuing AGM, and being eligible, offer themselves for re-appointment. None of the Directors are disqualified under Section 164(2) of the Companies Act, 2013.


As per Regulation 36 of SEBI Listing Regulations, 2015, the brief resume of the directors proposed to be appointed/ reappointed in the ensuing AGM, is incorporated in the explanatory statement to the notice of AGM.


There has been no change in KMPs during the year under review. Declaration by Independent Directors


All the Independent Directors have duly confirmed that they meet the criteria of independence as prescribed under the Companies Act, 2013.


Meetings of the Board


Four Meetings of the Board of Directors were held during the Financial Year 2016-17. For more details, kindly refer the Corporate Governance Report annexed to this Report.


Meeting of Independent Directors


A separate meeting of Independent Directors was held during the Financial Year 2016-17. Other relevant information regarding the meeting are provided in the Corporate Governance Report.


Board Evaluation


In compliance with the provisions of the Companies Act, 2013 and the Corporate Governance requirements as prescribed under SEBI Listing Regulations, 2015, the Board has carried out annual performance evaluation of Individual Directors, the Board as a whole and the Board level Committees during the year. The policy has well defined standards for evaluation including performance of directors against objectives set by the Board, their contribution towards the development of strategies, updation in relevant areas, their attendance & participation in the Board & Committee Meetings etc.


Directors'''' Responsibility Statement


In terms of the Companies Act, 2013, to the best of their knowledge and belief and according to the information and representations obtained by the management, your directors state the following:


? That in the preparation of the annual financial statements for the Financial Year 2016-17, 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 Companies Act, 2013, 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.


Composition of Audit & CSR Committee


In terms of requirements of the Companies Act, 2013, the relevant details pertaining to composition of Audit Committee and CSR Committee are given in the Corporate Governance Report annexed to this report.


Particulars of Contracts/Arrangements with Related Parties


All contacts/arrangements/transactions entered by the Company with its related parties are pre-approved by the Audit Committee. Prior omnibus approval of the Audit Committee is obtained on yearly basis for the transactions which are of repetitive nature.


During the year, all contacts/arrangements/transactions entered into by your Company with its related parties were in the ordinary course of business & on arms'''' length basis and thus the provisions of Section 188 of the Companies Act, 2013 and the Rules made thereunder are not attracted. Accordingly, the disclosure in form AOC-2 as provided in terms of section 134 of the Companies Act, 2013 is not required.


Further, there were no materially significant related party transactions undertaken by the Company with its related parties as defined under the Related Party Transactions Policy of the Company.


The policy on Related Party Transactions may be accessed on the Company''''s website at the following link: http://www.tcil.com/tcil/pdf/FINAL RPT POLICY-TCI.pdf.


Vigil Mechanism/ Whistle Blower Policy


Your Company has in place, a Whistle Blower mechanism for providing safeguard against victimization of employees and to report instances of any unethical behavior, actual or suspected fraud or violation of the Company''''s Code of Conduct or ethics policy. For more information, please refer the Corporate Governance Report.


Internal Financial Control and their Adequacy


Your Company has an effective internal control and risk mitigation system, commensurate with its size, scale and complexities of its operations, which is assessed on regular basis. The Company has a robust Management Information System, which is an integral part of the control mechanism. The audit of internal control system is carried out by the Chief Internal Auditor, who reports directly to the Audit Committee. The main thrust of internal audit is to test and review controls, appraisal of risks and business processes, besides benchmarking controls with best practices in the industry.


The Chief Internal Auditor reports the status of Internal Controls including the adequacy and effectiveness of the internal control systems to the Audit Committee on quarterly basis.


Risk Management Policy


Your Company has a well-defined Risk Management Policy which establishes a structured and disciplined approach to Risk Management. The risks existing in the internal and external environment are periodically identified and reviewed, based on which, the cost of treating risks is assessed and risk treatment plans are devised.


With the recommendations of the Board, the policy undergoes continuous improvements to allow the Company to optimize risk exposures.


Conservation of Energy, Technology Absorption, Foreign Exchange Earnings And Outgo


The details pertaining to conservation of energy, technology absorption, foreign exchange earnings and outgo are attached as "Annexure B" to this report.


Extract of Annual Return


Pursuant to the Companies Act, 2013, the extract of Annual Return as on 31st March, 2017 is attached as "Annexure C".


Auditors Statutory Auditors


As per the provisions of section 139 of the Companies Act, 2013, no listed Company can appoint or re-appoint an audit firm as auditor for more than two terms of five consecutive years. The Act has also provided a period of three years from the date of commencement of the Act to comply with this requirement.


In line with the above provisions, the Company''''s existing Auditors, M/s. R S Agarwala & Co., (Firm Registration No. 304045E), Chartered Accountants, Kolkata, are retiring at the ensuing Annual General Meeting. Accordingly, the Audit Committee has recommended the appointment of M/s. Brahmayya & Co., Chartered Accountants, (Firm Registration No. 000511S) as Statutory Auditors of the Company in place of the retiring auditor, to hold office from the conclusion of 22nd Annual General Meeting till the conclusion of 27th Annual General Meeting to be held in the calendar year 2022.


M/s. Brahmayya & Co., Chartered Accountants, have confirmed their willingness and eligibility to the effect that their re-appointment, if made would be within the prescribed limits under the Companies Act, 2013 and that they are not disqualified for re-appointment.


Secretarial Auditor


Pursuant to the provisions of Section 204 of the Companies Act, 2013, the Board had appointed M/s Vinod Kothari & Associates, Company Secretaries, as Secretarial Auditors of the Company for the Financial Year 2016-17. The Report on Secretarial Audit in the prescribed format of MR- 3 is attached as "Annexure D" to this report.


During the Financial Year 2016-17, there were no observations/ qualifications or remarks either by the Statutory or the Secretarial Auditors in their Report, which call for any further comments. Further, no instance of fraud has been reported by the Statutory Auditors under the Companies Act, 2013.


Particulars of Loans, Guarantees and Investments


The information pertaining to the loans/guarantees given, investments made and securities provided under section 186 of the Companies Act, 2013 is provided in the notes to standalone financial statement.


Corporate Social Responsibility Policy


During the Financial Year 2016-17, the initiatives taken by your Company towards CSR have been detailed in the ''''Annual Report on CSR Activities'''' which is set out in "Annexure E" to this Report.


In addition, the Company has in place a CSR policy in conformity with the Companies Act, 2013 which is available on the Company''''s website at the following link: http://www.tcil.com/tcil/tci-policies.html.


Remuneration Policy and Disclosures


Your Company has a well-structured Remuneration Policy in respect of the remuneration of its Directors, KMPs and Senior Management as required under SEBI Listing Regulations, 2015 and the Companies Act, 2013. The details on the Remuneration Policy are available in the Corporate Governance Report.


The disclosures pertaining to Remuneration of Directors, KMPs and Senior


Managerial Personnel as required under the Companies Act, 2013, are attached as "Annexure F" to this report.


Corporate Governance Report


The constructive corporate governance function is a device that preserves a Board''''s ability to pursue long-term strategies that maximizes stakeholders'''' value on a sustainable basis. The Company strives to adopt and implement best Corporate Governance practices. The report on Corporate Governance as stipulated under the SEBI Listing Regulations,


2015 forms an integral part of this Report.


Management Discussion and Analysis Report


The Annual Report contains a detailed report on Management Discussion and Analysis.


Disclosure Under The Sexual Harassment of Women at Workplace (Prevention, Prohibition And Redressal) Act, 2013


Keeping in view the requirements of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013, your Company has in place a Policy on Sexual Harassment, which provides for setting up of Internal Complaint Committee to regularly redress complaints received.


During the year under review, no complaints were reported against sexual harassment.


Human Resources


Human Resource is the most vital factor to achieve the goals of any organization. Being a progressive organization, TCI firmly believes in the strength of its most vital asset- the 4000 strong workforce. To maintain its competitive edge in a highly dynamic industry, TCI recognizes the importance of having a workforce which is customer focused, performance driven and future capable. In keeping with this, a number of policies and initiatives have been drawn up to ensure a healthy balance between business needs and individual aspirations.


Your Company''''s employees relentlessly strive to deliver world-class performance and discharge their role as ''''trustees'''' of all stakeholders with true faith and in the spirit of allegiance.


Fixed Deposits


During the year under review, your Company has not accepted any fixed deposit within the meaning of the Companies Act, 2013.


Significant/Material Orders Passed by the Regulators


There are no material litigations pending as on 31st March, 2017. Details of litigations on tax matters are disclosed in the financial statements.


Change in Nature of Business


During the year under review, there was no change in general character or nature of business.


Acknowledgement


The Board of Directors of your Company wish to express their deep gratitude towards the valuable co-operation and support received from various Ministries and Departments of Government of India, various State Governments, Banks/Financial Institutions and other stakeholders such as shareholders, customers and vendors etc.


Further, the Board places its special appreciation for the co-operation and continued support extended by employees of the Company at all levels whose enthusiasm drives the Company to grow and excel.


For and on behalf of Board of Directors


Place: Gurugram S M Datta


Date: 16th May, 2017 Chairman

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