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Transport Corporation of India Ltd.

BSE: 532349 | NSE: TCI |

Represents Equity.Intra - day transactions are permissible and normal trading is done in this category
Series: EQ | ISIN: INE688A01022 | SECTOR: Transport & Logistics

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Annual Report

For Year :
2018 2017 2016 2015 2014 2013 2012 2011 2010

Director’s Report

Dear Members,

The Directors have pleasure in presenting the Twenty-Third Annual Report of Transport Corporation of India Limited (‘your Company’or ‘the Company’ or ‘TCI’) along with the Audited Standalone and Consolidated Financial Accounts and the Auditors’ Report thereon for the Year ended 31st March, 2018.

FINANCIAL RESULTS

The highlights of Consolidated as well as Standalone Financial Results of your Company are as follows:

(Rs. in Lakhs)

Particulars

Consolidated

Standalone

2017-18

2016-17

2017-18

2016-17

Total Income from Operations

236,431.41

195,469.91

220,227.17

182,196.54

Total Expenses

223,425.57

186,979.61

206,670.85

173,321.03

Exceptional Item

-

-

400

-

Add: Profit From JV

2,241.99

1,546.58

-

-

Profit Before Tax

15,247.83

10,036.88

13,156.32

8,875.51

Less: Provision for Tax-Current & deferred

2,816.18

1,910.41

2,731.30

1,849.21

- For earlier years

49.88

-

49.88

-

Profit after Tax (PAT)

12,381.77

8,126.47

10,375.14

7,026.30

Other Comprehensive Income

301.51

42.24

301.62

42.25

DIVIDEND & TRANSFER TO RESERVES

The Company has a Dividend Policy in terms of Securities and Exchange Board of India (SEBI) Circular No. SEBI/LAD-NR0/6N/2016-17/008 and the same is available on the website of the Company (www.tcil.com).

In line with the policy, during the year under review, the Board has declared dividends as under:

Date of Declaration

Dividend Type

%age of Dividend

Dividend per Share

Declared

(in Rs.)

2nd November, 2017

1st Interim

30%

0.60

8th February, 2018

2nd Interim

50%

1.00

Since the total dividend outflow has achieved targets in line with the Dividend Policy of the Company, your Board does not recommend any final dividend for the Financial Year 2017-18.

During the year, RS.6,000 Lakhs were transferred to the General Reserves.

TRANSFER OF UNPAID / UNCLAIMED DIVIDENDS & SHARES TO IEPF

The details of unpaid/unclaimed dividend(s) & shares 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.

SUBSIDIARIES, JOINT VENTURES & ASSOCIATE COMPANIES

A statement in Form AOC-I pursuant to the provisions of the Companies Act, 2013 and Rules made thereunder (the Act) containing salient features of the financial statement of Subsidiaries/ Associate Companies/ Joint Ventures forms a part of this report. The Company has adopted Ind AS from April 1, 2016 and, accordingly, the consolidated financial statements of the Company and its subsidiaries are prepared in accordance with the recognition and measurement principles stated therein.

During the year, following subsidiary companies have been incorporated/liquidated:

S. No.

Name of the Company

% of Shareholding

Status

Subsidiary/ Step down Subsidiary

1

TCI Nepal Pvt. Ltd.

100%

Incorporated

Subsidiary

2

Stratsol Logistics Pvt. Ltd.

100%

Incorporated

Step-down Subsidiary

3

PT. TCI Global Indonesia

48%

Liquidated

Step-down Subsidiary

4

PT. TCI Global

100%

Liquidated

Step-down Subsidiary

5

TCI Global (Thailand) Co. Ltd.

49%

Liquidated

Step-down Subsidiary

The audited accounts of the subsidiaries will be provided on request to any shareholder desiring to have a copy, on receipt of such request addressed to the Company Secretary. These documents will also be available for inspection by any shareholder at the registered office of the Company and will be available on the website of the Company.

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 line with the provisions of the Act, the Abridged Annual Report is being sent to all the shareholders who have not registered their email address(es). The comprehensive Annual Report for the year 2017-18 is being sent via email to all shareholders who have registered their email address(es) and is also available on the website of the Company. It is also available for inspection at the Registered Office of the Company during working hours upto the date of ensuing Annual General Meeting (AGM).

Any member requiring full Annual Report may write to the Company Secretary.

EMPLOYEE STOCK OPTION SCHEME

During the year under review, the shareholders approved the Employee Stock Option Plan-2017.

The Company also has another ESOP Scheme running since 2006, called Employee Stock Option Scheme-2006 for the employees of the Company and its subsidiaries.

During the year under review, the Compensation/ Nomination & Remuneration Committee of the Board of Directors granted options under Employee Stock Option Scheme-2006, Part IX.

The details with regard to ESOP Scheme as on 31st March, 2018 as required to be disclosed pursuant to the provisions of SEBI (Share Based Employee Benefits) Regulations, 2014, are set out in Annexure A to this Report.

STATEMENT IN RESPECT OF ADEQUACY OF INTERNAL FINANCIAL CONTROLS WITH REFERENCE TO THE FINANCIAL STATEMENTS

The Company has in place adequate internal financial controls with reference to financial statements.

During the year under review, such controls were tested and no reportable material weakness in the policy or procedures was observed.

RISK MANAGEMENT

The Company has established a well-documented and robust risk management framework which identifies risks across all business processes of the Company on a continuous basis.

The details of risk management are given in a separate section forming part of this Annual Report.

WHISTLE BLOWER MECHANISM

The Company has a structured Vigil Mechanism via the Whistle Blower Policy for reporting instances of alleged wrongful conduct including instances of unethical behavior, actual or suspected fraud or violation of the Company’s code of conduct.

The Whistle Blower Policy is available on the website of the Company.

DIRECTORS & KEY MANAGERIAL PERSONNEL (KMPs)

As per the provisions of Section 152 of the Act, Mr. S N Agarwal and Mrs. Urmila Agarwal, Non-executive Directors, retire by rotation and being eligible, offer themselves for re-appointment.

Further, the current tenure of Mr. D P Agarwal, Vice Chairman & Managing Director, and Mr. Vineet Agarwal, Managing Director, is expiring on 31st July, 2018 and 30th June, 2018 respectively. Based upon recommendation of the Compensation/ Nomination & Remuneration Committee, it is proposed to appoint them for a further period of 05 (five) years each, subject to the approval of shareholders in the ensuing AGM.

Brief resume of director seeking appointment/re-appointment alongwith other details as stipulated under SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015 (‘SEBI Listing Regulations’ or ‘the Regulations’), is provided in the Notice convening the Annual General Meeting.

None of the Company’s directors are disqualified from being appointed as a director as specified in Section 164 of the Act.

The Independent Directors of the Company have furnished the declaration under the Act and the SEBI Listing Regulations that each of them meets the criteria of independence, as provided in the Act/ Regulations and during the year, there has been no change in the circumstances which may affect their position as Independent Director.

The terms and conditions of appointment of the Independent Directors are placed on the Company’s website, http://cdn.tcil.in/website/ tcil/corporate-governance/terms-and-conditions-of-independent-directors/terms-and-conditions-of-independent-directors.pdf.

The Company has also placed the Director’s familiarisation programme on its website and the same can be accessed on http://cdn.tcil.in/ website/tcil/corporate-governance/familarisation-programme-of-independent-directors/familiarisation-programme-for-independent-directors.pdf.

As on 31st March, 2018, the Key Managerial Personnel of the Company were Mr. Ashish Kumar Tiwari, Group CFO, Ms. Archana Pandey, Company Secretary, Mr. Jasjit Singh Sethi, CEO- TCI Supply Chain Solutions (a Division of the Company) and Mr. Ishwar Singh Sigar, CEO- TCI Freight (a Division of the Company). There has been no change in the KMPs during the period under review.

BOARD MEETINGS

During the year, 04 (four) Meetings of the Board of Directors were held. The details of the meetings are laid out in the Corporate Governance Report.

AUDIT COMMITTEE MEETINGS

The composition of the Audit Committee is in compliance with the provisions of the Act & the SEBI Listing Regulations. The detailed information regarding the Audit Committee forms part of the Corporate Governance Report.

The Board has accepted all the recommendations made by the Audit Committee during the year.

INDEPENDENT DIRECTORS’ MEETING

For the Financial Year 2017-18, 01 (one) separate meeting of the Independent Directors was held. The details of the meeting are laid out in the Corporate Governance Report.

PERFORMANCE EVALUATION OF THE BOARD

During the year under review, the annual evaluation of performance of the Board, its Committees and of individual Directors was carried out pursuant to the provisions of the Act and the SEBI Listing Regulations.

In the meeting of independent directors, the performance of the Board as a whole, its committees and the Chairman was evaluated. The conclusions were discussed in the meeting of the Compensation/ Nomination & Remuneration Committee where the performances of the Board, its committees and individual directors were reviewed.

Thereafter, the Board, based on the update by the Chairman and the Compensation/ Nomination & Remuneration Committee, discussed the assessment of the Board, its committees and the Chairman.

DIRECTORS’ RESPONSIBILITY STATEMENT

Pursuant to the provisions of Section 134(5) of the Act, the Board of Directors, to the best of their knowledge and ability, confirm that:

a) In the preparation of the annual financial statements for the Financial Year ended 31st March, 2018, all the applicable accounting standards have been followed and that there is no material departure from the same;

b) For the Financial Year ended 31st March, 2018, 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 the Financial Year ended 31st March, 2018;

c) 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;

d) The annual accounts have been prepared on a going concern basis;

e) The internal financial controls have been followed by the Company and that such internal financial controls are adequate and are operating effectively; and

f) The proper systems have been devised to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively.

EXTRACT OF ANNUAL RETURN

As provided under Section 92(3) of the Act, the extract of annual return is given in the prescribed Form MGT-9, which forms part of the Board’s Report as Annexure B.

STATUTORY AUDITORS

During the year under review, M/s. R S Agarwala & Co., (Firm Registration No. 304045E), Chartered Accountants, Kolkata, retired in line with the provisions of Section 139 of the Act.

Accordingly, the shareholders, based upon recommendations of the Audit Committee & the Board of Directors, appointed M/s. Brahmayya & Co., Chartered Accountants, (Firm Registration No. 000511S) as Statutory Auditors of the Company in place of M/s. R S Agarwala & Co., to hold office from the conclusion of 22nd AGM till the conclusion of 27th AGM to be held in the calendar year 2022.

The Company has obtained a written consent from the Auditors for such continued appointment and that they are eligible for such continuation of their appointment.

The report of the Statutory Auditors along with notes & Schedules is enclosed to this Report. The observations made in the Auditors’ Report are self-explanatory and, therefore, do not call for any further comments.

During the year under review, the Auditors have not reported any matter under Section 143(12) of the Act and, therefore, no detail is required to be disclosed under Section 134 (3)(ca) of the Act.

SECRETARIAL AUDITORS

Secretarial Audit for the Financial Year 2017-18 was conducted by M/s Vinod Kothari & Associates, Company Secretaries. The Report on Secretarial Audit in the prescribed format of MR- 3 is attached as Annexure C to this report.

The Secretarial Audit report does not contain any qualification, reservation or adverse remark.

CORPORATE SOCIAL RESPONSIBILITY

The Company has formed Corporate Social Responsibility (CSR) Committee of the Board of Directors to overview and supervise the CSR initiatives of the Company. The details regarding the CSR Committee are laid down in the Corporate Governance Report.

The brief outline of the CSR Policy of the Company and the initiatives undertaken regarding CSR activities during the year are set out in Annexure D of this report in the format prescribed in the Act. The CSR policy is available on the website of the Company.

RELATED PARTY TRANSACTIONS

During the year, there were no transactions with related parties which were not at arm’s length or materially significant or which were in conflict with the interests of the Company and that require an approval of the Company’s shareholders in terms of the SEBI Listing Regulations. Accordingly, the disclosure required u/s 134(3)(h) of the Act in Form AOC-2 is not applicable to your Company.

Further, details on the policy of the company with respect to the transactions with related parties are given in the Corporate Governance Report.

The detailed policy on Related Party Transactions is available on the website of the Company.

DETAILS OF LOANS/GUARANTEES/INVESTMENTS MADE BY THE COMPANY

The particulars of loans given, investments made, guarantees given and securities provided alongwith the purpose for which the loan or guarantee or security is proposed to be utilized as per the provisions of Section 186 of the Act, are provided in the financial statement forming part of the Annual Report.

REMUNERATION POLICY

The objective of the Remuneration Policy is to attract, motivate and retain qualified and proficient individuals that the Company needs in order to attain its strategic and operational objectives.

The summary of the remuneration policy has been given in the Corporate Governance Report.

COMPLIANCE WITH SECRETARIAL STANDARDS

During the year, the company has duly complied with all the applicable Secretarial Standards as issued by ICSI and MCA from time to time.

PARTICULARS OF EMPLOYEES

Disclosure pertaining to the remuneration and other details as required under the Act are attached as Annexure E to this Report.

Details of employee remuneration as required under provisions of Section 197 of the Act are available at the Registered Office of the Company during working hours, 21 days before the Annual General Meeting and shall be made available to any shareholder on request. Such details are also available on your Company’s website.

CORPORATE GOVERNANCE REPORT

Pursuant to the SEBI Listing Regulations, the Management Discussion and Analysis Report, Corporate Governance Report and Auditors’ Certificate regarding compliance with conditions of corporate governance form part of this Annual Report.

POLICY FOR PREVENTION, PROHIBITION AND REDRESSAL OF SEXUAL HARASSMENT

Your Company has adopted a policy for prevention, prohibition and redressal of sexual harassment. As per the requirements of the Sexual Harassment of Women at Workplace (Prevention, Prohibition & Redressal) Act, 2013 and Rules made thereunder, your Company has constituted an Internal Complaints Committee.

During the year, no complaint with allegations of sexual harassment was filed with the Company.

HUMAN RESOURCES

The Indian logistics industry is growing not only in terms of numbers but also in complexity and scope. With the inclusion of Logistics Sector under Infrastructure Industry, career opportunities have opened up & hence, there is a strong emphasis to attract and retain talent.

At TCI, we continuously strive to adopt the best Human Resource Management practices across industries through the development of employee’s knowledge, skills, attitudes, and being a cohesive team, which are the primary building blocks of organizational capabilities & culture.

Our endeavor is to continuously attract, recruit and nurture the best talent pool of the industry and create a benchmark in the field of Logistics.

FIXED DEPOSITS

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

SIGNIFICANT/MATERIAL ORDERS PASSED BY THE REGULATORS

There was no material litigation outstanding as on 31st March, 2018. Details of litigation 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.

CONSERVATION OF ENERGY & RESEARCH AND DEVELOPMENT

In keeping up with the Company’s commitment towards conservation of energy, the following optimization and innovative measures were taken by the Company during this fiscal :

Fleet Management

- New BS IV vehicles were purchased for reducing emissions and carbon footprint.

- The conversion of National Capital Region (NCR) Delivery vehicles to CNG was 100% completed during this fiscal.

- Recycling of Radial Tyres for extracting the steel and rubber for alternative usage was initiated this year.

Warehouses

- Warehouse audit for energy consumption and electrical safety was strengthened with re-audit by in-house Audit team.

- Use of day-light sensors, timers that help in controlling street area lighting and prevent electricity consumption when not in use.

- Extensive use of energy sub-metering to measure and to have check over use of energy for different purposes.

Solar Power generation plant

- Have started using solar power generated at one of the warehousing facility to reduce consumption of grid and diesel generator energy.

- Cold Chain warehouse in Gurugram was outfitted with a 160KVA roof-top Solar panels witRs.60 KVA backup.

These are in addition to the measures adopted in yesteryears.

TECHNOLOGY ABSORPTION, ADOPTION & INNOVATION

- The Company undertook massive steps in the last year in ERP enhancement at all levels for readiness on GST from 1st July, 2017.

- Various initiatives for digital transformation helped in improving the internal efficiency and improving customer experience.

- Telematics was taken to another level by Integration of ERP and GPS systems.

- A new automated warehouse for goods to man was inaugurated, making a new benchmark in the industry.

FOREIGN EXCHANGE EARNINGS AND OUTGO

Details of earnings accrued and expenditure incurred in foreign currency are given in the Notes to the financial statements.

ACKNOWLEDGMENT

Your Directors place on record their deep appreciation to employees at all levels for their hard work, dedication and commitment which enabled the Company to persist as industry leaders.

The Board also extends its gratitude for the support and cooperation your Company has been receiving from its customers, vendors, suppliers and others associated with the Company. The Company always strives to build and nurture relations with all its stakeholders.

The Directors also take this opportunity to acknowledge the support and assistance extended to us by the Ministries and Departments of Government of India, various State Governments, financial institutions, bankers, stock exchanges, communities, shareholders and investors at large for their continued support.

For and on behalf of Board of Directors

Place: Gurugram S. M. Datta

Date: 16th May, 2018 Chairman

Director’s Report