Your Directors have pleasure in presenting their 19 Annual Report along with theAudited Accounts for the year ended on 31 March 2014.
1. Financial Highlights
Your Company's financial performance for the year under review has been as under:
(Rs. in Mn)
|Particulars ||Consolidated ||Standalone |
| ||2013 - 2014 ||2012 - 2013 ||2013 - 2014 ||2012 - 2013 |
|Income ||22356.8 ||21378.7 ||20329.8 ||19566.3 |
|Profit before Interest Depreciation Taxation & Exceptional Item || || || || |
| ||1771.9 ||1810.8 ||1550.4 ||1502.8 |
|Less: Interest (Net) ||311.2 ||336.3 ||296.7 ||321.7 |
|Depreciation (Net) ||468.2 ||464.0 ||424.3 ||420.8 |
|Profit before Tax & Exceptional Item ||992.5 ||1010.5 ||829.4 ||760.3 |
|Less: Exceptional Item ||- ||- ||- ||3.7 |
|Profit before Tax (PBT) ||992.5 ||1010.5 ||829.4 ||756.6 |
|Less: Provision for Tax- Current ||249.1 ||309.4 ||187.3 ||232.4 |
|- Deferred ||16.8 ||-2.5 ||13.1 ||-3.5 |
|- Taxes for earlier years ||8.9 ||8.3 ||8.9 ||8.2 |
|Profit after Tax (PAT) ||717.6 ||695.3 ||620.1 ||519.5 |
|Share of (profit)/loss transferred to minority interest ||1.4 ||0.2 ||- ||- |
|Profit for the year ||716.2 ||695.1 ||620.1 ||519.5 |
|Add: Balance brought forward ||388.7 ||249.4 ||95.5 ||86.0 |
|Add: Share of loss in derecognized joint venture (As per latest balance sheet) ||- ||14.2 ||- ||- |
|Add: Share of loss in derecognized subsidiary (As per latest balance sheet) ||1.8 ||0.0 ||- ||- |
|Profit available for appropriation ||1106.7 ||958.7 ||715.6 ||605.5 |
|Appropriation: || || || || |
|- Interim dividend ||36.5 ||29.1 ||36.5 ||29.1 |
|- Proposed dividend ||97.6 ||82.9 ||58.4 ||43.7 |
|- Dividend Tax ||22.8 ||18.8 ||16.1 ||12.2 |
|- Tonnage Tax reserve ||50.0 ||15.0 ||50.0 ||15.0 |
|- General reserve ||420.0 ||424.2 ||420.0 ||410.0 |
|Balance carried forward ||480.1 ||388.7 ||134.6 ||95.5 |
2. Operational Review
TCI has been able to sustain steady growth for the last couple of years despiteslowdown in the economy. The Company's revenue growth has been subdued due to slowdown inmanufacturing and investment in infrastructure projects. Sustained demand for logisticsservices from pharma retail and FMCG and e-commerce sectors however has compensated forthe decline in demand from other verticals. The highlights of the Company's performanceare as under:
Revenue from Operations increased by 3.93% to Rs. 20329.8 Mn.
Profit Before Tax Increased by 9.64% to Rs. 829.4 Mn.
Cash Profit increased by 11.08% to Rs. 1044.4 Mn.
Net Profit increased by 19.38% to Rs. 620.1 Mn.
The Consolidated revenue from operations for the year ended 31 March 2014 was Rs.22356.8 Mn an increase of 4.55% on year to year basis.
Based on Company's performance your directors are pleased to recommend for approval ofshareholders a final dividend of Re. 0.80 per share @40% for the year ended 31 March2014. This is in addition to the Interim Dividend of Re. 0.50 per equity share @25% paidon 4 February 2014 totaling to a dividend of Rs. 1.30 per share @ 65% (Previous year Re.1.00 @50%).
The final dividend subject to sanction of Members at the Annual General Meeting on 23July 2014 will be paid to the Members whose names appear in the Register of Members ason the date of book closure i.e. from 19 July 2014 to 23 July 2014 (inclusive of bothdates).
The total dividend payout for the year works out to 18% (Previous year 16%).
4. Fixed Deposits
As on 31 March 2014 the Company had fixed deposits aggregating Rs. 2.68 Mn from 08deposit holders.
Further the Company has not accepted any fresh public deposits during Financial Year2013-14 & there were no overdues on accounts of principal or interest on publicdeposits.
5. Transfer To General Reserve
The Company proposes to transfer Rs. 420 Mn to the general reserve out of the amountavailable for appropriation.
6. Employee Stock Option Scheme
Details of Employee Stock Option Scheme-2006 (ESOS-2006) & also the disclosures asrequired under Clause 12 of the Securities and Exchange Board of India (Employee StockOption Scheme and Employee Stock Purchase Scheme) Guidelines 1999 are set out in AnnexureIII to this Report.
During the year under review the Compensation/ Nomination & RemunerationCommittee granted 445000 options to eligible employees under Employee Stock OptionScheme Part VI. Each option under the Scheme entitles the employee to subscribe to oneshare of the Company.
Further during the year under review the Company allotted 122180 Equity Shares uponexercise of stock options by eligible employees under Employee Stock Option Scheme 2006Part-IIIIV& V. Due to this the outstanding issued subscribed and paid up equityshare capital stands increased from Rs. 145652000/- to Rs. 145896360/-as at 31March 2014.
The Company has received a certificate from the Auditors of the Company that the Schemehas been executed in accordance with the SEBI Guidelines and the resolution passed by theshareholders. The certificate would be placed at the Annual General Meeting for inspectionby shareholders.
7. Subsidiary Companies
The Ministry of Corporate Affairs vide its General Circular No 2/2011 dated 8 February201 had granted a general exemption subject to certain conditions to holding companiesfrom complying with the provisions of Section 212 of the Act which requires the attachingof the Balance Sheet Profit & Loss Account and other documents of its subsidiarycompanies to its Balance Sheet. Accordingly the said documents are not being included inthis Annual Report. However as directed by the said circular the financial data of thesubsidiaries have been furnished under 'Subsidiary Companies Particulars' forming part ofthis Annual Report.
Furthermore the consolidated financial statements which includes the financialinformation of the subsidiaries of the Company for the Financial Year 31 March 2014 hasbeen prepared as per applicable provisions of Accounting Standards as issued by theInstitute of Chartered Accountants (ICAI) forming part of this Annual Report.
Shareholders who wish to have a copy of the full report and accounts of thesubsidiaries will be provided the same on receipt of a written request from them. Thesedocuments will also be uploaded on the Company's Website viz. www.tcil.com will beavailable for inspection during business hours at the Registered Office of the Company.
During the year under review there was neither any appointment nor any resignation.
Further pursuant to Section 149 read with Companies (Appointment and Qualification ofDirectors) Rules 2014 and Clause 49 (II) (B) (3) of the Listing Agreement an independentdirector shall hold office for a term up to five consecutive years on the Board of aCompany and shall be eligible for reappointment for another term of up to five consecutiveyears on passing of a special resolution by the Company.
Furthermore as per Clause 49 of the Listing Agreement entered into with the StockExchanges amended vide Circular No. CIR/CFD/POLICY CELL/2/2014 dated 17 April 2014 aperson who has already served as an independent director for five years or more in aCompany as on 1 October 2014 shall be eligible for appointment on completion of hispresent term for one more term of up to five years only.
Accordingly your Board hereby proposes to appoint Mr. S M Datta Mr. O SwaminathaReddy & Mr. K S Mehta for a consecutive period of 05 years since they have beenassociated with the Company for a period of more than 05 years and Mr. Ashish Bharat Ramfor a period of 02 years since he has been associated with the Company for a period of 03year.
It may kindly be noted the Company need another rotational director on the Board of theCompany to meet the compliance norms as prescribed under the Act. Therefore it isproposed to appoint Mr. Chander Agarwal Joint Managing Director as rotational one andchange his terms of appointment accordingly.
Further pursuant to applicable provisions of the Companies Act 2013 and in accordancewith provisions of Articles of Association of the Company Mr. S N Agarwal & Mrs.Urmila Agarwal Directors of the Company are liable to retire by rotation and beingeligible offer themselves for re-appointment at this Annual General Meeting.
A brief resume of the Directors being re-appointed has been incorporated in thenotice of the Annual General Meeting forming part of this Annual Report.
It is further confirmed that none of the above directors are disqualified under Section164 (2) of the Companies Act 2013 (corresponding Section 274 (1) (g) of the CompaniesAct 1956).
Your directors recommend their re-appointment.
9. Directors' Responsibility Statement
Pursuant to Section 217 (2AA) of the Act the Directors based on the representationreceived from the Management confirm that:
(i) In the preparation of the annual accounts the applicable Accounting Standards readwith requirements set out under Schedule VI to the Companies Act 1956 have been followedand there has been no material departure;
(ii) In the selection of the accounting policies consulted the Statutory Auditors andhave applied them consistently and made judgments and estimates that are reasonable andprudent so as to give a true and fair view of the state of affairs of the Company at the31 March 2014 and of the profit of the Company for the year ended on that date;
(iii) Proper and sufficient care has been taken for the maintenance of adequateaccounting records in accordance with the provisions of the Companies Act 1956 forsafeguarding the assets of the Company and for preventing and detecting fraud and otherirregularities;
(iv) We have prepared the annual accounts on a going concern basis.
M/s R.S. Agarwala & Co. Chartered Accountants Kolkata who are the StatutoryAuditors of the Company hold office till the conclusion of the forthcoming AGM and areeligible for re-appointment. Pursuant to the provisions of section 139 of the CompaniesAct 2013 and the Rules framed thereunder it is proposed to appoint M/s R.S. Agarwala& Co. as Statutory Auditors of the Company from the conclusion of the forthcoming AGMtill the conclusion of the next AGM.
Further M/s R. S. Agarwala & Co. Chartered Accountants Bangalore Branch Auditorfor TCI Seaways Division of the Company are retiring at this AGM and being eligible offerthemselves for re-appointment.
Further M/s. K.B. Chitracar & Co. Chartered Accountants Kathmandu the BranchAuditors for branches situated in Royal Kingdom of Nepal are retiring at this AGM andbeing eligible offer themselves for re-appointment.
The Company has received letters from all of them to the effect that theirre-appointment if made would be within the prescribed limits under Section 141 of theCompanies Act 2013 and that they are not disqualified for re-appointment
Your directors recommend their reappointment.
11. Internal Control Systems
The Company has a proper and adequate system of internal controls. This ensures thatall assets are safeguarded and protected against loss from unauthorized use or dispositionand those transactions are authorized recorded and reported correctly.
An extensive programme of internal audit and management review supplements the processof internal control. Properly documented policies guidelines and procedures are laid downfor this purpose. The internal control system has been designed to ensure that thefinancial and other records are reliable for preparing financial and other statements andfor maintaining accountability of assets.
12. Human Resources
Your Company's Human Resource agenda for the year focused on strengthening four keyareas: building a robust talent pipeline enhancing individual and organizationalcapabilities for future readiness driving greater employee engagement and strengtheningemployee relations with the organisation. Knowing the importance of human resource forsuccess of business and its sustainability the Company has always accorded uniqueattention to its employee. Talent management leadership development and successionplanning are the major focus areas for the Company. There was continued focus during theyear on training and development of employees in various areas with specific focus oncustomer service & technical and managerial capability building.
Your Company has been able to create a favorable work environment that encouragesinnovation and meritocracy. Your Company has put in place a scalable recruitment and humanresource management process enabling it to attract and retain high-caliber employees.Your Company has a consultative and participative management style which has facilitatedachievement of its corporate goals. The morale of employees remained high during the yearcontributing positively to the progress of your Company.
13. Corporate Governance Report & Management Discussion & Analysis Report
Pursuant to Clause 49 of the Listing Agreement entered into with Stock ExchangesCorporate Governance Report with Auditors Certificate thereon & Management Discussionand Analysis Report are attached hereto & forming part of this Report.
14. Corporate Social Responsibility
The Company is committed to serve the communities in the country with a motto ofEquality and Better Life for All through its social cooperation entity-TCIFoundation. Since its inception in the year 1995 TCI Foundation has always beeninstrumental in supporting and assisting the communities including less privileged byfacilitating primary and specialized health services disability rehabilitationeducation women empowerment women and child development environment natural calamityreliefs development of youth and sports and working towards making a meaningfuldifference in their lives. Detailed information on Companys CSR initiative isprovided in this Annual Reports CSR section.
15. Particulars of Employees
As per Section 217(2A) of the Companies Act 1956 read with the Companies (Particularsof Employees) Rules 1975 the names and other particulars of the employees are set out inthe annexure to this Report.
16. Energy Conservation Technology Absorption Foreign Exchange Earnings and Outgo
The particulars relating to energy conservation technology absorption foreignexchange earnings and outgo as required to be disclosed under Section 217(1)(e) of theCompanies Act 1956 read with the Companies (Disclosure of Particulars in the Report ofBoard of Directors) Rules 1988 are provided in Annexure to this Report.
The Directors wish to convey their appreciation to all of the Company's employees fortheir enormous personal efforts as well as their collective contribution to the Company'sperformance.
The Directors would also like to thank the shareholders customers bankers Governmentand all the other stakeholders for the continuous support given by them to the Company andtheir confidence in its management.
| ||For & on behalf of the Board |
|Place: Gurgaon ||S M Datta |
|Date: 24 2014May ||Chairman |
CEO & CFO Certification
The Board of Directors
Transport Corporation of India Limited
We in our respective capacities as Chief Executive Officer (CEO) and Chief FinancialOfficer (CFO) of Transport Corporation of India Limited (the Company) certifythat:
I. We have reviewed the financial statements and the cash flow statement for thefinancial year ended 31 March 2014 and based on our knowledge and belief we state that:
These statements do not contain any materially untrue statement or omit anymaterial fact or contain any statements that might be misleading.
These statements together present a true and fair view of the Company's affairsand are in compliance with the existing accounting standards applicable laws andregulations.
II. We further state that to the best of our knowledge and belief there are notransactions entered into by the Company during the year which are fraudulent illegal orviolative of the Company's code of conduct.
III. We hereby declare that all the members of the Board of Directors and ManagementCommittee have confirmed compliance with the Code of Conduct as adopted by the Company.
IV. We are responsible for establishing and maintaining internal controls and forevaluating the effectiveness of the same over the financial reporting of the Company andhave disclosed to the Auditors and the Audit Committee deficiencies in the design oroperation of internal controls if any of which we are aware and the steps we have takenor propose to take to rectify these deficiencies.
V. We have indicated based on our most recent evaluation wherever applicable to theAuditors and Audit Committee:
Significant changes if any in the internal control over financial reportingduring the year;
Significant changes if any in the accounting policies made during the year andthat the same has been disclosed in the notes to the financial statements;
Instances of significant fraud of which we have become aware and the involvementtherein if any of the management or an employee having significant role in the Company'sinternal control system over financial reporting.
|For Transport Corporation of India Ltd. ||For Transport Corporation of India Ltd. |
|D.P. Agarwal ||A. K. Bansal |
|Vice Chairman & Managing Director ||Group CFO & Co. Secretary |
|Place: Gurgaon ||Place: Gurgaon |
|Date: 24 2014May ||Date: 24 May 2014 |
Annexure to The Directors' Report
I. Particulars pursuant to Companies (Disclosure of Particulars in the Report of Boardof Directors) Rules 1988
A. Conservation of Energy And Research & Development
During the year the Company has taken following steps to conserve energy and in orderto accommodate new technology:
Whenever there was any renovation provision for natural lighting usingtransparent sheets was made to reduce artificial lighting and usage of electricity.
In all offices CFL /LED lighting is being implemented to reduce energyconsumption.
Most of the payments have now been converted into e-payments thereby saving onthe physical cheques.
For reconciliation of accounts with clients the Company insists on statementsby emails rather than physical statements.
Entire Strategic Planning exercise made online thereby saving enormous quantityof paper.
Started using 32 feet vehicles instead of 22 feet vehicles in order to carrymore load at lesser fuel consumption.
TCI has been implementing solar power system on large warehouses being developedby it as well as taken on long term lease for its operations.
B. Technology Absorption Adoption and Innovation
The logistics Industry in India is evolving rapidly and Indian logistics players areincreasing investing in IT and it is playing a vital role in modernizing and organizingthe logistics sector in India.
Introduction of cost effective models have propelled a paradigm shift in the Indianlogistics market. With the latest technology logistics service providers are no longerrestricted to the geographical boundaries but can expand their business to any location.
At TCI it is our constant endeavor to understand customer needs and deliveraccordingly. A customer-centric delivery model has been deployed which encourages adoptionof new services and technology to ensure customer satisfaction and loyalty.
We have a technology-enabled warehousing system which helps ensure better management ofassets. We have also received the Information Week EDGE Award for its pioneering in housedevelopment of the Express Management System (EMS) which is a web-based application. EMSis a pioneering concept by TCI. The system was designed and developed on the basis ofaccounting requirements and detailed cost- benefits analysis and substantially reducesmanual operations.
We have integrated processes through the supply chain to share valuable informationincluding demand signals forecasts inventory transportation potential collaboration toall our stakeholders. Apart from this some of our other technological forays have been:
Integration of our in house ERP with customers ERP has been initiated for betterservice deliverables and tracking of Service level Agreements
Implementation of bar coding each part at SKU level. This is not only forDistribution Center management but also for error free logistics where the human frailtiescan be negated by error proof system.
The Company has also set up an integrated supply chain management system whichenables real-time visibility of material requirement and inventory throughout the valuechain and provides decision support at all stages of operations.
Introduction of Mobility A Mobile App development for Lorry Tracking CNSTracking & Image Capturing (Lorry & Driver) to ensure faster tracking and reducemanual work and enhance error free work.
C. Foreign Exchange Earnings and Outgo
| || ||(Rs.. in Mn) |
|Particulars ||2013 - 14 ||2012 - 13 |
|Foreign Exchange Outgo ||159.89 ||158.18 |
|Foreign Exchange Earnings ||83.82 ||171.22 |
II. Statement under Section 217(2A) of the Companies Act 1956 and the Companies(Particulars of Employees) Rules 1975.
|S. No. ||Name & Qualification ||Age (In years) ||Designation/ Nature of Duties ||Remuneration (in Rs.) ||Exp. (In years) ||Date of Commencement ||Previous employment held |
|1 ||Mr. D.P. Agarwal* B.Com ||64 ||Vice - Chairman & Managing Director Overall Management ||36401523 ||49 ||10 April 1996 ||VC & MD TCI Industries Ltd. |
|2 ||Mr. Vineet Agarwal* B.Sc. (Econ.) ||40 ||Managing Director General Management ||29690128 ||18 ||1 April 1996 ||Executive TCI Industries Ltd. |
|3 ||Mr. Chander Agarwal* B.Sc. in Business Admin. ||35 ||Jt. Managing Director General Management ||24662797 ||12 ||1 November 2002 ||- |
|4 ||Mr. Jasjit Singh Sethi* AMP Havard Business School ||46 ||CEO TCI SCS Division ||8799999 ||26 ||1 August 2000 ||Zonal Logistic Manager Apollo Tyres Ltd. |
|5 ||Mr. Phool Chand Sharma* AMP Havard Business School ||52 ||CEO TCI XPS Division ||6300006 ||30 ||1 January 1984 || |
*Nature of employment contractual as per the terms of appointment.
Note: Remuneration stated above include inter-alia value of perquisites and otherbenefits as per provisions of the Income Tax Act 1961 and Rules made hereunder andCompany's contribution to Provident Fund but does not include Gratuity paid orcontribution made to Gratuity Fund.