DIRECTORS' REPORT TO THE MEMBERS OF TINNA RUBBER AND INFRASTRUCTURE LIMITED Your Directors take pleasure in presenting the Twenty Eighth Annual Report of your Company, together with the Audited Financial Statements for the Financial Year ended March 31, 2015. 2. FINANCIAL REVIEW AND STATE OF COMPANY'S AFFAIRS Our financial performance despite the challenging operating environment underpins the success of our strategy. During the year under review Profit before tax and extra ordinary items was Rs. 972.38 lacs as compared to Rs. 418.08 lacs in the previous Financial Year showing a growth of 132.54 %. Gross revenue from operations was Rs. 9961.43 lacs as compared to Rs. 9835.79 lacs in the previous Financial Year with a marginal growth of 1.27 %. Future outlook of the Company looks bright. The Company proposes to transfer Rs.52.62 lacs to the general reserve out of the amount available for appropriation. Main business of the Company is manufacture of Crumb Rubber, Crumb Rubber Modifier, Modified Bitumen, Bitumen Emulsion and allied products. Other businesses include Trading of Agro Commodity and Agro Warehousing business carried on through wholly owned subsidiary Tinna Trade Pvt. Limited. Therefore, Investment (note 13 & 16) are further classified as followings undertaking: 3. DIVIDEND The Board has, subject to the approval of the Members at the ensuing Annual General Meeting, recommended a dividend of Rs. 2/- (20%) per fully paid-up Equity Share of Rs.10/-each of the Company, for the year ended March 31, 2015. Together with Corporate Tax on dividend, the total outflow, on account of equity dividend, will be Rs. 2.06 crores, vis-avis Rs. 1.00 crores paid for Financial Year 2013-14. 4. PROJECTS AND EXPANSION PLANS The Company won contract for supply of 22000 Mt crumb rubber modifier from Indian Oil Corporation Ltd. Company has also won contract for supply of 8000 Mt crumb rubber from Hindustan Colas Limited. We are seeing renewed focus of our Government to accelerate spending in road building and infrastructure, which will result in higher sales of CRM in the coming years. The Company has already ordered two additional lines for tyre rubber reclaim which hopefully will be commissioned during the Financial Year 2015-16 to manufacture Ultrafine Rubber Compound. The Company is in process of introducing high quality ultrafine rubber reclaims for rubber compounding and for rubber components industry. The Company is also very actively exploring the overseas market for export of crumb rubber and reclaim of crumb rubber. 5. SUBSIDIARY, JOINT VENTURE (JV) AND ASSOCIATE COMPANIES The Company has two subsidiaries as on March 31, 2015. There are two associate Companies within the meaning of Section 2(6) of the Companies Act, 2013 ("Act"). There is no JV Company of the Company. Further there has been no material change in the nature of the business of the subsidiaries & associate companies. Pursuant to provisions of Section 129(3) of the Act, a statement containing salient features of the financial statements of the Company's subsidiaries & associate Companies in Form AOC-1 is provided at Annexure "A" to this report. Pursuant to the provisions of Section 136 of the Act, the financial statements of the Company, consolidated financial statements along with relevant documents and separate audited accounts in respect of subsidiaries are available on the website of the Company. During the Financial Year 2014-15 status of B.G.K. Infrastructure Developers Private Limited changed from Associates to Subsidiary Company. Policy for determining material subsidiaries of the Company is available on the website of the Company www.tinna.in The details of major subsidiaries, JV and associate Companies are given below: (i) SUBSIDIARIES TINNA TRADE PVT. LTD. (TTPL) Tinna Trade Pvt. Ltd. (TTPL) is 100% subsidiary of Tinna Rubber & Infrastructure Ltd. TTPL is currently engaged in the business of trading (domestic as well as international market) of agro commodities like Pulses Yellow Peas, Green Peas, Chick Peas, Lentils, Kaspa Peas etc. and Grain and Oil Seed Soya Bean, Soya Bean Doc/Meals, Maize, Wheat, Barley etc. TTPL's primary focus is on importing of Pulses like Yellow Peas, Green Peas, Chick Peas, Lentils, Kaspa Peas etc. from Canada and Australia. It has presence at all the major Gateway Ports of India which cater to handling of agriculture commodities. TTPL is playing a major role in bringing agriculture produce directly from Canada and Australia to millers/wholesalers in India. The wholesalers then sell these agricultural commodities to retailers. The Company has their own team at each location for effective execution, distribution and collection. In the Financial Year 2013-14, the Company had entered into strategic agreement with Vitol Asia Pte Limited to represent them in India. Revenue from operations (net) for the Financial Year 2014-15 is Rs. 25287.54 lacs as compared to Rs. 25178.81 lacs showing a marginal growth of .43%. Profit after tax during the year under review is Rs. 25.91 lacs as compared to Rs. 88.08 lacs in the previous Financial Year. B.G.K. INFRASTRUCTURE DEVELOPERS PRIVATE LIMITED The Company is engaged in the business of professional warehousing including providing logistic solution to the Agri commodity industry. Revenue from operations (gross) for the Financial Year 2014-15 is Rs. 394.37 lacs as compared to Rs. 205.46 lacs showing a remarkable growth of 77.34 %. Loss after tax during the year under review is Rs. 139.13 lacs as compared to Rs. 3.62 lacs in the previous Financial Year. (ii) ASSOCIATES TP BUILDTECH PVT. LTD. (TPBPL) TPBPL is an associate Company of Tinna Rubber And Infrastructure Ltd. The Company is engaged in the business of manufacturing of construction chemicals. With the help of lots of Research & Development activities during the Financial Year 2014-15, TPBPL has succeeded in getting orders from various renowned brands and some of the best construction Companies in the country. Revenue from operations (gross) for the Financial Year 2014-15 is Rs. 1256.97 lacs as compared to Rs. 277.41 lacs showing a remarkable growth of 353.11%. Loss after tax during the year under review is Rs. 71.56 lacs as compared to Rs. 90.01 lacs in the previous Financial Year. BGNS INFRATECH PVT.LTD. The Company is engaged in the business of real estate activities. Revenue from operations for the Financial Year 2014-15 is Rs. 60.00 lacs as compared to nil in the previous Financial Year. Profit after tax during the year under review is Rs. 17.70 lacs as compared to loss of Rs. 3.41 lacs in the previous Financial Year. 6. RISK MANAGEMENT The Company's risk management framework identifies and evaluates business risks and opportunities. The Company recognises that these risks need to be managed and mitigated to protect its shareholders and other stakeholders, to achieve its business objectives and enable sustainable growth. The risk framework is aimed at effectively mitigating the Company's various business and operational risks, through strategic actions. Risk management is embedded in our critical business activities, functions and processes. The risks are reviewed for the change in the nature and extent of the major risks identified since the last assessment. It also provides control measures for risks and future action plans. Tyres are highly inflammable and your Company's property and stock are subject to risk of loss due to fire and flood and these are mitigated with insurance and fire detecting and firefighting equipments and proper security personnel. Regular training program for employees are being organised by the Company relating to fire control. 7. INT ERNAL C O NTRO L S , INTE RNAL FINANC IAL C O NTROLS AND AUDIT OVERVIEW A system of internal control, commensurate with the size and nature of its business, forms an integral part of the Company's corporate governance policies. INTERNAL CONTROL The Company has a proper and adequate system of internal control commensurate with the size and nature of its business. Some of the significant features of internal control systems includes: • Ensuring compliance with laws, regulations, standards and internal procedures and systems. • De-risking the Company's assets/resources and protecting them from any loss. • Ensuring the accounting system's integrity proper and authorised recording and reporting of all transactions. • Preparing and monitoring of annual budgets for all operating and service functions. • Ensuring the reliability of all financial and operational information. • Forming an Audit committee of the Board of Directors. The Audit Committee regularly reviews audit plans, significant audit findings, controls and compliance with accounting standards and so on. • Continuous up-gradation of IT Systems. The internal control systems and procedures are designed to assist in the identification and management of risks, the procedure-led verification of all compliance as well as an enhanced control consciousness. 8. FIXED DEPOSITS The Company has not accepted any fixed deposits from the public. Therefore, it is not required to furnish information in respect of outstanding deposits under Non-banking, Non-financial Companies (Reserve Bank) Directions, 1966 and Companies (Accounts) Rules, 2014. 9. SHARE CAPITAL There was no change in the Company's share capital during the year under review. The Company's paid up equity share capital remained at Rs. 8,56,47,500/-comprising of85,64,750 equity shares of Rs. 10/- each. 10. CORPORATE GOVERNANCE The Company has complied with requirements of Clause 49 of the Listing Agreement regarding Corporate Governance. Corporate Governance Report in accordance with Clause 49 of the listing agreement is given in this Annual Report. Certificate from Company Secretary in practice on compliance of mandatory requirements thereof is also given in this report. 11. MANAGEMENT DISCUSSION & ANALYSIS A detailed report on the Management Discussion & Analysis is provided in Annexure "B" to the Directors' Report. 12. DIRECTORS AND KEY MANAGERIAL PERSONNEL In accordance with the provisions of Section 152 of the Companies Act, 2013 Mr. Anand Kumar Singh, Director, retires by rotation at theforthcoming Annual General Meeting and being eligible, offers himself for re-appointment. Mr. Ashok Kumar Sood was appointed as an Additional Director by the Board of Directors of the Company in their meeting held on 29th September, 2014. In terms of Section 161 of the Companies Act, 2013, Mr. Ashok Kumar Sood holds office upto the date of this Annual General Meeting. Further he has been designated as an Independent Director. The terms and conditions of appointment of independent director are as per Schedule IV of the Act. Healso submitted a declaration that he meets the criteria of independence as providedin Section 149(6) of the Act and there has been no change in the circumstances which may affect their statusas independent director during the year. Pursuant to the provisions of Section 149 of the Act, Mr. Ashish Madan and Mr. Vivek Kohli were appointed/confirmed as independent Directors at the Annual General Meeting of the Company held on 29th September, 2014. The terms and conditions of appointment of independent Directors are as per Schedule IV of the Act. They have submitted a declaration that each of them meets the criteria of independence as provided in Section 149(6) of the Act and there has been no change in the circumstances which may affect their status as independent director during the year. In terms of the recommendation and approval of Nomination and Remuneration Committee and approval of the Board of Directors of the Company in their meeting held on 18thDecember, 2014, Mrs. Shobha Sekhri was appointed as Additional Director of the Company with effect from 18th December, 2014 and designated as Whole Time Director in accordance with the provisions contained in Section 196 and 197 read with Section 203 of the Companies Act, 2013. In terms of Section 161 of the Companies Act, 2013, Mrs. Shobha Sekhri holds office upto the date of this Annual General Meeting. The details of remuneration payable to Mrs. Shobha Sekhri and the terms and conditions of the appointment are given in the resolution.Mrs. Shobha Sekhri also meets the requirement of Woman Director in the Company Mr. Maneesh Mansingka and Mr. Kapil Sekhri resigned from the post of Director of the Company w.e.f. 29th May, 2014, Mr. Rahul Garg resigned from the post of Director w.e.f. 29th September, 2014 and Mr. Kulbir Singh resigned from the post of Director w.e.f. 18th December, 2014.Your Directors place on record their deep appreciation for the valuable services rendered by these Directors during their tenure as Directors of the Company. Mr. Raghuvansh Mani, Company Secretary resigned w.e.f 31st March, 2015 and Mr. Y.P. Bansal appointed as Company Secretary w.e.f. 16thApril, 2015. The disclosure under Clause 49 of the Listing Agreement in respect of Directors appointed/ reappointed during the Financial Year is given in the Notice of Annual General Meeting. 13. BOARD EVALUATION The Board carried out an annual performance evaluation of its own performance, the individual Directors as well as the working of the Committees of the Board. The performance evaluation of the Independent Directors was carried out by the entire Board. The performance evaluation of the Chairman and the Non-Independent Directors was carried out by Independent Directors. 14. AUDITORS AND AUDITOR'S REPORT A. STATUTORY AUDITORS At the Company's Twenty Seventh Annual General Meeting (AGM) held on 29th September, 2014, M/s. V. R. Bansal & Associates, Chartered Accountants, New Delhi, were appointed as the Company's Statutory Auditors from the conclusion of the Twenty Seventh AGM till the conclusion of the Twenty Ninth AGM. In terms of Section 139 (1) of the Companies Act, 2013, the appointment of the statutory auditors to hold office from the conclusion of the Twenty Eighth AGM until the conclusion of the Twenty Ninth AGM is placed for your ratification. The Notes on financial statement referred to in the Auditors' Report are self-explanatory and do not call for any further comments. There was slight delay in payment owing to non-adherence of delivery schedule by the suppliers in Micro, small and medium enterprises. However, the Company has paid the principal amount during the year. B. COST AUDITORS Pursuant to Section 148(2) of the Companies Act, 2013 read with the Companies (Cost Records and Audit), Amendment Rules 2014, your Company is required to get its cost accounting records audited by a Cost Auditor. Accordingly, the Board at its meeting held on 12th August, 2015, has on the recommendation of the Audit Committee, appointed M/s Pant S. & Associates (ICWAI registration no. 101402), Cost Accountants to conduct the Audit of the cost accounting records of the Company for the Financial Year 2015-16. C. SECRETARIAL AUDITOR Pursuant to the provisions of Section 204 of the Companies Act, 2013 and The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company had appointed M/s. Ajay Baroota & Associates, Company Secretaries to undertake the Secretarial Audit of the Company. The Report of the Secretarial Audit carried out is annexed herewith as Annexure "C". The report does not contain any observation or qualification requiring explanation or comments from the Board under Section 134(3) of the Companies Act, 2013. 15. CONSOLIDATED FINANCIAL RESULTS As required by Clause 32 of the Listing Agreement with the Stock Exchanges, the Consolidated Financial Statements have been prepared in accordance with applicable accounting Standards. The Audited Consolidated Financial Statements together with Auditors Report form part to of the Audit Report. The Consolidated net profit of the Company was Rs.583.85 lacs during the Financial Year 2014-15 as compared to Rs. 2212.84 in the previous Financial Year. The previous Financial Year net profit includes Rs. 1917.05 lacs as extra ordinary income. 16. COMPANY'S POLICY ON DIRECTORS' APPOINTMENT AND REMUNERATION AND OTHER DETAILS The policy on Directors' appointment and remuneration and other matters provided in Section 178(3) of the Companies Act, 2013 has been disclosed in the Corporate Governance Report, which forms a part of this report and is available on the website of the Company www.tinna.in 17. RELATED PARTY TRANSACTIONS Related Party Transactions that were entered into during the financial year were generally on arm's length basis and in the ordinary course of business subject to certain exceptions. The policy on dealing with Related Party Transactions as approved by the Board is uploaded on the Company's website <http://www.tinna.in> . The Policy intends to ensure that proper reporting, approval and disclosure processes are in place for all transactions between the Company and Related Parties. This Policy specifically deals with the review and approval of Related Party Transactions keeping in mind the potential or actual conflicts of interest that may arise because of entering into these transactions. Related Party Transactions are placed before the Audit Committee for review and approval. Prior omnibus approval is obtained for Related Party Transactions for transactions which are of repetitive nature and / or entered in the ordinary course of business and are at Arm's Length. The disclosure of related party transactions required under Section 134 (3)(h) read with section 188(2) of the Companies Act, 2013 is given in Form AOC 2. Accordingly related party transactions which were entered into during the year by your Company, is given in Annexure "D" to this report. Your Directors draw your attention to Note 34 to the Standalone financial statements and Note No 35 to the consolidated financial statements which sets out related party disclosures. 18. CORPORATE SOCIAL RESPONSIBILITY INITIATIVES Provisions of Section 135 of the Companies Act, 2013 relating to Corporate Social Responsibility were not applicable to the Company during Financial Year 201415. The Company has formulated the CSR Policy and the same is available on the website of the Company www.tinna.in 19. ENVIRONMENTAL INITIATIVES Tinna has always been a frontrunner in continuously improving its operational performance in all areas including quality, safety and environment protection. These initiatives have been taken across all production facilities of the Company. The Company has undertaken various measures to address environmental issues at its plant locations. 20. DIRECTORS' RESPONSIBILITY STATEMENT Pursuant to the requirements under Section 134 subsection 3(c) and sub-section 5 of the Companies Act, 2013, your Directors hereby state and confirm that: 1. In the preparation of the annual accounts, the applicable accounting standards have been followed and there was no material departure. 2. Such accounting policies have been selected and applied consistently and judgements and estimates have been made that are reasonable and prudent to give a true and fair view of the Company's state of affairs as at March 31, 2015 and of the Company's profit or loss for the year ended on that date. 3. Proper and sufficient care has been taken 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. 4. The annual financial statements have been prepared on a going concern basis. 5. That internal financial controls were laid down to be followed and that such internal financial 6. Proper systems were devised to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating. 21. MATERIAL CHANGES AND COMMITMENTS There was fire at units of the Company at Wada (Maharashtra) and Haldia (West Bengal) during first quarter of Financial Year 2015-16. Part of the inventory of raw material, finished goods, stock in process, building and plant & machinery were damaged in the fire. The units are fully insured and all stocks and assets are fully covered. The Company is in the process of lodgement of insurance claim with the insurance Company. Restoration work is in process and insurance claim shall be lodged on ascertainment of final claim. The units have partially restarted. 22. PARTICULARS OF EMPLOYEES In terms of the provisions of Section 197(12) of the Companies Act, 2013 read with Rules 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, a statement showing the names and other particulars of the employees drawing remuneration in excess of the limits set out in the said rules are provided in the Annexure "E" forming part of the Annual Report. Disclosures pertaining to the remuneration and the other details as required under Section 197(12) of the Companies Act, 2013 read with rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are also provided in the Annexure "E" forming part of the Annual Report. 23. DISCLOSURES NUMBER OF MEETINGS OF THE BOARD OF DIRECTORS During the year, nine Board Meetings were convened and held, the details of which are given in the corporate governance report. The intervening gap between the meetings was within the period prescribed under the Companies Act, 2013. AUDIT COMMITTEE The Audit Committee comprises of two Non-Executive Directors, both are Independent Directors and one Executive Non Independent Director. Mr. Vivek Kohli is the Chairman of the Audit Committee. The Members possess adequate knowledge of Accounts, Audit, Finance, etc. The Composition of the Audit Committee meets the requirements as per Section 177 of the Companies Act, 2013 and Clause 49 of the Listing Agreement. There are no recommendations of the Audit Committee which have not been accepted by the Board. EXTRACT OFANNUAL RETURN In accordance with the provisions of Section 134(3)(a) of the Companies Act, 2013, the extract of the annual return in Form No. MGT - 9 is attached as Annexure "F" hereto and forms a part of this report. VIGIL MECHANISM / WHISTLE BLOWER POLICY The Company has formulated and published a Whistle Blower Policy to provide Vigil Mechanism for employees including Directors of the Company to report genuine concern and the same is available on the website of the Company www.tinna.in. The provisions of this policy are in line with the provisions of the Section 177(9) of the Act and the revised Clause 49 of the Listing Agreements with stock exchanges. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS UNDER SECTION 186 Details of Loans, guarantees and investments covered under the provisions of Section 186 of the Companies Act, 2013 are given in the notes to the Financial Statements. PARTICULARS REGARDING CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO Information in accordance with the provisions of Section 134(3)(m) of the Companies Act, 2013 read with Rule 8 of the Companies (Accounts) Rules, 2014 regarding conservation of energy, technology absorption and foreign exchange earnings and outgo is given in the statement annexed (Annexure "G") hereto and forms a part of this report. D ISC LO S URE UNDE R THE S EXUAL HARASSMENT OF WOMEN AT WORK PLACE ( PREVE NT IO N, PRO HIBITIO N AND REDRESSAL) ACT, 2013. The Company has in place an Anti-Sexual Harassment Policy in line with the requirements of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. An Internal Complaints Committee (ICC) has been set up to redress complaints received regarding sexual harassment. All employees (permanent, contractual, temporary, trainees) are covered under this policy. No complaints pertaining to sexual harassment were received during Financial Year 2014-15. DECLARATION GIVEN BY INDEPENDENT DIRECTORS UNDER SUB-SECTION (6) OF SECTION 149 OF THE COMPANIES ACT, 2013 The Independent Directors have given declaration that they meet the criteria of independence as specified in sub-section (6) of section 149of The Companies Act, 2013. FAMILIARIZATION PROGRAMME FOR INDEPENDENT DIRECTORS The Company proactively keeps its Directors informed of the activities of the Company, its management and operations and provides an overall industry perspective as well as issues being faced by the industry. The policy on familiarization programmes is available on the Company's website www.tinna.in POLICY FOR DETERMINING MATERIAL SUBSIDIARIES AND POLICY ON DEALING WITH RELATED PARTY TRANSACTIONS Policy for determining material subsidiaries of the Company and Policy on dealing with related party transactions areavailable on the website of the Company www.tinna.in OTHER DISCLOSURES/ REPORTING Your Directors state that no disclosure or reporting is required in respect of the following items as there were no transactions on these items during the year under review: 1. Details relating to deposits covered under Chapter V of the Act. 2. Issue of equity shares with differential rights as to dividend, voting or otherwise. 3. Issue of shares (including sweat equity shares and ESOPs) to employees of the Company under any scheme. 4. Neither the Managing Director nor the Whole- time Directors of the Company receive any remuneration or commission from any of its subsidiaries. 5. No significant or material orders were passed by the Regulators or Courts or Tribunals which impact the going concern status and Company's operations in future. 24. HUMAN RESOURCES AND INDUSTRIAL RELATIONS The Company firmly believes that Human Resource is the key driver for the success of any organization. Teamwork is encouraged and at the same time every individual is trained and empowered to take right decisions at right time. Training has become a part of the lives of every employee so that innovation becomes the key for all their activities. Your Company has a dedicated team of 756 employees as on 31st March, 2015 as compared to 454 employees as on 31st March, 2014 showing a growth of66.52%. 25. APPRECIATION Your Directors take this opportunity to express their appreciation for the cooperation and assistance received from the concerned departments of Central and State Governments, financial institutions, banks and shareholders during the year under review. The Directors also wish to place on record their appreciation of the devoted and dedicated services rendered by all employees of the Company. For and on behalf of the Board of Directors Tinna Rubber And Infrastructure Limited Bhupinder Kumar Sekhri Chairman DIN: 00087088 Office Address: Tinna House, No. 6, Sultanpur, Mandi Road Mehrauli, New Delhi-110030 Place: New Delhi Date: 12th August, 2015 |