REPORT OF THE BOARD OF DIRECTORS

DEAR SHAREHOLDERS,

Your Directors have pleasure in presenting the 50th Annual Report together with the Audited Statement of Accounts of Tantia Constructions Limited ("the Company") for the year ended 31st March, 2015

3. DIVIDEND

During the year under review, with a view to conserve the resource for future development of the Company, your Directors do not recommended any dividend for the year ended 31 st March, 201 5.

4. SUMMARY OF OPERATIONS

During the year, the net revenue from operations of your Company decreased by 29.91%, from Rs. 74662 Lacs to Rs. 52330 Lacs. For FY2015, your Company's loss after tax stood at Rs. 6111 Lacs vis-a-vis profit after tax stood to Rs. 674 Lacs in the previous year, registering a loss of the company.

During the year under review, your Company has received requisite approval from the concerned authority for Corporate Debt Restructuring.

5. TRANSFER TO RESERVES

Since the company is having losses so no amount is being transferred to reserve account.

6. SHARE CAPITAL

The paid up Equity Share Capital as on 31st March, 2015 was Rs. 18,82,30,660/-. During the year under review, your Company has redeemed its 1,40,000 10.5% cumulative preference shares of Rs. 10 each which were issued on 8th January, 2005 for a maximum period of 10 years. Therefore, the paid up capital of the Company after such redemption is Rs. 18,82,30,660/-.

During the year under review, the Company has not issued shares with differential voting rights, neither granted stock options nor issued sweat equity shares.

7. CHANGE IN NATURE OF BUSINESS

During the year under review, the Company has not changed its nature of business.

8. MATERIAL CHANGES AFFECTING THE FINANCIAL POSITION OF THE COMPANY

There were no material changes and commitments affecting the financial position of the Company between the end of financial year (31st March, 2015) and date of the report (30th May, 2015).

9. INDUSTRY SCENARIO

Infrastructure sector is one of the key drivers of economic development in the developing country like India. In recent years, India has consistently increased investment on infrastructure from 5% of GDP in 10th five year plan period to 9% in 11th five year plan. India's planning commission has projected an investment of US$ 1 trillion for the infrastructure in 12th five year plan. However, development in basic infrastructure is still relatively slower compared to other countries. The rapid growth of the Indian economy in recent years has placed increasing stress on physical infrastructure i.e. electricity, railways, roads, ports, irrigation, water supply and sanitation, all of which already suffer from deficit in terms of capacities as well as efficiencies. Infrastructure sector is mainly affected due to delay in project awarding, environmental clearances hurdles, land acquisition issues, slower execution, lack of cheaper financing options etc.

10. OUTLOOK

Sustained increase in infrastructure is expected to be one of the crucial factors for sustaining strong growth during the current decade. Significant investment in physical infrastructure will also lead to employment generation, increased production efficiency, reduction in cost of doing business and improved standard of living.

Infrastructure investment (as measured by Gross Fixed Capital Formation) is expected to surge to 12.1% of GDP by FY20 from 7.0% of GDP in FY11. Rising demand for infrastructure facilities, given the rapid growth in urbanisation, bulging of the middle class and an increasing working-age population, would engender substantial increase in infrastructure investments during the current decade.

Apart from development of infrastructure facilities in existing cities/towns, increased focus is expected on infrastructure development in new townships/rural areas. Regional-urban development plans will be made to identify new growth corridors. A substantial rise in rural infrastructure development, which will provide further impetus to economic growth in rural areas, in turn resulting in significant reduction in poverty. Increased investment in rural infrastructure will benefit the rural population through higher income, rise in employment opportunities, and lower cost of basic goods due to improvement in transportation facilities. Nonetheless, improvement in rural infrastructure will need to be properly targeted to benefit the rural poor.

The Indian Economy in 2014-15 has emerged as one of the largest economies with promising economic outlook on the back of controlled inflation, rise in domestic demand, increase in investments, decline in oil prices and reforms among others. But the construction sector maintains a negative outlook due to strained liquidity resulting from lengthened working capital cycles and restrained lending by banks. Aggressive bidding at low margins has reduced potential surpluses from operations

The government has unveiled plans to invest US$ 137 billion in its decrepit rail network over the next five years, heralding Prime Minister Narendra Modi's aggressive approach to building infrastructure needed to unlock faster economic growth. Over the next year, India will increase investment by about a half to US$ 16.15 billion including funds raised by market borrowing.

11. DETAILS OF BOARD MEETINGS

During the year five Board Meetings were convened and held 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.

12. COMMITTEES OF BOARD

a. Audit Committee

The composition and terms of reference of the Audit Committee has been furnished in the Corporate Governance Report forming part of this Annual Report. There has been no instance where the Board has not accepted the recommendations of the Audit Committee

b. Nomination and Remuneration Committee

The composition and terms of reference of the Nomination and Remuneration Committee has been furnished in the Corporate Governance Report forming part of this Annual Report.

c. Stakeholders Relationship Committee

The composition and terms of reference of the Share transfer cum Stakeholders Relationship Committee has been furnished in the Corporate Governance Report forming part of this Annual Report.

d. Finance Committee

The composition and terms of reference of Finance Committee has been furnished in the Corporate Governance Report forming part of this Annual Report.

e. Corporate Social Responsibility Committee

The composition and terms of reference of Corporate Social Responsibility Committee has been furnished in the Corporate Governance Report forming part of this Annual Report.

Corporate Social Responsibility (CSR) Policy

Committee had approved the CSR policy and the Budget. The CSR policy is uploaded on Company's website. Further, the Report on CSR Activities/ Initiatives is enclosed as Annexure A.

13. FINANCE

Cash and cash equivalent as at 31st March, 2015 was Rs. 3211 Lacs. The Company continues to focus on judicious management of its working capital. Receivables, inventories and other working capital parameters were kept under strict check through continuous monitoring.

14. EXTRACT OF ANNUAL RETURN

Pursuant to section 92(3) of the Companies Act, 2013 ('the Act') and rule 12(1) of the Companies (Management and Administration) Rules, 2014, extract of annual return (MGT-9) is annexed as Annexure B.

15. VIGIL MECHANISM / WHISTLE BLOWER POLICY

The Company has a vigil mechanism policy named Vigil Mechanism Policy (VMP) to deal with instance of fraud and mismanagement, if any. The details of the Vigil Mechanism Policy is explained in the Corporate Governance Report and also posted on the website of the Company at www.tantiagroup.com/

16. DISCLOSURES UNDER SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION & REDRESSAL) ACT, 2013

An Internal Complaints Committee has been constituted under the Anti Sexual Harassment Policy approved by the Board of Directors of the Company, which provides a forum to all female personnel to lodge complaints (if any) therewith for redressal.

During the year, no complaint was lodged with the Internal Complaints Committee.

17. DIRECTORS' RESPONSIBILITY STATEMENT

As required under Section 134 of the Companies Act, 2013 your Directors hereby confirms:

a) that in the preparation of the annual financial statements for the year ended 31st March, 2015, the applicable accounting standards have been followed along with proper explanation relating to material departures, if any;

b) that such accounting policies as mentioned in Notes to the Financial Statements have been selected and applied consistently and judgment and estimates have been made that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at 31st March, 2015 and of the profit of the Company for the year ended on that date;

c) that 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;

d) that the annual financial statements have been prepared on a going concern basis;

e) that proper internal financial controls were in place and that the financial controls were adequate and were operating effectively;

f) that systems to ensure compliance with the provisions of all applicable laws were in place and were adequate and operating effectively.

18. AUDITORS

a) Statutory Auditors

In the last AGM held on 9th September, 2014 M/s. Konar Mustaphi & Associates, (FRN No: 314125E) Chartered Accountants have been appointed Statutory Auditors of the Company for a period of one year.

The Company's Auditors, M/s Konar Mustaphi & Associates, Chartered Accountants, Kolkata who retire at the ensuing Annual General Meeting of the Company are eligible for reappointment for further period of five years. They have confirmed their eligibility under Section 141 of the Companies Act, 2013 and the Rules framed thereunder for reappointment as Auditors of the Company. As required under Clause 41 of the Listing Agreement, the auditors have also confirmed that they hold a valid certificate issued by the Peer Review Board of the Institute of Chartered Accountants of India. Members' attention is invited to the observation made by the Auditors under "Emphasis of Matter" appearing in the Auditors Reports.

i) Para vii to the Annexure to the Independent Auditors Report regarding delay in payment of statutory liabilities.

ii) Note 42 to the Financial Statement for repossession of assets by the financers due to nonpayment of their installments.

iii) Note 44 to the Financial Statement in relation to excess payment of managerial remuneration for the financial year 2013-14 which is yet to be taken up with the Central Government for their approval.

iv) Note 43 to the Financial Statements regarding provision for gratuity made on an estimated basis and not as per the actuarial valuation, thereby not following Accounting Standard 15 (AS 15).

Management Response to the emphasis on matters in Auditors Report

i) On Auditors observation made in para vii of the Annexure to Auditor's Report, your directors wish to inform that all necessary measures are being made for repayment in statutory liabilities with interest.

ii to iv) As regards to emphasis of matter expressed by the Auditors in their Report with regards to Note nos 42,44 and 43 of Standalone Financial Statement attention is hereby drawn that Note nos 42,44 and 43 of Standalone Financial Statement are self explanatory and therefore not call for any further comments.

Further, the report of the Statutory Auditors alongwith notes to Schedules is enclosed to this report.

b) Cost Auditors

Pursuant to Section 148 of the Companies Act, 2013 read with The Companies (Cost Records and Audit) Amendment Rules, 2014, the cost audit records maintained by the Company in respect of its construction activity is required to be audited. Your Directors had, on the recommendation of the Audit Committee, appointed M/s S Chhaparia & Associates.(FRN: 101591) to audit the cost accounts of the Company for the financial year 2014-2015 on a remuneration of Rs. 85,000/- per annum plus reimbursement of out of pocket expenditure, and applicable taxes. As required under the Companies Act, 2013, the remuneration payable to the cost auditor is required to be placed before the Members in a general meeting for their ratification. Accordingly, a Resolution seeking Member's ratification for the remuneration payable to M/s S Chhaparia & Associates, Cost Auditors is included at the Notice convening the Annual General Meeting.

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 has appointed M/s MR & Associates,(CP No: 2551) , a firm of Company Secretaries in Practice to undertake the Secretarial Audit of the Company. The Report of the Secretarial Audit Report is annexed herewith as "Annexure C".

The Company is pleased to inform that there were no qualification/reservation/adverse remarks made by the Secretarial Auditor.

19. RELATED PARTY TRANSACTIONS

All related party transactions that were entered into during the financial year were on an arm's length basis and were in the ordinary course of business and that of provisions of Section 188 of the Companies Act, 2013 are not attracted. Thus disclosure in AOC-2 is not required. Further, there are no materially significant related party transactions made by the Company with Promoters, Directors, Key Managerial Personnel or other designated persons which may have a potential conflict with the interest of the Company at large.

All Related Party Transactions are placed before the Audit Committee as also the Board for approval. Prior omnibus approval of the Audit Committee is obtained on a quarterly basis for the transactions which are of a foreseen and repetitive nature. The transactions entered into pursuant to the omnibus approval so granted are audited and a statement giving details of all related party transactions is placed before the Audit Committee and the Board of Directors for their approval on a quarterly basis. The statement is supported by a Certificate from the MD and the CFO.

The policy on Related Party Transactions as approved by the Board is uploaded on the Company's website. The weblink of the same has been provided in corporate governance report.

None of the Directors has any pecuniary relationships or transactions vis-a-vis the Company.

The Policy on materiality of related party transactions as approved by the Board may be accessed on the Company's website at the link www.tantiagroup.com/Investor's  

Corner/Policies/Related Party Transaction and Materiality Policy.

20. SUBSIDIARY COMPANIES

During the year under review your Company is having four (4) subsidiary companies namely- Tantia Infrastructure Private Limited, Tantia Batala-Beas Tollway Private Limited, Tantia Sanjauliparkings Private Limited and Tantia Raxaultollway Private Limited, out of which the first three are wholly owned subsidiaries of the Company. The statement containing salient features of the financial statement of subsidiaries/associate companies/joint venture is enclosed in Annexure 'D' in Form AOC-1 Further as per section 136 of the Companies Act, 2013, the audited financial statements, including the consolidated financial statements and related information of the Company and audited accounts of each of the subsidiaries are available at our website at www.tantiagroup.com/Investor's Corner/Annual Report.

Further, brief about the business of the each of the Subsidiaries and Associates is given hereunder:-

I. Tantia Infrastructure Private Limited - The Company is engaged in executing various infrastructure projects.

II. Tantia Batala Beas Tollway Private Limited - The Company is in process to enhance its resources, technology, and manpower to strength its future capabilities by development and Operation & Maintenance of Batala- Mehta- Beas Road (MDR-66) on Design, Build, Finance, Operate and Transfer (DBFOT) Basis in the state of Punjab.

III. Tantia Sanjauliparkings Private Limited - The Company is a Special Purpose Vehicle (SPV) incorporated specifically to execute the project received from H. P. Infrastructure Development Board, Shimla for Development of Parking Complex at Sanjauli, Shimla in Public Private Partnership (PPP) format.

IV. Tantia Raxaultollway Private Limited - The Company is a Special Purpose Vehicle (SPV) incorporated specifically to execute the project received from National Highways Authority of India (NHAI) for 2 Two-Laning of Piprakothi-Raxaul Section of NH-28A (from Km 0.600 to Km 62.064) and construction of 2-Lane Road from Km 62.064 to ICP Raxaul (7.33 Km length) in the State of Bihar under NHDP Phase-III on Design, Build, Finance, Operate and Transfer on BOT (Toll) Basis. The Company has already started the execution of aforesaid works.

A Policy has been formulated for determining the Material Subsidiaries of the Company pursuant to Clause 49 of the Listing Agreement with the Stock Exchanges. The said Policy has been posted on the Company's website at the weblink www.tantiagroup.com/Investor's Corner/Policies/Material Subsidiary Policy.

21. CONSOLIDATED FINANCIAL STATEMENTS

The Consolidated Financial Statements of the Company prepared in accordance with relevant Accounting Standards (AS) viz. AS 21, AS 23 and AS 27 issued by the Institute of Chartered Accountants of India form part of this Annual Report.

22. REMUNERATION POLICY

The Board has on the recommendation of the Nomination & Remuneration Committee framed a policy for selection and appointment of Directors, Senior Management and their remuneration. The Nomination and Remuneration policy is uploaded on Company's website.

The Company's policy on director's appointment and remuneration including criteria for determining qualifications, positive attributes, and independence of a director is enclosed in Annexure 'E'.

23. INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY

The Company has an Internal Control System, commensurate with the size, scale and complexity of its operations. To maintain its objectivity and independence, the Internal Audit function reports to the Chairman of the Audit Committee of the Board.

The Internal Audit Department monitors and evaluates the efficacy and adequacy of internal control system in the Company, its compliance with operating systems, accounting procedures and policies at all locations of the Company and its subsidiaries. Based on the report of internal audit function, process owners undertake corrective action in their respective areas and thereby strengthen the controls.

24. DIRECTORS AND KEY MANAGERIAL PERSONNEL

A. Appointment of Independent Directors

The Board of Directors had appointed Sri Tarun Chaturvedi as Additional Director of the Company in the category of Independent Directors with effect from 25th September, 2013, Sri Umashankar Agarwal and. Mrs. Madhuchhanda Chaterjee with effect from13th February, 2014 and Sri Bajrang Lal Tulsian with effect from 30th May, 2014. Thereafter, at the Annual General Meeting (AGM) of the Company held on 9th September, 2014, the Members of the Company appointed the said Directors as Independent Directors under the Companies Act, 2013 for a period of 5 years with effect from 9th September, 2014 till 31st March, 2019.

At the said AGM held on 9th September, 2014, the Members had also appointed the existing Independent Director, Sri Shaleen Khemani, as Independent Director under the Act for a period of 5 years with effect from 9th September, 2014 till 31st March, 2019.

The Board of Directors had appointed Sri Sandeep Kumar Saraogi as Additional Director of the Company in the category of Independent Directors with effect from 13th February, 2015. His appointment will be regularized at the ensuing Annual General Meeting of the Company.

B. Resignations

Sri Umashankar Agarwal resigned from the services of the Company with effect from 15th September, 2014. The Board has placed on record its appreciation for the outstanding contributions made by Sri Umashankar Agarwal during his tenure of office.

C. Decleration by Independent Directors

Sri. Tarun Chaturvedi, Sri. Shaleen Khemani, Sri. Bajrang Lal Tulsian, Sri. Sandeep Kumar Saraogi and Mrs. Madhuchhanda Chaterjee are independent Directors on the Board of your Company. The Company has received declarations pursuant to Section 149(7) from all the Independent Directors of the Company confirming that they meet the criteria of independence as prescribed both under sub-section (6) of Section 149 of the Companies Act, 2013 and under Clause 49 of the Listing Agreement with the Stock Exchanges.

D. Non Independent Director

In accordance with the provisions of the Companies Act, 2013 and in terms of the Memorandum and Articles of Association of the Company, Sri Rahul Tantia and Sri Murare Lal Agarwala retire by rotation and are eligible for re-appointment.

E. Key Managerial Personnel

Ms. Rohini Sureka had been appointed as Chief Financial Officer of the Company with effect from 1st April, 2014.

Md. Jamshed Alam, Company Secretary of the Company resigned from the Company with effect from 15th November, 2014.

Ms. Neha Bajoria has been appointed as a Company Secretary of the Company with effect from 1st April, 2015

25. TRANSFER OF AMOUNTS TO INVESTOR EDUCATION AND PROTECTION FUND

Your Company had Rs. 73,722/- (Rupees Seventy Three Thousand Seven Hundred and Twenty Two) lying unpaid or unclaimed for financial year 2006-07 . The fund was duly transferred to Investor Education and Protection Fund (IEPF) on 3rd October, 2014.

Pursuant to the provisions of the Investor Education Protection Fund (Uploading of information regarding unpaid and unclaimed amounts lying with companies) Rules, 2012, the Company has already filed the necessary form and uploaded the details of unpaid and unclaimed amounts lying with the Company, as on the date of last AGM (i.e. 9th September, 2014), with the Ministry of Corporate Affairs.

26. DEPOSITS

The Company did not accept any Deposit from the public during the Financial Year ended 31st March, 2015 as per Section 73 of the Companies Act, 2013 read with Companies (Acceptance of Deposits) Rules, 2014

27. PARTICULARS OF EMPLOYEES

Disclosures pertaining to remuneration and other details as required under section 197(12) of the Companies Act 2013, read with Rule 5(1) of the Companies (Appointment of Remuneration of Managerial Personnel) Rules 2014 are attached as Annexure F.

In terms of section 197(12) of the Companies Act 2013 read with Rule 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 also provided in Annexure F forming part of the Annual Report.

28. ENERGY CONSERVATION, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

The information on conservation of energy, technology absorption and foreign exchange earnings and outgo stipulated 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 G.

29. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS

Details of Loans, Guarantees and Investments covered under the provisions of Section 186 of the Companies Act, 201 3 are given in Note No 1 3 and 1 4 of the notes to the Financial Statements.

30. BOARD EVALUATION

Pursuant to the provisions of the Companies Act, 2013 and Clause 49 of the Listing Agreement, the Board has carried out an annual performance evaluation of its own performance, the directors individually as well as the evaluation of the working of its Audit, Nomination & Remuneration and Compliance Committees. The manner in which the evaluation has been carried out has been explained in the Corporate Governance Report.

31. ENHANCING SHAREHOLDERS VALUE

Your Company believes that its Members are among its most important stakeholders. Accordingly, your Company's operations are committed to the pursuit of achieving high levels of operating performance and cost competitiveness, consolidating and building for growth, enhancing the productive asset and resource base and nurturing overall corporate reputation. Your Company is also committed to creating value for its other stakeholders by ensuring that its corporate actions positively impact the socio-economic and environmental dimensions and contribute to sustainable growth and development.

32. RISK MANAGEMENT POLICY

A statement indicates the development and implementation of the risk management policy of the company, identifying the elements of risks, if any, which in the opinion of the board, may threaten the existence of the company forms the part of annual report.

33. CORPORATE GOVERNANCE REPORT

As per Clause 49 of the Listing Agreement with the Stock Exchange(s), a separate section on corporate governance practices followed by the Company, together with a certificate from the Company's Auditors confirming compliance forms an integral part of this Report.

34. MANAGEMENT DISCUSSION & ANANLYSIS REPORT

Management Discussion and Analysis Report comprising an overview of the financial results, operations / performance and the future prospects of the Company forms an integral part of this Report.

35. DETAILS OF SIGNIFICANT & MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNAL

There was no significant and material order passed by the regulators or courts or tribunals impacting the going concern status and Company's operations in future.

36. ACKNOWLEDGEMENTS

Your Directors thank the various Central and State Government Departments, Organizations and Agencies for the continued help and co-operation extended by them. The Directors also gratefully acknowledge all stakeholders of the Company viz. customers, members, dealers, vendors, banks and other business partners for the excellent support received from them during the year. The Directors place on record their sincere appreciation to all employees of the Company for their unstinted commitment and continued contribution to the Company.

37. CAUTIONARY STATEMENT

Statements in the Board's Report and the Management Discussion & Analysis describing the Company's objectives, expectations or forecasts may be forward-looking within the meaning of applicable securities laws and regulations. Actual results may differ materially from those expressed in the statement. Important factors that could influence the Company's operations include global and domestic demand and supply conditions affecting selling prices of finished goods, input availability and prices, changes in government regulations, tax laws, economic developments within the country and other factors such as litigation and industrial relations

For and on behalf of the Board of Directors

Tantia Constructions Limited

Ishwari Prasad Tantia

Chairman and Managing Director

Date : 30th May, 2015

Place: Kolkata