TMIL 2015-16 Cover Final - TM International Logistics … · Directors’ Report ... This will be a...

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TM International Logistics Ltd.(A JV of Tata Steel, NYK and Martrade) 14th Annual Report 2015-16

Contents

Financial Highlights ......................................................................................................................................... 4

Corporate Information...................................................................................................................................... 9

Chairman’s Statement ..................................................................................................................................... 8

Directors’ Report ............................................................................................................................................ 10

Annexures to Directors’ Report ..................................................................................................................... 25

Shareholders’ Information ............................................................................................................................. 39

Independent Auditors’ Report ........................................................................................................................ 40

Annexure to the Auditors’ Report ................................................................................................................... 42

Balance Sheet ............................................................................................................................................... 47

Profit and Loss Account ................................................................................................................................. 48

Cash Flow Statement .................................................................................................................................... 49

Accounting Polices ........................................................................................................................................ 51

Notes to Financial Statement ........................................................................................................................ 55

Accounts of Subsidiary Companies

TKM Global Logistics Limited ........................................................................................................................ 77

International Shipping and Logistics FZE .................................................................................................... 129

TKM Global GmbH ...................................................................................................................................... 163

TKM Global China Limited........................................................................................................................... 187

TM Harbour Services Private Limited .......................................................................................................... 213

TM International Logistics Limited - Consolidated Financial Statements .................................................... 257

Visit us at: www.tmilltd.com

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Distribution of Revenue of TMIL 2015-16

Revenue Earned by TMIL 2015-16

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Financial Highlights of TMIL 2015-16

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Financial Highlights of TMIL Group 2015-16

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Corporate InformationBoard of Directors of TMILL Group of Companies

(As on 1st June, 2016)

Mr. Jayant ChakrabortyDirector, TMILL & ISL

Mr. R. N. Murthy Managing Director – TMILL & TMHSPL

Chairman – ISL & TKM IndiaDirector – TKM China

Mr.Sandipan ChakravorttyChairman – TMILL

Mr. Guenther HahnDirector – TMILL & ISL

Mr. Dipak BanerjeeDirector – TMILL & TKM India

Mr. Sabyasachi HajaraDirector – TMILL, ISL & TMHSPL

Mr. Peeyush GuptaDirector – TMILL

Mr. Shingo MizoguchiDirector – TMILL

Mr. Klaus SchmockerDirector – TMILL

Mr. Koichi UragamiDirector – TMILL

TMILL – TM INTERNATIONAL LOGISTICS LIMITED TKM GmbH – TKM GLOBAL GmbHISL – INTERNATIONAL SHIPPING & LOGISTICS FZE, DUBAI TKM CHINA – TKM GLOBAL CHINA LTD.TKM INDIA – TKM GLOBAL LOGISTICS LTD. TMHSPL – TM HARBOUR SERVICES PRIVATE LTD.

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Corporate Information

Board of Directors of TMILL Group of Companies(As on 1st June, 2016)

Capt. Man Mohan SaggiDirector – TMHSPL

Capt. Soumya Ranjan PatnaikDirector & CEO – ISLDirector – TMHSPL

Mr. Anurag GargDirector – TMHSPL

Mr. Virendra SinhaDirector – TKM India

Mr. Amar PatnaikMD – TKM GmbH

Director – TKM India,TMHSPL & TKM China

Mr. Anand ChandDirector – TKM India &

TKM China

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Chairman’s StatementI take pleasure in presenting the 14th Annual Accounts of the Company for the fiscal year ended 31st March, 2016. TMILL has continued to reap the benefits of its wide geographical and diverse business portfolios in the year just gone by. Our presence in Port Operations, Shipping, Freight Forwarding (FF), Warehousing, Ship Agency and Tugging, with worldwide portfolios, have ensured that the group copes well with the volatility in the world business markets and trade flows.

Berth 12 Terminal at Haldia recorded its best ever performance in the year due to increased imports of both raw materials and steel, as a consequence to the start of rail-bound cargo handling. The Company was able to respond quickly and effectively to the increased demand, resulting in 1.35 million ton volumes handled during the year. The Custom House Agency division has also cleared the highest number of Bill of Entries (5491 Nos.) in the year.

These enabled the Company to tide over the challenges presented by a depressed shipping market impacting our shipping business, and the volume impact on FF business due to loss of Air Freight on TSL account. While ISL and TKM Group could not perform as before because of the challenging market conditions, I expect a better performance in the coming year.

The Company took a conscious decision to limit its exposure in Shipping business and this has resulted in a lower revenue compared to the business plan. However, the bottom-line of the Company was good and close to the plan. The Special Freight Train Operation (SFTO), our innovative and new initiative will commence in near future with wagons to be taken on lease and the Company will procure the newly designed wagons once the commercial manufacturing starts. This will be a win-win project for us and also for Tata Steel.

The Company made conscious efforts to improve the safety culture in the organisation and executed several social welfare projects so as to positively impact the society in the areas of sanitation, skilling, health, water and shelter. The Company believes in sustainable development through operational excellence and adequate focus on Corporate Social Responsibility (CSR) and community development. I thank all the employees of the Company, who exhibited great enthusiasm and carried out CSR activities so as to improve the quality of life of people in the communities in and around the geographies we operate in.

I would like to take this opportunity to express my sincere gratitude to all our shareholders, customers, suppliers and other stakeholders for their continued support and confidencein the Company and the management. I thank the unions for maintaining harmonious industrial relations. I also thank all employees in the Company in India and Overseas, the dynamic Managing Director, the management team and my colleagues in the Board of Directors for their significant contributions to the Company. There is no doubt in my mind that the same spirit and commitment will enable the TMILL group to achieve many more significant successes in the coming years.

Sandipan ChakravorttyChairman

4th June, 2016

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Board of Directors (As on 1st June, 2016)

ChairmanMr. Sandipan Chakravortty

DirectorsMr. Guenther HahnMr. Klaus SchmockerMr. Koichi UragamiMr. Shingo MizoguchiMr. Sabyasachi HajaraMr. Dipak BanerjeeMr. Peeyush GuptaMr. Jayant Chakraborty

Managing DirectorMr. R. N. Murthy

Registered Office:Tata Centre43, Jawaharlal Nehru RoadKolkata – 700 071Tel: 91-33-22883012 / 2224 8485

Corporate Identification Number (CIN)U63090WB2002PLC094134

Committee of Directors

Audit CommitteeMr. Dipak Banerjee (Chairman)Mr. Sabyasachi Hajara (Member)Mr. Jayant Chakraborty (Member)

Nomination and Remuneration CommitteeMr. Dipak Banerjee (Chairman)Mr. Sabyasachi Hajara (Member)Mr. Guenther Hahn (Member)Mr. Sandipan Chakravortty (Member)

Corporate Social Responsibility CommitteeMr. Sandipan Chakravortty (Chairman)Mr. Dipak Banerjee (Member)Mr. Peeyush Gupta (Member)Mr. R. N. Murthy (Member)

Management TeamMr. R. N. Murthy – Managing DirectorMr. Anand Chand – Chief Financial OfficerMr. Anurag Garg – V.P. (Sales, Mktg. & BD)Mr. Sudip Sinha – G.M (Operations)Mr. Robin A. Pramanik – Chief Corporate Safety, CSR, AA and Chief Ethics CounsellorMr. Rajesh Singh – Deputy CFOMs. Kinkini Das – Chief HR/IR & AdministrationMr. Abhishek Verma – Chief (IT)Ms. Jyoti Purohit – Company Secretary

AuditorsDeloitte Haskins & SellsChartered Accountants

Kolkata

BankersState Bank of India

HDFC Bank LimitedICICI Bank LimitedAxis Bank Limited

Kotak Mahindra Bank Limited

CORPORATE INFORMATION

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TM International Logistics Ltd.CIN – U63090WB2002PLC094134

Directors’ ReportTo the Members,Your directors present the Fourteenth Report on the business and operations of the Company together with the Audited Statement of Accounts for the year ended 31st March, 2016.

FINANCIAL HIGHLIGHTS(` in millions)

Particulars 2015-16 2014-15(a) Total Income

(b) Less: Operating and Administrative Expenses

(c) Profit before interest, depreciation and taxes

(d) Less: Depreciation

(e) Less: Interest

(f) Profit before taxes (PBT)(g) Less: taxes (including deferred taxes)

(h) Profit after taxes (PAT)(I) Less: Appropriations

(i) Proposed Dividend

(ii) Tax on Dividend

(iii) Transfer to General Reserve

Net Profit carried to Balance Sheet

2199.49

1,668.25

531.24

81.57

0.00

449.67152.18

297.50

45.00

9.16

100.00

154.16

143.34

2643.25

2134.65

508.60

78.50

0.00

430.10143.78

286.32

45.00

9.16

100.00

154.16

132.16

During the year under review, the Company has registered a total Income of ` 2199.49 million as against ` 2643.25 million for the previous year. The Profit after tax for the year under review was ` 297.50 million as compared to ` 286.32 million for the previous year.

DIVIDEND

The Board has recommended a dividend @25% (` 2.50/- per equity share) on the 18,000,000 equity shares of the Company for the year ended 31st March, 2016.

RESERVES

The Board further recommends a transfer to General Reserve of `100 million (previous year ` 100 million). Consequently, the Surplus in Statement of Profit and Loss as at 31st March, 2016 would stand at ` 777.84 million (previous year ` 634.51 million ).

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OPERATIONS

(i) Port Operations

The coastline of India is currently served with 12 Major Ports and about 100 operational Non Major Ports which is predominantly on the west coast. Major Ports are under the jurisdiction of the Government of India and are governed by the Major Port Trust Act 1963, except Ennore Port which is administered under the Companies Act 1956 & its amendments thereof. Non Major Ports come under the jurisdiction of the respective state Governments’ Maritime Boards.

TMILL operates both at Major and Non Major ports predominantly on the eastcoast of India mentioned below:

Major Ports – Kolkata Port, Paradip Port, Vishakhapatnam Port, Mumbai Port.

Non Major Ports– Dhamra Port, Gangavaram Port, Kattupalli Port, Krishnapatnam Port, Visakha Container Terminal

Private Limited.

The total tonnage handled by TMILL during FY15-16 is as below: (MMts: Million Metric Tonnes)

Ports Volume (2015-16) Volume (2014-2015 )Haldia B12 1.348 MMTs 0.869 MMTsHaldia Other Berths 2.513 MMTs 4.368 MMTsParadip 2.579 MMTs 3.291 MMTsOther Ports 0.474 MMTs. 2.73 MMTsTotal 6.914 MMTs 11.258 MMTs

During the year 2015-16, the following were the highlights with regard to TMILL Port Operations: – Highest tonnage of 1.348 MMTs handled in B-12 in FY15-16.

– Implementation of bio-diesel in the fleet of equipment’s at Haldia.

– Coastal Exports from Haldia Port to Bangladesh and Mumbai took place in CY for the first time.

– Successful handling of Steel Slabs at Paradip Port which were meant for TSL- KPO.

– Commissioning of dedicated siding for dispatches and unloading for the cargo handled at B-12 in the current fiscal year.

– Successfully handled the enhanced export volume of Ferro-Chrome exports of Container (Tues). The average export Tues handled in H1 stood at 78 which spiked to an average of 320 Tues in H2.

– Reason for decrease in volumes handled at other ports was mainly because there was no imports of Iron ore in FY15-16, since the dedicated mines of TSL had been given sanction to operate again. Most of these mines were closed in FY 14-15.

– Drop in volume handled at Paradip Port is mainly due to : (a) cannibalization of vessel calls at Dhamra Port over Paradip Port in order to minimize the gap of the Minimum Guarantee Tonnage at Dhamra Port; and (b) nil Steel Exports from the Kaliganagar Plant.

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- Handling losses for cargo handled at Ports were well within the contractual norms laid down by TSL.

(ii) CHA & Inland LogisticsDuring the year under review, there has been a considerable drop in import volumes. The value of imports dropped from ` 25240 million in FY14-15 to approx. ` 23140 million in FY15-16. There has also been a drop of more than 1 million tonnes in import of Bulk cargo. The main contributor to this drop was the reduction in imports for Kalinganagar as the Project is already in its completion phase and MRO imports has still not started in full swing. Further improvement in coke rate of Blast Furnace has resulted in significant reduction in volume of imported coal.

However, the number of consignments / BOEs filed and processed for Tata Steel, Tata Motors, Tata Hitachi has increased from 4999 nos. in FY 14-15 to 5546 nos. in FY 15-16.

During the current year, there has been a focused approach on standardisation of processes and IT upgradation of various modules like License monitoring and tracking, Warehouse modules, Supplier Scorecard and the overall CHA & IL module.

Shikhar 25 - Project on Reduction in container detention charges for bulk commodities jointly undertaken by TSL, TMILL & TKM: A Cross Functional Team between TSL and TMILL Group was formed to reduce container detention and the same has worked towards identifying the root causes of detention through structured analysis (Pareto & Fish bone analysis) and implemented corrective actions over the last few months. This has resulted into drop of container detention from a level of ` 24000/container to Rs. 9500/container and culminating to Zero Net Detention in consecutive three months of January’16, February’16 and March’16.

The division also facilitated Tata Steel in settlement of ` 95.70 million of insurance claims. This covered 23 insurance claims from FY’2010 till date.

There has been a newly formed Customer Services Department within the division. This team developed and deployed the strategy of customer engagement, statistical analysis and process improvement drive apart from being the Single Focal Point of Information for various customers.

In warehouse Operations, two new customers were added during FY’16 viz M/s The Tinplate Company of India Ltd. and Tata Steel Growth Shop. There has been an increase of approximate 35% in revenue over the Previous Year for the Warehouse division.

iii) Agency BusinessShip Agency Business handled a total of 342 ship calls in 15 ports out of which majority of the vessels were attended in Haldia, Paradip & Dhamra. The annual revenue generated by the division was ` 77.00 million, a 14.22% increase over the ABP for FY’16. While the contribution of ` 53.80 million was 4% lower, PBT (before allocation) of Rs. 44.80 million was about 10% higher than ABP for FY’16. In terms of customer base, ` 25.10 million (33% approx. of the total) revenue has been generated from non-Tata Steel business in FY’16 as compared to ` 19.30 million (24% approx. of the total revenue) in FY’15.

TMILL, for the first time, has performed as a comprehensive logistics service provider by organizing TSL's steel plates movements ex B-12, HDC till delivery at Bangladesh Ports including the functions of shore handling/stevedoring at Haldia, Customs clearance at Haldia/Kolkata/Hem Nagar (through outsourced agency), placement of suitable barges & transportation upto the discharge port. Total

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3117 Mt shipment in three barges have been moved. The service for this cost-efficient project, has been well appreciated by TSL.

The division has handled steel coils in Mumbai port for Tata Steel’s coastal movement and transported it to Tarapur Plant, CRC (West).

It has signed an agency agreement with NYK Line for attending to its inbound break bulk vessels at Haldia under Liner Out terms for FY’17.

Ship Agency division has successfully established a VRC Tracker & FDA Cycle in the internal biz process, through which the debtors & funds are being managed more effectively.

SUBSIDIARIES

The statement pursuant to Section 129 of the Companies Act, 2013 and the relevant rules in respect of the subsidiaries of the Company viz. International Shipping and Logistics FZE, Dubai, TKM Group, (i.e TKM Global Logistics Limited, TKM Global GmbH, Germany, TKM Global China Ltd., China), and TM Harbour Services Private Limited has been included as an Annexure to the report. (Refer Annexure 1)

Also, separate Directors’ report on each of the above mentioned Subsidiaries,forms part of the Annual Report.

(i) International Shipping and Logistics FZE

During the year, inspite of the depressed market conditions, the company has closed the financial year with a contribution of `102.69 million and PBT of ` (110.53 million). The Company followed a cautious approach for increasing overall contribution rather than increasing volumes and revenue. The Company did a volume of 3.29 MN MT with a revenue of Rs. 2171.14 million.

The new Initiatives, achievements of the Companyduring the year were:

– Duqm Port - Oman handled its first bulk shipment through ISL’s chartered Supramax vessel MV Cebihan in March 2016 carrying 50,000 MT of Dolomite.

– An all-time high of 6 nos. of Capesize shipments handled, also 13 new customers added.

– In terms of volume, Coal continues to be the major cargo.

– Sharp drop in loss making vessels in comparison to previous year.

– Achieved higher contribution with a leaner sales team w.r.t PY.

– Savings of ` 8.51 million on Travel, Communication and other admin costs vis-a-vis PY.

– Savings of ̀ 29.46 million on operational efficiencies like Bunker negotiations, optimizing stowage planning and negotiation of Port DA.

Market Report:

– The year 2015 has experienced a downturn even more than that experienced in the global recession of 2008. The Baltic Dry Index, on February 11, 2016, reached the lowest point in its 31 year history at 290. Average BDI for FY 15-16 was 650.50 as compared to 900 in FY 2014-15.

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– The daily average time charter rates for all segments reached as low as $2000 (Cape $1000).

– Several companies have filed for bankruptcy/bank protection and many closely held companies have gone out of business in the past one year.

Outlook:

– The supply growth to outpace demand growth by more than 2% in 2016-17.

– Company expects the market to remain low for the next two years at least.

– Moody’s has switched its outlook on the global shipping sector to negative.

– Tonnages are at 30 year low historical prices.

– Ship brokers estimates 690 dry bulk ships / 7% of global fleet are currently sitting idle.

(ii) TKM Group (Freight Forwarding)

TKM group handled 15000 TEUs during the year, which was 25% lower than the previous year. The drop was mainly attributed to the lower export volumes of Tata Steel and shortfall in actual volumes from third party customer vis-à-vis plan.

TKM, Germany handled approximately 20,000 FRT ton, which is more than double the previous year tonnage.

The group handled 2150 MT of Air Freight, which was 15% lower than previous year. The drop was mainly attributed to the drop of overall volume for Tata International Ltd. (Dewas, M.P.) , our largest customer for Air Exports from India. The group lost Tata Steel’s Contract for Air Export from Germany during H2 of the year to DB Schenker.

TKM China handled 556 MT Air Exports, which was 30% higher than the shipment in the previous year.

TKM India also operates warehouses in Kalinganagar, Orissa for Tata Steel’s 3.0 Mil TPA Plant under two separate contract. The Contract for IM section (Project cargo) was renewed for a year till Aug 2016. The second contract is for Central Warehousing (Consumables), which has been extended up to July 2016.

The group successfully handled some critical consignments for Tata Steel during the year, the most critical being the air lifting of 14 MT cargo of Blast Furnace spares for Tata Steel from China during Chinese New Year holidays to meet the commissioning deadlines .

The group also undertook the ocean freight of various heavy lift project cargoes like 85 MT Pinch Roll, 34 MT Sinter Plant Spare, etc. for Tata Steel.

The group registered a revenue of Rs. 145.11crore, which was 18.04% lower than the previous year. The PBT for the year stood at Rs. 26.02 crore, which was 19.83% higher than the previous year.

(iii) TM Harbour Services Private Limited (Tugging and towage services)

The Dhamra port has handled 14.7 million tons (approx.) of cargo during the year against 15.45 million tons handled during the previous year.

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The 3 tugs handled a total of 184 vessels during the year and achieved a revenue of ` 285.37 million against a revenue of ` 278.12 million in the previous year.

The annual survey of Tug Bahuda has been successfully completed in March’2016 and the surveys for tug Brahmani & Baitarani is planned in April’16.

Due to the technical reasons Tug Bahuda has been off-hire during the month of June & Nov 2015 which resulted in a deduction of ` 19.46 lacs.

The Company is also reviewing the Service Level Agreement of the current Technical Consultant contracts and benchmarking with few reputed service providers of the industry to make it more cost effective and robust.

The Company was also engaged in various CSR initiatives during the year. 71 poor SC/ST/OBC candidates from the state of Odhisa were sponsored for Vocational training / skilling in the area of Food & Beverage Course / Food Production and Industrial Sewing machine operator training at Tata Steel Skill Development Society training centre in Gopalpur Odhisa. The water filter cartridge units of the 604 Tata Swach Smart Non Electric Water Purifiers distributed to the 604 families of poor farmers under the CSR activity for 2014-15 were replaced in 2015-16.

PROJECT INITIATIVES– Special Freight Train Operating Scheme: As a result of TMILL’s continued engagement with

various stakeholders on SFTO train operation, Indian Railways in June 2015, released the final version of agreement to be signed between IR and SFTO, clearing the last legal hurdle. TMILL has applied for SFTO license in Jan- 2016 and is awaiting final clearance from IR for movement of SFTO rake with 22.9 T design axle load. The wagons of the said design can carry 64 T of coils in a full rake length of 43, totalling 2752 T cargo per rake. In FY 15 -16, Railway Design Services Organization (RDSO) released a new design of wagon, capable of carrying 68 T per wagon in a rake formation of 58 wagons totalling 3950 T cargo per rake. This wagon has been proto typed and is now awaiting field trials, based on which its design will be finalised and will be ready for induction on IR network. Since the timelines for final approval of this new design are not finalised as yet, the Company has decided to take three rakes of current design (2752 T cargo) on lease from a leasing Company called GATX for a period of five 5 years. Further, Tata Steel has also floated RFQ for induction of SFTO rakes in the system from Jamshedpur to Chennai Depot (Circuit -1) and Kalinganar (Circuit-2). The Company plans to commence SFTO operations in FY 16-17.

– TSL has commenced coastal movement of HR Coils from Jamshedpur to Tarapur (Maharashtra) through coastal route. The Coils are loaded in ship at Haldia-TMILL’s Berth-12, unloaded at Mumbai Port and then transported by truck to Tarapur. The Company expects this business to grow over next few years if the coastal freight rates remain competitive to train / truck.

– Haldia Port has floated tender for New Berth called Outer Terminal-II (OT-II) which is outside the lock gate and hence ships can berth & un-berth without the constraints of lock gate at this port. The storage area, proposed for this berth is approximately 4 -5 kms from HMC ( Hooghly Met Coke). The Company is currently undertaking a joint survey of conveyor route with Haldia Dock Complex before taking investment decision. The cost of conveyor transportation from OT – II Berth to HMC would be approximately 50% of the current rail transportation cost from Haldia Port to HMC.

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– The Company is currently scanning opportunities for Coastal movement of Tata Steel Products from Haldia / Kolkata to North east via Bangladesh.

– The Company is also exploring the possibility of a new berth in Paradip port for coking coal imports as the completion of Paradip – Haridaspur Rail line in next 2 years will make the rail freight from Paradip to Kalinganangar competitive .

QUALITY INITIATIVESTMILL Group participated in the JRDQV External Assessment for the FY 2015-2016 and for the first time entered into the score band of 450 to 550, which is termed as “Good Performance”, with an absolute score of 452.

TMILL group continues to believe that training of employees is a critical to its success and accordingly selective training programmes and symposiums related to Tata Business Excellence Model has been imparted to its employees. Various initiatives to update and adhere to the Standard Operating procedure and Enterprise Process Manual has also been undertaken.

SAFETY INITIATIVES

Emphasis on regular Safety training and awareness from time to time was the key focus area amongst the employees both on roll and off roll during the year 2015-16. A total of 37,462 (26,673 in FY 14-15) man hours of safety training was carried out during the year. The employees were encouraged to come forward with safety observations which were compiled and discussed in various forum and corrective actions were carried out. The high safety standards maintained by the TMILL Warehousing operations group at I M Section Kalinganagar were appreciated by Tata Steel Limited’s appointed external consultant for Safety at KPO in September 2015. The TMILL Warehousing operations team also achieved 1.8 Million Hours of LTI free operations at Tata Steel Limited in November 2015 for which they received an award from Tata Steel Limited. Safety training programmes for Fire Fighting and First Aid and Life Saving were conducted at regular intervals at Warehousing and Port operations to sensitise the employees. Safety Audits were carried out at regular frequencies within the group and the findings of the audit were acted upon. MD reviewed the Safety Scorecard with Chief Corporate Safety, for the group, on monthly basis and emphasized the importance of Safety to all employees and their families at different forums. The importance of correct use of PPE (Personal Protective Equipment) was made known and reemphasised to all employees on roll and off roll at all areas of operations. Knowledge sharing sessions / campaigns on Safety were carried out across the group. The Safety Policy for the group is in place. No fatalities have been reported during the year 2015-16. Only two cases of LTI were reported during the year 2015-16 and the LTIFR came down from 0.70 in 2014-15 to 0.69 in 2015-16.

CORPORATE GOVERNANCEThe Company is committed to maintain a high standard of corporate governance practices and procedures. The Company believes that good corporate governance practices are essential for enhancing shareholders’ value and in carrying on business, imbibing the principles of trusteeship, empowerment, innovation, corporate social responsibility, transparency and ethical practices.

The Committees constituted by the Board of Directors viz., Audit Committee, Nomination & Remuneration Committee, Corporate Social Responsibility Committee have functioned effectively during the year under review.

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Various policies like, Nomination & Remuneration Policy, Whistle Blower Policy for employees & vendors, Risk Management Policy, Corporate Social Responsibility Policy as required under the Companies Act 2013 have been adopted by the Company and are being adhered.

The Company follows a process of selection & governance of Board members, reviews the independence & effectiveness of Internal & External Auditors and lays a large emphasis on protection of stakeholders’ interest.

REPORT ON OTHER AREASA report on each of the following areas has been attached as an Annexure to this report: (Refer Annexure 2).– Company’s Policy as regards to foreign exchange exposure;

– Earnings Management of the Company;

– Asset Management of the Company;

– Accounting policies adopted by the Company;

– Going Concern Test;

– Segmental Report.

BOARD OF DIRECTORSDuring the year ended 31st March, 2016, 5 (Five) meetings of the Board of Directors of the Company were held.

The Board comprises of 10 (Ten) Directors, out of which 2 (two) are Independent, 7 (seven) are Non- Executive and 1 (One) is Executive. The Composition of the Board of Directors as on 31st March, 2016 along with the details of the meetings held during the year under review has been attached an as Annexure to this report : (Refer Annexure 3).None of the Directors of the Company are disqualified under Section 164 of the Companies Act, 2013.

During the year under review, the following changes in the Board of Directors have been recorded:

– Consequent to withdrawal of nomination of Mr. Kazuo Ogasawara by NYK Holding (Europe) B.V -JV Partner, (he resigned from the Board w.e.f 22nd July, 2015) and on recommendation of the Nomination and Remuneration Committee, Mr. Koichi Uragami (nominee of NYK Holding (Europe) B.V) was proposed and appointed in his place as an Additional Non-Executive Director on the same day.

– On recommendation of Nomination and Remuneration Committee, Mr. Klaus Schmocker (Nominee of IQ Martrade Holding & Management GmbH) was proposed and appointed as an Additional Non-Executive Director w.e.f 24th November, 2015.

Appropriate resolutions seeking your approval to the aforesaid appointments are appearing in the Notice convening the 14th Annual General Meeting of the Company.

Directors to retire by rotationIn accordance with the provisions of the Companies Act, 2013 and the Articles of Association of the Company, Mr. Sandipan Chakravortty, Non-Executive Chairman & Mr. Guenther Hahn, Non-Executive Director, retire by rotation and being eligible, have offered themselves for re-appointment.

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Independent Directors The Board of Directors of the Company has 2 (Two) Independent Directors. The Companies Act requires that the Non-Executive Directors, including Independent Directors, be drawn from amongst eminent professionals with experience in business / finance / law / public administration and enterprises. The attributes and qualifications of Independent Directors are in accordance with those prescribed under Section 149(6) of the Companies Act, 2013 read with the Rules thereunder. The Independent Directors of your Company have confirmed that they meet the criteria of independence as prescribed under Section 149(6) of the Act.

COMMITTEES OF THE BOARD OF DIRECTORSThe Committees constituted by the Board of Directors viz., Audit Committee, Nomination & Remuneration Committee, Corporate Social Responsibility Committee have functioned effectively during the year under review. The details of the Committees, as required to be formed as per the applicable sections of the Companies Act are as follows:

i) Audit CommitteeThe Audit Committee comprises of 3 (three) Non-Executive Directors, 2 (two) of whom are Independent Directors. The Chairman of the Committee is an Independent Director. The names of the members of the Audit Committee along with the meetings held are provided as an Annexure to this Report. (Refer Annexure 3).Board of Directors of the Company has accepted all recommendation of the Audit Committee during the year under review.

ii) Nomination & Remuneration Committee The Nomination and Remuneration Committee is constituted of 4 (Four) Non-Executive Directors out of which two are Independent. Details of the meeting held during the year under review has been attached as an Annexure to this report.(Refer Annexure 3).The NRC Policy as approved by the Board of Directors and adopted by the Company which also formed part of the 13th Annual Report to the shareholders for the financial year 2014-2015, remains unchanged. The NRC Policy can be viewed at www.tmilltd.com/about-us/shareholders.asp

iii) Corporate Social Responsibility Committee The Board constituted a Corporate Social Responsibility Committee in compliance with the provisions of Section 178 of the Companies Act 2013, comprising of 4 (Four) Directors of which three are Non - Executive. On recommendation of the Committee, the CSR Policy has been adopted by the Board of Directors.

At TMILL, the CSR activities are designed to promote sustainable and equitable development so as to improve the quality of life of people in the communities in and around the geographies we operate in. The focus is on improving the quality of life amongst socially and economically backward communities, providing preventive health care and sanitation, making available safe drinking water, ensuring environmental sustainability and promoting education and employment enhancing vocational skills.

During the year 2015-16, the annual expenditure on CSR was drawn up as per the guidelines and an amount of Rs. 43.70 lakhs was spent. Some of the major CSR activities carried during the year were:

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– construction of a dining hall area at the old age home at ‘Nivedita Ashram’, in Patalipank in Odhisa thereby providing a hygienic area for serving meals for the old aged and orphan children;

– renovation of the boys and girls toilet at ‘The Assembly of God Church School’, in Haldia;

– replacement of filter cartridges for providing safe drinking water facility through ‘Tata Swach’ for the children of 6 Anganwadi schools in Haldia;

– setting up of one quad and one twin Tata Nest-In toilet facility for girls at Barbajitpur Girls High School, Haldia;

– providing scholarships to SC/ST students through FAEA (Foundation of Academic Excellence and Access) and sponsorship of skilling / vocational training programmes for 8 orphan children at George Telegraph Institute, Haldia;

– providing preventive healthcare for pregnant mothers and children through CINI (Child in Need Institute) at Kolkata and contribution towards ‘Humara Surakchit Asmaan’ an Adolescent Girls Night Shelter at CINI Kolkata;

– completion of Green Belt Phase – II at the main entrance to the Haldia Dock Complex.;

– TMILL employees has actively participated and were engaged with the socially and economically backward communities and people requiring special help during the Tata Volunteering Week 4 & 5 during the year.

Details of the meeting held during the year under review has been attached as an Annexure to this report. (Refer Annexure 3).Annual Report on CSR containing particulars as required under Section 135 of the Act and Rule 8 of the Companies (Corporate Social Responsibility Policy) Rules, 2014 has been attached as an Annexure to this report. (Refer Annexure 4).DIRECTORS’ RESPONSIBILITY STATEMENTBased on the framework of internal financial controls and compliance systems established and maintained by the Company, work performed by the internal, statutory auditors and external consultant(s), including audit of internal financial controls over financial reporting by the statutory auditors and the reviews performed by Management and the relevant Board Committees, including the Audit Committee, the Board is of the opinion that the Company’s internal financial controls were adequate and effective during the financial year 2015-16.

Accordingly, pursuant to Section 134(3)(c) &134(5) of the Companies Act, 2013, the Board of Directors, to the best of their knowledge and ability, confirm having:

– followed in the preparation of the Annual Accounts, the applicable accounting standards and that there are no material departures;

– selected such accounting policies and applied them consistently and made judgements and estimates that are reasonable and prudent so as to give true and fair view of the state of affairs of the Company at the end of financial year and of the profit of the Company for that period;

– taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

20


– prepared the Annual Accounts on a going concern basis; and

– devised proper systems to ensure compliance with the provisions of all applicable laws and the same are adequate and operating effectively.

AUDITORSThe Auditors of the Company, M/s Deloitte Haskins & Sells, Chartered Accountants, Kolkata, retire at the ensuing Annual General Meeting and being eligible, have offered themselves for re-appointment.

AUDIT OBSERVATIONS & EXPLANATION BY THE BOARDAuditors’ observations are suitably explained in notes to the Accounts and are self-explanatory.

No qualification, reservation or adverse remark or disclaimer have been made by the Auditor’s in their report.

PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS The particulars of loans, guarantees or investments covered under the provisions of Section 186 of the Companies Act, 2013 are given in the notes to the financial statement.

INTERNAL FINANCIAL CONTROLAs required under Section 134(3) (q) of the Companies Act 2013 read with Rule 8(5) (viii) of Companies (Accounts) Rules, 2014 and the guidance note issued by the Institute of Chartered Accountant of India, the Company has adopted and implemented Internal Control over Financial Reporting (ICOFR) which commensurate with the size, scale and complexity of the Company’s business.The Company confirms having the following in place:

– an Internal Audit System whose reports are reviewed by the Audit Committee;

– orderly and efficient conduct of Company’s Business, including adherence to Company’s policies;

– procedures to safeguard Company’s assets;

– procedures to prevent and detect frauds and errors,

– accuracy and completeness of the accounting records.

RELATED PARTY DISCLOSURESDuring the financial year, all contracts or arrangements entered into by the Company with the related parties as referred in Section 188 (1) of the Act were on arm’s length basis and were in ordinary course of business.

The disclosures of material transactions as required under Section 134 of the Companies Act read with Rule 8(2) of the Companies (Accounts) Rules, 2014, relating to contracts or arrangements entered by the Company with related parties referred to in Section 188 (1) of the Act are provided in Form AOC-2 . (Refer Annexure 5).CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION & FOREIGN EXCHANGE EARNINGS AND OUTGOInformation as per Section 134(3)(m) of the Companies Act, 2013 and Rule 8(3) of Companies (Accounts) Rule, 2014 :

– Conservation of Energy: The Company is not a major consumer of energy.

21

– Technology Absorption : Not Applicable.

– Foreign exchange earnings & outgo:Earnings in foreign exchange was Rs. 29,299,022/- and Rs. 24,558,245/- was spent in foreign exchange on account of agency business, foreign travel, payment of commission to non-executive directors, etc.

RISK MANAGEMENT POLICY

The Board of Directors of the Company has already adopted the Risk Management Policy on 31st March, 2015. The Company always had a system-based approach to business risk management. Backed by strong internal control systems, the current risk management framework consists of the following elements:

– Strategic Planning: Senior leadership Group of TMILL provides direction for formulation of strategy in collaboration with cross section of all levels of management. The Company follows two level of strategy;

i) Group level Strategy taking into account the shareholders perspective from medium to long term, and;

ii) The current business perspective –Short term which starts at SBU level culminating into Annual Business Plan approved by the Board.

– Strategic challenges & advantages are determined from SWOT analysis of individual SBU’s & support functions.

– The senior management of your Company regularly discuss the strategic & Operational risks involved in the business.

– A combination of centrally issued policies and divisionally-evolved procedures brings robustness to the process of ensuring that business risks are effectively addressed.

– Appropriate structures have been put in place to proactively monitor and manage the inherent risks in businesses with unique / relatively high risk profiles.

– A strong and independent Internal Audit function carries out risk focused audits enabling identification of areas where risk management processes may need to be improved. The Audit Committee of the Board reviews Internal Audit findings, and provides strategic guidance on internal controls.

PARTICULARS OF EMPLOYEESThe Company declares that there is no employee/officer whose details are required to be given in the statement of particulars of employees as required under the provisions of section 197 of the Companies Act read with Rule 5(2) of Companies (Appointment & Remuneration) of Managerial Personnel, Rules 2014.

VIGIL MECHANISMAs per the provisions of Section 177 (10), of the Companies Act 2013, the Company has established a vigil mechanism by adoption of the Whistle Blower Policy for Directors & Employees and Vendors to report their genuine concerns.

The Whistle blower Policy of the Company encourages Directors and employees and Vendors to

22


bring to the Company’s attention, instances of unethical behaviour, actual or suspected incidents of fraud or violation of the Tata Code of Conduct that could adversely impact the Company’s operations, business performance and / or reputation. The Company investigates such incidents, when reported, in an impartial manner and takes appropriate action to ensure that the requisite standards of professional and ethical conduct arealways upheld. It is the Company’s Policy to ensure that no employee or vendor is victimised or harassed for bringing such incidents to the attention of the Company. The practice of the Whistle blower Policy is overseen by the Audit Committee of the Board. The policy allow access to the Audit Committee Chairman in cases specified under the policy.

ANNUAL RETURN

The Extract of the Annual Return under cover of Form MGT 9, as per the provisions of Section 92(3)& Section 134 (3) of the Companies Act 2013 read with Rule 12 of Companies (Management & Administration) Rules, 2014, has been attached as an Annexure to this report.Also the details of the remuneration of KMP are part of Form MGT 9. (Refer Annexure 6).INTERNAL COMPLAINTS COMMITTEE

The Company has zero tolerance for sexual harassment at workplace. The Company has adopted a Policy on prevention, prohibition and redressal of sexual harassment at workplace in line with the provisions of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and the Rules framed thereunder and in line with the POSH policy for Tata Steel Group Companies, on 9th December 2014. The internal complaints committee was reconstituted during the year to take care of the members who had resigned from the services of the Company. No cases of sexual harassment were reported during the year. The committee members periodically created an awareness amongst the employees based on the awareness packs sent by Chief Ethics Counsellor. Periodic awareness programmes were conducted by the Chief Ethics Counsellor for male and female employees to sensitize them on the provisions of the Act as well as the POSH policy in place.

ENVIRONMENT

The Company completed the second phase of the Green Belt Project at the main entrance to the Haldia dock complex as well as planted trees within the Haldia dock in order to provide a greener and cleaner working environment. The drainage systems were overhauled and low lying areas levelled so as to ensure no stagnation of water which earlier resulted in breathing grounds for mosquito larvae. The Company has procured dust fences to be set up at Berth-12 at Haldia to prevent the dust entering main working area from adjacent berths. The frequency of water sprinkling tankers at Paradip and Haldia has been increased during our operations so as to ensure effective dust control measures. The usage of Video conferencing was further maximised within the TMILL group of companies for conducting meetings at all locations so as to reduce our carbon footprint. Communications are carried out electronically through email with a request not to print out the email unless absolutely essential so as to reduce the consumption of paper within the group. All employees are advised to power off lights, fans, air conditioner units and other electrical equipment when not in use. The Company replaced the earlier sodium vapour lamps with LED lamps which provide better illumination and also consume lesser electricity at port locations. Dock workers undergo period medical check up’s as per the guidelines laid down by the Dock Workers (Safety, Health and Welfare) Rules 1990.

23

PERSONNEL

The Company has a diverse workforce with a total strength of 269+ on-roll employees and 900+ contractual employees across various locations in the year 2015-16. During the year the Company continued its focus on training and development with specific emphasis in building leadership competencies across levels. The year closed with a significant upside in total training coverage of 70% and a 1.75 average per employee training man day. The Company has maintained excellent and cordial industrial relations with the representative of Union of employees at the ports and at Kolkata and have been able to successfully manage the complexities around contractual labour especially in KPO Jajpur. Special Shabashi scheme was rolled out for the Port Workers Union to acknowledge and recognize special contributions during the year. Long Service Awards for staff at Kolkata, Haldia & Paradip were handed out as per the existing policy. Also, the Company concluded the Wage agreement for the Tata Port Workers Union in May 2015 which would be effective from FY 13-14 valid till FY 18-19. The Company also completed the Employee engagement Survey after a hiatus of 4 years with an overall score of 89%, which is above the Global Logistics Norms & India National Average. Specific action plans have been formulated from the survey response in the areas of Leadership, Organisation Communication & Career Progression. Apart from the above activities, other focus areas for the HR department during the year has been the revamp of the Campus Hiring Programme, Implementation of the Revised Organisation Structure and continued strengthening of the Performance Management System for the TMILL group.

INFORMATION TECHNOLOGY

In TMILL group, different SBUs manage the operational and customer data using the business specific application due to varied requirement of each businesses which caters to the specific part of the logistic chain. Main ERP chosen for the company is SAP, which was implemented in the year 2006 and has been upgraded to the latest version and is being planned to rollout the same to cover other Indian group companies. It brings IT infrastructure of TMILL compatible to the growth plan of the organisation.

During the year, two new applications on Compliance Management and Warehouse operations were added to the existing set of applications. In total, the Company uses more than 15 applications and supports the workforce across multiple locations. Port locations, Diamond Heritage office and HO at Kolkata are directly connected to the company Wide Area Network. Company has deployed strict perimeter security and backup mechanism to protect the hardware and software information assets. Regular preventive maintenance of hardware, monitoring of application and strict SLA with service providers has helped the Company to maintain nearly 100% uptime in all its applications and network.

The IT system of the Company allows interfacing with the IT application of key customers on real time sharing of information and communication, for example the Tata Steel SAP is connected with TMILL IT system and information transmission is done through the IT interface.

Integrity, reliability and accuracy is ensured through various policies and procedures which are followed by the IT department. Company’s audit process includes the validation of the same. IT MIS captures the key performance elements and is being reviewed and circulated to all business heads on a monthly basis.

24


The Company have unified the Email and collaboration services of all group companies except TKM GmbH for which the work is in progress. The Company is also focusing on creating and integrating the various business applications to enhance cross functional synergies and create a platform which can promote unified brand and knowledge management.

ACKNOWLEDGEMENT

The Company maintained cordial relationship with Port Officials at Haldia and Paradip, DPCL, Customs Authorities, Banks and other government agencies including various tax authorities. The Directors acknowledge with gratitude the support extended by Tata Steel Limited, IQ Martrade Holding And Management GmbH and NYK Holding (Europe) B.V. The Directors are also thankful to the Government of India, Board of Trustees of Kolkata and Paradip Port, DPCL and other State and Central Government Agencies, Reserve Bank of India, State Bank of India, HDFC Bank, ICICI Bank, Axis Bank, the union, the employees of the Company, and other business associates for their continued support.

For and on behalf of the Board of Directors

Sd/-

Sandipan Chakravortty

Chairman

Sd/-R. N. Murthy

Kolkata, 28th April, 2016 Managing Director

25

Annexure 1 to the Directors' Report

Form AOC-I(Pursuant to first proviso to sub-section (3) of section 129 read with rule 5 of Companies (Accounts) Rules, 2014)

Statement containing salient features of the financial statement of subsidiaries/associate companies/joint ventures

Part 'A': Subsidiaries(Information in respect of each subsidiary to be presented with amounts in ` In Million)

Particulars 1 2 3 4 5

1 Name of the subsidiary TKM Global Logistics Limited

International Shipping & Logistics

FZE

TKM Global China Limited

TKM Global GmbH, Germany

TM Harbour Services Private

Limited

2 Reporting Period for the subsidiary concerned, if different from the holding company's reporting period

NA NA NA NA NA

3 Reporting currency and Exchange rate as on the last date of the relevant Financial year in the case of foreignSubsidiaries

NA 1USD = INR 66.33

1 RMB = INR 10.25

1 EUR = INR 75.10

NA

4 Share capital 36.00 18.16 70.03 3.84 576. 92

5 Reserves & surplus 210.84 2059.18 (34.13) 1255.50 566.94

6 Total assets 395.71 2282.22 52.36 1650.58 1153.38

7 Total Liabilities 148.88 204.88 16.46 391.24 9.52

8 Investments 55.94 229.69 0 554.50 14.13

9 Turnover 638.66 2199.51 194.58 482.70 285.37

10 (Loss)/Profit before taxation 37.94 (111.97) (1.77) 61.41 165.75

11 Provision for taxation 7.83 2.50 0 22.76 6.77

12 (Loss)/Profit after taxation 30.11 (114.47) (1.77) 38.65 158.99

13 Proposed Dividend NIL NIL NIL NIL NIL

14 % of shareholding 100% 100%

100% Shareholding of TKM Global

Logistics Limited

100% Shareholding

of TKM Global Logistics Limited

74.18% (TKM Global GmbH,

Germany); 25.82% (International

Shipping &Logistics FZE)

PART 'B': Associates and Joint Ventures: The Company does not have any associates/Joint Ventures as on 31st March, 2016. Hence, there is nothing to Report.

26



Report on Other Areas:

Company's Policy as regards to foreign exchange exposure

The Company complies with the FEMA Act and Rules.

Earnings Management of the Company

The Company is currently engaged in Port Operations and Customs House Agent & Inland Logistics business. The Revenue, Operating and Administrative Expenses, Tax Provisions and Profit are indicated under the heading Financial Highlights in the Directors' Report.

Asset Management of the Company

The Company has made investments in various Fixed Assets during the year. All the assets are properly insured and maintained.

Accounting Policies adopted by the Company

The Accounting policies of the Company have been stated in the Significant Accounting Policies in the Notes forming part of the Annual Accounts and transactions of the Company have been recorded as per the said policies.

Going Concern Test

The operations in all business areas have been efficient throughout the financial year under review and the response from customers has been encouraging. The Company, therefore, by all accounts fulfils the test of going concern and with the projected business, it is estimated to generate sufficient revenue, profit and funds. The Company has been regular in meeting its external commitments.

Segmental Report

The Company has considered Port Operation business segment as the primary segment. The Company is engaged in cargo handling and related activities at Ports, which in the context of accounting Standard (AS) 17 'Segmental Reporting' issued by the Institute of Chartered Accountants of India, is the only business segment.

The Company renders Port operation service only within India and there are no exports. The conditions prevailing in India being uniform, no separate geographical segment disclosure is considered necessary.

27


Meeting of the Board of Directors

Name of the Directors Composition No. of meetings held No. of meetings attended

Mr. Sandipan Chakravortty Non Executive (Chairman) 5 5

Mr. Dipak Banerjee Independent 5 5

Mr. Sabyasachi Hajara Independent 5 5

Mr. Guenther Hahn Non Executive 5 5

Mr. Klaus Schmocker* Non Executive 5 1

Mr. Koichi Uragami* Non Executive 5 1

Mr. K. Ogasawara* Non Executive 5 1

Mr. Peeyush Gupta Non Executive 5 5

Mr. Jayant Chakraborty Non Executive 5 5

Mr. Shinichi Yanagisawa Non Executive 5 5

Mr. R N Murthy Managing Director 5 5

* For part of the yearMeeting of the Audit Committee


Mr. Dipak Banerjee Independent (Chairman) 4 4


Mr. Jayant Chakraborty* Non Executive 4 2

Mr. K. Ogasawara* Non Executive 4 0

*For part of the year

Meeting of the Nomination and Remuneration Committee


Mr. Dipak Banerjee Independent (Chairman) 2 2


Mr. Guenther Hahn Non Executive 2 2

Mr. Sandipan Chakravortty Non Executive 2 2

Meeting of the Corporate Social Responsibility Committee


Mr. Sandipan Chakravortty Non Executive (Chairman) 4 4

Mr. Peeyush Gupta Non Executive 4 4

Mr. Dipak Banerjee Independent 4 3

Mr. R N Murthy Managing Director 4 4

28


Anne

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Annu

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in L

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ta, 2

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, 201

6

R

N M

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Anne

xure

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the

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of th

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pani

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ccou

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014)

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ticul

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ontra

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ered

into

by

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Com

pany

with

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es re

ferr

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in s

ub-s

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ct, 2

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incl

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of th

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in C

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Act

201

3, th

e Co

mpa

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as c

onsid

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10%

of t

he s

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alon

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FY

15-1

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mat

eria

l, an

d ac

cord

ingl

y th

e de

tails

of a

ll suc

h co

ntra

cts

havin

g 10

% o

r mor

e of

the

valu

e of

turn

over

as

on

31st

Mar

ch 2

016

are

bein

g pr

ovid

ed b

elow

:

Sl. N

o.Na

me

of th

e re

lated

Par

ty an

d na

ture

of r

elatio

nship

Natu

re o

f Con

tract

/arra

ngem

ents

/tra

nsac

tions

Dura

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of th

e co

ntra

cts/a

rrang

emen

ts /

trans

actio

nsSa

lient

feat

ures

of t

he co

ntra

cts o

r arra

ngem

ents

or tr

ansa

ction

s inc

luding

the

value

, if a

nyAc

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Value

of

trans

actio

ns (R

s. In

milli

ons)

Date

(s) o

f ap

prov

al by

the

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d, if

any

Amou

nt p

aid

as a

dvan

ces,

if any

Ag

ency

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Tata

Ste

el Lim

ited

(Par

ent C

ompa

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Ship

Agen

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ssel

wise

cont

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Ship

Agen

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ctivit

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58NA

NARe

imbu

rsem

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f por

t due

s/oth

ers

Vess

el wi

se co

ntra

ctSh

ip Ag

ency

Acti

vities

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NA

CHA

& IL

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ta S

teel

Limite

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aren

t Com

pany

)

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m C

leara

nce

From

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4 till

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6Cu

stom

Clea

ranc

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Reim

burs

emen

t of s

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g lin

e bil

lsFr

om 0

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till 3

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(Ren

ewed

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aited

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sing

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& K

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to 3

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ision

- IM

Sec

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31.

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ct aw

aited

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F Ag

ent f

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Valid

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and

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nclud

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ificat

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arine

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NA

War

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to 3

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ores

& O

pen

Yard

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agem

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om 0

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5 to

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Rent

ing o

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se fo

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& T

estin

g wi

th S

upply

of s

ecur

ity a

nd

electr

icity

0.21

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ehou

sing

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01/

07/2

015

to 3

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/201

8Re

nting

of W

areh

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for R

&D E

stabli

shm

ent o

f Tat

a St

eel w

ith

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ly of

secu

rity a

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lectri

city

0.14

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Oper

atio

ns3.

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Ste

el Lim

ited

(Par

ent

Com

pany

)Po

rt Ha

ndlin

g - R

aw M

ater

ialFr

om 0

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.14

till 3

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Port

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1000

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ling-

Raw

Mat

erial

From

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04.1

4 till

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6Re

imbu

rsem

ent

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Port

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ling

- Ber

th n

o.12

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01.

04.1

4 till

30.

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6Po

rt Ha

ndlin

g32

.42

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Hand

ling

- Ber

th n

o.12

From

01.

04.1

4 till

30.

06.1

6Re

imbu

rsem

ent

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7NA

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rt Ha

ndlin

g (S

teel

hand

ling

at

Para

deep

)va

lid til

l 30.

06.2

016

Port

Hand

ling

37.5

9NA

NA

Port

Hand

ling

- TSL

Kolk

ata

vess

el wi

se co

ntra

ctPo

rt Ha

ndlin

g 41

.34

NANA

Port

Hand

ling-

FAM

DFr

om 0

1.04

.14

till 3

1.06

.16

(Por

t Han

dling

an

d re

imbu

rsem

ent)

Port

Hand

ling

49.8

6NA

NA

Port

Hand

ling-

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DFr

om 0

1.04

.14

till 3

1.06

.16

Reim

burs

emen

t30

.16

NANA

Othe

rs4.

Tata

Ste

el Lim

ited

(Par

ent

Com

pany

)Re

ntal

serv

ices r

eceiv

edFr

om 0

1.04

.16

till 3

1.03

.17

Rent

al se

rvice

s -Ko

lkata

and

Jam

shed

pur

26.0

0NA

NA

Reim

burs

emen

t of s

alary

& o

ther

em

ploye

e re

lated

exp

ense

s3

year

sRe

imbu

rsem

ent o

f Sala

ries f

or O

fficer

s on

depu

tatio

n fro

m T

SL0.

90NA

NA

32



EXTRACT OF ANNUAL RETURN

as on the financial year ended on 31st March 2016[Pursuant to section 92 (3) of the Companies Act, 2013 and rule 12(1) of the Companies

(Management and Administration) Rules, 2014]

I. REGISTRATION AND OTHER DETAILS:

i) CIN : U63090WB2002PLC094134

ii) Registration Date : 18th January 2002

iii) Name of the Company : TM International Logistics Ltd.

iv) Category/Sub-Category of the Company : Port Operations

v) Address of the registered office & contact details : Tata Centre,

43, Jawaharlal Nehru Road,

Kolkata 700 071.

vi) Whether listed company (Y/ N) : No

vii) Name, Address and Contact details of Registrar and Transfer Agent, if any : NA

II. PRINCIPAL BUSINESS ACTIVITIES OF THE COMPANY

All the business activities contributing 10% or more of the total turn over of the Company shall be stated:

Sl. No. Name & Description of main Services

NIC Codeof the Product/ service

% to total turn over of the company

1 Port Operations 5222 88.51

III. PARTICULARS OF HOLDING, SUBSIDIARY AND ASSOCIATE COMPANIES

Sl. No. Name of the Company CIN/GLN

Holding/ Subsidiary/ Associate

% Of Shares

Held

Applicable Section

1. Tata Steel Limited L27100MH1907PLC000260 Holding 51 2(46)

2. TKM Global Logistics Limited U51109WB1991PLC051941 Subsidiary 100 2(87)

3. TM Harbour Services Private Limited U61100WB2009FTC138168 Subsidiary 100 2(87)

4. International Shipping Logistics FZE - NA - Subsidiary 100 2(87)

5. TKM Global China Limited - NA - Subsidiary 100 2(87)

6. TKM Global GMBH, Germany - NA - Subsidiary 100 2(87)

33

SHAREHOLDING PATTERN (Equity Share Capital Break-up as percentage of Total Equity)

i) Category-wise Shareholding

Category of Shareholders No. of Shares held at the beginning of the year (01.04.2015)

No. of Shares held at the end of the year (31.03.2016) % Change during the year

Demat Physical Total % of Total Shares


A. Promoters(1) Indian

a) Individual/ HUF - Yes 10 0.00 - Yes 10 0.00 Nilb) Central Govt.c) State Govt (s)d) BodiesCorp. - Yes 9179990 51 - Yes 9179990 51 Nile) Banks/FIf) Any Other

Sub-total (A)(1):- 9180000 51 9180000 51 NIL(2) Foreign

a) NRIs- Individuals b) Other- Individualsc) Bodies Corp. - Yes 8820000 49 - Yes 8820000 49 NILd) Banks/FI e) Any Other....

Sub-total (A)(2):- 8820000 49 8820000 49 NILTotal shareholding of Promoter (A)= (A)(1)+(A)(2)

18000000 100 18000000 100 NIL

B. Public Shareholding1. Institutions NIL NIL

a) Mutual Fundsb) Banks/FIc) Central Govt.d) State Govt.(s)e) Venture Capital Fundsf) Insurance Companiesg) FIIsh) Foreign Venture Capital Fundsi) Others (specify)

Sub-total (B)(1):- NIL NIL2. Non- Institutions NIL NIL

a) Bodies Corp.i) Indianii) Overseas

b) Individuals i) Individual shareholders holding

nominal share capital upto ` 1 lakh

ii) Individual shareholders holding nominal share capital in excess of `1 lakh

c) Others (specify)

Sub-total (B) (2):- NIL NIL

Total Public Shareholding (B) = (B)(1)+ (B) (2)

NIL NIL

34


Category of Shareholders No. of Shares held at the beginning of the year (01.04.2015)

No. of Shares held at the end of the year (31.03.2016) % Change during the year



2. Non- Institutions NIL NIL

a) Bodies Corp.

i) Indian

ii) Overseas

b) Individuals

i) Individual shareholders holding nominal share capital upto `1 lakh

ii) Individual shareholders holding nominal share capital in excess of ` 1 lakh

c) Others (specify) NIL

Sub-total(B)(2):- NIL NIL

Total Public Shareholding (B) = (B)(1)+ (B) (2)

NIL NIL

C. Shares held by Custodian for GDRs & ADRs

NIL NIL

Grand Total (A+B+C) 18000000 18000000

(ii) Shareholding of Promoter

Sl. No. Shareholder's Name

Shareholding at the beginning of the year Shareholding at the end of the year

% change in share holding

during the year

No. of Shares

% of total Shares of the

company

% of Shares Pledged/

encumbered to total shares

No. of Shares

%of total Shares of the

company



1. Tata Steel Ltd. 9179990 51 NIL 9179990 51 NIL NIL

2. IQ Martrade Holding And Management, GmbH 4140000 23 NIL 4140000 23 NIL NIL

3. NYK Holding (Europe) (BV) 4680000 26 NIL 4680000 26 NIL NIL

4. Mr. Dibyendu Bose (Nominee of Tata Steel) 1 0.00 NIL 1 0.00 NIL NIL

5. Mr. V. S. N. Murty (Nominee of Tata Steel) 1 0.00 NIL 1 0.00 NIL NIL

6. Mr. Jayant Chakraborty (Nominee of Tata Steel) 1 0.00 NIL 1 0.00 NIL NIL

7. Mr. Chacko Joseph (Nominee of Tata Steel) 1 0.00 NIL 1 0.00 NIL NIL

8. Mr. Om Prakash Mishra (Nominee of Tata Steel) 1 0.00 NIL 0.00 0.00 NIL NIL

9. Mr. Sumit Shubhdarshan (Nominee of Tata Steel) 1 0.00 NIL 1 0.00 NIL NIL

10. Mr. Dhamrendra Kumar (Nominee of Tata Steel) 1 0.00 NIL 1 0.00 NIL NIL

11. Mr. R. Ranganath (Nominee of Tata Steel) 1 0.00 NIL 1 0.00 NIL NIL

12. Mr. V. Narendran (Nominee of Tata Steel) 1 0.00 NIL 1 0.00 NIL NIL

13. Mr. N. S. Raghu (Nominee of Tata Steel) 1 0.00 NIL 1 0.00 NIL NIL

14. Mr. Peeyush Gupta (Nominee of Tata Steel) 1 0.00 NIL 1 0.00 NIL NIL

Total 18000000 18000000 Total 18000000

35

(iii) Change in Promoters' Shareholding (please specify, if there is no change) - No Change

Sl. No.

Shareholding at the beginning of the year

Cumulative Shareholding during the year

No. of shares % of total shares of the company No. of shares % of total shares

of the company

At the beginning of the year 18000000 100.00 18000000 100.00

Date-wise Increase/ Decrease in Promoters Share holding during the year specifying the reasons for increase /decrease (e.g. allotment/ transfer/ bonus/ sweat equity etc.)

-- -- -- --

At the End of the year 18000000 100.00 18000000 100.00

(iv) Shareholding Pattern of top ten Shareholders (other than Directors, Promoters and Holders of GDRs and ADRs): Nil

Sl. No.

For Each of theTop 10 Shareholders Shareholding at the beginning of the year

Cumulative Shareholding during the year

No.of shares % of total shares of the

company

No.of shares % of total shares of the

company

At the beginning of the year __ __ __ __

Date-wise Increase/ Decreasein Shareholding during the year specifying the reasons for increase/ decrease(e.g. allotment/ transfer/ bonus/sweat equity etc):

__ __ __ __

At theEnd of theyear(or onthedateof separation,if separated duringthe year)

__ __ __ __

(v) Shareholding of Directors and Key Managerial Personnel :

Sl. No. For Each of the Directors and KMP

Shareholding at the Beginning of the year

Cumulative Shareholding During the year

No.of shares % of total shares of the company No.of shares % of total shares

of the company

At the beginning of theyear 2 0 2 0

Date-wise Increase/ Decreasein Share holding during the year specifying thereasons for increase /decrease(e.g. allotment/ transfer/ bonus/ sweat Equity etc):

__ __ __ __

At the End of the year 2 0 2 0

36


V. INDEBTEDNESS

Indebtedness of the Company including interest outstanding/accrued but not due for payment

Secured Loans excluding deposits

Unsecured Loans (In `)

Deposits (In `)

Total Indebtedness (In `)

Indebtedness at the beginning of the financial year

i) Principal Amount

ii) Interest due but not paid

iii) Interest accrued but not

Nil Nil Nil Nil

Total (i +ii + iii) Nil Nil Nil Nil

Change in Indebtedness during the financial year

l Addition

l Reduction

Nil Nil Nil Nil

Net Change Nil Nil Nil Nil

Indebtedness at the end of the financial year i) Principal Amount ii) Interest due but not paid iii) Interest accrued but not due

Nil Nil Nil Nil

Total (i+ii+iii) NIL NIL NIL NIL

VI. REMUNERATION OF DIRECTORS AND KEY MANAGERIAL PERSONNEL

A. Remuneration to Managing Director, Whole-time Directors and/or Manager:

Sl. No. Particulars of Remuneration

Name of MD/WTD/Manager

Total AmountMr. R N Murthy

(Managing Director)

1. Gross salary

(a) Salary as per provisions contained in section 17(1) of the Income-tax Act, 1961

(b) Value of perquisites u/s 17(2) Income-tax Act, 1961

(c) Profits in lieu of salary under section 17(3) Income-tax Act, 1961

43,39,104

74,623

2. Stock Option

3. Sweat Equity

4. Commission - as % of profit - others, specify

5. Others, please specify (PF, SAF, Performance Bonus etc.) 48,79,297

Total (A) 92,93,024

(Amount in `)

37

B.

Rem

uner

atio

n to

oth

er d

irect

ors

(Am

ount

in `

)

Parti

cula

rs o

f Rem

uner

atio

n

Nam

e of

the

Dire

ctor

s

Tota

lM

r. Sa

ndip

an

Chak

ravo

rtty

Mr.

Dipa

k Ba

nerje

e

Mr.

Saby

asa-

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38


C. REMUNERATION TO KEY MANAGERIAL PERSONNEL OTHER THAN MD/MANAGER/WTD

Sl. No.

Particulars of Remuneration Key Managerial Personnel (Mr. Anand Chand, CFO)

Key Managerial Personnel (Ms. Jyoti Purohit, CS)

Total Total

1. Gross salary

(a) Salary as per provisions contained in section 17(1) of the Income-tax Act, 1961

(b) Value of perquisites u/s 17(2) Income-tax Act, 1961

(c) Profits in lieu of salary under section 17(3) Income-tax Act, 1961

32,11,530 11,86,633

2. Stock Option

3. Sweat Equity

4. Commission - as % of profit - others, specify.

5. Others, please (PF, SAF, LTA, Performance bonus etc.) 13,83,750 1,52,894

Total 45,95,280 13,39,527

VII. PENALTIES / PUNISHMENT/ COMPOUNDING OF OFFENCES:

There were no Penalties / punishments / compounding of offences for the year ended 31st March, 2016.

(Amount in ` )

39

Shareholders' Information (` in Lakhs)

Financial Highlights 2015-16 2014-15 2013-14 2012-13 2011-12 2010-11

Assets Employed

Net Fixed Assets

Net Current Assets

Non-Current Investments

Other Long Term Loans & Advances

10,225.31

10,949.72

639.58

1,194.02

10,495.83

8,398.67

639.58

1,242.86

9,288.37

5,855.83

459.58

2,929.29

9,925.02

5,259.07

459.58

2,473.98

10,129.06

4,790.68

379.58

1,807.40

9,138.55

3,411.46

379.58

2,392.09

Total 23,008.63 20,776.93 18,533.07 18,117.65 17,106.72 15,321.67

Financed by

Equity Share Capital

Reserves & Surplus

1,800.00

15,495.21

1,800.00

13,061.85

1,800.00

10,740.27

1,800.00

10,127.58

1,800.00

9,153.77

1,800.00

8,280.07

Shareholders' Funds 17,295.21 14,861.85 12,540.27 11,927.58 10,953.77 10,080.07

Loan Fund

Long Term Provision & Liabilities

Deferred Tax Liability

5548.82

164.59

5,717.28

197.80

5,697.70

295.10

5,768.24

421.83

5,684.52

468.428

4,796.79

444.807

Total 23,008.63 20,776.93 18,533.07 18,117.65 17,106.72 15,321.67

Total Income 21,994.89 26,432.53 18,502.03 18,872.19 12,777.92 17,755.72

Profit and Appropriations

Profit before tax

Income Tax & Fringe Benefit Tax

Profit after Tax

Dividend and tax thereon

Retained Earnings

4,496.75

1,521.78

2,974.97

541.61

2,433.36

4,301.02

1,437.83

2,863.19

541.61

2,321.58

1184.779399

361.16

823.62

210.59

613.03

1,894.47

605.11

1,289.36

315.89

973.48

1,613.57

447.00

1,166.57

292.88

873.69

2,799.68

793.32

2,006.37

292.88

1,713.49

Financial Ratios

1 EBITDA / Turnover

2 PAT / Turnover

3 Return on Average Capital Employed

4 Average Debtors to Turnover

5 Gross Block to Net Block

6 Debt to Equity

7 Current Ratio

8 Networth per Share

9 Earnings per share (`)

10 Dividend Pay Out

24.15%

13.53%

27.66%

23.70%

1.53

-

2.18

96.08

16.53

15.13%

19.24%

10.83%

30.84%

12.05%

1.45

-

1.79

82.57

15.91

15.72%

12.51%

4.45%

9.41%

19.63%

0.97

-

1.88

69.67

4.58

21.85%

14.69%

6.83%

15.94%

20.12%

1.13

-

1.64

66.26

7.16

20.94%

18.16%

9.13%

14.70%

19.78%

1.13

-

1.81

60.85

6.48

21.60%

19.10%

11.30%

28.93%

13.25%

1.24

-

1.50

56.00

11.15

12.56%

40


INDEPENDENT AUDITORS REPORT

INDEPENDENT AUDITOR'S REPORT

TO THE MEMBERS OF

TM INTERNATIONAL LOGISTICS LIMITED

Report on the Standalone Financial Statements

We have audited the accompanying standalone financial statements of TM INTERNATIONAL LOGISTICS LIMITED ('the Company'), which comprise the Balance Sheet as at 31st March, 2016, the Statement of Profit and Loss and the Cash Flow Statement for the year then ended, and a summary of the significant accounting policies and other explanatory information.

Management's Responsibility for the Standalone Financial Statements

The Company's Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 ('the Act') with respect to the preparation of these standalone financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Accounting Standards prescribed under section 133 of the Act, as applicable.This responsibility also includes 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 frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditor's Responsibility

Our responsibility is to express an opinion on these standalone financial statements based on our audit.

We have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made thereunder and the Order under section 143 (11) of the Act.

We conducted our audit of the standalone financial statements in accordance with the Standards on Auditing specified under Section 143(10) of the Act. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the financial statements. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial control relevant to the Company's preparation of the financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the Company's Directors, as well as evaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the standalone financial statements.

Opinion

In our opinion and to the best of our information and according to the explanations given to us, the aforesaid standalone

41

financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the state of affairs of the Company as at 31st March, 2016, and its profit and its cash flows for the year ended on that date.

Report on Other Legal and Regulatory Requirements

1. As required by Section 143 (3) of the Act, we report that:

a) We have sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of our audit.

b) In our opinion, proper books of account as required by law have been kept by the Company so far as it appears from our examination of those books.

c) The Balance Sheet, the Statement of Profit and Loss, and the Cash Flow Statement dealt with by this Report are in agreement with the books of account.

d) In our opinion, the aforesaid financial statements comply with the Accounting Standards prescribed under section 133 of the Act, as applicable.

e) On the basis of the written representations received from the directors as on 31st March, 2016 taken on record by the Board of Directors, none of the directors is disqualified as on 31st March, 2016 from being appointed as a director in terms of Section 164 (2) of the Act.

f) With respect to the adequacy of the internal financial controls over financial reporting of the Company and the operating effectiveness of such controls, refer to our separate Report in 'Annexure A'. Our report expresses an unmodified opinion on the adequacy and operating effectiveness of the Company's internal financial controls over financial reporting.

g) With respect to the other matters to be included in the Auditor's Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, in our opinion and to the best of our information and according to the explanations given to us:

i. The Company has disclosed the impact of pending litigations on its financial position in its financial statements - refer note 25.(b) to 25.(p)to the financial statements.

ii. The Company did not have any long-term contracts including derivative contracts for which there were any material foreseeable losses.

iii. There were no amounts which were required to be transferred to the Investor Education and Protection Fund by the Company.

2. As required by the Companies (Auditor's Report) Order, 2016 ('the Order') issued by the Central Government in terms of Section 143(11) of the Act, we give in 'Annexure B' a statement on the matters specified in paragraphs 3 and 4 of the Order.

For DELOITTE HASKINS & SELLS

Chartered Accountants

(Firm's Registration No. 302009E)

Abhijit Bandyopadhyay

Partner

KOLKATA, 28th April, 2016 (Membership No. 054785)

42


ANNEXURE 'A' TO THE INDEPENDENT AUDITOR'S REPORT (Referred to in paragraph 1 (f) under 'Report on Other Legal and Regulatory Requirements' of our report of even date)

Report on the Internal Financial Controls Over Financial Reporting under Clause (i) of Sub-section 3 of Section 143 of the Companies Act, 2013 ('the Act')

We have audited the internal financial controls over financial reporting of TM International LogisticsLimited ('the Company') as of March 31, 2016 in conjunction with our audit of the financial statements of the Company for the year ended on that date.

Management's Responsibility for Internal Financial Controls

The Company's management is responsible for establishing and maintaining internal financial controls based on 'the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India'. These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to company's policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Companies Act, 2013.


Our responsibility is to express an opinion on the Company's internal financial controls overfinancial reporting based on our audit. We conducted our audit in accordance with the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting (the 'Guidance Note') issued by the Institute of Chartered Accountants of India and the Standards on Auditing prescribed under Section 143(10) of the Companies Act, 2013, to the extent applicable to an audit of internal financial controls. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls over financial reporting was established and maintained and if such controls operated effectively in all material respects.

Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls system over financial reporting and their operating effectiveness. Our audit of internal financial controls over financial reporting included obtaining an understanding of internal financial controls over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. The procedures selected depend on the auditor's judgement, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the Company's internal financial controls system over financial reporting.

Meaning of Internal Financial Controls Over Financial Reporting

A company's internal financial control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company's internal financial control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting

43

principles, and that receipts and expenditures of the company are being made only in accordance with authorisations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorised acquisition, use, or disposition of the company's assets that could have a material effect on the financial statements.

Inherent Limitations of Internal Financial Controls Over Financial Reporting

Because of the inherent limitations of internal financial controls over financial reporting, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may occur and not be detected. Also, projections of any evaluation of the internal financial controls over financial reporting to future periods are subject to the risk that the internal financial control over financial reporting may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Opinion

In our opinion, to the best of our information and according to the explanations given to us, the Company has, in all material respects, an adequate internal financial controls system over financial reporting and such internal financial controls over financial reporting were operating effectively as at March 31, 2016, based on 'the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India'.

For DELOITTE HASKINS & SELLS Chartered Accountants


Abhijit BandyopadhyayPartner

(Membership No. 054785)Kolkata, 28th April, 2016

44


ANNEXURE B TO THE INDEPENDENT AUDITORS' REPORT

(Referred to in paragraph 2 under 'Report on Other Legal and Regulatory Requirements' section of our report of even date)

(i) (a) The Company has maintained proper records showing full particulars, including quantitative details and situationof fixed assets.

(b) The fixed assets were physically verified during the year by the management in accordance with a regular program of verification, which, in our opinion, provides for physical verification of all the fixed assets at reasonable intervals. According to the information and explanations given to us, no material discrepancies were noticed on such verification.

(c) According to the information and explanations given to us and the records examined by us and based on the examination of the sale deed / completion and possession certificate provided to us, we report that, the title deeds, comprising all the immovable properties of buildings which are freehold, are held in the name of the Company as at the balance sheet date, however the same is yet to be registered with the State government authority as on the date of the balance sheet.

In respect of immovable properties of land and buildings that have been taken on lease and disclosed as fixed asset in the financial statements, the lease agreements are in the name of the Company, where the Company is the lessee in the agreement.

(ii) As explained to us, inventories were physically verified during the year by the management at reasonable intervals and no material discrepancies were noticed on physical verification.

(iii) According to the information and explanations given to us, the Company has granted loans, secured or unsecured, to companies, firms, Limited Liability Partnerships or other parties covered in the register maintained under section 189 of the Companies Act, 2013, in respect of which:

(a) The terms and conditions of the grant of such loans are, in our opinion, prima facie, not prejudicial to the Companys interest.

(b) The schedule of repayment of principal and payment of interest has been stipulated and repayments or receipts of principal amounts and interest have been regular as per stipulations.

(c) There is no overdue amount remaining outstanding as at the year-end.

(iv) The Company has not granted any loans, made investments or provide guarantees and hence reporting under clause (iv) of the CARO 2016 is not applicable.

(v) According to the information and explanations given to us, the Company has not accepted any deposit during the year. In respect of unclaimed deposits, the Company has complied with the provisions of Sections 73 to 76 or any other relevant provisions of the Companies Act, 2013.

(vi) The maintenance of cost records has been specified by the Central Government under section 148(1) of the Companies Act, 2013 with respect to the Company's operation at Berth 12, Haldia Dock Complex. We have broadly reviewed the cost records maintained by the Company pursuant to the Companies (Cost Records and Audit) Rules, 2014, as amended prescribed by the Central Government under sub-section (1) of Section 148 of the Companies Act, 2013, and are of the opinion that, prima facie, the prescribed cost records have been made and maintained We have, however, not made a detailed examination of the cost records with a view to determine whether they are accurate or complete.

45

(vii) According to the information and explanations given to us, in respect of statutory dues:

(a) The Company has generally been regular in depositing undisputed dues, including Provident Fund, Employees' State Insurance, Income-tax, Sales Tax, Service Tax, Customs Duty, Excise Duty, Value Added Tax, cess and other material statutory dues applicable to it to the appropriate authorities.

(b) There were no undisputed amounts payable in respect of Provident Fund, Employees' State Insurance,Income-tax, Sales Tax, Service Tax, Customs Duty, Excise Duty, Value Added Tax, cess and other material statutory dues in arrears as at March 31, 2016 for a period of more than six months from the date they became payable.

(c) Details of dues of Income-tax, Sales Tax, Service Tax, Customs Duty, Excise Duty and Value Added Tax which have not been deposited as on March 31, 2016 on account of disputes are given below.

Name of Statute Nature of Dues Forum where Dispute is Pending Financial year to which the Amount Relates

Amount (` In lacs)

Finance Act, 1994 Service Tax High Court of Orissa 2001-02 to 2005-06 705.96

Central Excise Service Tax Appellate Tribunal 2004-05 to 2007-08 147.20^

Commissioner (Appeal) 2006-07 to 2007-08 19.08

Commissioner (Appeal) 2009-10 23.90^^

Commissioner (Appeal) 2010-11 to 2013-14 4.53

Income Tax Act, 1961 Income Tax Income Tax Appellate Tribunal 2008-09 74.79

Deputy commissioner of Income Tax 2009-10 21.55#

Deputy commissioner of Income Tax 2010-11 114.48

Custom Act, 1962 Custom Duty Central Excise Service Tax Appellate Tribunal 2005-06 23.13*

^ Net of Rs. 10.00 lacs paid under protest.

^^ Net of Rs. 3.50 lacs paid under protest.

# Net of Rs. 2.10 lacs paid under protest.

* Net of Rs. 1.87 lacs paid under protest.

(viii) The Company has not taken any loans or borrowings from financial institutions, banks and government or has not issued any debentures. Hence reporting under clause (viii) of CARO 2016 is not applicable to the Company.

(ix) The Company has not raised moneys by way of initial public offer or further public offer (including debt instruments) or term loans and hence reporting under clause (ix) of the CARO 2016 Order is not applicable.

(x) To the best of our knowledge and according to the information and explanations given to us, no fraud by the Company and no fraud on the Company by its officers or employees has been noticed or reported during the year.

(xi) In our opinion and according to the information and explanations given to us, the Company has paid / provided managerial remuneration in accordance with the requisite approvals mandated by the provisions of section 197 read with Schedule V to the Companies Act, 2013.

(xii) The Company is not a Nidhi Company and hence reporting under clause (xii) of the CARO 2016 Order is not applicable.

(xiii) In our opinion and according to the information and explanations given to us the Company is in compliance with Section 177and 188 of the Companies Act, 2013, where applicable, for all transactions with the related parties and

46


the details of related party transactions have been disclosed in the financial statements etc. as required by the applicable accounting standards.

(xiv) During the year the Company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures and hence reporting under clause (xiv) of CARO 2016 is not applicable to the Company.

(xv) In our opinion and according to the information and explanations given to us, during the year the Company has not entered into any non-cash transactions with its directors, or directors of its holding, subsidiary company or persons connected with them and hence provisions of section 192 of the Companies Act, 2013 are not applicable.

(xvi) The Company is not required to be registered under section 45-IA of the Reserve Bank of India Act, 1934.

For DELOITTE HASKINS & SELLSChartered Accountants

(Firm Registration No. 302009E)


Membership No. 054785

Kolkata, 28th April, 2016

47

TM International Logistics LimitedBalance Sheet as at 31st March 2016

Note As at No. 31st March 2016 31st March 2015 ` `

I. EQUITY AND LIABILITIES (1) Shareholder's Funds (a) Share Capital 2 180,000,000 180,000,000 (b) Reserves and Surplus 3 1,549,521,394 1,306,184,980 1,729,521,394 1,486,184,980 (2) Non-Current Liabilities (a) Deferred Tax Liabilities (Net) 31 16,459,200 19,779,831 (b) Other Long Term Liabilities 4 450,276,164 471,120,674 (c) Long Term Provisions 5 104,606,328 100,607,823 571,341,692 591,508,328 (3) Current Liabilities (a) Trade Payables (A) Total outstanding dues of Micro Enterprises and Small enterprises 29 (B) Total outstanding dues of creditors other than Micro Enterprises and Small enterprises 6 380,934,302 494,202,406 (b) Other Current Liabilities 7 486,060,459 518,106,845 (c) Short-Term Provisions 8 59,477,123 58,007,523 926,471,884 1,070,316,774

Total 3,227,334,970 3,148,010,082 II. ASSETS (1) Non-Current Assets (a) Fixed Assets (i) Tangible Assets 9 313,440,468 299,759,619 (ii) Intangible Assets 10 706,668,644 733,111,791 (iii) Capital Work-in-Progress 2,421,923 16,462,067 (iv) Intangible Assets under Development – 249,399 (b) Non-Current Investments 11 63,957,695 63,957,695 (c) Long Term Loans and Advances 12 113,462,642 122,468,358 (d) Other Non-Current Assets 13 5,939,831 1,817,380 1,205,891,203 1,237,826,309 (2) Current Assets (a) Current Investments 14 81,258,302 961,080,940 (b) Inventories 15 9,379,884 10,730,722 (c) Trade Receivables 16 399,571,769 395,923,542 (d) Cash and Bank Balances 17 1,269,174,538 195,561,494 (e) Short-Term Loans and Advances 18 236,251,509 343,215,673 (f) Other Current Assets 19 25,807,765 3,671,402 2,021,443,767 1,910,183,773 Total 3,227,334,970 3,148,010,082 See accompaning notes forming part of Financial StatementsIn terms of our report attached For and on behalf of the Board of DirectorsFor Deloitte Haskins & Sells Sd/- Chartered Accountants Sandipan Chakravortty Sd/- Sd/- Sd/- Chairman Abhijit Bandyopadhyay Jyoti Purohit Anand Chand Sd/- Partner Company Secretary Chief Financial Officer R N Murthy Managing Director Kolkata, 28th April, 2016 Kolkata, 28th April, 2016

48


TM International Logistics LimitedStatement of Profit and Loss for the Year Ended 31st March 2016

For the year ended For the year ended 31st March 2016 31st March 2015 Note No. ` `

I. Revenue from Operations 20 1,937,400,676 2,545,849,451

II. Other Income 21 262,087,899 97,404,022

III. Total Revenue (I +II) 2,199,488,575 2,643,253,473

IV. Expenses:

(a) Employee Benefit Expense 22 291,157,847 286,134,789

(b) Operational Expenses 23 1,121,467,201 1,552,056,395

(c) Depreciation and Amortization Expense 81,565,779 78,503,388

(d) Other Expenses 24 255,622,887 296,457,222

Total Expenses 1,749,813,714 2,213,151,794

V. Profit Before Tax (III-IV) 449,674,861 430,101,679

VI. Tax Expense: 152,177,507 143,782,963

(1) Current Tax 155,247,000 153,514,000

(2) Short/(Excess) provision for tax relating to earlier years 251,138 (511)

(3) Deferred Tax 31 (3,320,631) (9,730,526)

VII. Profit for the Year (V-VI) 297,497,354 286,318,716

VIII.Earning per Equity Share 38

(1) Basic 16.53 15.91

(2) Diluted 16.53 15.91

See accompaning notes forming part of Financial Statements

In terms of our report attached For and on behalf of the Board of DirectorsFor Deloitte Haskins & Sells Sd/- Chartered Accountants Sandipan Chakravortty Sd/- Sd/- Sd/- Chairman Abhijit Bandyopadhyay Jyoti Purohit Anand Chand Sd/- Partner Company Secretary Chief Financial Officer R N Murthy Managing Director Kolkata, 28th April 2016 Kolkata, 28th April 2016

49

TM International Logistics LimitedStatement of Cash Flow for the Year Ended 31st March 2016

For the year ended For the year ended 31st March 2016 31st March 2015 ` `

A. CASH FLOW FROM OPERATING ACTIVITIES Profit before Tax 449,674,861 430,101,679

Adjustments for: Depreciation / Amortisation 81,565,779 78,503,388

Assets written off – 1,036,180

(Profit)/ Loss on sale of Fixed Assets(net) – 10,270,659

Profit on sale of Investments (128,551,091) (19,906,834)

Interest Income (59,471,609) (21,623,240)

Dividend Income (3,612,861) (3,015,641)

Provision for Wealth Tax – 102,500

Operating profit before Working Capital changes 339,605,079 475,468,691

Adjustments for changes in Operating Assets & Liabilities

Adjustments for (increase) / decrease in Operating Assets:

Trade and Other Receivables (3,648,225) (154,685,422)

Inventories 1,350,838 15,263,341

Long-Term Loans and Advances 1,901,706 (3,897,631)

Short-Term Loans and Advances 106,964,164 (46,016,495)

Adjustments for increase / (decrease) in Operating Liabilities:

Trade Payables & Others (133,772,884) 353,323,332

Short-Term Provisions 768,230 (735,080)

Long-Term Provisions 3,998,505 24,549,333

Cash generated from Operations 317,167,413 663,270,069

Direct Taxes Paid (Net of Refund) (152,618,084) (151,584,424)

Net cash from Operating Activities 164,549,329 511,685,645

B. CASH FLOW FROM INVESTING ACTIVITIES Purchase of Fixed Assets (Including CWIP & Capital Advances) (68,278,497) (146,151,303)

Payment for Leasehold Liability (19,072,076) (18,125,776)

Sale of Fixed Assets 678,344 56,505,199

Investments in subsidiary-TKM Global Logistics Limited – (18,000,000)

50


TM International Logistics LimitedStatement of Cash Flow for the Year Ended 31st March 2016 (contd.)


Loan to Subsidiary-TKM Global Logistics Limited – (34,000,000)

Investment In Fixed Deposits (990,192,590) (18,240,289)

Repayment of Loan by subsidiary- TM Harbour Services Pvt. Ltd. – 106,000,000

Repayment of Loan by subsidiary- TKM Global Logistics Ltd. 4,800,000 1,200,000

Purchase and Sale of Investments (Net) 1,008,373,729 (448,773,564)

Wealth Tax paid (102,500) (105,500)

Interest received 37,083,837 21,105,603

Dividend received on Investment in Mutual Funds 3,612,861 3,015,641

Net cash used in Investing Activities (23,096,892) (495,569,989)

C. CASH FLOW FROM FINANCING ACTIVITIES Dividend Paid (45,000,000) (18,000,000)

Tax on Dividend Paid (9,160,940) (3,059,100)

Net cash used in Financing Activities (54,160,940) (21,059,100)

Net increase/(decrease) in Cash & Cash equivalents(A+B+C) 87,291,497 (4,943,446)

Cash and Cash equivalents at the beginning of the Year 73,335,752 78,279,196

Cash and Cash equivalents at the end of the Year 160,627,249 73,335,752

[The above Cash & Bank Balances do not include Investments in

Liquid Funds amounting to `81,258,302 (31.03.2015 ` 872,583,186)]

Additional notes to cash flow statement:

1. Figures in brackets indicate outflows.

2. Cash and bank balances includes Cash and Cash equivalents (refer note 17)

3. Net cash from operating activities includes payment made for CSR activity of ` 4,369,167/-.

4. Previous year figures have been regrouped/restated wherever necessary.

In terms of our report attached For and on behalf of the Board of DirectorsFor Deloitte Haskins & Sells Sd/- Chartered Accountants Sandipan Chakravortty Sd/- Sd/- Sd/- Chairman Abhijit Bandyopadhyay Jyoti Purohit Anand Chand Sd/- Partner Company Secretary Chief Financial Officer R N Murthy Managing Director Kolkata, 28th April, 2016 Kolkata, 28th April, 2016

51

TM International Logistics LimitedNotes forming part of Financial Statement for the Year Ended 31st March 2016

1. ACCOUNTING POLICIES:

(a) Basis of accounting and preparation of financial statements

The financial statements of the Company have been prepared in accordance with the Generally Accepted Accounting Principles in India (Indian GAAP) to comply with the Accounting Standards specified under Section 133 of the Companies Act, 2013, and the relevant provisions of the Companies Act, 2013 ("the 2013 Act")/ Companies Act, 1956 ("the 1956 Act"), as applicable. The financial statements have been prepared on accrual basis under the historical cost convention. The accounting policies adopted in the preparation of the financial statements are consistent with those followed in the previous year.

All assets and liabilities have been classified as current or non-current as per the Company's normal operating cycle and other criteria set out in the Schedule III to the Companies Act, 2013. Based on the nature of service rendered and their realisation in cash and cash equivalents, the Company has ascertained its operating cycle as 12 months for the purpose of current – non current classification of assets and liabilities.

(b) Revenue Recognition

i) Sale of Services

Income from Services is recognised on completion of the relevant Port activities and related service.

ii) Interest Income

Interest Income is recognised on accrual basis, based on Interest rate implicit in the transaction.

iii) Dividend Income

Dividend income is recognised when the Company's right to receive Dividend is establised. The Company's dividend income is mainly from Investment in Mutual Fund and it is recognised once the dividend is credited in the account.

(c) Use of Estimates

The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent liabilities at the date of financial statements and the results of operations during the reporting year end. Although these estimates are based upon management's best knowledge of current events and actions, actual results could differ from these estimates.

(d) Tangible Assets

Tangible assets are valued at cost less depreciation and net of impairment, if any. The cost of an item of tangible asset comprises its purchase price, including import duties and other non-refundable taxes or levies and any directly attributable cost of bringing the asset to its working condition for its intended use; any trade discounts and rebates are deducted in arriving at the purchase price. Interest on borrowings and financing cost during the period of construction is added to the cost of tangible assets.

52


(e) Intangible Assets

Intangible assets are stated at cost of acquisition, including any cost attributable for bringing the same to its working condition, less accumulated amortisation.

(f) Investments

Long term investments are carried at cost and provisions recorded to recognize any decline, other than temporary, in the carrying value of each investment. Current investments are carried at lower of cost or fair value.

(g) Impairment of Assets

The carrying amounts of assets are reviewed at each balance sheet date to determine if there is any indication of impairment based on external/internal factors. An impairment loss is recognized wherever the carrying amount of an asset exceeds its recoverable amount which represents the greater of the net selling price and 'Value in use' of the assets. The estimated future cash flows considered for determining the value in use, are discounted to their present value at the weighted average cost of capital.

(h) Depreciation/Amortisation

Depreciation on assets is provided on the straight-line method over the useful lives of assets. Depreciation is charged based on the useful life of its fixed assets as prescribed in Part C of Schedule II of the Companies Act, 2013. The details of estimated life for each category of assets are as under:

Type of Asset Estimated Useful lifeBuildings constructed on the leased land Upto 30 yearsOffice Building 60 yearsPlant and Equipments 7 -15 yearsVehicles-Four Wheelers 8 yearsVehicles-Two Wheelers 10 yearsOffice Equipment 5 yearsFurniture and Fixtures 10 yearsComputers-Desktop, Laptops etc. 3 yearsComputers-Servers 6 years

The premium paid/ payable for leasehold land is amortised over the lease period. The lease rent paid is expensed as and when the payment is made. Expenses incurred on development of leasehold is amortised equally over the lease period. Intangible Assets in respect of accounting software is amortised over a period of 5 years. Other Intangible Assets are amortised equally over the period for which the right is obtained.

(i) Provision

A provision is recognized when an enterprise has a present obligation as a result of past event and it is probable that an outflow of resources will be required to settle the obligation, in respect of which a reliable estimate can be made.

53

(j) Contingencies

Liabilities which are material and whose future outcome cannot be ascertained with reasonable certainty are treated as contingent and disclosed by way of notes to the financial statements.

(k) Inventories

Inventories comprising of stores and spares are carried at or below cost. Necessary provision is made and charged to revenue in case of identified obsolete and non-moving items. Cost of Inventories is generally ascertained on 'weighted average' basis.

(l) Foreign Exchange Transactions

Foreign Currency transactions are recorded on initial recognition in the reporting currency i.e. Indian rupees, using the exchange rates prevailing on the date of the transaction. Monetary assets and liabilities in currencies other than the reporting currency are remeasured at the rates of exchange prevailing at the balance sheet date. Exchange difference arising on the settlement of monetary items, and on the remeasurement of monetary items, are included in the statement of profit and loss for the period. In respect of transaction covered by foreign exchange contracts, the difference between the contract rate and spot rate on the date of transaction is charged to Statement of Profit & Loss over the period of contract. Exchange differences relating to monetary items that are in substance forming part of the company's net investment in non-integral foreign operations are accumulated in Foreign Currency Translation Reserve Account.

(m) Employee Benefits

Short Term Employee Benefits

Short term employee benefits are recognised as an expense at the undiscounted amount in the Statement of profit and loss of the period in which the related service is rendered.

Defined Contribution Plans

The Company provides Provident Fund benefit to its employees. The contributions towards Provident fund upto May, 2009 were paid to the trust administered by the Government. The Company has got exemption under Section 17 of the Employees' Provident Fund and Miscellaneous Provisions Act, 1952 from the Central Govt., Ministry of Labour and Employment for setting up of an exempted Provident Fund Trust w.e.f. 30th March, 2009. Accordingly, the Company has been contributing PF dues from June, 2009 onwards to the Trust fund created under the name and style as 'TM International Logistics Limited Employees' Provident Fund' The Company also provides Superannuation Benefit to its employees. The contribution towards Superannuation is paid to a separate trust administered by the Company. The company has no legal or constructive obligation to pay further contributions if the funds do not hold sufficient assets to pay employee benefits. The contributions are recognised as expenses in the statement of profit and loss based on the amount of contribution required to be made and when services are rendered by the employees.

54


Defined Benefit Plans

The Company provides Gratuity and Leave Encashment Benefits to its employees. Gratuity liabilities are funded through a separate trust managed by Tata Steel Limited. The liability towards leave encashment is not funded. The present value of these defined benefit obligations are ascertained by an independent actuarial valuation as per the requirement of Accounting Standards 15 - Employee Benefits. The liability recognised in the balance sheet is the present value of the defined benefit obligations on the balance sheet date less the fair value of the plan assets (for funded plans), together with adjustments for unrecognised past service costs. All actuarial gains and losses are recognised in Statement of Profit and Loss in full in the year in which they occur.

(n) Taxes on Income

Income Tax

Provision for Current tax is determined on the basis of taxable income and tax credits computed in accordance with the provisions of the Income Tax Act, 1961.

Deferred Taxes

Deferred tax assets and liabilities are recognised by computing the tax effect on timing differences which arise during the period and reverse in the subsequent periods. Deferred tax assets are recognised only to the extent that there is a reasonable certainty that sufficient future taxable income will be available against which such deferred tax assets can be realised. In case of tax holiday, deferred tax is recognised for the timing difference which reverse after the expiry of tax holiday period.

55

TM International Logistics LimitedNotes forming part of Financial Statements as at 31st March 2016

As at2. SHARE CAPITAL 31st March 2016 31st March 2015 ` ` i. Authorised 19,000,000 Equity Shares of ` 10/- each 190,000,000 190,000,000 [31.03.2015: 19,000,000 shares of ` 10/- each]

ii. Issued, Subscribed and Paid-up 180,000,000 180,000,000 18,000,000 Equity Shares of ` 10/- each [31.03.2015: 18,000,000 shares of ` 10/- each] 180,000,000 180,000,000

iii. Reconciliation of shares 31st March 2016 31st March 2015 ` `

Equity Shares of `10/- each

Opening Balance at the beginning of Year 180,000,000 180,000,000 Issue during the Year – –

Closing Balance at end of the Year 180,000,000 180,000,000

iv. Details of shareholders holding more than 5% of outstanding shares

Details Shareholders

31st March 2016 31st March 2015

No. of eq. shares

% age No. of eq. shares

% age

Tata Steel Ltd 9,180,000 51 9,180,000 51

NYK Holding (Europe) B.V. 4,680,000 26 4,680,000 26

IQ Martrade Holding Und Management GmbH 4,140,000 23 4,140,000 23

18,000,000 100 18,000,000 100

The company has one class of equity shares having a par value of ` 10 per share. Each shareholder is eligible for one vote per share held. In the event of liquidation, the equity shareholders are eligible to receive the remaining assets of the Company after distribution of all preferential amounts, in proportion to their shareholding.

As at

56



3. RESERVES & SURPLUSAs at

31st March 2016`

31st March 2015 `

Reserves

General Reserves

Balance at the commencement of the Year 671,675,749 571,675,749

Add: Transfer from Statement of Profit & Loss 100,000,000 100,000,000

Closing Balance 771,675,749 671,675,749

Surplus

Statement of Profit & Loss

Balance at the commencement of the Year 634,509,231 502,351,456

Add: Profit for the Year 297,497,354 286,318,715

Less: Proposed Dividend 45,000,000 45,000,000

Less: Tax on Dividend 9,160,940 9,160,940

Less: Transfer to General Reserve 100,000,000 100,000,000

Closing Balance 777,845,645 634,509,231

1,549,521,394 1,306,184,980

The Board of Directors has recommended a dividend of `2.5 per Equity Share (Previous year ` 2.5 per Equity Share) for the year ended March 31, 2016. The dividend payment is subject to the approval of the shareholder at the Annual General Meeting. The total dividend payout (including tax on dividend) works out to `54,160,940 (Previous year `54,160,940) for the Company.

4. OTHER LONG TERM LIABILITIES As at

31st March 2016`

31st March 2015`

Liability for Lease Hold Land 445,056,308 465,026,302

Other Liabilities 5,219,856 6,094,372

450,276,164 471,120,674

57

As at5. LONG TERM PROVISIONS 31st March 2016

` 31st March 2015

`

Provisions for employee benefits

- Post Retirement Benefits 40,117,522 45,243,343

- Other Long Term Employee Benefits 64,488,806 55,364,480

104,606,328 100,607,823

6. TRADE PAYABLESAs at

31st March 2016`

31st March 2015`

Creditors for Supplies and Services 318,839,870 410,462,160

Creditors for Accrued Wages and Salaries 62,094,432 83,740,246

380,934,302 494,202,406

7. OTHER CURRENT LIABILITIESAs at

31st March 2016`

31st March 2015`

Advances received from Customers 445,150,164 470,246,879

Other Payables

- Statutory Dues 14,905,583 9,439,131

- Payable on Purchase of Fixed Assets 2,461,788 15,775,829

- Other Payables 3,559,298 3,559,298Liability for Lease Hold Land 19,983,626 19,085,708

486,060,459 518,106,845

8. SHORT TERM PROVISIONSAs at

31st March 2016`

31st March 2015`

Provision for Employee Benefits

- Post Retirement Benefits 1,854,730 1,521,860

- Other Long Term Employee Benefits 1,729,630 1,294,270

Provision for Taxes 1,731,823 1,030,453

[Net of Advance: ` 153,515,176 (31.03.2015: ` 152,586,047)] Proposed Dividends 45,000,000 45,000,000 Tax on Dividend 9,160,940 9,160,940

59,477,123 58,007,523


58


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60



11. NON CURRENT INVESTMENTSAs at

31st March 2016 `

31st March 2015 `

Trade InvestmentsInvestments in Equity Instruments of Subsidiary Companies (Unquoted)

International Shipping Logistics FZE, Dubai1 Share of 1,000,000 AED fully paid up[31.03.2015: 1 Share of 1,000,000 AED fully paid up ]

12,382,249 12,382,249

TKM Global Logistics Ltd. 3,600,000 Shares of ` 10/- fully paid up[31.03.2015: 3,600,000 Shares of ` 10/- fully paid up]

51,575,446 51,575,446

63,957,695 63,957,695

As at

31st March 2016 `

31st March 2015 `

Aggregate value of Quoted investments Aggregate value of Unquoted investments

- 63,957,695

- 63,957,695

63,957,695 63,957,695

12. LONG TERM LOANS AND ADVANCESAs at

31st March 2016`

31st March 2015`

Capital Advances Security Deposits Loan to Related Party - Subsidiary -TKM Global Logistics Ltd Loan to Employees Advance Payment of Taxes [Net of Provision for tax: ` 206,811,309 (31.03.2015: ` 163,393,309)] Other Advances

42,174 21,857,447 23,200,000

9,638,588 57,617,880

1,106,553 113,462,642

270,000 26,601,705 28,000,000

6,321,334 59,694,064

1,581,255 122,468,358

Secure Considered GoodUnsecured, Considered GoodDoubtful

- 113,462,642

-

- 122,468,358

-

13. OTHER NON CURRENT ASSETSAs at


Bank deposits with more than 12 months maturityInterest accrued on deposits.

5,433,575 506,256

1,562,533254,847

5,939,831 1,817,380

61


14. CURRENT INVESTMENTSAs at

31st March 2016 `

31st March 2015 `

Investments in Mutual Funds (Quoted) - At lower of cost and fair valueIn units of ` 10/- each

DSP BlackRock Dual Advantage Fund-Series 3-36M Nil(31.03.2015: 1,500,000) Units

– 15,000,000

– 15,000,000

Investments in Mutual Funds (Unquoted) - At lower of cost and fair valueIn units of ` 10/- each

ICICI Prudential Capital Protection Oriented Fund Nil (31.03.2015: 2,189,200) Units

– 21,892,000

HDFC Liquid Fund- Growth Nil (31.03.2015: 3,013,026) Units

– 80,136,132

HDFC Short Term Plan-Direct Plan - Growth Nil (31.03.2015: 1,060,125) Units

– 26,605,754

HDFC Cash Management Fund - Treasury Advantage Plan Nil (31.03.2015: 750,956) Units

– 21,073,404

Sundaram Money Fund - Direct Plan - Growth Nil (31.03.2015: 1,191,946) Units

– 30,947,791

HDFC Dynamic PE ratio Fund of Funds- Direct Plan - Growth Nil (31.03.2015: 2,269,467) Units

– 25,000,000

IDFC Ultra Short Term Fund-Growth - Regular Plan Nil (31.03.2015: 3,179,572) Units

– 58,866,346

IDFC -SSIF Short Term Growth - Regular Plan Nil (31.03.2015: 407,536) Units

– 8,481,531

Kotak Treasury Advantage Fund - GrowthNil (31.03.2015: 1,884,270) Units

– 40,000,000

Kotak Bond (Short Term) GrowthNil (31.03.2015: 694,846) Units

– 16,889,888

Sundaram Money Fund - Regular Plan - GrowthNil (31.03.2015: 1,630,606) Units

– 45,000,000

ICICI Prudential Short Term Regular Plan Growth OptionNIL (31.03.2015: 1,763,429) Units

– 38,283,289

DSP BlackRock Income Opportunities Fund-Direct Plan GrowthNIL (31.03.2015: 3,968,692) Units

– 75,721,264

Kotak Monthly Income Plan-Direct Plan- GrowthNil (31.03.2015: 1,397,617) Units

– 25,478,276

62



14. CURRENT INVESTMENTS (contd) As at 31st March 2016 31st March 2015

JP Morgan India Treasury Fund-Super Inst-DDP-Reinvest Nil (31.03.2015: 9,110,294) Units

– 91,183,626

Kotak Bond (Short Term)-Direct Plan - Growth Nil (31.03.2015: 1,300,768) Units

– 30,000,000

Kotak Treasury Advantage Fund - Direct Plan-Growth Nil (31.03.2015: 504,393) Units

– 10,000,000

JM High Liquidity Fund- Growth Option Nil (31.03.2015: 2,130,312) Units

– 80,000,000

In units of ` 100/- eachICICI Prudential Liquid-Regular Plan - Growth Nil (31.03.2015: 196,845) Units

– 38,770,389

In units of ` 1,000/- eachL&T Liquid Fund- Growth Nil (31.03.2015: 21,348) Units

– 40,000,000

Religare Invesco Liquid Fund - Growth Plan Nil (31.03.2015: 32,337) Units

– 60,000,000

DSP Black Rock Liquidity Fund-Direct Plan - Growth Nil (31.03.2015: 14,341) Units

– 26,751,250

Tata Money Market Fund - Regular Plan - Daily Dividend81,135 (31.03.2015) Nil Units

81,258,302 –

DSP Black Rock Liquidity Fund-Inst- Growth Nil (31.03.2015: 28,701) Units

– 55,000,000

Less: Excess of cost over fair value of Current Investments

81,258,302 961,080,940

- -

81,258,302 961,080,940

As at


Aggregate value of Quoted investments - 15,000,000

[Market Value as at 31.03.2016 : ` Nil (31.03.2015: ` 20,199,600)]

Aggregate value of Unquoted investments 81,258,302 946,080,940

81,258,302 961,080,940

63

15. INVENTORIES

As at

31st March 2016 `

31st March 2015 `

InventoryStores and Spares- at or below costLess : Provison for Dead Stock

10,010,089630,205

11,918,7881,188,066

9,379,884 10,730,722

16. TRADE RECEIVABLESAs at

31st March 2016 `

31st March 2015 `

Trade Receivable (i) Debts Outstanding for a period exceeding six months(ii) Other Debts

Less : Provision for Doubtful Debts(i) For a period exceeding six months(ii) Other Debts

10,395,199389,176,570

5,163,042 393,891,167

399,571,769 399,054,209

––

1,118,4572,012,210

399,571,769 359,923,542

Secured Considered GoodUnsecured, Considered GoodDoubtful

–399,571,769

–

–395,923,542

3,130,667

17. CASH & BANK BALANCES

As at

31st March 2016 `

31st March 2015 `

Cash on hand Cheques, drafts on handBalances with BanksIn Deposit Account (maturity less than 3 months)In Current Account

41,7665,229,622

130,000,000

25,355,861

91,72211,556,883

50,000,00011,687,147

Total Cash and Cash Equivalents

Other Bank BalancesIn Deposits Account (Maturity more than 3 months & less than 12 months)In Earmarked Account

160,627,249

981,303,434127,243,855

1,269,174,538

73,335,752

–122,225,742195,561,494

Earmarked balances with Banks includes: - Held as margin money against guarantees - Other commitments

–

122,243,855 75,000

122,150,742

The above Cash & Bank Balances do not include Investments in Liquid Funds amounting to `81,258,302 (31.03.2015` 872,583,186)


64


18. SHORT TERM LOANS AND ADVANCESAs at

31st March 2016`

31st March 2015`

Loan to Related Party - Subsidiary - TKM Global Logistics Ltd (Previous year -TM Harbour Services Pvt Ltd) Balance with Excise/Service Tax AuthoritiesLoan to EmployeesOther AdvancesSecurity deposits

4,800,000

14,411,2232,471,240

209,141,6015,899,344

4,800,000

35,909,977 2,933,961

298,214,6391,357,096

236,723,408 343,215,673

Less : Provision for Bad and Doubtful Adance 471,899 -

236,251,509 343,215,673


- 236,251,509

471,899

- 343,215,673

-

19 OTHER CURRENT ASSETSAs at

31st March 2016`

31st March 2015`

Interest accrued on deposits etc.25,807,765 3,671,402

25,807,765 3,671,402

20 REVENUE FROM OPERATIONS For the Year ended

31st March 2016 `

For the Year ended 31st March 2015

`

Income from Port Related Services1,937,400,676 2,545,849,451

1,937,400,676 2,545,849,451

21 OTHER INCOME For the Year ended

31st March 2016`


`

Dividend on Investments Interest on Income Tax Refund Interest on Deposits etc. Interest on Loan to Subsidiary Provision for bad and doubtful debts written back (Net) Profit on sale of Current Investments Other Non Operating Income Income from Rental Services Provision/Liabilities no longer required written back

3,612,861 4,399,411

51,817,197 3,255,001

97,606 128,551,091

5,107,384 5,530,710

59,716,638

3,015,641 2,082,058

10,895,477 8,645,705 1,053,419

19,906,834 3,797,320

- 48,007,568

262,087,899 97,404,022


65

22. EMPLOYEE BENEFIT EXPENSE For the Year ended

31st March 2016`


`

Salaries and Wages, including BonusContribution to Provident and other Funds Staff Welfare Expenses

241,847,69326,787,874 22,522,280

236,301,94131,959,92717,872,921

291,157,847 286,134,789

23 OPERATIONAL EXPENSES For the Year ended

31st March 2016`


`

Intraport Transportation including On Shore handling Custom Clearence Charges Stevedoring & Other Related Expenses Equipment Assistance Charges Royalty to Kolkata Port Trust - Haldia Dock Complex

78,711,143 2,882,775

956,084,622 25,186,369 58,602,292

48,651,081 3,704,040

1,424,116,157 39,843,265 35,741,852

1,121,467,201 1,552,056,395

24 OTHER EXPENSES


`


`

Administrative ExpensesConsumption of stores and spare partsPower & FuelRent (including Plot Rent)Repairs to BuildingsRepairs to MachineryRepairs- othersInsurance chargesRates and taxesTravelling ExpensesLoss on foreign currency transactions (Net) CSR Expenditure (Refer Note No.- 37)Provision for wealth taxSecurity ChargesProvision for Dead StockLoss on sale of Fixed Assets (Net)/Assets written offProvision for Bad and Doubtful Advance

38,497,100

12,044,154 57,070,144 8,302,612

26,171,241 11,398,697 5,762,357 2,178,899

15,594,770 194,131

4,369,167 -

20,314,575 62,675

578,628 471,899

39,818,650 11,531,584 53,688,551 6,341,721

49,597,795 12,623,750 5,841,733 2,391,717

15,180,863 114,805

2,857,702 102,500

21,174,502 1,154,535

11,306,839 -


66


24. OTHER EXPENSES (contd.)


`


`

Bad Debts written offLess: Adjusted against Provison for Doubtful DebtsProfessional & Consultancy chargesAuditor Remuneration - as Auditor - for taxation matters - for Other services - for Reimbursement of ExpensesMiscellaneous Expenses

3,123,792 3,033,061

90,731

16,990,463

2,018,000 355,000

1,092,000 51,384

32,014,259

19,324,800 11,103,142 8,221,658

17,341,563

1,105,000 245,000 680,000 54,700

35,082,054

255,622,886 296,457,222


25 Contingent Liabilities not provided for: (a) Bank Guarantees: ` 2,459,577 (31.03.2015: ` 2,559,577). (b) Kolkata Port Trust has claimed an amount of ` 128,002,158 (31.03.2015: ` 128,002,158) in December, 2007 for cargo

shifting charges . An appeal has been filed with Hon'ble Calcutta High Court. The Hearing has not been concluded and the suit is pending for disposal at Hon'ble Calcutta High Court.

(c) Service Tax: ` 70,596,230 (31.03.2015: ` 70,596,230). The Service Tax Department has raised the demand for handling of export cargo and intra-port transportation for the FY 2001-02 to FY 2005-06 and the Company has filed writ petitions and obtained stay orders from Hon'ble High Court of Orissa. The matter is pending with Hon'ble High Court of Orissa.

(d) Additional Claim by KoPT for (54000 sq.m. & 9000 sq.m.) plot rent at Berth#12 for ` 21,263,334 (31.03.2015: ` 18,272,099). The Company has not accepted the claim and the matter is under discussion with KoPT.

(e) Additional Claim by KoPT for 14000 sq.m. plot rent at Berth#12 for ̀ 6,169,071 (31.03.2015: ̀ 5,213,189). The Company has not accepted the claim and the matter is under discussion with KoPT. However, the Company has deposited under protest ` 686,603 inclusive of interest of ` 195,368 to KoPT.

(f) In accordance with the provisions of the Major Port Trust Act, Tariff Authority of Major Ports (TAMP) issued tariff order directing the company to refund the alleged excess charge of ` 235,955,325 to the customers along with compound interest totalling to ` 661,131,765 (31.03.2015: ` 590,112,153) relating to the period from 01.04.2002 to 30.09.2007. The matter is pending to be heard by Hon'ble Calcutta High Court.

(g) Kolkata Port Trust (Haldia Dock Complex) has demanded in 2009 an amount of ` 33,270,804 (31.03.2015: ` 33,270,804) towards interest against non-payment of royalty of ` 57,588,046 for the first 6 years of operation, which the Company has disputed. The case has been referred for Arbitration. The Arbitration proceedings has been concluded and awaited for award.

(h) Tariff Authority of Major Ports (TAMP) vide order dated 25.05.2011 has notified the revised rates of various port charges of Berth# 12, Haldia Dock Complex, to be effective from 24.06.2011 against which the Company has filed writ petition with Hon'ble Calcutta High Court. As per Hon'ble Calcutta High Court order dated 05.07.2011, the Company had made the monthly deposit of differential amount between revised and earlier rates amounting to ` 127,143,855 (31.03.2015: ` 119,180,235) with a scheduled bank till April 2014.

(i) The Company had received in December, 2011, a demand of ` 7,479,050 (31.03.2015: ` 7,479,050) for AY 09-10 in respect of assessment done under section 143(3) of the Income Tax Act, 1961, against which the Company appealed to CIT(A) and the order of CIT(A) issued in January 2013 was in favour of the Company except for disallowance of ` 1,415,996 towards exempt dividend income by applying section 14A read with rule 8D against which the Company has appealed to ITAT. The Department has also filed a counter appeal to ITAT.

67


(j) The Company had received a demand of ` 2,365,790 (31.03.2015: ` 2,365,790) for AY10-11 in respect of assessment done under section 143(3) of the Income Tax Act, 1961, against which the Company has appealed to CIT(A) as per the relevant provisions of the Income Tax Act, 1961. The Company has paid ` 219,770 in protest to the department.

(k) The Company had received in March, 2014, a demand of ` 11,448,430 (31.03.2015: ` 11,448,430) for AY11-12 in respect of assessment done under section 143(3) of the Income Tax Act, 1961, against which the Company has appeal to CIT(A) as per the relevant provisions of the Income Tax Act, 1961. Further the department has adjusted the said demand from the refund receivable of ` 6,259,530 related to AY 06-07.

(l) The Company had received in June, 2011, a demand of ` 130,513 (31.03.2015 : ` 130,513) from the Deputy Director, ESI, in respect of assessment done covering the period from October 2009 to March 2010, against which the Company has made an appeal to Employees' State Insurance Court, Kolkata under section 75(1)(g) of the Employees State Insurance Act as amended. The company has also deposited 25% of the demanded amount in protest. Subsequently, the Company has withdrawn the case and submitted prayer on 10.09.2015 for availing Amnesty Scheme – 2014 to the Director General, ESI Corporation, Delhi by paying additional 5% of the demanded amount.

(m) The Company had received a show cause notice in December, 2014, from DRI, Mumbai. Pursuant to the said show cause notice, a penalty of ` 2,500,000 (31.03.2015: ` 2,500,000) has been imposed on the Company, against which the Company has filed an appeal in February 2015 in CESTAT, Kolkata, after paying the required applicable fees of ` 187,000 (7.5% of the penalty imposed).

(n) The Company had received a demand of ` 15,719,792 (31.03.2015 : ` 15,719,792) from the Commissioner of Service Tax, Service Tax Commissionerate Kolkata, vide order no.-72/Commr/ST/Kol/2010-11 dated 31/03/2011, in respect of various services rendered covering the period from FY2004-05 to FY2007-08, against which the Company has appealed to CESTAT, as per the relevant provisions of the law. CESTAT, Eastern Zone vide order dated 24.09.2013 directed the Company to deposit the entire amount, against which the Company filed a writ petition with Hon'ble Calcutta High Court for stay on the deposit demanded by CESTAT. The Hon'ble Calcutta High Court has granted stay on pre-deposit in the month of March 2014 and remanded the matter back to the CESTAT to reconsider the matter in entirety on the ground of natural justice. During FY14-15, CESTAT has transferred the case back to Commissioner for futher hearing on a condition of a pre-deposit of ` 1,000,000 and accordingly the Company has deposited the same.

(o) The Company had received a demand of ` 1,907,522 (including penalty of ` 953,761)(31.03.2015 : ` 1,907,522) from the Additional Commissioner of Service Tax, Kolkata, vide order no.-10/JC/ST/Kol/2012-13 dated 18/06/2012, in respect of various services rendered covering the period from FY2006-07 to FY2007-08, against which the Company has appealed to Commissioner (Appeal-1), as per the relevant provisions of the law and the matter is pending with commissioner (A).

(p) The Company had received a demand for penalty of ` 452,849 ( 31.03.2015: ` NIL) from deputy commissioner of service Tax for wrong availing of Cenvat Credit and short payment of service tax during the period FY2010-11 to FY2013-14. The Company has appealed to The Commissioner of Central Excise (Appeals-I).

26 Commitment (a) In terms of the Licence Agreement dated 29.01.2002 with Board of Trustees for the Port of Kolkata, the company is required

to invest in equipments and infrastructure in Berth #12 (Haldia Dock Complex) as follows:

Sl. No Purpose of Investment

Phasing of Investment from Licence Agreement dated 29.01.2002 (in `)

Within18 months (Lapsed on 28.07.2003)

Within 24 months (Lapsed on 28.01.2004)

Within 36 months (Lapsed on 28.01.2005)

Total

1 For Procurement of Equipment for ship to shore handling & vice versa and horizontal transfer of cargo

230,600,000 28,500,000 - 259,100,000

2 Storage of cargo - 17,400,000 12,000,000 29,400,000

3 Office building, workshop etc. - 7,500,000 2,500,000 10,000,000

4 Utility Services - 2,200,000 - 2,200,000

Total 230,600,000 55,600,000 14,500,000 300,700,000

68



As at 31.03.2016, Company's investments in equipments and infrastructure aggregate to ` 258,000,000 (31.03.2015: ` 258,000,000).

The Management has requested the Port Trust Authorities for suitable modification to the investment obligation in view of the changes in the business and economic scenario. The Port Trust Authorities have, subject to sanction of the Government of India, approved the changes proposed by the Company in the specifications of the equipments and other required infrastructure.

(b) Estimated amount of contracts remaining to be executed on capital account and not provided for: ` 18,524,663 (31.03.2015: ` 1,468,498).

27 The Company has taken on lease from Haldia Dock Complex 63000 Sq. Mtr. of land in the Dock Interior Zone for setting up of railway siding and other infrastructure in terms of the agreement dated 28.12.2006. Further, the Company is under an obligation to transfer the assets to be constructed on the additional land to Kolkata Port Trust as per the Licence Agreement. The lease is for a period of 25 years commencing from 11th January 2007 (for 54,000 Sq. Mtr.) and 3rd October 2007 (for 9,000 Sq. Mtr.) till 28th January 2032.

The consideration for lease of land comprises mainly a Non Refundable and Non Adjustable Premium of ` 18,040,320 (for 54,000 Sq. Mtr.) and ` 3,006,720 (for 9,000 Sq. Mtr.) and the lease rental of ` 510,437,765 (for 54,000 Sq. Mtr.) and ` 84,976,840 (for 9,000 Sq. Mtr.) payable over the lease period.

The amount of ` 445,056,308 (31.03.2015: ` 465,026,302) disclosed in Other Long Term Liabilities and amount of ` 19,983,626 (31.03.2015: ` 19,085,708) disclosed in Other Current Liabilities represents the lease rental payable during the period from 1st April, 2016 till 28th January 2032.

28 Licence included under Intangible Assets in Fixed Assets represents Upfront Fees paid to Kolkata Port Trust – Haldia Dock Complex towards securing the right to operate Berth No. 12 (situated at Haldia) for a period of 30 years and which is amortised on straight line basis over the lease period.

29 Based on and to the extent of information obtained from the suppliers regarding their status as Micro, Small & Medium Enterprises Development Act, 2006 there are no amounts due to them at the end of the year. The Company has not paid any interest during the year in terms of Sec 16 of The Micro, Small and Medium Enterprise Development Act, 2006.

30 Segment Reporting(a) Business Segment The Company is engaged in cargo handling and related activities at Ports, which in the context of Accounting Standard 17

of the Companies (Accounting Standard) Rules, 2006 issued by the Ministry of Corporate Affairs, is considered as the only business segment

(b) Geographical Segment The company renders Port operation service mainly within India. The conditions prevailing in India being uniform no separate

geographical segment disclosure is considered necessary.

31 DEFERRED TAX LIABILITY (NET)As at 31st March

2015 `

Charge/ (credit) for the Year

`

As at 31st Mar 2016

`

Deferred Tax LiabilitiesDifference between Book and Tax Depreciation

41,655,551

(1,125,426) 40,530,125

41,655,551 (1,125,426) 40,530,125

Deferred Tax AssetsLeave liabilitiesProvision for Doubtful Debts & AdvancesOthers

Net Deferred Tax Liability/ (Asset)

(19,608,460) (1,083,461) (1,183,799)

(3,308,416)

920,146 193,065

(22,916,876) (163,315) (990,734)

(21,875,720) (2,195,205) (24,070,925)

19,779,831 (3,320,631) 16,459,200

69


32 Stevedoring and other related expenses include the following: Particulars

31st March 2016`

31st March 2015`

Survey ExpensesDespatch related ServicesHandling ChargesLashing, securing, dunnaging and On-board supervision expensesHaulage & SidingUnloading/Loading ChargesStevedoring ChargesHandling LossLabour on Contract/ Labour ChargesMisc Operational Expenes

22,499,524 14,917,405

658,965,489 12,146,821

104,785 15,926,465 68,047,760 37,108,296 34,823,328 30,494,515

26,658,273 20,593,309

1,169,629,118 11,515,367

- 6,754,921

66,629,085 13,253,111 45,463,641 26,266,262

Total 895,034,388 1,386,763,087

33 Value of Imported and Indigenous Stores Consumed

Particulars For the Year ended 31st March

2016 Amount


For the Year ended 31st March

2016 Percentage


Imported 18,738,470 13,292,255 32% 20%

Indigenously obtained 39,742,120 52,081,966 68% 80%

34 Earnings in Foreign Currency

Particulars 31st March 2016`

31st March 2015 `

Agency Fees and related Income 29,299,022 36,221,677

29,299,022 36,221,677

35 Expenditure in Foreign Currency (accruals)

Particulars 31st March 2016`

31st March 2015`

CommissionPayable on Other Accounts

464,602 24,093,643

555,554 15,892,079

24,558,245 16,447,633

70


39. (a) The company has recognised an amount of ` 18,361,638 in Statement of Profit and Loss for the year (2014-2015 : ` 16,179,524) expenses under defined contribution plans.

Benefit (Contribution to) For the Year ended 31st March 2016


Provident FundSuperannuation FundEmployees Pension SchemeTata Employees' Pension Scheme

9,244,026 6,075,403 2,191,136

851,073

7,764,902 6,245,449

1,575,413 593,760

Total 18,361,638 16,179,524 (b) The company operates post retirement defined benefit plans as follows :

i. Funded a. Post Retirement Gratuity ii. Unfunded: a. Director Pension Scheme b. Post Retirement Medical Benefit Scheme


36 Remittances of dividends in foreign currencies for dividends

Name of Non-resident Share Holders No. of shares held

For the Year Ended


IQ Martrade Holding Und Management GmbH, Germany 4140000

` 10,350,000 4,140,000

Dividend related to Year

2014-15 2013-14

NYK Holding (Euro) B.V. 4680000` 11,700,000 4,680,000

Dividend related to Year

2014-15 2013-14

37 In accordance to section 135 of Companies Act 2013, the company has incurred ` 4,369,167/- as CSR expenditure. Under the CSR activities the company has supported construction of a dining hall area at the old age home in Nivedita Ashram, Patalipank Odhisa, Educational and Skill building scholarships for orphan children, setting up of sanitation and hygiene facilities at girls schools at Haldia, Preventive Health care for pregnant mothers and child at Kolkata and tree plantations cum green belt at Haldia amongst some of the major CSR projects.a) Gross amount required to be spent by the company during the year : ` 4,397,866/-.b) Amount spent during the year on:

In cash Yet to be paid in cash

Total

(i) Construction/acquisition of any asset - - -

(ii) On purposes other than (i) above 4,369,167 - 4,369,167

38 Earning Per Share (EPS) 31st March 2016 ` 31st March 2015 `Profit after tax (`)Profit attributable to Shareholders (`)Weighted average No. of Shares for Basic EPSNominal value of Ordinary Shares (`)Basic/Diluted Earnings per Share (`)

297,497,354297,497,354 18,000,000

10 16.53

286,318,716286,318,716 18,000,000

10 15.91

71


(c) Details of the Gratuity plan are as follows

DescriptionFor the year ended

31st March 2016`

31st March 2015`

1. Reconciliation of opening and closing balances of obligation

a. Obligation as at the beginning of the year 81,247,740 66,249,560

b. Current Service Cost 4,926,970 4,888,790

c. Interest Cost 6,307,230 5,675,570

d. Obligation of New Companies - -

e. Actuarial (gain)/loss 7,125,790 9,887,660

f. Benefits paid (2,818,790) (6,375,240)

g. Acquisition costs - 921,400

h. Exchange rate variation - -

i. Obligation as at the end of the year 96,788,940 81,247,740

2. Change in Plan Assets (Reconciliation of opening & closing balances)

a. Fair value of plan assets as at beginning of the year 65,054,700 58,975,100

b. Expected return on plan assets 5,739,350 4,770,380

c. Actuarial gain/(loss) 4,331,700 -

d. Employers' Contributions 16,193,040 7,274,460

e. Benefits paid (2,818,790) (5,965,240)

f. Fair value of plan assets as at end of the year 88,500,000 65,054,700

3. Reconciliation of fair value of assets and obligations

a. Fair value of plan assets as at end of the year 88,500,000 65,054,700

b. Present value of obligation as at the end of the year 96,788,940 81,247,740

c. Amount recognised in the balance sheet 8,288,940 16,193,040

4. Expense recognized in the Year

a. Current service cost 4,926,970 4,888,790

b. Interest cost 6,307,230 5,675,570

c. Expected return on plan assets (5,739,350) (4,770,380)

d. Actuarial (gain)/loss 2,794,090 9,887,660

e. Expense recognized in the Year 8,288,940 15,681,640

The expense is disclosed in the line item – Payments to & Provisions for Employees

72


Information for Current and Previous Financial Years

2015-16 2014-15 2013-14 2012-13 2011-12

` ` ` ` `

I. a) Present Value of Defined Benefit Obligation 96,788,940 81,247,740 66,249,560 55,591,320 45,038,990

b) Fair Value of Plan Assets 88,500,000 65,054,700 58,975,100 45,870,980 41,827,960

c) Surplus/(Deficit) in Plan Assets (8,288,940) (16,193,040) (7,274,460) (9,720,340) (3,211,030)

II. a) Experience Gain/(loss) Adjustment on Plan Liabilities (5,899,110) (2,553,170) (2,242,880) (3,422,980) (3,852,690)

b) Experience Gain/(Loss) Adjustment on Plan Assets 4,331,700 - - - 1,948,180.00

III. a) Actuarial gains/(losses) on change in assumptions (1,226,680) (7,334,490) (602,920) (2,560,940) 2,158,150.00

IV. Expected contribution (best estimate) to funded plans in subsequent financial year

8,288,940 16,193,040 7,274,460 9,720,340 3,211,030


Description

Amount Invested in %

31st March 2016

Amount Invested in %

31st March 2015

5. Investment Details

a. Government of India Securities 9.2% 11.4%

b. Public Sector unit Bonds 5.5% 8.6%

c. State / Central Government Guarenteed Securities 7.6% 9.4%

d. Special Deposit Schemes 0.0% 0.0%

e. Private Sector unit Bonds 7.2% 10.1%

f. Others (including bank balances) 70.5% 60.4%

6. Assumptions 31st March 2016 31st March 2015

a. Discount rate (per annum) 7.75% 7.90%

b. Estimated rate of return on plan assets (per annum) 8.00% 8.00%

c. Rate of escalation in salary (per annum) 9.00% 9.00%

73

(d) Details of unfunded post retirement defined benefit obligations are as follows:

Description

For the year ended

31st March 2016 31st March 2015` ` ` `

Medical Others Medical Others

1. Reconciliation of opening and closing balances of obligationa. Obligation as at the beginning of the year 3,003,165 27,569,000 1,730,465 23,963,000 b. Current Service Cost - - - - c. Interest Cost 206,240 2,115,670 125,710 2,095,110 d. Actuarial (gain)/loss 1,632,890 1,518,130 1,814,280 2,878,890 e. Past service cost - - - - f. Benefits paid (784,980) (1,576,800) (667,290) (1,368,000)g. Obligation as at the end of the year 4,057,315 29,626,000 3,003,165 27,569,000

2. Expense recognized in the Yeara. Current service costb. Interest cost 206,240 2,115,670 125,710 2,095,110 c. Past Service Cost - - - - d. Actuarial (gain)/loss 1,632,890 1,518,130 1,814,280 2,878,890 e. Expense recognized in the Year 1,839,130 3,633,800 1,939,990 4,974,000

The expense amounting to (a) Medical - ` 1,839,130, and (b) Others ` 3,633,800 is disclosed under the line item Salaries and wages, including bonus(Net) 3. Assumptions

a. Discount rate (per annum) on 01.04.15/ 01.04.14 7.90% 7.90% 9.00% 9.00%b. Discount rate (per annum) on 31.03.16/ 31.03.15 7.75% 7.75% 7.90% 7.90%c. Medical costs inflation rate 6.00% 6.00%

4. Information for current and previous financial yearI. a) Present value of defined organization 4,057,315 29,626,000 3,003,165 27,569,000

b) Fair value of Plan Assets - - c) Surplus/(Deficit) in plan assets (4,057,315) (29,626,000) (3,003,165) (27,569,000)

II. a) Experience gain (loss) adjustment on plan liabilities (1,572,130) (1,074,130) (1,501,440) (6,890)b) Experience gain (loss) adjustment on plan assets - - - -

III. a) Actuarial gains/(losses) on change in assumptions (60,760) (444,000) (312,840) (2,872,000)IV.Expected contribution (best estimate) to funded plans in

subsequent financial year - - - -

Effect of a 1% change in health care cost on Increase (i) aggregate current service and interest cost 233,160 142,910 (ii) closing balance of obligation 4,505,870 3,343,910 Decrease (i) aggregate current service and interest cost 183,030 110,860 (ii) closing balance of obligation 3,669,000 2,709,270

(e) The estimate of future salary increases take into account inflation, seniority,promotion and other relevant factors


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40. LIST OF RELATED PARTIES AND RELATIONSHIP

Holding Company

Tata Steel Limited

Joint Venturer

IQ Martrade Holding and Management GmbH

NYK Holding (Europe) B.V.

Subsidiaries

International Shipping Logistics FZE

TKM Global Logistics Limited TKM Global GmbH

TM Harbour Services Private Limited TKM Global China Limited

Fellow Subsidiaries #

The Indian Steel and Wire Products Limited

Tata Sponge Iron Limited Tata Metaliks Limited

Tinplate Company of India Limited Jamshedpur Continous Annealing & Processing Company Private Limited

Key Managerial Personnel

Mr R N Murthy, Managing Director

Mr Anand Chand, Chief Financial Officer

# Companies with which there are transactions during the Current & Previous Year.


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TM International Logistics LimitedNotes forming part of Financial Statements as at 31st March 2016Transactions with Related Parties

Particulars Holding Company

Fellow Subsidiaries

Subsidiaries Key Managerial Personnel

Total

Rendering of Services 1,489,582,709 120,962,053 2,193,031 - 1,612,737,793 (1,943,251,667) (111,565,536) (1,813,651) - (2,056,630,854)

Receiving of Services 34,166,344 - 368,242 - 34,534,586 (29,077,395) - - - (29,077,395)

Interest Income - - 3,255,000 - 3,255,000 - - (8,645,705) - (8,645,705)

Loan to TKM Global Logistics Ltd - - - - - - - (34,000,000) - (34,000,000)

Equity Contribution in TKM Global Logistics Ltd. - - - - - - - (18,000,000) - (18,000,000)

Repayment of Loan given - - 4,800,000 - 4,800,000 - - (107,200,000) - (107,200,000)

Re-imbursement Received 1,255,561,982 172,773,232 55,450,407 - 1,483,785,621 (1,454,632,918) (374,245,600) (23,776,493) - (1,852,655,011)

Re-imbursement Paid 568,404 - 8,685,656 - 9,254,060 - - (8,236,739) - (8,236,739)

Rental Income - - 5,530,706 - 5,530,706 - - - - -

Remuneration of Mr R N Murthy, MD - - - 92,930,24 92,930,24 - - - (8,535,141) (8,535,141)

Remuneration of Mr A Chand, CFO - - - 4,595,280 4,595,280 - - - (3,919,366) (3,919,366)

Directors Nomination Fees Paid 200,000 - 200,000 - 400,000 - - - - -

Directors Nomination Fees Received 200,000 - 200,000 - 400,000 - - - - -

Dividend Paid 22,950,000 - - - 22,950,000 (22,950,000) - - - (22,950,000)

Bad Debt written off 35,219 1,419 - - 36,638 (769,113) - - - (769,113)

Provision against Debtors - - - - - - (61,035) - - (61,035)

Reversal of Provison for Bad and Doubtful Debts 2,077,259 61,035 - - 2,138,294 (1,857,130) - - - (1,857,130)

Debit Balance Outstanding as on 31st March 2016 - Outstanding Receivables 344,793,140 6,425,450 1,936,562 - 353,155,152

(278,243,570) (10,147,087) (3,234,782) - (291,625,439)Loan outstanding - - 28,000,000 - 28,000,000

- - (32,800,000) - (32,800,000)Credit Balance Outstanding as on 31st March 2016 - Outstanding Payables 3,921,219 - 627,590 - 4,548,809

(129,639) - (416,737) - (546,376)Advance from Customers 313,201,778 13,509,685 102,173 - 326,813,636

(280,535,184) (20,382,415) - - (300,917,599)

Provision for Doubtful debts - - - - -

(2,077,259) (61,035) - - (2,138,294)

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TM International Logistics LimitedNotes forming part of Financial Statements as at 31st March 2016Details of transaction and closing balances with fellow subsidiaries & subsidiaries, the amount of which is in excess of 10% of the total related party transaction of the similar nature

Nature of Transaction Name of Company Fellow Subsidiaries SubsidiariesRendering of Services Tata Metaliks 50,150,644 -

(36,874,606) - Tata Sponge 60,776,952 -

(72,500,645) - TM Harbour Services Pvt. Limited - -

- (769,988)TKM Global Logistics Limited - 941,083

- (927,099)International Shipping Logistics FZE - 1,227,148

- - Repayment of Loan TKM Global Logistics Limited - 4,800,000

- (1,200,000)Receiving of Services TKM Global Logistics Limited - 368,242

- - Rental Income TKM Global Logistics Limited - 5,530,706

- - Interest Income TKM Global Logistics Limited - 3,255,000

- (1,163,917)Re-imbursement Received Tata Metaliks Limited 65,313,268 -

(44,052,141) - International Shipping Logistics FZE - 45,845,289

- (9,286,490)TKM Global Logistics Limited - 6,516,619

- (12,643,572)Tata Sponge Iron Limited 92,294,548 -

(304,573,043) - Re-imbursement Paid TKM Global Logistics Limited - 8,424,950

- (7,959,464)Bad Debt written off Jamshedpur Continous Annealing & Processing Co. Pvt. Ltd. 1,419 -

- - Reversal of Provison for Bad and Doubtful Debts

Jamshedpur Continous Annealing & Processing Co. Pvt. Ltd. 61,035 - - -

Debit Balance Outstanding as on 31st March 2016Outstanding Receivables TKM Global Logistics Limited - 802,770

- (589,487)International Shipping Logistics FZE - 489,236

- (1,316,760)TM Harbour Services Pvt. Limited - 616,159

- (1,328,535)Jamshedpur Continous Annealing & Processing Co. Pvt. Ltd. 71,423 -

(1,165,684) - The Tinplate Company of India Limited 1,170,745 -

(797,756) - Tata Sponge Iron Limited 5,007,490 -

(8,623,142) - Loan given TKM Global Logistics Limited - 28,000,000

- (32,800,000)Credit Balance Outstanding as on 31st March 2016Outstanding payables TKM Global Logistics Limited - 627,590

- (416,737)Advance from Customers Tata Metaliks Limited 10,432,816 -

(4,892,068) - Tata Sponge Iron Limited 2,598,006 -

(15,411,055) - TKM Global GMBH - 102,173

- - Provision for Doubtful debts Jamshedpur Continous Annealing & Processing Co. Pvt. Ltd. - -

(61,035) - 40. Previous year's figures have been regrouped / reclassified wherever necessary to correspond with the current year's classification

/ disclosure. Signature to Accounting policies and Notes 1 to 40 For and on behalf of the Board of Directors Sd/- Sandipan Chakravortty Sd/- Sd/- Chairman Jyoti Purohit Anand Chand Sd/-

Company Secretary Chief Financial Office R N Murthy Managing Director

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TKM Global Logistics Limited

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CORPORATE INFORMATIONTKM Global Logistics Limited

(As on 1st June, 2016)

Board of DirectorsChairmanMr. R. N. Murthy

DirectorsMr. Amar PatnaikMr. Dipak Kumar BanerjeeMr. Virendra SinhaMr. Anand Chand

Registered OfficeTata Centre14th Floor43, Jawaharlal Nehru RoadKolkata – 700 071

Tel: 91-33-22887051Fax: 91-33-22886342

Corporate OfficeUnit No. 711, 7th floorDiamond Heritage16, Strand RoadKolkata – 700 001.

Corporate Identification Number (CIN)U51109WB1991PLC051941

Management TeamMr. Anurag Garg VP (BD, Marketing & Sales)Mr. Manish Agarwal Chief Financial OfficerMs. Kinkini Das Chief - HRMr. Ratanjeet Singh AGM – Freight Forwarding, SalesMr. Robin Pramanik Chief - Corporate Safety, CSR, AA & Chief Ethics CounsellorMr. Animesh Panda Head – Logistics

Statutory AuditorsDeloitte Haskins & SellsChartered AccountantsKolkata

BankersCiti BankStandard Chartered BankHDFC Bank LimitedICICI Bank Limited

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Directors’ Report[(Pursuant to Section 134(3) of the Companies Act, 2013 and

Rule 8 of the Companies (Accounts) Rules, 2014]

To the Members,

The Directors have pleasure in presenting the 25th Annual Report and the Audited Statement of Accounts for the year ended 31st March, 2016.

FINANCIAL RESULTS(` in millions)

31.03.2016 31.03.2015

(a) Total Income 648.74 937.95

(b) Less: Operating and Administrative Expenses 600.08 915.39

(c) Profit before interest, depreciation and taxes 48.66 22.56

(d) Less: Depreciation 3.06 4.14

(e) Less: Interest 7.66 8.83

(f) Profit before taxes (PBT) 37.94 9.59

(g) Less: taxes (incl. deferred taxes) 7.83 0.12

(h) Profit after taxes (PAT) 30.11 9.47

A report on the performance and financial position of each of the subsidiaries as included in the consolidated financial statements is provided in Annexure A to this report.

DIVIDEND

To plough back the profits and strengthening the financial position of the company, the Directors do not recommend payment of any dividend for the year under review.

RESERVES

Your Company does not propose to transfer any amount to its General Reserve.

OPERATIONAL REVIEW

The freight forwarding business of the Company registered a revenue of Rs. 487 mn against a target of Rs. 1,256 mn (39% Compliance). The shortfall in achieving the Revenue target is attributed to the following main reasons:

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i. Drop in volume against the budget:

l The sea exports volumes in case of non-Tata customers was much below the budget (29% Compliance). The actual volume of Sea Export for Tata Steel was 34% below ABP.

l The air exports volumes were also lower than the budget due to drop in overall volumes of the single largest customer (Tata International) and lower volumes from non-Tata Customers.

ii. There was a drastic drop in the Ocean Freight rates across sectors over the year.

PUBLIC DEPOSITS

The Company has not accepted or renewed any deposit from the public during the year under report.

EMPLOYEE RELATIONS

The Company continued to maintain excellent and cordial Industrial Relations and concerted efforts were put in to maintain the complexities around contractual workforce in KPO Jajpur. The Directors express their appreciation for the dedication, commitment and sincere services rendered by the employees at all levels throughout the year.

BOARD OF DIRECTORS

a. Composition

Your Board comprises of 5 (Five) Directors, out of which 2 (two) are Independent Non-executive Directors and 3 (Three) are Non-Independent Non-Executive Directors.

During the year under review, the following changes in the Board of Directors have been recorded: i) Mr. Soumya K. Acharya (DIN 00471171) resigned from his directorship from the Board of the

Company w.e.f., 24th September, 2015 due to personal reasons. ii) Mr. Virendra Sinha (DIN 03113274) was appointed as an Additional Director u/s 161(1) of

the Act, on the Board of your Company w.e.f., 7th December, 2015, as recommended by the Nomination and Remuneration Committee of your Company. Further, Mr. Sinha shall hold office till the forthcoming Annual General Meeting (AGM) of the Company, where his appointment will be regularised as a Director.

Mr. Sinha fulfils the criteria of ‘Independent Director’ u/s 149(6) of the Act. Accordingly, the appointment of Mr. Virendra Sinha has been proposed as Independent Director on the Board of the Company, subject to approval of shareholders at the forthcoming AGM of the Company.

As on 31st March, 2016, Mr. R. N. Murthy, Mr. Amar Patnaik, Mr. Anand Chand, Mr. Dipak Kumar Banerjee and Mr. Virendra Sinha continued to be the Directors on the Board of your Company.

b. Directors to retire by rotation

In accordance with the provisions of the Companies Act, 2013 and the Articles of Association of the Company, Mr. R. N. Murthy, Non-Executive Director retire by rotation and being eligible, has offered himself for re-appointment. The Board has at its meeting held on 20th April, 2016 recommended his re-appointment.

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None of the Directors of your Company are disqualified under Section 164(2) of the Companies Act, 2013.

Appropriate resolutions seeking your approval to the aforesaid appointments are appearing in the Notice convening the 25th AGM of the Company.

c. Independent Directors

The Board of Directors of your Company has 2 Independent Directors as per the Companies Act, 2013. The Act requires that the Non-Executive Directors, including Independent Directors, be drawn from amongst eminent professionals with experience in business/finance/law/public administration and enterprises. The attributes and qualifications of Independent Directors are in accordance with those prescribed under Section 149(6) of the Companies Act, 2013 read with the Rules thereunder. The Independent Directors of your Company have submitted a declaration confirming that they meet the criteria of independence as prescribed under Section 149(6) of the Act.

The Independent Directors of the Company met on 29th March, 2016 without the presence of Non-Independent Directors and members of the Management. At this meeting, the IDs inter alia evaluated the performance of the Non-Independent Directors and the Board of Directors as a whole, evaluated the performance of the Chairman of the Board and discussed aspects relating to the quality, quantity and timeliness of the flow of information between the Company, the Management and the Board.

d. Board Evaluation Criteria

Pursuant to the provisions of the Companies Act, 2013, 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 CSR Committees. The manner in which the evaluation has been carried out has been explained in the Nomination and Remuneration Policy as adopted by the Company.

DISCLOSURE AND COMPOSITION OF THE COMMITTEES OF THE BOARD

The Committees constituted by the Board of Directors viz., Audit Committee, Nomination and Remuneration Committee and Corporate Social Responsibility Committee have functioned effectively during the year under review.

Details of the meetings held by the Board and various Committees during the year under review are given in Annexure B to this report.

The details of the Committee as required to be formed as per the applicable sections of the Companies Act are as follows:

Audit Committee

An Audit Committee of the Board of Directors as required u/s 177 of the Act has been constituted and it comprises of three Non-Executive Directors, of which two are Independent Directors.

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The Chairman of the Audit Committee is an Independent Director. The composition of the Audit Committee is as below:

Sl. No. Name of the Member Category1. Mr. Virendra Sinha, Chairman Independent Non-Executive Director2. Mr. Dipak Kumar Banerjee, Member Independent Non-Executive Director3. Mr. R. N. Murthy, Member Non-Independent Non-Executive Director

The Board of Directors of your Company has accepted all recommendation of the Audit Committee during the year under review.

Corporate Social Responsibility Committee

The Corporate Social Responsibility Committee of the Board of Directors as required u/s 135 of the Act and Rules made thereunder has been constituted and it comprises of three Directors, of which one is an Independent Director. The Chairman of the CSR Committee is a Non-Independent Director.

a. Composition

The composition of the CSR Committee is as below:

Sl. No. Name of the Member Category1. Mr. R. N. Murthy, Chairman Non-Independent Non-Executive Director2. Mr. Amar Patnaik, Member Non-Independent Non-Executive Director3. Mr. Dipak Kumar Banerjee, Member Independent Non-Executive Director

Your Company did not spend any amount towards CSR activities during FY 15-16, since the Company had been suffering losses.

b. Corporate Social Responsibility Initiatives

During the year 2014-15, your Company was required to spend an amount of Rs.2.10 lacs towards CSR activities. However, your Company could not spend any amount towards CSR activities during FY 14-15, since the Company took a while in pursuing the CSR projects and it was decided to spend the budgeted amount of Rs. 2.10 lacs in Q1 of FY 15-16 as per the CSR policy.

In view of the above, an amount of Rs.2.10 lacs was spent towards CSR activities during FY 15-16 as below:

Adopt a Mother and Save her Child Program at CINI, Kolkata: 14 mothers were adopted in villages at the Falta Block. The Chairman of the Company along with other volunteers from the office had paid a visit to some of the mothers on 17th September, 2015.

This project was in accordance with Schedule VII of the Companies Act, 2013.

The Annual Report on CSR activities for period under review is annexed as Annexure C to this report.

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Nomination and Remuneration Committee

The Nomination and Remuneration Committee of the Board of Directors as required u/s 178 of the Act has been constituted and it comprises of four Non-Executive Directors, of which two are Independent Directors. The Chairman of the Nomination and Remuneration Committee is an Independent Director. The composition of the Nomination and Remuneration Committee is as below:

Sl. No. Name of the Member Category1. Mr. Dipak Kumar Banerjee, Chairman Independent Non-Executive Director2. Mr. Virendra Sinha, Member Independent Non-Executive Director3. Mr. R. N. Murthy, Member Non-Independent Non-Executive Director4. Mr. Anand Chand, Member Non-Independent Non-Executive Director

On recommendation of the Committee, the Company has adopted and implemented a Nomination and Remuneration Policy of your Company. The remuneration policy can be viewed at www.tmilltd.com/about-us/shareholders.asp

OPPORTUNITIES & THREATS

a. Strengths

i. Ability to manage complex operations with high service orientation.ii. Offices covers major business geographies in Indiaiii. IM Section – The existing contract was valid till August, 2015. A new contract based on

fixed markup percentage has been awarded having validity till August, 2016. The process improvement has been the focus area during the year.

iv. Central Warehouse – The existing contract valid till December, 2015 has been extended till April, 2016. Tata Steel has floated Request for Quotation (RFQ) for a new contract with effect from May, 2016 for a period of 3 years. The prospective bidders for the same are DHL, TOLL, DIESL & TKM Global/TMILL.

b. Weakness

i. Limited freight buying power as compared to large forwardersii. Absence of robust channel partners / overseas network structureiii. Limited ability to consolidate air cargo at pallet level

c. Opportunities

i. Other Tata group companies, which have not been tapped so far

ii. Emerging segments such as defence, pharma, etc.

d. Threats

i. Continuous fall in exports volumes, since last one and half year.

ii. Shipping lines directly contacting small/mid-size customers obviating the need for freight forwarders.

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DIRECTORS’ RESPONSIBILITY STATEMENT

The Company is in compliance with various accounting and financial reporting requirements in respect of the financial statements for the year under review.

Pursuant to Section 134(5) of the Companies Act, 2013 and in respect of the Annual Accounts for the year under review, the Directors hereby confirm that:

i. in the preparation of the annual accounts, the applicable accounting standards had been followed with proper explanation relating to material departures;

ii. the directors had selected such accounting policies and applied them consistently and made judgements and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the company at the end of the financial year and of the profit and loss of the company for that period;

iii. the directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities;

iv. the directors had prepared the annual accounts on a going concern basis; and

v. the directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

AUDITORS

The Auditors of the Company, M/s Deloitte Haskins & Sells, Chartered Accountants, Kolkata, retire at the ensuing Annual General Meeting and being eligible, have offered themselves for re-appointment.

AUDIT OBSERVATIONS & EXPLANATIONS/COMMENTS BY THE BOARD

No qualification, reservation or adverse remark or disclaimer have been made by the Auditor’s in their report.

PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS

The Company has not given any loans, guarantees or made any investment as per the provisions of Section 186 of the Companies Act, 2013.

Hence, there is nothing to report in this regard.

RELATED PARTY DISCLOSURES

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. There are no materially significant related party transactions made by the Company with the Promoters, Directors, Key Managerial Personnel or other designated persons which may have a potential conflict with the interest of the Company at large.

All the related party transactions were placed before the Audit Committee for approval and also before the Board for their review. Prior omnibus approval of the Audit Committee is obtained and a review of the same is conducted on a quarterly basis for the transactions which are of a foreseen and

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repetitive in nature. The transactions entered into pursuant to the omnibus approval so granted are audited and a statement giving details of all the related party transactions is placed before the Audit Committee and the Board of Directors on a quarterly basis.

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

It may be noted that in view of good corporate governance practice, the meaning of the term ‘material transaction’ has been derived from Clause 23 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. Accordingly, the Company has considered all such transactions entered/to be entered into whether individually or taken together with previous transactions, if any, which are equal to or more than 10% of the annual standalone turnover (Listing Agreement specifies ‘annual consolidated turnover’) as per the last audited financial statements of the company i.e., for the year ended 31st March, 2016.

The particulars, as required under Section 134 of the Act read with Rule 8(2) of Companies (Accounts) Rules, 2014, relating to contracts or arrangements entered by the Company with related parties referred to in Section 188 (1) of the Act is provided in Annexure D to this Report.

EXTRACT OF THE ANNUAL RETURN AS PER SECTION 92(3) OF THE ACT

Pursuant to Section 92(3) of the Companies Act, 2013, read with Rule 12 of the Companies (Management and Administration) Rules, 2014, an extract of the Annual Return is provided in Annexure B to this Report.

INTERNAL FINANCIAL CONTROL

As required under Section 134(3) (q) of the Companies Act 2013 read with Rule 8(5) (viii) of Companies (Accounts) Rules, 2014, the Company has an Internal Control System commensurate with the size, scale and complexity of the business. As per the relevant provisions of the Companies Act, 2013 and the guidance note issued by the Institute of Chartered Accountant of India, the management of the company has adopted and implemented the Internal Control over Financial Reporting (ICOFR) framework. The management of the company has adopted the following steps for the development of the said framework:

l Define materiality of the transactions;

l Preparation of process narrative or process flow charts, as the case may be;

l Identify/assess internal/external risk factors and availability of existing controls;

l Development of Risk Control Matrix (RCM) for the entity, key processes and IT General Controls;

l Testing of controls to ensure they are operating effectively;

l Remediate the gaps, if necessary;

l Re-testing to ensure operating effectiveness.

RISK MANAGEMENT POLICY

The Company has a Risk management Policy in place. The Company always had a system-based approach to business risk management. Backed by strong internal control systems, the current risk management framework consists of the following elements:

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The Company has always had a system-based approach to business risk management. Backed by strong internal control systems, the current risk management framework consists of the following elements:

l Strategic Planning: Senior leadership Group provides direction for formulation of strategy in collaboration with cross section of all levels of management. Your company follows two level of strategy:

i) Group Level Strategy taking into account the shareholders perspective from medium to long term, and

ii) The Current Business perspective – Short term which starts at unit level culminating into Annual Business Plan approved by the Board.

l Strategic Challenges & advantages are determined from SWOT analysis of individual units & support functions.

l The Senior Management of your Company regularly discuss the Strategic & the Operational risks involved in the business and also on the appropriate mitigation strategies and periodic reviews of the progress on the management of risks.

l A combination of centrally issued policies and divisionally-evolved procedures brings robustness to the process of ensuring that business risks are effectively addressed.

l Appropriate structures have been put in place to proactively monitor and manage the inherent risks in businesses with unique/relatively high risk profiles.

l A strong and independent Internal Audit function carries out risk focused audits enabling identification of areas where risk management processes may need to be improved. The Audit Committee of the Board reviews Internal Audit findings, and provides strategic guidance on internal controls. The Audit Committee reviews the Internal Audit findings & implementation of the action plans emerging out of the same.

l The Statutory Auditors continuously verify compliance with laid down policies and procedures, and help plug control gaps by assisting operating management in the formulation of control procedures for new areas of operation.

The combination of policies and processes as outlined above adequately addresses the various risks associated with your Company’s business. The senior management of your Company periodically reviews the risk management framework to maintain its contemporariness so as to effectively address the emerging challenges in a dynamic business environment.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO:

Information as per Section 134(3)(m) of the Companies Act, 2013 read with Rule 8(3) of the Companies (Accounts) Rules, 2014 is as below:

A. Conservation of Energy

The Company is not a major consumer of energy.

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B. Technology Absorption:

Nil

C. Foreign exchange earnings & outgo:

The foreign exchange earnings in terms of inflows during the year was Rs.1,99,77,836/- on account of freight, agency fees and others and the foreign exchange outgo during the year in terms of outflows was Rs. 9,72,90,082/- on account of freight and foreign travel.

PARTICULARS OF EMPLOYEES

Your Company has no such employees falling within the provisions of Section 197 of the Companies Act, 2013, read with Rule 5(2) of Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014.


SUBSIDIARY COMPANIES

The statement pursuant to Section 129 of the Companies Act, 2013 read with Rule 5 of Companies (Accounts) Rules, 2014 in respect of the subsidiaries of the Company viz. TKM Global GmbH, Germany, TKM Global China Ltd., China, and TM Harbour Services Private Limited is provided as Annexure E to this report.

ACKNOWLEDGEMENT

Your Directors wish to take the opportunity to place on record their sincere appreciation and gratitude for the continued assistance, support and co-operations extended by all Government Authorities, Banks, Overseas Agents, Clearing Agents, Shipping Lines, Air Lines and other business associates and last but not the least the Members of the Company.

For and on behalf of the Board

R. N. Murthy

Chairman

DIN: 06770611

Place: Kolkata Anand Chand

Date: 20th April, 2016 Director

DIN: 06879532

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Annexure A

FINANCIAL PERFORMANCE OF SUBSIDIARIES(` In millions)

Particulars TKM Global GmbHAs on 31.03.2016

TKM Global China Ltd.

As on 31.03.2016

TM Harbour Services Pvt. Ltd.

As on 31.03.2016

(a) Total Income 477.10 197.44 317.15

(b) Less: Operating and Administrative Expenses 416.05 199.02 64.92

(c) Profit before interest, depreciation and taxes 61.05 (1.55) 252.23

(d) Less: Depreciation 2.16 0.23 86.48

(e) Less: Interest – – –

(f) Profit before taxes (PBT) 58.89 (1.78) 165.75

(g) Less: taxes (incl. deferred taxes) 21.83 – 6.77

(h) Profit after taxes (PAT) 37.06 (1.78) 158.99

The reporting currency and exchange rate as on the last date of the relevant financial year in the case of foreign subsidiaries is as below:

1 EUR = INR 72.01 and 1 RMB = INR 10.3196

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Annexure B

A. Extract of Annual Return as on Financial Year ended 31st March, 2016

[Pursuant to section 92(3) of the Companies Act, 2013 and Rule 12(1) of the Companies (Management and Administration)

Rules, 2014]

I. Registration and other details:

i. CIN Number of the Company: U51109WB1991PLC051941

ii. Registration Date: 5th June, 1991

iii. Name of the Company: TKM Global Logistics Limited

iv. Category/ Sub-category of the Company: Freight Forwarding and Warehousing Services

v. Address of Registered office and contact details: 'Tata Centre', 43, Jawaharlal Nehru Road, Kolkata - 700 071.

vi. Whether listed company: No

vii. Name, Address and contact details of Registrar and Transfer Agent: N.A.

II. Principal Business Activity of the Company:

All the business activities contributing to 10% or more of the total turnover of the Company shall be stated:

Sr. No. Name and Description of main products/ services

NIC Code of the product/ service

Percentage to total turnover of the company

1. Freight Forwarding DIV 52 Group 522

78%

2. Warehousing & Material Handling DIV 52Group 521

22%

III. Particulars of Holding, Subsidiary and Associate Companies:

Sr. No. Name of the Company CIN Holding/ Subsidiary/

AssociatePercentage of shares held

Applicable Section

1. TM International Logistics Limited U63090WB2002PLC094134 Holding Company 100% S.2(46)

2. TKM Global GmbH N.A. Subsidiary Company 100% S. 2(87)

3. TKM Global China Ltd. N.A. Subsidiary Company 100% S. 2(87)

4. TM Harbour Services Private Limited U61100WB2009FTC138168 Subsidiary Company 100% S. 2(87)

90


IV. Share holding pattern (Equity Share Capital Breakup as percentage of Total Equity)

i. Category wise shareholding

Category of Shareholders

No. of Shares held at the beginning of the year 01.04.2015 No. of Shares held at the end of the year 31.03.2016 %

Change during

the year

Demat Physical Total % of Total Shares Demat Physical Total

% of Total

Shares

A. Promoters

(1) Indian

a) Individual/HUF – – – – – – – – –

b) Central Govt. – – – – – – – – –

c) State Govt.(s) – – – – – – – – –

d) Bodies Corp. – 36,000,000 36,000,000 100 – 36,000,000 36,000,000 100 –

e) Banks/FIs – – – – – – – – –

f) Any Other – – – – – – – – –

Sub-total: (A)(1) – 36,000,000 36,000,000 100 - 36,000,000 36,000,000 100 –

(2) Foreign

a) NRIs – Individuals – – – – – – – – –

b) Other Individuals – – – – – – – – –

c) Bodies Corp. – – – – – – – – –

d) Banks/FIs – – – – – – – – –

e) Any Other – – – – – – – – –

Sub-total: (A)(2) – – – – – – – – –

Total shareholding of Promoter (A) = (A)(1) + (A)(2)

0 36,000,000 36,000,000 100 0 36,000,000 36,000,000 100 –

B. Public Shareholding

(1) Institutions

i. Mutual Funds – – – – – – – – –

ii. Banks/FIs – – – – – – – – –

iii. Central Govt. – – – – – – – – –

iv. State Govt.(s) – – – – – – – – –

v. Venture Capital Funds – – – – – – – – –

vi. Insurance Companies – – – – – – – – –

vii. FIIs – – – – – – – – –

viii. Foreign Venture Capital Funds – – – – – – – – –

91

ix. Others (Specify) – – – – – – – – –

Sub-total: (B)(1) 0 0 0 0 0 0 0 0 0

(2) Non-Institutions

a) Bodies Corp. – – – – – – – – –

i. Indianii. Overseas

– – – – – – – – –

b) Individuals – – – – – – – – –

i. Individual shareholders holding nominal share capital upto ` 1 lakh

– – – – – – – – –

ii.Individual shareholders holding nominal share capital in excess of `1 lakh

– – – – – – – – –

c) Others (specify) – – – – – – – – –

Sub-total: (B)(2) 0 0 0 0 0 0 0 0 0

Total public shareholding (B) = (B)(1) + (B)(2)

0 0 0 0 0 0 0 0 0

C. Shares held by custodian for GDRs & ADRs

0 0 0 0 0 0 0 0 0

Grand Total (A+B+C) 0 36,000,000 36,000,000 100 0 36,000,000 36,000,000 100 –

ii. Shareholding of Promoters


Shareholding at the beginning of the year 01.04.2015

Shareholding at the end of the year 31.03.2016 % change

in share-holding

during the year

No. of Shares% of total Shares of

the company



No. of Shares

%of total Shares of the

company



1. TM International Logistics Ltd. 35,999,994 100 0 35,999,994 100 0 0

2. TM International Logistics Ltd. j/w Mr. R. N. Murthy

1 0 0 1 0 0 0

3. TM International Logistics Ltd. j/w Mr. Sudip Sinha

1 0 0 1 0 0 0

4. TM International Logistics Ltd. j/w Mr. Amit Kumar Sau

1 0 0 1 0 0 0

5. TM International Logistics Ltd. j/w Mr. Anand Chand

1 0 0 1 0 0 0

6. TM International Logistics Ltd. j/w Mr. Arup Das

1 0 0 0 0 0 0

7. TM International Logistics Ltd. j/w Mr. Manish Agarwal

1 0 0 1 0 0 0

8. TM International Logistics Ltd. j/w Mr. K. L. Bhowmick

0 0 0 1 0 0 0

92


iii. Change in Promoters' Shareholding

Sl. No. Particulars


Cumulative Shareholding during the year 31.03.2016

No. of shares % of total shares of the company No. of shares

% of total shares of the

company

1. At the beginning of the year 36,000,000 100 36,000,000 100

2. Date-wise Increase/ Decrease in Promoters Share holding during the year specifying the reasons for increase /decrease (e.g. allotment/ transfer/ bonus/ sweat equity etc.)

– – – –

3. At the end of the year 36,000,000 100 36,000,000 100

iv. Shareholding pattern of top ten shareholders (other than Directors, Promoters and holders of GDRs and ADRs)

NIL

v. Shareholding of Directors and Key Managerial Personnel

None of the Directors holds any shares of the Company. The Company does not have any key managerial personnel.

V. Indebtedness


Particulars Secured Loans excluding deposits Unsecured Loans Deposits Total

Indebtedness

Indebtedness at the beginning of the financial year (01.04.2015)i) Principal Amountii) Interest due but not paidiii) Interest accrued but not Due

000

7,78,00,00000

000

7,78,00,00000

Total (i)+(ii)+(iii) 0 7,78,00,000 0 7,78,00,000

Change in Indebtedness during FY 15-16l Additionl Reduction

00

0(1,98,00,000)

00

0(1,98,00,000)

Net Change 0 (1,98,00,000) 0 (1,98,00,000)

Indebtedness at the end of the financial year (31.03.2016)i) Principal Amountii) Interest accrued but not dueiii) Interest due but not paid

000

5,80,00,00000

000

5,80,00,00000

Total (i)+(ii)+(iii) 0 5,80,00,000 0 5,80,00,000

VI. Remuneration of Directors and Key Managerial Personnel

A. Remuneration to Managing Director, Whole-time Directors and/or Manager

The Company does not have any Managing Director, Whole-time Directors and/or Manager.

93

B. Remuneration to other Directors

Particulars of Remuneration Name of the Directors

TotalMr. Dipak Kumar Banerjee

Mr. Soumya K. Acharya Mr. Virendra Sinha

1. Independent Directors

a. Sitting fees for attending Board/Committee meetings of the Company during FY 15-16

142,500 24,000 27,000 193,500

b. Commission paid to Independent Non-Executive Directors for FY 15-16

252,212 53,097 13,274 318,584

Total (1) 394,712 77,097 40,274 512,084

2. Other Non-Executive Directors


NIL NIL NIL NIL

b. Commission paid to Non-Independent Non-Executive Directors for FY 15-16

NIL NIL NIL NIL

Total (2) 0 0 0 0

Total Remuneration (1+2) 394,712 77,097 40,274 512,084

Overall Ceiling as per the Act 1% of net profit calculated as per Sec 198 of the Act

C. Remuneration to Key Managerial Personnel other than MD/ Manager/WTD

The Company does not have any Key Managerial Personnel.

VII. Penalties/ Punishment/ Compounding of Offences

No penalties/punishment/compounding of offences has been imposed on the Company by any government authorities during the year under review.

However, a legal case in respect of a service tax demand amounting to Rs.66 crores (including penalty and interest) has been imposed on the Company by DGCEI of Service Tax Dept. The Company has challenged the DGCEI order and the matter is sub-judice at CESTAT, Kolkata.

B. Board and Committee meetings held during the year

Dates on which the Board and Committee Meetings were held during FY 15-16Board Meetings

Date of the Meeting Total Strength of the Board/Committee No. of Directors Present22nd April, 2015 5 414th July, 2015 5 415th October, 2015 4 315th January, 2016 5 4

Audit Committee Meetings22nd April, 2015 3 314th July, 2015 3 215th October, 2015 2 215th January, 2016 2 2

Nomination and Remuneration Committee Meetings22nd April, 2015 4 414th July, 2015 4 315th October, 2015 3 2

Corporate Social Responsibility Meetings

22nd April, 2015 3 2

94


Anne

xure

C

Annu

al R

epor

t on

CSR

Activ

ities

of t

he C

ompa

ny fo

r the

fina

ncia

l yea

r end

ed 3

1st M

arch

, 201

6[(S

ectio

n 13

5 of

the

Com

pani

es A

ct, 2

013

read

with

the

Com

pani

es (C

orpo

rate

Soc

ial R

espo

nsib

ility)

Rul

es, 2

014]

1.

A b

rief

outlin

e of

the

Com

pany

's CS

R Po

licy

inclu

ding

ove

rvie

w of

pr

ojec

ts o

r pro

gram

s pr

opos

ed to

be

und

erta

ken

and

a re

fere

nce

to

the

web-

link

to th

e CS

R Po

licy

and

proj

ects

or p

rogr

ams.

TKM

's CS

R ac

tivitie

s ar

e de

signe

d to

pro

mot

e su

stai

nabl

e an

d eq

uita

ble

deve

lopm

ent s

o as

to im

prov

e th

e qu

ality

of l

ife o

f peo

ple

in th

e co

mm

unitie

s in

and

ar

ound

the

geog

raph

ies

we o

pera

te in

. The

focu

s ha

s be

en o

n im

prov

ing

the

qual

ity o

f life

am

ongs

t soc

ially

and

eco

nom

ically

bac

kwar

d co

mm

unitie

s, p

rom

otin

g ed

ucat

ion

and

mak

ing

avai

labl

e sa

fe d

rinkin

g wa

ter.

One

of t

he m

ajor

CSR

act

ivitie

s wh

ich w

as p

ropo

sed

to b

e un

derta

ken

durin

g th

e ye

ar w

as:

Prov

idin

g pr

even

tive

heal

th c

are

for 1

4 pr

egna

nt m

othe

rs a

nd th

eir c

hild

thro

ugh

the

"Ado

pt a

mot

her a

nd s

ave

her c

hild

" pro

gram

me

of C

hild

In N

eed

Inst

itute

at

Kol

kata

.

The

CSR

Polic

y of

the

Com

pany

may

be

acce

ssed

on

http

://ww

w.tm

ill.co

m/a

bout

-us/

shar

ehol

ders

.asp

.

2. C

ompo

sitio

n of

CSR

com

mitt

eeTh

e CS

R Co

mm

ittee

com

prise

s of t

he N

on-E

xecu

tive

Chai

rman

of t

he C

ompa

ny a

long

with

2(tw

o) N

on-E

xecu

tive

Dire

ctor

s, o

ne o

f who

m is

an

Inde

pend

ent D

irec-

tor.

The

Man

agin

g Di

rect

or o

f the

Com

pany

is th

e Ch

airm

an o

f the

Com

mitt

ee. T

he n

ames

of t

he m

embe

rs o

f the

CSR

Com

mitt

ee a

re a

s fo

llows

:

Mr.

R. N

. Mur

thy

- Cha

irman

, Mr.D

ipak

Kum

ar B

aner

jee

- Mem

ber,

Mr.

Amar

Pat

naik

- M

embe

r

3.

Aver

age

net p

rofit

of c

ompa

ny fo

r la

st 3

fina

ncia

l yea

rs(`

1,2

45,4

89/-*

*)

4.

Pre

scrib

ed C

SR e

xpen

ditu

re (2

%

of th

e am

ount

as

in it

em 3

abo

ve)

` NI

L**

5. D

etai

ls of

CSR

spe

nt d

urin

g th

e fin

ancia

l yea

r:a)

Tot

al a

mou

nt

to

be

spen

t du

ring

the

fi-na

ncia

l yea

r

` 20

6,23

2/-*

b)

Amou

nt

un-

spen

t, if

any

NIL

c)

Man

ner

in

which

th

e am

ount

sp

ent

in th

e fin

ancia

l ye

ar

Sl

NoCS

R Pr

ojec

t or

act

ivity

id

entif

ied

Sect

or

in

which

th

e pr

ojec

t is

cove

red

Proj

ects

or

pro-

gram

mes

(1) L

o-ca

l are

a or

oth

er

(2)

Spec

ify

the

Stat

e an

d di

stric

t wh

ere

proj

ects

or

pr

ogra

mm

es

were

und

erta

ken

Amou

nt

out-

lay

(Bud

get)

proj

ects

or p

ro-

gram

me

wise

(`

In L

akhs

)

Amou

nt s

pent

on

the

proj

ects

of

pr

ogra

mm

es S

ub

head

s:

1.

Dire

ct

expe

nditu

re

on

proj

ects

or 2

. pro

-gr

amm

es

Ove

r-he

ads

Cum

ulat

ive

expe

nditu

re

up t

o th

e re

-po

rting

per

iod

(` In

Lak

hs)

Am

ou

nt

spen

t: Di

rect

or

th

roug

h im

plem

entin

g ag

ency

1 Pr

ovid

ing

prev

entiv

e he

alth

ca

re

for

14

preg

nant

m

othe

rs

and

thei

r chi

ld th

roug

h 'A

dopt

a

mot

her

and

save

her

ch

ild'

prog

ram

me

of

Child

In

Need

Ins

titut

e,

Kolka

ta.

Prev

entiv

e he

alth

ca

re.

Kolka

ta,

Wes

t Be

ngal

2.10

(TIA

E)

Thro

ugh

Impl

emen

tatio

n Ag

ency

Ext

erna

l

Nil

TIAE

Tota

l2.

10

95

6. R

easo

ns fo

r not

spe

ndin

g th

e pr

escr

ibed

am

ount

(in

case

the

Com

pany

has

faile

d to

spe

nd

amou

nt s

pecif

ied

unde

r ite

m 4

)

N.A.

* It m

ay b

e pe

rtine

nt to

not

e th

at th

e en

tire

amou

nt s

pent

towa

rds

CSR

expe

nditu

re p

erta

ined

to F

Y 14

-15

which

was

spe

nt in

FY

15-1

6.

**Th

e fig

ure

is ar

rived

at a

fter c

alcu

latio

n of

ave

rage

net

pro

fit/lo

ss o

f the

Com

pany

of l

ast 3

yea

rs fo

r FY

15-1

6.

The

CSR

Com

mitt

ee h

as c

onfir

med

that

the

impl

emen

tatio

n an

d m

onito

ring

of th

e CS

R Po

licy

is in

com

plia

nce

with

the

CSR

obje

ctive

s an

d Po

licy

of th

e Co

mpa

ny

For T

KM G

loba

l Log

istics

Lim

ited

Sd/-

R. N

. Mur

thy

Dire

ctor

&Ch

airm

an, T

KM G

loba

l Log

istics

Ltd

. &Ch

airm

an, C

SR C

omm

ittee

Date

& P

lace

: Ko

lkata

, 20t

h Ap

ril, 2

016

DI

N: 0

6770

611

96


Disc

losu

re o

f par

ticul

ars

of c

ontra

cts/

arra

ngem

ents

ent

ered

into

by

the

Com

pany

with

its

rela

ted

parti

es re

ferr

ed to

in s

ub-s

ectio

n 18

8 of

the

Com

pani

es A

ct, 2

013

incl

udin

g ce

rtain

arm

s' le

ngth

tran

sact

ions

und

er th

ird p

rovi

so th

eret

o[P

ursu

ant t

o cla

use

(h) o

f sub

-sec

tion

134

of th

e Ac

t and

Rul

e 8(

2) o

f the

Com

pani

es (A

ccou

nts)

Rul

es, 2

014]

1.

Deta

ils o

f con

tract

s or

arra

ngem

ents

or t

rans

actio

ns n

ot a

t arm

's le

ngth

bas

is:- N

IL2.

De

tails

of m

ater

ial c

ontra

cts

or a

rrang

emen

ts o

r tra

nsac

tions

at a

rm's

leng

th b

asis:

Sl.

No.

Nam

e of

the

rela

ted

Party

an

d na

ture

of r

elat

ions

hip

Natu

re o

f Con

tract

/ a

rran

gem

ents

/ tra

nsac

tions

Dura

tion

of th

e co

ntra

cts

/ arr

ange

men

ts/

trans

actio

ns

Salie

nt fe

atur

es o

f th

e co

ntra

cts

or

arra

ngem

ents

or

trans

actio

ns

Actu

al V

alue

of

trans

actio

ns e

n-te

red

durin

g FY

'16

(` In

mill

ions

)

Date

(s) o

f ap

prov

al b

y th

e Bo

ard,

if

any

Amou

nt p

aid

as

adva

nces

, if a

ny

1.Ta

ta S

teel

- FA

MD

(Par

ent C

ompa

ny)

Serv

ice C

harg

e &

Hand

ling

Cont

ract

an

d re

imbu

rsem

ent o

f ex

pens

es

Cont

ract

exp

ired

on

31.0

3.14

pen

ding

rene

wal

Term

s of

Con

tract

un

der n

egot

iatio

n48

.91

N.A.

2.Ta

ta S

teel

- IB

U (P

aren

t Com

pany

)Se

rvice

Cha

rge

& Ha

ndlin

g Co

ntra

ct

and

reim

burs

emen

t of

expe

nses

Cont

ract

exp

ired

on

31.0

3.14

pen

ding

rene

wal

Term

s of

Con

tract

un

der n

egot

iatio

n28

.01

3.Ta

ta S

teel

- Im

port

(Par

ent C

ompa

ny)

Deliv

ery

Ord

er F

ees

and

DDP

char

ges

Cont

ract

expir

ed o

n 30

.09.

14

cont

ract

rene

wal p

roce

ss is

be

ing u

nder

take

n by

TSG

- S

& LO

.

Term

s of

Con

tract

un

der n

egot

iatio

n9.

56

4.Ta

ta S

teel

- Ja

msh

edpu

r (P

aren

t Com

pany

)Bu

sines

s In

voice

Spot

con

tract

Air E

xpor

t fre

ight

co

ntra

ct0.

03

5.Ta

ta S

teel

IM S

ectio

n (P

aren

t Com

pany

)Bu

sines

s In

voice

From

01.

04.1

5 to

31

.05.

2016

Rent

10.4

0

From

01.

09.1

5 to

31

.08.

2016

Serv

ice A

gree

men

t Re

sour

ce B

ased

58.0

0

6.Ta

ta S

teel

IM S

ectio

n (P

aren

t Com

pany

)Bu

sines

s In

voice

From

01.

04.1

5 to

30

.04.

2016

Serv

ice A

gree

men

t So

lutio

n Ba

sed

72.0

0

7.Ta

ta S

teel

IM S

ectio

n

(Par

ent C

ompa

ny)

Busin

ess

Invo

iceFr

om 0

1.04

.15

to

30.0

5.20

16Re

imbu

rsem

ent o

f ex

pens

es0.

09

8.Ta

ta S

teel

-( W

ire D

ivisio

n Ex

port

and

Impo

rt ) L

td

(Par

ent C

ompa

ny)

Agen

cy C

harg

es a

nd

reim

burs

emen

t of

expe

nses

From

15.

07.1

5 till

31.

07.1

6Ag

ency

Cha

rges

an

d re

imbu

rsem

ent

of e

xpen

ses

11.1

2

9.Ta

ta S

teel

-(CRC

Wes

t ) L

td

(Par

ent C

ompa

ny)

Clea

ranc

e &

trans

porta

tion

char

ges

and

reim

burs

emen

t of

expe

nses

Spot

con

tract

Clea

ranc

e &

trans

-po

rtatio

n ch

arge

s an

d re

imbu

rsem

ent

of e

xpen

ses

0.87

Anne

xure

D

97

Sl.

No.

Nam

e of

the

rela

ted

Party

an

d na

ture

of r

elat

ions

hip

Natu

re o

f Con

tract

/ a

rran

gem

ents

/ tra

nsac

tions

Dura

tion

of th

e co

ntra

cts

/ arr

ange

men

ts/

trans

actio

ns

Salie

nt fe

atur

es o

f th

e co

ntra

cts

or

arra

ngem

ents

or

trans

actio

ns

Actu

al V

alue

of

trans

actio

ns e

n-te

red

durin

g FY

'15

(` In

mill

ions

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98


Annexure-E

Statement containing salient features of the financial statement of subsidiaries/associate companies/joint ventures

[Pursuant to first proviso to sub-section (3) of Section 129 read with Rule 5 of Companies (Accounts) Rules, 2014]

Part 'A' : SubsidiariesAmount (In ` millions)

Sl. No.

Particulars

1. Name of the subsidiary TKM Global GmbH,

Germany


TM Harbour Services

Private Limited

2. Reporting Period for the subsidiary concerned, if different from the holding company's reporting period

N.A. N.A. N.A.

3. Reporting currency and Exchange rate as on the last date of the relevant financial year in the case of foreign subsidiaries.

1 EUR = INR 75.10

1 RMB = INR 10.25

N.A.

4. Share capital 3.84 70.03 576.92

5. Reserves & surplus 1,255.50 (34.13) 566.94

6. Total assets 1650.58 52.36 1153.38

7. Total Liabilities 391.24 16.46 9.52

8. Investments 554.50 – 14.13

9. Turnover 482.70 194.58 285.37

10. Profit before taxation 61.41 (1.77) 165.75

11. Provision for taxation 22.76 – 6.77

12. Profit after taxation 38.65 (1.77) 158.99

13. Proposed Dividend NIL NIL NIL

14. % of shareholding 100% 100% 74.18%

Part 'B': Associates and Joint Ventures

The Company does not have any joint ventures or associates as on 31st March, 2016. Hence, there is nothing to report in this regard.

99


TO THE MEMBERS OF

TKM GLOBAL LOGISTICS LIMITED

Report on the Financial Statements

We have audited the accompanying financial statements of TKM GLOBAL LOGISTICS LIMITED ('the Company'), which comprise the Balance Sheet as at 31st March, 2016, the Statement of Profit and Loss and the Cash Flow Statement for the year then ended, and a summary of the significant accounting policies and other explanatory information.

Management's Responsibility for the Financial Statements

The Company's Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 ('the Act') with respect to the preparation of these financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Accounting Standards prescribed under section 133 of the Act, as applicable.This responsibility also includes 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 frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error


Our responsibility is to express an opinion on these financial statements based on our audit.


We conducted our audit of the financial statements in accordance with the Standards on Auditing specified under Section 143(10) of the Act. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.


We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the financial statements.

Opinion

In our opinion and to the best of our information and according to the explanations given to us, the aforesaid financial

100


statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the state of affairs of the Company as at 31st March, 2016, and its profit and its cash flows for the year ended on that date.






d) In our opinion, the aforesaid financial statements comply withthe Accounting Standards prescribed under section 133 of the Act, as applicable.



g) With respect to the other matters to be included in the Auditor's Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, in our opinion and to the best of our information and according to the explanations given to us: i. The Company has disclosed the impact of pending litigations on its financial position in its financial

statements -refer note 24.2 to 24.7 to the financial statements.ii. The Company did not have any long-term contracts including derivative contracts for which there were any

material foreseeable losses.iii. There were no amounts which were required to be transferred to the Investor Education and Protection

Fund by the Company.2. As required by the Companies (Auditor's Report) Order, 2016 ('the Order') issued by the Central Government in terms

of Section 143(11) of the Act, we give in 'Annexure B' a statement on the matters specified in paragraphs 3 and 4 of the Order.


(Firm's Registration No. 302009E)Sd/-


KOLKATA, April, 2016 (Membership No. 054785)

101

ANNEXURE 'A' TO THE INDEPENDENT AUDITOR'S REPORT

(Referred to in paragraph 1 (f) under 'Report on Other Legal and Regulatory Requirements' of our report of even date)


We have audited the internal financial controls over financial reporting of TKM Global Logistics Limited ('the Company') as of March 31, 2016 in conjunction with our audit of the financial statements of the Company for the year ended on that date.


The Company's management is responsible for establishing and maintaining internal financial controls based on 'the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated inthe Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India'. These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to company's policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Companies Act, 2013.


Our responsibility is to express an opinion on the Company's internal financial controls over financial reporting based on our audit. We conducted our audit in accordance with the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting (the 'Guidance Note') issued by the Institute of Chartered Accountants of India and the Standards on Auditing prescribed under Section 143(10) of the Companies Act, 2013, to the extent applicable to an audit of internal financial controls. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls over financial reporting was established and maintained and if such controls operated effectively in all material respects.




A company's internal financial control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company's internal financial control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorisations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection

102


of unauthorised acquisition, use, or disposition of the company's assets that could have a material effect on the financial statements.



Opinion





(Membership No. 054785)

KOLKATA, April, 2016

103

ANNEXURE B TO THE INDEPENDENT AUDITORS' REPORT


(i) (a) The Company has maintained proper records showing full particulars, including quantitative details and situation of fixed assets.


(c) According to the information and explanations given to us and the records examined by us and based on the examination of the registered sale deed / transfer deed / conveyance deed (state any other relevant document which evidences title) provided to us, we report that, the title deeds, comprising all the immovable properties of land and buildings which are freehold, are held in the name of the Company as at the balance sheet date.

(ii) The Company does not have any inventory and hence reporting under clause (ii) of the CARO 2016 is not applicable.(iii) The Company has not granted any loans, secured or unsecured, to companies, firms, Limited Liability Partnerships

or other parties covered in the register maintained under section 189 of the Companies Act, 2013.(iv) The Company has not granted any loans, made investments or provide guarantees and hence reporting under

clause (iv) of the CARO 2016 is not applicable.(v) According to the information and explanations given to us, the Company has not accepted any deposit during the

year. In respect of unclaimed deposits, the Company has complied with the provisions of Sections 73 to 76 or any other relevant provisions of the Companies Act, 2013.

(vi) The maintenance of cost records has not been specified by the Central Government under section 148(1) of the Companies Act, 2013.

(vii) According to the information and explanations given to us, in respect of statutory dues:(a) The Company has generally been regular in depositing undisputed dues, including Provident Fund, Employees'

State Insurance, Income-tax, Sales Tax, Service Tax, Customs Duty, Excise Duty, Value Added Tax, cess and other material statutory dues applicable to it to the appropriate authorities.

(b) There were no undisputed amounts payable in respect of Provident Fund, Employees' State Insurance,Income-tax, Sales Tax, Service Tax, Customs Duty, Excise Duty, Value Added Tax, cess and other material statutory dues in arrears as at March 31, 2016 for a period of more than six months from the date they became payable.

(c) Details of dues of Income-tax, Sales Tax, Service Tax, Customs Duty, Excise Duty, and Value Added Tax which have not been deposited as on March 31, 2016 on account of disputes are given below.

Name of Statute Nature of Dues Forum where Dispute is Pending

Period to which the Amount Relates

Amount (` In lacs)

Finance Act, 1994 Service Tax Central Excise Service tax Appellate

Tribunal

FY 2005-06 to 2009-10

6,677.63

Income Tax Act, 1961 Income Tax Commissioner (Appeal)

FY 2010-11 120.60^

Income Tax Act, 1961 Income Tax Dispute Resolution Panel

FY 2011-12 88.75

^ Net of Rs. 21.40 lacs paid under protest.

104





(xi) In our opinion and according to the information and explanations given to us, the Company has paid / provided managerial remuneration in accordance with the requisite approvals mandated by the provisions of section 197 read with Schedule V to the Companies Act, 2013.


(xiii) In our opinion and according to the information and explanations given to us the Company is in compliance with Section 177 and 188 of the Companies Act, 2013, where applicable, for all transactions with the related parties and the details of related party transactions have been disclosed in the financial statements etc. as required by the applicable accounting standards.


(xv) In our opinion and according to the information and explanations given to us, during the year the Company has not entered into any non-cash transactions with its directors, directors of its holding, subsidiary company or persons connected with them and hence provisions of section 192 of the Companies Act, 2013 are not applicable.





Membership No. 054785KOLKATA, April, 2016

105

TKM Global Logistics Ltd. Balance Sheet as at 31st March 2016

In terms of our report attached For and on behalf of the Board of DirectorsFor Deloitte Haskins & Sells Sd/-Chartered Accountants R N Murthy Sd/- Chairman

Abhijit Bandyopadhyay Anand ChandPartner Director Kolkata, 20th April, 2016 Kolkata, 20th April, 2016

As at 31st March 2016 31st March 2015 Note ` `

I. EQUITY AND LIABILITIES (1) Shareholder's Funds

(a) Share Capital 2 36,000,000 18,000,000 (b) Reserves and Surplus 3 210,834,872 180,725,609 246,834,872 216,725,609 (2) Non-Current Liabilities (a) Long-Term Borrowings 4 23,200,000 58,000,000 (b) Deferred Tax Liabilities (Net) 30 7,29,005 - (c) Long-Term Provisions 5 16,578,326 16,265,397 40,507,331 74,265,397 (3) Current Liabilities (a) Trade Payables (i) total outstanding dues of micro enterprises and Enterprises 29 - - (ii) total outstanding dues of creditors other than micro 6 68,660,821 99,693,446 and small enterprises (b) Other Current Liabilities 7 39,458,169 26,831,808 (c) Short-Term Provisions 8 2,50,059 1,922,053 108,369,059 128,447,307 Total 395,711,262 419,438,313

II. ASSETS (1) Non-Current Assets (a) Fixed Assets (i) Tangible Assets 9A 67,222,829 69,791,525 (ii) Intangible Assets 9B 243,271 351,195 (b) Non-Current Investments 10 54,941,215 54,941,215 (c) Long Term Loans and Advances 11 64,991,708 60,675 146 (d) Other Non-Current Assets 12 144,598 - 187,543,621 185,759,081 (2) Current Assets (a) Current Investments 13 998,419 - (b) Trade Receivables 14 151,408,028 183,651,848 (c) Cash and Bank Balances 15 38,997,537 32,515,929 (d) Short-Term Loans and Advances 16 16,669,062 17,426,847 (e) Other Current Assets 17 94,595 84,608 208,167,641 233,679,232 Total 395,711,262 419,438,313

See accompanying notes forming part of the financial statements

106


In terms of our report attached For and on behalf of the Board of DirectorsFor Deloitte Haskins & Sells Sd/- Chartered Accountants R N Murthy Chairman

Sd/- Sd/-

Abhijit Bandyopadhyay Anand Chand Partner Director Kolkata, 20th April, 2016 Kolkata, 20th April, 2016

TKM Global Logistics Ltd. Statement of Profit and Loss for the Year Ended 31st March 2016

For the year ended For the year ended 31st March 2016 31st March 2015 Note No. ` `

I Revenue from Operations 18 638,663,573 925,668,261

II Other Income 19 10,078,141 12,282,692

III Total Revenue (I +II) 648,741,714 937,950,953

IV Expenses:

(a) Operating Expenses 20 482,937,677 792,041,361

(b) Employee Benefits Expense 21 76,318,667 84,648,169

(c) Finance Costs 22 7,660,683 8,827,508

(d) Depreciation and Amortization Expense 3,062,886 4,140,513

(e) Other Expenses 23 40,821,534 38,703,102

Total Expenses 610,801,447 928,360,653

V Profit/(Loss) Before Tax (III - IV) 38,258,851 9,590,300

VI Tax Expense:

Current Tax 8,382,000 1,218,265

Less : MAT credit entitlement 1,280,000 (1,098,000)

Deferred Tax 30 729,004 -

VII Profit/(Loss) for the year (V-VI) 30,109,263 9,470,035

VIII Earning/(Loss) per Equity Share: 32

(1) Basic 8.36 3.87

(2) Diluted 8.36 3.87

See accompaning notes forming part of Financial Statements

107

TKM Global Logistics Ltd.Cashflow Statement for the Year Ended 31st March 2016

For the year ended For the year ended 31st March 2016 31st March 2015

` `

A. CASH FLOW FROM OPERATING ACTIVITIES

Profit before Tax 37,940,267 9,590,300

Adjustments for: Depreciation 3,062,886 4,140,513

Profit on Sale of Fixed Assets (Net) (57,434) (10,546)

Assets/Capital work in Progress written off - 163,394

Interest Income (267,495) (188,602)

Dividend Income (1,195,347) (620,948)

Interest Expense 7,660,683 8,827,508

Operating profit before Working Capital Changes 47,143,560 21,901,619

Adjustments for (increase) / decrease in Operating Assets:

(Increase) /Decrease in Trade and Other Receivables 32,243,820 30,481,769

(Increase) /Decrease in Short Term Loans & Advances 2,747,992 7,460,915

(Increase) /Decrease in Long Term Loans & Advances (185,157) 9,290,773

Adjustments for Increase/ (Decrease) in Operating Liabilities:

Increase/ (Decrease) in Trade Payables & Other Liabilities 33,440,982 (38,117,401)

Increase/ (Decrease) in Short Term Provisions 28,120 22,430

Increase/ (Decrease) in Long Term Provisions 312,929 2,897,656


Direct Taxes Paid (14,923,726) (16,992,914)


B. CASH FLOW FROM INVESTING ACTIVITIES

Purchase of Fixed Assets including Capital Work in Progress (525,689) (805,791)

Sale of Fixed Assets 231,586 39,024

Dividend Income from Investments in Mutual Funds 1,195,347 620,948

Purchase and Sale of Investments (Net) (998,419) -

(Increase)/Decrease in Fixed Deposits (104,587) (73,974)

Interest Received 254,519 162,215

Net Cash generated/(used) in Investing Activities 52,757 (57,578)

108


TKM Global Logistics Ltd.Cashflow Statemtn for the Year Ended 31st March 2016 (contd.)


` `

C. CASH FLOW FROM FINANCING ACTIVITIES

Proceed from issue of Equity Share Capital - 18,000,000

Repayment of Unsecured Loan to Group Company (19,800,000) (41,861,795)

Unsecured Loan from Holding Company - 34,000,000

Interest Paid (7,660,683) (9,064,038)

Net cash generated/(used) in Financing Activities (27,460,683) 1,074,167

Net increase/(decrease) in Cash & Cash equivalents (A+B+C) 6,518,630 17,961,436

Cash and Cash equivalents at the beginning of the year 31,317,818 13,356,382

Cash and Cash equivalents at the end of the year (Refer note 15) 37,836,448 31,317,818

Additional Notes:

1) Figures in brackets indicate outflows.

2) Cash and Bank Balances includes Cash and Cash equivalents (refer note 15)

3) Net cash from operating activities includes payment made for CSR activity ` 210,000

4) Previous year's figures have been regrouped/restated wherever necessary.

In terms of our report attached For and on behalf of the Board of DirectorsFor Deloitte Haskins & Sells Sd/- Chartered Accountants R N Murthy Chairman

Sd/- Sd/-

Abhijit Bandyopadhyay Anand Chand Partner Director Kolkata, 20th April, 2016 Kolkata, 20th April, 2016

109

TKM Global Logistics Ltd. Notes Forming part of Financial Statements of the year ended 31st March, 2016

1. Accounting Policies

1.01. Basis of accounting and preparation of financial statements

The financial statements of the Company have been prepared in accordance with the Generally Accepted Accounting Principles in India (Indian GAAP) to comply with the Accounting Standards notified under Section 133 of the Companies Act, 2013, read with Rule 7 of the Companies (Accounts) Rules, 2014 and the relevant provisions of the Companies Act, 2013 (“the 2013 Act”)/Companies Act,1956 (“the 1956 Act”), as applicable. The financial statements have been prepared on accrual basis under the historical cost convention. The accounting policies adopted in the preparation of the financial statements are consistent with those followed in the previous year. All assets and liabilities have been classified as current or non-current as per the Company's normal operating cycle and other criteria set out in the Schedule III to the Companies Act, 2013. Based on the nature of products and the time between the acquisition of assets for processing and their realisation in cash and cash equivalents, the Company has ascertained its operating cycle as 12 months for the purpose of current - non current classification of assets and liabilities.

1.02. Use of Estimates

The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent liabilities at the date of financial statements and the results of operations during the reporting year end. Although these estimates are based upon management’s best knowledge of current events and actions, actual results could differ from these estimates.

1.03. Revenue Recognition

Income from Service:

Revenues from contracts priced on a time and material basis are recognised when services are rendered and related costs are incurred.

Other Income:

Interest income is accounted on accrual basis. Dividend income is accounted for when the right to receive it is established.

1.04. Tangible Assets

Tangible assets are valued at cost less depreciation and net of impairment, if any. The cost of an item of tangible asset comprises its purchase price, including import duties and other non-refundable taxes or levies and any directly attributable cost of bringing the asset to its working condition for its intended use; any trade discounts and rebates are deducted in arriving at the purchase price.Interest on borrowings and financing cost during the period of construction is added to the cost of tangible assets.

110



1.05. Intangible Assets

Intangible assets are stated at cost of acquisition,including any cost attributable for bringing the same to its working condition, less accumulated amortisation.

1.06. Impairment of Assets

The carrying amounts of tangible and intangible assets are reviewed at each balance sheet date to determine if there is any indication of impairment based on external/internal factors. An impairment loss is recognized wherever the carrying amount of an asset exceeds its recoverable amount which represents the greater of the net selling price and ‘Value in use' of the assets. The estimated future cash flows considered for determining the value in use, are discounted to their present value at the weighted average cost of capital.

1.07. Investments

Long-term investments are carried at cost less provision for permanent diminution in value of such investments. Current Investments are stated at lower of cost and fair value.

1.08. Provision


Provisions made in terms of Accounting Standard 29 are not discounted to its present value and are determined based on best estimates required to settle the obligation at the balance sheet date. These are reviewed at each balance sheet date and adjusted to reflect the current management estimates.

1.09. Contingencies

Liabilities which are material and whose future outcome cannot be ascertained with reasonable certainty, are treated as contingent and disclosed by way of notes to the accounts.

1.10. Transactions in Foreign Currency

Foreign Currency transactions are recorded on initial recognition in the reporting currency i.e. Indian rupees, using the exchange rates prevailing at the date of transaction. Monetary assets and liabilities in currencies other than the reporting currency are remeasured at the rates of exchange prevailing at the balance sheet date. Exchange difference arising on the settlement of monetary items, and on the remeasurement of monetary items, are included in the statement of profit and loss. In respect foreign exchange contracts, Premium/Amount is amortised over the period of contract.

1.11. Depreciation

Depreciable amount of an asset is the cost of an asset, or other amount substituted for cost, less its estimated residual value. Depreciation on tangible assets is provided on the straight-line method over the useful lives of assets. The details of estimated life for each category is as under:

111


Type of Asset Estimated life

Buildings 60 years

Plant and Equipments 7-15 years

Furniture and Fixtures 10 years

Vehicles - Two Wheeler 10 years

Vehicles - Four Wheeler 8 years

Office Equipment 5 years

Computers 3 years

Intangible Assets in respect of accounting software is amortised over a period of 5 years. Other Intangible Assets are amortised equally over the period for which the right is obtained.

1.12. Employee Benefits

Short term employee benefits

Short term employee benefits are recognised as an expense at the undiscounted amount in the statement of profit and loss of the year in which the related service is rendered.


The Company provide Provident Fund to its employees. The contributions towards Provident fund are paid to the trust administered by the Government. The company has no legal or constructive obligation to pay further contributions if the funds do not hold sufficient assets to pay employee benefits. The contributions are recognised as expenses in the statement of profit and loss based on the amount of contribution required to be made and when services are rendered by employees.


The Company provides Gratuity and Leave Encashment Benefits to its employees. Gratuity liabilities are funded through a separate trust funds managed by Life Insurance Corporation of India. The liability towards leave encashment is not funded. The present value of these defined benefit obligations are ascertained by an independent actuarial valuation as per the requirement of Accounting Standards 15 - Employee Benefits. The liability recognised in the balance sheet is the present value of the defined benefit obligations on the balance sheet date less the fair value of the plan assets (for funded plans), together with adjustments for unrecognised past service costs. All actuarial gains and losses are recognised in Statement of Profit and Loss in full in the year in which they occur.

1.13. Taxes on Income


Deferred tax assets and liabilities are recognised by computing the tax effect on timing differences which arise during the year and reverse in the subsequent periods. Deferred tax assets are recognised only to the extent that there is a reasonable certainty that sufficient future taxable income will be available against which such deferred tax assets can be realised.

112



Note 2 : SHARE CAPITALAs at

31st March 2016 31st March 2015 ` `

a) Authorised5,000,000 Equity Shares of ` 10 each

(31.03.2015 : 5,000,000 Equity Shares of ` 10 each)b) Issued, Subscribed and Paid-up 3,600,000 Equity Shares of ` 10 each (31.03.2015 : 3,600,000 Equity Shares of ` 10 each) (All the above shares are held by TM International Logistics Ltd., the Holding Company.)

50,000,000

36,000,000

50,000,000

18,000,000

36,000,000 18,000,000

Note 2A : RECONCILIATION OF SHARESNo. of Shares


Equity Shares of ` 10/- eachOpening Balance at the beginning of the yearIssued during the yearClosing Balance at the end of the year

3,600,000 -

1,800,000 1,800,000

3,600,000 3,600,000

Note 2B : DETAILS OF SHAREHOLDERS HOLDING MORE THAN 5% OF OUTSTANDING SHARES

% age of Shareholding

No. of Shares


No.of Shares No. of Shares

TM International Logistics Limited 100% 36,00,000 36,00,000

The company has one class of equity shares having a par value of ̀ 10 per share. Each shareholder is eligible for one vote per share held. In the event of liquidation, the equity shareholders are eligible to receive the remaining assets of the Company after distribution of all preferential amounts, in proportion to their shareholding.

Note 3 : RESERVES & SURPLUS 31st March 2016 31st March 2015

` `

a) Reservesi) General Reserves Opening Balance at the beginning of the year Add:Transfer from Statement of Profit & Loss Closing Balance at the end of the period

5,64,457 -

5,64,457 -

5,64,457 5,64,457

b) Surplusi) Statement of Profit & Loss Opening Balance at the beginning of the year Add: Profit/(Loss) for the year Closing Balance at the end of the year

180,161,15230,109,263

170,691,1179,470,035

210,270,415 180,161,152

210,834,872 180,725,609

113


Note 4 : LONG TERM BORROWINGSAs at

31st March 2016 31st March 2015` `

UNSECUREDLoan from Related Party (Refer Note No. 28.1)(i) TM Harbour Services Private Limited(ii) TM International Logistics Limited

- 23,200,000

30,000,00028,000,000

23,200,000 580,00,000

Note 5 : LONG TERM PROVISIONS

As at


` `

Provision for Employee Benefitsa) Provision for Gratuityb) Provision for compensated absences

1,182,079 15,396,247

2,952,980 13,312,417

16,578,326 16,265,397

Note 6 : TRADE PAYABLES

As at


` `

a) Creditors for supplies / servicesb) Creditors for accrued wages and salaries

57,898,317 10,762,504

84 919 813 14,773,633

68,660,821 99,693,446

114



Note 7 : OTHER CURRENT LIABILITIES

As at


` `

a) Current Maturities of Long-Term Debt b) Advances Received from Customersc) Other Payables

(i) Statutory Dues(ii) Payable on purchase of fixed assets(iii)Others

34,800,000 541,053

1,840,7332,076,383

200,000

198,00,000 3,179,850

1,810,293 2,041,665

-

39,458,109 26,831,808

Note 8 : SHORT TERM PROVISIONS

As at


` `

a) Provision for Employee Benefits(i) Other Long Term Benefits

b) Provision for Taxation[Net of Advance Tax: ` 1,105,000 (31.03.2015 : ` 5,132,471)]

237,72012,349

209,6001,712,453

250,069 1,922,053

115

TKM

Glo

bal L

ogis

tics

Ltd.

Not

es fo

rmin

g pa

rt o

f fina

ncia

l sta

tem

ents

of t

he y

ear e

nded

31s

t Mar

ch, 2

016

Note

9A:

TAN

GIB

LE A

SSET

S

`

PART

ICUL

ARS

GRO

SS B

LOCK

( AT

CO

ST)

DEPR

ECIA

TIO

NNE

T BL

OCK

As a

t 1st

Apr

il 20

15Ad

ditio

ns

Dele

tions

As a

t 31s

t Mar

ch

2016

As a

t 1st

Apr

il 20

15Fo

r the

Yea

rDe

letio

nsAs

at 3

1st M

arch

20

16As

at 3

1st M

arch

20

16

Build

ing

67,

030,

093

--

67,

030,

093

4,66

7,92

41,

123,

256

-5,

791,

180

61,2

38,9

13

(67,

030,

093)

- -

(67,

030,

093)

(3,5

47,7

37)

(1,1

20,1

87)

- (4

,667

,924

) (6

2,36

2,16

9)

Plan

t and

Equ

ipm

ents

772

,354

1

01,1

61-

873

,515

14

4,60

4 5

7,87

8 -

202,

482

671,

033

(772

,354

) -

- (7

72,3

54)

(91,

991)

(52,

613)

- (1

44,6

04)

(627

,750

)

Furn

iture

and

Fixt

ures

8,03

6,05

6 98

,547

564,

826

7,56

9,77

72,

999,

799

835,

792

474,

684

3,36

0,90

74,

208,

870

(8,3

72,6

01)

(6,6

00)

(343

,145

) (8

,036

,056

) (2

,279

,664

) (9

42,0

44)

(221

,909

) (2

,999

,799

) (5

,036

,257

)

Vehi

cles

1,2

11,6

46

-44

,127

1,16

7,51

91,

211,

646

-44

,127

1,16

7,51

9-

(1,2

64,7

66)

- (5

3,12

0) (1

,211

,646

) (1

,264

,766

)-

(53,

120)

(1,2

11,6

46)

-

Offi

ce E

quip

men

ts12

,118

,620

36

0,70

04,

062,

954

8,41

6,36

610

,353

,271

938,

036

3,97

8,95

47,

312,

353

1,10

4,01

3

(13,

304,

100)

(496

,286

) (1

,681

,766

) (1

2,11

8,62

0) (1

0,04

6,36

1) (1

,918

,040

) (1

,611

,130

) (1

0,25

3,27

1) (1

,765

,349

)

Tota

l89

,168

,769

560,

408

4,67

1,90

785

,057

,270

19,3

77,2

442,

954,

962

4,49

7,76

517

,834

,441

67,2

22,8

29

(90,

743,

914)

(502

,886

) (2

,078

,031

) (8

9,16

8,76

9) (1

7,23

0,51

9) (4

,032

,884

) (1

,886

,159

) (1

9,37

7,24

4) (6

9,79

1,52

5)

Note

9B:

INTA

NGIB

LE A

SSET

S

PART

ICUL

ARS

GRO

SS B

LOCK

( AT

CO

ST)

AMO

RTIS

ATIO

NNE

T BL

OCK

As a

t 1st

Apr

il 20

15Ad

ditio

ns

Dele

tions

As a

t 31s

t Mar

ch

2016

As a

t 1st

Apr

il 20

15Fo

r the

Yea

rDe

letio

nsAs

at 3

1st M

arch

20

16As

at 3

1st M

arch

20

16

Softw

are

538

,440

-

- 5

38,4

40

187,

245

107

,924

-29

5,16

924

3,27

1

(538

,440

) -

- (5

38,4

40)

(79,

616

) (1

07,6

29)

- (1

87,2

45)

(351

,195

)

Tota

l 5

38,4

40

--

538

,440

18

7,24

5 1

07,9

24-

295,

169

243,

271

(538

,440

)-

- (5

38,4

40)

(79,

616)

(1

0762

9)-

(187

,245

) (3

51,1

95)

Fig

ures

in b

rack

ets

rela

te to

the

prev

ious

yea

r com

para

tive.

116



Note 10 : NON CURRENT INVESTMENTSAs at

31st March 2016 31st March 2015 ` `

TRADE INVESTMENTSEquity Instruments in Subsidiary Companies (Unquoted)i) TKM Global GmbH

100 Shares of Euro 511.29 each, fully paid up(31.03.2015 : 100 Shares of Euro 511.29 each, fully paid up)

ii) TKM Global China Ltd1 Share of USD 1,000,000 fully paid up(31.03.2015 : 1 Share of USD 1,000,000 fully paid up)

11,063,715

43,877,500

11,063,715

43,877,500

54,941,215 54,941,215

As at31st March 2016 31st March 2015

Aggregate value of Unquoted Investments

` `

54,941,215 54,941,215 54,941,215 54,941,215

Note 11 : LONG TERM LOANS & ADVANCESAs at


a) Security Depositb) Loan to Employeesc) Prepaidd) Advance Payment of Taxes

[Net of Provisions for Tax ` 30,741,497 (31.03.2015 : ` 13,921,717)]

2,693,15033,000 8,031

62,257,527

2,508,150 27,280 13,594

58,126,122

64,991,708 60,675,146

Note 12 : OTHER NON CURRENT ASSETSAs at


Bank Deposits with more than 12 months maturityInterest Accrued on Deposits

141,6092,989

- -

144,598 -

Note 13 : CURRENT INVESTMENTS31st March 2016 31st March 2015

` `

Investment in Units of Mutual Fund(Unquoted)At lower of cost or fair valueIn units of ` 1000/- eachTATA Liquid Fund Direct Plan-Daily Div Re-invest895.828 Units (31.03.2015 Nil) Less : Excess of Cost over Fair Value of Current Investment

998,419

-

998,419 -

--

998,419 -

117

Note:

Particulars 31st March 2016 31st March 2015

(i) Aggregate value of Quoted Investments(ii) Aggregate value of Unquoted Investments

` `

- 998,419

- -

998,419 -

Note 14 : TRADE RECEIVABLESAs at


a) Debts Outstanding for a period exceeding six monthsb) Other Debts

Less : Provision for Doubtful Debtsa) For a period exceeding six monthsb) Other Debts

Of the above:- Secured Considered Good- Unsecured Considered Good- Doubtful

9,942,803149,774,451

5,317,543 182,439,059

159,717,254

7,888,101421,125

187,756,602

3,524,287580,467

151,408,028 183,651,848 -

151,408,0288,309,226

- 183,651,848

4,104,754159,717,254 187,756,602

Note 15 : CASH AND BANK BALANCESAs at


a) Cash in handb) Cheques, Drafts on handc) Balance with Banks :

- In Current Accounts- In Deposit Accounts (maturity less than 3 months)Total Cash and Cash Equivalents

Other Bank Balances(more than 3 months less than 12 months)

Total Cash and Bank Balances

145,1379,073

11,682,23826,000,000

151,902 1,016,055

18,149,861 12,000,000

37,836,448

1,161,089

31,317,818

1,198,111

38,997,537

32,515,929


118


Note 16 : SHORT TERM LOANS & ADVANCES

As at


` `

a) Loan to Employeesb) Advance with Public Bodiesc) Security Depositd) Prepaide) MAT credit entitlementf) Others

Less: Provision for Bad & Doubtful Loans & Advances

Of the above:- Secured Considered Good- Unsecured Considered Good- Doubtful

1,625,7952,891,582 6,472,309 1,872,957 3,088,207

758,212

771,024 3,780,841

7,080,009 2,410,874 1,098,000

2,386,099

16,719,062 50,000

17,526,847 100,000

16,669,062 17,426,847

-16,669,062

50,000

- 17,426,847

100,000

16,719,062 17,526,847

Note 17 : OTHER CURRENT ASSETS

As at


` `

Interest Accrued on Deposits 94,595 84,608

94,595 84,608


119


Note 18 : REVENUE FROM OPERATIONSFor the Year ended

31st March 2016For the Year ended

31st March 2015

` `

a) Sale of servicesi) Freightii) Charges Collect Feesiii) Delivery Order Feesiv) Clearing & Forwardingv) Warehousingvi) Others

b) Other operating revenuesi) Service Charge

Total

281,728,595

3,043,849 8,824,317

59,003,536 139,884,375 134,714,664

11,464,237

505,018,307 3,727,992 8,715,675

88,005,653 131,614,931 180,701,840

7,883,863

638,663,573 925,668,261

Note 19 : OTHER INCOME



` `

a) Dividend from Current Investments b) Liabilities no longer required written backc) Profit/(Loss) on Sale of Fixed Assest (net)d) Recovery of bad debte) Profit on Foreign Currency Transactions (net)f) Provision for Bad and Doubtful Debts written back (net)g) Interest on Deposits etc. h) Rental Incomeh) Other Non-Operating Income

1,195,347 3,617,229

57,434 22,600

3,838,915-

267,495 950,500128,621

620,948 4,562,544

10,546 16,674

6,678,248 38,139

188,602 -

166,991

10,078,141 12,282,692

Note 20 : OPERATING EXPENSE



` `

a) Freight Chargesb) Delivery Order Costsc) Clearing & Forwardingd) Warehousinge) Others

252,621,668 1,770,352 51,770,06980,196,29396,579,295

460,825,685 2,495,909

78,906,855 88,644,219

161,168,693

482,937,677 792,041,361

120


Note 21 : EMPLOYEE BENEFITS EXPENSEFor the Year ended


31st March 2015` `

a) Salaries and wages, including bonusb) Contribution to Provident and other Fundsc) Staff Welfare

67,898,309 3,567,440 4,852,918

74,997,514 6,428,217 3,222,438

76,318,667 84,648,169

Note 22 : FINANCE COSTS



` `

a) Interest on Secured Term Loanb) Interest on Unsecured Loan from related party

-7,660,683

2,501,333 6,326,175

7,660,683 8,827,508

Note 23 : OTHER EXPENSES



` `

a) Administrative Expenses - Power and Fuel - Rent

b) Repairs - Building- Others

c) Insuranced) Rates and Taxese) Assets/Capital Work-in-progress written offf) Provision for Bad and Doubtful Loans and Advancesg) Auditor's Remuneration:

- As Auditors- Other Services- Out of Pocket Expenses

h) Assets/ capital work-in- progress written offi) Bad Debts, Loans and Advances written off (Net)j) Miscellaneous Expenses

1,477,05311,457,470

365,130 2,355,583 1,664,462

531,421-

4,363,740

910,800 457,600 16,000

404,092 748,435

16,069,748

1,724,533 9,989,618

586,592 2,366,544 2,627,837

642,322 163,394100,000

660,000

110,000 3,700

163,394 1,292,447

18,436,115

40,821,534 387,03,102


121

TKM Global Logistics Ltd. Notes Forming part of Financial Statements of the year ended 31st March, 2016Additional Information to the financial statements

24. Contingent Liabilities 24.1. Outstanding Bank Guarantees - ` 75,000 (31.03.2015- ` 1,075,000)24.2. Service Tax - ` 667,763,367 (Comprising of Interest ` 222,587,789 & Penalty of ` 222,587,789) (31.03.2015-

` 667,763,367) The Service Tax Department has raised the demand on applicability of service tax on remittances made to Overseas

Logistics Service Providers by the company from Financial Year 2005-2006 to Financial Year 2009-2010. Company has filed an appeal against the demand and has obtained stay from Kolkata High Court against the pre-deposit demanded by the CESTAT Eastern Zone. The matter is pending with CESTAT Eastern Zone.

24.3. Other Matters – ` 6,661,085 ( 31.03.2015- ` 6,661,085)i) A case has been filed against the company by New India Assurance Company for ` 4,986,826 (31.03.2015 -

`4,986,826 ) for the cargo damage handled by the company in year 2008. Insurance company has paid the claim for damages to the consignee and has filed a claim for re-imbursement with the company. The matter is pending before Civil Court, Secunderabad.

ii) A case has been filed against the company by New India Assurance Company for ` 1,674,259 (31.03.2015 - ` 1,674,259) for the cargo damage handled by the company in year 2006. Insurance company has paid the claim for damages to the consignee and has filed a claim for re-imbursement with the company. The matter is pending before Civil Court, Hyderabad.

24.4. The Deputy Commissioner of Income Tax has passed a order under section 143(3) relating to FY 2010-11 on dated 5th May 2015 demanding ` 14,200,550 (31.03.15 - ` 14,200,550). Company has filed an appeal on 3rd June 2015 against the order. On 28th March 2016 the Company has deposited ` 2,140,000 which is 15% of the disputed amount.

24.5. The Assistant Commissioner of Income Tax has passed a draft order relating to FY 2011-12 on dated 17th February 2016 and disallowed ` 1,448,940 (31.03.15 - ` NIL) under section 14A of Income Tax Act 1961 read with Rule 8D of Income Tax Rule 1962. Expected consequent liability on the company is ` 470,109 (31.03.15 -` NIL)

24.6. The Deputy Commissioner of Income Tax (Transfer Pricing)-II,Kolkata has passed an order related to FY 2011-11 on dated 25th January 2016 and made a upward adjustment of ` 50,873,621 (31.03.15 - ` NIL) which is added back to the total income.Subsequently the company has filed letter on dated 10th March 2016 under section 154 and to rectify the mistake and our submission has been considered.The revised order dated 30th March 2016 has been received in which upward adjustment of ` 25,906,151 is made, Accordingly expected consequent liability on the company is ` 8,405,251 (31.03.15 - ` NIL)

24.7. Claim against the company not acknowledged as debt - ` 3,552,045 (31.03.15 -` 2,096,300)25. The year end foreign currency exposures that have not been hedged by a derivative instrument or otherwise are given below: As at 31st March 2016 amount receivable & payable are as below: Receivables:

As at 31st March 2016 As at 31st March 2015

Foreign Currency Amount in Foreign Currency

Amount in `

Amount in Foreign Currency

Amount in `

CAD – – 82 3,860 EUR 10,514 765,412 25,164 1,650,758GBP 197 18,169 1,034 92,760 JPY 113,143 64,831 - - CHF 82 5,425 353 21,773SGD 355 16,918 130 5,643USD 77,382 4,979,533 211,128 12,815,470

122



Payables:

Foreign CurrencyAs at 31st March 2016 As at 31st March 2015


Amount in `


Amount in `

AUD 587 30,656 - -

CHF 12,122 857,656 13,356 901,664

EUR 73,355 5,671,075 39,869 2,778,471

GBP 4,284 419,587 9,322 888,480

HKD - - 18,538 156,275

JPY 106,349 64,660 84,964 46,237

NOK 3,099 25,226

SGD 3,008 152,039 4,269 202,991

THB 66,976 134,742

USD 84,548 5,777,163 193,854 12,497,767

26. Earnings in Foreign Currency:

Particulars For the year ended 31st March 2016

For the year ended 31st March 2015

Freight, Agency Fees and related income 19,977,836 37,279,503

27. Expenditure in Foreign Currency (Accruals)

Particulars For the year ended 31st March 2016

For the year ended 31st March 2015

Freight 97,290,082 144,085,206

Travelling - 176,840

Total 97,290,082 144,262,046

123


28. The Terms of repayment of Long Term Borrowings and Short Term Borrowings as on 31st March, 2016 are as under:

28.1 UNSECURED LONG TERM LOAN FROM RELATED PARTY

(a) Loan from TM International Logistics Limited

(i) Period of Maturity : 31st March 2022

(ii) No. of Quarterly Principal Instalments : 29

(iii) No. of Instalments Outstanding : 24

(iv) Quarterly Principal Re-payment : ` 1,200,000

(v) Rate of Interest : Floating, Currently 10.50 %

(vi) Interest Payment Due Date : At the end of each month

Financial Year`

Yearly Principal Repayable

FY 2016-17 4,800,000

FY 2017-18 4,800,000

FY 2018-19 4,800,000

FY 2019-20 4,800,000

FY 2020-21 4,800,000

FY 2021-22 4,800,000

(b) Loan from TM Harbour Services Private Limited

(i) Rate of Interest : Floating, Currently 10.50 %

(ii) Interest Payment Due Date : At the end of each month

(iii) Period of Maturity :

Re-payment Date Amount in `

31st December 2016 30,000,000

29. Based on and to the extent of information obtained from suppliers regarding their status as Micro, Small or Medium Enterprises under the Micro, Small and Medium Enterprises Development Act, 2006 there are no amounts due to them as at the end of the year. The Company has not paid paid any interest during the year in terms of Sec 16 of The Micro, Small and Medium Enterprise Development Act, 2006.

124



30. Deferred Tax Liability/(Asset) Net

`

As at 31st March'15

Charge/ (credit) for the year

As at 31st March'16

Deferred Tax LiabilitiesDifference between Book and Tax Depreciation

Deferred Tax AssetsProvision for Doubtful Debts and AdvancesAdvancesLeave EncashmentCarry Foward Business Loss

Net Deferred Tax Liability/(Assets)

7,236,619

1,425,255 8,661,874

7,236,619 1,425,255 8,661,874

(1,299,270)

(4,178,302) (1,759,047)

(1,464,542)

(990,755) 1,759,047

(2,763,812)

(5,169,057)-

(7,236,619) (696,250) (7,932,869)

0 729,005 729,005

31. The Company has recognized, in the statement of profit and loss for the year, an amount of ` 3,570,864 (Previous year :

` 3,575,731) expenses under defined contribution plans.

`

Benefit (Contribution to) 31st March 2016 31st March 2015

Provident Fund 2,205,091 2,470,265

Employees Pension Scheme 1,365,773 1,098,492

Superannuation Fund 100,000 100,000

Employees State Insurance - 6,974

Total 3,670,864 3,675,731

31.1. The company operates post retirement defined benefit plans as follows: a. Funded (i) Post Retirement Gratuity

125


31.2. Gratuity Scheme

`

Description 31st March 2016 31st March 2015

1. Reconciliation of opening and closing balances of obligationa. Obligation as at 01.04.2015 b. Current Service Costc. Interest Costd. Actuarial Losse. Benefits paidf. Acquisitionsg. Plan Amendmentsh. Obligation as at 31.03.2016

12,041,110 1,366,000

932,710333,190

(469,210) - -

14,203,800

10,315,0301,339,980

896,190 1,242,390(714,800)

(774,800)(262,880)

12,041,110

2. Change in Plan Assets (Reconciliation of opening & closing balances)a. Fair value of plan assets as at 01.04.2015b. Acquisitionsc. Expected return on plan assetsd. Actuarial Gaine. Contributions from Employerf. Benefits paidg. Fair value of plan assets as at 31.03.2016

9,088,130-

772,7702,017,930 1,612,101 (469,211)

13,021,720

7,609,710

- 642,220

- 1,551,000 (714,800) 9,088,130

3. Reconciliation of fair value of assets and obligationsa. Fair value of plan assets as at 31.03.2016b. Present value of obligation as at 31.03.2016c. Unrecognized past service costsd. Amount recognized in the balance sheet

13,021,72014,203,800

- (1,182,080)

9,088,130 12,041,110

- (2,952,980)

4. Expense recognized during the yeara. Current service costb. Interest costc. Expected return on plan assetsd. Past Service Coste. Actuarial Lossf. Expense recognized during the year

1,366,000932,710

(772,770)-

1,684,740(158,800)

1,339,980896,190

(642,220)(262,880)1,242,390

2,573,460

The expense is disclosed in the line item - Contribution to Provident & other funds under Employee benefit expenses in note 21

5. Assumptionsa. Discount rate (per annum)b. Estimated rate of return on plan assets (per annum)c. Rate of escalation in salary (per annum)

7.75%8.00%9.00%

7.90%8.00%9.00%

Investment details are not available, all contributions are deposited and managed by Life Insurance Corporation of India.

126


TKM Global Logistics Ltd. Notes Forming part of Financial Statements of the year ended 31st March, 20166. Information for current and previous years 31st March

201631st March

201531st March

201431st March

201331st March

2012I. (a) Present value of defined benefit obligation

(b) Fair value of Plan Assets(c) Surplus/(Deficit) in Plan Assets

II. (a) Experience gain/(loss) adjustment on plan liabilities(b) Experience gain/(loss) adjustment on plan assets

III.Expected contribution (best estimate) to funded plans in subsequent financial year.

14,203,80013,021,720(1,182,080)

69,050-

1,182,080

12,041,110 9,088,130

(2,952,980)

350,780 -

2,952,980

10,315,030 7,609,710

(2,705,320)

(182,580) -

2,705,320

8,839,390 6,697,590

(2,141,800)

(563,640) -

2,141,800

7,362,440 5,979,160

(1,383,280)

(567,490) -

1,383,280

32. Earnings Per Share ( EPS ) :

For the year 31st March 2016

For the year 31st March 2015

Profit/(Loss) after Tax (`) 30,109,263 9,470,035Profit/(Loss) attributable to Shareholders (`) 30,109,263 9,470,035Weighted average No. of Shares for Basic EPS 3,600,000 2,446,027Nominal value of Equity Shares (`) 10.00 10.00Basic/Diluted Earning per Share (`) 8.36 3.87

33. In accordance to section 135 of Companies Act 2013, the company has incurred ` 404,092 as CSR expenditure. Under the CSR activities, the company has contributed `210,000 to Chind in Need Institute (CIN).

In cash Yet to be paid in cash Total(i) Construction/acquisition of any asset - - - (ii) On purposes other than (i) above 210,000 194,092 404,092

34. Related Party Disclosures a) List of Related Parties & Relationships. Holding Company (1) Tata Steel Limited --- Ultimate Holding Company (2) TM International Logistics Limited --- Holding Company Subsidiary (1) TKM Global GmbH (2) TM Harbour Services Private Limited (3) TKM Global China LimitedFellow Subsidiaries (1) Tayo Rolls Limited (2) Indian Steel & Wire Products (3) Tata Steel Asia HK Limited (4) Centennial Steel Company Limited (5) Tata Steel UK Limited (6) International Shipping and Logistics,FZE (7) Natsteel Holding Pte Ltd. (8) Jamshedpur Continuous Annealing and Processing Pvt. Ltd. (9) Tata Metaliks Ltd. (10) The Tinplate Company of India Ltd . # Company with which there are transactions during the current and previous year.

127

TKM Global Logistics Ltd. Notes Forming part of Financial Statements of the year ended 31st March, 2016b) Transactions with Related Parties `

Particulars

Ultimate Hold-ing Company

Holding Company Subsidiary

CompanyFellow

Subsidiaries TotalTATA Steel Ltd. TM International

Logistics Ltd.Rendering of Services 194,592,223 368,242 14,315,772 37,495,576 246,771,813

(167,468,406) (2,581,156) (25,857,931) (101,978,328) (297,885,821)Receiving of services - 6,459,079 40,120,550 - 46,579,628

- (927,102) (62,774,622) - (63,701,724)Loan Received - - - - -

- (34,000,000) - - (34,000,000)Loan Re-paid - 4,800,000 15,000,000 - 19,800,000

- (1,200,000) (5,000,000) - (6,200,000)Interest Paid - 3,255,000 4,405,685 - 7,660,685

- (1,163,917) (5,162,260) - (6,326,177)Reimbursement Received 49,588,493 7,662,794 - 38,572,397 95,823,684

(74,222,927) (8,019,464) (3,469,032) (80,249,567) (165,960,990)Reimbursement Paid - 6,516,620 16,321 - 6,532,941

(12,579) (12,643,572) (67,474) - (12,723,625)Bad Debt written off - 60,000 - 213,260 273,260

(97,129) - - (55,470) (152,599)Provision against Debtors 704,659 60,000 - 160,819 925,478

(28,423) - - - (28,423)Rental Income - - - 950,500 950,500

- - - - - Security Deposit Received - - - 200,000 200,000

- - - - - Director Candidature Fees Received - 200,000 - - 200,000

- - - - - Director Candidature Fees Paid - 200,000 - - 200,000

- - - - - Issue of Share Capital - - - -

- (18,000,000) - - (18,000,000)Outstanding Loan Payable as on 31-03-16as on 31-03-15

28,000,000 30,000,000 - 58,000,000 (32,800,000) (45,000,000) - (77,800,000)

Outstanding Receivables as on 31-03-16as on 31-03-15

72,354,226 796,706 3,464,183 3,784,629 80,399,745 (58,385,049) (485,209) (4,436,410) (19,823,737) (83,130,405)

Outstanding Payables as on 31-03-16as on 31-03-15

- 800,809 6,969,331 200,000 7,970,139 - (589,487) (9,346,202) - (9,935,689)

Advance From Customers as on 31-03-16as on 31-03-15

56,602 - - 190,721 247,323 (29,898) - - (135,312) (165,210)

Provision for Doubtful Debts as on 31-03-16as on 31-03-15

721,742 - - 155,896 877,638 (28,423) - - - (28,423)

Advance to Parties as on 31-03-16as on 31-03-15

- 147 - - 147 - - - - -

128


c) Details of transactions and closing balances with fellow subsidiaries (included under column ‘Fellow subsidiaries’ in ‘b’ above) the amount of which in excess of 10% of the total related party transaction of the similar nature

Nature of Transaction Name of Company Fellow Subsidiaries Subsidiaries

Rendering of Services

Tayo Rolls Ltd. 786,225 - (18,691,252) -

Tata Steel Asia HK Ltd. - -(39,808,288) -

The Tinplate Co. of India Ltd. 16,764,815 - (38,667,264) -

Tata Steel Processing and Distribution Company Ltd. 9,693,649 - - -

International Shipping Logistics FZE 6,720,000 - - -

TKM Global GmbH - 10,950,652 - (20,866,993)

TKM Global China Ltd. - 3,365,119 - (4,990,938)

Rental Income The Tinplate Co. of India Ltd. 950,500 - - -

Receiving of ServicesTKM Global GmbH - 18,799,018

- (21,238,697)TKM Global China Ltd. - 21,321,532

- (41,535,925)

Reimbursement ReceivedTata Steel Asia HK Ltd. 37,193,762 -

(76,984,425) -

TKM Global GmbH - -- (3,457,325)

Reimbursement Paid TKM Global China Ltd. - 16,321- (67,474)

Bad Debts Written Off The Tinplate Co. of India Ltd. 213,260 - (55,470) -

Provision for Debtors during the period Tayo Rolls Ltd. 155,896 -- -

Loan Repayment during the year TM Harbour Services Pvt. Ltd. - 15,000,000- (5,000,000)

Interest Paid TM Harbour Services Pvt. Ltd. - 4,405,685- (5,162,260)

Debit Balance Outstanding as on 31.03.16

Outstanding Receivables

Tata Steel Processing and Distribution Company Ltd. 414,953 -

- -

The Tinplate Co. of India Ltd. 55,863 - (12,395,626) -

Tata Steel Asia HK Ltd. 3,194,461 -

(5,080,882) -

Tayo Rolls Ltd.- -

(2,051,960)

TKM Global GmbH - 3,011,069 - (3,573,874)

TKM Global China Ltd. - 453,115 - (862,536)

Credit Balance Outstanding as on 31.03.16

Outstanding Payables

TKM Global GmbH- 4,851,974

- (1,004,179)

TKM Global China Ltd. - 2,117,357

- (8,342,023)

The Tinplate Co. of India Ltd. 200,000 - - -

Provision for Debtors Tata Steel Asia HK Ltd. 155,896 - - -

Loan Payable TM Harbour Services Pvt. Ltd.- 30,000,000

(45,000,000)

Advance from CustomersTayo Rolls Ltd.

79,933 -

(79,933) -

The Tinplate Co. of India Ltd. 100,346 -(55,379) -

35. Previous year's figures have been regrouped/restated wherever necessary. For and on behalf of the Board of Directors Sd/- Sd/- Anand Chand R N Murthy Chief Financial Officer and Company Secretary Managing Director

Kolkata, 20th April , 2015 Kolkata, 20th April , 2015

129

International Shipping and Logistics FZE

130



INTERNATIONAL SHIPPING AND LOGISTICS FZE, DUBAI(As on 16th April, 2016)

Board of Directors

ChairmanMr. R. N. Murthy

DirectorsMr. Guenther HahnMr. Jayant ChakrabortyMr. Sabyasachi Hajara

Director & Chief Executive OfficerCapt. S. R. Patnaik

Registered Office

Office No. TPOFCA 0140Techno Park, Jebel AliP.O. Box: 18490Dubai, UAE

Branch Office

Jumeirah Business Centre 5Cluster W Office No. 1604 to 1606Jumeirah Lakes TowersP.O Box: 18490Dubai, U.A.E

Tel: 00971-4-4508953Fax: 00971-4-4508941

Management Team

Capt. S. R. Patnaik -- Director & CEOMr. M. Krishnamurthy – GM CommercialCapt Sudhir Kunnath – Head OperationsMr. Deepak Agarwal – Head F & A Mr. Partha Sarthi Pal – Head Commercial & Projects

AuditorsM/s. Pannell Kerr ForsterChartered AccountantsDubai

BankersCiti Bank N.A State Bank of BahrainICICI BahrainHDFC Bahrain

131

INTERNATIONAL SHIPPING AND LOGISTICS FZE

Directors’ Report

To the Members,

The Directors hereby present their twelfth report on the business and operations of the Company and the audited financial account for the year ended 31st March, 2016.

The Company was formed on 1st February, 2004 as a Free Zone Establishment with limited liability pursuant to Law No. 9 of 1992 of H.H. Sheikh Maktoum Bin Rashid Al Maktoum, Ruler of Dubai and implementing Regulations issued thereunder by the Jebel Ali Free Zone Authority.

The Company is a wholly owned subsidiary of TM International Logistics Ltd., which is incorporated in India.

FINANCIAL RESULTS

31.3.2016 31.3.2016 31.3.2015 31.3.2015 Amount in Amount in Amount in Amount in Rs. USD Rs. USD

(a) Revenue 2,171,146,593 33,158,658 4,042,737,688 66,132,150

(b) Less: Direct Costs 2,068,455,126 31,590,311 3,958,446,811 64,753,298

(c ) Gross Profit 102,691,467 1,568,347 84,290,877 1,378,852

(d) Less: Administrative & Other expenses 256,045,902 3,910,440 160,224,692 2,620,997

(e ) Profit from Operating Activities (153,354,434) (2,342,093) (75,933,814) (1,242,145)

(f) Add: Interest on Fixed Deposit &

Other operating Income 42,825,177 654,044 50,203,815 821,247

(g) Net Profit Before Tax for the year (110,529,257) (1,688,049) (25,730,000) (420,898)

(h) Current Tax Expense 2,466,080 37,663 6,343,462 103,768

(i) Profit After Tax for the year (112,995,337) (1,725,712) (32,073,462) (524,666)

During the year under review, total revenue of the Company was USD 33.15 Million (Rs. 2171.14 million) as against USD 66.13 Million (Rs. 4042.73 million) for the previous year. The Company made a loss of USD 1.72 Million (Rs. -112.99 million) as against net loss of USD 0.52 Million (Rs. -32.07 million) in the previous year.

132


DIVIDEND

Considering the performance of the Company, the Directors do not recommend payment of any dividend for the year under Report.

OPERATIONAL REVIEW

The following are the operational highlights of the Company during FY 15-16:

In FY 15-16, the Company took a conscious call to reduce volume and top line and focus on profitable cargoes. ISL’s performance saw a fall in volumes and revenue with respect to the previous year. Results for the year was negatively affected by provision for doubtful debts of USD 2.27 Million and hence the PAT for the year stood at USD (1.725) Million.

Despite the unfavorable market conditions, ISL was able to make positive contribution for various cargoes handled.

During the last quarter of FY 15-16 there was a significant improvement in the performance of the Company. This has been possible due to the highly profitable voyages of Dolomite and the overall reduction in loss making voyages.

The total cargo volume handled in the FY 15-16 was 3.30 Million Mts as compared to last year’s performance of 6.20 Million Mts. This has resulted in a decrease in turnover of $ 33.15 Million in FY 15-16 from $ 66.15 Mn in FY 14-15. The major cargoes handled during the year were Coal and Cement. The Company handled a Coal Cargo quantity of 1.90 Million MT which is close to the previous high of 1.99 Million Mt in FY 14-15.

The percentage and quantum of loss making vessels has drastically reduced in comparison to last year. In FY 14-15 it was 30% and in FY 15-16 it is 17%. Contribution loss from underperforming voyages in FY 15-16 dropped to $.38 Million from a level of $ 2.06 Million in FY. There was a 41% drop in the profit making vessel contribution from $3.48 Million in FY 14-15 as compared to $2.05 Million in FY 15-16.

NEW INITIATIVES / ACHIEVEMENTS:

l Duqm Port, Oman handled its first bulk shipment through ISL’s chartered Supramax vessel MV Cebihan in March 2016 carrying 50,000 MT of Dolomite;

l An all-time high of 6 nos. of Capesize shipments handled and 13 new customers added;

l Won the London arbitration against PEC Limited ‘A Landmark judgement’;

133

MARKET REPORT:

l The year 2015 has experienced a downturn worse than that of the global recession of 2008. The Baltic Dry Index on February 11, 2016, reached the lowest point in its 31-year history at 290. Average BDI for FY 15-16 was 650.50 as compared to 900 in FY 14-15.

l The index has lost about 97 percent of its value from a peak of 11,793 in May 2008.

l The daily average time charter rates for all segments reached as low as $2000 (Cape $1000).

l Several companies have filed for bankruptcy / Protection and many closely held companies have gone out of business for the past one year.

l The supply growth is expected to outpace demand growth in 2016 by more than 2%.

l The market is expected to remain low at least for the next two years and Moody’s has switched its outlook on the global shipping sector to negative.

l Tonnages are at a 30 year low historical price.

l Ship brokers estimate that 690 dry bulk ships (i.e., 7% of global fleet) are currently sitting idle.

OPPORTUNITIES & THREATS

a. Opportunities

l Indian Coastal Business: Bulk and Break Bulk movement are being encouraged

l Providing Shipping support to end to end Logistics Service providers in India - PG Region.

l Currently the ship acquisition prices are at historical low levels providing shipping companies investment opportunities.

b. Threats

l Cargo demand growth is close to zero, hence supply / demand gap continues to be unfavourable.

l Owners are targeting operators market – hence increase in competition.

l Volatility in bunker price still persists.

l Counter Party Risk: Inadequate liquidity and poor market conditions.

134


BOARD OF DIRECTORS

During the financial year under review, 4 (Four) meetings of the Board of Directors of the Company were held.

As on 31st March, 2016, Mr. R. N. Murthy, Mr. Guenther Hahn, Mr. Sabyasachi Hajara, Mr. Jayant Chakraborty and Capt. S. R Patnaik continued as Directors on the Board of the Company.

None of the Directors of the Company are disqualified under Section 164 of the Companies Act, 2013.

DIRECTORS’ RESPONSIBILITY STATEMENT

As required under Section 134(3) (c) & 134 (5) of the Companies Act 2013, your

Directors confirm having :

l followed in the preparation of the Annual Accounts, the applicable accounting standards and that there are no material departures;

l selected such accounting policies and applied them consistently and made judgements and estimates that are reasonable and prudent so as to give true and fair view of the state of affairs of the Company at the end of financial year and of the profit of the Company for that period;

l taken proper and sufficient care for the maintenance of adequate accounting records in the 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;

l prepared the Annual Accounts on a going concern basis; and

l devised proper systems to ensure compliance with the provisions of all applicable laws and the same are adequate and operating effectively.

AUDITORS

The Auditors of the Company M/s. Pannell Kerr Forster, Chartered Accountants, have offered themselves for re-appointment.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

Information as per Section 134(3) (m) of the Companies Act, 2013 and Rule 8(3) of Companies (Accounts) Rule, 2014

A. Conservation of Energy: The Company is not a major consumer of energy.

B. Technology Absorption: Nil

135

C. Foreign exchange earnings & outgo: There were no earnings in foreign exchange from freight and related income and no expenses in foreign exchange on account of freight payment, purchase of fixed assets, administrative expenses etc.

ACKNOWLEDGEMENT

The Directors wish to take the opportunity to place on record their sincere appreciation and gratitude for the continued assistance, support and co-operation extended by all the customers, vendors, business partners, Government Authorities, Bankers, TM International Logistics Ltd., the holding company and other business associates for their continued support during the year. We place on record our appreciation of the contribution made by our employees at all levels.


Sd/-

R. N. Murthy Chairman

Place: Dubai Capt. S. R. PatnaikDate: 16th April, 2016 Director & CEO

136


INDEPENDENT AUDITOR’S REPORT

The Shareholder

INTERNATIONAL SHIPPING AND LOGISTICS FZE


We have audited the accompanying financial statements of INTERNATIONAL SHIPPING AND LOGISTICS FZE (‘’the establishment’’), which comprise the Balance Sheet as at 31 March 2016, the Statement of Profit and Loss, the Cash Flow Statement for the year then ended, and a summary of significant accounting policies and other explanatory information set out on pages 9 to 26.

Management’s Responsibility for the Financial Statements

The establishment’s Board of Directors is responsible for the matters in section 134(5) of the Companies Act, 2013 (“the Act”) with respect to the preparation and presentation of these financial statements that give a true and fair view of the financial position, financial performance and cash flows of the establishment in accordance with the accounting principles generally accepted in India, including the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014. This responsibility also includes the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the establishment and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditor’s Responsibility

Our responsibility is to express an opinion on these financial statements based on our audit. We have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made there under.

We conducted our audit in accordance with the Standards on Auditing specified under section 143(10) of the Act. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free

137

from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial control relevant to the establishment’s preparation of the financial statements that give true and fair view in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on whether the establishment has in place an adequate internal financial controls system over financial reporting and the operating effectiveness of such controls. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by establishment's directors, as well as evaluating the overall presentation of the financial statements.


Opinion

In our opinion and to the best of our information and according to the explanations given to us, the aforesaid financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the state of affairs of the establishment as at 31 March 2016, and its loss and its cash flows for the year ended on that date.


1. As required by the Companies (Auditor’s Report) Order, 2015 (‘’the Order”) issued by the Central Government of India in terms of Section 143(11) of the Act, we give in the Annexure A, statement on the matters specified in paragraphs 3 and 4 of the Order.

2. As required by section 143(3) of the Act, we report that:

a. we have sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of our audit;

b. in our opinion, proper books of account as required by law have been kept by the establishment so far as it appears from our examination of those books;

c. the Balance Sheet, and the Statement of Profit and Loss and the Cash Flow Statement dealt with by this report are in agreement with the books of account;

138


d. in our opinion, the aforesaid financial statements comply with the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014;

e. on the basis of the written representations received from the directors as on 31 March 2016, taken on record by the Board of Directors, none of the directors is disqualified as on 31 March 2016, from being appointed as a director in terms of Section 164(2) of the Act;

f. with respect to the adequacy of the internal financial controls over financial reporting of the establishment and the operating effectiveness of such controls, refer to our separate report in “Annexure B”; and

g. with respect to the other matters to be included in the Auditor's Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, in our opinion and to the best of our information and according to the explanations given to us:

i. the establishment did not have any pending litigations;

ii. the establishment did not have any long-term contracts including derivative contracts for which there were any material foreseeable losses; and

iii. there were no amounts which were required to be transferred to the Investor Education and Protection Fund by the establishment.

PKF

Dubai

United Arab Emirates

April 2016

139

Annexure – A to the Independent Auditor’s Report

(Referred to in paragraph 1 under ‘Report on Other Legal and Regulatory Requirements’ section of our report of even date)

(i) (a) The establishment has maintained proper records showing full particulars, including quantitative details and situation of fixed assets.

(b) The establishment has a regular programme of physical verification of fixed assets which, in our opinion, is reasonable having regard to the size of the establishment and the nature of its assets. No material discrepancies were noticed on verification.

(c) According to the information and explanations given to us and on the basis of our examination of the records of the establishment, the title deeds of immovable properties are held in the name of the establishment.

(ii) The establishment has no inventory. Accordingly, clauses 3(ii) (a), (b) and (c) of the Companies (Auditor’s Report) Order, 2015 are not applicable to the establishment.

(iii) According to the books and records maintained by the establishment and the information and explanations given to us, the establishment has neither granted nor taken any loans, secured or unsecured to/from companies, firms or other parties listed under Section 189 of the Companies Act, 2013.

(iv) In our opinion and according to the information and explanations given to us, the Establishment has complied with the provisions of section 185 and 186 of the Act, with respect to the loans and investments made.

(v) In our opinion and according to the information and explanations given to us, the establishment has not accepted any deposits from the public.

(vi) To the best of our knowledge and as explained, the Central Government has not prescribed maintenance of cost records under sub-section (1) of section 148 of the Companies Act, for the services of the establishment.

(vii)(a) The establishment is regular in depositing with appropriate authorities undisputed statutory dues including provident fund, investor education and protection fund, employees’ state insurance, income-tax, sales-tax, wealth-tax, service-tax, customs duty, excise duty, cess and other material statutory dues applicable to it.

(b) According to the records of the establishment, the dues outstanding of income-tax, sales-tax, wealth-tax, service-tax, customs duty, excise duty and cess on account of any dispute, are as follows:

Name of the statue Nature of dues Amount (US$)

Period to which the amount

relate

Forum where dispute is pending

The Income Tax Act, 1961

Additional tax demand

2,564 2009-10 Income Tax Officer (Kolkata)

The Income Tax Act, 1961

Additional tax demand

1,370 2010-11 Income Tax Officer (Kolkata)

140


(c) There were no amounts which were required to be transferred to the Investor Education and Protection Fund in accordance with the relevant provisions of the Companies Act 1956 (1 of 1956) and rules made there under.

(viii) The establishment does not have any dues towards financial institution, bank or debenture holders.

(ix) According to the information and explanations given to us, the establishment has not raised any money by way of initial public offer and term loans during the year under audit.

(x) According to the information and explanations given to us, no fraud on or by the establishment has been noticed or reported during the course of our audit.

(xi) According to the information and explanations give to us and based on our examination of the records of the establishment, the establishment has paid/provided for managerial remuneration in accordance with the requisite approvals mandated by the provisions of section 197 read with Schedule V to the Act.

(xii) In our opinion and according to the information and explanations given to us, the establishment is not a nidhi company. Accordingly, paragraph 3(xii) of the Order is not applicable.

(xiii) According to the information and explanations given to us and based on our examination of the records of the establishment, transactions with the related parties are in compliance with sections 177 and 188 of the Act where applicable and details of such transactions have been disclosed in the financial statements as required by the applicable accounting standards.

(xiv) According to the information and explanations give to us and based on our examination of the records of the establishment, the establishment has not made any preferential allotment or private placement of shares or fully or partly convertible debentures during the year.

(xv) According to the information and explanations given to us and based on our examination of the records of the establishment, the establishment has not entered into non-cash transactions with directors or persons connected with him. Accordingly, paragraph 3(xv) of the Order is not applicable.

(xvi) The establishment is not required to be registered under section 45-IA of the Reserve Bank of India Act, 1934.

PKF

Dubai

United Arab Emirates

April 2016

141

Annexure - B to the Auditors’ Report

Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section 143 of the Companies Act, 2013 (“the Act”)

We have audited the internal financial controls over financial reporting of INTERNATIONAL SHIPPING AND LOGISTICS FZE (‘’the establishment’’) as of 31 March 2016 in conjunction with our audit of the standalone financial statements of the establishment for the year ended on that date.

Management’s Responsibility for Internal Financial Controls

The establishment’s management is responsible for establishing and maintaining internal financial controls based on the internal control over financial reporting criteria established by the Establishment considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls over Financial Reporting issued by the Institute of Chartered Accountants of India (‘ICAI’). These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to establishment’s policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Companies Act, 2013.

Auditors’ Responsibility

Our responsibility is to express an opinion on the establishment's internal financial controls over financial reporting based on our audit. We conducted our audit in accordance with the Guidance Note on Audit of Internal Financial Controls over Financial Reporting (the “Guidance Note”) and the Standards on Auditing, issued by ICAI and deemed to be prescribed under section 143(10) of the Companies Act, 2013, to the extent applicable to an audit of internal financial controls, both applicable to an audit of Internal Financial Controls and, both issued by the Institute of Chartered Accountants of India. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls over financial reporting was established and maintained and if such controls operated effectively in all material respects.

Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls system over financial reporting and their operating effectiveness. Our audit of internal financial controls over financial reporting included obtaining an understanding of internal financial controls over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error.

142


We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the establishment’s internal financial controls system over financial reporting.

Meaning of Internal Financial Controls over Financial Reporting

A establishment's internal financial control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A establishment's internal financial control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the establishment; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the establishment are being made only in accordance with authorisations of management and directors of the establishment; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorised acquisition, use, or disposition of the establishment's assets that could have a material effect on the financial statements.



Opinion

In our opinion, the establishment has, in all material respects, an adequate internal financial controls system over financial reporting and such internal financial controls over financial reporting were operating effectively as at 31 March 2016, based on the internal control over financial reporting criteria established by the establishment considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India.

PKFDubaiUnited Arab EmiratesApril 2016

143

International Shipping and Logistics FZE Balance Sheet as at 31st March 2016

Notes 2016`

2016USD

2015`

2015USD

I. EQUITY AND LIABILITIES(1) Shareholder's funds

(a) Share capital(b) Reserves and surplus

(2) Non-current liabilitiesLong Term Provisons

(3) Current liabilities(a) Trade payables(b) Other current liabilities(c.) Short-term provisions

3

4

678

9101112

13141617

12,382,249 2,013,997,083

273,748 31,043,230

12,382,249 2,008,817,206

273,748 32,768,942

2,026,379,332 31,316,978 2,021,199,455 33,042,690

22,820,110

51,132,517 130,636,876

286,558

344,024

770,847

1,969,413 4,320

27,554,983

82,465,380 64,461,063

236,009

442,381

1,323,939 1,034,889

3,789 182,055,951 2,744,580 147,162,451 2,362,617

TOTAL EQUITY AND LIABILITIES 2,231,255,392 34,405,582 2,195,916,890 35,847,688 II. ASSETS

(1) Non-current assets(a) Fixed assets

Tangible assetsIntangible assets

(b) Investment in associate(c) Other non-current assets

60,202,304 2,923,506

178,720,010 559,580,630

907,578 44,073

3,462,636 8,435,944

61,008,631 4,439,756

178,720,010 557,458,268

979,462 71,278

3,462,636 8,949,704

801,426,450 12,850,231 801,626,665 13,463,080 (2) Current assets

(a) Trade receivables(b) Cash and cash equivalents(c) Short-term loans and advances(d) Other current assets

70,961,344

1,178,888,132 29,924,629

150,054,837

1,069,776 17,772,299

451,128 2,262,148

219,021,822 1,043,407,846

81,839,449 50,021,108

3,516,282 16,751,373 1,313,890

803,063 1,429,828,942 21,555,351 1,394,290,225 22,384,608

TOTAL ASSETS 2,231,255,392 34,405,582 2,195,916,890 35,847,688 The accompanying notes form an integral part of these financial statements.

The report of the independent auditor is set forth on pages 1 to 5.

We confirm that we are responsible for these financial statements, including selecting the accounting policies and making the judgments underlying them. We confirm that we have made available all relevant accounting records and information for their compilation.

Authorised for issue by the Board of Directors on 16 April 2016.

For INTERNATIONAL SHIPPING AND LOGISTICS FZE

Sd/-SOUMYA RANJAN PATNAIKCEO & DIRECTOR

144


International Shipping and Logistics FZE Statement of Profit and Loss for the year ended 31st March 2016

Notes 2016 2016 2015 2015

Rupees USD Rupees USD

I. REVENUE1819

20212223

2,171,146,582 42,825,177

33,158,658 654,044

4,042,739,892 50,203,842

66,132,150 821,247

Revenue Other income

II. TOTAL REVENUE 2,213,971,759 33,812,702 4,092,943,734 66,953,397

EXPENSESDirect costsEmployee benefit expensesDepreciation expensesOther expenses

2,068,455,115 68,343,533 8,106,640

179,595,727

31,590,311 1,043,771

123,808 2,742,861

3,958,448,969 79,381,352 8,416,854

72,426,575

64,753,298 1,298,540

137,685 1,184,772

TOTAL EXPENSES 2,324,501,016 35,500,751 4,118,673,750 67,374,295

III. Loss before tax (I-II)

IV. Tax expenses

V. Loss for the year (III-IV)

VI. Earning per equity share:Basic

(1,688,049) (25,730,015) (420,898)

2,302,386 37,663 6,343,466 103,768

(112,831,643) (1,725,712) (32,073,481) (524,666)

(112,831,643) (1,725,712) (32,073,481) (524,666)

The accompanying notes form an integral part of these financial statements.

The report of the independent auditor is set forth in financial statements.

145

International Shipping and Logistics FZE Statement of Changes in Equity for the year ended at 31st March 2016

Share capital

`

Retained earn-ings

`

Total`

Share capitalUSD

Retained earningsUSD

TotalUSD

Balance at 1.4.2014Effect of foreign ExchangeLoss for the year

12,382,249 - -

1,974,169,506 66,721,181

(32,073,481)

1,986,551,755 66,721,181

(32,073,481)

273,748 - -

33,293,608 -

(524,666)

33,567,356 -

(524,666)

Balance at 31.03.2015Effect of foreign ExchangeLoss for the year

Balance at 31.03.2016

12,382,249 - -

2,008,817,206 118,175,213

(112,995,336)

2,002,657,138 118,175,213

(112,995,336)

273,748 - -

32,768,942 -

(1,725,712)

33,042,690 -

(1,725,712)

12,382,249 2,013,997,083 2,026,379,332 273,748 31,043,230 31,316,978


The report of the independent auditor is set forth in financial statements.

146


International Shipping and Logistics FZE Cash Flow Statement for the year ended at 31st March 2016

Notes 2016`

2016USD

2015`

2015USD

Cash flows from operating activitiesLoss for the year before taxAdjustments for:Depreciation on Tangible assetsAmortisation on Intangible assetsProvision for Bad and doubtful DebtsUnrealised exchange LossCredit Balances written backExcess Provision no longer required written back Profit/(Loss) on disposal of assets (net)Interest incomeOperating profit/(Loss) before changes in operating assets and liabilitiesDecrease in Trade Receivables(Increase)/Decrease in Short-Term Loans & Advances(Increase)/ decrease in other Non Current Assets(Increase)/ decrease in other Current Assets(Decrease)/Increase in Trade PayablesIncrease in other Long-Term Liabilities(Decrease)/ increase in other Current LiabilitiesIncrease in Short Term Provisions (net)Cash(used in)/ from operationsTaxes paidNet cash(used in)/ from operating activitiesCash flows from investing activitiesPayment for Tangible AssetsPayment for Intangible AssetsPayment for additional investments in associateProceeds from disposal of tangible assets(Increase)/Decrease in Fixed deposits (net)Interest receivedNet cash used in investing activities Net decrease in cash and cash equivalents Cash and cash equivalents at beginning of year Effect of foreign Exchange

14

(110,529,257)

6,325,325 1,781,316

147,998,896 - -

(9,284,384) (408,645)

(32,210,879)

(1,688,049)

96,603 27,205

2,260,301 - -

(141,795) (6,241)

(491,938)

(25,730,014)

6,884,966 1,531,888

34,343,405 1,910,351

(17,635,383) -

16,811 (32,075,864)

(420,898)

112,626 25,059

561,798 31,250

(288,484) -

275 (524,705)

3,672,372

12,351,518 57,229,505

308,647 (56,852,469) (27,282,523) (6,524,305) 61,989,687

35,223 44,927,655 2,498,296

56,086

186,205 862,762

4,653 (857,078) (411,297) (98,357) 934,524

531 678,029 37,663

(30,753,840)

196,042,320 16,877,093

(140,708) 144,936,157

(204,570,281) (15,000,421)

(143,831,544) 10,141,342

(26,299,881) (6,463,491)

(503,079)

3,147,358 270,953 (2,259)

2,326,875 (3,284,270)

(240,824) (2,309,141)

162,814 (431,573) (103,768)

47,425,951 640,366 (32,763,372) (535,341)

(1,639,683)

- -

413,984 (173,693,495)

12,076,767

(24,719) - -

6,241 (2,618,512)

182,063

(800,150) (837,212)

(91,104,525) 59,672

84,013,733 26,066,614

(12,846) (13,441)

(1,462,636) 958

1,348,797 418,486

(162,842,427) (115,416,476)

239,647,774 10,614,201

(2,454,927) (1,814,561)

3,847,421 -

17,398,132 (15,365,240) 246,616,164

8,396,851

279,318 (256,023) 4,103,444

-

Cash and cash equivalents at end of year 134,845,499 2,032,860 239,647,774 3,847,421 Note:The above Cash Flow statement has been prepared under the indirect method as set out in Accounting Standard 3 (AS 3) 'Cash Flow Statements' as specified in Companies (Accounting Standards) Rules, 2006The accompaying notes form an integral part of these interim financial statements

147

International Shipping and Logistics FZE Notes to the Financial Statements for the year ended at 31st March 2016

1. LEGAL STATUS AND BUSINESS ACTIVITY

a) INTERNATIONAL SHIPPING AND LOGISTICS FZE (the 'establishment') was incorporated on 1 February 2004 in the

Jebel Ali Free Zone pursuant to Law No. 9 of 1992 of late H.H. Sheikh Maktoum Bin Rashid Al Maktoum, the former Ruler

of Dubai. The establishment is a wholly owned subsidiary of T.M. International Logistics Limited, India (the 'parent'), which is

a joint venture between Tata Steel Limited, India, IQ Martrade Holding and Management GmbH, Dusseldorf, Germany and

NYK Holding (Europe) B.V. Netherland. Prior to this, the parent company was a joint venture between Tata Steel Limited,

India and IQ Martrade Holding and Management GmbH, Dusseldorf, Germany. The registered office is located at P.O. Box

18490, Dubai, UAE.

b) The establishment's principal activity is chartering of vessels and transporting marine cargo on behalf of its customers.

c) In the year 2011, the establishment has registered a branch in Dubai Multi Commodity Centre Authority (DMCC), which

operates under the name 'International Shipping and Logistics FZE'. These financial statements include the assets, liabilities

and operating results of the branch.

2. SIGNIFICANT ACCOUNTING POLICIES

The financial statements are prepared under the historical cost convention on accrual basis and are in compliance with the

Accounting Standards notified under section 133 of the Companies Act, 2013 ('the Act'), read with Rule 7 of the Companies

(Accounts) Rules, 2014. The significant accounting policies adopted are as follows:

a) Presentation currency

Although the currency of country of domicile is UAE Dirham, these financial statements are presented in US$, which is

considered to be the functional currency of the establishment.

b) Tangible assets

Tangible assets are stated at cost less accumulated depreciation and impairment losses. The cost is depreciated over their

estimated useful lives using the straight-line method applying the following rates, which are specified in the Companies Act,

2013 of India or based on estimated useful life whichever is higher. The details of estimated life for each category of assets

are as under:

Type of asset Estimated life

Freehold buildings 30 years

Furniture and fixtures 5 years

Office equipment 5 years

Computers 4 years

Vehicles 5 years

148



c) Intangible assets

Intangible assets are stated at cost less accumulated amortisation and impairment losses. The amount in respect of accounting software is amortised over a period of 4 years.

d) Investment in associate

Investment in associate is accounted at cost less provision, if any, for permanent diminution in the value of such investments in the separate financial statements of the investor as per Accounting Standard (AS) 13, 'Accounting for Investments'.

e) Staff end-of-service gratuity

The establishment provides gratuity and leave encashment benefits to its employees. Gratuity and leave encashment liabilities are not funded. The present value of these defined benefit obligations are ascertained by an independent actuarial valuation as per the requirement of Accounting Standards 15 (Revised) - Employee Benefits. The liability recognised in the balance sheet is the present value of the defined benefit obligations on the Balance Sheet date, together with adjustments for unrecognised past service costs. All actuarial gains and losses are recognised in the Statement of Profit and Loss in full in the period in which they occur.

f) Revenue

Time charter

Revenue under time charter is recognised based on the terms of the time charter agreement.

Voyage charter

Revenue and expenses relating to incomplete voyages are carried forward as voyage in progress and profits are recognised on completion of the voyages. Losses on contracts are assessed on an individual basis and provision is made for the full amount of the anticipated losses.

Demurrage income

Demurrage income, which is included in time/voyage chartering, represents payments by the customers to the establishment when loading or discharging time exceeds the stipulated time in the time/voyage charter, and is recognised when services have been performed and there exists no significant uncertainty as to its measurability and collectability.

Income from jointly controlled operations

Income from jointly controlled operations represents the net income from jointly controlled coastal container services and limestone and other dry cargoes as per the agreement entered with the co-venturers. Share of expenses are accounted separately. Losses on contracts are assessed on an individual basis and provision is made for the full amount of the anticipated losses. These revenues under profit/(loss) sharing arrangement, being jointly controlled operations, are recognised on the same basis as similar contracts independently executed by the establishment.

g) Voyages-in-progress/Income received in advance

Expenses relating to incomplete voyages are carried forward as voyages-in-progress. Revenue relating to voyages-in-progress is carried forward in the balance sheet as income received in advance.

149


h) Foreign currency transactions

Transactions in foreign currencies are translated into US$ at the rate of exchange ruling on the date of the transactions.

Monetary assets and liabilities expressed in foreign currencies are translated into US$ at the rate of exchange ruling at the

reporting date.

Gains or losses resulting from foreign currency transactions are taken to the Statement of Profit and Loss.

i) Provision

Provision is recognised when the establishment has a present obligation as a result of past event and it is probable that an

outflow of resources will be required to settle the obligation, in respect of which a reliable estimate can be made.

j) Taxes on income

Income tax is calculated on the taxable income for the period as applicable in respect of income from jointly controlled

operations determined in accordance with the provision of the Indian Income Tax Act, 1961.

k) Financial instruments

Financial assets and financial liabilities are recognised when, and only when, the establishment becomes a party to the

contractual provisions of the instrument.

Financial assets are de-recognised when, and only when, the contractual rights to receive cash flows expire or when

substantially all the risks and rewards of ownership have been transferred.

Financial liabilities are de-recognised when, and only when, they are extinguished, cancelled or expired.

Current and non-current financial assets that have fixed or determinable payments and for which there is no active market,

which comprise trade and other receivables, short-term loans and other current and non-current assets are classified as

loans and receivables and stated at cost or, if the impact is material, at amortised cost using the effective interest method,

less any write down for impairment losses plus reversals of impairment losses. Impairment losses and reversals thereof are

recognised in the Statement of Profit and Loss.

Current financial liabilities, which comprise trade payables, short-term provisions and other current liabilities are measured

at cost or, if the impact is material, at amortised cost using the effective interest method.

l) Significant judgments and key assumptions

The significant judgments made in applying accounting policies that have the most significant effect on the amounts

recognised in the financial statements are as follows:

Impairment

At each reporting date, management conducts an assessment of tangible assets, intangible assets and all financial assets

to determine whether there are any indications that they may be impaired. In the absence of such indications, no further

action is taken. If such indications do exist, an analysis of each asset is undertaken to determine its net recoverable amount

150



and, if this is below its carrying amount, a provision is made. In the case of loans and receivables, if an amount is deemed

irrecoverable, it is written off to the Statement of Profit and Loss or, if previously a provision was made, it is written off

against the provision. Reversals of provisions against loans and receivables are made to the extent of the related amount

being recovered.

Key assumptions made concerning the future and other key sources of estimation uncertainty at the reporting date that

have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next

financial year, are as follows:

Carrying values of property, plant and equipment

Residual values are assumed to be zero unless a reliable estimate of the current value can be obtained for similar assets

of ages and conditions that are reasonably expected to exist at the end of the assets' estimated useful lives.

Doubtful debt provisions

Management regularly undertakes a review of the amounts of receivables owed to the establishment either from third

parties (refer note 13) or from related parties (refer note 15) and assesses the likelihood of non-recovery. Such assessment

is based upon the age of the debts, historic recovery rates and assessed creditworthiness of the debtor. Based on the

assessment assumptions are made as to the level of provisioning required.

Impairment

Assessments of net recoverable amounts of tangible assets, intangible assets and all financial assets other than receivables

(see above) are based on assumptions regarding future cash flows expected to be received from the related assets.

151


2016`

2016USD

2015`

2015 USD

3 SHARE CAPITALIssued and paid up:1 share of AED 1,000,000(translated to US Dollars at the fixed exchange rate of AED 3.653 = US Dollar 1.00)

12,382,249

273,748

12,382,249 273,748

12,382,249 273,748 12,382,249 273,748

4 LONG-TERM PROVISONSProvision for employee benefitsPost Retirement BenefitsOther Long Term Employee Benefits

18,140,323 4,679,786

273,474 70,550

14,975,755 12,579,228

240,428 201,953

22,820,110 344,024 27,554,983 442,381

5. POST RETIREMENT BENEFITS The establishment operates post-retirement defined benefit plans as follows Unfunded INR USD INR USD Post Retirement Gratuity Details of the gratuity plan are as follows:

1. Reconciliation of opening and closing balances of obligation a. Obligation as at 1 April 15,192,579 243,909 12,882,092 214,345 b. Current service cost 3,065,068 46,811 3,338,560 54,613 c. Interest cost 699,038 10,676 589,244 9,639 d. Actuarial loss (986,484) (15,066) 516,498 8,449 e. Benefits paid (572,928) (8,750) (2,637,018) (43,137) f. Exchange Fluctuation 1,015,414 - 503,204 - g. Obligation as at 31 March 18,412,686 277,580 15,192,579 243,909

2. Expense recognised during the year a. Current service cost 3,065,068 46,811 3,338,560 54,613 b. Interest cost 699,038 10,676 589,244 9,639 c. Expected return on plan assets - - d. Actuarial loss (986,484) (15,066) 516,498 8,449 e. Expense recognised in the year 2,777,622 42,421 4,444,302 72,701

3. Assumptions Discount rate 5.00% 5.00% 4.50% 4.50% Rate of escalation in salary (per annum) 5.00% 5.00% 5.00% 5.00%

4. Information for current and previous financial year a. Present value of defined benefit obligation (18,412,686.38) (277,580) (15,192,579) (243,909) b. Plan Assets at the end of the year NA NA c. Funded Status (18,412,686.38) (277,580) (15,192,579) (243,909) d. Experience gain/(loss) adjustment on plan liabilities (235,415.46) (3,549) 462,675 7,428 e. Experience gain/(loss) adjustment on plan assets NA NA f. Acturail gain/(loss) due to change on assumptions 1,234,720.60 18,614 (988,945) (15,877)

152



2016 2016 2015 2015 ` USD ` USD

6 TRADE PAYABLES Creditors for services 18,885,773 284,712 26,403,529 423,895 Creditors for Expenses 12,456,722 187,791 23,598,456 378,861 Provision for operating expenses 19,790,023 298,344 32,463,395 521,183

51,132,517 770,847 82,465,380 1,323,939

7 OTHER CURRENT LIABILITIES Income received in advance 127,675,443.27 1,924,768 54,927,152 881,827 Accruals 2,961,432.32 44,645 9,533,911 153,062

130,636,876 1,969,413 64,461,063 1,034,889

8 SHORT-TERM PROVISIONS Provison for Employee Benefits: Post retirement benefits 272,362.89 4,106 216,824 3,481 Other Long-term employee benefits 14,195.24 214 19,185 308 286,558 4,320 236,009 3,789

153


9 TANGIBLE ASSETS Freehold building

USD

Furniture and Fixtures

USD

Office Equipments

USD

Computers USD

Vehicles USD

Total USD

CostAs at 1 April 2014 957,239 218,769 71,208 76,891 110,182 1,434,289 Additions 2,187 9,099 1,560 - 12,846 Disposals - - (5,802) - - (5,802)As at 31 March 2015 957,239 220,956 74,505 78,451 110,182 1,441,333 Additions - 821 657 - 23,241 24,719 Disposals - (16,504) - - (18,191) (34,695)As at 31 March 2016 957,239 205,273 75,162 78,451 115,232 1,431,357 Accumulated depreciation and impairment lossesAs at 1 April 2014 85,169 106,251 42,439 57,128 62,827 353,814 Depreciation 31,877 38,426 9,678 13,788 18,857 112,626 Adjustment for disposals - - (4,569) - - (4,569)As at 31 March 2015 117,046 144,677 47,548 70,916 81,684 461,871 Depreciation 31,963 36,041 9,345 3,745 15,509 96,603 Adjustment for disposals - (16,504) - - (18,191) (34,695)As at 31 March 2016 149,009 164,214 56,893 74,661 79,002 523,779 Carrying amountAs at 1 April 2014 872,070 112,518 28,769 19,763 47,355 1,080,475 As at 31 March 2015 840,193 76,279 26,957 7,535 28,498 979,462 As at 31 March 2016 808,230 41,059 18,269 3,790 36,230 907,578

9 TANGIBLE ASSETS

Freehold building

`

Furniture and Fixtures

`

Office Equipments

`

Computers`

Vehicles `

Total `

CostAs at 1 April 2014 57,529,872 13,147,973 4,279,587 4,621,134 6,621,916 86,200,482 Additions - 132,550 551,474 94,549 - 778,573 Disposals - - (351,649) - - (351,649)Effect of Foreign Exchange (2,094,535) (482,362) (161,348) (170,866) (241,089) (3,150,200)As at 31 March 2015 59,624,407 13,762,885 4,640,760 4,886,548 6,863,005 89,777,606 Additions - 54,526 43,581 - 1,541,643 1,639,750 Disposals - (1,094,756) - - (1,206,662) (2,301,418)Effect of Foreign Exchange (3,872,032) (893,767) (301,373) (317,334) (445,686) (5,830,192)As at 31 March 2016 63,496,439 13,616,422 4,985,713 5,203,882 7,643,673 94,946,130 Accumulated depreciation and impairment lossesAs at 1 April 2014 5,118,640 6,385,664 2,550,575 3,433,381 3,775,890 21,264,151 Depreciation 1,948,680 2,349,029 591,628 842,877 1,152,752 6,884,966 Adjustment for disposals - - (279,309) - - (279,309)Effect of Foreign Exchange (223,229) (276,934) (98,770) (140,950) (159,283) (899,166)As at 31 March 2015 7,290,550 9,011,627 2,961,665 4,417,209 5,087,925 28,768,975 Depreciation 2,092,884 2,359,871 611,887 245,229 1,015,497 6,325,368 Adjustment for disposals - (1,080,639) - - (1,191,102) (2,271,741)Effect of Foreign Exchange (500,792) (601,930) (200,325) (290,058) (328,118) (1,921,223)As at 31 March 2016 9,884,226 10,892,789 3,773,878 4,952,496 5,240,438 34,743,826 Net Book valuesAs at 1 April 2014 52,411,233 6,762,309 1,729,011 1,187,752 2,846,026 64,936,331 As at 31 March 2015 52,333,858 4,751,259 1,679,095 469,339 1,775,081 61,008,631 As at 31 March 2016 53,612,213 2,723,633 1,211,836 251,386 2,403,235 60,202,304

154



10 INTANGIBLE ASSETS

Capital work in progress

USD Software

USD TotalUSD

CostAs at 1st April 2014 11,559 83,522 95,081 Additions 13,441 - 13,441 Transfers (25,000) 25,000 - As at 31 March 2016 and at 31st March 2016 - 108,522 108,522 Accumulated AmortisationAs at 1st April 2014 - 12,185 12,185 Amortisation - 25,059 25,059 As at 31 March 2015 - 37,244 37,244 Amortisation - 27,205 27,205 As at 31 March 2016Carrying amountAs at 1st April 2014As at 31 March 2015

- 64,449 64,449

11,559 71,337 82,896 - 71,278 71,278

As at 31 March 2016 - 44,073 44,073 10 INTANGIBLE ASSETS

Capital work in progress`

Software`

Total`

CostAs at 31 March 2014 694,694 5,019,632 5,714,326 Additions 837,212 1,557,198 2,394,410 Transfers (1,557,198) - (1,557,198)Effect of Foreign Exchange (25,292) (182,778) (208,070)As at 31 March 2015 (0) 6,759,607 6,759,607 Additions - - - Assets written off - - - Effect of Foreign Exchange - 438,972 438,972 As at 31 March 2016 - 7,198,579 7,198,579 Accumulated impairment lossesAs at 31 March 2014 - 732,340 732,340 Amortisation - 1,531,888 1,531,888 Effect of Foreign Exchange - (55,623) (55,623)As at 31 March 2015 - 2,319,851 2,319,851 Amortisation - 1,781,301 1,781,301 Adjustment for assets written off - - - Effect of Foreign Exchange - (173,922) (173,922)As at 31 March 2016 - 4,275,073 4,275,073 Net Book valuesAs at 31 March 2014 694,694 4,287,292 4,981,986 As at 31 March 2015 (0) 4,439,756 4,439,756 As at 31 March 2016 - 2,923,506 2,923,506

155


11. INVESTMENT IN ASSOCIATE 2016`

2016USD

2015`

2015USD

Investment in 14,893,334 unquoted shares of TM Harbour Services Private Limited (a company registered in the State of West Bengal, India) representing 25.82% in the share capital.

178,720,010 3,462,636

178,720,010

3,462,636

The investee was incorporated on 2 September 2009. The establishment became an associate of the investee company on 18 June 2010. Further on 05th December 2014, the establishment has made an additional investment in 5,957,334 shares at ` 15 per share in the same ratio of its shareholding. Investment in associate is accounted at cost less provision, if any, for permanent diminution in the value of such investments in the separate financial statements of the investor as per Accounting Standard (AS) 13, 'Accounting for Investments'.

12. OTHER NON-CURRENT ASSETS 2016`

2016USD

2015`

2015USD

Employee Security Deposits*Other DepositsBank Deposits more than 12 months maturityInterest accrued on fixed deposits

2,385,463.75 35,962 2,495,752 40,068

707,507 10,666 698,434 11,213

552,665,226 8,331,691 32,478,453 8,548,666

3,822,433 57,625 21,785,629 349,757

559,580,630 8,435,944 557,458,268 8,949,704

*These deposits are held with Jebel Ali Free Zone Authority

13. TRADE RECEIVABLES 2016`

2016USD

2015`

2015USD

Current trade receivablesLess than six monthsMore than six monthsGross Current Trade receivablesLess: provision for bad & doubtful debts

Amount due from a co-venturer

Classification of current trade receivables:Unsecured, considered goodDoubtfulTotal Current trade receivables

66,447,722 306,548,874

1,001,7314,621,370

68,796,923

293,052,548

1,104,499

4,704,807

372,996,596(302,035,252)

5,623,101(4,553,325)

361,849,471 (142,827,650)

5,809,306 (2,293,024)

70,961,344 1,069,776 219,021,822 3,516,282

- - - -

70,961,344

302,035,252-

1,069,776

4,553,325-

219,021,822

219,021,822 142,827,650

3,516,282

3,516,282 2,293,024

372,996,596 5,623,101 361,849,471 5,809,306

14. CASH AND CASH EQUIVALENTS 2016`

2016USD

2015`

2015USD

Cash on handBalances with banks: In current AccountsBank deposit less than 3 months maturityCash and cash equivalents as per cash flow statementbank deposits (with 3-12 months maturity)

197,473.04 68,315,126.0566,332,900.00

2,9771,029,883 1,000,000

103,709 83,824,315

155,719,750

1,665 1,345,756 2,500,000

134,845,499 1,044,042,633

2,032,860 15,739,439

239,647,775 803,760,072

3,847,421 12,903,952

1,178,888,132 17,772,299 1,043,407,846 16,751,373

156



16. SHORT-TERM LOANS AND ADVANCES 2016`

2016USD

2015`

2015USD

Advance to suppliers/agentsStaff loans and advancesPrepaid expensesDeposits (other than employee security deposits)Advances against hire charges/container leasesAdvance TaxOther receivables

712,548330,404

3,051,380485,358

4,749,3036,815,971

13,779,665

10,7424,981

46,0017,317

71,598102,754207,735

32,963,878 1,266,002 3,173,755

628,111 2,010,840 6,238,258

35,558,605

529,218 20,325 50,953 10,084 32,283

100,152 570,875

29,924,629 451,128 81,839,449 1,313,890

17. OTHER CURRENT ASSETS 2015`

2015USD

2014`

2014USD

Voyages-in-progressInterest accrued on fixed deposits

104,563,070.9245,491,766.15

1,576,338685,810

44,801,195 5,219,913

719,260 83,803

150,054,837 2,262,148 50,021,108 803,063

15. RELATED PARTIES

The establishment enters into transactions with entities that fall within the definition of a related party as contained in Indian Accounting Standard 18. The management considers such transactions to be in the normal course of business.

Related parties with whom transactions were entered and balances appeared comprise the parent company, the ultimate parent company, joint ventures of the parent company, directors, companies under common ownership/management control, associate, fellow subsidiaries and key management personnel.

Parent company TM International Logistics Limited

Ultimate parent company Tata Steel Limited, India

Directors Mr. R.N. Murthy (Chairman)

Mr. Guenther Hahn

Mr. Dipak Banerjee

Mr. Jayant Chakraborty

Mr. Sabyasachi Hajara

Capt. S.R. Patnaik

Companies under common ownership/management control Martrade Gulf Logistics FZC, Dubai

Martrade Shipping & Logistics GmbH

Tata Steel Asia (Hongkong) Limited

Associate T.M Harbour Services Pvt. Ltd.

Fellow subsidiaries TKM Global GmbH, Germany

TKM Global Logistic Ltd.

TKM Global China Limited, China

157

Inte

rnat

iona

l Shi

ppin

g an

d Lo

gist

ics

FZE

Not

es to

the

Fina

ncia

l Sta

tem

ents

for t

he y

ear e

nded

at 3

1st M

arch

201

6

At th

e re

porti

ng d

ate,

sig

nific

ant b

alan

ces

with

rela

ted

parti

es w

ere

as fo

llows

:

Paren

t co

mpan

y

Ultim

ate

Paren

t Co

mpan

y

Comp

anies

un

der

comm

on

owne

rship/

mana

geme

nt co

ntrols

Asso

ciates

Fello

w Su

b-sid

iaries

Direc

tors/

Key m

an-

agem

ent

perso

nnel

Total

Total

Paren

t co

mpan

y

Ultim

ate

Paren

t Co

mpan

y

Comp

anies

un

der

comm

on

owne

rship/

mana

geme

nt co

ntrols

Asso

ciates

Fello

w Su

bsidi

aries

Direc

-tor

s/ Ke

y ma

nage

ment

perso

nnel

Total

Total

2016 `

2016 `

2016 `

2016 `

2016 `

2016 `

2016 `

2015 `

2016

US

$20

16US

$20

16US

$20

16US

$20

16US

$20

16US

$20

16US

$

2015

US$

Includ

ed in

trade

rece

ivable

s -

4,530

,869

- -

- -

4,530

,869

- -

68,03

5 -

- -

- 68

,035

- 4,

237,7

57

20,54

5,057

-

- -

- 4,2

37,75

7 -

68,03

5 -

- -

- -

68,03

5

Includ

ed in

trade

and o

ther

paya

bles

504,4

62 -

- -

28,85

5 -

533,3

17 -

7,605

- -

- 43

5 -

8,040

224,5

48

- -

- -

--

224,5

48 3,

605

- -

- -

- -

3,605

Inves

tmen

t in as

socia

tes -

- -

229,6

86,68

8 -

- 22

9,686

,688

- -

- 3,

462,6

36

- 3,

462,6

36

- -

- 21

5,680

,325

- -

--

- -

3,462

,636

- -

3,462

,636

Includ

ed in

staff

loan

s and

ad

vanc

es -

- -

- -

- -

215,6

80,32

5 -

- -

-

- -

- -

- -

- -

- -

- -

-

All b

alan

ces

are

unse

cure

d an

d ar

e ex

pect

ed to

be

settl

ed in

cas

h. R

epay

men

t and

oth

er te

rms

are

set o

ut in

not

es 1

1 &

24.

158


Inte

rnat

iona

l Shi

ppin

g an

d Lo

gist

ics

FZE

Not

es to

the

Fina

ncia

l Sta

tem

ents

for t

he y

ear e

nded

at 3

1st M

arch

201

6

Paren

t co

mpan

y

Ultim

ate

Paren

t Co

mpan

y

Comp

anies

un

der

comm

on

owne

rship/

mana

geme

nt co

ntrols

Asso

ciates

Fello

w Su

bsidi

aries

Direc

tors/

Key

mana

geme

nt pe

rsonn

elTo

talTo

talPa

rent

comp

any

Ultim

ate

Paren

t Co

mpan

y

Comp

anies

un

der

comm

on

owne

rship/

mana

geme

nt co

ntrols

Asso

ciates

Fello

w Su

bsidi

aries

Direc

tors/

Key

mana

geme

nt pe

rsonn

el

Total

Total

2016 `

2016 `

2016 `

-20

16 `20

16 `20

16 `20

15 `20

16US

$20

16US

$20

16US

$20

16US

$20

16US

$20

16US

$20

16US

$20

15US

$

Reve

nue (

servi

ces r

ende

red)

- 59

,648,1

8416

3,693

,464

--

- 59

,648,1

84 -

- 91

0,972

--

- -

910,9

72-

- -

152,8

27,77

8 -

6,913

,902

- -

152,8

27,77

8 -

- 2,

499,9

95

--

- -

2,499

,995

Direc

t cos

ts (S

ervice

s rec

eived

)1,2

27,18

0 -

- -

3,29

6,013

- 8,1

41,08

2 -

18,74

2 -

105,5

92 -

124,3

34-

130,9

43

- -

- -

- -

3,426

,956

2,142

-

53,91

7 -

- 56

,059

Reim

burse

ment

of Se

rvice

s rec

eived

43,47

2,422

-

- -

120,0

20 -

--

6,63

,929

- -

1,83

366

5,762

-

9,28

6,507

-

- -

69,07

8 -

9,35

5,585

9,3

55,58

5 15

1,911

-

- 1,

130

- 15

3,041

Direc

tors'

fees r

emun

eratio

ns an

d ben

efits

- -

- -

- 15

,745,5

09

15,74

5,509

-

- -

240,4

7224

0,472

-

- -

- -

- 17

,858,6

34

- 17

,858,6

34

- -

- 29

2,136

-

292,1

36

The

esta

blish

men

t has

ent

ered

into

tran

sacti

ons a

nd co

ntra

cts w

ith re

lated

par

ties o

n ar

m le

ngth

pric

e ba

sis

Sign

ifican

t tra

nsac

tions

with

rela

ted

parti

es d

urin

g th

e ye

ar w

ere

as fo

llows

:

159


18. REVENUE 2016`

2016 USD

2015 `

2015 USD

Time charteringVoyage chartering

Income from jointly controlled operarions

1,859,755,614.17 311,390,967.67

-

28,402,9654,755,693

-

3,175,574,886 724,418,686 142,746,320

51,946,848 11,850,222

2,335,080

2,171,146,582 33,158,658 4,042,739,892 66,132,150

19. OTHER INCOME 2016`

2016 USD

2015 `

2015 USD

Interest income on fixed depositsCredit balances written backExcess Provision no Longer Required Written BackProfit on sale of tangible assetsForeign Exchange gainRental IncomeMiscellaneous income

32,210,878.59 -

9,284,384 408,645

- 905,816

15,452.69

491,938 -

141,795 6,241

- 13,834

236

32,075,864 17,635,383

- 470,099

22,496

524,705 288,484

- 7,690

368

42,825,177 654,044 50,203,842 821,247

20. DIRECT COSTS 2016`

2016 USD

2015 `

2015 USD

Vessel hire chargesBunkering costsExpenses of Jointly controlled operations*Other direct costs

655,926,130 511,066,226

- 901,462,758

10,017,578 7,805,217

- 13,767,516

1,472,210,043 1,046,492,257

140,438,433 1,299,308,236

24,082,780 17,118,782

2,297,327 21,254,409

2,068,455,115 31,590,311 3,958,448,969 64,753,298

Includes unrealised exchange loss of US$ Nil (Previous year US$ 31,250)

21. EMPLOYEE BENEFIT EXPENSES 2016`

2016 USD

2015`

2015 USD

Directors' fees, remuneration and benefitsStaff salaries and benefitsStaff end-of-service gratuity

15,640,222 49,925,690

2,777,622

238,864762,486

42,421

17,858,634 61,763,453

4,444,302

215,497 1,010,342

72,701

68,343,533 1,043,771 84,066,388 1,298,540

22. DEPRECIATION AND AMORTISATION EXPENSES 2016`

2016 USD

2015`

2015 USD

Depreciation on tangible assetsAmortisation on intangible assets

6,325,325 1,781,316

96,603 27,205

6,884,966 1,531,888

112,626 25,059

8,106,640 123,808 8,416,854 137,685

23. OTHER EXPENSES 2016`

2016 USD

2015`

2015 USD

RentLoss on assets written offProvision for bad and doubtful debtsOther expenses

1,246,168.10-

147,998,89630,350,663

19,032-

2,260,301463,528

1,257,959 16,811

34,343,405 32,123,363

20,578 275

561,798 602,121

179,595,727 2,742,861 67,741,537 1,184,772

160



24. FINANCIAL INSTRUMENTS The management conducts and operates the business in a prudent manner, taking into account the significant risks to which the

business is or could be exposed. The primary risks to which the business is exposed, which are unchanged from the previous year, comprise credit risks, currency,

liquidity risks and market risks (including currency risks, cash flow interest rate risks and fair value interest rate risks). Credit risk is managed by assessing the creditworthiness of potential customers and the potential for exposure to the market in

which they operate, combined with regular monitoring and follow-up. Management continuously monitors its cash flows to determine its cash requirements in order to manage exposure to liquidity

risk. The establishment avails and renders services in local and foreign currencies. Exposure to foreign currency transaction is

minimised where possible by denominating such transactions in UAE Dirhams, which has a fixed parity with US Dollars. Exposures to the aforementioned risks are detailed below: Credit risk Financial assets that potentially expose the establishment to concentrations of credit risk comprise principally bank accounts and

trade and other receivables. The establishment's bank accounts are placed with high credit quality financial institutions. Trade and other receivables are stated net of allowances of doubtful recoveries. At the reporting date, the establishment's

maximum exposure to credit risk from such receivables outside UAE is as follows:

India sub-continent

Middle East countries

Other Asian Countries

Europe

Bank balance (fixed deposits) Trade and other receivables

2016

`

2016 USD

2015

`

2015

USD

- - 44,027,069

(41,342,286)

663,729

(663,729)

1,712,354,959

(1,518,963,817)

25,814,566

(24,386,178)

135,982,445

(127,690,195)

2,050,000

(2,050,000)

- - 163,873,638

(153,880,575)

2,470,473)

(2,470,473)

- - 4,006,308

(3,762,002)

60,397

(60,397)

At the balance sheet date 74% of trade receivables comprise receivable from three customers (previous year 75% of trade receivables was due from four customers).

Significant concentration of credit risk by industry are as follows:

2016`

2016USD

2015`

2015USD

Minerals - - 174,025,229 2,793,885

Construction - - 184,062,239 2,955,024

Agriculture - - 3,762,002 60,397

161


Currency risk There are no significant currency risks as substantially all financial assets and financial liabilities are denominated in US Dollars or UAE Dirham

which has fixed parity with the US Dollars except for the following

Indian Rupees

2016 2015

Trade receivables 249,100 265,990

Short-term loans and advances 73,379 157,348

Trade payables 5,321 7,036

Other current liabilities 4,331 955

Interest rate risk Fixed deposit accounts are subject to fixed interest rates at levels generally obtained in UAE and are therefore expose o fair value interest rate

risk. Fair values The fair value in the price that would be received to sell an asset or paid to transfer a liability in an oderly transaction between market participants

at the measurement date. The fair value of the establishment's financial assets and financial liabilities which are required to be stated at cost or at amortised cost

approximate to their carrying values.

25. AUDITOR'S REMUNERATION 2016`

2016USD

2015 `

2015 USD

Audit Fees 1,702,808 26,006 1,589,779 26,006

1,702,808 26,006 1,589,779 26,006

26. CONTINGENT LIABILITIES 2016`

2016USD

2015 `

2015 USD

Income tax Demand 260,954 3,934 245,040.60 3,934.00

260,954 3,934 245,040.60 3,934.00

Represents demand from the Indian Income Tax authorities for payment of additional tax of US$ 3,934 pertaining to financial years 2009-10 and 2010-11.

27. VESSEL HIRE COMMITMENTS 2016`

2016USD

2015 `

2015USD

The establishment has entered into non-cancellable vessel charter agreement for which the future minimum hire payments are as follows:

Not later than one year 16,805,042 253,344 8,123,837 130,424

28. VESSEL HIRE INCOME 2016`

2016USD

2015`

2015USD

The establishment has entered into non-cancellable operating hire agreements for chartering vessels. The total minimum hire income to be received is as follows:

Not later than one year 2,630,720.43 498,350 62,535,418 1,022,970

162



29. EARNINGS PER SHARE (BASIC) 2016`

2016USD

2015`

2015USD

(112,995,336.24) (1,725,712) (32,073,480) (524,666) 30. JOINTLY CONTROLLED OPERATIONS

Following assets and liabilities are held by the establishment in respect of jointly controlled operations which the establishment has entered into on a 50% profit/(loss) sharing basis.

2016`

2016USD

2015`

2015USD

Included in creditor for services (note 6) 352,957 5,321 438,258 7,036

Included in other current liabilities (note 7) 287,288 4,331 59,485 955

Included in advance tax (note 16) 52,469 791 52,197 838

Included in trade receivables (note 13) (net of provision) - - 16,567,959 265,990

Included in other receivables (note 16) 4,252,602 64,110 4,232,027 67,943

Included in deposits (note 16) 58,240 878 327,697 5,261

Included in advance to agents (note 17) 504,130 7,600 5,188,956 83,306

31. COMPARATIVE FIGURES

Previous year's figures have been regrouped/reclassified wherever necessary to make them comparable to those of current year.

For INTERNATIONAL SHIPPING AND LOGISTICS LIMITED

sd/-SOUMYA RANJAN PATNAIKCEO & DIRECTOR

163

TKM Global GmbH

164



TKM Global GmbH(As on date 1st June, 2016)

Board of Directors Management TeamMr. Amar Patnaik – Managing Director Mr. Gerhard Schiefer – General Manager (Geschaeftsfuehrer) (Prokurist)

Registered Office AuditorsSpaldingstrasse 210 M/s. A2C Treuhand GmbH20097 Hamburg Chartered AccountantsGermany Germany

Tel: +49 40 238802 15 BankersFax: +49 40 238802 79 Commerzbank State Bank of India

165

TKM GLOBAL GmbH

DIRECTOR’S REPORT

To the Members,

I have pleasure in presenting the business and operations of the Company along with the Audited Statement of Accounts for the year ended 31st March, 2016.

FINANCIAL RESULTS:

31.3.2016 31.3.2016 31.3.2015 31.3.2015 Amount in Amount in Amount in Amount in ` Euro ` Euro

(a) Total Income 486,312,550 6,753,403 540,648,821 6,974,314

(b) Less: Operating and

Administrative Expenses 427,426,661 5,935,657 405,966,426 5,236,925

(c) Profit before taxes (PBT) 58,885,889 817,746 134,682,395 1,737,389

(d) Less: taxes (including deferred taxes) 21,825,511 303,090 46,860,220 604,492

(e) Profit after taxes (PAT) 37,060,378 514,656 87,822,175 1,132,897

DIVIDEND

With a view to plough back the profit and strengthening the financial position of the Company, we do not recommend payment of any dividend for the year under report.

OPERATIONAL REVIEW

During the year under review, the Company achieved a total income of Euro 6.43 mn (Rs.462.87 mn) as compared to Euro 6.97 mn (Rs. 540.65 mn) during the previous year. The current year revenue is marginally lower than the last year. However, considering that the unit freight rates significantly dropped during the year (over 40%), the revenue numbers need to be viewed keeping the drop in freight rate in perspective.

During FY 15-16, the plan for break bulk cargo was 8000 freight tons. The actual for the year at 19,800 freight ton showed an increase of 250% over the planned figure. The air freight volume at 283 metric tons were marginally lower than planned. Given the fact that during H2 FY ’16 the Company lost the Tata Steel air freight account, the year-end number reflects a good H1.

The container volume was 10% lower than compared to the previous year figures.

The operating contribution percentage for the year stood at 32%, a 1% increase over the contribution margin of the previous year. In a falling freight, an increased contribution margin was possible due to aggressive spot contracts.

166


The weakening EUR specifically against the USD resulted in an increase in margin since approx. 45% of our business is traded in USD denominated freight.With a large percentage of revenue in USD and the entire Fixed Costs in EUR, the drop in value of the EUR has contributed to 2% (approx.) point’s improvement to the bottom line. The EBIT for the year 15-16 was EUR 817,000 (Rs.58.83 mn) against the ABP of EUR 1.03 mn (Rs.74.17 mn) for the year. The gap was due to accounting for a notional loss of EUR 128,000 (Rs.9.22 mn) on account of USD denominated net worth.The Company continued to have a good operating cash flow and followed its practices of keeping the system under a continuous strain for cash by removing any idle cash to term deposits. Under current market conditions where interest rates in Euro zone are tending to be negative, managing of working capital as well as surplus funds require a new approach. Turnover per employee was Euro 800,000 (Rs.57.61 mn) for the year with an operating productivity of 402.5 shipments per employee per annum. This compares to an average of less than EUR 250,000 (Rs.18 mn) per employee per annum for large multinational forwarders. The Company forecasts the next financial year to be even more challenging. Forecasted economic parameters for the Eurozone are not encouraging. The euphoria about the Indian market growth story though looks better compared to most other economies, in ground realty this has not translated into higher business opportunities. We do not expect to see any change to capacity expansion during the year. With depressed freight market and low demand, we expect the next financial year to one where providers will fight to retain market share compromising on contribution.OPPURTUNITIES AND THREATSi. Scope for supply chain services, specifically in the e-commerce industry will show a high growth.ii. TSL Kalinganagar facilities going into production will have an increased demand for consumables and

spare.iii. TKM will continue to aggressively pursue its decided plan of guaranteed space contracting and offering

the same to its customers on a carrier based model instead of a service fee model. However under a depressed freight market, the per unit contributions would be significantly reduced from earlier USD 75-100 per TEU to a level of USD 30-50 per TEU.

iv. While we continue to put a concerted effort to regain a part of the lost TSL accounts for LCL and Air Freight, the much larger FCL contract is due for renewal effective April ’16. We expect strong competition among others from Schenker and DHL resulting in lower per unit contribution to retain the business.

EMPLOYEE RELATIONSThe Company continued to maintain excellent and cordial Industrial Relations and concerted efforts were put in to maintain Industrial Harmony and Peace. The Company expresses its appreciation for the dedication, commitment and sincere services rendered by the employees throughout the year.DIRECTORSAs on 31st March, 2016, Mr. Amar Patnaik continued to be the ‘Geschaeftsfuehrer’ (Managing Director) and Mr. Gerhard Schiefer as the ‘Prokurist’ (General Manager) of the Company. Mr. Amar Patnaik was not disqualified under section 164(2) of the Indian Companies Act, 2013.DIRECTOR’S RESPONSIBILITY STATEMENTThe Company is in compliance with various accounting and financial reporting requirements in respect of the financial statements for the year under review. Pursuant to Section 134(5) of the Companies Act, 2013 and in respect of the Annual Accounts for the year under review, the Directors hereby confirm that:i. in the preparation of the annual accounts, the applicable accounting standards had been followed with

proper explanation relating to material departures;ii. the directors had selected such accounting policies and applied them consistently and made judgements

167

and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the company at the end of the financial year and of the profit and loss of the company for that period;


iv. the directors had prepared the annual accounts on a going concern basis; andv. the directors had devised proper systems to ensure compliance with the provisions of all applicable laws

and that such systems were adequate and operating effectively.AUDITORSM/s. A2C Treuhand GmbH are the Statutory Auditors of the Company and being eligible, have offered themselves for re-appointment.AUDIT OBSERVATIONS & EXPLANATIONS/COMMENTS BY THE BOARDNo qualification, reservation or adverse remark or disclaimer have been made by the Auditor’s in their report.CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGOInformation as per Section 134(3)(m) of the Companies Act, 2013 read with Rule 8(3) of the Companies (Accounts) Rules, 2014 is as below:A. Conservation of Energy The Company is not a major consumer of energy. B. Technology Absorption: NilC. Foreign exchange earnings & outgo:Revenue in foreign exchange (in GBP and USD) was equivalent to Euro 2.95 mn (Rs. 212.43 mn) from Freight and related income and Euro 2.98 mn (Rs. 214.59 mn) was spent in foreign exchange on account of freight payment, purchase of fixed assets, administrative expenses etc.PARTICULARS OF EMPLOYEESThe Statement of particulars of employees as required under Section 197 of the Companies Act, 2013, read with Rule 5(2) of Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is given as an annexure.ACKNOWLEDGEMENTI wish to take the opportunity to place on record my sincere appreciation and gratitude for the continued assistance, support and co-operations extended by all Government Authorities, Banks, Overseas Associates, Clearing Agents, Shipping Lines, Air Lines and other business associates and last but not the least the Members of the Company.

For TKM Global GmbH

Sd/- Amar Patnaik

GeschaeftsfuehrerDate: 18th April, 2016 (Managing Director) Place: Hamburg, Germany DIN: 02730170

168


Annexure

Section 197 of the Companies Act, 2013, read with Rule 5(2) of Companies (Appointment and Remuneration) of Managerial Personnel Rules, 2014

Name Age Designation Gross remuneration

Qualification Total Experience

Date of employment

Last employment

held

Mr. Amar Patnaik

48 years Managing Director

(Geschaeftsfu-ehrer)

` 19,696,141/- M.B.A.M. I. S. C.

25 years October, 1998 Director 'Marketing' TKM Global

GmbH

For TKM Global GmbH

Sd/-

Managing DirectorGeschaeftsfuehrer

Date : 18th April, 2016

169

INDEPENDENT AUDITOR’S REPORT TO THE SHAREHOLDER OFTKM GLOBAL GmbH

1. We have audited the attached Balance Sheet of TKM Global GmbH (the "establishment") as at 31st March 2016, the Profit and Loss Account of the establishment for the year ended 31st March 2016 and the Cash Flow Statement for the year ended on that date, both annexed thereto.

2. Management is responsible for the preparation of these Financial Statements that give a true and fair view of the financial position and financial performance of the establishment in accordance with the accounting principles generally accepted in India including Accounting Standards referred to in Section 211 (3C) of the Companies Act, 1956 ("the Act") which continue to be applicable in respect of Section 133 of the Companies Act, 2013 in terms of General Circular 15/2013 dated 13th March 2013 of the Ministry of Corporate Affairs. This responsibility includes the design, implementation and maintenance of internal controls relevant to the preparation and presentation of the Financial Statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

3. Our responsibility is to express an opinion on these Financial statements based on our audit. We conducted our audit in accordance with the Standards on Auditing issued by the Institute of Chartered Accountants of India. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the Financial Statements are free from material misstatements.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the Financial Statements. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement, of the Financial Statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the establishment's preparation and fair presentation of the Financial Statements in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the management, as well as evaluating the overall presentation of the Financial Statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

4. In our opinion and to the best of our Information and according to the explanations given to us. the aforesaid Financial Statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:

I. in the case of the Balance Sheet, of the state of affairs of the establishment as at 31st March 2016;

II. in the case of the Profit and Loss Account, of the profit for the fiscal year ended on that date;

III. in the case of the Cash Flow Statement, of the cash flows for the fiscal year ended on that date.

5. As required by the Companies (Auditor's Report) Order, 2003 ("the order") issued by the Central Government of India in terms of Section 227 (4A) of the Act, we give in the Annexure a Statement on the matters specified in paragraphs 4 and 5 of the Order.

170


6. As required by section 227(3) of the Act, we report that:

I. We have obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purpose of our audit.

II. In our opinion, proper books of accounts as required by law have been kept by the establishment so far as appears from the examination of those books and proper returns adequate for the purposes of our audit have been received from branches not visited by us.

III. The Balance Sheet, and the Profit and Loss account and the Cash Flow Statement dealt with by this report are in agreement with the books of accounts.

IV. In our opinion, the Balance Sheet, the Profit and Loss account and the Cash Flow Statement, with the Accounting Standards referred to in Section 211 (3C) of the Act (which continue to be applicable in respect of Section 133 of the Companies Act, 2013 in terms of General Circular 15/2013 dated March 13. 2013 of the Ministry of Corporate Affairs).

V. On the basis of the written representations received from the directors as on 31st March 2016, taken on record by the Board of Directors, none of the directors is disqualified as on 31st March 2016, from being appointed as a director in terms of Section 274(1) (g) of the Act.

Hamburg A2C Treuhand GmbH7th April 2016 Wirtschaftsprüfungsgesellschaft ppa.

Mirco Schroeter Marko Lüthje Wirtschaftsprüfer Wirtschaftsprüfer Steuerberater Steuerberater

171

Annexure to the Independent Auditor’s Report(Referred to in paragraph 3 of our report of even date)

I. The establishment has maintained proper records showing full particulars, including quantitative details and location of fixed assets. There is a regular program of physical verification which, in our opinion, is reasonable having regard to the size of the establishment and the nature of its assets. No material discrepancies were noticed on verification. There was no substantial disposal of fixed assets during the year.

II. The establishment has no inventory. Accordingly, clauses 4(ii) (a), (b) and (c) of the Companies (Auditor's Report) Order, 2003 (as amended) are not applicable to the establishment.

III. According to the books and records maintained by the establishment and the Information and explanations given to us, the establishment has neither granted nor taken any loans, secured or unsecured to/from companies, firms or other parties listed under Section 301 of the Companies Act. 1956.

IV. In our opinion and according to the information and explanations given to us, there are generally adequate internal control procedures commensurate with the size of the establishment and the nature of its business with regard to purchase of fixed assets.

V. In our opinion and according to the information and explanations given to us, the

transactions made in pursuance of contracts or arrangements under Section 301 of the

Companies Act. 1956 have been made at prevailing market rates.

VI. In our opinion and according to the information and explanations given to us, the establishment has not accepted any deposits from the public.

VII. In our opinion the establishment has an internal audit system commensurate with the size and nature of the business.

VIII. To the best of our knowledge and as explained, the Central Government has not prescribed maintenance of cost records under clause (d) of sub-section (1) of section 209 of the Companies Act, 1956 for the Services of the establishment.

IX. The establishment does not have any accumulated losses at the end of the financial year and it has not incurred cash losses during the current year or in the immediately preceding financial year.

X. The establishment does not have any dues towards financial institution, bank or debenture holders.

XI. The establishment has not granted any loans or advances on the basis of security by way of pledge of shares, debentures and other securities.

XII. In our opinion, the establishment is not a chit fund or a nidhi/mutual benefit fund/society Therefore, the provisions of clause 4 (xiii) of the Companies (Auditor's Report) Order, 2003 (as amended) are not applicable to the establishment

XIII. In our opinion, the establishment is not dealing in or trading in shares, securities, debentures and other

172


investments. Accordingly, the provisions of clause 4(xiv) of the Companies (Auditor's Report) Order, 2003 (as amended) are not applicable to the establishment.

XIV. The establishment has not given any guarantees for loans taken by others from bank and financial institutions.

XV. According to the information and explanations given to us, the establishment has not availed any term loans during the year under audit.

XVI. According to the Cash Flow Statement and other records examined by us and the Information and the explanations given to us, on an overall basis, funds raised on short term basis have, prima facie, not been used during the year for long-term investment (fixed assets. etc.).

XVII. The establishment has not made any preferential allotment of shares to parties or companies covered in the register maintained under Section 301 of the Companies Act, 1956.

XVIII. The establishment does not have any outstanding debentures during the year.

XIX. The establishment has not received any money through a public issue during the year.

XX. Based upon the audit procedure Performance for the purpose of reporting the true and fair view of the Financial Statements and as per the information and explanations given by the management, we report that no fraud on or by the establishment has been noticed or reported during the course of our audit.

Hamburg A2C Treuhand GmbH7th April 2016 Wirtschaftsprüfungsgesellschaft ppa.

Mirco Schroeter Marko Lüthje Wirtschaftsprüfer Wirtschaftsprüfer Steuerberater Steuerberater

173

TKM Global GmbHBalance Sheet as at 31st March 2016

For the year ended 31st March '16




Notes ` EURO ` EURO

I. EQUITY AND LIABILITIES(1) Shareholders funds

(a) Share capital(b) Reserves and surplus

(2) Non current liabilities(a) Deferred tax liability(b) Long term provision

(3) Current liabilities(a) Trade payables(b) Other current liabilities

TOTAL

12

34

56

3,839,558 1,255,501,464

16,761,316 4,505,730

332,043,464 37,942,227

51,129 16,718,731

223,20060,000

4,421,616505,253

3,451,739 1,093,943,585

14,825,284 4,050,624

357,036,987 43,964,393

51,129 16,204,075

219,600 60,000

5,288,622 651,224

1,650,593,759 21,979,929 1,517,272,611 22,474,650

II. ASSETS(1) Non current assets

(a) Fixed assets(i) Tangible assets(ii) Intangible assets

(b) Non current investment(c) Long term loans and advances(d) Other Non current assets

778910

5,815,095 432,550

554,515,610 1,877,388

507,767,160

77,436 5,760

7,384,139 25,000

6,761,619

7,958,936 604,218

498,506,178 1,687,760

260,504,203

117,892 8,950

7,384,139 25,000

3,858,727

(2) Current Assets(a) Trade receivables(b) Cash and cash equivalents(c) Other current assetsTOTAL

111213

57,230,806 483,848,041 39,107,108

762,107

6,443,103 520,765

90,512,138 508,457,886 149,041,292

1,340,714 7,531,549 2,207,679

1,650,593,758 21,979,929 1,517,272,611 22,474,650 The accompanying notes form an integral part of these financial statements. We confirm that we are responsible for these financial statements, including selecting the accounting policies and making the judgements underlying them. We confirm that we have made available all relevant accounting records and information for their compilation. Approved by the Directors on 7th April 2016.

For TKM Global GmbH Amar Patnaik Global Head Logistics and Managing Director

A2C Treuhand GmbH Wirtschaftsprüfungsgesellschaft

ppa.

Mirco Schroeter Marko Lüthje

Wirtschaftsprüfer Wirtschaftsprüfer

Steuerberater Steuerberater

174


TKM Global GmbHProfit and Loss Account for the year ended 31st March 2016





Notes ` EURO ` EURO

Revenue from operationsOther incomeTotal revenues (I+II)

1415

462,931,524 23,448,560

6,427,819 325,584

515,894,670 24,754,152

6,654,988 319,326

486,380,084 6,753,403 540,648,821 6,974,314

ExpensesPurchase of stock in tradeFinance CostDepreciation and amortization expensesOther expensesProfit before exceptional and extraordinary items and tax(III-V)

16171819

(315,456,891)

(9,276,464) (2,164,057)

(100,588,606)

(4,380,129) (128,804) (30,048)

(1,396,676)

(370,969,867) 92,443,065 (2,041,024)

(125,398,600)

(4,785,473) 1,192,506

(26,329) (1,617,629)

58,894,067 817,746 134,682,395 1,737,389

Tax expenses(1) Current tax(2) Deferred tax

Profit for the period

203/20

(21,828,542) (21,569,270)

(259,272)

(303,090) (299,490)

(3,600)

(46,860,220) (31,488,004) (15,372,216)

(604,492) (406,192) (198,300)

37,065,525 514,656 87,822,175 1,132,897

Earnings Per Share(1) Basic 21 370.66 5.147 878.22 11.329

The accompanying notes form an integral part of these financial statements.Approved by the Directors on 7th April 2016. For TKM Global GmbH Amar Patnaik

Global Head Logistics and Managing Director A2C Treuhand GmbH Wirtschaftsprüfungsgesellschaft

ppa.

Mirco Schroeter Marko Lüthje

Wirtschaftsprüfer Wirtschaftsprüfer

Steuerberater Steuerberater

175

TKM Global GmbHCash Flow Statement for the year ended 31st March 2016





Cash flows from operating activitiesProfit before Tax & Extraordinary items

Adjustments for:loss on disposal of fixed assetsDepreciationOther non Cash ItemsInterest IncomeOperating profit before Working Capital changesAdjustments for:

Trade and other receivablesTrade Payable and Other Liabilities

Notes ` EURO ` EURO

12

58,894,067

1,290,382 2,164,057

- (12,853,265)

817,746

17,917 30,048

- (178,468)

134,682,395

762,564 2,041,024

175,118 (15,186,013)

1,737,389

9,837 26,329

2,259 (195,898)

49,495,241

170,220,062 (72,971,168)

687,243

2,363,511 (1,013,207)

122,475,088

(17,102,307) (48,393,488)

1,579,916

(220,618) (624,271)

Cash generated from Operations Taxes received for Prior Period Taxes paid for Prior Period Taxes paid for Actual Periods

Net cash from operating activities (A)

Cash flows from investing activities Paid in of disposal of fixed assetsPurchase of Fixed assetsPurchase of Financial assetsMovement of fixed deposits more than 3 and less 12 monthsInterest received

Net cash used in investing activities (B)

146,744,135 -

(1,965,858) (26,660,724)

118,117,553

252,070 (563,124)

(209,049,717) 89,053,666 12,853,265

2,037,547 -

(27,296) (370,185)

1,640,066

3,500 (7,819)

(2,902,662) 1,236,513

178,468

56,979,293 12,052,344

- (35,237,956)

33,793,681

977,140 (4,405,617)

(263,523,969) 173,138,904

15,186,013

735,027 155,474

- (454,566)

435,935

12,605 (56,832)

(3,399,432) 2,233,474

195,898

(107,453,840) (1,492,000) (78,627,528) (1,014,287)

Cash flows from financing activitiesNet cash introduced from financing activities (C) - - - -

Net increase/(decrease) in cash and cash equivalents (A+B+C)Cash and cash equivalents at the beginning of yearEffects of foreign ExchangeCash and cash equivalents at the end of year

10,663,713

176,776,522

20,317,022

148,066

2,618,508

-

(44,833,847)

215,821,297

5,789,072

(578,352)

3,196,860

-

207,757,258 2,766,574 176,776,522 2,618,508

The accompanying notes form an integral part of these financial statements Approved by the Directors on 7th April 2016.For TKM Global GmbH A 2C Treuhand GmbH WirtschaftsprüfungsgesellschaftAmar Patnaik ppa.Global Head Logistics and Managing Director Mirco Schroeter Marko Lüthje Wirtschaftsprüfer Wirtschaftsprüfer Steuerberater Steuerberater

176


TKM Global GmbHStatement of Change in Equity for the year ended 31st March 2016





` EURO ` EURO

Share CapitalIssued, Subscribed and Paid upShare Capital

Reserves and SurplusNet profit at the beginning of the Year

Effect of Foreign Exchange

Net profit after tax for the period

As at 31.3.

3,839,558

1,093,943,585

124,492,354

37,065,525

1,255,501,464

51,129

16,204,075

-

514,656

16,718,731

3,451,739

1,244,525,130

(238,403,721)

87,822,175

1,093,943,585

51,129

15,071,178 -

1,132,897

16,204,075


Approved by the Directors on 7th April, 2016.

For TKM Global GmbH A2C Treuhand GmbH Wirtschaftsprüfungsgesellschaft

Amar Patnaik ppa.Global Head Logistics and Mirco Schroeter Marko LüthjeManaging Director Wirtschaftsprüfer Wirtschaftsprüfer Steuerberater Steuerberater

177

TKM GLOBAL GmbH

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31st March 2016

1. LEGAL STATUS AND BUSINESS ACTIVITY

a) TKM Global GmbH was incorporated on 8th November 1994 in the Local Court of Frankfurt under HRB 48316. With date of 22nd October 2004 the company changed the registered address from Frankfurt (Main) to Hamburg. Now the company is registered in the Local court of Hamburg (HRB 90039). The establishment became a wholly owned subsidiary of TKM Global Logistics Ltd., a Company incorporated in India, with effect from 1st March 2005. With date of 13th of March 2007 TKM Overseas Transport (Europe) GmbH changed its company name into TKM Global GmbH. With date of 1st October 2011 the company opened a branch office in Frankfurt (Main) especially for air freight business.

b) The establishment's principal activity is the brokerage of transports and performing national and international transports of all kinds, by air and ocean and road. The company is entitled to execute all appropriate activities. The company is also entitled to represent other companies, to hold interest in other companies and to establish subsidiaries.

2. SIGNIFICANT ACCOUNTING POLICIES

The financial statements are prepared under the historical cost convention on accrual basis and in accordance with the Indian Accounting Standards. The significant accounting policies adopted are as follows:

a) Fixed Assets and Depreciation

All the fixed assets are stated at cost. Cost comprises of purchase price and its attributable costs of bringing the assets to its working conditions for the intended use.

Depreciation on assets is provided on the straight-line method over the useful lives of assets. During the current year, the Company has revised its estimates of useful life of its fixed assets as prescribed in Part C of Schedule II of the Companies Act, 2013, except for certain fixed assets for which different useful life have been considered.

The details of estimated life for each category of assets are as under:



Vehicles - Four Wheeler 8 years


Computers 3 years

b) Leave salary

Provision is made for value of unutilized leave due to employees at the year ended on actual basis.

c) Revenue

Revenue represents freight invoiced to customers for services rendered during the year.

178


d) Revenue recognition

Income from freight / service charges etc. and related liabilities are recognized when the relevant consignments is shipped out. Freight /Service charges etc. earned and related freight / service charges are stated at gross values.

e) Foreign currency transactions

Transactions in foreign currencies are translated into Euro at the rate of exchange ruling on the date of the transactions. Monetary assets and liabilities expressed in foreign currencies are translated into Euro at the rate of exchange ruling at the balance sheet date. Gains or losses resulting from foreign currency transactions are taken to the income statement.

f) Cash and cash equivalents

Cash and cash equivalents comprise cash and bank balance in bank current accounts, bank deposits free of encumbrance with a maturity date of three months or less from the date of deposit and highly liquid investments with a maturity date of three months or less from the date of investment.

g) Bank deposits

Bank deposits are carried at cost.

h) Financial instruments

Financial instruments of the establishment comprise trade and other receivables and accruals, cash and cash equivalents and other current financial assets.

Financial assets that do not have an active market and whose fair value cannot be estimated reliably are measured at amortized cost less any write-down for impairment if they have a fixed maturity date, and at cost less any write-down for impairment if there is no fixed maturity date.

Financial liabilities with no fixed maturity date are measured at cost and at amortized cost if they have a fixed maturity date.

Changes in values of such financial assets and financial liabilities are recognized in the income statement.

i) Taxes on Income

Current Tax is calculated under the tax payable method on the taxable income for the year as determined in accordance with the provisions of the German Corporate Income Tax Code.

Deferred Tax is recognized on timing differences; being the difference between taxable income and accounting income that originate in one quarter and are capable of reversal in one or more subsequent quarters.

179

TKM Global GmbHNotes to the Financial Statements for the year ended 31st March 2016

Note





` Euro ` Euro

SHAREHOLDERS FUND'S

SHARE CAPITAL Authorised Issued and paid up

Reserves and surplus Profit brought forward

DEFERED TAX LIABILITIES Difference between book and tax depreciation

NON CURENT LIABILITIES LONG TERM PROVISIONS For storage

CURRENT LIABILITIES TRADE PAYBLES For operations

OTHER CURRENT LIABILITIES

For personell costs

Advance payments

For accounts and audit

Overpaid debtors

Others

1

2

3,839,558 51,129 3,451,739 51,129

1,255,501,464 16,718,731 1,093,943,585 16,204,075

3 16,761,316 223,200 14,825,284 219,600

4

4,505,730 60,000 4,050,624 60,000

5 332,043,464 4,421,616 357,036,987 5,288,622

6

15,738,29013,632,905

2,167,406

-

6,403,633

209,577181,541

28,862-

85,273

23,519,0718,394,4461,687,760

57,18110,305,935

348,377124,343

25,000847

152,65737,942,233 505,253 43,964,393 651,224

180


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40,

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61,

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51,

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58,

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14,

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34,

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21,

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31,

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5,1

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7,5

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4,5

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8,74

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41,

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26,

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25,

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24,

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33,

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13,8

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4,5

85,9

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31,4

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1,47

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181


Note





` Euro ` Euro

NON CURRENT INVESTMENT Subsidiary TM Harbour Services Private Limited, Kolkata TKM Global GmbH helds 25,679,292 of 34,615,293 equity shares Market value thereof

8

554,515,610 7,384,139 498,506,178 7,384,139

554,515,610 7,384,139 498,506,178 7,384,139

LONG TERM LOANS AND ADVANCES Personnel advances: loan to director

9

1,877,388 25,000 1,687,760 25,000

OTHER NON CURRENT ASSETS Fixed deposits more than 12 months

10

507,767,160 6,761,619 260,504,203 3,858,727

TRADE AND OTHER RECEIVABLES Trade receivables to third parties, unsecured thereof exceeding more than 6 months

Trade Receivables to consolidated entities, unsecured

Less: Allowance for doubtful debts Less: Provision for doubtful debts

11 66,567,805 22,616,061

- -

(8,682,166) (654,833)

886,442 301,164

- (115,615)

(8,720)

98,963,900 10,505,158

- -

(7,665,941) (785,821)

1,465,906

155,608

- (113,552)

(11,640)

57,230,806 762,107 90,512,138 1,340,714

CASH AND CASH BALANCES Balance with BankCash and Cash equivalents(Fixed deposits more than 3 months less than 12 months)

Other Bank Balance (FD more than 3 months less than 12 months)

12 162,479,252

220,706 45,057,300

2,163,635 2,939

600,000

129,281,201 238,042

47,257,280

1,914,982 3,526

700,000

207,757,258 2,766,574 176,766,522 2,618,508

276,090,784 3,676,529 331,681,363 4,913,041

483,848,041 6,443,103 508,457,886 7,531,549

OTHER CURRENT FINANCIAL ASSETS Prepayment to SupplierIn accrued on loans and advanesTax City tax Tax Corporation tax Prepayments and deferred charges Tax refunds VAT, nettedSecurity deposit Personnel advances: other receivables from director Personnel advances: interest on loan to director Overpaid creditors Others

13 46,559

22,050,292 4,220,367 9,293,068 1,705,719 1,188,687

349,119 39,200 76,597 78,775 58,725

620 293,630

56,200 123,750

22,714 15,829

4,649 522

1,020 1,049

782

121,912,036

12,886,318 2,862,441 2,670,711 6,341,117 1,915,270

313,788 -

29,232 42,869 67,510

1,805,826

190,879 42,400 39,560 93,928 28,370

4,648 -

433 635

1,000

39,107,108 520,765 149,041,292 2,207,679

182



Note





` Euro ` Euro

REVENUE FROM OPERATIONFreight

14 462,931,524

6,427,819

515,894,670

6,654,988

462,931,524 6,427,819 515,894,670 6,654,988

OTHER INCOMEInterestOther incomeTOTAL

15 12,853,265 10,595,294

178,468 147,116

15,186,013 9,568,139

195,898 123,428

23,448,560 325,584 24,754,152 319,326

PURCHASE OF STOCK IN TRADEFreight

16 315,456,891 4,380,129

370,969,867

4,785,473

315,456,891 4,380,129 370,969,867 4,785,473

FINANCE COSTSApplicable net gain/loss on foreign currency transaction and translation

17 9,276,464

128,804 (92,443,065)

(1,192,506)

9,276,464 128,804 (92,443,065) (1,192,506)

DEPRECIATION AND AMORTIZATIONDepriciation on tangible and intangible assets

18 2,164,057 30,048

2,041,024

26,329

2,164,057 30,048 2,041,024 26,329

OTHER EXPENSESPersonal Expenses

Staff salariesEmployes benefit

Rent and occupancy costInsurance costAudit feesEntertainment and conference expensesOffice supplies and administrative costTravel costTelephone and internet costContribution costsAutomobiles costsLoss on debtorsRepairs and maintenancePostage and courier chargesRent equipmentAccounting expensesBank chargesCharitable donationsTraining expensesLoss on disposal of fixed assetsTOTAL

19

60,344,118 11,433,247

4,227,358 2,011,663 2,739,497 2,283,322 2,492,756 3,390,125 1,551,959 1,038,096

614,259 4,059,191 1,532,081

220,525 272,596 272,020 523,873

- 291,537

1,290,382

837,880 158,751

58,697 27,932 38,038 31,704 34,612 47,072 21,549 14,414

8,529 56,362 21,273

3,062 3,785 3,777 7,274

4,048 17,917

66,365,647 17,711,149

5,630,278 3,732,666 3,448,245 4,758,410 2,142,808 3,435,609 2,186,762 1,332,181 1,656,990 8,802,551 1,608,773

577,214 337,522 333,336 480,702

27,132 68,063

762,564

856,110 228,472

72,630 48,151 44,482 61,383 27,642 44,319 28,209 17,185 21,375

113,552 20,753

7,446 4,354 4,300 6,201

350 878

9,837

100,588,606 1,396,676 125,398,600 1,617,629

183


Note





` Euro ` Euro

TAXESCurrent taxes- Taxes of the periodCorporation taxSolidarity surchargeCity taxWithholding taxes

20 9,160,944

503,780 9,938,112

72

127,200 6,995

137,991 1

13,136,539 725,975

14,410,115 1,085

169,460 9,365

185,889 14

19,602,908 272,187 28,273,715 364,728

Taxes for Prior PeriodCorporation taxSolidarity surchargeCity tax

Total Tax expenses

31,833 -

1,934,529

442 -

26,861

1,079,699 59,613

2,074,978

13,928 769

26,767

1,966,362 27,303 3,214,289 41,464

21,569,270 299,490 31,488,004 406,192

Defered taxesDifferent depreciation on fixed and intangible assets

3259,272 3,600

15,372,216 198,300

Earning per shareProfit after tax(Euro)Profit attributable to shareholdersweight average no. of shares for Basic EPSNominal Value of ordinary shares (Euro)Basic Earnings per share (Euro)

21 81,591,242 81,591,242

287633 287633

87,822,17587,822,175

1,132,8971,132,897

100 100 100 100

511 207153

511 2,876

511 878,222

511 11,329

22. NUMBER OF EMPLOYEES

The Number of employees at the year ended 31st March 2016 was 12 without the Global Head Logistics & Managing Director

23. RELATED PARTIES

Related parties comprise the following Ultimate parent company Tata Steel Limited TM International Logistic Ltd.

Joint Ventures of the Parent company IQ Martrade Düsseldorf, Germany NYK Holding (Europe) B.V. Netherlands Parent company TKM Global Logistics Ltd.

Fellow Subsidiaries International Shipping Ltd., FZE, Dubai Subsidiary Company TM Harbour Services Pvt. Ltd. Global Head Logistics & Managing Director Mr. Amar Patnaik

184



24. The nature of significnt related party transactions and the amounts involved are as follows :





` Euro ` Euro

Revenue (services rendered)TKM INDIATKM China

Direct Costs (services availed)TKM INDIATKM ChinaTMILLISL Dubai

19,654,906 1,493,623

272,909 20,739

15,681,831 1,793,038

202,294 23,130

12,268,247 76,554,739 1,283,036

-

170,345 1,062,965

17,815 -

19,870,469 15,388,805

- -

256,327 198,514

- -

At the balance sheet date balances with related parties were as follows:

As at 31st March '16




` Euro ` Euro

Disclosed under trade receivablesTKM IndiaTKM ChinaTMILLISL DubaiDisclosed under other assetsTKM ChinaISL DubaiDisclosed under trade payablesTKM IndiaTKM ChinaTMILLISL Dubai

6,432,831 18,849

- -

- -

2,112,211 2,006,552

(59,701) -

85,662

251 - -

- -

28,127 26,720

(795) -

16,317,399 (1,350)

- -

- -

10,161,395 40,236

- -

241,702 (20)

- -

- -

150,516 596

- -

185

25. FINANCIAL INSTRUMENTS: CREDIT, INTEREST RATE AND EXCHANGE RATE RISK EXPOSURES

Credit risk

Financial assets which potentially expose the establishment to concentrations of credit risk comprise principally bank accounts and trade

receivables.

The establishment's bank accounts are placed with high credit quality financial institutions.

Trade receivables are stated net of the allowance for doubtful recoveries.

Interest rate risk

There are no interest rate risks.

Exchange rate risk

There are no significant exchange rate risks as substantially all financial assets and financial liabilities are denominated in Euro.

26. FINANCIAL INSTRUMENTS: FAIR VALUES

The fair value of a financial instrument is the amount for which an asset could be exchanged, or a liability settled, between knowledgeable, willing

parties in an arm's length transaction. The fair values of the financial assets and financial liabilities which are required to be carried at cost or at

amortized cost approximate to their fair values.






` Euro ` Euro

27. CONTINGENT LIABILITIESBanker's letter of guarantee 1,794,782 23,900

1,613,499 23,900

1,794,782 23,900 1,613,499 23,900





` USD in Euro ` GBP in Euro

28. Earnings and expenditure in foreign ExchangeFreight incomefreight ExpenditureSpot Transaction incomeSpot Transaction expensesOther incomeBank chargesother expediture

206,547,238 206,891,998

- - -

33,489 26,071

2,867,915 2,872,702

- -

465 362

7,748,704 7,996,669

- -

123,442 180,050

9,402,283

107,591 111,034

- -

1,714 2,500

130,551

413,498,797 5,741,444 25,451,148 353,390

186


Approved by the Directors on 7th April 2016.For TKM Global GmbH A 2C Treuhand GmbH WirtschaftsprüfungsgesellschaftAmar Patnaik ppa.Global Head Logistics and Managing Director Mirco Schroeter Marko Lüthje Wirtschaftsprüfer Wirtschaftsprüfer Steuerberater Steuerberater





` Euro ` Euro

29. PAYMENTS TO THE AUDITORAuditingtaxation mattersCompany law mattersManagement servicesOther servicesReimbursement of expenses

612,170 - - -

1,008,280-

8500 - - -

14,000 -

658,920

- - -

1,170,552 -

8500 - - -

15,100 -

1,620,450 22,500 1,829,472 23,600

187


188



TKM Global China Limited(As on 1st, June 2016)

Board of Directors Management Team Mr. R. N. Murthy Mr. Chirag Bijlani - General ManagerMr. Amar Patnaik Mr. Anand Chand Registered Office AuditorsUnit G, Floor 11, HengJi Mansion M/s. Shanghai Jia Liang 99 Huai Hai East Road, Huangpu District CPAs Shanghai - 200 021, P. R. China China Bankers

Tel: +8621 64155365 Standard Chartered Bank Fax: +8621 64156378 HSBC Bank

189


Directors’ Report

To the Members,

The Directors hereby present their seventh report on the business and operations of the Company and the financial accounts for the year ended 31st March, 2016.

The Company was formed on 25th June, 2008 with limited liability based on the Foreign-Invested Enterprise law of the People’s Republic of China. The business license was issued by Shanghai Administration for Industry and Commerce of the PRC.

The Company is a wholly owned subsidiary of TKM Global Logistics Limited, which is incorporated in India.

FINANCIAL RESULTS:

31.03.2016 31.03.2016 31.03.2015 31.03.2015 Amount in Amount in Amount in Amount in INR RMB INR RMB

Revenue 195,965,159 18,989,608 197,346,309 19,892,578

Less: Direct Costs 172,628,735 16,728,239 175,931,067 17,733,914

Gross Profit 23,336,424 2,261,369 21,415,242 2,158,664

Less: Administrative Expenses 25,153,365 2,437,436 24,231,125 2,442,506

Profit/(Loss) from Operating Activities (1,816,941) (176,067) (2,815,883) (283,842)

Add: Other Income 38,399 3,721 93,402 9,415

Net profit/(Loss) for the year (1,778,542) (172,346) (2,722,481) (274,427)

OPERATIONAL REVIEW

During the year under review, the Company earned a total income of RMB 18,989,608 (` 195,965,159/-) vis-à-vis RMB 19,892,578 (` 197,346,309/-) during the previous financial year. The Net Loss for the FY 15-16 was RMB 172,346 (` 1,778,542/-) against a Net Loss of RMB 274,427 (` 2,722,481/-) in FY 14-15. The drop in revenue was due to drop in the Sea Export volumes by 15% as compared to the previous year, compounded by drop in unit Freight rate.

During this period, while Sea Freight Export Volumes (both FCL & LCL) were down by 15% (YoY), Air Export Volumes recorded a growth of 35% (YoY), which was accounted by increase in the volumes of present customers and newly acquired accounts.

Break Bulk Exports: During FY 14-15, the Company had not handled any volumes, whereas, there was about

190


11,500 Freights in FY 15-16 on account of TKM GmbH.

During the period, the operating contribution percentage at 12% was slightly higher than the previous year at 11%. This increase was possible due to growth of increased customers in China with higher yields.

A positive operating cash flow was maintained while outstandings were kept under control.

OPPORTUNITIES AND THREATS

In spite of slowdown of China, the current market holds huge opportunities for us to tap, especially Indian imports from China. Overall China has still contributed more than 25% of Global Economic Growth, while manufacturing has slowed down, but the service sectors are doing well. However, India’s engagement with China has increased exponentially over the last decade and this relationship is still being dominated by China’s exports to India, which accounted for almost 80% of total bilateral trade, mainly on FOB terms.

a. The Company needs to continue to develop our sales focused approach on an “End to End Solution“ model instead of port to port freight.

b. Joint efforts to grow nominations more aggressively with TKM India, considering majority of exports from China to India are to be delivered on FOB terms with the decision on the nomination of the forwarder being taken by the importer in India.

c. The focus during the next year will be to continue to grow more the share of Shipper nominated business to develop on Buyers Consolidations, special equipment’s and Air Exports which have proven to yield better.

DIRECTORS

The Board of the Company comprises of 3 (Three) Non-Independent Non-Executive Directors.

As on 31st March, 2016, Mr. R. N. Murthy, Mr. Amar Patnaik and Mr. Anand Chand continued to be the Directors on the Board of your Company.

None of the Directors of your Company are disqualified under Section 164(2) of the Indian Companies Act, 2013.

DIRECTOR’S RESPONSIBILITY STATEMENT

The Company is in compliance with various accounting and financial reporting requirements in respect of the financial statements for the year under review. Pursuant to Section 134(5) of the Companies Act, 2013 and in respect of the Annual Accounts for the year under review, the Directors hereby confirm that:





191

v. the directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

AUDITORS

M/s. Shanghai Jia Liang CPAs are the Statutory Auditors of the Company and being eligible, have offered themselves for re-appointment.


No qualification, reservation or adverse remark or disclaimer have been made by the Auditors in their report.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO





Nil


Earnings in foreign exchange was RMB 13,357,481/- (INR 137,843,861/-) from Freight and related income and RMB 10,144,301/- (INR 104,685,129/-) was spent in foreign exchange on account of freight payment, purchase of fixed assets, administrative expenses etc.


Your Company has no such employees falling within the provisions of Section 197 of the Companies Act, 2013, read with Rule 5(2) of Companies (Appointment and Remuneration) of Managerial Personnel Rules, 2014.


ACKNOWLEDGEMENT

I wish to take the opportunity to place on record my sincere appreciation and gratitude for the continued assistance, support and co-operations extended by all Government Authorities, Banks, Overseas Associates, Clearing Agents, Shipping Lines, Air Lines and other business associates and last but not the least the Members of the Company.

For TKM Global China Limited

Sd/-Amar Patnaik

Date: 19th April, 2016 DirectorPlace: China DIN: 02730170

192


Independent auditor’s Report

To the board of directors of TKM Global China Limited(Established in the People's Republic of China with Limited Liability)

Report on the financial statements

We have audited the accompanying financial statements of TKM Global China Limited (the Company) set out on pages 3 to 20, which comprise the statement of financial position as at 31 March 2016, and the statement of comprehensive income, the statement of changes in equity and the statement of cash flows for the year then ended, and a summary of significant accounting policies and other explanatory notes.

Management's responsibility for the financial statements

Management of the Company is responsible for the preparation and the true and fair presentation of these financial statements in accordance with International Financial Reporting Standards promulgated by the International Accounting Standards Board. This responsibility includes designing, implementing and maintaining internal control relevant to the preparation and the true and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error; selecting and applying appropriate accounting policies; and making accounting estimates that are reasonable in the circumstances.

Auditors' responsibility

Our responsibility is to express an opinion on these financial statements based on our audit and to report our opinion solely to you, as a body, and for no other purpose. We do not assume responsibility towards or accept liability to any other person for the contents of this report.

We conducted our audit in accordance with International Standards on Auditing issued by the International Federation of Accountants. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance as to whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor's judgement, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error in making those risk assessments, the auditor considers internal control relevant to the entity's preparation and the true and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity's internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Opinion

In our opinion, the financial statements give a true and fair view of the state of the Company's affairs as at 31 March 2016 and of the Company's profit and cash fiows for the period in accordance with International Financial Reporting Standards.

Shanghai, JiaLiang CPAs Limited

19th April, 2016

193

TKM Global China LimitedStatement of Comprehensive Income for the year ended 31st March 2016

Note 2016`

2016RMB

2015`

2015RMB

RevenueCost of SalesGross profitOther gains and lossesAdministration ExpensesLoss before taxIncome tax expenses

Loss for the year

Other comprehensive incomeTotal comprehensive income for the year

5

6

7

195,965,159 (172,628,735)

18,989,608 (16,728,239)

197,346,309 (175,931,067)

19,892,578 (17,733,914)

23,336,424 38,399

(25,153,365)

2,261,369 3,721

(2,437,436)

21,415,242 93,402

(24,231,125)

2,158,664 9,415

(2,442,506)

(1,778,542) -

(172,346) -

(2,722,480) -

(274,427) -

(1,778,542) -

(172,346) -

(2,722,480) -

(274,427) -

(1,778,542) (172,346) (2,722,480) (274,427)

See acompanying notes to financial statements

194


TKM Global China LimitedStatement of Financial Position as at 31st March 2016

Note 3/31/2016`

3/31/2016RMB

3/31/2015`

3/31/2015RMB

AssetsNon current assetsProperty, plant and equipmentsOther intangible assetsDeferred tax assets

8910

851,574 320,995 132,314

83,108 31,327 12,913

951,216 392,048 121,458

93,283 38,447 11,911

1,304,884 127,348 1,464,722 143,641

Current assets

Trade and other receivablesAmount due from related companiesCash and bank balance

Total assets

1116

16,551,067 10,829,908 23,674,903

1,615,274 1,056,927 2,310,513

15,132,802 17,118,708 35,185,318

1,484,030 1,678,782 3,450,522

51,055,877 4,982,714 67,436,828 6,613,334

52,360,761 5,110,062 68,901,550 6,756,975


195

TKM Global China LimitedStatement of Financial Position as at 31st March 2016

Notes 3/31/2016`

3/31/2016RMB

3/31/2015`

3/31/2015RMB

Equity and LiabilitiesEquity Paid in capitalAccumulated lossesTotal Equity

Non current LiabilitiesDeferred tax liabilities

Current LiabilitiesTrade and other payablesAmount due to related companies

Total liabilitiesTotal equity and liabilities

12

10

1416

70,030,388 (34,126,496)

6,834,500 (3,330,519)

69,692,080 (32,204,206)

6,834,500 (3,158,173)

35,903,892 3,503,981 37,487,874 3,676,327

132,314 12,913 121,458 11,911

132,314 12,913 121,458 11,911

16,103,464

221,091

1,571,591

21,577 30,495,702

796,516

2,990,625

78,112

16,324,555 1,593,168 31,292,218 3,068,737

16,456,870 1,606,081 31,413,676 3,080,648

52,360,761 5,110,062 68,901,550 6,756,975

Sd/- Sd/-Amar Patnaik Chirag BijlaniLegal representative Principal in charge of accounting See acompanying notes to financial statements

196


TKM Global China LimitedStatement of Changes in Equity for the year ended 31st March 2016

Paid-in-capital

Accumulated losses

Total Paid-in-capital Accumulated losses

Total

` ` ` RMB RMB RMB

Balance at 1st April 2014Effect of foreign ExchangeLoss for the yearBalance at 1st April 2015Effect of foreign ExchangeLoss for the yearBalance at 31st March 2016

65,998,7163,693,364

(27,847,470) (1,634,255) (2,722,480)

38,151,246 2,059,108

(2,722,480)

6,834,500

–

(2,883,746)

(274,427)

3,950,754

(274,427)

69,692,080 (32,204,206) 37,487,874 6,834,500 (3,158,173) 3,676,327

338,308 -

(143,748) (1,778,542)

194,559 (1,778,542) –

(172,346) (172,346)

70,030,388 (34,126,496) 35,903,892 6,834,500 (3,330,519) 3,503,981


197

TKM Global China LimitedStatement of Cash Flows for the year ended 31st March 2016

Note 2016 INR

2016 RMB

2015 INR

2015 RMB

Cash flows from/(used in) operating activitiesProfit/(loss) before income taxAdjustments for:Depreciation on property, plant and equipmentAmortisation of intangible assetsLoss on disposal of property, plant and equipmentExchange LossInterest income

Operating profit before movements in working capital

Decrease/(increase) in trade and other receivablesDecrease in amount due from related companiesDecrease/(increase) in trade and other payablesIncrease/ (Decrease) in amount due from related companiesCash generated from/(used in) operationsIncome taxes paidNet cash generated fron/(used in)operating activityCash flows from/(used in) investing activitesInterest receivedNet proceeds from disposal of property, plant and equipmentPurchase of property, plant and equipmentNet cash generated fron/(used in)investing activitiesCash flows from financing activities

Net increase/(decrease) in cash and cash equivalentscash and cash equivalents at 1 AprilEffect of foreign exchange rate changescash and cash equivalents at 31 March

6666

(1,778,542)--

155,939 73,476

- (1,465,290)

(38,399)

(172,346)

15,111 7,120

- (141,991)

(3,721)

(2,722,480)--

156,904 70,635

- (248,551) (93,402)

(274,427)

15,816 7,120

- (25,054) (9,415)

(3,052,816) (295,827) (2,836,895) (285,960)

(1,354,386) 6,417,295

(14,643,863) (583,419)

(131,244) 621,855

(1,419,034) (56,535)

2,681,370 (7,098,606) 19,095,875

(48,194)

270,283 (715,542) 1,924,871

(4,858)

(13,217,189) -

(1,280,785) -

11,793,550 -

1,188,794 -

(13,217,189)

38,399 -

(50,938)

(1,280,785)

3,721 -

(4,936)

11,793,550

93,402 - -

1,188,794

9,415 --

(12,538) (1,215) 93,402 9,415

- - - -

(13,229,727) 35,185,318 1,719,316

(1,282,000) 3,450,522

141,991

11,886,952 21,507,972

248,551

1,198,209 2,227,259

25,054

23,674,907 2,310,513 35,185,318 3,450,522 See acompanying notes to financial statements

198


TKM Global China LimitedNotes to the Financial Statements for the year ended 31st March 2016

1. General information

TKM Global China Limited (the "Company") is a wholly owned foreign invested enterprise established in Shanghai, the People's Republic of China (the "PRC") by TKM Global Logistics Limited on 25 June 2008 with an operating period of 20 years. The company was approved by People's Government of Shanghai and obtained the Business Certificate, numbered 310000400576953.

The principal activities of the Company are undertaking ocean shipping, land transportation and air-express for import and export product, int'l transportation agent of international display, incl: canvassion, booking cargo space, consigning, storage, transshipment, container handling, settling accounts for incidental expenses of transportation, applying to customs, contacting the customs for the inspection of the freight, insurance, relevant services to short-distance transportation and consulting, Non-Vessel Operating Common Carrier.

The directors consider the ultimate holding company to be TATA Steel Ltd., a company incorporated in India.

2. Basis of preparation

The financial statements on pages 3 to 20 have been prepared in accordance with International Financial Reporting Standards ("IFRSs") which collective term includes all applicable International Financial Reporting Standards, International Accounting Standards and Interpretations issued by the International Accounting Standards Board. The financial statements have been prepared on the historical cost basis except for the revaluation of certain noncurrent assets and financial instruments. Historical cost is generally based on the fair value of the consideration given in exchange for assets. The principal accounting policies are set out below.

3. Principal accounting policies

3.1 Revenue recognition

Revenue is measured at the fair value of the consideration received or receivable, Revenue is reduced for estimated customer returns, rebates and other similar allowances.

Revenue from the rendering of services are recognised when all the following conditions have satisfied: i) the amount of revenue can be measured reliably; ii) it is probable that the economic benefits associated with the transaction will flow to the entity; iii) the stage of completion of the transaction at the balance sheet date can be measured reliably; and iv) the costs incurred for the transaction and the costs to complete the transaction can be measured reliably.

Interest income is accrued on a time basis, by reference to the principal outstanding and at the effective interest rate applicable, which is the rate that exactly discounts estimated future cash receipts through the expected life of the financial asset to that asset's net carrying amount.

3.2 Foreign currencies

The Company's financial statements are presented in Renminbi Yuan ("RMB"), which is also the functional currency of the Company.

Foreign currency transactions are translated into the functional currency of the Company using the exchange rates prevailing at the dates of the transactions. At balance sheet date, monetary assets and liabilities denominated in foreign currencies are translated at the foreign exchange rates ruling at the balance sheet date. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation of monetary assets and liabilities denominated in foreign currencies are recognised in the income statement.

199


3. Principal accounting policies (continued)

3.2 Foreign currencies (continued)

Non-monetary items carried at fair value that are denominated in foreign currencies are retranslated at the rates prevailing on the date when the fair value was determined and are reported as part of the fair value gain or loss. Non-monetary items that are measured in terms of historical cost in a foreign currency are not retranslated.

3.3 Leases

Leases which do not transfer substantially all the risks and rewards of ownership of assets to the Company are classified as operating leases. Where the Company has the use of assets held under operating leases, payments made under the leases are charged to the income statement on a straight line basis over the lease terms except where an alternative basis is more representative of the pattern of benefits to be derived from the leased assets. Lease incentives received are recognised in the income statement as an integral part of the aggregate net lease payments made. Contingent rental are charged to the income statement in the accounting period in which they are incurred.

3.4 Pension obligations

The Company's PRC employees are enrolled in the mandatory central pension plan operated by the local municipal government. The Company is required to make a contribution of 22.5% of the basic and other salaries of the employees or that specified by the local municipal government, to the central pension plan to fund the retirement benefits. The local municipal government undertakes to assume the retirement benefits obligations of all existing and future retired PRC employees. The only obligation of the Company in respect to the central pension plan is to meet the required contribution under the plan. The contributions are charged to the income statement as they become payable in accordance with the rules of the central pension plan.

3.5 Accounting for income taxes

Income tax comprises current tax and deferred tax.

Current income tax assets and/or liabilities comprise those obligations to, or claims from, fiscal authorities relating to the current or prior reporting period, that are unpaid at the balance sheet date. They are calculated according to the tax rates and tax laws applicable to the fiscal periods to which they relate, based on the taxable profit for the period. All changes to current tax assets or liabilities are recognised as a component of tax expense in the income statement.

Deferred tax is calculated using the liability method on temporary differences at the balance sheet date between the carrying amounts of assets and liabilities in the financial statements and their respective tax bases. Deferred tax liabilities are generally recognised for all taxable temporary differences. Deferred tax assets are recognised for all deductible temporary differences, tax losses available to be carried forward as well as other unused tax credits, to the extent that it is probable that taxable profit will be available against which the deductible temporary differences, unused tax losses and unused tax credits can be utilised.

Deferred tax assets and liabilities are not recognised if the temporary difference arises from initial recognition of assets and liabilities in a transaction that affects neither taxable nor accounting profit or loss.

200




3.5 Accounting for income taxes (continued)

Deferred tax liabilities are always provided for in full. Deferred tax assets are recognised to the extent that it is probable that they will be able to be offset against future taxable income. Deferred tax assets and liabilities are calculated, without discounting, at tax rates that are expected to apply to their respective period of realisation, provided they are enacted or substantively enacted at the balance sheet date.

Changes in deferred tax assets or liabilities are recognised in the income statement, or in equity if they relate to items that are charged or credited directly to equity .

3.6 Property, plant and equipment

Property, plant and equipment are stated at acquisition cost less accumulated depreciation and accumulated impairment losses. Cost of an asset comprises its purchase price and any directly attributable costs of bringing the asset to the working condition and location for its intended use.

The gain or loss arising from the disposal is determined as the difference between the sales proceeds and the carrying amount of the assets and is recognised in the income statement.

Subsequent costs are included in the asset's carrying amount or recognised as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Company and the cost of the item can be measured reliably. All other repairs and maintenance are charged to the income statement during the financial period in which they are incurred.

Depreciation is calculated using the straight-line method to allocate the cost less impairment losses of each asset to their residual values over their estimated useful lives, as follows:

Depreciation rates

Equipment 20% p.a.

Computers 25% p.a.

Furniture and fixtures 6.33% p.a.

The assets' residual values and useful lives are reviewed, and adjusted if appropriate, at each balance sheet date.

3.7. Intangible assets

Other intangible assets

Software are stated at cost less accumulated amortisation and accumulated impairment losses. Amortisation is calculated on a straight-line method over their estimated useful lives.

Impairment of assets

The Company's tangible and infungible assets are subject to impairment testing.

An impairment loss is recognised as an expense immediately for the amount by which the asset's carrying amount exceeds its recoverable amount. The recoverable amount is the higher of fair value, reflecting market conditions less costs to sell, and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessment of time value of money and the risk specific to the asset.

201



3.7 Intangible assets (continued)

Impairment of assets (continued)

For the purposes of assessing impairment, where an asset does not generate cash infiows largely independent from those from other assets, the recoverable amount is determined for the smallest group of assets that generate cash infiows independently (i.e. a cash-generating unit). As a result, some assets are tested individually for impairment and some are tested at cash-generating unit level.

An impairment loss is reversed if there has been a favorable change in the estimates used to determine the asset's recoverable amount and only to the extent that the asset's carrying amount does not exceed the carrying amount that would have been determined, net of depreciation and amortisation, if no impairment loss had been recognised.

3.8 Cash and cash equivalent

Cash and cash equivalents include cash at bank and in hand less bank overdrafts which are repayable on demand and form an integral part of the Company's cash management.

3.9 Provisions

Provisions are recognised when present obligations will probably lead to an outflow of economic resources from the Company which can be estimated reliably. Timing or amount of the outflow may still be uncertain. A present obligation arises from the presence of a legal or constructive commitment that has resulted from past events. Provisions are not recognised for future operating losses.

Provisions are measured at the estimated expenditure required to settle the present obligation, based on the most reliable evidence available at the balance sheet date, including the risks and uncertainties associated with the present obligation.

All provisions are reviewed at each balance sheet date and adjusted to refiect the current best estimate.

3.10 Financial assets

Trade and other receivables (including amount due from related companies) are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. Trade and other receivables are initially measured at fair value and subsequently measured at amortised cost using the effective interest method, less any impairment losses. Amortised cost is calculated taking into account any discount or premium on acquisition and includes fees that are an integral part of the effective interest rate and transaction cost.

Impairment of financial assets

At each balance sheet date, trade and other receivables are reviewed to determine whether there is any objective evidence of impairment. If there is objective evidence that an impairment loss on trade and other receivables has been incurred; the amount of the loss is measured as the difference between the asset's carrying amount and the present value of estimated future cash fiows (excluding future credit losses that have not been incurred) discounted at the financial asset's original effective interest rate (i.e. the effective interest rate computed at initial recognition). The amount of the loss is recognised in profit or loss of the period in which the impairment occurs.

If, in subsequent period, the amount of the impairment loss decreases and the decrease can be related objectively to an event occurring after the impairment was recognised, the previously recognised impairment loss is reversed to the extent that it does not result in a carrying amount of the financial asset exceeding what the amortised cost would have been had the impairment not been recognised at the date the impairment is reversed. The amount of the reversal is recognised in profit or loss of the period in which the reversal occurs.

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3. Principal accouting policies (continued)

3.11 Finance liabilities

The Company's financial liabilities include trade and other payables. They are included in balance sheet line items as trade and other payables and amounts due to related companies.

Financial liabilities are recognised when the Company becomes a party to the contractual provisions of the instrument. All interest related charges are recognised as an expense in finance costs in the income statement. A financial liability is derecognised when the obligation under the liability is discharged or cancelled-or expires.

Trade and other payabIes and amounts due to related companies

Trade and other payables and amounts due to related companies are recognised initially at their fair value and subsequently measured at amortised cost, using the effective interest method.

3.12 Related parties

A party is considered to be related to the Company if:

(i) directly or indirectly, through one ore more intermediaries, the Company:

- controls, is controlled by, or is under common control with, the entity;

- has an interest in the entity that gives it significant influence over the entity;

- has joint control over the entity;

(ii) the party is an associate;

(iii) the party is a joint-controlled entity;

(iv) the party is a member of the key management personnel of the Group or its parent;

(v) the party is a close member of the family of any individual referred to in (i) or (iv);

(vi) the party is an entity that is controlled, jointly-controlled or significantly influenced by or for which significant voting power in such entity resides with, directly or indirectly, any individual referred to in (iv) or (v); or

(vii) the party is a post-employment benefit plan for the benefit of employees of the Company, or of any entity that is a related party of the Company.

4. Critical accounting estimates and judgments

Estimates and judgments are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. The Company makes estimates and assumptions concerning the future. The resulting accounting estimates will, by definition, seldom equal the related actual results. The estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are discussed below:

4.1 Useful lives of property, plant and equipment

The Company's management determines the estimated useful lives for its property, plant and equipment. This estimate is based on the historical experience of the actual useful lives of property, plant and equipment of similar nature and functions. It could change significantly as a result of technical innovations and competitor actions in response to severe industry cycles.

The Company's management will increase the depreciation charge where useful lives are less than previously estimated lives, or will write-off or write-down technically obsolete or non-strategic assets that have been abandoned or sold.

203


4. Critical accounting estimates and judgments (continued)

4.2 Impairment of receivables

The Company's management reviews receivables on a regular basis to determine if any provision for impairment is necessary. This estimate is based on the credit history of its customers, past settlement and industry practice and current market conditions. Management reassess the impairment of receivables at the balance sheet date.

5. Revenue

Revenue represents the invoiced value of services rendered net of discount.

2016 2016 2015 2015` RMB ` RMB

Rendering of services 195,965,159 18,989,608 197,346,309 19,892,578

6. (Loss)/Profit Before Income Tax

(Loss)/Profit before income tax is arrived after charging/(crediting)

2016 2016 2015 2015` RMB ` RMB

Staff costs

-Salaries and wages

-Staff benefits

Depriciation on property, plant and equipments (Note 6.1)

Amortisation of intangible assets (Note 6.2)

Loss on disposal of property, plant and equipments

Exchange (gain)/loss, net

Bank interest income

Exchange (gain)/loss, net

11,479,956

3,692,167

1,112,442

357,782

10,922,779

3,645,503

1,101,020

367,468

15,172,124 1,470,224 14,568,282 1,468,488

155,939

73,476

-

-

(38,399)

(1,465,288)

15,111

7,120

-

-

(3,721)

(141,991)

156,904

70,635

-

(248,551)

(93,402)

1,083,330

15,816

7,120

-

(25,054)

(9,415)

109,200

Notes:

6.1 Amortisation charges of ` 73,476 (2015: ` 70,635) of intangible assets have been expensed in administrative expenses.

6.2 Depreciation charges of ` 674,664 (2015: ` 674,664) have been expensed in administrative expenses.

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7. Income Tax Expenses

2016 2016 2015 2015

` RMB ` RMB

Current tax epenses

Deferred tax expenses

- - - -

- - - -

- - - -

Pursuant to the Income Tax Laws of the PRC Concerning Foreign Investment and Foreign Enterprises and various local income

tax laws (the "Income Tax Laws"), foreign investment enterprises are subject to a statutory income tax rate of 25% unless the

enterprise is located in specially designated regions or cities for which more favorable effective tax rates apply.

Reconciliation between tax expense and accounting profit/(loss) at applicable tax rates is as follows:

2016

`

2016

RMB

2016

%

2015 `

2015

RMB

2015

%

Loss before income tax

Tax calculated at rates applicable to the jurisdictions concerned 25% (2015:25%)

Tax effect of utilisation of tax losses not previously recognised

Tax effect of tax losses not recognised

Actual income tax expenses and effective tax rate for the year

(1,778,542) (172,346) (2,722,480) (274,427)

(444,641) (43,087) 25% (680,622) (68,607) 25%

- - 0%

- - -

444,641 43,087 -25% 680,622 68,607 -25%

- - - - - -

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8. Property Plant And Equipment

Equipment Computers Furniture & Fixtures

Total

RMB RMB RMB RMB

At 1 April 2015CostAccumulated depriciation Net book amount

137,448

(126,582) 15,856

(10,184) 103,062 (26,317)

256,366 (163,083)

10,866 5,672 76,745 93,283

Year ended 31 March 2016Opening net book amountAdditionDepreciationClosing Net book amount

10,866 4,936

(4,623)

5,672 -

(3,964)

76,745 -

(6,524)

93,283 4,936

(15,111)

11,179 1,708 70,221 83,108

At 31 March 2016CostAccumulated depriciation Net book amount

137,245 (126,066)

15,856

(14,148)

103,062

(32,841) 256,163

(173,055)

11,179 1,708 70,221 83,108

8. Property Plant And Equipment

Equipment Computers Furniture & Fixtures

Total

` ` ` `

At 1 April 2015CostAccumulated depreciation Net book amount

1,401,571 (1,290,769)

161,685 (103,847)

1,050,934 (268,357)

2,614,190 (1,662,974)

110,802 57,838 782,576 951,216

Year ended 31 March 2016Opening net book amountDepreciationClosing Net book amount

111,340 (47,370)

58,119 (40,618)

786,375 (66,849)

955,834 (154,836)

114,547 17,501 719,526 851,574

At 31 March 2016CostAccumulated depreciation Net book amount

1,406,295 (1,291,748)

162,470 (144,969)

1,056,035 (336,509)

2,624,800 (1,773,225)

114,547 17,501 719,526 851,574

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9. Other intangible assets

2016 INR

2016 RMB

2015 INR

2015 RMB

At 1 April Gross carrying amountAccumulated amortisationNet carrying amount

726,034 (333,986)

71,200 (32,753)

729,558 (262,651)

71,200 (25,633)

392,048 38,447 466,907 45,567

Year ended 31 MarchOpening net book amountAmortisationEffect of Foreign Exchangeclosing carrying amount

392,048 (73,476)

2,423

38,447 (7,120)

-

466,907

(70,635) (4,224)

45,567 (7,120)

-

320,995 31,327 392,048 38,447

At 31 MarchGross carrying amountAccumulated AmortisationNet book amount

729,558 (408,563)

71,200 (39,873)

726,034 (333,986)

71,200 (32,753)

320,995 31,327 392,048 38,447

Intangible assets represent software which is amortised on a straight-line method over 10 years.

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10. Defered tax

The following are the major deferred tax liabilities and assets recognised by the company and the movements there on during the current and priod reporting years.

Depreciation `

Depreciation RMB

Tax losses `

Tax losses RMB

Total`

Total RMB

At April 2014Charge/(credit) to profit or loss

(105,924) (9,345)

(10,969) (942)

105,924 9,345

10,969 942

- -

- -

(6,188) 6,188 - -

At April 2015Charge/(credit) to profit or lossEffect of Foreign Exchange

(121,458) (10,340)

(516)

(11,911) (1,002)

121,458 10,340

516

11,911 1,002

- - -

- - -

At 31 March 2016 (132,314) (12,913) 132,314 12,913 - -

Deferred tax assets and liabilities are offset when there is a legally enforeable right to set off current tax assets against current tax liabilities and when the deferred income taxes relae to the same fiscal authority The offset amounts are as follows :

3/31/2016 3/31/2016 3/31/2015 3/31/2015` RMB ` RMB

Defered tax liabilitiesDefered tax assets

132,314 (132,314)

12,913 (12,913)

111,852 (111,852)

11,911 (11,911)

- - - -

At the balance sheet date, the Company has unused tax losses of RMB1,421,764 (2015: RMB 1,249,419) available for offset against future profits. A deferred tax asset has been recognised in respect of RMB 51,651 (2015: RMB 47,643) of such losses. No deferred tax asset has been recognised in respect of the remaining RMB 1,370,133 (2015: RMB 1,201,776) due to the unpredictability of future profit streams.

11. Trade and other receivables

3/31/2016 3/31/2016 3/31/2015 3/31/2015` RMB ` RMB

Trade receivables- Debt exceeding 6 months - - - -

Trade receivables- Other Debt 6,049,429 590,384 5,145,253 504,580

Deposits 8,525,253 832,008 8,484,069 832,008

Prepayment & other receivables 1,976,385 192,882 1,503,481 147,442

16,551,067 1,615,274 15,132,802 1,484,030

Less: Impairment of trade receivables - - - -

16,551,067 1,615,274 15,132,802 1,484,030

The carrying amounts of trade and other receivables approximate their fair value.

In determining the recoverability of a trade receivable the Company considers any change in the credit quality of the trade receivable from the date credit was initially granted up to the reporting dated. The concentration of credit risk is limited due to the customer base being large and unrelated. Accordingly, the directors believe that there is no further credit provision required in excess of the impairment of trade receivables.

208



11. Trade and other receivables

Included in trade receivables are the following amounts denominated in a currency other than the following currency of the entity to which they relate :

3/31/2016 3/31/2015

US dollar $20,989 $60,235

12. Paid- in - capital

2016 2015

US$ US$

At 1 AprilIncrease during the yearAt 31 March

1,000,000 1,000,000

- -

1,000,000 1,000,000

3/31/2016 3/31/2016 3/31/2015 3/31/2015

INR RMB INR RMB

Registered capital 70,030,388 6,834,500 69,692,080 6,834,500

Capital contributions in foreign currency have been translated into RMB at the exchange rates prevailing at the dates of each contribution received as quoted by the People's Bank of China.

Shanghai Huaju Certified Public Accountants Co., Ltd. has verified the above capital contributions and issued related capital verification reports.

13. Reserve As stipulated by the relevant laws and regulations for Foreign Investment Enterprises ('FIE') in the PRC, the Company is required

to transfer at least 10% of its profit after taxation to the general reserve until the balance of the general reserve is equal to 50% of its registered capital. The general reserve can be used to make up prior years' cumulative losses, if any. FIE is also required to transfer certain percentage, at the discretion of the board of directors, of their profit after taxation to the staff welfare and incentive bonus fund. The staff welfare and incentive bonus fund is mainly utilised on incentive bonus for employees, as well as capital items for the collective benefits of the employees such as the construction of staff quarters and other staff welfare facilities.

209


14. Trade and other payables

3/31/2016 3/31/2016 3/31/2015 3/31/2015` RMB ` RMB

Trade payablesOther payablesVAT and other taxes

15,356,866 1,498,728 29,959,294 2,938,021

632,430 61,721 529,566 51,933

114,168 11,142 6,842 671

16,103,464 1,571,591 30,495,702 2,990,625

The carrying amounts of trade and other payables approximate their fair values.

Included in trade payables are the following amounts denominated in a currency other than the functional currency of the entity to which they relate :

Trade and other payables(continued) 3/31/2016 3/31/2015

US Dollar US$57,322 US$31,151

15. Operating lease commitments

At 31 March 2015, the total future minimum lease payments under non-cancelable operating leases in respect of the leasing of properties are payable by the Company as follows:-

3/31/2016 3/31/2016 3/31/2015 3/31/2015

INR RMB INR RMB

Within one yearIn the second to fifth years

1,156,237 112,841 1,380,779 135,409

- 1,150,651 112,841

1,156,237 112,841 2,531,430 248,250 The Company leases a number of properties under operating leases. The leases run for an initial period of one to two years, with an option to renew the lease and renegotiated the terms at the expiry date or at dates as mutually agreed between the Company and respective landlords. None of the leases include contingent rentals.

210



16. Related party transaction

Ultimate Parent Company

Name of the party Country

Tata Steel Limited India

TM International Logistics Ltd., India

Parent Company

Name of the Party Country

TKM Global Logistics Ltd. "TKM India" India

Fellow Subsidiaries

Name of the Party Country % Holding

TKM Global GmbH ("TKM Germany") Germany 100

TRL China Limited ("TRL China") China 100

York Transport Equiment (Shanghai) Co. Ltd. ("York Shanghai") China 100

Qingdao YTE Special Products Co. Ltd. ("York Quingdao") China 100

NanJing Tata Auto Comp Systems Limited ("Nanjing Tata") China 100

A portion of the Company's business is represented by transactions to which other related entities are parties and the financial statements reflect the effect of these transactions which are conducted on bases determined amongst these parties. The significant transactions are summerised below :

2016 2015

(RMB) (RMB) Rendering of services to related companies:

-- TKM INDIA 1,883,191 4,058,569

-- TKM GERMANY 7,386,179 5,223,413

-- TRL CHINA 1,873,162 2,859,644

-- YORL SHANGHAI 708,049 673,168

-- YORK QUINGDAO 3,625 -

-- NANJING TATA 19,791 -

11,873,997 12,814,794

Purchase of services from related companies:

-- TKM INDIA 320,910 526,247

-- TKM GERMANY 143,175 192,506

464,085 718,753

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16. Related party transaction (contd) 31/3/2016 31/3/2015

(RMB) (RMB) Amount due from related companies:

-- TKM INDIA Trade receivables 334,094 897,113

-- TKM GERMANY Trade receivables 492,308 420,725

-- YORK SHANGHAI Trade receivables - 27,773

-- TRL CHINA Trade receivables 106,685 290,144

-- NANJING TATA Trade receivables 19,714 -

-- TATA London Other receivables 103,719 36,557

-- TKM INDIA Other receivables 407 6,470

1,056,927 1,678,782

Amount due to related companies: -- TKM INDIA Trade payables 21,577 78,112

The balances with related companies are unsecured, interest-free and have no fixed terms of repayment.

17. Financial risk management

17.1 Financial risk factors

The Company's activities are exposed to credit risks, foreign exchange risk and interest rate risk.

Credit risks

The Company has no significant concentration of credit risk. The Company's credit risk is primarily attributable to its trade receivables. The amounts presented in the balance sheet are net of allowances for doubtful debts, if any, estimated by the Company's directors based on prior experience and their assessment of the current economic environment.

Foreign exchange risk RMB is not freely convertible into other foreign currencies and conversion of RMB into foreign currencies is subject to rules and regulations of foreign exchange control promulgated by the PRC government.

The Company's cash and cash equivalents are deposited with banks in the PRC. The remittance of these funds out of the PRC is subject to the exchange control restrictions imposed by the PRC government.

The Company has not used any forward contracts or currency borrowings to hedge its exposure to foreign currency risk.

17.2 Fair values

The fair values of the Company's current financial assets and liabilities are not materially different from their carrying amounts because of the immediate or short term maturity.

18. Approval of financial statements

The financial statements were approved by the board of directors on 1 April 2016.

212


213

TM Harbour Services Private Limited

214



TM Harbour Services Pvt. Ltd.(As on 1st June, 2016)

Board of Directors

Directors Management Team

Mr. Sabyasachi Hajara Mr. R. N. Murthy – Managing DirectorCapt. Man Mohan Saggi Capt. S. R. Patnaik – Chief Executive OfficerMr. Amar Patnaik Mr. Anand Chand – Chief Financial OfficerCapt. S. R. Patnaik Ms. Swati Sheth – Asst. Company SecretaryMr. Anurag Garg Auditors Deloitte Haskins & SellsRegistered Office Chartered Accountants, KolkataTata Centre 43, Jawaharlal Nehru Road BankersKolkata – 700 071 HDFC Bank State Bank of IndiaTel: 91-33-66339108/9103 Kotak Mahindra BankFax: 91-33-2288 6342 Corporate Identification Number (CIN) U61100WB2009FTC138168

215

TM HARBOUR SERVICES PRIVATE LIMITED

DIRECTORS' REPORT[Pursuant to Section 134(3) of the Companies Act, 2013 and

Rule 8 of the Companies (Accounts Rules, 2014)]

To the Members,

Your Directors hereby present their seventh annual report on the business and operations of the Company and the financial accounts for the year ended 31st March, 2016.

Your Company was incorporated on 2nd September, 2009 with the Registrar of Companies in West Bengal as per the provisions of Companies Act, 1956.

Your Company is a subsidiary of TKM Global GmbH, which is incorporated in Germany. Your Company is engaged in the business of owning and operating harbour tugs, port craft and offshore support vessels.

FINANCIAL RESULTS

` (In millions)

31.03.2016 31.03.2015

(a) Total Income 317.15 293.98

(b) Less: Operating and Administrative Expenses 64.92 99.96

(c) Profit before interest, depreciation and taxes 252.23 194.02

(d) Less: Depreciation 86.48 88.52

(e) Less: Interest 0 29.93

(f) Profit before taxes (PBT) 165.75 75.57

(g) Less: Taxes 6.77 2.90

(h) Profit after taxes (PAT) 158.98 72.67

DIVIDEND

To plough back the profits and strengthening the financial position of the company, the Directors do not recommend payment of any dividend for the year under review.

RESERVES

Your Company does not propose to transfer any amount to its General Reserve.

OPERATIONAL REVIEW

The port has handled marginally lower cargo of 14.7 million tons of cargo during the year against 15.45 million tons handled during the previous year. Accordingly, there has been a decrease in the vessel calls during the year under review.

The 3 tugs handled a total of 184 vessels during the year and achieved a revenue of `285.37 million against a revenue of `278.12 million during the previous year.

The annual survey of Tug Bahuda has been completed successfully during March'15. The survey for Brahmani and Baitarani is planned in April'16.

216


Tug Bahuda was off-hire during June'16 for 3.14 days due to entanglement of vessel tyre fender with tugs propeller leading to a deduction of hire charges of `7.44 lacs.

Tug Bahuda was off-hire during Nov'16 for 4.82 days since the winch motor was out of order and was sent for repair leading to deduction of hire charges of `12.02 lacs.

The Service Level Agreement of the current Technical Consultancy contract is under review and in the process of benchmarking with a few reputed service providers of the industry to make it more cost effective and robust.

The Standard Operating Manual has been revised and updated during the year as per the business requirements.

SAFETY

l 100% compliance to safety drills were achieved during the year

l A Zero Lost Time Injury Frequency has been achieved during the year

CREW MANAGEMENT

80% retention of Top Deck and Engineering Crew could be achieved during the financial year period.

CORPORATE GOVERNANCE

The Company is committed to maintaining a high standard of corporate governance practices and procedures. The Company believes that good corporate governance practices are essential for enhancing shareholders' value. The Company believes in carrying on the business by imbibing the principles of trusteeship, empowerment, innovation, corporate social responsibility, transparency and ethical practices.

The Committees constituted by the Board of Directors viz., Audit Committee, Nomination & Remuneration Committee, Corporate Social Responsibility Committee etc. have functioned effectively during the year under review.

Various policies like, Nomination & Remuneration Policy, Risk management Policy and Corporate Social Responsibility Policy as required under the Companies Act 2013 have been adopted by the Company and are being adhered.

The Company follows a process for selection & governance of Board members, reviews the independence & effectiveness of Internal & External Auditors.

BOARD OF DIRECTORS

a. Composition

Your Board comprises of 6 (Six) Directors, out of which 2 (Two) are Independent Non-executive Directors, 3 (Three) are Non-Independent Non-Executive Directors and 1 is a Non-Independent Executive Director.

During the year under review, the following changes in the Board of Directors have been recorded:

i) Mr. Tamal Roy, Non-Independent Non-Executive Director resigned as a Director from the Board of the Company w.e.f., 8th June, 2015.

ii) Consequent upon resignation of Mr. Tamal Roy as a Director from the Board of the Company, Mr. Anurag Garg (holding DIN 07290452) was appointed as a Director in casual vacancy in his place u/s 161(4) of the Act w.e.f., 19th October, 2015 as recommended by the Nomination and Remuneration Committee of your Company. Further, Mr. Garg shall hold office till the forthcoming Annual General Meeting (AGM) of the Company, where his appointment will be regularised as a Director.

As on 31st March, 2016, Mr. Anurag Garg, Mr. Amar Patnaik, Capt. S. R. Patnaik, Mr. Sabyasachi Hajara and Capt. M. M. Saggi continued to be the Directors on the Board.

b. Directors to retire by rotation

In accordance with the provisions of the Companies Act, 2013 and the Articles of Association of the Company, Capt. S. R. Patnaik, Non-Executive Director retire by rotation and being eligible, has offered himself for re-appointment. The Board has at its meeting held on 13th April, 2016 recommended his re-appointment.

217

None of the Directors of your Company are disqualified under Section 164(2) of the Companies Act, 2013.

Appropriate resolutions seeking your approval to the aforesaid appointment has been stated in the Notice convening the 7th AGM of the Company.

c. Independent Directors

The Board of Directors of your Company has 2 Independent Directors as per the Companies Act, 2013. The Act requires that the Non-Executive Directors, including Independent Directors, be drawn from amongst eminent professionals with experience in business/finance/law/public administration and enterprises. The attributes and qualifications of Independent Directors are in accordance with those prescribed under Section 149(6) of the Companies Act, 2013 read with the Rules thereunder. The Independent Directors of your Company have submitted a declaration confirming that they meet the criteria of independence as prescribed under Section 149(6) of the Act.

The Independent Directors of the Company met on 3rd February, 2016 without the presence of Non-Independent Directors and members of the Management. At this meeting, the IDs inter alia evaluated the performance of the Non-Independent Directors and the Board of Directors as a whole, evaluated the performance of the Chairman of the Board and discussed aspects relating to the quality, quantity and timeliness of the flow of information between the Company, the Management and the Board.

d. Board Evaluation Criteria

Pursuant to the provisions of the Companies Act, 2013, 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 CSR Committees. The manner in which the evaluation has been carried out has been explained in the Nomination and Remuneration Policy as adopted by the Company.

DISCLOSURE AND COMPOSITION OF THE COMMITTEES OF THE BOARD

The Committees constituted by the Board of Directors viz., Audit Committee, Nomination and Remuneration Committee and Corporate Social Responsibility Committee have functioned effectively during the year under review.

During the year, 4 Board Meetings, 4 Audit Committee Meetings, 4 CSR Committee Meetings and 3 Nomination and Remuneration Committee Meetings were convened and held. The intervening gap between the Meetings was within the period prescribed under the Companies Act, 2013. A meeting of the Independent Directors' of the Company was also held during the year under review.

The details of the meetings held by the Board and various Committees during the year under review are given in Annexure A to this report.

The details of the Committee as required to be formed as per the applicable sections of the Companies Act are as follows:

Audit Committee

An Audit Committee of the Board of Directors as required u/s 177 of the Act has been constituted and it comprises of three Directors, of which two are Independent Non-Executive Directors and one is a Non-Independent Executive Director. The Chairman of the Audit Committee is an Independent Director. The composition of the Audit Committee is as below:

Sl. No. Name of the Member Category

1. Mr. Sabyasachi Hajara, Chairman Independent Non-Executive Director

2. Capt. M. M. Saggi, Member Independent Non-Executive Director

3. Mr. R. N. Murthy, Member Non-Independent Executive Director

The Board of Directors of your Company has accepted all recommendation of the Audit Committee during the year under review.

Nomination and Remuneration Committee

The Nomination and Remuneration Committee of the Board of Directors as required u/s 178 of the Act has been constituted and it comprises of four Non-Executive Directors, of which two are Independent Directors. The Chairman of the Nomination and Remuneration Committee is an Independent Director. The composition of the Nomination and Remuneration Committee is as below:

218



1. Mr. Sabyasachi Hajara, Chairman Independent Non-Executive Director

2. Capt. M. M. Saggi, Member Independent Non-Executive Director

3. Capt. S. R. Patnaik, Member Non-Independent Non-Executive Director

4. Mr. Amar Patnaik, Member Non-Independent Non-Executive Director

On recommendation of the Committee, the Company has adopted and implemented a Nomination and Remuneration Policy of your Company. The remuneration policy can be viewed at www.tmilltd.com/about-us/shareholders.asp

Corporate Social Responsibility (CSR) Committee

The Corporate Social Responsibility Committee of the Board of Directors as required u/s 135 of the Act and Rules made thereunder has been constituted and it comprises of four Directors, of which one is an Independent Director. The composition of the CSR Committee is as below:

a. Composition

The composition of the CSR Committee is as below:


1. Mr. R. N. Murthy, Chairman Non-Independent Executive Director

2. Capt. S. R. Patnaik, Member Non-Independent Non-Executive Director

3. Mr. Amar Patnaik, Member Non-Independent Non-Executive Director

4. Mr. Sabyasachi Hajara, Member Independent Non-Executive Director

b. Corporate Social Responsibility Initiatives

The CSR activities are designed to promote sustainable and equitable development so as to improve the quality of life of people in the communities in and around the geographies we operate in. The focus is on improving the quality of life amongst socially and economically backward communities, providing preventive health care and sanitation, making available safe drinking water, ensuring environmental sustainability and promoting education and employment enhancing vocational skills.

As a part of the initiatives under 'Corporate Social Responsibility' (CSR), the Company has been engaged in various CSR initiatives during the year. The projects were in accordance with Schedule VII of the Companies Act, 2013.

During the year 2015-16, the CSR Annual spend plan was drawn up as per the guidelines and an amount of ` 14.17 lacs was budgeted for the year out of which ` 14.15 lacs was spent. Some of the major CSR activities carried out during the year were as below:

i. Replacement of water filter cartridges for 604 units of Tata Swach Smart Non Electric Water Purifier units which were given to the families of poor fishermen at Dhamra as part of the CSR activity carried out by the company in 2014-15.

ii. Sponsorship of Vocational Training / Skilling in the area of Food & Beverage Course / Food Production & Industrial Sewing machine operator training for 71 poor SC/ST/OBC candidates at Tata Steel Skill Development Society Training Centre in Gopalpur Odisha.

The Annual Report on CSR activities for period under review is annexed as Annexure B to this report.

KEY MANAGERIAL PERSONNEL (KMP)

As on 31st March, 2016, the Company continues to have Mr. R. N. Murthy as Managing Director, Mr. Anand Chand as the Chief Financial Officer and Ms. Swati Sheth as the Company Secretary of the Company. Details of remuneration of Ms. Swati Sheth as KMP of the Company is provided in Form MGT - 9 as Annexure A to this Report.

219

OPPORTUNITIES AND THREATS

a. Opportunities

Maritime Agenda 2010-20 has envisaged capacity creation in major and minor ports in India with investment of `1,100 Bn. in major ports alone, of which private sector is expected to fund 66%. This funding will be in the area of new berths construction, cargo handling facilities, tugs and towage facilities, dredging, inter alia, building upon the Maritime Agenda, current government is focusing on port-led growth through Sagarmala initiative which envisages development of new ports in addition to capacity augmentation of existing ports. All in all, there is a growing opportunity to provide tug and towage services to the ports. Further, with renewed focus on inland waterways, tugs will be required to pull a fleet of barges in the waterway to achieve optimum parcel size per movement.

b. Threats

The Company faces threats from well-established players in the field, which might hinder the prospects of expansion in new lines of businesses.

DIRECTORS' RESPONSIBILITY STATEMENT

The Company is in compliance with various accounting and financial reporting requirements in respect of the financial statements for the year under review. Pursuant to Section 134(5) of the Companies Act, 2013 and in respect of the Annual Accounts for the year under review, the Directors hereby confirm that:





v. The directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

AUDITORS

The Auditors of the Company, M/s Deloitte Haskins & Sells, Chartered Accountants, Kolkata, retire at the ensuing Annual General Meeting and being eligible, have offered themselves for re-appointment.


No qualification, reservation or adverse remark or disclaimer have been made by the Auditor's in their report.

SECRETARIAL AUDIT

Pursuant to the provisions of Section 204(1) of the Companies Act, 2013 read with Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company has appointed M/s D. Dutt & Co., a firm of Company Secretaries in Practise to undertake the Secretarial Audit of the Company. The Secretarial Audit Report is provided in Form MR - 3 as Annexure C to this report.

PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS

The details of loans, guarantees or any investments covered under the provisions of Section 186 of the Companies Act, 2013 are given in the notes to the Financial Statements of the Company.

RELATED PARTY DISCLOSURES

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. There are no materially significant related party transactions made by the Company with the Promoters, Directors,

220


Key Managerial Personnel or other designated persons which may have a potential conflict with the interest of the Company at large.

All the related party transactions were placed before the Audit Committee for approval and also before the Board for their review. Prior omnibus approval of the Audit Committee is obtained and a review of the same is conducted on a quarterly basis for the transactions which are of a foreseen and repetitive in nature. The transactions entered into pursuant to the omnibus approval so granted are audited and a statement giving details of all the related party transactions is placed before the Audit Committee and the Board of Directors on a quarterly basis.

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

It may be noted that in view of good corporate governance practice, the meaning of the term 'material transaction' has been derived from Clause 23 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. Accordingly, the Company has considered all such transactions entered/to be entered into whether individually or taken together with previous transactions, if any, which are equal to or more than 10% of the annual standalone turnover (Listing Agreement specifies 'annual consolidated turnover') as per the last audited financial statements of the company i.e., for the year ended 31st March, 2016.

However, there were no material contracts/arrangements entered by the company with related parties pursuant to Sec 188(1) and Sec 134 of the Act read with Rule 8(2) of the Companies (Accounts) Rules, 2014. Hence, there is nothing to report in this regard.

EXTRACT OF THE ANNUAL RETURN AS PER SECTION 92(3) OF THE ACT

Pursuant to Section 92(3) and Section 134(3) of the Companies Act, 2013, read with Companies (Management and Administration) Rules, 2014 with Rule 12, an extract of the Annual Return is provided in Form MGT - 9 as Annexure A to this Report.

INTERNAL FINANCIAL CONTROL

As required under Section 134(3) (q) of the Companies Act 2013 read with Rule 8(5) (viii) of Companies (Accounts) Rules, 2014, the Company has an Internal Control System commensurate with the size, scale and complexity. As per the relevant provisions of the Companies Act, 2013 and the guidance note issued by the Institute of Chartered Accountant of India, the management of the company has adopted and implemented the Internal Control over Financial Reporting (ICOFR) framework. The management of the company has adopted the following steps for the development of the said framework:

l Define Materiality of the transactions;

l Preparation of process narrative or process flow charts, as the case may be;

l Identify/Assess internal/external Risk Factors and availability of existing controls;

l Development of Risk Control Matrix (RCM) for the entity, key processes and IT General Controls;

l Testing of controls to ensure they are operating effectively;

l Remediate the gaps, if necessary;

l Re-testing to ensure operating effectiveness.

RISK MANAGEMENT

The Company has a Risk management Policy in place. The Company always had a system-based approach to business risk management. Backed by strong internal control systems, the current risk management framework consists of the following elements:

The Company has always had a system-based approach to business risk management. Backed by strong internal control systems, the current risk management framework consists of the following elements:

l Strategic Planning: Senior leadership Group provides direction for formulation of strategy in collaboration with cross section of all levels of management. Your company follows two level of strategy:

i) Group level Strategy taking into account the shareholders perspective from medium to long term, and

ii) The Current Business perspective - Short term Annual Business Plan approved by the Board.

l Strategic Challenges & advantages are determined from SWOT analysis of individual SBU's & support functions.

221

l The Senior Management of your Company regularly discuss the strategic & the Operational risks involved in the business.

l A combination of centrally issued policies and divisionally-evolved procedures brings robustness to the process of ensuring that business risks are effectively addressed.

l Appropriate structures have been put in place to proactively monitor and manage the inherent risks in businesses with unique / relatively high risk profiles.

l A strong and independent Internal Audit function carries out risk focused audits enabling identification of areas where risk management processes may need to be improved. The Audit Committee of the Board reviews Internal Audit findings, and provides strategic guidance on internal controls. The Audit Committee reviews the Internal Audit findings & implementation of the action plans emerging out of the same.

PUBLIC DEPOSITS

The Company has not accepted or renewed any deposit from the public during the year under report.

EMPLOYEE RELATIONS

The Company continued to maintain excellent and cordial Industrial Relations and concerted efforts were put in to maintain Industrial Harmony and Peace. The Directors express their appreciation for the dedication, commitment and sincere services rendered by the employees at all levels throughout the year.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO:





Nil


There was no foreign exchange earnings and outgo in terms of actual inflows and actual outflows during the year under review.


The Company has no such employees falling within the provisions of Section 197 of the Companies Act, 2013, read with Rule 5(2) of Companies (Appointment and Remuneration) of Managerial Personnel) Rules, 2014.


ACKNOWLEDGEMENT

Your Directors wish to take the opportunity to place on record their sincere appreciation and gratitude for the continued assistance, support and co-operations extended by all Government Authorities, Banks, Overseas Agents, Clearing Agents, Shipping Lines, Air Lines and other business associates and last but not the least the Members of the Company.


R. N. MurthyManaging Director

DIN: 06770611

Place : Kolkata Swati Sheth Anurag GargDate : 13th April, 2016 Assistant Company Secretary Director

DIN : 07290452

222


Annexure A

A. Extract of Annual Return as on Financial Year ended 31st March, 2016

[Pursuant to section 92(3) of the Companies Act, 2013 and rule 12(1) of the Companies (Management and Administration) Rules, 2014]

I. Registration and other details:

i. CIN Number of the Company: U61100WB2009FTC138168

ii. Registration Date: 2nd September, 2009

iii. Name of the Company: TM Harbour Services Private Limited

iv. Category/ Sub-category of the Company:Tugging & Towage services

v. Address of Registered office and contact details: Tata Centre, 43, Jawaharlal Nehru Road, Kolkata - 700 071.

vi. Whether listed company: No

vii. Name, Address and contact details of Registrar and Transfer Agent: N.A.

II. Principal Business Activity of the Company:

All the business activities contributing to 10% or more of the total turnover of the Company shall be stated:

Sr. No. Name and Description of main products/ services

NIC Code of the product/ service

Percentage to total turnover of the company

1. Tugging & Towage services DIV 52 Group 522 100%*

*The Company is engaged in tugging & towage services as its sole business activity

III. Particulars of Holding, Subsidiary and Associate Companies:

Sr. No.

Name and Address of the Company

CIN Holding/Subsidiary/ Associate

Percentage of shares held

Applicable Section

1. TKM Global GmbH Spladingstrasse 210 20097 Hamburg, Germany

NA Holding Company 74.18% S.2 (46)

2. International Shipping and Logistics FZE Level 16, JBC 5 Cluster W Jumerirah Lakes Towers P.O. Box 18490 Dubai. U.A.E.

NA Associate Company 25.82% S. 2 (6)

223

IV. Share holding pattern (Equity Share Capital Breakup as percentage of Total Equity)

i. Category wise shareholding

Category of Shareholders

No. of Shares held at the beginning of the year 01.04.2015

No.of Shares held at the end of the year 31.03.2016 %

Change during

the yearDemat Physical Total% of Total

SharesDemat Physical Total

% of Total

Shares

A. Promoters

(1) Indian

a) Individual/HUF - - - - - - - - -

b) Central Govt. - - - - - - - - -

c) State Govt.(s) - - - - - - - - -

d) Bodies Corp. - - - - - - - - -

e) Banks/FIs - - - - - - - - -

f) Any Other - - - - - - - - -

Sub-total: (A)(1) - - - - - - - - -

(2) Foreign

a) NRIs - Individuals - - - - - - - - -

b) Other Individuals - - - - - - - - -

c) Bodies Corp. - 5,76,92,155 5,76,92,155 100 - 5,76,92,155 5,76,92,155 100 -

d) Banks/FIs - - - - - - - - -

e) Any Other - - - - - - - - -

Sub-total: (A) (2) - - - - - - - - -

Total shareholding of Promoter (A) = (A)(1) + (A)(2)

0 5,76,92,155 5,76,92,155 100 0 5,76,92,155 5,76,92,155 100 -

B. Public Shareholding

(1) Institutions

i. Mutual Funds - - - - - - - - -

ii. Banks/FIs - - - - - - - - -

iii. Central Govt. - - - - - - - - -

iv. State Govt.(s) - - - - - - - - -

v. Venture Capital Funds - - - - - - - - -

vi. Insurance Companies - - - - - - - - -

vii. FIIs - - - - - - - - -

viii. Foreign Venture Capital Funds

ix. Others (Specify) - - - - - - - - -

Sub-total: (B)(1) 0 0 0 0 0 0 0 0 0

224


(2) Non-Institutionsa) Bodies Corp. - - - - - - - - -

i. Indianii. Overseas - - - - - - - - -

b) Individuals - - - - - - - - - i. Individual shareholders

holding nominal share capital upto Rs. 1 lakh

- - - - - - - - -

ii. Individual shareholders holding nominal share capital in excess of ` 1 lakh

- - - - - - - - -

c) Others (specify) - - - - - - - - -Sub-total: (B)(2) 0 0 0 0 0 0 0 0 0Total public shareholding (B) = (B)+(1) + (B)(2)

0 0 0 0 0 0 0 0 0

C. Shares held by custo-dian for GDRs & ADRs

0 0 0 0 0 0 0 0 0

Grand Total (A+B+C) 0 5,76,92,155 5,76,92,155 100 0 5,76,92,155 5,76,92,155 100 -

ii. Shareholding of Promoters



Shareholding at the end of the year 31.03.2016 % change in

share-hold-ing during the year

No. of Shares

% of total Shares of

the company

% of Shares Pledged/ en-cumbered to total shares

No. of Shares

%of total Shares of

the company

% of Shares Pledged/ en-cumbered to total shares

1. TKM Global GmbH 4,27,98,820 74.18 - 4,27,98,820 74.18 - -

2. International Shipping And Logistics, FZE j/w TKM Global GmbH

1 0.00 - 1 0 - -

3. International Shipping and Logistics, FZE

1,48,93,334 25.82 - 1,48,93,334 25.82 - -

iii. Change in Promoters' Shareholding

Sl. No.

Particulars Shareholding at the beginning of the year 01.04.2015

Cumulative Shareholding during the year 31.03.2016

No. of shares % of total shares of the company

No. of shares % of total shares of the company

1. At the beginning of the year 5,76,92,155 100 5,76,92,155 100

2. Date-wise Increase/ Decrease in Promoters Share holding during the year specifying the reasons for increase /decrease (e.g. allotment/ transfer/ bonus/ sweat equity etc.)

- - - -

3. At the end of the year 5,76,92,155 100 5,76,92,155 100

225

iv. Shareholding pattern of top ten shareholders (other than Directors, Promoters and holders of GDRs and ADRs)

NIL

v. Shareholding of Directors and Key Managerial Personnel

None of the Directors and key managerial personnel holds any shares of the Company.

V. Indebtedness:


Particulars Secured Loans excluding deposits

Unsecured Loans

Deposits Total Indebtedness

Indebtedness at the beginning of the financial year (01.04.2015)

i) Principal Amount

ii) Interest due but not paid

iii) Interest accrued but not Due

0

0

0

0

0

0

0

0

0

0

0

0

Total (i) + (ii) + (iii) 0 0 0 0

Change in Indebtedness during FY 15-16

l Addition

l Reduction

0

0

0

0

0

0

0

0

Net Change 0 0 0 0

Indebtedness at the end of the financial year (31.03.2016)

i) Principal Amount

ii) Interest accrued but not due

iii) Interest due but not paid

0

0

0

0

0

0

0

0

0

0

0

0

Total (i) + (ii) + (iii) 0 0 0 0

VI. Remuneration of Directors and Key Managerial Personnel

i. Remuneration to Managing Director, Whole-time Directors and/or Manager

The Company does not pay any remuneration to Managing Director, Whole-time Directors and/or Manager.

ii. Remuneration to other Directors

226


Amount (in `)

Particulars of RemunerationName of the Directors

TotalMr. Sabyasachi Hajara

Capt. Man Mohan Saggi

1. Independent Directors


b. Commission paid to Independent Non-Executive Directors for FY 15-16

177,500

345,132

134,500

146,018

312,000

491,150

Total (1) 522,632 280,518 803,1502. Other Non-Executive Directors


b. Commission paid to Non-Independent Non-Executive Directors for FY 15-16

NIL

NIL

NIL

NIL

NIL

NIL

Total (2) 0 0 0Total Remuneration (1+2) 522,632 280,518 803,150Overall Ceiling as per the Act 1% of net profit calculated as per Sec 198 of the Act

iii. Remuneration to Key Managerial Personnel other than Managing Director/Manager/Whole-time Director

Sl. No. Particulars of remuneration Key Managerial Personnel

TotalCEO Company Secretary CFO

1. Gross salary (a) Salary as per provisions contained in section 17(1) of the Income-tax Act, 1961 (b) Value of perquisites u/s 17(2) Income-tax Act, 1961 (c) Profits in lieu of salary under section 17(3) Income-tax Act, 1961

- 1,033,934 - 1,033,934

- 15,000 - 15,000

- -

2. Stock Option - - - -

3. Sweat Equity - - - -

4. Commission - as % of profit - others, specify

- - - -

5. Others, please specify - - -

Total - 10,48,934 - 10,48,934

VII. Penalties/ Punishment/ Compounding of Offences

No penalties/punishment/compounding of offences has been imposed on the Company by any government authorities during the year under review.

227

B. Board and Committee meetings held during the year

Dates on which the Board and Committee Meetings were held during FY 15-16

Board Meetings

Date of the Meeting Total Strength of the Board No. of Directors Present

16th April, 2015 6 4

13th July, 2015 5 5

19th October, 2015 5 5

18th January, 2016 6 5

Audit Committee Meetings

16th April, 2015 3 3

13th July, 2015 3 3



Corporate Social Responsibility Committee Meetings

16th April, 2015 4 2

13th July, 2015 4 4



Nomination and Remuneration Committee Meetings

2th April, 2015 4 2

13th July, 2015 4 4


228


Anne

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B

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229

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230


Annexure C

Form No. MR - 3

SECRETARIAL AUDIT REPORTFOR THE FINANCIAL YEAR ENDED 31ST MARCH 2016

ToThe Members,TM Harbour Services Private Limited

We have conducted the secretarial audit of the compliance of applicable statutory provisions and the adherence to good corporate practices by TM Harbour Services Private Limited (hereinafter called 'the Company'). Secretarial Audit was conducted in a manner that provided us a reasonable basis for evaluating the corporate conducts / statutory compliances and expressing our opinion thereon.

The Company is a Private Limited Company, not listed on any recognized Stock Exchange in India, but being a subsidiary of a Public Limited Company, provisions of Section 204 of the Companies Act, 2013 [hereinafter referred to as 'the Act'] have become applicable. Based on our verification of TM Harbour Services Private Limited's books, papers, minute books, forms and returns filed and other records maintained by the Company and also the information provided by the Company, its officers, agents and authorized representatives during the conduct of secretarial audit, we hereby report that in our opinion, the Company has, during the audit period covering the financial year ended on 31st March 2016 complied with the statutory provisions listed hereunder and also that the Company has proper Board processes and compliance mechanism in place to the extent, in the manner and subject to the reporting made hereinafter.We have examined the books, papers, minute books, forms and returns filed and other records maintained by the Company for the financial year ended on 31st March 2016 according to the provisions of:(i) The Companies Act, 2013 (the Act) and the Rules made there under;(ii) Foreign Exchange Management Act, 1999 and the Rules and Regulations made there under to the extent of Foreign Direct

Investments in the Company. The Company does not have any Overseas Direct Investment and External Commercial Borrowings.(iii) Following other laws as are specifically applicable to the Company:

a. The Merchant Shipping Act, 1958; b. IMO Conventions as adapted by GOI viz:

- SOLAS Convention, - MARPOL Convention, - STCW 2010 Code, - International Loadline Convention, - Tonnage Rules, - LSA/FFA Code- Collission Regulations, - ISPS Code, - Maritime Labour Convention, 2006; - Anti Fouling Convention and Classification Rules (Indian Register of Shipping)

We have also examined compliance with the applicable clauses of Secretarial Standards issued by the Council of the Institute of Company Secretaries of India and approved by the Central Government under section 118(10) of the Companies Act, 2013 which became applicable with effect from 01st July 2015.

The Company complies with statutory Tax Audit requirement under section 44AB of the Income Tax Act, 1961 which is done by Tax Auditor. So we have not reviewed compliance of applicable Income Tax Laws to the Company. VAT/CST is not applicable on the Company since it is not engaged in the business of trade of any goods / commodity as defined under various VAT Act(s) or CST Act.

231

The management has represented and we have also checked that the Company being an unlisted Private Limited Company the following Acts, Regulations, Guidelines, Agreements etc. as specified in the prescribed MR-3 Form were not applicable to the Company: (i) The Securities Contracts (Regulation) Act, 1956 ('SCRA') and the rules made there under; (ii) The Depositories Act, 1996 and the Regulations and Bye-laws framed there under; (iii) The following Regulations and Guidelines prescribed under the Securities and Exchange Board of India Act, 1992 ('SEBI Act'):-

(a) The Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 2011;(b) The Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations, 1992;(c) The Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2009;(d) The Securities and Exchange Board of India (Employee Stock Option Scheme and Employee Stock Purchase Scheme)

Guidelines, 1999;(e) The Securities and Exchange Board of India (Issue and Listing of Debt Securities) Regulations, 2008;(f) The Securities and Exchange Board of India (Registrars to an issue and Share Transfer Agents) Regulations, 1993 regarding

the Companies Act and dealing with client;(g) The Securities and Exchange Board of India (Delisting of Equity Shares) Regulations, 2009; and(h) The Securities and Exchange Board of India (Buyback of Securities) Regulations, 1998;

(iv) The Listing Agreements with Stock Exchange(s). During the period under review the Company has complied with the provisions of the Acts, Rules, Regulations, Guidelines etc.

mentioned above and has generally adhered to the secretarial standards. In respect of compliance of other laws specifically applicable to the Company, we have relied on information and records produced by the Company and written representations made by the management during the course of our audit and the reporting is limited to that extent.

We further report that:(a) The Board of Directors of the Company is duly constituted with proper balance of Executive Directors, Non-Executive Directors

and Independent Directors. The changes in the composition of the Board of Directors that took place during the period under review were carried out in compliance with the provisions of the Act.

(b) Adequate notice was given to all the directors to schedule the Board Meetings, agenda and detailed notes on agenda were sent at least seven days in advance, and a system exists for seeking and obtaining further information and clarifications on the agenda items before the meeting and for meaningful participation at the meeting.

(c) Views of the Directors on all important matters have been captured and recorded in the Minutes and majority decision is carried through. There has not been any dissent among the directors on any matter dealt with by the Board.

We further report that based on review of compliance mechanism established by the Company and on the basis of the Compliance Certificate(s) issued by the Managing Director and taken on record by the Board of Directors at their meeting(s), we are of the opinion that there are adequate systems and processes in place in the Company which is commensurate with the size and operations of the Company to monitor and ensure compliance with applicable laws, rules, regulations and guidelines.As informed, the Company has appropriately responded to notices for demands, claims, dues, fines, penalties etc. received from various statutory / regulatory authorities and initiated actions for corrective measures, wherever necessary. We further report that during the audit period there were no specific events / actions having a major bearing on the Company's affairs in pursuance of the above referred laws, rules, regulations, guidelines, standards etc. referred to above.

For D. DUTT & CO.

Place: Kolkata Company Secretaries

Date: 13.04.2016 (DEBABRATA DUTT) Proprietor FCS-5401 C.P. No.-3824

This report is to be read with our letter of even date which is annexed as Annexure - A and forms an integral part of this report.

232


Annexure - AToThe Members,TM Harbour Services Private Limited

Our report of even date is to be read along with this letter.

1. Maintenance of secretarial record is the responsibility of the management of the Company. Our responsibility is to express an opinion on these secretarial records based on our audit.

2. We have followed the audit practices and processes as were appropriate to obtain reasonable assurance about the correctness of the contents of the secretarial records. The verification was done on test basis to ensure that correct facts are reflected in secretarial records. We believe that the processes and practices we followed provide a reasonable basis for our opinion.

3. We have not verified the correctness and appropriateness of financial records and Books of Accounts of the company.

4. Wherever required, we have obtained the management representation about the compliance of laws, rules, regulations, guidelines, standards and happening of events etc.

5. The compliance of the provisions of Corporate and other applicable laws, rules, regulations, standards is the responsibility of management. Our examination was limited to the verification of procedures on test basis.

6. The Secretarial Audit report is neither an assurance as to the future viability of the company nor of the efficacy or effectiveness with which the management has conducted the affairs of the company.

For D. DUTT & CO.

Place: Kolkata Company Secretaries

Date: 13.04.2016

Sd/-

(DEBABRATA DUTT) Proprietor FCS-5401 C.P. No.-3824

233


TO THE MEMBERS OF

TM HARBOUR SERVICES PRIVATE LIMITED


We have audited the accompanying financial statements of TM HARBOUR SERVICES PRIVATE LIMITED ('the Company'), which comprise the Balance Sheet as at 31st March, 2016, the Statement of Profit and Loss and the Cash Flow Statement for the year then ended, and a summary of the significant accounting policies and other explanatory information.

Management's Responsibility for the Financial Statements

The Company's Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 ('the Act') with respect to the preparation of these financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Accounting Standards prescribed under section 133 of the Act, as applicable.This responsibility also includes 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 frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial control, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error


Our responsibility is to express an opinion on these financial statements based on our audit.


We conducted our audit of the financial statements in accordance with the Standards on Auditing specified under Section 143(10) of the Act. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.



Opinion

In our opinion and to the best of our information and according to the explanations given to us, the aforesaid financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity

234


with the accounting principles generally accepted in India, of the state of affairs of the Company as at 31st March, 2016, and its profit and its cash flows for the year ended on that date.






d) In our opinion, the aforesaid financial statements comply withthe Accounting Standards prescribed under section 133 of the Act, as applicable.



g) With respect to the other matters to be included in the Auditor's Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, in our opinion and to the best of our information and according to the explanations given to us:

i. The Company has disclosed the impact of pending litigations on its financial position in its financial statements - refer note 22(b) to the financial statements.

ii. The Company did not have any long-term contracts including derivative contracts for which there were any material foreseeable losses.

iii. There were no amounts which were required to be transferred to the Investor Education and Protection Fund by the Company.

2. As required by the Companies (Auditor's Report) Order, 2016 ('the Order') issued by the Central Government in terms of Section 143(11) of the Act, we give in 'Annexure B' a statement on the matters specified in paragraphs 3 and 4 of the Order.




Abhijit Bandyopadhyay

Partner

(Membership No. 054785)


235

ANNEXURE 'A' TO THE INDEPENDENT AUDITOR'S REPORT

(Referred to in paragraph 1 (f) under 'Report on Other Legal and Regulatory Requirements' of our report of even date)


We have audited the internal financial controls over financial reporting of TM Harbour Services Private Limited ('the Company') as of March 31, 2016 in conjunction with our audit of the financial statements of the Company for the year ended on that date.

Management's Responsibility for Internal Financial Control

The Company's management is responsible for establishing and maintaining internal financial controls based on 'the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India'. These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to company's policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Companies Act, 2013.


Our responsibility is to express an opinion on the Company's internal financial controls over financial reporting based on our audit. We conducted our audit in accordance with the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting (the 'Guidance Note') issued by the Institute of Chartered Accountants of India and the Standards on Auditing prescribed under Section 143(10) of the Companies Act, 2013, to the extent applicable to an audit of internal financial controls. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls over financial reporting was established and maintained and if such controls operated effectively in all material respects.


We believe that the audit evidence we have obtained is sufficient and appropriate to providea basis for our audit opinion on the Company's internal financial controls system over financial reporting.


A company's internal financial control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company's internal financial control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorisations of

236


management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorised acquisition, use, or disposition of the company's assets that could have a material effect on the financial statements.



Opinion





(Membership No. 054785)Kolkata, 13th April, 2016

237

ANNEXURE B TO THE INDEPENDENT AUDITOR'S REPORT


(i) (a) The Company has maintained proper records showing full particulars, including quantitative details and situation of fixed assets.


(c) The Company does not have any immovable properties of freehold or leasehold land and building and hence reporting under clause (i)(c) of the CARO 2016 is not applicable.

(ii) As explained to us, inventories were physically verified during the year by the management at reasonable intervals and no material discrepancies were noticed on physical verification.

(iii) According to the information and explanations given to us, the Company has granted loans, secured or unsecured, to companies, firms, Limited Liability Partnerships or other parties covered in the register maintained under section 189 of the Companies Act, 2013, in respect of which:

(a) The terms and conditions of the grant of such loans are, in our opinion, prima facie, not prejudicial to the Company's interest.

(b) The schedule of repayment of principal and payment of interest has been stipulated and repayments or receipts of principal amounts and interest have been regular as per stipulations.

(c) There is no overdue amount remaining outstanding as at the year-end.

(iv) In our opinion and according to the information and explanations given to us, the Company has complied with the provisions of Sections 185 and 186 of the Companies Act, 2013 in respect of grant of loans, making investments and providing guarantees and securities, as applicable.

(v) According to the information and explanations given to us, the Company has not accepted any deposit during the year.

(vi) The maintenance of cost records has not been specified by the Central Government under section 148(1) of the Companies Act, 2013.

(vii) According to the information and explanations given to us, in respect of statutory dues:

(a) The Company has generally been regular in depositing undisputed dues, including Income-tax, Sales Tax, ServiceTax, Customs Duty, Excise Duty, Value Added Tax, cess and other material statutory dues applicable to it to the appropriate authorities. The provisions of Provident Fund and Employees' State Insurance are not applicable to the Company.

(b) There were no undisputed amounts payable in respect of Income-tax, Sales Tax, Service Tax, Customs Duty, Excise Duty, Value Added Tax, cess and other material statutory dues in arrears as at March 31, 2016 for a period of more than six months from the date they became payable.

(c) There are no dues of Income-tax, Sales Tax, Service Tax, Customs Duty, Excise Duty and Value Added Tax as on March 31, 2016 on account of disputes.

238





(xi) The Company is a private company and hence the provisions of section 197 of the Companies Act, 2013 do not apply to the Company.


(xiii) In our opinion and according to the information and explanations given to us the Company is in compliance with Section 177 and 188 of the Companies Act, 2013, where applicable, for all transactions with the related parties and the details of related party transactions have been disclosed in the financial statements etc. as required by the applicable accounting standards.


(xv) In our opinion and according to the information and explanations given to us, during the year the Company has not entered into any non-cash transactions with its directors or directors of its holding company or persons connected with them and hence provisions of section 192 of the Companies Act, 2013 are not applicable.





Membership No. 054785Kolkata, 13th April, 2016

239

Note No As at 31st March 2016

As at 31st March 2015

` `

I. EQUITY AND LIABILITIES

(1) Shareholders' Funds(a) Share Capital(b) Reserves and Surplus

(2) Non-Current Liabilities(a) Long-Term Provisions

(3) Current Liabilities(a) Trade Payables

A) Total outstanding dues of micro enterprises and small enterprisesB) Total outstanding dues of creditors other than micro enterprises and

small enterprises(b) Other Current Liabilities(c) Short-Term Provisions

Total

II. ASSETS

(1) Non-Current Assets(a) Fixed Assets (i) Tangible Assets

(b) Long-term Loans and Advances

(2) Current Assets(a) Current Investments(b) Inventories(c) Trade Receivables(d) Cash and Bank Balances(e) Short-Term Loans and Advances(f) Other Current Assets

Total

23

4

27

567

576,921,550 566,939,972

1,143,861,522 573,890 573,890

-

8,427,060 510,425

8,490 8,945,975

576,921,550 407,954,781 984,876,331

456,020 456,020

-

12,880,638 1,132,579

7,670 14,020,887

1,153,381,387 999,353,238

89

101112131415

652,970,7019,813,905

662,784,606

14,128,142 14,322,291 27,532,615

392,852,540 33,720,670

8,040,523 490,596,781

739,056,806 48,158,683

787,215,489

416,827,006 15,662,303 26,110,429 6,567,908

16,970,103-

212,137,749

1,153,381,387 999,353,238

See acompanying notes forming part of the financials statements

TM Harbour Services Private Limited Balance Sheet as at 31st March, 2016

In terms of our report attached For and on behalf of Board of Directors For Deloitte Haskins & Sells Anurag Garg R N MurthyChartered Accountants Director Managing Director

Abhijit Bandyopadhyay Partner Swati Sheth Anand Chand Asst. Company Secretary Chief Financial Officer

Kolkata, 13th April, 2016 Kolkata, 13th April, 2016

240


In terms of our report attached For and on behalf of Board of Directors For Deloitte Haskins & Sells Anurag Garg R N MurthyChartered Accountants Director Managing Director

Abhijit Bandyopadhyay Partner Swati Sheth Anand Chand Asst. Company Secretary Chief Financial Officer

Kolkata,13th April, 2016 Kolkata, 13th April, 2016

TM Harbour Services Private LimitedStatement of Profit & Loss for year ended 31st March, 2016

Note No.

For the year ended 31st

March, 2016

For the year ended 31st

March, 2015` `

I. Revenue From OperationsII. Other IncomeIII. Total Revenue (I + II)IV. Expenses:

(a) Operational expenses(b) Employee benefits expense(c) Financial costs(d) Depreciation expense(e) Other expenses

Total ExpensesV. Profit Before Tax (III - IV)VI. Tax Expense :

(a) Current tax expense(b) Shortl(Excess) provision for tax relating to A.Y. 2011 -12(c) (Less): MAT credit for A.Y. 2011 -12

VII Profit For The Year (V - VI)VIII. Earning Per Equity Share:

(1) Basic(2) Diluted

1617

181920821

29

285,373,228 31,781,457

278,120,63315,857,379

317,154,685 293,978,012

32,674,7976,953,423

-86,481,75725,293,217

42,158,7366,397,905

29,931,89588,516,71751,404,547

151,403,194 218,409,800

165,751,4916,766,3006,779,3802,683,061

(2,696,141)158,985,191

2.762.76

75,568,2122,901,8902,901,890

--

72,666,322

1.731.73

See acompanying notes forming part of the financial statements

241

TM Harbour Services Private Limited Cash Flow Statement for the year ended 31st March, 2016

In terms of our report attached For and on behalf of Board of Directors For Deloitte Haskins & Sells Anurag Garg R N MurthyChartered Accountants Director Managing DirectorAbhijit Bandyopadhyay Partner Swati Sheth Anand Chand Asst. Company Secretary Chief Financial Officer Kolkata, 13th April, 2016 Kolkata, 13th April, 2016

For the year ended 31st March, 2016


` `A. CASH FLOW FROM OPERATING ACTIVITIES

Profit Before TaxAdjustments for:

Depreciation Profit on Sale of current investments (net)Interest incomeLoss on Assets discardedInterest expenseDividend income

Operating profit before Working Capital changesChanges in Working Capital:Adjustments for (increase) / decrease in Operating Assets:

(Increase)/Decrease in Inventories(Increase) /Decrease in Trade receivables(Increase)/Decrease in Short term loans & advances(Increase)/Decrease in Long term loans & advances

Adjustments for Increase/ (Decrease) in Operating Liabilities:Increase/ (Decrease) in Trade payables Increase/(Decrease) in Other current liabilitiesIncrease/(Decrease) in Short term provisionsIncrease/(Decrease) in Long term provisions

Cash generated from OperationsDirect taxes paid (net of Income tax refund)

Net Cash from Operating Activities

B. CASH FLOW FROM INVESTING ACTIVITIESPurchase of fixed assets Loan realised from Intermediate holding company(Purchase)/Sale of current investments(Net)Dividend incomeInterest received Investment In Fixed DepositsNet Cash used in Investing Activities

C. CASH FLOW FROM FINANCING ACTIVITIESProceeds from issue of Equity SharesRepayment of long term borrowings - Term loanRepayment of long term borrowings - Unsecured loan Interest paid

Net Cash used in Financing ActivitiesNet increase/(decrease) in Cash & Cash equivalents (A+B+C)Cash and Cash equivalents at the beginning of the yearCash and Cash equivalents at the end of the year

165,751,491

86,481,757(10,345,788)(17,830,510)

14,292 -

(3,603,659)

75,568,212

88,516,717(943,166)

(9,213,696)11,703

29,931,895(5,677,017)

220,467,583

1,340,012(1,422,186)

945,57413,750

(4,453,578)(622,153)

820117,870

178,194,648

(773,460)(2,690,595)(1,109,267)

15,000

6,150,610605,602

84099,216

216,387,691 180,492,594(1,131,413) (7,694,308)

215,256,278 172,798,286

(409,944) 15,000,000 143,044,652

3,603,6599,789,987

(391,499,968)

(156,595) 5,000,000

(68,315,215)5,677,0179,213,696

- (220,471,614) (48,581,097)

- - - -

346,152,930 (331,620,419)(106,000,000)(33,760,980)

- (125,228,469) (5,215,336)

6,567,9081,352,572

(1,011,280)(7,579,1886,567,908

Additional notes to cash flow statement:1. Figures in brackets indicate outflows.2. Cash and Cash equivalents represent Cash and Bank balances (Refer Note 13)3. Net cash from operating activities includes payment made for CSR activity ` 1,415,779/-.4. Previous year figures have been regrouped/restated wherever necessary.

242


TM Harbour Services Private Limited Notes forming part of financial Statements

1. ACCOUNTING POLICIES:


The financial statements of the Company have been prepared in accordance with the Generally Accepted Accounting Principles in India (Indian GAAP) to comply with the Accounting Standards specified under Section 133 of the Companies Act, 2013, and the relevant provisions of the Companies Act, 2013 (“the 2013 Act”). The financial statements have been prepared on accrual basis under the historical cost convention. The accounting policies adopted in the preparation of the financial statements are consistent with those followed in the previous year.

All assets and liabilities have been classified as current or non-current as per the Company’s normal operating cycle and other criteria set out in the Schedule III to the Companies Act, 2013. Based on the nature of products and the time between the acquisition of assets for processing and their realisation in cash and cash equivalents, the Company has ascertained its operating cycle as 12 months for the purpose of current – non current classification of assets and liabilities.

(b) Use of Estimates

The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent liabilities at the date of financial statements and the reported amount of income & expenses for the period presented. Although these estimates are based upon management's best knowledge of current events and actions, actual results could differ from these estimates.

(c) Revenue Recognition

i) Sale of Services

Income from Services is recognised on completion of the relevant shipping activities and related service.

ii) Dividend and Interest Income

Dividend income is recognised when the Company’s right to receive Dividend is establised. Interest Income is recognised on accurual basis, based on Interest rate implicit in the transaction.

(d) Tangible Assets

Tangible assets are valued at cost less depreciation and net of impairment, if any. The cost of an item of tangible asset comprises its purchase price, including import duties and other non-refundable taxes or levies and any directly attributable cost of bringing the asset to its working condition for its intended use; any trade discounts and rebates are deducted in arriving at the purchase price. Interest on borrowings used to finance the construction of tangible assets are capitalised as part of the cost of the assets until such time that the asset is ready for its intended use.

(e) Borrowing Cost

Borrowing cost that are attributable to the acquisition, construction or production of qualifying assets are capitalised as part of the cost of such assets . A qualifying asset is an asset that necessarily takes a substantial period of time to get ready for its intended use or sale. All other borrowing cost are recognised as an expense in the period in which they are incurred.

(f) Depreciation

Depreciable amount of an asset is the cost of an asset, or other amount substituted for cost, less its estimated residual value. Depreciation on tangible assets is provided on the straight-line method over the useful lives of assets. The company has determined estimated useful life of its fixed assets as prescribed in Part C of Schedule II

243


of the Companies Act 2013 except for certain assets for which different useful life has been considered. The details of estimated life for each category of assets are as under:


Ships (1) 10 - 14 years

Plant and Equipment 10 years



Vehicles 10 years

Computers 3 years

(1) The company has componentised its fixed assets considering the cost of the component being significant to the total cost of the asset and having different useful life. Accordingly few components of ship have been identified having useful life other than those prescribed in part C of Schedule II of the Companies Act 2013, whose useful life have been derived based on technical advise taking into account the nature of the assets, the estimated uses of the assets, the operating condition of the asset, past history of replacement, anticpated technological changes, manufacturing warranties, maintenance support etc.

(g) Investments


(h) Inventories

Inventories comprising of stores and spares are carried at or below cost.

Necessary provision is made and charged to revenue in case of identified obsolete and non-moving items. Cost of Inventories is generally ascertained on “weighted average” basis.

(i) Foreign Exchange Transactions

Foreign Currency transactions are recorded on initial recognition in the reporting currency i.e. Indian rupees, using the exchange rates prevailing on the date of the transaction. Monetary assets and liabilities in currencies other than the reporting currency are remeasured at the rates of exchange prevailing at the balance sheet date. Exchange difference arising on the settlement of monetary items, and on the re measurement of monetary items, are included in the statement of profit and loss. In respect of foreign exchange contracts, premium/discount is amortised over the period of contract.

(j) Provision


Provisions made in terms of Accounting Standard 29 are not discounted to its present value and are determined based on best estimates required to settle the obligation at the balance sheet date. These are reviewed at each balance sheet date and adjusted to reflect the current management estimates.

(k) Contingencies

Liabilities which are material and whose future outcome cannot be ascertained with reasonable certainty, are treated as contingent and disclosed by way of notes to the accounts.

244



(l) Employee Benefits


Short term employee benefits are recognised as an expense at the undiscounted amount in the statement of profit and loss of the period in which the related service is rendered.


The Company provides Gratuity and Leave Encashment benefits to its employees. Gratuity liabilities are funded through a separate trust, funds of which are managed by Life Insurance Corporation of India. The liability towards leave encashment is not funded. The present value of these defined benefit obligations are ascertained by an independent actuarial valuation as per the requirement of Accounting Standards 15 - Employee Benefits. The liability recognised in the balance sheet is the present value of the defined benefit obligations on the balance sheet date less the fair value of the plan assets (for funded plans), together with adjustments for unrecognised past service costs. All actuarial gains and losses are recognised in the statement of Profit and Loss in full in the period in which they occur.

(m) Taxes on Income

Current tax is calculated on the taxable income as determined in accordance with the applicable tax rates and the provisions of Income Tax Act, 1961 and other applicable tax laws.

To make the Indian Shipping Industry more competitive a tonnage tax scheme (the Scheme) for taxation of shipping profit has been introduced in the Income Tax Act,1961. A company owning at least one qualifying ship may join the scheme. The company has opted for Tonnage Tax scheme. Order approving Tonnage Tax Scheme has been issued by Income Tax Department. It is a scheme of presumptive taxation whereby the notional income arising from the operation of ship is determined based on the tonnage of the ship which is taxed at the normal rate applicable for the year.

Pursuant to introduction of section 115VA under the Income Tax Act,1961, the company has opted for computation of its income from shipping activities under the tonnage tax scheme. Thus, income from the business of operating qualifying ships is assessed on the basis of deemed tonnage income of the company and no deferred tax is applicable to such income as there are no timing differences.

(n) Impairment of Assets

The carrying amounts of assets are reviewed at each balance sheet date to determine if there is any indication of impairment based on external/internal factors. An impairment loss is recognized wherever the carrying amount of an asset exceeds its recoverable amount which represents the greater of the net selling price and ‘Value in use’ of the assets. The estimated future cash flows considered for determining the value in use, are discounted to their present value at the weighted average cost of capital.

(o) Dry dock expenditure

Dry-dock expenditure is recognized in the Statement of Profit and Loss on completion of dry-dock.

245


2. SHARE CAPITALAs at 31st March,

2016 As at 31st March,

2015 ` `

I. Authorised80,000,000 Equity Shares of ` 10/- each(31.03.2015: 80,000,000 Equity Shares of ` 10/- each)

II. Issued, Subscribed and Paid-up57,692,155 Equity Shares of ` 10/- each(31.03.2015: 57,692,155 Equity Shares of ` 10/- each)

800,000,000

576,921,550

800,000,000

576,921,550

576,921,550 576,921,550

III. Reconciliation of shares No. of shares

As at 31st March, 2016


Equity Shares of ` 10/- eachOpening balance at beginning of the yearShares alloted during the yearClosing Balance at end of the year

57,692,155-

34,615,293 23,076,862

57,692,155 57,692,155

IV. Details of shareholders holding more than 5% of outstanding shares

Details of Shareholder

%



No. of eq. shares No. of eq. shares

TKM Global GmbH, Germany 74.18 International Shipping & Logistics FZE, Dubai 25.82

42,798,820 14,893,335

42,798,820 14,893,335

57,692,155 57,692,155

The company has one class of equity shares having a par value of `10 per share. Each shareholder is eligible for one vote per share held. In the event of liquidation, the equity shareholders are eligible to receive the remaining assets of the Company after distribution of all preferential amounts, in proportion to their shareholding.

3. RESERVES & SURPLUSAs at 31st March,

2016As at 31st March,

2015` `

1 RESERVES(i) Tonnage Tax Reserve u/s 115 VT of the Income Tax Act, 1961(To be utilised only for the purposes specified therein)Balance at the commencement of the yearAdd: Transfer from Statement of Profit & Loss Closing Balance

57,581,00027,000,000

45,581,000 12,000,000

84,581,000 57,581,000

(ii) Securities Premium ReserveBalance at the commencement of the yearAdd: Premium on issue of shares during the yearClosing Balance

115,384,310-

- 115,384,310

115,384,310 115,384,310

246



3. RESERVES & SURPLUSAs at 31st March,


2015` `

2 SURPLUSStatement of Profit & Loss Balance at the commencement of the yearAdd: Profit for the yearLess: Transfer to Tonnage Tax Reserve accountClosing Balance

234,989,471 158,985,191

27,000,000

174,323,149 72,666,322 12,000,000

366,974,662 234,989,471

566,939,972 407,954,781

4. LONG TERM PROVISIONS As at 31st March,


2015 ` `

Provision for employee benefits - Other Long Term Employee Benefits 573,890

456,020

573,890 456,020

5. TRADE PAYABLES As at 31st March,


2015` `

Creditors for supplies and services Creditors for accrued wages and salaries

6,873,8851,553,175

11,686,3401,194,298

8,427,060 12,880,638

6. OTHER CURRENT LIABILITIESAs at 31st March,


2015` `

Other payables (i) Statutory Dues (ii) Payable on purchase of fixed assets

268,239242,186

890,392242,187

510,425 1,132,579

7. SHORT TERM PROVISIONSAs at 31st March,


2015` `

Provision for employee benefits - Other Long Term Employee Benefits 8,490 7,670

8,490 7,670

247

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248



9. LONG TERM LOANS AND ADVANCES As at 31st March,


2015` `

Advance payment of Income Tax[Net of Provisions : ` 13,266,720 (31.03.2015 ` 6,979,341)]Taxes paid under protest (Refer Note 22(b))

Loans and advances to Related party (Unsecured, Considered Good) -Intermediate Holding Company- TKM Global Logistics Ltd.

Security depositsOther advances

9,781,405

-

-

25,0007,500

14,845,323

3,267,110

30,000,000

25,000 21,250

9,813,905 48,158,683

10. CURRENT INVESTMENTS As at 31st March,


2015 ` `

Investments in Units of Mutual Funds (Unquoted) - At lower of cost and fair value

In units of ` 1,000/- eachTata Liquid Fund - Plan A Daily DividendNil (31.03.2015: 18,865) Units Tata Money Maker Fund - Regular Plan - Daily Divident14,107 (31.03.2015: NIL ) Units

SBI Magnum Instacash Fund - Regular Plan- Daily DividendNil (31.03.2015: 14,557 ) Units

SBI Magnum Instacash Fund - Direct Plan- Daily DividendNil (31.03.2015: 0.033 ) Units

UTI Money Market Fund - Institutional Plan - Daily Dividend ReinvestmentNil (31.03.2015: 20,662 ) UnitsIn units of ` 10/- eachSundaram Money Fund - Regular - Daily DividendNil (31.03.2015: 2,190,038 ) UnitsJP Morgan India Treasury Fund - Super Institutional Daily Dividend ReinvestmentNIL (31.03.2015: 3,136,911 ) UnitsDSP Black Rock Income Opportunities Fund - Regular Plan - GrowthNil (31.03.2015: 1,590,871 ) Units

-

14,128,142

-

-

-

-

-

-

21,025,843

-

24,382,722

56

20,731,996

22,109,090

31,397,108

27,180,191

14,128,142 146,827,006

249


11. INVENTORIESAs at 31st March,


2016` `

Inventory - at or below cost- Stores and Spares 14,322,291 15,662,303

14,322,291 15,662,303

12. TRADE RECEIVABLES As at 31st March,


2015 ` `

Trade Receivable(i) Debts outstanding for a period exceeding six months(ii) Other Debts


-

27,532,615-

26,110,42927,532,615 26,110,429

- -

-

27,532,615 26,110,429Secured considered goodUnsecured considered goodDoubtful

-27,532,615

-

- 26,110,429

-

13. CASH AND BANK BALANCES As at 31st March,


2015` `

Cash and Cash EquivalentsCash on hand Balances with Banks

In Current Account

Other Bank BalanceIn Deposit Account (maturity more than 3 months & Less than 12 months)

18,899

1,333,673

1,998

6,565,9101,352,572

391,499,968

6,567,908

-392,852,540 6,567,908

The above cash and bank balance does not include investment in liquid funds amounting to ` 14,128,142 (31.03.15 ` 146,827,006)

14. SHORT TERM LOANS & ADVANCESAs at 31st March,


2014 ` `

Loans and advances to Related party-Intermediate Holding Company- TKM Global Logistics Ltd.

Balances with Excise/Service Tax authoritiesMAT credit entitlementOther advances

30,000,000614,868

2,696,141409,661

15,000,0001,681,049

-289,054

33,720,670 16,970,103Secured, considered goodUnsecured, considered good

-33,720,670

- 16,970,103

250



15. OTHER CURRENT ASSETS For the year ended

31st March, 2016 For the year ended 31st March, 2015

` `

Interest accrued on deposits etc. 8,040,523 -

8,040,523 -

16. REVENUE FROM OPERATIONS For the year ended


` `

Income from Port related services 285,373,228 278,120,633

285,373,228 278,120,633

17. OTHER INCOME For the year ended


` `

Dividend on InvestmentsInterest income from Loans and AdvancesInterest Income from Fixed DepositsInterest Income From delayed of Tug Hire ChargesProfit on Sale of Current InvestmentsMiscellaneous Income

3,603,6594,410,411

13,420,099-

10,345,788 1,500

5,677,0175,163,680

-4,050,016

943,16623,500

31,781,457 15,857,379

18. OPERATIONAL EXPENSES For the year ended


` `Crew ManningO & M Consultancy and on board Training ExpensesCharter Hire charges

29,589,4283,085,369

-

29,908,4082,985,6139,264,715

32,674,797 42,158,736

19. EMPLOYEE BENEFITS EXPENSEFor the year ended 31st March, 2016


` `Salaries and wages, including bonusContribution to gratuity fundStaff welfare expenses

6,716,195140,26096,968

6,184,575111,780101,550

6,953,423 6,397,905

20. FINANCE COSTFor the year ended 31st March, 2016


` `Interest on Term Loan-HDFC Bank Ltd.Interest on Loan from Related Party

--

22,450,1077,481,788

- 29,931,895

251


21. OTHER EXPENSESFor the year ended 31st March, 2016


` `

Vessel Survey & CertificationLoss on foreign currency transactions (Net) Auditors Remuneration

- as Auditor- for Taxation Matters- for Other Services- for Out of Pocket Expenses

Consumption of stores & spare partsRepairs to MachineryInsuranceRates & Taxes Filing FeesLoss on Asset DiscardedExpenses for CSR ActivityMiscellaneous Expenses

299,858-

328,250175,000149,730

-

9,871,8013,939,7962,310,275

2,50011,37614,292

1,415,7796,774,560

2,708,50124,465

285,000105,000

- 1,900

16,082,21220,469,6093,173,187

2,5003,023,365

11,7031,318,9324,198,173

25,293,217 51,404,547

22. (a) Contingent liabilities not provided for: Bank Guarantee : ` 14,407,749. (31.03.2015 - ` 13,988,106)

(b) The Company has received a demand of ` Nil (31.03.2015 : ` 3,267,110) for AY 11-12 in respect of assessment done under section 143(3) of the Income Tax Act, 1961, against which the Company appealed to CIT(A). The company had deposited the demanded amount in full. Order has been passed by CIA (A) on 05th January 2016 whereby the original demand has been confirmed.

23. Value of Imported and Indigenous Stores Consumed

Particulars For the year ended 31st March, 2016




Amount (` ) Percentage

Imported 923,896 1,590,804 9% 10%

Indigenously obtained 8,947,905 14,491,408 91% 90%

24. Expenditure in Foreign Currency :

Amount (`)

Particulars For the Year ended 31st March, 2016

For the Year ended 31st March, 2015

Other matters including ` NIL (Previous Year ` NIL) on capital account 802,083 879,417

802,083 879,417

252


25. Value of Imports on C.I.F Basis:

Amount (`)

ParticularsFor the Year ended 31st March, 2016

For the Year ended 31st March, 2015

Components & spare parts - 1,947,887

- 1,947,887

26. The company operates post retirement defined benefit plans as follows:

i. Funded

Post Retirement Gratuity

a) Details of the gratuity plan are as follows:

For the year ended For the year ended Descriptions 31st March, 2016 31st March, 2015

` `


a. Obligation as at 01.04.2015 458,760 323,380

b. Current Service Cost 100,820 105,170

c. Interest Cost 36,240 29,100

d. Acquisitions - -

e Actuarial (gain)/loss 39,900 1,110

f. Benefits paid - -

g. Obligation as at 31.03.2016 635,720 458,760


a. Fair Value of plan assets as at 01.04.2015 458,760 274,300

b. Expected return on plan assets 36,700 21,940

c. Actuarial gain/(loss) - 1,660

d. Contributions 140,260 160,860

e. Benefits paid - -

f. Fair Value of plan assets as at 31.03.2016 635,720 458,760


253

TM Harbour Services Private Limited Notes forming part of financial Statements For the year ended For the year ended

Descriptions 31st March, 2016 31st March, 2015 ` `


a. Fair value of plan assets as on 31.03.2016 635,720 458,760

b. Present value of obligation as at 31.03.2016 635,720 458,760

c. Amount recognized in the balance sheet - -

4. Expense recognized during the year

a. Current service cost 100,820 105,170

b. Interest cost 36,240 29,100

c. Expected return on plan assets (36,700) (21,940)

d. Actuarial (gain)/loss 39,900 (550)

e. Expense recognized in the period 140,260 111,780

5. Assumptions 31.03.2016 31.03.2015

a. Discount rate (per annum) 7.75% 7.90%


c. Rate of escalation in salary (per annum) 9.00% 9.00%

6. Information for current and previous financial years 2015-2016 2014-15 2013-14 2012-13 2011-2012

I. a) Present value of defined benefit obligation 635,720 458,760 323,380 196,650 84,630

b) Fair value of Plan Assets 635,720 458,760 274,300 196,650 84,630

c) Surplus / (Deficit) in Plan Assets - - (49,080) - -

II. a) Experience gain/(loss) adjustment on plan liabilities (24,350) 75,430 (20,540) (8,630) 8,240

b) Experience gain/(loss) adjustment on plan assets - 1,660 1500 - -

c) Acturial gain/(loss) due to change in assumption (15,550) (76,540) (20) (25,500) 4,770

b) The estimate of future salary increases take into account inflation, seniority, promotion and other relevant factors.

27. Based on and to the extent of information obtained from the suppliers regarding their status as Micro, Small & Medium Enterprises Development Act, 2006 there are no amounts due to them at the end of the year. The Company has not paid any interest during the year in terms of see 16 of The Micro, Small and Medium Enterprises Development Act, 2006.

254


28. SEGMENT REPORTING

a. Business Segment

The Company is engaged in providing tugging & towage service at Ports, which in the context of Accounting Standard 17 of the Companies (Accounting Standard) Rules, 2006 issued by the Ministry of Corporate Affairs, is considered as the only business segment.

b. Geographical Segment

The company renders Tugging & Towage service only within India and there are no exports. The conditions prevailing in India being uniform no separate geographical segment disclosure is considered necessary.

29. EPSFor the year ended 31st March, 2016


Profit after tax (`)

Profit attributable to Shareholders (`)

Weighted average No. of Shares for Basic EPS & Diluted EPS

Nominal value of Ordinary Shares (`)

Basic/Diluted Earnings per Share (`)

158,985,191

158,985,191

57,692,155

10.00

2.76

72,666,322

72,666,322

42,012,534

10.00

1.73

30 LIST OF RELATED PARTIES & RELATIONSHIPS

Ultimate Parent company

Tata Steel Limited

Intermediate Holding Company

TM International Logistics Limited


Holding Company

TKM Global GmbH

Fellow Subsidiary holding more than 20% of equity

International Shipping and Logistics FZE


Mr. R. N. Murthy, Managing Director

Capt. S. R. Patnaik, Director


255


Transaction with Related Party (`)


Intermediate Holding

Company

Fellow Subsidairy

Transactions

Equity Contribution - - -

(265,792,920) - (89,360,010)

Receiving of Services - - -

- (865,158) -

Repayment of Loan to Intermediary Holding Company - TM International Logistics Limited

- - -

- (106,000,000) -

Loan Given to Intermediate Holding Company - TKM Global Logistics Limited

- 15,000,000 -

- 5,000,000 -

Reimbursement Paid - 1,832,824 -

- (1,845,404) -

Reimbursement Received - - -

- (277,275) -

Interest Income - 4,405,682 -

- (5,162,258) -

Interest Expense - - -

- (7,481,788) -

Directors' Nomination Fees Received- - 300,000

- - -

Directors' Nomination Fees Refunded- - 300,000

- - -

Debit Balance Outstanding as on 31.03.2016

Loan Given - 30,000,000 -

- (45,000,000) -

Credit Balance Outstanding as on 31.03.2016

Outstanding payables - 612,908 -

- (1,307,972) -

256



For and on behalf of Board of Directors R N Murthy Managing Director

Swati Sheth Anand Chand Anurag Gurg Asst. Company Secretary Chief Financial Officer Director

31 In accordance to section 135 of Companies Act 2013, the company has incurred ` 1,415,779 as CSR expenditure. Under the CSR activities, the company has provided 604 cartridges of Tata Swach water purifiers to households of fishermen families to whom we had provided Tata Swach water purifiers last year in the villages around Dhamra port and also sponsored training to 71 partcipants through Tata Skill Development Society.

a) Gross amount required to be spent by the company during the year : 14,17,364/-.

b) Amount spent during the year on:

In cash Yet to be paid in cash

Total

(i) Construction/acquisition of any asset - - - (ii) On purposes other than (i) above 1,415,779 - 1,415,779

32 Previous year figures have been regrouped / reclassified wherever necessary to correspond with the current year’s classification / disclosure.

Signatures to Accounting Policies and Notes 1 to 32

257

TM International Logistics Limited – CFS

258


INDEPENDENT AUDITOR’S REPORT

TO THE MEMBERS OF

TM INTERNATIONAL LOGISTICS LIMITED

Report on the Consolidated Financial Statements

We have audited the accompanying consolidated financial statements of TM INTERNATIOAL LOGISTICS LIMITED(hereinafter referred

to as 'the Holding Company')and its subsidiaries (the Holding Company and its subsidiaries together referred to as `the Group'),

comprising of the Consolidated Balance Sheet as at 31st March, 2016, the Consolidated Statement of Profit and Loss, the Consolidated

Cash Flow Statement for the year then ended, and a summary of the significant accounting policies and other explanatory information

(hereinafter referred to as 'the consolidated financial statements').

Management's Responsibility for the Consolidated Financial Statements

The Holding Company's Board of Directors is responsible for the preparation of these consolidated financial statements in terms of the

requirements of the Companies Act, 2013 (hereinafter referred to as 'the Act') that give a true and fair view of the consolidated financial

position, consolidated financial performance and consolidated cash flows of the Group in accordance with the accounting principles

generally accepted in India, including the Accounting Standards prescribed under Section 133 of the Act, as applicable. The

respective Board of Directors of the companies included in the Group are responsible for maintenance of adequate accounting records

in accordance with the provisions of the Act for safeguarding the assets of the Group and for preventing and detecting frauds and other

irregularities; the selection and application of appropriate accounting policies; making judgments and estimates that are reasonable

and prudent; and the design, implementation and maintenance of adequate internal financial controls, that were operating effectively

for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the financial

statements that give a true and fair view and are free from material misstatement, whether due to fraud or error, which have been used

for the purpose of preparation of the consolidated financial statements by the Directors of the Holding Company, as aforesaid.


Our responsibility is to express an opinion on these consolidated financial statements based on our audit. While conducting the audit,

we have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be

included in the audit report under the provisions of the Act and the Rules made thereunder.

We conducted our audit in accordance with the Standards on Auditing specified under Section 143(10) of the Act. Those Standards

require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the

consolidated financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the consolidated

financial statements. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material

misstatement of the consolidated financial statements, whether due to fraud or error. In making those risk assessments, the auditor

considers internal financial control relevant to the Holding Company's preparation of the consolidated financial statements that give a

true and fair view in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the

appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the Holding Company's

259

Board of Directors, as well as evaluating the overall presentation of the consolidated financial statements.

We believe that the audit evidence obtained by us and the audit evidence obtained by the other auditors in terms of their reports referred

to in the Other Matters paragraph below, is sufficient and appropriate to provide a basis for our audit opinion on the consolidated

financial statements.

Opinion

In our opinion and to the best of our information and according to the explanations given to us, the aforesaid consolidated financial

statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the

accounting principles generally accepted in India, of the consolidated state of affairs of the Group as at 31st March, 2016, and their

consolidated profit and their consolidated cash flows for the year ended on that date.

Other Matters

We did not audit the financial statements of three subsidiaries, whose financial statements reflect total assets of ` 31,915.18 lakhs as at

31st March, 2016, total revenues of ` 27,126.22 lakhs and net cash outflows amounting to ` 1,213.80 lakhs for the year ended on that

date, as considered in the consolidated financial statements. These financial statements have been audited by other auditors whose

reports have been furnished to us by the Management and our opinion on the consolidated financial statements, in so far as it relates

to the amounts and disclosures included in respect of these subsidiaries, is based solely on the reports of the other auditors.

Our opinion on the consolidated financial statements, and our report on Other Legal and Regulatory Requirements below is not modified

in respect of the above matters with respect to our reliance on the work done and the reports of the other auditors.


1. As required by Section143(3) of the Act, we report, to the extent applicable, that:

a) We have sought and obtained all the information and explanations which to the best of our knowledge and belief were

necessary for the purposes of our audit of the aforesaid consolidated financial statements.

b) In our opinion, proper books of account as required by law relating to preparation of the aforesaid consolidated financial

statements have been kept so far as it appears from our examination of those books and the reports of the other auditors.

c) The Consolidated Balance Sheet, the Consolidated Statement of Profit and Loss, and the Consolidated Cash Flow

Statement dealt with by this Report are in agreement with the relevant books of account maintained for the purpose of

preparation of the consolidated financial statements.

d) In our opinion, the aforesaid consolidated financial statements comply with the Accounting Standards prescribed under

Section 133 of the Act, as applicable.

e) On the basis of the written representations received from the directors of the Holding Company as on 31st March, 2016

taken on record by the Board of Directors of the Holding Company and the reports of the statutory auditors of its subsidiary

companies, incorporated in India, none of the directors of the Group companies, incorporated in India is disqualified as on 31st

March, 2016 from being appointed as a director in terms of Section 164 (2) of the Act.

260


f) With respect to the adequacy of the internal financial controls over financial reporting and the operating effectiveness of such

controls, refer to our Report in 'Annexure A', which is based on the auditors' reports of the Holding company and subsidiary

companies incorporated in India. Our report expresses an unmodified opinion on the adequacy and operating effectiveness of

the Holding company's subsidiary company's incorporated in India internal financial controls over financial reporting.

g) With respect to the other matters to be included in the Auditor's Report in accordance with Rule 11 of the Companies (Audit

and Auditor's) Rules, 2014, in our opinion and to the best of our information and according to the explanations given to us:

i. The consolidated financial statements disclose the impact of pending litigations on the consolidated financial position of the Group,- refer note 25(B) to 25(H) to the consolidated financial statements.

ii. The Group did not have any material foreseeable losses on long-term contracts including derivative contracts.

iii. There were no amounts which were required to be transferred to the Investor Education and Protection Fund by the Holding Company, and its subsidiary companies incorporated in India.




Sd/-


(Membership No.054785)


261

ANNEXURE 'A' TO THE INDEPENDENT AUDITORS REPORT

(Referred to in paragraph 1(f)under 'Report on Other Legal and Regulatory Requirements' of our report of even date)


In conjunction with our audit of the consolidated financial statements of the Company as of and for the year ended March 31, 2016, we have audited the internal financial controls over financial reporting of TM International Logistics Limited (hereinafter referred to as 'the Holding Company') and its subsidiary companies, which are companies incorporated in India, as of that date.


The respective Board of Directors of the Holding company, its subsidiary companies, which are companies incorporated in India, are responsible for establishing and maintaining internal financial controls based on 'the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India (ICAI)'. These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to the respective company's policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Companies Act, 2013.


Our responsibility is to express an opinion on the Company's internal financial controls over financial reporting based on our audit. We conducted our audit in accordance with the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting (the 'Guidance Note') issued by the Institute of Chartered Accountants of India and the Standards on Auditing, prescribed under Section 143(10) of the Companies Act, 2013, to the extent applicable to an audit of internal financial controls. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls over financial reporting was established and maintained and if such controls operated effectively in all material respects.




A company's internal financial control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company's internal financial control over financial reporting includes those policies and procedures that (1)

262


pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorisations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorised acquisition, use, or disposition of the company's assets that could have a material effect on the financial statements.



Opinion

In our opinion to the best of our information and according to the explanations given to us, the Holding Company, its subsidiary companies, which are companies incorporated in India, have, in all material respects, an adequate internal financial controls system over financial reporting and such internal financial controls over financial reporting were operating effectively as at March 31, 2016, based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India.


(Firm Registration No. 302009E)Sd/-


Membership No. 054785


263

TM International Logistics LimitedConsolidated Balance Sheet as at 31st March 2016

Note As at No. 31st March 2016 31st March 2015 ` `

I. EQUITY AND LIABILITIES (1) Shareholder's Funds (a) Share Capital 2 180,000,000 180,000,000 (b) Reserves and Surplus 3 5,408,507,743 4,867,175,127 5,588,507,743 5,047,175,127 (2) Non-Current Liabilities (a) Deferred Tax Liabilities (Net) 30 33,949,522 34,605,115 (b) Other Long Term Liabilities 4 454,053,093 482,783,647 (c) Long-term provisions 5 140,801,725 133,221,250 628,804,340 650,610,012 (3) Current Liabilities (a) Trade Payables (A) Total Outstanding dues of Micro Enterprises and Small Enterprises - - (B) Total Outstanding dues of creditors other than Micro Enterprises and Small Enterprises 6 868,528,644 1,104,455,843 (b) Other Current Liabilities 7 635,126,471 594,120,782 (c) Short-Term Provisions 8 198,619,512 211,718,293 1,702,274,627 1,910,294,918 Total 7,919,586,710 7,608,080,057II. ASSETS (1) Non-Current Assets (a) Fixed Assets (i) Tangible Assets 9 1,100,502,998 1,178,526,615 (ii) Intangible Assets 10 710,588,949 738,898,994 (iii) Capital Work-in-Progress 2,422,009 14,726,459 (iv) Intangible Assets under Development - 1,985,034 (b) Long Term Loans and Advances 11 322,931,292 330,655,513 (c) Other Non-Current Assets 12 1,070,339,323 827,193,363 3,206,784,571 3,091,985,978 (2) Current Assets (a) Current Investments 13 96,384,863 1,107,907,946 (b) Inventories 14 23,702,175 26,393,025 (c) Trade Receivables 15 701,391,669 919,003,550 (d) Cash and Bank Balances 16 3,388,785,790 1,821,696,345 (e) Short-Term Loans and Advances 17 296,489,630 585,037,484 (f) Other Current Assets 18 206,048,012 56,055,729 4,712,802,139 4,516,094,079 Total 7,919,586,710 7,608,080,057

See accompaning notes forming part of Consolidated Financial Statements.In terms of our report attached For and on behalf of the Board of DirectorsFor Deloitte Haskins & Sells Sd/- Chartered Accountants Sandipan Chakravortty Chairman Sd/- Sd/- Sd/- Sd/- Abhijit Bandyopadhyay Anand Chand Jyoti Purohit R N MurthyPartner Chief Financial Officer Company Secretary Managing Director Kolkata, 28th April, 2016 Kolkata, 28th April, 2016

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TM International Logistics LimitedConsolidated Statement of Profit and Loss for the Year Ended 31st March 2016


Note No. ` `

I. Revenue from Operations 19 5,551,139,720 8,359,153,779

II. Other Income 20 352,665,640 179,007,174

III. Total Revenue (I +II) 5,903,805,360 8,538,160,953

IV. Expenses:

Employee Benefit Expense 21 507,537,332 544,923,424

Operational Expenses 22 4,060,746,890 6,745,906,315

Finance cost 23 – 24,951,440

Depreciation and Amortization Expense 181,610,563 181,846,033

Other Expenses 24 554,588,252 419,038,968

Total Expenses 5,304,483,037 7,916,666,180

V. Profit Before Tax (III-IV) 599,322,323 621,494,773

VI. Tax Expense: 191,069,362 200,008,804

(1) Current Tax 192,477,297 189,452,134

(2) Short/(Excess) provision for tax relating to earlier years 4,900,561 6,012,980

(3) Deferred Tax 30 (2,332,355) 5,641,690

(4) MAT Credit (3,976,141) (1,098,000)

VII. Profit for the Year (V-VI) 408,252,961 421,485,969 VIII. Earning per Equity Share 32 (1) Basic 22.68 23.42 (2) Diluted 22.68 23.42

See accompaning notes forming part of Consolidated Financial Statements

In terms of our report attached For and on behalf of the Board of DirectorsFor Deloitte Haskins & Sells Sd/- Chartered Accountants Sandipan Chakravortty Chairman Sd/- Sd/- Sd/- Sd/- Abhijit Bandyopadhyay Anand Chand Jyoti Puroshit R N MurthyPartner Chief Financial Officer Company Secretary Managing Director Kolkata, 28th April, 2016 Kolkata, 28th April, 2016

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TM International Logistics LimitedConsolidated Statement of Cash Flow for the Year Ended 31st March 2016


A. CASH FLOW FROM OPERATING ACTIVITIES

Profit before Tax 599,322,323 621,494,773

Adjustments for :

Depreciation / Amortisation 181,610,563 181,846,033

Loss on sale of Fixed Assets(net) 1,417,223 12,250,765

Profit on sale of Investments (138,896,879) (20,850,000)

Interest Income (115,011,474) (64,572,854)

Dividend Income (8,411,867) (9,313,606)

Interest Expense - 24,951,440

Foreign exchange (Gain)/Loss on consolidation - (6,783,781)

Operating profit before Working Capital changes 520,029,889 739,022,770

Adjustments for: Movements in trade and other receivables 494,198,888 201,830,952

Movements in inventories 2,690,849 14,489,881

Trade Payables & Others (255,645,131) (26,853,796)


Direct Taxes Paid (Excluding Dividend Tax) (205,257,397) (218,782,602)


B. CASH FLOW FROM INVESTING ACTIVITIES

Purchase of Fixed Assets (Including Capital Work in Progress) (52,527,751) (152,628,936)

Payment for Leasehold Liability (19,072,076) (18,125,776)

Sale of Fixed Assets 1,144,817 57,257,739

Investment In Fixed Deposits (1,668,381,337) (1,450,270,714)

266


TM International Logistics LimitedConsolidated Statement of Cash Flow for the Year Ended 31st March 2016


Interest received from external investments / agencies (Bank etc.) 52,224,962 54,430,594

Purchase and Sale of Investments (Net) 1,150,419,962 (517,088,781)

Dividend received on Investment in Mutual Funds 8,411,867 9,313,606

Net cash used in Investing Activities (527,779,556) (2,017,112,268)

C. CASH FLOW FROM FINANCING ACTIVITIES

Repayment of borrowings from external agencies (Bank etc.) - (367,282,215)

Interest paid to external agencies (Bank etc.) - (28,145,297)

Dividend Paid (45,000,000) (18,000,000)

Tax on Dividend Paid (9,160,940) (3,059,100)

Net cash used in Financing Activities (54,160,940) (416,486,612)

Net decrease in Cash & Cash equivalents(A+B+C) (25,923,398) (1,723,891,675)

Cash and Cash equivalents at the beginning of the Year 515,573,758 2,271,616,112

Effect of exchange rate on translation of foreign currency 32,736,437 (32,150,679)

Cash and Cash equivalents at the end of the Year 522,386,797 515,573,758

Additional notes to cash flow statement:

1. Figures in brackets indicate outflows.

2. Cash and bank balances includes Cash and Cash equivalents (refer note 16)

3. Previous year figures have been regrouped/restated wherever necessary.

In terms of our report attached For and on behalf of the Board of DirectorsFor Deloitte Haskins & Sells Sd/- Chartered Accountants Sandipan Chakravortty Chairman Sd/- Sd/- Sd/- Sd/- Abhijit Bandyopadhyay Anand Chand Jyoti Puroshit R N MurthyPartner Chief Financial Officer Company Secretary Managing Director Kolkata, 28th April, 2016 Kolkata, 28th April, 2016

267

TM International Logistics LimitedNotes forming part of the Consolidated Financial Statements

1.1 PRINCIPLES OF CONSOLIDATION

The Consolidated Financial Statements consist of TM International Logistics Limited ("the Company") and its subsidiary companies (collectively referred to as "the Group"). The Consolidated Financial Statements have been prepared on the following basis :

(a) The financial statements of the Company and its subsidiary companies have been combined on a line-by-line basis by adding together book values of like items of assets, liabilities, income and expenses. Intra group balances, intra group transactions and unrealised profits or losses have been fully eliminated as per Accounting Standard (AS) 21 - Consolidated Financial Statements notified under Section 133 of the Companies Act, 2013, and the relevant provisions of the Companies Act, 2013 ("the 2013 Act") Companies Act, 1956 ("the 1956 Act") as applicable.

(b) In case of foreign subsidiary companies, being non-integral operation, revenue items are consolidated at the average rate prevailing during the year. All assets and liabilities are converted at the rate prevailing at the end of the year. Exchange gains/(losses) arising on conversion are accumulated under Foreign Currency Translation Reserve.

(c) The financial statements of the subsidiary companies used in the consolidation are drawn up to the same reporting date as that of the Company i.e. March 31, 2015.

(d) The list of subsidiary companies and joint venture which are included in the consolidation and the Company's holdings therein are as under:

Name of the Company Ownership in % either directly Country or through subsidiaries of Incorporation

2015-16 2014-15

Subsidiaries

1. TKM Global Logistics Ltd 100 100 India

2. International Shipping & Logistics FZE 100 100 Dubai

3. TKM Global GmbH 100 100 Germany

4. TKM Global China Ltd 100 100 China

5. TM Harbour Services Pvt Ltd 100 100 India

1.2 ACCOUNTING POLICIES:


The financial statements of the Company have been prepared in accordance with the Generally Accepted Accounting Principles in India (Indian GAAP) to comply with the Accounting Standards specified under Section 133 of the Companies Act, 2013, read with Rule 7 of the Companies (Accounts) Rules, 2014 and the relevant provisions of the Companies Act, 2013 ("the 2013 Act") / Companies Act, 1956 ("the 1956 Act"), as applicable. The financial statements have been prepared on accrual basis under the historical cost convention. The accounting policies adopted in the preparation of the financial statements are consistent with those followed in the previous year.

All assets and liabilities have been classified as current or non-current as per the Company's normal operating cycle and other criteria set out in the Schedule III to the Companies Act, 2013. Based on the nature of service rendered and their realisation in cash and cash equivalents, the Company has ascertained its operating cycle as 12 months for the purpose of current - non current classification of assets and liabilities.

268



(b) Revenue Recognition

i) Sale of Services

Income from Services is recognised when services are rendered and related costs are incurred.

ii) Interest Income

Interest Income is recognised on accrual basis, based on Interest rate implicit in the transaction.

iii) Dividend Income

Dividend income is recognised when the Company's right to receive Dividend is establised. The Company's dividend income is from Investment in Mutual Fund and it is recognised once the units is reflected in the statement or amount is credited in bank.

(c) Use of Estimates

The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent liabilities at the date of financial statements and the results of operations during the reporting year end. Although these estimates are based upon management's best knowledge of current events and actions, actual results could differ from these estimates. During the current year, the Company has revised its estimates of useful life of its fixed assets as prescribed in Part C of Schedule II of the Companies Act, 2013.

(e) Tangible Assets

Tangible assets are valued at cost less depreciation and net of impairment, if any. The cost of an item of tangible asset comprises its purchase price, including import duties and other non-refundable taxes or levies and any directly attributable cost of bringing the asset to its working condition for its intended use; any trade discounts and rebates are deducted in arriving at the purchase price. Interest on borrowings and financing cost during the period of construction is added to the cost of tangible assets.

(f) Intangible Assets

Intangible assets are stated at cost of acquisition, including any cost attributable for bringing the same to its working condition, less accumulated amortisation.

(g) Investments


(h) Impairment of Assets

The carrying amounts of assets are reviewed at each balance sheet date to determine if there is any indication of impairment based on external/internal factors. An impairment loss is recognized wherever the carrying amount of an asset exceeds its recoverable amount which represents the greater of the net selling price and 'Value in use' of the assets. The estimated future cash flows considered for determining the value in use, are discounted to their present value at the weighted average cost of capital.

269

(i) Depreciation/Amortisation

Depreciation on all tangible fixed assets are provided on a straight line basis over its useful life estimated by the management or on the basis of depreciation rates prescribed under local laws.The details of estimated life for each category of assets are as under:

Type of Asset Estimated Useful Life

Ships 10 - 14 years

Buildings constructed on the leased land Upto 30 years

Office Building 60 years

Plant and Equipments 7 -15 years

Vehicles-Four Wheelers 8 years

Vehicles-Two Wheelers 10 years



Computers-Desktop, Laptops etc. 3 years

Computers-Servers 6 years

The Cost of Intangible assets are amortized on a straight line basis over their estimated useful life or licensing period.

(j) Provision


(k) Contingencies

Liabilities which are material and whose future outcome cannot be ascertained with reasonable certainty are treated as contingent and disclosed by way of notes to the financial statements.

(l) Inventories

Inventories comprising of stores and spares are carried at or below cost. Necessary provision is made and charged to revenue in case of identified obsolete and non-moving items. Cost of Inventories is generally ascertained on 'weighted average' basis.

(m) Foreign Exchange Transactions

Foreign Currency transactions are recorded on initial recognition in the reporting currency i.e. Indian rupees, using the exchange rates prevailing on the date of the transaction. Monetary assets and liabilities in currencies other than the reporting currency are remeasured at the rates of exchange prevailing at the balance sheet date. Exchange difference arising on the settlement of monetary items, and on the remeasurement of monetary items, are included in the statement of profit and loss for the period. In respect of transaction covered by foreign exchange contracts, the difference between the contract


270


rate and spot rate on the date of transaction is charged to Statement of Profit & Loss over the period of contract. Exchange differences relating to monetary items that are in substance forming part of the company's net investment in non-integral foreign operations are accumulated in Foreign Currency Translation Reserve Account.

(n) Employee Benefits


Short term employee benefits are recognised as an expense at the undiscounted amount in the Statement of profit and loss of the period in which the related service is rendered.


Contribution to provident fund, superannuation fund and employee state insurance scheme by the entities in the Group are considered as defined contribution plans and are charged as an expense based on the amount of contribution required to be made and when services are rendered by the employees.


The Company provides Gratuity and Leave Encashment Benefits to its employees. Gratuity liabilities are funded through a separate trust managed by Tata Steel Limited. The liability towards leave encashment is not funded. The present value of these defined benefit obligations are ascertained by an independent actuarial valuation as per the requirement of Accounting Standards 15 - Employee Benefits. The liability recognised in the balance sheet is the present value of the defined benefit obligations on the balance sheet date less the fair value of the plan assets (for funded plans), together with adjustments for unrecognised past service costs. All actuarial gains and losses are recognised in Statement of Profit and Loss in full in the year in which they occur.

(o) Taxes on Income

Income Tax


Deferred Taxes

Deferred tax assets and liabilities are recognised by computing the tax effect on timing differences which arise during the period and reverse in the subsequent periods. Deferred tax assets are recognised only to the extent that there is a reasonable certainty that sufficient future taxable income will be available against which such deferred tax assets can be realised. In case of tax holiday, deferred tax is recognised for the timing difference which reverse after the expiry of tax holiday period.


271

TM International Logistics LimitedNotes forming part of the Consolidated Financial Statements as at 31st March, 2016

2. SHARE CAPITAL 31st March 2016 31st March 2015 ` ` i. Authorised 19,000,000 Equity Shares of ` 10/- each 190,000,000 190,000,000 [31.03.2015: 19,000,000 shares of ` 10/- each] ii. Issued, Subscribed and Paid-up 180,000,000 180,000,000 18,000,000 Equity Shares of ` 10/- each [31.03.2015: 18,000,000 shares of ` 10/- each] 180,000,000 180,000,000

3. RESERVES & SURPLUS 31st March 2016 31st March 2015

` `ReservesGeneral ReservesBalance at the commencement of the YearAdd: Transfer from Statement of Profit & LossClosing BalanceTonnage Tax Reserve u/s 115 VT of the Income Tax Act, 1961Balance at the commencement of the yearAdd: Transfer from Statement of Profit & Loss Closing Balance

Capital Reserve

Foreign Currency Translation ReserveBalance at the commencement of the YearAdd (less) : Adjustment for Translation ReserveClosing Balance

SurplusStatement of Profit & LossBalance at the commencement of the YearAdd: Profit for the PeriodLess: Proposed DividendLess: Tax on DividendLess: Transfer to Tonnage Tax ReserveLess: Transfer to General ReserveClosing Balance

671,675,749 100,000,000

571,675,749 100,000,000

771,675,749 671,675,749

57,581,000 27,000,000

45,581,000 12,000,000

84,581,000 57,581,00063,036,088

541,710,363 187,240,593

63,036,088

624,774,300 (83,063,937)

728,950,956 541,710,363

3,533,171,927 408,252,96345,000,000 9,160,94027,000,000

100,000,000

3,277,846,898 421,485,969

45,000,000 9,160,940

12,000,000 100,000,000

3,760,263,950 3,533,171,927

5,408,507,743 4,867,175,127

4. OTHER LONG TERM LIABILITIES31st March 2016 31st March 2015

` `

Liability for Lease Hold LandOther Liabilities

445,056,308 8,996,785

465,026,302 17,757,345

454,053,093 482,783,647

272



5. LONG TERM PROVISIONS


` `

Provision for employee benefits - Post Retirement Benefits - Other Long Term Employee Benefits

59,439,92581,361,800

63,172,07870,049,172

140,801,725 133,221,250

6. TRADE PAYABLES31st March 2016 31st March 2015

` `

Creditors for Supplies and Services Creditors for Accrued Wages and Salaries

770,549,78697,978,858

965,049,272 139,406,571

868,528,644 1,104,455,843

7. OTHER CURRENT LIABILITIES 31st March 2016 31st March 2015

` `

Advances received from Customers Income received in advanceOther Payables

- Statutory Dues - Payable on Purchase of Fixed Assets- Other Payables

Liability for Lease Hold Land

459,605,978127,675,443

18,971,193 4,780,357 4,109,874

19,983,626

481,878,35654,927,152

16,081,025 18,059,680 4,088,861

19,085,708

635,126,471 594,120,782

8. SHORT TERM PROVISIONS31st March 2016 31st March 2015

` `

Provision for Employee Benefits - Post Retirement Benefits - Other Long Term Employee Benefits

Provision for Taxes Proposed Dividends Tax on DividendOther Provision

2,127,093 1,990,035

135,835,71445,000,000 9,160,9404,505,730

1,738,684

1,530,725 150,237,320 45,000,000 9,160,9404,050,624

198,619,512 211,718,293

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11. LONG TERM LOANS AND ADVANCES 31st March 2016 31st March 2015

` `

Capital Advances Security Deposits Loan to Employees Advance Payment of Taxes Other Advances

42,17428,017,686 9,671,588

284,077,760 1,122,084

270,000 32,642,829

6,348,614 288,090,211

3,303,859

322,931,292 330,655,513

Secure Considered GoodUnsecured, Considered GoodDoubtful

–322,931,292

–

– 330,655,513

–

12. OTHER NON CURRENT ASSETS31st March 2016 31st March 2015

` `

Bank deposits with more than 12 months maturity Interest accrued on deposits.

1,065,135,035 5,204,288

794,545,180 32,648,183

1,070,339,323 827,193,363

13. CURRENT INVESTMENTS 31st March 2016 31st March 2015

` `

Investments in Mutual Funds (Quoted) Investments in Mutual Funds (Unquoted) Total Less: Excess of cost over fair value of Current Investments

–96384,86396384,863

–

15,000,000 1,092,907,9461,107,907,946

–96384,863 1,107,907,946

Aggregate value of Quoted investments [Market Value as at 31.03.2016 :` Nil (31.03.2015: ` 20,199,600)]Aggregate value of Unquoted investments


` `

–

96,384,863

15,000,000

1,092,907,946

96,384,863 1,107,907,946

14. INVENTORIES31st March 2016 31st March 2015

` `

InventoryStores and Spares- at or below costLess: Provison for Dead Stock

24,332,380630,205

27,581,091 1,188,066

23,702,175 26,393,025


276



15. TRADE RECEIVABLES31st March 2016 31st March 2015

` `

Trade Receivable (i) Debts Outstanding for a period exceeding six months(ii) Other Debts



349,504,439671,568,707

306,374,053 763,478,389

1,021,073,146

319,260,352 421,125

1,069,852,442

148,256,215 2,592,677

701,391,669 919,003,550

–701,391,669319,681,477

–919,003,550 150,848,892

16. CASH & BANK BALANCES 31st March 2016 31st March 2015

` `

Cash on hand Cheques, drafts on handBalances with Banks

In Deposit Account (maturity less than 3 months)In Current Account

Total Cash and Cash EquivalentsOther Bank Balances

In Deposit Account (maturity more than 3 months and (less than 12 months)In Earmarked Account

711,891 5,238,695

222,332,900294,103,311

675,976 12,572,938

217,719,750284,605,094

522,386,797

2,737,944,049128,404,944

515,573,758

1,182,698,734 123,423,853

3,388,785,790 1,821,696,345

Earmarked balances with Banks includes: - Held as margin money against guarantees - Other commitments

–127,243,855

75,000 122,150,742

17. SHORT TERM LOANS AND ADVANCES 31st March 2016 31st March 2015

` `

Balance with Excise/Service Tax AuthoritiesLoan to EmployeesMAT credit entitlementSecurity depositsOther Advances (Includes Advance to Suppliers / Agents, Prepaid expenses)

19,106,3596,420,62457,84,348

21,382,264 244,317,934

43,287,138 3,704,9851,098,000

9,065,216 527,982,145

297,011,529 585,137,484

Less: Provision for Bad & Doubtful Loans & Advances 521,899 100,000

296,489,630 585,037,484


–296,489,630

521,899

–585,037,484

100,000

277


18. OTHER CURRENT ASSETS31st March 2016 31st March 2015

` `

Voyages-in-progress Interest accrued on deposits etc.

104,563,071 101,484,941

44,801,195 11,254,534

206,048,012 56,055,729

19. REVENUE FROM OPERATIONS For the Year ended

31st March 2016 For the Year ended

31st March 2015

` `

Income from Port Related ServicesFreightIncome from Tugging & Towage ServicesClearing & ForwardingWarehousingTime CharteringVoyage CharteringOthers

1,937,400,676 813,249,665 283,699,145 59,003,536

139,884,375 1,859,755,614

311,390,968 146,755,741

2,543,308,841 1,080,028,822

278,120,633 88,005,653

131,614,931 3,318,321,206

724,418,686 195,335,007

5,551,139,720 8,359,153,779

20. OTHER INCOME For the Year ended


31st March 2015

` `

Dividend on InvestmentsInterest on Income Tax RefundInterest on Deposits etc.Profit on sale of Current InvestmentsOther Non Operating IncomeIncome from Rental ServicesRecovery of bad debtProvision/Liabilities no longer required written back

8,411,867 4,399,411

110,612,063 138,896,879 15,848,252 1,856,316

22,600 72,618,252

9,313,606 –

64,572,854 20,850,000 14,048,545

– 16,674

70,205,495

352,665,640 179,007,174

21. EMPLOYEE BENEFIT EXPENSE For the Year ended


31st March 2015

` `

Salaries and Wages, including BonusContribution to Provident and other FundsStaff Welfare Expenses

442,808,26633,273,196 31,455,870

480,342,808 42,944,225

21,636,391

507,537,332 544,923,424

278



22. OPERATIONAL EXPENSES For the Year ended


31st March 2015 ` `

Vessel Hire ChargesBunkering costsIntraport Transportation including On Shore handlingStevedoring & Other Related ExpensesEquipment Assistance ChargesRoyalty to Kolkata Port Trust - Haldia Dock ComplexOcean Freight ChargesClearing & ForwardingWarehousing ExpensesCrew ManningOther direct costs

655,926,130 511,066,226 78,711,143

954,410,539 25,186,369 58,602,292

609,507,851 51,770,069 80,196,293 29,589,428

1,005,780,549

1,621,913,191 1,046,492,257

48,651,081 1,423,116,981

39,843,265 35,741,852

865,190,851 78,906,855 89,643,395 29,908,408

1,466,498,179 4,060,746,889 6,745,906,315

23. FINANCE COST For the Year ended


31st March 2015 ` `

Interest on Secured Term Loan – 24,951,440 – 24,951,440

24. OTHER EXPENSES



` `Administrative ExpensesConsumption of stores and spare partsPower & FuelRent (including Plot Rent)Repairs to BuildingsRepairs to MachineryRepairs- othersInsurance ChargesRates and TaxesTravelling ExpensesProvision for Dead StockLoss on foreign currency transactions (Net) CSR ExpenditureProvision for Bad and Doubtful AdvanceLoss on sale of Fixed Assets (Net)/Written offProvision for Bad and Doubtful Debts (Net)Security ChargesBad Debts written offProfessional & Consultancy chargesAuditor Remuneration

- as Auditor- for Taxation matters- for Other Services (Certification)- for Out of Pocket Expenses

Miscellaneous Expenses

48,368,901 13,606,281 69,869,926 8,667,742

30,111,037 14,039,545 13,179,897 2,724,764

30,405,155 62,675

4,166,393 6,189,038

471,899 1,417,223

156,324,222 20,314,575

839,166 24,397,772

8,975,189 530,000

1,699,330 67,384

98,160,138

55,900,862

13,342,093 71,649,735 6,928,313

70,067,404 17,738,556 16,876,192 6,091,650

29,624,977 1,154,535

(97,806,111) 4,176,634

- 12,250,765 33,351,847 21,174,502 18,316,656 26,150,499

8,090,004 350,000 790,000 60,300

102,759,555 554,588,252 419,038,968

279


25. Contingent Liabilities not provided for:

Sl Particulars As on 31st March 2016

As on 31st March 2015

A Bank Guarantees 18,737,108 19,236,182

B Claims from the Department of Central Excise,Customs & Service Tax 759,070,273 758,617,424

C Claims from Income Tax Department 44,630,134 35,586,161

D TAMP Matters 788,275,620 709,292,388

E HDC- Non Payment of Royalty 33,270,804 33,270,804

F Cargo Shifting Charges 128,002,158 128,002,158

G Additional Claim by Kopt for Berth#12 27,432,405 23,485,288

H Others 10,213,130 9,696,151

1,809,631,632 1,717,186,556 26. In terms of the Licence Agreement dated 29.01.2002 with Board of Trustees for the Port of Kolkata, the company is required to

invest in equipments and infrastructure in Berth #12 (Haldia Dock Complex) as follows:

Phasing of Investment from Licence Agreement dated 29.01.2002 (in `)

S l . No

Purpose of Investment Within 18 months

(Lapsed on 28.07.2003)

Within 24 months

(Lapsed on 28.01.2004)

Within 36 months

(Lapsed on 28.01.2005)

Total

1 For Procurement of Equipment for ship to shore handling & vice versa and horizontal transfer of cargo

230,600,000 28,500,000 – 259,100,000

2 Storage of cargo – 17,400,000 12,000,000 29,400,000

3 Office building, workshop etc. – 7,500,000 2,500,000 10,000,000

4 Utility Services – 2,200,000 - 2,200,000

Total 230,600,000 55,600,000 14,500,000 300,700,000

As at 31.03.2016, Company's investments in equipments and infrastructure aggregate to ` 258,000,000 (31.03.2014: ` 258,000,000).

The Management has requested the Port Trust Authorities for suitable modification to the investment obligation in view of the changes in the business and economic scenario. The Port Trust Authorities have, subject to sanction of the Government of India, approved the changes proposed by the Company in the specifications of the equipments and other required infrastructure.

27. The Company has taken on lease from Haldia Dock Complex 63000 Sq. Mtr. of land in the Dock Interior Zone for setting up of railway siding and other infrastructure in terms of the agreement dated 28.12.2006. Further, the Company is under an obligation to transfer the assets to be constructed on the additional land to Kolkata Port Trust as per the Licence Agreement. The lease is for a period of 25 years commencing from 11th January 2007 (for 54,000 Sq. Mtr.) and 3rd October 2007 (for 9,000 Sq. Mtr.) till 28th January 2032.

The consideration for lease of land comprises mainly a Non Refundable and Non Adjustable Premium of ` 18,040,320 (for 54,000 Sq. Mtr.) and ` 3,006,720 (for 9,000 Sq. Mtr.) and the lease rental of ` 510,437,765 (for 54,000 Sq. Mtr.) and ` 84,976,840 (for 9,000 Sq. Mtr.) payable over the lease period.

The amount of ` 445,056,308 (31.03.2015: ` 456,026,302) disclosed in Other Long Term Liabilities and amount of ` 19,983,626

280



(31.03.2015: ` 19,085,708) disclosed in Other Current Liabilities represents the lease rental payable during the period from 1st April, 2016 till 28th January 2032.

28. Estimated amount of contracts remaining to be executed on capital account and not provided for: ` 18,524,663 (31.03.2015: ` 1,468,498).

29. Licence included under Intangible Assets in Fixed Assets represents Upfront Fees paid to Kolkata Port Trust - Haldia Dock Com-plex towards securing the right to operate Berth No. 12 (situated at Haldia) for a period of 30 years and which is amortised on straight line basis over the lease period.

33. Segment information

The Group has identified business segments as its primary segment and geographical segments as its secondary segment. Business segments are primarily Port Operations & Other segment, Shipping and Freight Forwarding segment. Revenues and expenses directly attributable to segments are reported under each reportable segment. The expenses which are not attributable or allocable to segments have been disclosed as unallocable expenses. Assets and liabilities that are directly attributable or allocable to segments are disclosed under each reportable segment. All other assets and liabilities are disclosed as unallocable. Geographical revenues are allocated based on the location of the customer. Geographical segments of the Group are India and Excluding India.

Particulars

For the year ended 31 March, 2016Business segments Eliminations

TotalPort Operations & Others

Shipping Freight Forwarding

` ` ` `

External revenue

Inter-segment revenue

Total revenue

Segment result before finance cost and tax

Unallocable income / (expenses) (net)

Profit before finance cost and taxes Finance cost

Profit before taxes

Tax expense

Profit for the year

2,075,610,968 2,456,519,810 1,019,008,942 – 5,551,139,720 (2,674,923,772) (4,320,860,525) (1,363,369,482) – (8,359,153,779)

1,674,083 – 6,836,942 (8,511,025) – (2,540,610) – (3,047,747) 5,588,357 –

2,077,285,051 2,456,519,810 1,025,845,884 -8,511,025 5,551,139,720 (2,677,464,382) (4,320,860,525) (1,366,417,229) 5,588,357 (8,359,153,779)

326,773,406 (10,100,044) 29,098,051 – 345,771,413 (443,281,739) (31,384,627) (106,047,132) – (580,713,497)

253,550,912 (65,732,715) 599,322,325

(646,446,213)–

(24,951,440) 599,322,325

(621,494,773) 191,069,362

(200,008,804) 408,252,963

(421,485,969)

281


Particulars

The geographical segments individually contributing 10 percent or more of the Group's revenues and segment assets are shown separately:

Geographical Segment

Revenues For the year ended

31 March, 2016

Segment assets As at

31 March, 2016

Capital expenditure incurred during the year

ended 31 March, 2016` ` `

India 4,006,568,164 4,594,109,307 70,452,177 (4,987,520,440) (4,385,738,891) (264,738,053)

Other than India 1,544,571,556 3,325,477,345 2,277,498 (3,371,633,339) (3,222,341,167) (6,194,099)

Note: Figures in bracket relate to the previous year

Particulars For the year ended 31 March, 2016Business segments

TotalPort Operations & Others

Shipping Freight Forwarding

` ` `

Segment assets 3,092,304,718 2,094,827,988 636,064,521 5,823,197,228 (2,073,526,746) (1,270,026,448) (252,287,155) (3,595,840,350)

Unallocable assets 2,096,389,424 (4,012,239,708)

Total assets 7,919,586,652 (7,608,080,058)

Segment liabilities 1,881,843,048 213,265,763 202,020,578 2,297,129,389 (1,855,277,130) (189,194,343) (331,591,022) (2,376,062,496)

Unallocable liabilities 33,949,522 (184,842,436)

Total liabilities 2,331,078,910 (2,560,904,931)

Other informationCapital expenditure (allocable) 69,839,733 2,049,693 840,249 72,729,675

(264,221,364) (2,513,943) (4,196,845) (270,932,152)Capital expenditure (unallocable) -

- Depreciation and amortisation (allocable) 81,679,132 94,588,426 5,343,003 181,610,561

(78,560,616) (96,933,571) (6,351,847) (181,846,034)Depreciation and amortisation (unallocable) -

- Other significant non-cash expenses other than depreciation

1,015,596 147,590,251 9,670,172 158,276,019

(19,629,613) (34,360,216) (11,083,974) (65,073,803)Other significant non-cash expenses (unallocable) -

282


30.

DEFERRED TAX LIABILITY (NET)As at 31st March

2015Charge/ (credit)

for the YearForex Adj As at 31st March

2016

` ` ` `

Deferred Tax LiabilitiesDifference between Book and Tax Depreciation Deferred Tax AssetsLeave liabilitiesProvision for Doubtful DebtsOthers

Net Deferred Tax Liability/ (Asset)

63,717,454 559,102

1,676,762

65,953,318

53,717,454 559,102 1,676,762 65,953,318

(23,786,762) (2,382,731) (2,942,846)

(4,299,170)

(544,397)1,952,110

–––

(28,085,932) (2,927,128)

(990,736)

(29,112,339) (2,891,457) – (32,003,796)

34,605,115 (2,332,355) 1,676,762 33,949,522

31 In accordance to section 135 of Companies Act 2013, the TMILL group of companies have incurred ` 6,189,038/- as CSR expenditure. Under the CSR activities the company has supported construction of a dining hall area at the old age home in Nivedita Ashram, Patalipank Odhisa, Educational and Skill building scholarships for orphan children, setting up of sanitation and hygiene facilities at girls schools at Haldia, Preventive Health care for pregnant mothers and child at Kolkata and tree plantations cum green belt at Haldia, have also provided 604 cartridges of Tata Swach water purifiers to households of fishermen families to whom the Company had provided Tata Swach water purifiers last year in the villages around Dhamra port and also sponsored training to 71 partcipants through Tata Skill Development Society, amongst some of the major CSR projects.

a) Gross amount required to be spent by the company during the year : ` 6,009,322/-.

b) Amount spent during the year on:

In cash Yet to be paid in cash Total

(i) Construction/acquisition of any asset – – –

(ii) On purposes other than (i) above 5,994,946 194,092 6,189,038

32.

EPS 31st March 2016 31st March 2015

` `

Profit after tax ( `) 408,252,961 421,485,969

Profit attributable to Shareholders ( `) 408,252,961 421,485,969

Weighted average No. of Shares for Basic EPS 18,000,000 18,000,000

Nominal value of Ordinary Shares ( `) 10 10

Basic/Diluted Earnings per Share ( `) 22.68 23.42


283

TM International Logistics LimitedAdditional Informations forming part of Financial Statements for the year ended 31st March, 2016

34 (a) The company has recognised an amount of ̀ 21,932,502 in Statement of Profit and Loss for the year (2014-2015 : ̀ 19,755,255) expenses under defined contribution plans.

Benefit (Contribution to)


2016


2015` `

Provident Fund 11,449,117 10,235,167

Superannuation Fund 6,175,403 6,245,449

Employees Pension Scheme 3,556,909 2,673,905

Tata Employees' Pension Scheme 851,073 593,760

Employees State Insurance – 6,974

Total 22,032,502 19,755,255

(b) The company operates post retirement defined benefit plans as follows :

i. Funded

a. Post Retirement Gratuity

ii. Unfunded:

a. Director Pension Scheme

b. Post Retirement Medical Benefit Scheme

(c) Details of the Gratuity plan are as follows :




a. Obligation as at the beginning of the year 108,940,190 89,770,561

b. Current Service Cost 9,458,848 9,672,478

c. Interest Cost 7,975,228 7,190,099

d. Plan Amendments – (262,880)

e. Obligation of New Companies – 146,600

f. Actuarial (gain)/loss 6,512,397 11,647,671

g. Exchange Rate Variation 1,015,409 502,659

h. Benefits paid (3,860,933) (9,727,000)

i. Obligation as at the end of the year 130,041,139 108,940,190


a. Fair value of plan assets as at beginning of the year 74,601,589 66,859,109

284





b. Expected return on plan assets 6,548,820 5,434,540

c. Actuarial gain/(loss) 6,349,630 1,660

d. Employers' Contributions 18,518,333 11,623,280

e. Benefits paid (3,860,933) (9,317,000)

f. Fair value of plan assets as at end of the year 102,157,439 74,601,589


a. Fair value of plan assets as at end of the year 102,157,439 74,601,589

b. Present value of obligation as at the end of the year 130,041,139 108,940,190

c. Amount recognised in the balance sheet (27,883,700) (34,338,601)


a. Current service cost 9,458,848 9,672,478

b. Interest cost 7,975,228 7,190,099

c. Expected return on plan assets (6,548,820) (5,434,540)

d. Actuarial (gain)/loss 162,767 11,646,011

e. Past Service Cost - (262,880)

f. Expense recognized in the Year 11,048,023 22,811,169

The expense is disclosed in the line item Payments to & Provisions for Employees

Amount invested in %

5. Investment Details 31st March 2016 31st March 2015

a. Government of India Securities 9.2% 11.4%

b. Public Sector unit Bonds 5.5% 8.6%

c. State / Central Government Guarenteed Securities 7.6% 9.4%

d. Special Deposit Schemes 0.0% 0.0%

e. Private Sector unit Bonds 7.2% 10.1%

f. Others (including bank balances) 70.5% 60.4%

6. Assumptions 31st March 2016 31st March 2015

a. Discount rate (per annum) 5.0% to 7.75% 5.3% to 7.9%


c. Rate of escalation in salary (per annum) 5.0% to 9.0% 5.0% to 9.0%

285


(d) Details of unfunded post retirement defined benefit obligations are as follows:

Description

For the year ended

31st March 2016 31st March 2015` ` ` `



a. Obligation as at the beginning of the year 3,003,165 27,569,000 1,730,465 23,963,000 b. Current Service Cost – – – –c. Interest Cost 206,240 2,115,670 125,710 2,095,110d. Actuarial (gain)/loss 1,632,890 1,518,130 1,814,280 2,878,890e. Past service cost – – – –f. Benefits paid (784,980) (1,576,800) (667,290) (1,368,000)g. Obligation as at the end of the year 4,057,315 29,626,000 3,003,165 27,569,000


a. Current service costb. Interest cost 206,240 2,115,670 125,710 2,095,110c. Past Service Cost – – – –d. Actuarial (gain)/loss 1,632,890 1,518,130 1,814,280 2,878,890 e. Expense recognized in the Year 1,839,130 3,633,800 1,939,990 4,974,000

The expense amounting to (a) Medical - ` 1,839,130, and (b) Others ` 3,633,800 is disclosed under the line item - Salaries and wages, including bonus (Net)

Information for Current and Previous Financial Years

2015-16 2014-15 2013-14 2012-13 2011-12

` ` ` ` `

I. a) Present Value of Defined Benefit Obligation 130,041,139 108,940,190 89,770,561 72,875,772 57,667,548

b) Fair Value of Plan Assets 102,157,439 74,601,589 66,859,109 52,765,220 47,891,750

c) Surplus/(Deficit) in Plan Assets (27,883,700) (34,338,601) (22,911,453) (20,110,552) (9,775,798)

II. a) Experience Gain/(loss) Adjustment on Plan Liabilities

(6,224,881) (1,672,869) (3,436,702) (4,574,767) (5,512,477)

b) Experience Gain/(Loss) Adjustment on Plan Assets 6,349,630 – – – 1,948,180

III. a) Actuarial gains/(losses) on change in assumptions (287,467) (9,974,802) (1,319,067) (3,382,750) 2,357,780


9,471,020 19,146,020 10,028,860 11,862,140 4,594,310

286


TKM International Logistics LimitedAdditional Informations forming part of Financial Statements for the year ended 31st March, 2016

Description

For the year ended For the year ended

31st March 2015

31st March 2016 ` `


3. Assumptions

a. Discount rate (per annum) on 01.04.15/ 01.04.14 7.90% 7.90% 9.00% 9.00%

b. Discount rate (per annum) on 31.03.16/ 31.03.15 7.75% 7.75% 7.90% 7.90%

c. Medical costs inflation rate 6.00% 6.00%

4. Information for current and previous financial year

I. a) Present value of defined organization 4,057,315 29,626,000 3,003,165 27,569,000

b) Fair value of Plan Assets - - - -

c) Surplus/(Deficit) in plan assets (4,057,315) (29,626,000) (3,003,165) (27,569,000)

II. a) Experience gain (loss) adjustment on plan liabilities (1,572,130) (1,074,130) (1,501,440) (6,890)

b) Experience gain (loss) adjustment on plan assets -- -- - -

III. a) Actuarial gains/(losses) on change in assumptions (60,760) (444,000) (312,840) (2,872,000)


- - - -

Effect of a 1% change in health care cost on

Increase

(i) aggregate current service and interest cost 233,160 142,910

(ii) closing balance of obligation 4,505,870 3,343,910

Decrease

(i) aggregate current service and interest cost 183,030 110,860

(ii) closing balance of obligation 3,669,000 2,709,270

(e) The estimate of future salary increases take into account inflation, seniority,promotion and other relevant factors

287


Note Particulars

35. Additional information as required by Paragraph 2 of the General Instructions for Preparation of Consolidated Financial Statements to Schedule III to the Companies Act, 2013

Net assets, i.e., total assets minus total liabilities

Share of profit or loss

As % of consolidated net

assets

Amount (`) As % of consolidated profit or loss

Amount (`)

Parent TM International Logistics Ltd.

29.28% 1,636,373,217 72.87% 297,497,354

Subsidiaries

Indian

1. TKM Global Logistics Ltd.2. TM Harbour Services Pvt. Ltd.

Foreign1. International Shipping & Logistics FZE2. TKM Global GmbH3. TKM Global China Ltd.

Minority Interests in all subsidiaries

4.46% 21.02%

33.07% 12.39% (0.21%)

248,979,624 1,174,474,429

1,848,176,579 692,424,197 (11,920,302)

7.38%38.94%

(27.68%)8.92%

(0.44%)

30,109,265 158,985,191

(112,995,365) 36,435,058 (1,778,542)

36. LIST OF RELATED PARTIES AND RELATIONSHIP Holding Company Tata Steel Limited

Fellow Subsidiaries # The Indian Steel and Wire Products Limited Tata Metaliks Limited Tayo Rolls Limited Jamshedpur Continous Annealing & Processing Company Private Limited Tata Sponge Iron Limited Tata Steel UK Limited Tayo Rolls Limited Tata Steel Asia HK Limited Centennial Steel Company Limited Natsteel Holding Pte Ltd The Tinplate Company of India Ltd

Key Managerial Personnel Mr. R N Murthy, Managing Director Mr. Anand Chand, Chief Financial Officer # Companies with which there are transactions during the Current & Previous Period.

288


TM International Logistics LimitedAdditional Informations forming part of Financial Statements for the year ended 31st March, 2016Related Party Transactions `


Fellow Subsidiaries


Total

Rendering of Services 1,743,823,074 152,688,129 – 1,896,511,203 (2,110,720,073) (173,753,201) – (2,284,473,274)

Receiving of Services 34,166,344 – – 34,166,344 (29,077,395) – – (29,077,395)

Re-imbursement Received 1,305,150,475 211,228,687 – 1,516,379,162 (1,528,855,845) (451,230,025) – (1,980,085,870)

Re-imbursement Paid 568,404 – – 568,404 – – – –

Remuneration Paid / Payable to KMP – – 13,888,304 13,888,304 – – (12,454,507) (12,454,507)

Dividend Paid/ Payable – – – – (22,950,000) – – (22,950,000)

Bad Debt written off 35,219 214,679 – 249,898 (866,242) (55,470) – (921,712)

Provision against Debtors 704,659 155,896 – 860,555 (2,052,903) (61,035) – (2,113,938)

Reversal of Provison for Bad and Doubtful Debts

– – – – (1,857,130) – – (1,857,130)

Debit Balance Outstanding as on 31st March 2016Outstanding Receivables 421,660,324 10,182,060 – 431,842,384

(340,866,376) (29,970,824) – (370,837,200)Credit Balance Outstanding as on 31st March 2016Outstanding Payables 317,179,600 14,100,406 – 331,280,006

(280,694,721) (20,517,727) – (301,212,448)Provision for Doubtful debts 721,742 155,896 – 877,638

(2,105,682) (61,035) – (2,166,717) 36. Previous year's figures have been regrouped / reclassified wherever necessary to correspond with the current year's classification

/ disclosure. Signature to Accounting policies and Notes 1 to 36 For and on behalf of the Board of Directors Sd/- Sandipan Chakravortty Chairman Sd/- Sd/ Sd/-

Anand Chand Jyoti Purohit R N Murthy Chief Financial Officer Company Secretary Managing Director

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