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Aegis Logistics Ltd.

BSE: 500003 Sector: Others
NSE: AEGISCHEM ISIN Code: INE208C01025
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OPEN 275.00
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VOLUME 45194
52-Week high 287.15
52-Week low 126.20
P/E 102.29
Mkt Cap.(Rs cr) 8,951
Buy Price 268.05
Buy Qty 180.00
Sell Price 268.30
Sell Qty 51.00
OPEN 275.00
CLOSE 271.90
VOLUME 45194
52-Week high 287.15
52-Week low 126.20
P/E 102.29
Mkt Cap.(Rs cr) 8,951
Buy Price 268.05
Buy Qty 180.00
Sell Price 268.30
Sell Qty 51.00

Aegis Logistics Ltd. (AEGISCHEM) - Director Report

Company director report

To the Members of the Company:

The Directors have pleasure in presenting the 60th Annual Report and Audited Statementof Accounts of the Company for the year ended 31st March 2017.

Financial Performance

(Rs. in crores)

Group Consolidated Company Standalone
2016-17 2015-16 2016-17 2015-16
Revenue from Operation 3932.81 2213.22 391.11 357.35
Profit before Finance cost (as mentioned below) Depreciation and Tax * 213.83 191.18 117.64 93.19
Finance Cost [including Interest (Net) Hedging Cost & Foreign Exchange Loss (Gain)] 17.83 15.09 8.34 7.74
Depreciation 24.30 23.42 11.39 11.55
Profit before tax 171.70 152.67 97.91 73.90
Provision for taxation – Current Tax 33.01 22.55 30.44 19.71
– Deferred 4.69 3.98 4.54 0.32
Net Profit after tax 134.00 126.14 62.93 53.87
Less: Minority Interest 13.74 12.81
Net Profit for the Year 120.26 113.33 62.93 53.87
Balance in statement of Profit & Loss 208.20 140.87 154.59 138.15
Profit available for Appropriations 328.46 254.20 217.52 192.02
Less: Appropriations
Transfer to General Reserves
Transfer to Debenture Redemption
Reserve (3.87) (9.82) (1.25) (1.25)
Transfer to Capital Redemption Reserve (38.00)
Interim Dividend {Re.0.70 (Previous Year Re. 0.90) per share} (23.38) (30.06) (23.38) (30.06)
Corporate Dividend Tax thereon (3.37) (6.12) (3.37) (6.12)
Corporate Dividend Tax on Preference
Share Dividend declared by a Subsidiary
Company (0.15)
Closing Balance 259.68 208.20 189.51 154.59

*Normalised EBIDTA

Operating Performance:

Company Standalone

Revenue from operations increased marginally by 9.45% at Rs. 391.11 crores (previousyear Rs. 357.35 crores). The Gross Profit (before net interest depreciation tax hedgingcost & foreign exchange loss (gain) PBIDT increased by 26 % to Rs. 117.64 crores(previous year Rs. 93.19 crores). Profit before Tax was higher at Rs. 97.91 crores(previous year Rs. 73.90 crores) an increase by 32.49% and Profit after Tax increased by16.82% to Rs. 62.93 crores (previous year Rs. 53.87 crores).

Group Consolidated

The Operating performance of the Group has shown improvement. The Revenue for the yearincreased by 77.70% to Rs. 3932.81 crores (previous year Rs. 2213.22 crores) on account ofhigher volumes. The Profit before Tax for the year rose to Rs. 171.69 crores (previousyear Rs. 152.67 crores) an increase of 12.46% on year on year basis. The Profit after Taxfor the year rose by 6.23% to Rs. 134 crores (previous year Rs. 126.14 crores).

Liquid Segment

Revenues of the group for Liquid Division is Rs. 153.88 crores (previous year Rs.170.60 crores).

Normalised EBITDA was Rs.90.70 crores compared to Rs. 102.38 crores in previous year.The revenues and margins were stable.

Gas Segment

The revenue for Gas Division during the year was Rs. 3778.92 crores (previous year Rs.2042.62 crores) on account of higher volumes. The normalized EBITDA increased to Rs.155.42 crores as compared to Rs. 121.23 crores in previous year mainly due to improvedmargins and higher throughput volumes.

Outlook for the Group

The oil gas and chemical logistics business continues to show good potential asIndia's import and exports of oil products and chemicals increase in line with the growthof the Indian economy. As the Government of India continues to encourage the use of LPG inlieu of other dirtier fuels such as kerosene and coal the demand for LPG continues toincrease and with it the demand for import terminalling capacity. In this context theoutlook for the group remains positive.

Dividend

The company continues to evaluate and manage its dividend policy to build long termshareholder value. The Directors recommended two interim dividends during the financialyear ended 31st March 2017 aggregating to total dividend of 70% i.e. Re. 0.70 per shareof Re. 1/- each. Further the Board of Directors of the Company at its meeting held on30th May 2017 has recommended the Final Dividend of 35% i.e Re. 0.35 per share of Re. 1/-each which is subject to the approval of members at the ensuing Annual General Meeting.

The Board of Directors of the Company has approved the Dividend Distribution Policy inaccordance with the SEBI (Listing Obligations & Disclosure Requirements) Regulations2015. The Policy is uploaded on the Company's website athttp://www.aegisindia.com/Corporate_Governances.aspx.

New Projects and Expansion

In light of increased demand for LPG in the region the group embarked on a furtherexpansion of its LPG storage capacity in Pipavav from 8100 MT to 18300 MT an increaseof 10300 MT. This capacity will be commissioned in FY 2017-18.

The Company is setting up a fully refrigerated LPG terminal at Haldia Dock ComplexWest Bengal with a static storage capacity of 25000 MT and throughput capacity of2500000 MT per annum. Terminal construction is underway with all the requisiteenvironmental permits secured and is nearing completion. This will be the largest LPGterminal in the Aegis portfolio. The Company has also signed a 20 year Memorandum ofUnderstanding (MoU) with a large public sector unit as the anchor customer for use of thisterminal.

The Company is expanding its Haldia liquids terminal by adding 25000 KL of storagecapacity which has now been commissioned.

The Company has initiated a project of debottlenecking of Mumbai LPG terminal byconnecting it by pipeline to the Uran-Chakan cross country LPG pipeline. This will resultin increased throughput capacity and less road movement of LPG.

In Kandla the Company is building 100000 KL of liquid capacity for chemicals andpetrochemicals. The project is nearing completion and will be fully commissioned in FY17-18.

The company continues to look for opportunities to lease or acquire land at major andminor ports in India.

Credit Rating

The credit rating agency Credit Analysis & Research Ltd. (CARE) has continued toassign a short term credit rating of CARE ‘A1+' (A One Plus) and has revised the longterm rating to CARE ‘AA' (Double A) from CARE ‘AA-' (Double A Minus).

India Ratings & Research (Ind-Ra) has continued to assign the short term creditrating of CARE‘A1+' (A One Plus) and Long-Term Issuer Rating of ‘IND AA' (DoubleAA). The Outlook is Stable.

Consolidated Financial Statements

In compliance with the directions by Ministry of Corporate Affairs Govt. of India(MCA) the

Consolidated Financial Statements of Aegis Group as provided in this Annual Report areprepared in accordance with the Accounting Standard (AS 21) "CONSOLIDATED FINANCIALSTATEMENTS". The Consolidated Financial Statements include Financial Results of itsSubsidiary Companies.

For information of members a separate statement containing salient features of thefinancial details of the Company's subsidiaries for the year ended 31st March 2017 inForm AOC-1 is included along with the financial statement in this Annual Report. TheAnnual Accounts of these subsidiaries will be made available to the holding and subsidiarycompanies' Members seeking such information at any point of time. The annual accounts ofthe subsidiary companies will also be kept for inspection by any Member at Head/CorporateOffice of the Company and that of the subsidiary companies concerned and the same shall bedisplayed on the website of the Company www.aegisindia.com.

The Annual Report of the Company the quarterly/half yearly and the annual results andthe press releases of the Company are also placed on the Company's website:www.aegisindia.com.

Indian Accounting Standards (IND AS)

The Ministry of Corporate Affairs vide notification dated February 16 2015 notifiedthe Companies (Indian Accounting Standard Rules) 2015 in pursuance of which the Companyand its subsidiaries shall adopt IND AS with effect from April 1 2017.

Subsidiary Companies

The Company has nine subsidiaries (out of which seven are wholly owned subsidiaries)as on 31st March 2017 having business akin and germane to the business of holdingCompany whose details are given in the Annual Report and there has been no change in thenature of business of its subsidiaries during the year. The operating & financialPerformance of the subsidiary Companies are as provided below:

Sea Lord Containers Limited ("SCL")

During the year under review the Company's Bulk Liquid terminal continued operationsat full capacity. The Company recorded a Turnover of Rs. 48.83 Crores (Previous year Rs.48.58 Crores) increase of 0.5% on YoY basis on account of product mix. Net Profit afterTax was recorded at Rs. 35.91 Crores (Previous year Rs. 33.29 Crores) an increase of7.8%.

During the year the Company provided an Exit O_er to the shareholders of Sea LordContainers Limited pursuant to Securities Exchange Board of India ("SEBI")Circular No. SEBI/HO/MRD/DSA/ CIR/P/2016/110 dated October 10 2016. As on March 31 2017the Company holds 92.26% Equity Shares of Sea Lord Containers Limited.

Further during the financial year F.Y. 2016-17 Sea Lord Containers Limited redeemedits entire Non- Cumulative Redeemable Preference Shares aggregating to Rs. 38 Croreswhich were held by the Company.

Aegis Gas (LPG) Private Limited (wholly owned subsidiary)

During the year under review the revenue for the year has increased to Rs. 115.41Crores as against Rs. 105.09 Crores of the previous year on account of increased volumes.Profit after tax was Rs. 12.22 Crores as compared to Rs. 15.64 Crores in previous year.

During the year under review the Liquid storage terminal undertaking of the Aegis Gas(LPG) Private Limited located at Pipavav Port was acquired by the Company along with allassets and liabilities.

Hindustan Aegis LPG Limited (wholly owned subsidiary)

During the year under review the operating revenue decreased to Rs. 42.83 Crores fromRs. 1215.59 Crores in previous year on account of lower volumes. Loss for the year ended31st March 2017 was Rs. 0.46 Crores as compared to profit of Rs. 11.38 Crores in previousyear.

During the year the under construction LPG Assets at Haldia Dock Complex West Bengalof the Company was transferred to Hindustan Aegis LPG Limited.

Konkan Storage Systems (Kochi) Private Limited (wholly owned subsidiary)

During the year under review the Income was Rs. 6.66 Crores as against Rs. 4.55 Croresin the previous year on account of improved utilisation of capacity. The company made anet profit of Rs. 1.95 Crore as against Rs. 0.65 Crore in the previous year.

Aegis Group International Pte. Limited

The revenue for the year increased to Rs. 3365.32 Crores as against Rs. 1500.44 Croresof the previous year on account of higher volumes. Profit after tax for the year ended31st March 2017 was Rs. 23.42 Crores as compared to profit of Rs. 11.22 Crores inprevious year.

Aegis International Marine Services Pte. Limited (wholly owned subsidiary)

The revenue for the year has increased to Rs. 15.69 Crores as against Rs. 8.82 Croresof the previous year on account of higher volumes. Loss for the year ended 31st March2017 was Rs. 0.04 Crore as compared to loss of Rs. 0.06 Crore in previous year. During theyear the Company further invested USD 20000 at par in Aegis International MarineServices Pte. Limited for its working capital needs.

Aegis LPG Logistics (Pipavav) Limited (wholly owned subsidiary)

The Company incurred normal expenditure of Rs. 0.23 Lacs during the year (Previous yearRs. 0.20 Lacs). The Company has not commenced any commercial operations as yet.

Aegis Terminal (Pipavav) Limited (wholly owned subsidiary)

The Company incurred normal expenditure of Rs. 0.23 Lacs during the year (Previous yearRs. 0.20 Lacs). The Company has not commenced any commercial operations as yet.

Eastern India LPG Company Private Limited (wholly owned subsidiary)

The Company incurred normal expenditure of Rs. 0.58 Lacs during the year (previous yearRs. 0.59 Lacs). The Company has not commenced any commercial operations as yet.

Fixed Deposits

During the year under review the Company has not invited any fresh fixed deposits norrenewed any existing fixed deposits from its shareholders and general public. The totalamount of fixed deposits matured and remaining unclaimed with the Company as on 31stMarch 2017 was Rs.2.45 lacs. There were no overdue deposits other than those unclaimed atthe year end. There is no default in payment of interest and repayment of matured deposits& interest thereon by the Company.

Corporate Governance

A report on Corporate Governance as stipulated under ‘Schedule V' of SEBI(Listing Obligations and Disclosure Requirements) Regulations 2015 ("SEBILODR") together with a certificate of compliance from the Auditors forms part ofthis report.

Management Discussion and Analysis

In compliance with ‘Schedule V' of SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015 a separate section on Management Discussion and Analysiswhich also includes further details on the state of affairs of the Company forms part ofthis Annual Report.

Listing of Company's Securities

Equity Shares

The Company's Equity Shares continue to remain listed with the BSE Ltd. and NationalStock Exchange of India Ltd. and the stipulated Listing Fees for the financial year2017-18 have been paid to both the Stock Exchanges.

Non-convertible Debentures

The Company's Redeemable Non-Convertible Debentures are listed on the Wholesale DebtMarket Segment of National Stock Exchange of India Ltd. and the stipulated Listing Feesfor the financial year 2017-18 have been paid.

Directors & Key Management Personnel

Pursuant to section 152 of the Companies Act 2013 Mr. Raj K. Singh Director of theCompany retires by rotation and being eligible offers himself for re-appointment.

During the year the Company's Chairman Mr. Kapoorchand M. Chandaria left for heavenlyabode on 27th September 2016. The Board placed on record their sincere appreciation forthe Chairman who was a guiding force to the Company since past several years.

Mr. Rajnikant J. Karavadia and Mr. Dineshchandra J. Khimasia Non - ExecutiveIndependent Directors of the Company resigned w.e.f. 8th November 2016 and 4th May 2017respectively due to their ill health. The Board placed on record their sincereappreciation for their long association with the Company.

Mr. Jaideep D. Khimasia was appointed as an Additional Director (category Independent)w.e.f. 11th May 2017 subject to approval of members at the ensuing Annual GeneralMeeting. Mr. Jaideep D. Khimasia is qualified as a B. E Production from BharatiVidyapeeth University of Poona and has over 25 years of management experience in fieldsrelated to Project Management with contributions in various quality assurance and processimprovement initiatives of various Multi-National Corporations. Your Directors recommendthe appointment of Mr. Jaideep D. Khimasia as Independent Director to hold office upto 5(five) consecutive years upto 10th May 2022 at the ensuing Annual General Meeting.

Disclosure from Independent Directors

Pursuant to the provisions of Section 134 of the Companies Act 2013 with respect tothe declaration given by the Independent Director of the Company under Section 149(6) ofthe Companies Act 2013 the Board hereby confirms that all the Independent Directors havegiven declarations and further confirms that they meet the criteria of Independence as perthe provisions of Section 149(6) read with SEBI (Listing Obligations & DisclosureRequirements) Regulations 2015.

Auditors

As per the provisions of sections 139 141 of the Companies Act 2013 and rules madethereunder (hereinafter referred to as "The Act") the Company at its AnnualGeneral Meeting ("AGM") held on 31st July 2014 approved the appointment ofM/s. Deloitte Haskins & Sells LLP Chartered Accountants Mumbai (ICAI FirmRegistration No. 117366W/W-100018) to hold office till the conclusion of the thirdconsecutive AGM (i.e. 60th AGM).

Accordingly as per the provisions of the Act applicable to the Company it ismandatory to rotate the Statutory Auditors at the ensuing Annual General Meeting andtherefore the Board recommends to appoint a reputed firm M/s. P.D.Kunte & Co.Chartered Accountants as statutory auditors for a period of 5 years commencing from theconclusion of 60th AGM till the conclusion of the 65th AGM subject to ratification by themembers at every AGM.

M/s. P. D. Kunte & Co Chartered Accountants was established in 1970 and is awell-known niche firm of Chartered Accountants in Mumbai India. The Firm has a richbackground and excellent collective experience across various sectors and industriesparticularly in servicing medium sector corporates. The firm it's partners and qualifiedpersonnel have a rich collective experience of over 40 years.

The Company has received a written consent and a certificate from M/s. P. D. Kunte& Co. Chartered Accountants to the effect that their appointment if made would bein accordance with the provisions of the Companies Act 2013 and that they are notdisqualified for such appointment.

Your directors recommend their appointment at the ensuing Annual General Meeting of theCompany.

Occupational Health Safety & Environment

The Company is holding ISO-9001 (2008) ISO-14001 (2004) and OHSAS-18001 (2007)certifications and thereby meets all quality environmental and safety standards specifiedunder these Certifications.

The company carries out a monthly review of health safety and environment compliancefor all sites and carries out regular mock drills and emergency preparedness tests. Thecompany carried out various competitions like slogans posters ‘spotting thehazards' to create awareness of safety amongst all levels of employees contract workmenand also transporters. The company completed internal safety audit with external auditor.To control VOC Emission Company has installed Internal Floating Roof on Closed roof tanksand installed Vapour absorption chillers on loading points.

Conservation of Energy Technology Absorption & Foreign Exchange Earnings and Outgo

Details of energy conservation and research and development activities undertaken bythe Company along with the information in accordance with the provisions of Section 134 ofCompanies Act 2013 read with Rule 8 of Companies (Accounts) Rules 2014 the extent asare applicable to the Company are given in Annexure - ‘A' to the Directors'Report.

Particulars of Employees

Disclosure pertaining to the remuneration and other details as required under Section197(12) of the Act and the Rules framed thereunder is enclosed as Annexure - ‘B'to the Board's Report.

The information in respect of employees of the Company required pursuant to Rule 5 ofthe Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014 forms partof this Annual Report. However in terms of Section 136 of the Companies Act 2013 theAnnual Reports are being sent to the Members and others entitled thereto excluding suchinformation. The said information is available for inspection at the registered office ofthe Company during working hours. If any Member is interested in obtaining a copy thereofsuch Member may write to the Company Secretary in this regard.

Directors' Responsibility Statement

The Directors would like to inform the Members that the Audited Accounts for thefinancial year ended 31st March 2017 are in full conformity with the requirement of theCompanies Act 2013. The Financial Accounts are audited by the Statutory Auditors MessrsDeloitte Haskins & Sells LLP. The Directors further confirm that:

a. In the preparation of the annual accounts the applicable accounting standards hadbeen followed along with proper explanation relating to material departures;

b. The Directors had selected such accounting policies and applied them consistentlyand made judgments and estimates that are reasonable and prudent so as to give a true andfair view of the state of affairs of the company at the end of the financial year and ofthe profit of the company for that year; c. The Directors had taken proper and sufficientcare for the maintenance of adequate accounting records in accordance with the provisionsof this Act for safeguarding the assets of the company and for preventing and detectingfraud and other irregularities;

d. The Directors had prepared the annual accounts on a going concern basis;

e. The Directors had laid down adequate internal financial controls to be followed bythe company and that such internal financial controls including with reference toFinancial Statements are adequate and were operating effectively; and

f. The Directors had devised proper systems to ensure compliance with the provisions ofall applicable laws and that such systems were adequate and operating effectively.

Internal Control Systems and their Adequacy

The Company has an effective internal control and risk-mitigation system which areconstantly assessed and strengthened. The Company's internal control system iscommensurate with its size scale and complexities of its operations. The internal andoperational audit is entrusted to Messrs Natvarlal Vepari and Company a reputed firm ofChartered Accountants. The main thrust of internal audit is to test and review controlsappraisal of risks and business processes besides benchmarking controls with bestpractices in the industry.

The Audit Committee of the Board of Directors actively reviews the adequacy andeffectiveness of the internal control systems and suggests improvements to strengthen thesame. The Company has a robust Management Information System which is an integral part ofthe control mechanism.

The Audit Committee of the Board of Directors Statutory Auditors and the BusinessHeads are periodically apprised of the internal audit findings and corrective actionstaken.

Significant and material orders

There are no significant and material orders passed by the regulators/courts/tribunalsimpacting the going concern status and the Company's operations in future.

Composition of Audit Committee

The Company has an Audit Committee comprising of total three members out of which twoare Non-Executive Independent Directors and one is an Executive Director:

1. Mr. Kanwaljit S. Nagpal (Chairman)

2. Mr. Anish K. Chandaria

3. Mr. Jaideep D. Khimasia

During the year the Board of Directors of the Company had always accepted therecommendations of the Audit Committee.

Vigil Mechanism for Directors and Employees

The Company pursuant to Section 177 of Companies Act 2013 read along with the rulesmade thereunder and Regulation 22 of SEBI LODR have established vigil mechanism forDirectors and Employees to report concerns about unethical behaviour actual or suspectedfraud or violation of the Company's code of conduct or ethics policy. The scope of thepolicy is that it covers any alleged wrongful conduct and other matters or activity onaccount of which the interest of the Company is affected and is formally reported byWhistle Blower(s). The Whistle Blower's role is that of a reporting party with reliableinformation. They are not required or expected to act as investigators or finders offacts nor would they determine the appropriate corrective or remedial action that may bewarranted in a given case.

The Company has a vigil mechanism to deal with instance of fraud and mismanagement ifany. The details of the said Policy are explained in the Corporate Governance Report andalso posted on the website of the Company.

Extract of the annual return as provided under sub-section (3) of section 92

Extract of the annual return as provided under sub-section (3) of Section 92 ofCompanies Act 2013 as prescribed in Form MGT-9 is given in Annexure - ‘C' tothe Directors' Report.

Policy relating to remuneration of Directors Key Managerial Personnel and otherEmployees

In terms of the provisions of Section 178 of the Companies Act 2013 read with theCompanies

(Meetings of Board and its Powers) Rules 2014 and Regulation 19 of SEBI LODR theCompany has duly constituted a Nomination and Remuneration (N&R) Committee comprisingof the following members:

1. Mr. Kanwaljit S. Nagpal (Chairman)

2. Mr. Rahul D. Asthana

3. Mr. Raj Kishore Singh

The N&R Committee identifies persons who are qualified to become Directors and whomay be appointed in Senior Management in accordance with the laid down criteria recommendto the Board their appointment and renewal and shall carry out evaluation of everyDirector's performance. The Committee formulates criteria for determining qualificationspositive attributes and independence of a Director and recommends to the Board a policyrelating to the remuneration for the directors key managerial personnel and otheremployees.

The Remuneration policy reflects the Company's objectives for good corporate governanceas well as sustained and long-term value creation for stakeholders'. The Policy will alsohelp the Company to attain optimal Board diversity and create a basis for successionplanning. In addition it is intended to ensure that –

a) the Company is able to attract develop and retain high-performing and motivatedExecutives in a competitive international market;

b) the Executives are offered a competitive and market aligned remuneration packagewith fixed salaries being a significant remuneration component as permissible under theApplicable Law;

c) remuneration of the Executives are aligned with the Company's business strategiesvalues key priorities and goals.

Disclosure of composition of the Corporate Social Responsibility Committee

Disclosure of composition of the Corporate Social Responsibility Committee contents ofthe CSR Policy and the format as provided under Section 135 of Companies Act 2013 readalong with Companies (Corporate Social Responsibility Policy) Rules 2014 is provided in Annexure- ‘D' to the Directors' Report.

Particulars of Loans Guarantees or Investments

The Company is engaged in the business of providing infrastructural facilities asspecified under Section 186(11)(a) of the Companies Act 2013 read with Schedule VI to theCompanies Act 2013. However details of Loans Guarantees and Investments are given inthe notes to the Financial Statements.

Disclosure of particulars of contracts/arrangements with related parties

All transactions entered into with the related parties are in compliance with theprovisions of the Companies Act 2013 and on the arm's length basis.

There are no significant related party transactions made by the Company with PromotersDirectors Key Managerial Personnel or other designated persons which may have a potentialconflict with the interest of the Company at large.

All Related Party Transactions are placed before the Audit Committee for approval.Prior omnibus approval of the Audit Committee is obtained on a yearly basis for thetransactions which are of a foreseen and repetitive nature. The transactions entered intopursuant to the omnibus approval so granted are audited and a statement giving details ofall related party transactions is placed before the Audit Committee on a quarterly basis.The policy on Related Party Transactions as approved by the Board is uploaded on theCompany's website at http://www.aegisindia.com/Corporate_Governances.aspx.

Development and implementation of Risk Management Policy

The Company has constituted a Risk Management Committee which is not a mandatoryrequirement consisting of majority members of Board of Directors comprising of thefollowing members:

1. Mr. Raj K. Chandaria (Chairman)

2. Mr. Kanwaljit S. Nagpal

3. Mr. Rajiv Chohan

The Committee lays down procedures to inform Board members about the risk assessmentand minimization procedures monitor and review risk management plan and for carrying outsuch other functions as may be directed by the Board.

The Company adopted a risk management policy including identification therein ofelements of risk and action taken by the Company to mitigate those risks.

The specific objectives of the Risk Management Policy are to ensure that all thecurrent and future material risk exposures of the company are identified assessedquantified appropriately mitigated and managed to establish a framework for thecompany's risk management process and to ensure companywide implementation to ensuresystematic and uniform assessment of risks related with Oil Gas & Chemicals Logisticsbusiness to enable compliance with appropriate regulations wherever applicable throughthe adoption of best practices and to assure business growth with financial stability.

The details of Committee and its terms of reference are also set out in the CorporateGovernance Report forming part of the Board's Report.

Material changes and commitments if any affecting the financial position of thecompany

There were no material changes and commitments which affected the financial positionof the company between the end of the financial year of the company to which the financialstatements relates and the date of the report.

Number of meetings of the Board of Directors

During the year ended 31st March 2017 4 Board Meetings were held on the followingdates:

1. 30/05/2016

2. 05/08/2016

3. 07/11/2016

4. 02/02/2017

The detailed composition of the Board of Directors along with the number of BoardMeetings and various committees has been provided in the Corporate Governance Report.

Disclosure under the Sexual Harassment of Women at Workplace (Prevention Prohibitionand Redressal) Act 2013

Your Company has always believed in providing a safe and harassment free workplace forevery individual working in the Company's premises through various interventions andpractices. The Company always endeavours to create and provide an environment that is freefrom discrimination and harassment including sexual harassment.

The policy on prevention of sexual harassment at workplace aims at prevention ofharassment of employees and lays down the guidelines for identification reporting andprevention of undesired behaviour.

During the year ended 31st March 2017 there were nil complaints recorded pertaining tosexual harassment.

Secretarial Audit Report

Pursuant to the provisions of Section 134(3) and section 204 of Companies Act 2013read along with the rules made thereunder the Board of Directors of the Company appointedMr. Prasen Naithani of P. Naithani & Associates Company Secretaries in Practice toconduct the Secretarial Audit. The Secretarial Audit Report for the financial year ended31st March 2017 forms part of this Report and is annexed herewith as Annexure -‘E'.

The Secretarial Audit Report confirms that the Company has complied with all theapplicable provisions of the Companies Act 2013 Securities Contracts (Regulation) Act1956 Depositories Act 1996 the Foreign Exchange Management Act 1999 to the extentapplicable to Overseas Direct Investment (ODI) and Foreign Direct Investment (FDI) allthe Regulations and Guidelines of SEBI as applicable to the Company including theSecurities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers)Regulations 2011 the Securities and Exchange Board of India (Prohibition of InsiderTrading) Regulations 2015 Listing Agreements with the Stock Exchanges and the Memorandumand Articles of Association of the Company.

Business Responsibility Report

The Company is amongst top 500 listed entities based on the market capitalization"Business Responsibility Report" describing the initiatives taken by the Companyfrom an environmental social and governance perspective in compliance with Regulation 34of the SEBI (Listing Obligations & Disclosure Requirements) Regulations 2015 formspart of this Annual Report and is annexed herewith as Annexure - ‘F'.

Board Evaluation

Pursuant to the provisions of the Companies Act 2013 and Regulation 17 (10) SEBI LODRthe Board has carried out an annual performance evaluation of its own performance thedirectors individually as well as the evaluation of the working of its Audit Nomination& Remuneration and Compliance Committees. The manner in which the evaluation has beencarried out has been explained in the Corporate Governance Report.

Appreciation

Your Directors place on the record their appreciation of the contribution made by theemployees at all levels who through their competence diligence solidarity co-operationand support have enabled the Company to achieve the desired results during the year.

The Board of Directors gratefully acknowledge the assistance and co-operation receivedfrom the authorities of Port Trust Bankers Central and State Government DepartmentsShareholders Suppliers and Customers.

For and on behalf of the Board
Raj K. Chandaria Anish K. Chandaria
Vice Chairman & Managing Director Managing Director & CEO
DIN: 00037518 DIN: 00296538
Place : Mumbai
Dated : 30th May 2017

Annexure A to the Directors' Report

(Information under section 134 of Companies Act 2013 read with Rule 8 of Companies(Accounts) Rules 2014 and forming part of the Directors' Report for the year ended 31stMarch 2017)

(A) C onservation of Energy

( t i) he steps taken or impact on conservation of energy;

The Company has taken following measures for energy conservation at the factories:

1. Automatic switching of cooling tower fans as per the set temperature is implemented

2. Modification in LPG pipeline chilling process done resulting in reduction in heatload on LPG refrigeration compressors which leads to lower power consumption.

3. Modification in Cooling water system by carrying out exchanger optimization studyand implemented series arrangement of exchangers saving running of pump which leads toreduce power consumption.

4. Modification of LPG compressors outlet system by considering heat exchanger networkresulting saving of power consumption.

5. Modification in Jetty line product evacuation process by using two lines instead ofone line reduces the equipment running hours resulting in saving of power.

(ii) The steps taken by the company for utilising alternate sources of energy:

The company is preparing a study report on the use of alternate green energy whereverpossible in its operation.

(iii) The capital investment on energy conservation equipment:

The Cost of Piping for series arrangement of Heat Exchangers was about Rs. 5 lacs andinstallation of Vapour chiller system was about Rs. 10 lacs. Cost for converting fixedroof tank into Floating roof tank was about 12 lacs.

(B) Technology Absorption

( Ti) he efforts made towards technology absorption:

The Company is taking various measures towards technology up gradation and innovationfrom time to time viz. Installation of Automatic Power Factor Correction Panel Mass FlowMeters and DCS and SCADA System for enhancement of Safety of surrounding environment ofexterior pipelines VFD system etc.

The Operational expenditure of the company was reduced by implementation of Powerpurchase through Open Access system. This was implemented from October 2016 and till March2017 savings are worth Rs. 59 lacs. (ii) Imported Technology: Hydraulic Marine Loading Armof Kanon make was installed at Second Chemical Berth New Pir pau Mumbai for Liquid andGas import system. The System was imported in the year 2016. All the Gas shipments handledafter the installation are being done using this Loading Arm which also has a QRCfacility. The loading initiation time has been reduced by 30 mins. Also it has enabled inreduction of Loading time due to the possibility of higher flow rates while unloading ofcargo.

(iii) The expenditure incurred on Research and Development:

The Company is not engaged in manufacturing activities and as such there is no specificR&D & Projects undertaken.

(C) Foreign Exchange Earnings and Outgo

T he Foreign Exchange earned in terms of actual inflows during the year and the ForeignExchange outgo during the year in terms of actual outflows: Foreign Exchange Earnings& Outgo are provided in the Notes forming part of the Accounts.

For and on behalf of the Board
Raj K. Chandaria Anish K. Chandaria
Place : Mumbai Vice Chairman & Managing Director Managing Director & CEO
Dated : 30th May 2017 DIN: 00037518 DIN: 00296538

Annexure B to the Directors' Report

DISCLOSURE UNDER SECTION 197(12) AND RULE 5(1) OF THE COMPANIES (APPOINTMENT ANDREMUNERATION OF MANAGERIAL PERSONNEL) RULES 2014

(i) Ratio of the remuneration of each Managing Director to the median remuneration ofthe employees of the company for the financial year ended 31st March 2017 was 82.5.

The Non-Executive Directors received the sitting fees from the Company for attendingeach Board meeting Audit Committee meeting Stakeholders Relationship Committee ShareTransfer Committee meeting and Occupational Health Safety & Environment Committeemeeting of Directors. There was no increase in said sitting fees during the Financial year2016-17.

(ii) The percentage increase in remuneration of the Chief Financial Officer and theCompany Secretary in the financial year 2016-17 was 13% and 9% respectively.

(iii) The percentage increase in the median remuneration of employees in the financialyear 2016-17 was 8 %.

(iv) The number of permanent employees on the rolls of company were 403.

(v) Average percentage increase made in the salaries of all the employees other thanmanagerial personnel in the last Financial Year i.e. 2016-17 was 8% whereas the percentageincrease in the managerial remuneration for the same financial year was Nil.

(vi) It is afirmed that the remuneration paid is as per the remuneration policy of theCompany.