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Gateway Distriparks Ltd.

BSE: 532622 Sector: Others
NSE: GDL ISIN Code: INE852F01015
BSE LIVE 19:40 | 19 Oct 237.85 -1.10
(-0.46%)
OPEN

239.40

HIGH

242.90

LOW

237.00

NSE 19:31 | 19 Oct 239.10 -0.65
(-0.27%)
OPEN

236.85

HIGH

240.90

LOW

236.70

OPEN 239.40
PREVIOUS CLOSE 238.95
VOLUME 1092
52-Week high 292.00
52-Week low 208.85
P/E 47.86
Mkt Cap.(Rs cr) 2,586
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 239.40
CLOSE 238.95
VOLUME 1092
52-Week high 292.00
52-Week low 208.85
P/E 47.86
Mkt Cap.(Rs cr) 2,586
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Gateway Distriparks Ltd. (GDL) - Director Report

Company director report

Your Directors have pleasure in presenting their report for the year ended 31st March2016.

A. Consolidated Financial Results

(Rs. In millions)

Sl. No Particulars 2015-16 2014-15
1 Income from Operations and Other Income 10705.36 11241.31
2 Profit before Finance Cost Depreciation and taxes 2683.32 3395.21
3 Finance cost 184.21 240.05
4 Depreciation & Amortisation 804.90 889.26
5 Profit before Exceptional items & taxation 1694.21 2265.90
6 Provision for taxes 670.64 440.52
7 Minority Interest 10.20 36.81
8 Add: Share of Profit of Associates 82.96 89.13
9 Profit after tax and minority interest 1096.33 1877.70
10 Surplus brought forward from previous year 4077.33 3119.77
11 Dividend 761.10 761.10
12 Tax on Dividend 154.94 139.13
13 Book value of Fixed Assets with expired useful life as on April 1 2014 (net of Minority Interest) - 19.91
14 Transfer to General Reserve - -
15 Surplus carried to Balance Sheet 4257.62 4077.33

B. Dividend

The Company has declared two Interim dividends totaling C7 per equity share amountingto C761.10 million for the financial year 2015-16. The Dividend Distribution Tax on theInterim Dividends amounts to C154.94 million. The Company does not recommend FinalDividend for the financial year 2015-16.

C. Management Discussion & Analysis

a) Industry structure and developments

Containerized cargo represents quarter of India’s Export Import Trade compared tothe global average of around 70%. Containerized tra_c in Indian ports increased by 3% to8.2 million TEUs in FY 2015-16.

JNPT accounted for around 55% of India’s total containerized tra_c by handlingaround 4.49 million TEUs in 2015-16. The country’s second biggest container port atChennai handled 1.56 million TEUs. The volumes at other significant container ports atVisakhapatnam grew by 18% to 0.29 million TEUs and Cochin grew by 15% to 0.42 millionTEUs.

b) Opportunities and threats

The company foresees opportunities for expansion and increase in profitability in thegrowing containerization in both Export-Import and domestic trade increase in privatesector participation in ports and movement of containers by rail liberalization ofGovernment policies and increase in the country’s foreign trade. During the past fewyears the Company has taken several initiatives for growth and expansion. The companyoperates Container Freight Stations at JNPT-Navi Mumbai Chennai Visakhapatnam andCochin. The Company is in the process of setting up a Logistics Park at Nellore to servicethe upcoming port at Krishnapatnam. The Company continues to prune costs and augment itsequipment for handling and transporting containers which are operated by contractors.

The Company’s rail subsidiary Gateway Rail Freight Limited (GRFL) has expandedits business relating to operating container trains on the Indian railways network. GRFLhas put in place a fleet of railway rakes / trailers and ICDs to provide end-to-endsolution to customers across the country. The Company’s cold chain logistics armSnowman Logistics Ltd. which had its IPO during FY 2014-15 and has expanded its capacityto become a premier player in this emerging business. Competition from existing and newentrants and managing the geographical / capacity expansion present the company with newchallenges.

c) Segment-wise / Product-wise performance

The Company’s entire business is from CFS. There are no other primary / secondarysegments in the Company’s business.

d) Outlook

Over the medium term growth in port volumes & resulting increased throughput atour CFSs increase in volume of rail movement of containers and growth in the cold chainlogistics business are expected to have positive impact on the Company’s long termbusiness and profitability. Containerized EXIM trade is expected to show consistentperformance at major Indian ports over the next few years.

e) Risks and concerns

Increase in fuel costs could result in increase in the Company’s major costs oftransport and handling of containers. Increase in container tra_c vis--vis creation ofinfrastructure at the ports could lead to congestion at ports which would result indecline / delay in the throughput handled by the Company. The revenues of the Company areconcentrated on the container volumes handled by major shipping lines and consolidatorswho use its CFSs at various locations.

f) Internal Control systems and adequacy

The Company makes use of IT enabled solutions in its operations accounting and forcommunication within its facilities and with customers and vendors. Pursuant to Companies(Accounts) Rules 2014 a control assurance program including internal financial controls(IFC) has been implemented and tested during the year. The control framework hadintegrated components including control environment risk assessment control activityinformation and communication and monitoring. The controls were documented assessedtested and found satisfactory. The evaluation was carried out under guidance of Dy. CEO& Chief Finance O_cer. The Company’s accounts and operations are subject tointernal audit and review by the Audit Committee of the Board of Directors.

g) Financial / Operational Performance

Operations:

Total income of the company (stand alone) from operations & other income during2015-16 was C2912.11 million (2014-15: C3077.93 million). The Profit before tax for2015-16 was C1411.84 million (2014-15: C1093.83 million). The Profit after tax for2015-16 was C1060.41 million (2014-15: C806.92 million). After dividend C761.10 milliontax on dividend distribution C124.40 million (net of credit for dividend distribution taxC30.54 million on dividend received from subsidiary company) the surplus carried forwardin Statement of Profit & Loss is C1977.12 million.

Together with its subsidiary companies in the CFS business at Chennai Visakhapatnamand Kochi the Segment revenues for FY 2015-16 was C3204.42 million (2014-15: C3384.33million) and Profit after Tax for FY 2015-16 was C416.77 million (2014-15: C742.95million)

Finance:

The Company has outstanding loans including loans for transport / handling equipmentsRs.249.57 million with HDFC Bank Limited as on March 31 2016. The Company has beensanctioned cash credit / overdraft facilities / Term loans / Buyers credit of Rs. 922million and non-funded facilities to Rs. 750 million by HDFC Bank Limited. The Company hasgiven guarantees in respect of outstanding funded / non-funded borrowing facilities of Rs.1788.30 million of subsidiary company Gateway Rail Freight Limited Rs. 17.78 million ofsubsidiary company Chandra CFS and Terminal Operators Private Limited and Rs. 135 millionof subsidiary company Gateway Distriparks (Kerala) Ltd. as on 31st March 2016. The incomefrom interest on fixed deposits with banks and investments was Rs. 59.64 million in thecurrent year (2014-15: Rs. 32.43 million).

h) Human Resources

The Company continued to have cordial and harmonious relations with its employees.Human relations policies were reviewed and upgraded in line with the Company’s plansfor geographical expansion. Initiatives on training and development of human resourceswere undertaken. The Company’s sta_ strength on March 31 2016 was 229 employees(March 31 2015: 238 employees).

i) Cautionary statement

Statements made in this report particularly those which relate to ManagementDiscussion and Analysis describing the Company’s objectives projections estimatesand expectations may constitute "forward looking statements" within the meaningof applicable laws and regulations. Actual results might vary materially from those eitherexpressed or implied.

D. Directors

During the year Mrs. Mamta Gupta has been appointed as Additional Director on theBoard of the Company. Mr. Bhaskar Avula Reddy and Mr. Arun Kumar Gupta have been appointedas Additional Directors (Independent) on the Board of the Company. During the year theDirectors Mr. Gopinath Pillai Mr. Sat Pal Khattar and Mrs. Chitra Gouri Lal have resignedfrom the Board. Mr. Arun Agarwal who retires by rotation does not desire forreappointment at the ensuing Annual General Meeting.

E. Corporate Governance

As a listed Company necessary measures are taken to comply with the listing agreementswith the Stock Exchanges. The various policies related to Prevention of insider tradingCode of Conduct Determining material events for disclosure Document preservation &archival of documents and other Corporate policies can be accessed by clicking on the weblink: http://www.gateway-distriparks. com/investor.asp. A report on corporate governanceand certificate of compliance from the Auditors are given as Annexure A of this Report.

F. Listing of Equity Shares

The Company’s Equity shares are listed on the Bombay Stock Exchange LimitedMumbai situated at Phiroze Jeejeebhoy Tower Dalal Street Mumbai - 400 001 and theNational Stock Exchange of India Ltd. situated at Exchange Plaza Bandra Kurla ComplexMumbai – 400 051. The Company has made up-to-date payment of the listing fees.

G. Auditors

M/s. Price Waterhouse Firm Registration No. FRN 301112E Chartered AccountantsMumbai were appointed as Statutory Auditors of the Company to hold o_ce from theconclusion of the Annual General Meeting held on 7 August 2015 until the conclusion ofthe Annual General Meeting to be held in the calendar year 2017 subject to ratificationof their appointment at the Annual General Meeting to be held in the calendar year 2016.The Company has received letter from M/s. Price Waterhouse Chartered Accountantsconfirming that their appointment would be within the limits prescribed under Sections139(2) and 141of the Companies Act 2013. Their comments on the accounts and notes to theaccounts are self-explanatory.

H. Statutory Information

Extracts of Annual Return under Section 92(3)

Particulars of the Annual report under Section 92 (3) of the Companies Act 2013 aregiven in Form MGT-9 which is annexed to this Report as Annexure B.

Number of meetings of the Board of Directors

During FY 2015-16 5 meetings of the Board of Directors were held on 29 April 2015 7August 2015 29 October 2015 6 November 2015 and 3 February 2016.

Directors Responsibility Statement

Pursuant to the requirements of Section 134 (5) of the Companies Act 1956 with respectto Directors’ Responsibility Statement it is hereby confirmed that:-i. in thepreparation of the annual accounts for the year ended 31st March 2016 the applicableaccounting standards have been followed along with proper explanation relating to materialdepartures. ii. such accounting policies as mentioned in Note 1 of the Annual Accountshave been applied consistently and judgments and estimates that are reasonable and prudentmade so as to give a true and fair view of the state of affairs of the Company for thefinancial year ended 31st March 2016 and of the profit of the Company for that period.iii. proper and sufficient care has been taken for the maintenance of adequate accountingrecords in accordance with the provisions of this act for safeguarding the assets of theCompany and for preventing and detecting fraud and other irregularities. iv. the annualaccounts for the year ended 31st March 2016 have been prepared on a going concern basis.v. have laid down internal financial controls to be followed by the Company and that suchinternal finance controls are adequate and are operating effectively. vi. proper systemsto ensure compliance with the provisions of all applicable laws are devised and suchsystems are adequate and operating effectively.

Declaration by Independent Directors

Independent Directors have given declarations that they meet the criteria ofindependence as provided under Section 149 (6) of the Companies Act 2013.

Policy on Directors’ Appointment & Remuneration

Details of Nomination and Remuneration Policy pursuant to Section 178 (4) of theCompanies Act 2013 and applicable regulations of SEBI (LODR) Regulations 2014 areannexed to this report as Annexure C.

Details of Familiarisation Programme for Independent Directors criteria for makingpayments to Non-Executive Directors and Board Diversity Policy can be accessed by clickingon the web link: http://www.gateway-distriparks. com/investor.asp

Audit Reports

There are no qualifications reservations or adverse remarks or disclaimers in theAuditors report or Secretarial Audit report.

Secretarial Audit Report from M/s. S. N. Ananthasubramanian & Co. PractisingCompany Secretaries is annexed to this Report as Annexure D.

Particulars of loans guarantees or investments

(Rs. In millions)

As at
Particulars of loans guarantees and investments under section 186 of Companies Act 2013 Investments 31.03.2016
8000000 Equity Shares of Rs. 10 each in Gateway East India Private Limited (100% Subsidiary) 148.40
3323945 Equity Shares of Rs. 100 each in Chandra CFS and Terminal Operators Private Limited (100% Subsidiary) 424.84
13830000 Equity Shares of Rs. 10 each in Gateway Distriparks (Kerala) Limited (Subsidiary) 138.30
198100000 Equity Shares of Rs. 10 each in Gateway Rail Freight Limited (Subsidiary) 1972.60
67254119 Equity Shares of Rs. 10 each in Snowman Logistics Limited (Associate) 1041.70
16672199 Zero Coupon Redeemable Preference Shares of Rs. 10 each in Gateway Distriparks (Kerala) Limited (Subsidiary) 166.72
115000000 Zero Coupon Redeemable Preference Shares of Rs. 10 each in Gateway Rail Freight Limited (Subsidiary) 1150.00
Guarantees for loans
Guarantee given for loan from HDFC Bank Limited to Chandra CFS and Terminal Operators Private Limited (100% Subsidiary) 17.78
Guarantee given for loan from KSIDC to Gateway Distriparks (Kerala) Limited (Subsidiary) 135.00
Guarantee given for loan from HDFC Bank Limited to Gateway Rail Freight Limited (Subsidiary) 1788.29

Particulars of contracts or arrangements with related parties

Particulars of contracts or arrangements with related parties referred to in Section188 (1) of the Companies Act 2013 are given in Form AOC-2 which is annexed to thisReport as Annexure E. Details of policy for determining material subsidiaries and thepolicy for dealing with related party transactions can be accessed by clicking on the weblink: http://www.gateway-distriparks.com/investor.asp

Remuneration from Subsidiary companies

During the year Mr. Prem Kishan Dass Gupta Chairman and Managing Director receivedCommission / sitting fees from subsidiary companies: Gateway Rail Freight Ltd. Rs.23000000 (FY 2014-15 Rs. 100000) and Gateway East India Private Limited Rs. 80000 (FY2014-15 Rs. 120000)

Deposits

The Company has not accepted any deposits from public and as such no amount on accountof principal or interest on public deposits was outstanding as on the date of the balancesheet.

Disclosure under Section 134 (3) (m) Conservation of Energy

The Company continues to give highest priority for conservation of energy by using amix of technology changes process optimization methods and other conventional methods onan on going basis.

Technology Absorption

The Company continues to lay emphasis on development and innovation of in-housetechnological and technical skills to meet the specific customer requirements. Efforts arealso being made to upgrade the existing standards and to keep pace with the advances intechnological innovations.

Foreign Exchange Earnings and Outgo

i) Expenditure in foreign currency: Rs. 2.10 million
(2014-15: C8.02 million)
(including Capital items)
ii) Earnings in foreign currency: Nil

Corporate Social Responsibility (CSR)

Particulars of Corporate Social Responsibility (CSR) activities are given in the Formwhich is annexed to this Report as Annexure F.

Annual Evaluation of Board performance

The performance evaluation criteria of the Board as laid down by the NominationRemuneration & ESOP Committee includes growth in Business volumes and profitabilitycompared to earlier periods growth over the previous years through inorganic expansiontransparency and fairness in Board Decision making processes. The performance evaluationcriteria of Individual Directors and Committees include attendance record and intensity ofparticipation at meetings Quality of interventions special contributions andinter-personal relationships with other Directors and management. The exclusive meeting ofIndependent Directors evaluated the performance of the Board Committees of Boardnon-Independent Directors & the Chairman as excellent. The Board evaluated theperformance of Independent Directors based on their attendance record contributionstheir interventions and interpersonal relationships and the Chairman expressed theBoard’s appreciation of their performance. The Nomination and Remuneration Committeenoted that the excellent performance of the individual directors & Committees based onthe high attendance record and intense participation at meetings high quality ofinterventions special contributionsandexcellentInter-personalrelationshipswithotherDirectors and management. The performanceof the Chairman was based on notable contributions in the achievements of the Company androle in conducting Board meetings and bringing out contributions from all directors.Prevailing remuneration in similar industry / function / experience are considered forrecruiting persons & while granting increases in remuneration besides the performanceof the person. The Committee noted and approved the remuneration paid to key managerialpersonnel and other employees.

Vigil Mechanism

The Company has adopted a Whistle Blower Policy details of which can be accessed byclicking on the web link: http://www.gateway-distriparks.com/investor.asp . Under thispolicy employees are encouraged to report financial irregularities fraud violation oflaws and Company’s Code of conduct. The policy provides for protection of the whistleblower for disclosures. No individual in the Company has been denied access to the AuditCommittee or its Chairman. Audit Committee has periodically reviewed the functioning ofVigil Mechanism. The Company has in place an Anti Sexual Harassment Policy in line withthe requirements of The Sexual Harassment of Women a the Workplace (PreventionProhibition & Redressal) Act 2013. A committee has been set up to redress complaintsreceived regarding sexual harassment. All employees (permanent contractual temporarytrainees) are covered under this policy. The Company did not receive any sexual harassmentcomplaints during the year.

Information under Companies (Appointment and Remuneration of Managerial Personnel)Rules 2014

Information under Companies (Appointment and Remuneration of Managerial Personnel)Rules 2014 is given in Annexure G to this report.

Business Responsibility Report

The Business Responsibility Report is annexed as Annexure H to this report.

Subsidiaries / Associates

Information about subsidiaries / Associates is given in Form AOC-1 which is annexed asAnnexure I to this report.

Risk Management Policy

The Board of Directors has put in place a Risk Management policy for the Company whichincludes business risks market risks event risks and IT / financial/ interest rate /liquidity risks and the structure infrastructure processes awareness and riskassessment / minimization procedures. The elements of the risk which in severe form canthreaten Company’s existence have been identified by the Board of Directors. Therisks have been prioritized based on risk analysis and process to identify emerging risksare in place. The Company has in place measures for Business Continuity Disaster recoveryand Information security. A control assurance program covering internal financial controls(IFC) has been implemented and tested during the year. Details of the Risk ManagementPolicy can be accessed by clicking on the web link:http://www.gateway-distriparks.com/investor. asp

Demat Suspense Account

No. of shareholders No. of Shares
No. in Suspense Account at beginning of the year 12 1237
No. of shareholders who approached for transfer from Suspense Account during the year - -
No. of shares transferred from Suspense Account during the year - -
No. in Suspense Account at end of the year 12 1237

Voting rights on above shares are frozen till claimed by rightful owner

Pursuant to Section 129 of the Companies Act 2013 the annual accounts of thesubsidiary companies and the related detailed information shall be made available toshareholders seeking such information at any point of time.

The annual accounts of the subsidiary companies are kept for inspection by anyshareholders in the registered offices of the company and its subsidiary companies. A copyof the accounts of subsidiaries shall be made available to shareholders on request.

For and on behalf of the Board of Directors
Prem Kishan Dass Gupta
Place: New Delhi Chairman & Managing Director
Date: April 27 2016 DIN: 00011670