Kesar Terminals & Infrastructure Ltd.
Your Directors present to you the 9th Annual Report and the Audited Statement ofAccounts of the Company for the year ended 31st March 2017.
STANDALONE FINANCIAL RESULTS
| || ||(Rs. in Lakh) |
| ||2016-17 ||2015-16 |
|Profit before interest depreciation & taxation ||2705.40 ||2685.55 |
|Less: Interest and Finance Charges ||239.70 ||275.58 |
|Profit before Depreciation & taxation ||2465.70 ||2409.97 |
|Less: Depreciation ||177.55 ||194.44 |
|Add: Depreciation of Earlier Years ||120.73 ||- |
|Profit before tax ||2408.88 ||2215.53 |
|Less: Provision for Taxation || || |
|(i) Income Tax - Current ||689.16 ||663.19 |
|(ii) Income Tax - Deferred ||34.21 ||(1.64) |
|Profit after tax and Profit available for appropriation ||1685.51 ||1553.98 |
|Appropriation: || || |
|Less: || || |
|(i) Transfer to General Reserve ||- ||500.00 |
|(ii) Proposed Dividend on Equity Share ||54.63 ||52.53 |
|(iii) Corporate Tax on Dividends ||11.12 ||10.69 |
|Profit after appropriation ||1619.76 ||990.76 |
|Add: Balance brought forward from previous year ||3592.45 ||2601.69 |
|Balance carried forward to Balance Sheet ||5212.21 ||3592.45 |
For the year 2016-17 there is a profit after tax of Rs.1685.51 lakh as againstRs.1553.98 lakh in the previous year.
The Directors are pleased to recommend a dividend of Re.0.50 per Equity Share (10%) ofRs.5/- each on 10926475 Equity Shares of the Company for the year 2016-17 [previousyear Re.1.00 per Equity Share (10%) of Rs. 10/- each]. The dividend payout will beRs.54.63 lakh excluding dividend distribution tax of Rs.11.12 lakh.
WORKING FOR THE CURRENT YEAR 2016-17
During the year under review your Company achieved a turnover of Rs. 4390.26 lakh asagainst Rs.4396.83 lakh in the previous year. The Company recorded an increase of 8.46 %in its profit after tax which grew from Rs.1553.98 lakh to Rs.1685.51 lakh. TheCompany's healthy performance was attributed to better realisation in terminal tankagecharges and improvement in the average commercial utilization charges of tanks.
SUBSEQUENT FINANCIAL YEAR 2017-18
For the financial year 2017-18 there is likely going to be drop in revenue as newterminals have come up in Kandla thus augmenting storage capacities. The new terminals areoffering lower rates to attract clients to their fold. As a consequence the terminalusers have been resisting annual increase in rental charges and in fact insisting fordownward revision of service charges.
EXPANSION / MODERNISATION
The Company has been exploring new avenues to optimize and expand its present capacityat its Terminals at Kandla. However as the issue of transfer/ renewal of lease of land infavour of the Company post Demerger is yet to take place no favourable response has beencoming from Kandla Port Trust [KPT] for construction of new capacities. It is expectedthat the issues with KPT would be sorted out by middle of the year in respect of renewalof the particular plot of land where construction of additional tanks are planned.
The Company has about 10 acres of land on long term lease basis at Kakinada port inAndhra Pradesh. The Company plans to put up both Dry Cargo Warehousing and Bulk LiquidTerminal facilities at Kakinada. Necessary statutory permissions are being renewed fromvarious State Government bodies including a No Objection Certificate (NOC) from theDistrict Magistrate for putting up the proposed facilities.
The Company has plans to set up a Container Freight Station [CFS] Bonded Warehouse andBulk Liquid Terminal at Pipavav. The preliminary work at Kakinada/ Pipavav is expected tocommence after Phase I of the Composite Logistics Hub Project of the Subsidiary CompanyKesar Multimodal Logistics Ltd. (KMLL) stabilizes its operations.
The % shareholding of the Company along with its Nominees in the Equity Share Capitalof Kesar Multimodal Logistics Ltd. (KMLL) is above 50%. Hence there is a Holding -Subsidiary relationship between the Company & KMLL. The Annual Report of the Companydoes not contain the individual financial statements of KMLL but contains the auditedconsolidated financial statements of the Company and KMLL. The Annual Accounts of theSubsidiary Company along with the related information is available for inspection at theCompany's registered office. Particulars of KMLL contained in Form AOC-1 forms part of thenotes to the financial statements annexed herewith.
CONSOLIDATED FINANCIAL STATEMENTS:
The Consolidated Financial Statements of the Company prepared as per AccountingStandard AS-21 consolidating the Company's accounts with its Subsidiary have also beenincluded as part of this Annual Report.
COMPOSITE LOGISTICS HUB PROJECT AT MADHYA PRADESH
KMLL has successfully completed construction of the 1st Phase of theProject. The West CentraI RaiIway JabaIpur Madhya Pradesh has notified the PrivateFreight TerminaI [PFT] of KMLL served by Powarkheda (PRKD) station of BhopaI Division as aGreenfieId PFT. The Private Freight Terminal of KMLL became operational on 19.04.2016.Since then KMLL has handled 90 rakes till 31.03.201 7.
The Hub covers an area of 88.3 acres which includes development of an entire range ofinfrastructure including rail sidings for cargo and container movement rail-sidewarehouses Inland Container Depot (ICD) Cold Storage food grains warehouse &development of common facilities for putting up agri-processing units. The facilities atthe Hub permit transportation of food grains soya extract vegetables and fruits fromthis location to any location in India by rail within 24 hours. This location which issituated at nearly the centre of the Indian Railway map offers an opportunity to themanufacturers of bulk commodities such as cement steel fertilizer etc. to quickly movetheir cargo from their manufacturing points to the Terminal for storage and onwarddistribution. The manufacturers of FMCG or white goods can also use the location as adesired central storage and distribution point for pan India distribution of theirproducts once the GST becomes a reality.
The facilities at the Hub also permits rail transportation of ICD containers fromsurrounding areas to the major ports like JNPT Mundra & vice-versa for both exports& imports thereby saving costly road freight besides reducing pollution of truckmovement. KMLL has been appointed as the Custodian of the import / export of goodsreceived at ICD of KMLL by the Office of the Principal Commissioner of Customs CentralExcise & Service Tax Bhopal (Madhya Pradesh). KMLL has obtained all permissions forInland Container Depot [ICD] including posting of Customs Officials and Electronic DataInter-phase (EDI) connectivity with Customs for processing of Import/ Export cargodocuments. KMLL will shortly move import/ export containers by Rail/ Road to/ from theICD. The Cold Storage is being patronized by local fruit and vegetable vendors and alsotraders for storing of seed potatoes potatoes coriander seeds chickpeas fruits etc.
The paid up Equity Share Capital as on 31.3.2017 was Rs. 5.46 crore. During the yearunder review the Face Value of One (1) Equity Share of Rs.10/- was sub-divided into Two(2) Equity shares of face value of Rs. 5/- each.
Thus the Authorised Share Capital of the Company is Rs.150000000/- divided into25000000 Equity Shares of Rs.5/- each aggregating to Rs.125000000 and 2500000Redeemable Preference Shares of Rs.10/- each aggregating to Rs.25000000. Thereafterthe Company issued 420249 fully paid up Equity Shares of Rs. 5/- each as Bonus Shares inproportion of One (1) new Equity Share of Rs.5/- each for every Twenty Five (25) existingfully paid Equity Shares of Rs.5 /- each held by the Member. The Paid up Share Capital ofthe Company is 10926475 Equity Shares of Rs.5/- each aggregating to Rs.54632375.
During the year 8 Board Meetings and 4 Audit Committee Meetings were heId. The detailsof which are given in the Corporate Governance Report. The intervening gap between theMeetings was within the period prescribed under the Companies Act 2013.
DIRECTORS & KEY MANAGERIAL PERSONNEL
Shri H R Kilachand ceased to be the Director of the Company with effect from 29.4.2016on his resignation due to his engagement in other business activities. The Board placed onrecord its sincere appreciation for the valuable support and guidance given by him to theCompany during his tenure as Director of the Company.
Consequent to the resignation of Shri H R Kilachand the Board had appointed Shri A SRuia Independent Director as Chairman of the Company with effect from 29.4.2016.
Shri R H Kilachand was appointed as Whole-time Director of the Company with effect from29.4.2016. Subsequently he has resigned as Whole-time Director of the Company w.e.f31.05.201 7 as he wishes to pursue his further studies and is now continuing only as aNon-Executive Director on the Board of the Company.
Pursuant to Section 152 of the Companies Act 2013 Shri J K Devgupta Non- ExecutiveDirector of the Company retires by rotation at the ensuing Annual General Meeting andbeing eligible offers himself for reappointment. As per the SEBI (LODR) Regulations 2015brief profile of Shri Devgupta retiring by rotation forms part of the Corporate GovernanceReport.
Consequent to the resignation of Shri Dilip Maharana as Company Secretary in his placeShri Alok Singh was appointed as Company Secretary with effect from 14.11.2016 pursuant toSection 203 of the Companies Act 2013.
All Independent Directors have given their declaration that they meet the criteria ofIndependence as laid down under Section 149(6) of the Companies Act 2013.
Pursuant to the provisions of Regulation 25 of the SEBI (LODR) Regulations 2015 theCompany has formulated a programme for familiarising the Independent Directors with theCompany their roles rights responsibilities in the Company nature of the industry inwhich the Company operates business model of the Company etc through various initiatives.The details of the aforementioned programme are available at the Company's websitewww.kesarinfra.com/ Investor's Corner/ Policies.
BOARD EVALUATION / APPOINTMENT AND REMUNERATION POLICY FOR DIRECTORS AND SENIORMANAGEMENT
Pursuant to the provisions of the Companies Act 2013 The Independent Directors madethe annual evaluation of performance of the Board its Committees and of individualDirectors.
The Board has framed a policy for selection and appointment of Directors SeniorManagement and their remuneration. The Remuneration Policy is stated in the CorporateGovernance Report. The details of the Nomination & Remuneration Policy are availableon the website of the Company www.kesarinfra.com/ Investor's Corner/ Policies.
MATERIAL CHANGES BETWEEN END OF THE FINANCIAL YEAR & DATE OF THIS REPORT:
Shri R H Kilachand has resigned as Whole-time Director of the Company w.e.f 31.05.201 7as he wishes to pursue his further studies and is now continuing only as a Non-ExecutiveDirector on the Board of the Company.
DIRECTORS' RESPONSIBILITY STATEMENT
Pursuant to the requirement of Section 134(3)(c) of the Companies Act 2013 the Boardof Directors to the best of their knowledge hereby state:
i) that in preparation of the annual accounts for the financial year ended on 31stMarch 2017 the applicable accounting standards have been followed along with properexplanation relating to material departures.
ii) that the Directors have selected such accounting policies and applied themconsistently and made judgments and estimates that are reasonable and prudent so as togive a true and fair view of the state of affairs of the Company at the end of thefinancial year and of the profit for that period.
iii) that the Directors have taken proper and sufficient care for the maintenance ofadequate accounting records in accordance with the provisions of this Act for safeguardingthe assets of the Company and for preventing and detecting fraud and other irregularities.
iv) that the Directors have prepared the annual accounts for the financial year endedon 31st March 2017 on a going concern basis.
v) that the Directors have Iaid down proper internal financial controls in pIace andthat such internal financial controls are adequate and were operating effectively.
vi) that the Directors have devised proper systems to ensure compliance with theprovisions of all applicable laws and that such systems were adequate and operatingeffectively.
RELATED PARTY TRANSACTIONS
There are no contracts or arrangements with related party referred Section 188(1) ofthe Companies Act 2013 hence Form AOC -2 is not annexed.
A policy of Related Party Transactions as approved by the Audit Committee and the Boardof Directors is uploaded on the website of the Company www.kesarinfra.com/ Investor'sCorner/Policies.
PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS
Details of Loans Guarantees and Investments covered under the provisions of Section186 of the Companies Act 2013 are given in the notes to the financial statements.
EXTRACT OF ANNUAL RETURN
The details forming part of the extract of the Annual Return in form MGT 9 is annexedherewith as Annexure"A". SIGNIFICANT AND MATERIAL ORDERS PASSED BY THEREGULATORS OR COURTS
There are no significant and material orders passed by the regulators or courts ortribunals impacting the going concern status and Company's operations in future.
MANAGEMENT DISCUSSION & ANALYSIS REPORT AND CORPORATE GOVERNANCE REPORT
The Management Discussion & Analysis Report is annexed and forms part of thisAnnual Report. The Company has complied with the Corporate Governance requirements asstipulated under Regulation 34 of the SEBI (LODR) Regulations 2015. A separate section onCorporate Governance along with a certificate from the auditors confirming thecompliances is also annexed and forms part of the Annual Report.
In compliance with the SEBI regulation on prevention of Insider Trading your Companyhas framed a comprehensive code which lays down guidelines and advises the Directors andemployees of the Company on procedures to be followed and disclosures to be made whiledealing in securities of the Company. During the year under review the Company adoptedCode of Practices and Procedures for Fair Disclosure of Unpublished Price SensitiveInformation and the Code of Conduct for Prohibition of Insider Trading in accordance withSEBI (Prohibition of Insider Trading) Regulations 2015.
SEXUAL HARASSMENT POLICY
The Company has constituted an Internal Complaint Committee (ICC) for prevention andredressal of complaints / grievances on the sexual harassment of women at work places. Aspart of this policy during the year under review the Company had arranged a session onWomen's Safety by Madhukar Katragadda Major (Retd). During the year under review noincident had taken place.
CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO
The particulars under Section 134(3)(m) of the Companies Act 2013 with respect toconservation of energy technology absorption is not applicable to the Company. During theyear under review there were no foreign Exchange Earnings (Previous year Nil) and ForeignExchange Outgo stood at Rs.750330/- (Previous Year Rs. 2080406/-).
The Company has taken adequate insurance for all its properties.
As per the Companies Act 2013 the Company is not eligible to raise Fixed Deposits interms of Section 73 of the Act. Hence the Company has not accepted / renewed any FixedDeposits. Further as per Section 74(1) of the Companies Act 2013 the Company has repaidthe entire Fixed Deposit.
Haribhakti & Co. LLP Chartered Accountants was appointed as Statutory Auditors ofthe Company to hold office till conclusion of the Annual General Meeting to be held in thecalendar year 2019. In terms of the provisions of the Section 139(1) of the Company's Act2013 the appointment of Haribhakti & Co. LLP Chartered Accountants is placed beforethe Shareholders for their ratification.
There are no qualifications reservations or remarks in the Auditors Report.
INTERNAL CONTROL SYSTEM & INTERNAL AUDITORS
The Company has an adequate Internal Control System. All transactions are properlyauthorized recorded and reported to the Management. The Company has Independent InternalAuditors Ashok Jayesh & Co. Chartered Accountants to review critical areas ofoperations. The Audit Reports are reviewed periodically by the Management and the AuditCommittee of the Board and appropriate measures are taken to improve the process.
Pursuant to the provisions of Section 204 of the Companies Act 2013 and the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 the Company hasappointed Ragini Chokshi & Co. Practicing Company Secretary to undertake theSecretarial Audit of the Company. The Report of the Secretarial Audit Report is annexedherewith as Annexure- "B". There are no qualifications reservations or remarksin the Secretarial Audit Report.
CORPORATE SOCIAL RESPONSIBILITY
As the Company meets with one of the criteria of Section 135(1) of the Companies Act2013 it has constituted a CSR Committee. The composition and functions of the CSRCommittee has been detailed in the Corporate Governance Report. The Company has undertakenCSR activities in accordance with Schedule VII of the Companies Act 2013. The AnnualReport on CSR activities is annexed herewith as Annexure-"C".
Relation with the employees remained cordial throughout the year. Your Directors placeon record their sincere appreciation for the excellent spirit and commendable progressshowcased by the entire team of the Company working at its Terminals and Offices.
The information required pursuant to Section 197(12) of the Companies Act 2013 readwith Rule 5(1) of The Companies (Appointment and Remuneration of Managerial Personnel)Rules 2014 in respect of employees on the payroll of the Company in India is providedas Annexure- "D" which forms part of this report.
The information required pursuant to Section 197 read with Rule 5(2)&(3) of TheCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014 in respect ofemployees of the Company will be provided upon request. In terms of Section 136 of theAct the Report and Accounts are being sent to the Members and others entitled theretoexcluding the information on employees' particulars which is available for inspection bythe Members at the Registered Office of the Company during business hours on working daysof the Company up to the date of the ensuing Annual General Meeting. Any member interestedin obtaining such particulars may write to the Company Secretary at the registered officeof the Company.
Your Directors wish to place on record their grateful appreciation for the assistanceand cooperation extended by the Banks Financial Institutions Customers and thewholehearted support extended by the shareholders during the year.
| || |
| ||For and on behalf of the Board of Directors |
| ||A S Ruia |
|Mumbai ||Chairman |
|30th May 2017 ||DIN:00296622 |