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Shreyas Shipping & Logistics Ltd.

BSE: 520151 Sector: Infrastructure
NSE: SHREYAS ISIN Code: INE757B01015
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NSE 15:54 | 22 Sep 437.45 -15.65
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OPEN 444.00
PREVIOUS CLOSE 449.60
VOLUME 8280
52-Week high 470.00
52-Week low 193.10
P/E 22.97
Mkt Cap.(Rs cr) 951
Buy Price 436.00
Buy Qty 50.00
Sell Price 0.00
Sell Qty 0.00
OPEN 444.00
CLOSE 449.60
VOLUME 8280
52-Week high 470.00
52-Week low 193.10
P/E 22.97
Mkt Cap.(Rs cr) 951
Buy Price 436.00
Buy Qty 50.00
Sell Price 0.00
Sell Qty 0.00

Shreyas Shipping & Logistics Ltd. (SHREYAS) - Director Report

Company director report

To

The Members

Your Directors are pleased to present the Twenty Ninth Annual Report of your Companytogether with the Audited Statement of Accounts and the Auditors' Report of your companyfor the financialyear ended 31st March 2017.

FINANCIAL RESULTS:

Rs. In Lacs

Particulars Current Year ended on 31st March 2017 Previous Year ended on 31st March 2016
Operating Income 37016.18 31299.99
Other Income 557.23 508.85
Profit before Interest Depreciation and Tax 5613.98 7507.88
Borrowing Cost (996.36) (890.94)
Depreciation (1755.72) (1598.76)
Profit before Tax Prior Year Adjustment & Exceptional Item 2861.90 5018.17
Exceptional Item (2319.70) -
Provision for Tax 134.65 150.38
Profit/ (Loss) After Tax 407.55 4867.80
Balance Brought Forward from Previous Year 9263.00 5688.76
Amount Available for Appropriation 9670.55 10556.56
Appropriations:
Transfer to Tonnage Tax Reserve (475.00) (950.00)
Proposed Equity Dividend - (285.45)
Tax on Equity dividend - (58.11)
Balance Carried Forward to Balance Sheet 9195.55 9263.00

DIVIDEND

Your Company proposes a Dividend of 1 0% (Re. 1 /-) for the year 2016-2017. Thedividend will be paid to the Members whose name appear in the Register of Members as on 21stJuly 2017. In respect of shares held in dematerialized form it will be paid to memberswhose names are furnished by National Securities Depository Limited and Cenfral DeposiforyServices (India) Limited as beneficial owners as on that date.

REVIEW OF OPERATIONS

The year 2016-2017 continued to be a challenging year with ocean freights underpressure supplemented with increase in fuel prices. However towards the close of thefinancial year the overall scenario appeared encouraging with the rise in container indexglobally.

On certain sectors the freight rates have witnessed northward movement coupled withincrease in volumes. Your Company continued to concentrate at rationalizing tonnage andservices to achieve better asset utilization and reduction in operating cost.

Your Company's focus has been on the development of coastal trade as well as feederservices on the East coast which has resulted positively and has facilitated developmentof Krishnapatnam container terminal as a transhipment hub for the Company as well as forother shipping lines where transhipment port changed from the erstwhile Singapore toKirshnapatnam.

With a view to cater the enhanced trade on the east coast of India and in view of theincreased utilization of our asset your Company acquired two vessels namely SSL DELHI(2500 Teus) at USD 3.87 Million and SSL KOLKATA (1100 Teus) at USD 3.875 Million. Boththe vessels are deployed by your Company on the Indian coast. Your Company also sold SSLTrust which was very high on operating costs and was due for special survey and drydocking. Resultantly your Company's current fleet stands at 10 vessels with atotalcapaclty 16109 Teus 226099 DWT being India's largest container tonnage owningcompany. The current container ship tonnages are right sized and priced to suit thecoastal trade. In addition your Company's services are well planned to provide completecoastal coverage and thus well suited for the trade.

During the year under review 4 vessels namely SSL Gujarat SSL Kochi SSLVisakhapatnam and SSL Mumbai have undergone dry docking.

These vessels were therefore not available in service for 108 days throughout the year.There was no special survey due for any vessel. For the year ended 31st March2017 your Company posted a Total Income of Rs. 370.16 crores with a Net Profit of Rs. 4crores.

STATUTORY AUDITORS

In accordance with the provisions of Section 139 of the Companies Act 201 3 thepresent Statutory Auditors M/s PKF Sridhar And Santhanam LLP (Firm RegistrationNo.003990S/S200018) Chartered Accountants have completed their term as stipulated underSection 139 of the Companies Act 2013 and therefore shallvacate office at the conclusionof the forthcoming 29th Annual General Meeting.

The Company is proposing to appoint M/s Deloitte Haskins and Sells LLP (Firm MembershipNo. 117366W/W100018) Chartered Accountants as Statutory Auditors for a period of 5 yearscommencing from the conclusion of 29th Annual General Meeting till theconclusion of 34th Annual General Meeting. M/s Deloitte Haskins and Sells LLPhave consented to the said appointment and confirmed that their appointment if made wouldbe within the limits mentioned under Section 141(3) (g) of the Companies Act 2013 andrelevant Rules framed thereunder.

The Audit Committee and the Board of Directors at their respective meetings recommendthe appointment of M/s Deloitte Haskins & Sells LLP(Firm RegistrationNo117366W/W100018) Chartered Accountants as Statutory Auditors for a period of 5 yearscommencing from the conclusion of 29th Annual General Meeting till theconclusion of 34th Annual General Meeting.

The Board of Directors wish to place on record its sincere appreciation for theinvaluable contribution of M/s PKF Sridhar and Santhanam LLP Chartered Accountants duringtheir tenure as Statutory Auditors of the Company.

MATERIAL CHANGES AND COMMITMENT AFFECTING FINANCIAL POSITION OF THE COMPANY

During the current year your Company acquired two vessels thereby adding 3580 TEUscapacity and also sold one of its old vessel in the fleet. This wlllhave positive Impacton the future performance of your Company whereby the operating income would increase andwith fuel efficient fleet the operating expenses are expected to be controlled.

SECRETARIAL AUDITORS

Pursuant to the provisions of Section 204 of the Companies Act 2013 and the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 your Company hasappointed M/s D. M. Zaveri & Co. a Arm of Company Secretaries In Practice to undertakethe Secretarial Audit of the Company. The Report of the Secretarial Audit Report isannexed herewith as Annexure 1. The Secretarial Audit Report does not contain anyqualification reservation or adverse remark.

RELATED PARTY TRANSACTIONS

During the period under review all transactions entered into by your Company with theRelated Parties were at arm's length and in the ordinary course of business as requiredunder section 1 88 of the Companies Act 2013. There was no material transaction with anyRelated Party. Your Company has entered into transactions with related parties as enteredin Form No. AOC-2 annexed to this report as Annexure 2. All the Related PartyTransactions have a prior approval of the Audit Committee.

CORPORATE SOCIAL RESPONSIBILITY

In compliance with Section 135 of the Companies Act 2013 and Rules read thereunderyour Company has formed a Committee for Corporate Social Responsibility (CSR). The membersof the Committee met twice during the year. Your Company is looking to address the lack ofquality education and empowerment opportunities among the lesser privileged childrenthrough holistically designed programs under its CSR initiative. During the year thecompany has spent Rs. 11 lacs on this initiative. A detailed report forms part of thisReport as Annexure 3.

EXTRACT OF ANNUAL RETURN

Pursuant to section 134(3)(a) and Section 92(3) of Companies Act 2013 read withrelevant Rules framed thereunder the extract of Annual Return as on 31stMarch 2017 forms part of this Report as Annexure 4.

MANAGEMENT DISCUSSION AND ANALYSIS

A detailed review of the operations performance and future outlook of the Company andits business is given in the Management Discussion and Analysis appearing as Annexure 5to this Report.

REPORT ON CORPORATE GOVERNANCE

As required by Regulation 34(3) of the Listing agreement entered into with the StockExchanges a detailed Report on Corporate Governance is given as Annexure 6 to thisReport alongwith the Auditors' Certificate on Its compliance by the Company and applicablecertification of the Chief Executive Officer and Chief Financial Officer and Declarationby the Chief Executive Officer affirming compliance with Code of Conduct for the yearunder review

LOANS GUARANTEE AND INVESTMENTS

Details of Loans Guarantees and Investments are given in the Notes to FinancialStatements

TRANSFER TO RESERVES

For the financial year ended 31st March 2017 your Company has nottransferred any amount to Reserves.

INVESTOR EDUCATION AND PROTECTION FUND

In accordance with provisions of the Companies Act 2013 there were no transfersduring the year to the Investor Education and Protection Fund established by the CentralGovernment.

SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR OTHERS

There are no significant and material orders passed by the regulators or others.

DIRECTORS AND KEY MANAGERIAL PERSONNEL

As on 31st March 2017 your Company has 10 Directors consisting of 4 Non-Independent Directors (including 2 Whole Time Directors) and 6 Independent Directors.

During the year Mr. S. Mahesh has tendered his resignation from the Board of Directorsof the Company with effect from 1st December 2016. The Board of Directorsplace on record their appreciation for the contribution by Mr. S. Mahesh during his tenureas Director. Mr. S.

Mahesh being a promoter continues to hold 112475 equity shares (0.51%) in theCompany.

Mr. Ritesh S. Ramakrishnan retires by rotation at the ensuing Annual General Meetingand being eligible offers himself for re-appointment.

This appointment forms part of the Notice of the Annual General Meeting and theResolution is recommended for your approval. Profile of Mr. Ritesh S. Ramakrishnan isgiven in the Report on Corporate Governance forming part of this Report.

Capt. V K. Singh was appointed by the Board of Directors at its meeting held on 25thMay 2017 as an Additional Director (Executive Director) with effect from 1stJune 2017. He shallhold office fill the conclusion of the Annual General Meeting. Amember has proposed his candidature for appointment as Executive Director alongwithrequisite fees. The appointment forms part of the Notice of the Annual General Meeting andExplanatory Statement annexed thereto. Profile of Capt. V. K. Singh is given in the Reporton Corporate Governance forming part of this Report.

All the Independent Directors have affirmed their Independence under Section 149 of theCompanies Act 2013 and provisions of Regulation 25 of SEBI (LODR) Regulations 2015. YourCompany has obtained requisite declaration to that effect from the said Directors.

Your Company has devised a Policy for determining gualifications positive attributesof Directors performance evaluation of Independent Directors Board Committees and otherindividual Directors which include criteria for performance evaluation of thenon-executive directors and executive directors.

In accordance with the provisions of Companies Act 2013 and Regulation 17(10) ofSEBI(LODR) Regulations 2015 the evaluation process for the performance of the Board itsCommittees and individual Directors was carried out internally.

The Independent Directors met on 9th March 2017 to review performanceevaluation of the Non Independent Directors and the entire Board of Directors includingthe Chairman and Managing Director and Executive Director. The Independent Directors weresatisfied with the functioning of the Board and Committees. The Independent Directorsappreciated the leadership role of the Chairman and Managing Director in upholding theGroup values and Corporate Governance standards.

The results of the review by the Independent Directors was shared with the Board ofDirectors. The Board of Directors have expressed their satisfaction with the evaluationresults.

During the year under review your Company has designated the following persons as KeyManagerial Personnel:

Sr. No Name Designation
1 Mr. S. Ramakrishnan Chairman & Managing Director
2 Mr. V. Ramnarayan Executive Director
3 Capt. Vivek Kumar Singh Chief Executive Officer
4 Mr. Rajesh Desai Chief FinancialOfficer
5 Ms. Namrata Malushte Company Secretary

BOARD MEETINGS

During the year 2016-17 the Board met five times. Detailed information is provided inthe Report on Corporate Governance which forms part of this Annual Report.

RISK MANAGEMENT

Your Company has a Risk Management Policy in place wherein all associated businessrisks are factored identified and assessed. In accordance with the provisions ofRegulation 21 of SEBI (Listing Obligation and Disclosure Requirements) Regulations 2015Your Company has a Committee for periodically evaluating the various risks. Your Companyhas introduced several improvements to drive a common integrated view of risks optimalrisk mitigation responses and efficient management of internal controland assuranceactivities.

VIGIL MECHANISM

In line with Regulation 22 of SEBI (Listing Obligation and Disclosure Requirements)Regulations 2015 of the Listing Agreement your Company has adopted a Whistle BlowerPolicy. The mechanism encourages the Whistle Blower to report genuine concerns orgrievances. It also provides adequate safeguard to the Whistle Blower againstvictimization. The functioning of the Audit Committee is reviewed by the Audit Committeeand the Whistle Blower has direct access to the Chairman of the Audit Committee. ThePolicy on Whistle Blower may be accessed on the Company's website www.transworld .com/shreyas.

POLICY ON SEXUAL HARRASMENT

Your Company has adopted Charter Under The Sexual Harrasment of Women at Workplace(Prevention Prohibition And Redressal) Act 2013. During the year ended 31stMarch 2017 your Company has not received any complaints pertaining to Sexual Harrasment.

QUALITY

Quality integrity and safety have been core to Your Company. We firmly believe thatthe pursuit of excellence Is one of the most critical components for success in thecompetitive market and therefore consistently strive to adhere to the highest qualitystandards. The Standard ISO 9001:2008 is valid upto 30th October 2017.

FIXED DEPOSITS:

Your Company has not accepted Axed deposits from the public during the year underreview.

SUBSIDIARY COMPANY:

As on 31st March 2017 your Company has no subsidiary. Shreyas RelaySystems Ltd (which was a wholly owned subsidiary until 26th March 2017) has on27th March 2017 allotted 8476050 (Eighty Four Lakhs Seventy Six Thousand andfifty Only) Equity Shares of face value of Rs.10/- each at a premium of Rs. 413.43 (RupeesFour Hundred and Thirteen and Forty Three Paisa only) per share to M/s Transworld HoldingsLimited Mauritius as consideration for acquisition of 99.99% stake in M/s Balaji ShippingLines FZCO and hence Shreyas Relay Systems Limited ceases to exist as Wholly OwnedSubsidiary with effect from 27th March 2017 and becomes an Associate Companywith effect from the said date.

CONSOLIDATED ACCOUNTS

The Consolidated Financial Statements are prepared in accordance with the relevantAccounting Standards issued by the Institute of Chartered Accountants of India and formspart of this Annual Report. Form AOC-1 in this regard forms part of this Annual Report.

DIRECTORS' RESPONSIBILITY STATEMENT:

In terms of clause (c) of sub-section (3) of Section 134 of the Companies Act 2013the Directors hereby state that:

(a) In the preparation of the annual accounts for the year ended 31st March2017 the applicable accounting standards had been followed along with proper explanationrelating to material parfures;

(b) Appropriate accounting policies were selected and applied consistently. TheDirectors made judgments and estimates that are reasonable and prudent so as to give atrue and fair view of the state of affairs of the company at the end of the financial yearand of the profit and loss of the company for that period;

(c) Proper and sufficient care was 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 defecting fraud and other Irregularities;

(d) The annual accounts are prepared on a going concern basis; and

(e) Internal financial controls are laid down and followed by the company and that suchinternal financial controls are adequate and were operating effectively.

(f) Proper systems are devised to ensure compliance with the provisions of allapplicable laws and that such systems were adequate and operating effectively.

PARTICULARS OF EMPLOYEES AND RELATED DISCLOSURES

In terms of the provisions of Section 197(12) of the Act read with Rules 5(2) and 5(3)of the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014 Mr.S. Ramakrishnan Chairman & Managing Director of the Company draws remuneration inexcess of the limits specified under the Act. The details of his remuneration Is providedin the Financial Statements which forms part of this Annual Report.

Disclosures pertaining to remuneration and other details as required under Section197(12) of the Act read with Rule 5(1) of the Companies (Appointment and Remuneration ofManagerial Personnel) Rules 2014:

1. The Ratio of Remuneration Of Each Director To The Median Remuneration Of TheEmployees For Ihe Year 2016-17:

Sr. No Name of the Director Ratio Of Remuneration To The Median Remuneration Of The Employees
i) Mr. S. Ramakrishnan Chairman & Managing Director 15.85 :1

2. The Percentage Increase In Remuneration Of Each Director

Chief Financial Of^cer Chief Executive Officer Company Secretary

Sr. No Name Percentage Increase In Remuneration
i Mr. S. Ramakrishnan Chairman & Managing Director -54.22%
ii Mr. V. Ramnarayan Executive Director NA
iii Capt. Vivek Kumar Singh Chief Executive Officer -13.37%
iv Mr. Rajesh Desai Chief Financial Officer -11.66%
v Ms. Namrata Malushte Company Secretary 0.19%

3. I he Percentage Increase In I he Median Remuneration Of Employees In The Year2016-17: -5.41%

4. The No. Of Permanent Employees On The Rolls Of The Company: 35

5. Average Percentile Increase Already Made In Salaries Of Employees Other Than TheManagerial Personnel In The Last Financial Year And Its Comparison With The PercentileIncrease

In The ManagerialRemuneration And Justification Thereof And Point Out If There Are AnyExceptional Circumstances For Increase In Managerial Remuneration

OTHER THAN MANAGERIAL PERSONNEL MANAGERIAL REMUNERATION COMPARISON OF REMUNERATION REMARKS
-7.33% -39.37% The remuneration of KMP includes remuneration paid to Chairman and Managing Director (CMD). As approved by the shareholders in the previous AGM CMD is paid commission as a percentage of Net Profit. In view of the Net Profits the commission was not paid to the CMD during the year.

6. The Remuneration Paid To the Key Managerial Personnel Is As

Per The Nomination And Remuneration Policy Of The Company

CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION FOREIGN EXCHANGE EARNINGS AND OUTGO:

Under the Notification No.GSR 1029 dated 31st December 1988 companies arerequired to furnish prescribed information regarding conservation of energy and technologyabsorption. This however does not apply to your Company as the shipping industry is notincluded in the Schedule to the relevant rules.

With regard to foreign exchange earnings and outgo for the current year 2016-17 theposition is as under:

(Rs. In Lacs)

(i) Foreign exchange earnings including proceeds on sale of ship (on accrual basis) 12282.47
(ii) Foreign exchange outgo including operating components spare parts vessel funding and other expenditure in foreign currency (on accrual basis) 12180.41

ACKNOWLEDGEMENTS

Your Directors thank the Company's clients vendors charterers business associatesmain line operators investors shareholders and bankers for their continued supportduring the year. It will be your Company's endeavor to build and nurture strong links withthem based on mutuality respect and co-operation with each other. Your Directors takethis opportunity to thank all employees for their hard work dedication and commitment.The enthusiasm and unstinting efforts of the employees have enabled the Company to remainat the forefront of the industry despite increased competition from several existing andnew players.

Your Directors place on record their appreciation for the support and continuedco-operation that the Company received from the Government of India the Ministry ofShipping the Ministry of Finance the Ministry of Corporate Affairs the DirectorateGeneral of Shipping the Mercantile Marine Department the Stock Exchanges the ReserveBank of India the Central Board of Excise and Customs and other Government agencies.Your Directors also express their sincere thanks to the Indian National ShipownersAssociation Port authorities Insurance companies Protection and Indemnity clubs fortheir continued support during the year.

For and on behalf of the Board of Directors
Place : Mumbai S. Ramakrishnan
Date : 25th May 2017 Chairman & Managing Director