Your Directors have pleasure in presenting their report for the year ended 31st March2019.
A. Consolidated Financial Results
| || || ||Rs. lakhs |
|Sl.No ||Particulars ||2018-19 ||2017-18 |
|1 ||Income from Operations and Other Income ||44339.23 ||40925.73 |
|2 ||Profit before Finance Cost Depreciation and taxes ||9517.67 ||9812.62 |
|3 ||Finance cost ||1279.75 ||1076.46 |
|4 ||Depreciation & Amortisation ||3256.24 ||3041.85 |
|5 ||Profit before Exceptional items & taxation ||4981.68 ||5694.31 |
|6 ||Share of profit from Associates / Joint Venture using Equity method ||6485.16 ||4016.21 |
|7 ||Exceptional item ||28047.98 ||- |
|8 ||Provision for taxes ||2995.39 ||1394.46 |
|9 ||Profit for the year ||36519.43 ||8316.06 |
|10 ||Other Comprehensive Income ||(13.67) ||25.84 |
|11 ||Total Comprehensive Income for the year ||36505.76 ||8341.90 |
The Company has declared one interim dividend totaling Rs. 4.50 per equity shareamounting to Rs. 4892.76 Lakhs for the financial year 2018-19. No Dividend DistributionTax is payable after netting off the dividend received from subsidiaries. The Interimdividend pay-out is in accordance with the Company's dividend distribution policy and ispaid out of free reserves available for this purpose. The Company does not recommend FinalDividend for the financial year 2018-19.
C. Management Discussion & Analysis:
a) Industry structure and developments
The container segment is expected to maintain its strong growth trend over the next fewyears. Going forward growth in container traffic will offer multiple businessopportunities to contractors developers freight forwarders and logistics serviceproviders technology and equipment suppliers and container shipping lines.
JNPT accounted for most of India's total containerized traffic by handling over 51 lakhTEUs in 2018-19. The country's second biggest container port at Chennai handled around 16Lakh TEUs. The port at Cochin and Krishnapatnam handled over 5 lakh TEUs each.
b) Opportunities and threats
The company foresees opportunities for expansion and increase in profitability in thegrowing containerization in Export-Import trade and rail movement 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 KrishnapatnamVisakhapatnam and Cochin. The Company continues to prune costs through various measuresand also augment its equipment for handling and transporting containers.
The subsidiary company Gateway Rail Freight Limited (GRFL) has expanded its businessrelating to operating container trains on the Indian railways network. GRFL has put inplace a fleet of railway rakes / trailers and ICDs to provide end-to-end solution tocustomers across the country. Gateway Rail continues to be the leader in Private ContainerTrain Operators. During the year the Company increased its shareholding in GRFL from50.01% to 99.93% making GRFL a subsidiary Company. The Company's cold chain logisticsarm Snowman Logistics Ltd. is a listed company since FY 2014-15. Snowman has expanded itscapacity to become a premier player in this emerging business. Competition from existingand new entrants and managing the geographical / capacity expansion present the companywith new challenges.
c) Segment-wise / Product-wise performance
The Company's entire business is from inter-modal logistics. There are no other primary/ secondary segments in the Company's business.
Over the medium term growth in port volumes direct port delivery movement ofcontainers & resulting increased throughput at our CFSs increase in volume of railmovement of containers and growth in the cold chain logistics business are expected tohave positive impact on the Company's long term business and profitability. ContainerizedEXIM trade is expected to show consistent performance at major Indian ports over the nextfew 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 traffic vis-a-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 Officer. The Company's accounts and operations are subject to internalaudit 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 during2018-19 was Rs.44129.80 Lakhs (2017-18: Rs. 35015.54 Lakhs). The Profit before tax andexceptional income for 2018-19 was Rs. 10470.33 Lakhs (2017-18: Rs. 5262.63 Lakhs). TheTotal comprehensive income for 2018-19 was Rs. 8807.43 Lakhs (2017-18: Rs. 3824.33Lakhs). The retained earnings as on 31 March 2019 after transfer of Rs. 55 lakhs toDebenture Redemption Reserve was Rs. 24397.26 Lakhs (2017-18: Rs. 20723.48 Lakhs)
The Company has outstanding Term loans of Rs. 6637.50 Lakhs loans for transport /handling equipments Rs. 1727.14 Lakhs and cash credit outstanding Rs. 728.02 Lakhs withHDFC Bank Limited as on March 31 2019. The Company has been sanctioned cash credit /overdraft facilities / Buyers credit / Bank Guarantee of Rs. 10500 Lakhs by HDFC BankLimited. The Company has raised Rs. 55000 lakhs during the year by issue ofnon-convertible debentures. The Company has given guarantees in respect of outstandingfunded / non-funded borrowing facilities of group companies Gateway Rail Freight Limited-Rs. 14863.25 Lakhs Chandra CFS & Terminal Operators Pvt. Ltd. - Rs. 190.70 lakhsGateway East India Private Limited- Rs. 863.37 Lakhs (utilized out of cash credit limitRs. 1100 Lakhs) and Gateway Distriparks (Kerala) Ltd.- Rs. 524.13 Lakhs as on 31st March2019. The income from interest on fixed deposits with banks and investments in mutualfunds was Rs. 583.04 lakhs in the current year (2017-18: Rs. 894.62 Lakhs).
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 plans forgeographical expansion. Initiatives on training and development of human resources wereundertaken. The Company's staff strength on March 31 2019 was 255 employees (March 312018: 247 employees).
i) Cautionary statement
Statements made in this report particularly those which relate to ManagementDiscussion and Analysis describing the Company's objectives projections estimates andexpectations may constitute "forward looking statements" within the meaning ofapplicable laws and regulations. Actual results might vary materially from those eitherexpressed or implied.
Mrs. Mamta Gupta (DIN: 00160916) who retires by rotation seeks re-appointment asDirector at the forthcoming 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 Limited Mumbaisituated at Phiroze Jeejeebhoy Tower Dalal Street Mumbai - 400 001 and the NationalStock Exchange of India Ltd. situated at Exchange Plaza Bandra Kurla Complex Mumbai -400 051. The Company has made up-to-date payment of the listing fees.
At the 23rd AGM held on 2 August 2017 the Members approved appointment of S. R.Batliboi & Co. LLP Firm Registration No.301003E / E300005 Chartered Accountants asStatutory Auditors of the Company to hold office for a period of five years from theconclusion of that AGM till the conclusion of the 28th AGM in calendar year 2022 subjectto ratification of their appointment by Members at every AGM if so required under theAct. The requirement to place the matter relating to appointment of auditors forratification by Members at every AGM has been done away by the Companies (Amendment) Act2017 with effect from May 7 2018. Accordingly no resolution is being proposed forratification of appointment of statutory auditors at the ensuing AGM and a note in respectof same has been included in the Notice for this AGM.
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 2018-19 11meetings of the Board of Directors were held on 16 May 2018 25May 2018 1 August 2018 6 August 2018 1 October 2018 30 October 2018 24 December 201824 January 2019 6 February 2019 15 March 2019 30 March 2019
Directors Responsibility Statement
Pursuant to the requirements of Section 134 (5) of the Companies Act 2013 with respectto Directors' Responsibility Statement it is hereby confirmed that:-
i. in the preparation of the annual accounts for the year ended 31st March 2019 theapplicable accounting standards have been followed along with proper explanation relatingto material departures.
ii. such accounting policies as mentioned in Note 1 of the Annual Accounts have beenapplied consistently and judgments and estimates that are reasonable and prudent made soas to give a true and fair view of the state of affairs of the Company for the financialyear ended 31st March 2019 and of the profit of the Company for that period.
iii. proper and sufficient care has been taken for the maintenance of adequateaccounting records in accordance with the provisions of this act for safeguarding theassets of the Company and for preventing and detecting fraud and other irregularities.
iv. the annual accounts for the year ended 31st March 2019 have been prepared on agoing concern basis.
v. have laid down internal financial controls to be followed by the Company and thatsuch internal finance controls are adequate and are operating effectively.
vi. proper systems to ensure compliance with the provisions of all applicable laws aredevised and such systems are adequate and operating effectively.
Declaration by Independent Directors
The independent directors have submitted declarations that each of them meet thecriteria of independence as provided in Section 149(6) of the Act along with Rules framedthereunder and Regulation 16(1)(b) of the Securities and Exchange Board of India (ListingObligations and Disclosure Requirements) Regulations 2015 ("SEBI ListingRegulations"). There has been no change in the circumstances affecting their statusas independent directors of the Company.
Policy on Directors' Appointment & Remuneration
Your Company has an equal mix of Promoter Directors and independent Directors on itsBoard. As at the year end the Board has six members consisting of two ExecutiveDirectors one woman Director and three independent Directors.
The details of Nomination and Remuneration Policy pursuant to Section 178 of theCompanies Act 2013 and applicable regulations of SEBI (LODR) Regulations 2015 areavailable on our website and can be accessed by clicking on the web link:http://www.gateway-distriparks. com/investor.asp. No changes have been made in the policyduring the year and the remuneration paid to the Directors are as per the terms laid outin the Nomination & Remuneration policy of the Company.
Details of Familiarization Program 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
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. Practising Company Secretaries is annexed to this Report asAnnexure C.
Particulars of loans guarantees or investments
| ||Rs. Lakhs |
|Particulars of loans guarantees and investments under section 186 of Companies Act 2013 ||As at 31.03.2019 |
|Investments || |
|8000000 Equity Shares of Rs. 10 each in Gateway East India Private Limited (100% Subsidiary) ||1484.00 |
|3583945 Equity Shares of Rs. 100 each in Chandra CFS and Terminal Operators Private Limited (100% Subsidiary) ||4508.44 |
|13830000 Equity Shares of Rs. 10 each in Gateway Distriparks (Kerala) Limited (Subsidiary) including equity component of Zero Coupon Redeemable Preference Shares ||1460.57 |
|201199798 Equity Shares of Rs. 10 each in Gateway Rail Freight Limited (Subsidiary) ||20511.32 |
|120000000 Compulsory Convertible Preference Shares of face value Rs. 24.65 each of Gateway Rail Freight Limited (Subsidiary) ||70565.69 |
|100 Equity Shares of Rs. 25 each in Gateway Rail Freight Limited (Subsidiary) ||0.03 |
|67254119 Equity Shares of Rs. 10 each in Snowman Logistics Limited (Associate) ||10416.99 |
|16672199 Zero Coupon Redeemable Preference Shares of Rs. 10 each in Gateway Distriparks (Kerala) Limited (Subsidiary) ||2147. 74 |
|Guarantees for loans || |
|Guarantee given for loan from HDFC Bank Limited to Chandra CFS and Terminal Operators Private Limited (100% Subsidiary) ||190.70 |
|Guarantee given for loan from KSIDC to Gateway Distriparks (Kerala) Limited (Subsidiary) ||524.13 |
|Guarantee given for Credit facility from HDFC Bank to Gateway East India Private Limited (Subsidiary) ||1100.00 |
|Guarantee given for loan from HDFC Bank Limited to Gateway Rail Freight Limited (Subsidiary) ||14863.25 |
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 D. 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 company During the year Mr. Prem Kishan Dass GuptaChairman and Managing Director received Commission / sitting fees from subsidiary company:Gateway East India Private Limited Rs. 3.40 Lakhs (FY 2017-18 Rs. 0.80 Lakhs). Mr. IshaanGupta Joint Managing Director received Commission / sitting fees from subsidiary company:Gateway East India Private Limited Rs. 3.40 Lakhs (FY 2017-18 Rs. 0.80 Lakhs). During theyear Gateway Rail Freight Limited paid Commission / sitting fees to Mr. Prem Kishan DassGupta Chairman and Managing Director Rs. 485 Lakhs (FY 201718 Rs. 229 Lakhs) and to Mr.Ishaan Gupta Joint Managing Director Rs. 40 Lakhs (FY 2017-18 Rs. 18 Lakhs).
During the year Gateway Distriparks (Kerala) Limited paid sitting fees to Mr. PremKishan Dass Gupta Chairman and Managing Director Rs. 2 Lakhs (FY 2017-18 Rs. Nil )
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.
The Company has devised proper systems to ensure compliance with the provisions of allapplicable Secretarial Standards issued by the Institute of Company Secretaries of Indiaand that such systems are adequate and operating effectively. There have been no materialchanges and commitments which affected the financial position of the Company which haveoccurred between the end of the financial year and the date of this report.
During the year the Company had issued rated secured redeemable non-convertibledebentures of face value Rs. 10 lakhs each aggregating to Rs. 550 crores. The debentureswere issued on private placement basis through Electronic Book Mechanism using the BSEBond platform. The Issue opened & closed on: 27 Mar 2019 and the Allotment date was 28March 2019. The Debentures were issued in 13 series carrying coupon rates - 11.25% &11.50%. The debentures are listed at BSE Ltd. The credit rating agency has rated thesecurities as IND AA- stable.
The Company had appointed Beacon Trusteeship Ltd. as the Trustee for the Debentureissue.
Their contact details are:
Beacon Trusteeship Ltd.
CIN:U74999MH2015PLC271288 4C Siddhivinayak ChambersGandhi Nagar Opp MIG CricketClubBandra (East) Mumbai 400 051 Ph: 022-26558759 Email: email@example.comWebsite: www.beacontrustee.co.in
|ISIN ||No. of NCD ||Amount (Rs. Crores) ||SERIES ||Coupon rate ||Allotment Date ||Maturity Date ||Tenor Yrs |
|INE852F07012 ||50 ||5.00 ||A3 ||11.25% ||28-Mar-19 ||7-Apr-21 ||2 |
|INE852F07020 ||100 ||10.00 ||B2 ||11.25% ||28-Mar-19 ||7-Apr-22 ||3 |
|INE852F07038 ||100 ||10.00 ||C2 ||11.25% ||28-Mar-19 ||7-Apr-23 ||4 |
|INE852F07046 ||100 ||10.00 ||D2 ||11.25% ||28-Mar-19 ||5-Apr-24 ||5 |
|INE852F07053 ||100 ||10.00 ||E2 ||11.25% ||28-Mar-19 ||7-Apr-25 ||6 |
|INE852F07061 ||100 ||10.00 ||F2 ||11.25% ||28-Mar-19 ||7-Apr-26 ||7 |
|INE852F07079 ||2500 ||250.00 ||A1 ||11.50% ||28-Mar-19 ||7-Apr-21 ||2 |
|INE852F07087 ||150 ||15.00 ||A2 ||11.50% ||28-Mar-19 ||7-Apr-21 ||2 |
|INE852F07095 ||400 ||40.00 ||B1 ||11.50% ||28-Mar-19 ||7-Apr-22 ||3 |
|INE852F07103 ||450 ||45.00 ||C1 ||11.50% ||28-Mar-19 ||7-Apr-23 ||4 |
|INE852F07111 ||450 ||45.00 ||D1 ||11.50% ||28-Mar-19 ||5-Apr-24 ||5 |
|INE852F07129 ||450 ||45.00 ||E1 ||11.50% ||28-Mar-19 ||7-Apr-25 ||6 |
|INE852F07137 ||550 ||55.00 ||F1 ||11.50% ||28-Mar-19 ||7-Apr-26 ||7 |
| ||5500 ||550.00 || || || || || |
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.
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. 93.10 Lakhs(including Capital items) (2017-18:Rs. 3 Lakhs)
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 E.
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 the Board'sappreciation of their performance. The Nomination and Remuneration Committee noted thatthe performance of the individual directors & Committees based on the high attendancerecord and intense participation at meetings high quality of interventions specialcontributions and excellent Inter-personal relationships with other Directors andmanagement. The performance of the Chairman was based on notable contributions in theachievements of the Company and role in conducting Board meetings and bringing outcontributions from all Directors. Prevailing remuneration in similar industry / function /experience are considered for recruiting persons & while granting increases inremuneration besides the performance of the person. The Committee and the Board approvedthe remuneration paid to key managerial personnel and other employees.
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 F to this report.
Subsidiaries / Associates
Information about subsidiaries / Associate / Joint Venture are given in Form AOC-1which is annexed as Annexure G 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 can threaten Company's existence havebeen identified by the Board of Directors. The risks have been prioritized based on riskanalysis and process to identify emerging risks are in place. The Company has in placemeasures for Business Continuity Disaster recovery and Information security. A controlassurance program covering internal financial controls (IFC) has been implemented andtested during the year. Details of the Risk Management Policy can be accessed by clickingon 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 ||2 ||224 |
|No. of shares transferred from Suspense Account during the year to IEPF ||- ||- |
|No. in Suspense Account at end of the year** ||2 ||224 |
|Voting rights on above shares are frozen till claimed by rightful owner |
** Documents awaited from the shareholders
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 |
|Place: New Delhi ||PREM KISHAN DASS GUPTA |
|Date: 14 May 2019 ||Chairman & Managing Director |
| ||DIN: 00011670 |