Your Directors have pleasure in presenting their report for the year ended 31st March2018.
A. Consolidated Financial Results
| || ||(Rs. In Lakhs) |
|Sl. No Particulars ||2017-18 ||2016-17 |
|1 Income from Operations and Other Income ||40925.73 ||40567.53 |
|2 Profit before Finance Cost Depreciation and taxes ||9812.62 ||10336.40 |
|3 Finance cost ||1076.46 ||531.22 |
|4 Depreciation & Amortisation ||3041.85 ||2650.80 |
|5 Profit before Exceptional items & taxation ||5694.31 ||7154.38 |
|6 Share of profit from Associates / Joint Venture using Equity method ||4016.21 ||1761.33 |
|7 Exceptional item || || |
|8 Provision for taxes ||1394.46 ||1503.80 |
|9 Profit for the year ||8316.06 ||7411.91 |
|10 Other Comprehensive Income ||25.84 ||2.69 |
|11 Total Comprehensive Income for the year ||8341.90 ||7414.60 |
The Company has declared two Interim dividends totaling Rs. 7 per equity shareamounting to Rs. 7610.96 Lakhs for the financial year 2017-18. The Company does notrecommend Final Dividend for the financial year 2017-18.
C. Management Discussion & Analysis:
a) Industry structure and developments
Containerisation in India currently stands at 55% of the country's total import-exporttrade and is expected to grow significantly in the years to come. Containerized trafficin Indian ports increased by over 8% in FY 2017-18.
JNPT accounted for over half of India's total containerized traffic by handling over 48Lakh TEUs in FY 2017-18. The country's second biggest container port at Chennai handledover 15 Lakh TEUs. The port at Cochin handled over 5 Lakh TEUs and Krishnapatnam over 4.8Lakh TEUs.
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 measures and also augmentits equipment for handling and transporting containers.
The Company's rail vertical Gateway Rail Freight Limited (GRFL) has expanded itsbusiness relating to operating container trains on the Indian railways network. GRFL hasput in place a fleet of railway rakes / trailers and ICDs to provide end-to-end solutionto customers across the country. The Company's cold chain logistics arm Snowman LogisticsLtd. which had its IPO during FY 2014-15 and has expanded its capacity to become a premierplayer in this emerging business.
Competition from existing and new entrants and managing the geographical / capacityexpansion present the company with new challenges.
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.
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--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) Int ernal 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 during2017-18 was Rs. 35015.54 Lakhs (2016-17: Rs. 34813.65 Lakhs). The Profit before tax andexceptional income for 2017-18 was Rs. 5262.63 Lakhs (2016-17: Rs. 6672.23 Lakhs). TheTotal comprehensive income for 2017-18 was Rs. 3824.33 Lakhs (2016-17: Rs. 5174.78Lakhs). The retained earnings and general reserves as on 31 March 2018 was Rs. 25623.68Lakhs (2016-17: Rs. 30796.86 Lakhs)
Together with its subsidiary companies in the CFS business at Chennai Visakhapatnamand Kochi the revenue from CFS operations for FY 2017-18 was Rs. 39550 Lakhs (2016-17:Rs. 39340 Lakhs) and Profit after Tax for FY 2017-18 was Rs. 4303 Lakhs (2016-17: Rs.5580 Lakhs)
The Company has outstanding Term loans of Rs. 8820.83 Lakhs loans for transport /handling equipments Rs. 2187.36 Lakhs and cash credit outstanding Rs. 660.54 Lakhs with
HDFC Bank Limited as on March 31 2018. The Company has been sanctioned cash credit /overdraft facilities / Buyers credit / Bank Guarantee of Rs. 10500 Lakhs by HDFC BankLimited. The Company has given guarantees in respect of outstanding funded / non-fundedborrowing facilities of group companies Gateway Rail Freight Limited- Rs. 18954.24 LakhsGateway East India Private Limited-Rs. 300.27 Lakhs (utilized out of cash credit limitRs.1100 Lakhs) Chandra CFS and Terminal Operators Private Limited-Rs. 301.52 Lakhs andGateway Distriparks (Kerala) Ltd.-Rs. 869.75 Lakhs as on 31st March 2018. The income frominterest on fixed deposits with banks and investments in mutual funds was Rs. 894.62 Lakhsin the current year (2016-17: Rs. 145.05 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 2018 was 247 employees (March 312017: 231 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 who retires by rotation seeks re-appointment as Director at theforthcoming 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 BSE Limited Mumbai situated at PhirozeJeejeebhoy Tower Dalal Street Mumbai - 400 001 and the National Stock Exchange of IndiaLtd. situated at Exchange Plaza Bandra Kurla Complex Mumbai 400 051. The Companyhas made up-to-date payment of the listing fees.
S. R. Batliboi & Co. LLP Firm Registration No.301003E / E300005 CharteredAccountants holds office as Statutory Auditors of the Company till the conclusion of theAnnual General Meeting 2022 subject to annual ratification at each Annual GeneralMeeting. The Company has received letter from M/s. S. R. Batliboi & Co. LLP FirmRegistration No.301003E
/ E300005 Chartered Accountants confirming that their appointment would be within thelimits prescribed under Sections 139(2) and 141of the Companies Act 2013.
H. Statut ory 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 2017-18 5 meetings of the Board of Directors were held on 11 May 2017 18May 2017 11 August 2017 9 November 2017 and 15 February 2018.
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 2018 theapplicable accounting standards have been followed along with proper explanation relatingto material departures. ii. such accounting policies as mentioned in Note 1 of the AnnualAccounts have been applied consistently and judgments and estimates that are reasonableand prudent made so as to give a true and fair view of the state of affairs of theCompany for the financial year ended 31st March 2018 and of the profit of the Company forthat 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 2018 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
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
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 2014 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 31.03.2018 |
|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 |
| || || |
|201100000 ||Equity Shares of Rs. 10 each in Gateway Rail Freight Limited (Joint Venture) including equity component of Zero Coupon Redeemable Preference Shares ||20476.00 |
|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) ||2016.79 |
|Guarantees for loans || |
|Guarantee given for loan from HDFC Bank Limited to Chandra CFS and Terminal Operators Private Limited (100% Subsidiary) ||301.52 |
|Guarantee given for loan from KSIDC to Gateway Distriparks (Kerala) Limited (Subsidiary) ||869.75 |
|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 (Joint Venture) ||18954.24 |
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 Gupta Chairman and Managing Director receivedCommission / sitting fees from subsidiary company: Gateway East India Private Limited Rs.0.80 Lakhs (FY 2016-17 Rs. 0.80 Lakhs). Mr. Ishaan Gupta Joint Managing Director receivedCommission / sitting fees from subsidiary company: Gateway East India Private Limited Rs.0.80 Lakhs (FY 2016-17 Rs. 0.80 Lakhs).
During the year Gateway Rail Freight Limited paid Commission / sitting fees to Mr.Prem Kishan Dass Gupta Chairman and Managing Director Rs. 229 Lakhs (FY 2016-17 Rs. 154Lakhs) and to Mr. Ishaan Gupta Joint Managing Director Rs. 18 Lakhs (FY 2016-17 Rs. 12Lakhs).
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.
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. 3.00 Lakhs |
|(including Capital items) ||(2016-17: Rs. 461.29 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 andinterpersonal 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 that the performance of the individualdirectors & Committees based on the high attendance record and intense participationat meetings high quality of interventions special contributions and excellentInter-personal relationships with other Directors and management. The performance of theChairman was based on notable contributions in the achievements of the Company and role inconducting Board meetings and bringing out contributions from all Directors. Prevailingremuneration in similar industry / function / experience are considered for recruitingpersons & while granting increases in remuneration besides the performance of theperson. The Committee and the Board approved the remuneration paid to key managerialpersonnel 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 canthreaten Company's existence have been identified by the Board of Directors. The riskshave been prioritized based on risk analysis and process to identify emerging risks are inplace. The Company has in place measures for Business Continuity Disaster recovery and
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 shares transferred from Suspense Account during the year to IEPF ||10 ||1013 |
| || || |
| || || |
|No. in Suspense Account at end of the year ||2 ||224 |
|Voting rights on above shares are frozen till claimed by rightful owner || || |
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: 16 May 2018 ||DIN: 00011670 |