Lancer Container Lines Limited
Your Directors have pleasure in presenting the 7th Annual Report (3rd AGM -Post IPO) on the business and operations of the Company and the accounts for the FinancialYear ended March 31 2018.
1. Financial Statements and Results
The Company's financial performance for the year under review along with previousyear's figures is given hereunder:
|Particulars ||2017 -18 ||2016 - 17 |
| ||(Amount in Rs. Crs) ||(Amount in Rs. Crs ) |
|Revenue from Operations ||109.44 ||77.6 |
|Other Income ||1.26 ||1.75 |
|Total Income ||110.71 ||79.34 |
|Less : Expenses ||101.45 ||77.29 |
|Profit Before Tax ||9.26 ||2.05 |
|Net Profit After Tax ||6.85 ||1.68 |
|Earnings per share # ||9.78 ||2.96 |
# EPS numbers are in actuals.
2. Brief description of the Company's working during the year.
During the year under review your Company has reported total income of Rs.110.71 Crs.for the current year as compared to the previous year income of Rs. 79.34 Crs.registering a growth of 40%. Net profit after tax is at Rs.6.85 Crs compared to previousyear profit of Rs.1.68 Crs. registering an increase of 3.08 times over the previous year.The increased profits during the year have been achieved due to better performance on theparameters as listed under; a) Increase in Gross Profit Margin by 3.20% in FY18 v/s FY17due to reduction in cost of services. b) Reduction in employee costs by 0.76% financecosts by 0.83% depreciation cost by 1.18% other expenses by 0.94% in FY18 v/s FY17. (Asa percentage to sales).
Your Directors do not recommend any dividend for the financial year ended March 312018.
4. Transfer to Reserve
The Profit after tax for the financial year FY 2017-18 amounting to Rs. 6.85 Crs. havebeen transferred to Reserves. During the year the company also received share premium ofRs.1.62 Crs on the warrants issued on preferential basis and utilized reserves to the tuneof Rs. 3.77 Crs. for the issue of bonus shares and amortization of lease of Rs. 0.10 Crs.
5. Change in Capital
Increase in Authorized Share Capital
During the year under review the Authorized Share Capital of the Company was increasedfrom Rs. 110000000/- (Rupees Eleven crores only) divided into 11000000 (One croreten Lakh) equity shares of Rs. 10/- (Rupees Ten only) each to Rs. 150000000/- (Rupeesfifteen crores only) divided into 15000000 (One Crore fifty lakhs) equity shares of Rs.10/- (Rupees Ten only) each ranking Pari Passu with the existing equity shares andconsequently CLAUSE V of Memorandum of Association was altered. The said increase inauthorized share capital and Alteration of Memorandum of Association was approved by theMembers in their Extra-Ordinary General Meeting held on 18th August 2017.
6. Migration of Equity Shares from BSE SME Platform to BSE Mainboard Platform
The board is pleased to inform that as per notice dated 8th May 2018 issued by BombayStock Exchange the equity shares of Company which were listed on the BSE SME Platform hasbeen migrated & admitted to dealings on the Mainboard with effect from 10th May 2018.
7. Increase in Paid Up Share Capital
A) During the previous financial year (FY 2016 - 2017) the members in theirExtra-Ordinary General Meeting had approved the issuance of 570000 warrants onpreferential basis at the pricing of Rs. 38.45 per warrant determined as per Chapter VIIof SEBI (Issue of Capital And Disclosure Requirements) Regulations 2009. Pursuant to thepayment of the amounts under the warrants by the allottees the company has during thefinancial year under review converted these 570000 warrants into 570000 equity shares.These shares are ranking pari-passu with the old equity shares of the company. The totalpaid up capital post conversion increased to Rs.62794000.
B) During the year under review the members also approved the Issue of bonus shares offace value of Rs. 10/- each in ratio 3:5 i.e in the proportion of three (3) equity sharesfor every five (5) equity shares held by them respectively as on the Record Date in theirExtra-Ordinary General Meeting held on 21st December 2017. Pursuant to the approval bythe members 3767640 Bonus Equity Shares of Rs. 10/- each were issued and allotted onJanuary 05 2018. These shares are ranking pari-passu with the old equity shares of thecompany. Total paid up capital after issue increased to Rs.100470400.
As on 31st March 2018 the total Paid up capital of company is Rs.100470400. Apartfrom the above the Company has not issued shares with differential voting rights norgranted stock options nor sweat equity.
8. Allotment of Shares
During the year under the review the company has allotted 570000 shares pursuant tothe conversion of the warrants allotted on preferential basis as stated above in PointNo. 7(A) above. Further the company has issued bonus shares in the proportion of three(3) equity shares for every five (5) equity shares held as stated above in Point No. 7(B)above.
The Audit Committee comprises Mr. Suresh Babu Sankara as Chairman Mr. GajanandHarivilas Ruia Narayanan M Variyam and Ms. Vijayshri Krishnan as the members. TheCommittee is assigned role powers and responsibilities as provided under Clause 52 of theEquity Listing Agreement and Section 177 of the Companies Act 2013. There is no suchincidence where Board has not accepted the recommendation of the Audit Committee duringthe year under review. During the year under review six Audit Committee meetings wereheld on 3rd May 201716th August 201728th August 201730th October 2017 and 13th November2017.
Stakeholders' Relationship Committee
The Stakeholders' Relationship Committee comprises Mr. Suresh Babu Sankara as ChairmanMr. Gajanand Harivilas Ruia and Ms. Vijayshri Anup Krishnan as the members. The Committeeis constituted to supervise and ensure Share Transfer related matters and to look afterthe Stakeholder's Grievances.
During the year under review Stakeholders' Relationship Committee meeting was held on24th November 2017
Nomination and Remuneration Committee
The Nomination and Remuneration Committee comprises Mr. Suresh Babu Sankara as Chairmanand Mr. Gajanand Harivilas Ruia and Ms. Vijayshri Krishnan as the members. The Committeeis formed for the purpose of recommending the Nomination and Remuneration and evaluationof the Directors' performance.
During the year under review 3(three) Nomination and Remuneration meetings were heldon 28th August 2017 30th October 2017 and 26th February 2018.
Corporate Social Responsibility Committee
The board of directors at its meeting held on 4th July 2018 at its registered officehas constituted the Corporate Social Responsibility Committee u/s. 135 (1) of theCompanies Act2013 read with Companies (Corporate Social Responsibility Policy) Rules2014. The Corporate Social Responsibility Committee constitute the following members:
|Name ||Chairperson/ Member ||Category |
|Abdul Khalik Abdul ||Chairperson ||Managing Director |
|Kadar Chataiwala || || |
|Fauzan Abdul ||Member ||Executive Director |
|Khalik Chataiwala || || |
|Harish ||Member ||Executive Director |
|Parameswaran || || |
|Suresh Babu ||Member ||Non-Executive independent Director |
|Sankara || || |
10. Directors and Key Managerial Personnel
A) Mr. Fauzan Abdul Khalik Chataiwala (DIN- 07376603) Director who retires by rotationand being eligible for re-appointment offers himself for re-appointment is part of theagenda of the current Annual General Meeting.
B) Mr. Suresh Babu Sankara Mr. Gajanand Harivilas Ruia and Ms. Vijayshri Anup Krishnanare appointed as an Independent Directors of the Company for a period of 5 years.
C) Appointment of Mr. Narayanan M Variyam (DIN: 08109682) as Independent Non-ExecutiveDirector on 19th July 2018 has been approved by members in a postal Ballot conductedpursuant to the Regulation 110 of Companies Act 2013 and Rule 22 Of The Companies(Management And Administration) Rules 2014.
D) On the recommendation of the Audit Committee the board has appointed Mr. RajeevBhavnani as a Chief Financial Officer with effect from 30th October 2017.
11. Internal Control and Its adequacy
The Board at its meeting held on 28th August 2017 had appointed GaneshNatarajan and Associates as internal auditor and replaces N.S Bhosle & CompanyChartered Accountants with effect from 1st August 2017. The company has anadequate internal controls and processes in place with respect to its financial statementswhich provide reasonable assurance regarding the reliability of financial reporting andthe preparation of financial statements. These controls and processes are driven throughvarious policies procedures and certifications. The processes and controls are reviewedperiodically by internal auditor. The Company has a mechanism of testing the controls atregular intervals for their design and operating effectiveness to ascertain thereliability and authenticity of financial information.
12. Corporate Social Responsibility [CSR]
The provisions of the CSR expenditure and Composition of Committee as provided in theSection 135 of the Companies Act 2013 will become effective from Financial Year 2018-19and hence the spending on CSR activities will be executed in the financial year of FY2018-19. The company has adopted the policy of Corporate Social Responsibility anduploaded the same on website.
13. Corporate Governance
For the full period under review (FY 2017-18) the Company was listed on BSE-SMEplatform and hence the requirements of Corporate Governance are not applicable to thecompany. However since the company has been migrated to the Main board of the BSE therequirements of Corporate governance are applicable from the ensuing financial year i.e.FY 2018-19. Your company is well placed to be in compliance with the corporate governancenorms prescribed under the Companies Act 2013 particularly in relation to appointmentof Independent Directors to our Board and constitution of Board-level committees. Yourcompany also undertakes to take all necessary steps to comply with all the requirements ofthe SEBI Listing Regulations.
14. Particulars of Employees
In terms of the provision of section 197(12) of the Companies Act 2013 read with Rule5(2) & (3) of the Companies (Appointment & Remuneration of Managerial Personnel)Rules 2014 requiring particulars of the employees in receipt of remuneration in excess ofRs.1.02 Crs per year to be disclosed in the Report of Board of Directors are notapplicable to the Company as none of the employees was in receipt of remuneration inexcess of Rs. 1.02 Crs during the financial year 2017-18. Particulars of Employees asrequired to be disclosed under Rule 5(1) and (2) of the Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014 is annexed herewith as "AnnexureI".
15. Related Party Transaction:
All related party transactions if any that were entered into during the financialyear were on an arm's length basis and were in the ordinary course of business.Particulars of contract or arrangements with related parties is annexed herewith in FormAOC 2 as "Annexure II".
16. Number of Board Meeting conducted during the year under review.
The Company had conducted total 14 Board meetings on the following dates 20thApril 2017 4th May 2017 18th July 2017 16th August2017 19th August 2017 28th August 2017 31st August2017 1st September 2017 30th October 2017 14thNovember 2017 24th November 2017 23rd December 2017 5thJanuary 2018 and 1st March 2018 during the financial year under review.
17. Statutory Auditors
M/s. Soman Uday & Co Chartered Accountants Mumbai (FRN: 110352W) has beenappointed and approved by members as the Statutory auditor for the company till theconcluding of the members meeting (AGM) for financial year FY 2017-2018. It is proposed inthe notice to this AGM for approval of members to appoint M/s Soman Uday & Co asstatutory auditor to hold the office from the conclusion of this AGM until the conclusionof the Annual General Meeting of the members to be held for the financial year ending on31st March 2019. M/s Soman Uday has given his consent letter along with requiredcertificate under Section 141 to the effect that their appointment if made would bewithin the limits specified under Section 139 of the Companies Act 2013.
18. Auditors' Report
The observation made in the Auditors Reports read with relevant notes thereon areself-explanatory and hence do not call for any further comments under Section 134 of theCompanies Act 2013.
19. Secretarial Audit Report
In terms of Section 204 of the Companies Act 2013 and Rules made there under theboard have appointed M/s. Geeta Canabar & Associates Practicing Company Secretary asthe Secretarial Auditors of the Company. The report of the Secretarial Auditors isenclosed as Annexure III to this report. The report is self-explanatory and do not callfor any further comments.
20. Vigil Mechanism
Your Company believes in promoting a fair transparent ethical and professional workenvironment. The Board of Directors of the Company pursuant to the provisions of Section177 of the Companies Act 2013 and SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015 has framed
"Vigil Mechanism" for Directors and employees of the Company for reportingthe genuine concerns or grievances or cases of actual or suspected fraud or violation ofthe Company's code of conduct and ethics policy. The Vigil Mechanism Policy has beenuploaded on the website of the Company at www.lancermarine.in underhttp://www.lancermarine.in/Policies.html link.
21. Sexual Harassment
There was no case filled during the year under the sexual harassment of women atworkplace (Prevention Prohibition & Redressal) Act 2013. Further Company ensuresthat there is a healthy and safe atmosphere for every women employee at the workplace andmade the necessary policies for safe and secure environment for women employees.
22. Extract of Annual Return
As required pursuant to section 92(3) of the Companies Act 2013 and rule 12(1) of theCompanies (Management and Administration) Rules 2014 an extract of annual return in MGT9 as a part of this Annual Report is enclosed as Annexure IV. The same document isalso placed on our website at www.lancermarine.in underhttp://www.lancermarine.in/MGT%209.pdf .
23. Material changes and commitments if any affecting the financial position of thecompany which have occurred between the end of the financial year of the company to whichthe financial statements relate and the date of the report The company has enteredinto an agreement dated 3rd April 2018 to purchase an additional office locatedat Mayuresh Chambers Unit No. H02-2 H02-3 and H02-4 Plot no~ 60 Sector 11 CBDBelapur Navi Mumbai - 400614. Each of the unit have 3 floors. A total area of 9270 sq.feet of carpet area (3090 Sq. feet * 3 units) would be available to the company to houseits expanding operations as it seeks to increase the fleet size and business verticals.
24. Details of significant and material orders passed by the regulators or courts ortribunals impacting the going concern status and company's operations in future.
There has been no material order passed by the regulators or courts or tribunalsimpacting the going concern status and company's operations in future. We however bring tothe attention of the members matters which are in the nature of disputes & theirassociated claims. For all the below stated matters the company has or is in the processof refuting the incorrect and invalid claims.
In the Court of Civil Judge (Senior Division) at Lucknow:
M/s Banaras Glasses (P) Ltd (Herein after referred to as Customer) having registeredoffice at 126/31 Shalimar square BN road Lalbagh Lucknow has filed petition in thecourt of civil judge (senior division) Lucknow against our company for mandatory Injectionand recovery of damages. With respect of this the customer has filed a suit for Rs.2741652/- and interest there-on from the date of filing the suit to the actual date ofpayment of the above amount by the company. The company believes that the case has nomerits and is an incorrect and invalid claim.
In the Court of Civil Judge (Senior Division) at Thane:
Vardhaman Wires and Polymers Limited (Herein after referred to as Shipper) havingregistered office at Plot No.662/II Savali Lamdapura Road Taluka Savali VillageMajusar Dist Baroda- 3971 770 has filed a suit in the court of civil judge (seniordivision) Thane against our company for recovery of losses caused due to damage to theircargo. The company had provided a container to the shipper for export from ex Nhava Shevato Jebel Ali on Shippers LOAD / STOW / COUNT basis in which case Lancer does not have anyresponsibility as regards the condition of cargo. Accordingly Bills of Lading had beenissued based on SAID TO CONTAIN clause (i.e. as per information provided by the Shipper).As per the shipper at the time the goods reached the destination they have been found tobe damaged by water seepage and thus they have filed a claim of Rs. 4200000 as damagesincluding the cost of the goods and various other costs and interest thereon till the dateof payment. The company is in the process of filing our response to prove that the claimis incorrect and invalid.
Proceedings against our Company
Our Company has voluntarily filed an application dated March 19 2016 for compoundingof offences for non-compliance under section 42 of the Companies Act 2013 i.e. delay inallotment of shares within prescribed timeline and not opening a separate bank account forreceipt of share application money. The said application is in process with the relevantauthority.
The Company has received a demand notice in April 2018 from the Assistant Commissionerof Sales tax Raigad Division with respect to the Sales Tax assessment for financial year2011-12. The demand notice is issued for an amount of Rs. 10066786/- (inclusive of Taxpenalty and interest) pertaining to an input tax credit for Rs. 4151252/- wronglyavailed by one of our customers during financial year 2011-12. We have already filed anappeal with Deputy Commissioner of Sales Tax Belapur Div. VAT-006 against the order.
During the year the Company has not accepted any deposits under the Companies Act2013.
25. Particulars of loans guarantees or investments under Section 186.
The Company has not given any loans or guarantees covered under the provision ofsection 186 of the Companies Act 2013. There is no investment and guarantee made duringthe year.
26. Declaration of Independent Directors
The Independent Directors have submitted their disclosures to the Board that theyfulfill all the requirements as stipulated in Section 149(6) of the Companies Act 2013 soas to qualify themselves to be appointed as Independent Directors under the provisions ofthe Companies Act 2013 and the relevant rules.
27. Management Discussion and Analysis
The Management Discussion and Analysis for the year ended 31 March 2018 forms part ofthis Annual Report as Annexure V.
28. Board evaluation
In compliance with the provisions of Companies Act 2013 and listing compliances theBoard carried out at an annual evaluation of its own performance and individual Directors.It also evaluated the performance of its committees. The evaluation inter alia covereddifferent aspects viz. composition of the Board and its Committees qualificationsperformance inter-personal skills submissions done by the Director in varied disciplinesrelated to the Company's business.
29. Conservation of energy technology absorption and foreign exchange earnings andoutgo
Conservation of Energy
No specific investment has been made in reduction in energy consumption.
As the company has not acquired any technology the question of absorption oftechnology does not apply to the company.
Foreign Exchange Earning and Outgo
During the period under review the foreign exchange earnings and outflow were asfollows:
1) Earnings USD 2149773.00
2) Outflow USD 2128277.00
30. Human Resources
Given that we are in the service industry employees remain the backbone of our servicedelivery and differentiation. Employees are engorged to contribute their best andappraised given feedback at regular intervals. During the year we added approximately 30employees. Employees are given a proper orientation training rotation under a structuredprogram.
31. Directors' Responsibility Statement
The Directors' Responsibility Statement referred to in clause 134(3)(c) of theCompanies Act 2013 state that (a) in the preparation of the annual accounts theapplicable accounting standards had been followed along with proper explanation relatingto material departures; (b) the directors had selected such accounting policies andapplied them consistently and made judgments and estimates that are reasonable and prudentso as to give a true and fair view of the state of affairs of the company at the end ofthe financial year and of the profit and loss of the company for that period; (c) thedirectors had taken proper and sufficient care 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; (d) the directorshad prepared the annual accounts on a going concern basis; and (e) the directors haddevised proper systems to ensure compliance with the provisions of all applicable laws andthat such systems were adequate and operating effective.
Your Company and its directors acknowledge with gratitude the support and co-operationreceived from the Members/ shareholders of the Company Bankers Local Bodies CustomersSuppliers Executives Financial Institution and Central and State Governments.
|Place: Mumbai ||By order of the Board of Directors |
| ||Sd/- |
|Date: 23rd August 2018 ||Abdul Khalik Chataiwala |
| ||Managing Director |
| ||DIN Number - 01942246 |