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Shreyas Shipping & Logistics Ltd.

BSE: 520151 Sector: Infrastructure
NSE: SHREYAS ISIN Code: INE757B01015
BSE 00:00 | 21 Aug 318.10 -11.95
(-3.62%)
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HIGH

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307.45

NSE 00:00 | 21 Aug 322.10 -8.40
(-2.54%)
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HIGH

327.40

LOW

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OPEN 321.10
PREVIOUS CLOSE 330.05
VOLUME 6807
52-Week high 645.00
52-Week low 307.45
P/E 10.28
Mkt Cap.(Rs cr) 699
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 321.10
CLOSE 330.05
VOLUME 6807
52-Week high 645.00
52-Week low 307.45
P/E 10.28
Mkt Cap.(Rs cr) 699
Buy Price 0.00
Buy Qty 0.00
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 Thirtieth Annual Report of your Companytogether with the Audited Statement of Accounts and the Auditors' Report of your companyfor the financial year ended 31st March 2018.

FINANCIAL RESULTS:

Particulars Current Year ended on 31st March 2018 Previous Year ended on 31st March 2017
Operating Income 54059 37016
Other Income 359 557
Profit before Interest Depreciation and Tax 11512 5551
Borrowing Cost (1277) (1009)
Depreciation (1902) (1756)
Profit before Tax Prior Year adjustment & Exceptional Item 8333 2786
Exceptional Item (129) (2320)
Prior Year Adjustment - -
Provision for Tax 88 135
Profit/ (Loss) after Tax 8091 352
Balance Brought Forward from Previous Year 9141 9612
Amount Available for Appropriation 17232 9964
Appropriations: - -
Transfer to Tonnage Tax Reserve (1550) (475)
Interim Equity Dividend - -
Re-measurement of deferred benefit plans (49) (4)
Proposed Equity Dividend (107) (344)
Tax on Equity dividend - -
Balance Carried Forward to Balance Sheet 15526 9141

DIVIDEND

Your Company proposes a Dividend of 15% (' 1.50/-) for the year 2017-2018 subject toapproval of shareholders at the ensuing Annual General Meeting of the company to be heldon 20th July 2018. The dividend will be paid to the Members whose name appear in theRegister of Members as on 20th July 2018 and in respect of shares held in dematerializedform it will be paid to members whose names are furnished by National SecuritiesDepository Limited and Central Depository Services (India) Limited as beneficial ownersas on that date.

REVIEW OF OPERATIONS

The year 2017-2018 continued to be a challenging year with ocean freights underpressure supplemented with increase in fuel prices. The HRCI ended the first quarter ofyear 2018 up 19.5% from the start of the year and 19.7% higher than late March 2017.

Whilst the HRCI has been moving upward to reach 750 points by end March 2018 the SCFI(Shanghai containerized freight Index) has reduced by 20% since the start of the year andcurrent level is at par with mid-2016.

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 four vessels out of which 2 MPPvessel namely SSL SABARIMALAI (1118 teus) at USD 4.4 million and SSL BALAJI (671 Teus) atUSD 3.4 million were acquired while the remaining two vessels namely SSL BRAHMAPUTRA(4273 teus) at USD 8 Million and SSL GANGA (1541 Teus) at USD 3.625 Million were alsoacquired. The Company also sold SSL SAGARMALA which was due for special survey and drydocking.

Besides handling containerised cargo SSLL commenced handling coastal break bulk cargoin the 2nd half of year 2017 and handled 107324 MT cargo during the year mainly steelproducts of RINL and JSW besides some project cargo. RINL commenced coastal movement ofsteel products for the first time venturing into modal shift from land to sea mode.

Resultantly the Company's current fleet stands at 13 vessels with a total capacity23143 Teus 315722 DWT being India's largest container tonnage owning company. Thecurrent container ship tonnages are right sized and priced to suit the coastal trade. Inaddition the Company's services are well planned to provide complete coastal coverage andthus well suited for the trade.

For the year ended 31st March 2018 your Company posted a Total Income of ' 544.18crores with a Net Profit of ' 80.91 crores.

STATUTORY AUDITORS

M/s Deloitte Haskins and Sells LLP (Firm Membership No. 117366W/ W100018) CharteredAccountants were appointed as Statutory Auditors of your Company for a term of 5 yearsfrom the conclusion of 29th Annual General Meeting till the conclusion of 34th AnnualGeneral Meeting subject to the ratification of Members at each Annual General Meeting.

A written consent from them has been received along with a certificate that theirappointment if made shall be in accordance with the prescribed conditions and the saidAuditor satisfy the criteria provided in Section 141 of the Companies Act.

The resolution seeking ratification of their appointment has been included in theNotice of Annual General Meeting.

MATERIAL CHANGES AND COMMITMENT AFFECTING FINANCIAL POSITION OF THE COMPANY

During the current year Company acquired four vessels thereby adding 7603 TEUscapacity and also sold one of its old vessel in the fleet. This will have positive impacton the future performance of the 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 the Company hasappointed M/s D. M. Zaveri & Co. a firm of Company Secretaries in Practice toundertake the Secretarial Audit of the Company. The Report of the Secretarial Audit Reportis annexed 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 the Company with theRelated Parties were at arm's length and in the ordinary course of business as requiredunder section 188 of the Companies Act 2013. There was no material transaction with anyRelated Party. The Company has entered into transactions with related parties as enteredin Form No. AOC-2 annexed to this report as Annexure 2. All the Related Party Transactionshave a prior approval of the Audit Committee.

CORPORATE SOCIAL RESPONSIBILITY

In compliance with Section 135 of the Companies Act 2013 and Rules read thereunderthe Company has formed a Committee for Corporate Social Responsibility (CSR). The membersof the Committee met twice during the year. The 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 ' 20 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 31st March 2018forms 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 5 tothis 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 this Reportalongwith the Auditors' Certificate on its compliance by the Company and applicablecertification of the Chief Executive Officer and Chief Financial Officer and Declarationby the Managing Director affirming compliance with Code of Conduct for the year underreview

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 2018 your Company has not transferred anyamount to Reserves.

INVESTOR EDUCATION AND PROTECTION FUND

In accordance with provisions of the Companies Act 2013 an amount of ' 195766 beingunclaimed dividend (interim) for the year ended 31st March 2011 was transferred during theyear to the Investor Education and Protection Fund established by the Central Government.

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 2018 the Company has 11 Directors consisting of 4 Non- IndependentDirectors (including 2 Whole Time Directors) and 7 Independent Directors.

Mr. Ritesh S. Ramakrishnan was re-appointed as the Director of the company as approvedby the members at the last Annual General Meeting held on July 212017

In accordance with the provisions of 152 (6) of Act and the Article of Association ofthe Company Mr. L B Culas is proposed to retire by rotation at the ensuing Annual GeneralMeeting (AGM) and being eligible for reappointment. The Board recommends hisreappointment.

Capt. V. K. Singh was appointed as the Whole Time Director of the company as approvedby the members at the last Annual General Meeting held on July 212017

During the year Mr. V. Ramnarayan has tendered his resignation from the Board ofDirectors of the Company with effect from 29th March 2018. The Board of Directors placeon record their appreciation for the contribution by Mr. V. Ramnarayan during his tenureas Director Mr. V Ramnarayan being a promoter continues to hold 109375 equity shares(0.50%) in the Company.

Mr. Deepak Shetty was appointed by the Board of Directors at its meeting held on 1 3thFebruary201 8 as an Additional Director (Non-Executive Independent Director) with effectfrom 13th February2018. He shall hold office till the conclusion of the Annual GeneralMeeting.

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.TheCompany has obtained requisite declaration to that effect from the said Directors.

Your Company has devised a Policy for determining qualifications 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 26th March 2018 to review performance evaluation ofthe Non Independent Directors and the entire Board of Directors including the Chairman andManaging Director and Executive Director. The Independent Directors were satisfied withthe functioning of the Board and Committees. The Independent Directors appreciated theleadership role of the Chairman and Managing Director in upholding the Group values andCorporate 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 the 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 Financial Officer
5 Ms. Namrata Malushte Company Secretary

*Mr. V Ramnarayan resigned w.e.f. 29th March 2018

*Ms. Namrata Malushte resigned on 07th May 2018 while Ms. Asha Prakash was appointed asthe Company Secretary w.e.f. 07th May 2018

BOARD MEETINGS

During the year 2017-18 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 2015the

Company has a Committee for periodically evaluating the various risks. The Company hasintroduced several improvements to drive a common integrated view of risks optimal riskmitigation responses and efficient management of internal control and assuranceactivities.

VIGIL MECHANISM

In line with Regulation 22 of SEBI (Listing Obligation and Disclosure Requirements)Regulations 2015 of the Listing Agreement the

Company has adopted a Whistle Blower Policy. The mechanism encourages the WhistleBlower to report genuine concerns or grievances. It also provides adequate safeguard tothe Whistle Blower against victimization. The functioning of the Audit Committee isreviewed by the Audit Committee and the Whistle Blower has direct access to the Chairmanof the Audit Committee. The Policy on whistle blower may be accessed on the Company'swebsite 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 31st March 2018the Company has not received any complaints pertaining to Sexual Harassment.

Quality

Quality integrity and safety have been core to the Company. We firmly believe that thepursuit of excellence is one of the most critical components for success in thecompetitive market and therefore consistently strive to adhere to the highest qualitystandards. During the year the Company has shifted its accreditation agency to IndianRegister of Shipping (IRS). The Standard ISO 9001:2008 is valid upto 14th September 2018.

fixed deposits:

The Company has not accepted fixed deposits from the public during the year underreview.

Subsidiary cOMPANY:

As on 31st March 2018 the Company has no subsidiary. 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 March 2018 theapplicable accounting standards had been followed along with proper explanation relatingto material departures;

(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 detecting 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 Section 197(1 2) 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 The(mployees For The Year 2017-18:

Sr. No. Name of the Director Ratio of Remuneration To The Median Remuneration Of The Employees
I Mr. S. Ramakrishnan Chairman & Managing Director 43.46:1
2 Capt. Vivek Kumar Singh Chief Executive Officer & Executive Director 14.25:1

2. The Percentage Increase in Remuneration of Each Director Chief Financial OfficerChief Executive Officer Company Secretary

Sr. No. Name Percentage Increase in Remuneration
1 Mr. S. Ramakrishnan Chairman & Managing Director 150.76%
2 Mr. V. Ramnarayan Executive Director N.A
3 Capt. Vivek Kumar Singh Chief Executive Officer & Executive Director 41.46%
4 Mr. Rajesh Desai Chief Financial Officer 23.35%
5 Ms. Namrata Malushte Company Secretary 35.26%

3. I he Percentage Increase in I he Median Remuneration of

Employees in The Year 2017-18: -11.24%

4. The No. Of Permanent Employees on The Rolls of The Company: 42

5. Average Percentile Increase Already Made in Salaries of Employees Other Than TheManagerial Personnel In Hie Last Financial Year And Its Comparison With !he PercentileIncrease In The Managerial Remuneration And Justification Thereof

And Point Out If There Are Any Exceptional Circumstances For Increase In ManagerialRemuneration

OTHER THAN MANAGERIAL PERSONNEL MANAGERIAL REMUNERATION COMPARISON OF REMARKS REMUNERATION
12.42% 92.81% The remuneration In view of of KMP includes the Net remuneration paid Profits the to Chairman and commission Managing Director was not paid (CMD). As approved to the CMD by the shareholders during the in the previous year. AGM CMD is paid commission as a percentage of Net Profit.

6. The Remuneration Paid to The Key Managerial Personnel is As per The Nomination andRemuneration 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 are requiredto 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 2017-18 theposition is as under:

(i) Foreign exchange earnings including proceeds on sale of ship (on accrual basis) 19874
(ii) Foreign exchange outgo including operating components spare parts vessel funding and other expenditure in foreign currency (on accrual basis) 19538

ACKNOWLEDGEMENIS

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 2018 Executive Chairman

Annexure 2

PARTICULARS Of CONTRACTS/ARRANGEMENTS MADE WITH RELATED PARTIES

AOC -2

(Pursuant to clause (h) of sub-section(3) of section 134 of the companies Act 2013 andRule 8(2) of the companies ( Accounts) Rules 2014-Aoc-2)

This Form pertains to the disclosure of particulars of contracts/arrangements enteredinto by the Company with related parties referred to in Sub-section(l) of Section 188 ofthe Companies Act; 2013 including certains arm's length transactions under third provisothereto.

1) There were no contracts or arrangements or transactions entered in during the yearended March 312018 which were not at arm's length basis.

2) Details of material contracts or arrangements or transactions entered in during theyear ended March 312018 which were at arm's length basis.

(Rs. in lacs)
Name of the Related Party Nature of Relationship duration of contract salient term Amount
Nature of contract service / Freight income 2018
Balaji Shipping Line FZCO Fellow Subsidiary Company Not Applicable Based on transfer pricing guidelines 2251
BLPL Singapore Pte. Ltd. Other related party Not Applicable Based on transfer pricing guidelines -
Transworld Feeders FZCO /OEL FZCO Fellow Subsidiary Company Not Applicable Based on transfer pricing guidelines 580
Shreyas Relay Systems Ltd. Associate Company 1st September2005—Ongoing Contract Based on transfer pricing guidelines 27052
slot charges Payable
Transworld Feeders FZCO Fellow Subsidiary Company Not Applicable Based on transfer pricing guidelines 864
Agency fees
Relay Shipping Agency Ltd. Other related party 1st April 2013 Ongoing Contract Based on transfer pricing guidelines -
Transworld Shipping Agencies Pvt Ltd Other related party 1st June 2016 Ongoing Contract Based on transfer pricing guidelines 224
Lanka Orient Express Lines Ltd. Other related party 23rd February2014-—Ongoing Contract Based on transfer pricing guidelines 1
Transworld Shipping & Logistics WLL Other related party Based on transfer pricing guidelines 12
Transworld Shipping & Logistics LLC Dubai Other related party 1st Feburary 2015 Ongoing Contract Based on transfer pricing guidelines 50
Vessel Management fees
TW Ship Management Ltd Other related party 1st Nov 2016 Ongoing Contract Based on transfer pricing guidelines 642
Orient Express Ship Management Ltd. Other related party 1st April 2010 Ongoing Contract Based on transfer pricing guidelines -
Rent
Sivaswamy Holdings Pvt. Ltd. Other related party 1st January2012 Ongoing Contract Based on transfer pricing guidelines 37
Geeta Ramakrishnan Relatives of Key Management Personnel 1st April 2013 Ongoing Contract Based on transfer pricing guidelines -
Vehicle Lease Rent
Manita Vivek Kumar Singh Other related party Ongoing Contract Not Applicable 11
Ratnaprabha Desai Other related party Ongoing Contract Not Applicable 1
Oracle Implementation
Encore Pierian Logistics Business Services Ltd. Other related party 11th November 2013—Ongoing Contract Based on transfer pricing guidelines -
Advance Paid
Relay Shipping Agency Ltd. Other related party -
Encore Pierian Logistics Business Services Ltd. Other related party -
Transportation Service
Shreyas Relay Systems Ltd. Associate Company 1st September2005—Ongoing Contract Based on transfer pricing guidelines 96

-Appropriate Approvals have been taken for related party transactions. Advance paidhave been adjusted against billings wherever applicable. As per our report of even date.

For and on behalf of the Board of Directors
Place: Mumbai S. ramakrishnan
Date: 25th May 2018 Executive chairman