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Snowman Logistics Ltd.

BSE: 538635 Sector: Others
NSE: SNOWMAN ISIN Code: INE734N01019
BSE 00:00 | 14 Aug 41.80 -0.85
(-1.99%)
OPEN

43.00

HIGH

43.00

LOW

41.60

NSE 00:00 | 14 Aug 41.75 -1.00
(-2.34%)
OPEN

42.60

HIGH

43.00

LOW

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OPEN 43.00
PREVIOUS CLOSE 42.65
VOLUME 42283
52-Week high 71.00
52-Week low 39.30
P/E
Mkt Cap.(Rs cr) 698
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 43.00
CLOSE 42.65
VOLUME 42283
52-Week high 71.00
52-Week low 39.30
P/E
Mkt Cap.(Rs cr) 698
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Snowman Logistics Ltd. (SNOWMAN) - Director Report

Company director report

Dear Members

The Board of Directors presents the Annual Report of the Company together with theAudited Statements of Account for the financial year ended 31 March 2017.

Your Company crossed 1 lakh pallet capacity with the commencement of operations at theCochin Warehouse reconfirming its position as the market leader in the temperaturecontrolled logistics industry. While 2016-17 was a year of consolidation and correctionthe company believes that the initiatives taken during the year has positioned itselftowards a growth Trajectory.

Financial Performance

(Rs.in lakhs)

Particulars 2016-17 2015-16 Growth
Pallet Capacity 103600 98500 5%
Fleet Strength 293 422 -31%
Revenue From Operations 18924 22486 -16%
Other Income 79 278 -72%
Total Income 19003 22764 -17%
EBITDA 3636 4865 -25%
EBITDA% 19% 22%
PBT -1549 1176 -232%
PBT% -8% 5%
PAT -493 2054 -124%
PAT% -3% 9%

Management Discussion & Analysis

Operations

During the year the Company recorded sales of Rs. 18924 lakhs as compared to Rs.22486 lakhs a decrease of 16%. EBITDA Rs. 3636 lakhs as against Rs. 4865 which is adecrease of 25%. Due to higher incidences of interest & depreciation on account ofexpansion & exceptional items PBT has dropped from Rs. 1176 lakhs to a loss of Rs.1549 lakhs and PAT from Rs. 2054 lakhs to a loss of Rs. 493 lakhs.

Temperature controlled warehousing continued to be the core strength of the Company andthe focus area of our business due to its huge potential. The second vertical of theCompany viz transportation functioned as an enabler to provide a one stop solution to thetemperature controlled logistics requirement of our clients.

Outlook

The outlook for the Company for the coming years continues to be positive. Most of thecustomers have indicated robust growth plans which augurs well for the growth of theCompany. The introduction of GST by the Government will also work in the Company's favouras customers will now see more value in utilising the services of organised players likeSnowman.

Competition

Temperature controlled logistics industry continues to be heavily fragmented with alarge part of the requirement being addressed by unorganised players. Increased industryawareness has brought in several new players in the recent times. However Snowman withits one lakh plus pallets of warehousing capacity spread across the country and fleet of293 trucks traversing the length and breadth of the country is in an unique leadershipposition. The Company will strengthen its position by offering customised logisticssolutions to its large base of customers.

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.

Utilization of the IPO Proceeds

The proceeds of the IPO successfully brought out by the company in 2014 have been usedfor setting up of temperature controlled and ambient warehouses long term working capitaland for General Corporate Purposes. The summary of utilization of net IPO proceeds is asfollows:

Particulars Amount (In Rs.)
Issue Proceeds 1974283786
Less: Issue expenses 138440409
Net proceeds from IPO 1835843377
Amount utilised 2014-15 1203898171
Amount utilised 2015-16 610944247
Amount utilised 2016-17 21000959
Balance to be utilised Nil

Share Capital

The paid-up share capital of your company is 167087995 equity shares of Rs.10/- each.There were no changes during the year.

Dividend

Keeping in mind the Company's growth plans and hence the need to conserve cash theBoard of Directors have not recommended any dividend for the year.

Board of Directors

As on date the Board of Directors of the Company comprises eight Directors of whichfour are Non-Executive Independent Directors in terms of SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015 and Section 149(6) of the Companies Act 2013.

All Independent Directors have given declarations that they meet the criteria ofindependence as laid down under Section 149(6) of the Companies Act 2013 and SEBI(Listing Obligations and Disclosure Requirements) Regulations 2015.

The information related to remuneration of director as required under Section 197(12)of the Act is given at the end of the report.

Nomination Remuneration and Board Evaluation Policy

The Nomination Remuneration and Board Evaluation Policy contains the criteria fordetermining qualifications positive attributes and independence of a director and policyrelating to the remuneration for the directors key managerial personnel and otheremployees of the Company. The Nomination and Remuneration Policy forms part of this reportas "Annexure C" and are also available on the website of the Company.

Board Evaluation

Pursuant to the provisions of the Companies Act 2013 and SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015 the Board has carried out an annual evaluationof its own performance the Directors individually as well as the evaluation of theworking of its Audit Nomination & Remuneration Committee. The manner in which theevaluation has been carried out has been explained in the Corporate Governance Report.

Meetings

During the year 4 (Four) Board Meetings and 4 (Four) Audit Committee Meetings wereconvened and held the details of which are given in the Corporate Governance Report. Theintervening gap between the Meetings was within the period stipulated under the CompaniesAct 2013.

Directors' Responsibility Statement

In terms of Section 134(3)(c) of the Companies Act 2013 with respect to Directors'Responsibility Statement it is hereby confirmed that:

(a) in the preparation of the annual accounts the applicable accounting standards hadbeen followed along with proper explanation relating to material departures; (b) thedirectors had selected such accounting policies and applied them consistently and madejudgments and estimates that are reasonable and prudent so as to give a true and fair viewof the state of a3 airs of the company at the end of the financial year and of the Profitand loss of the company for that period; (c) the directors had taken proper and sufficientcare for the maintenance of adequate accounting records in accordance with the provisionsof this Act for safeguarding the assets of the company and for preventing and detectingfraud and other irregularities; (d) the directors had prepared the annual accounts on agoing concern basis; and (e) the directors had laid down internal financial controls tobe followed by the company and that such internal financial controls are adequate and wereoperating effectively.

(f ) the directors had devised proper systems to ensure compliance with the provisionsof all applicable laws and that such systems were adequate and operating effectively.

Corporate Governance

As per SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 adetailed report on corporate governance practices followed by the Company together withthe certificate from the Company's Statutory Auditors confirming compliance forms part ofthis report as "Annexure A"

Auditors

Statutory auditors

The term of the current auditor M/s Price Waterhouse is due to come to an end at theforthcoming Annual General Meeting ("AGM") and a new statutory auditor to beappointed in their place. The Audit Committee members and Board after evaluating severalproposals have decided to recommend M/s S R Batliboi & Co LLP as the statutoryauditor for a period of five years from the forthcoming AGM.

Secretarial Audit

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 Mr.

Nagendra D Rao Practising Company Secretary to undertake the Secretarial Audit of theCompany. The report is annexed herewith as "Annexure B"

Insider Trading Regulations

Based on the requirements under SEBI (Prohibition of Insider Trading) Regulations1992 as amended from time to time the code of conduct for prohibition of insidertrading as approved by the Board is in force by the Company. The Company also adopts theconcept of Trading Window Closure to prevent its Directors Officers designatedemployees and other employees from trading in the securities of the Company at the timewhen there is unpublished price sensitive information.

The Board has appointed Mr. A. M. Sundar Chief Financial Officer and Company Secretaryas the Compliance Officer under the Code.

Corporate Social Responsibility ("CSR")

The Annual Report on CSR activities is annexed herewith as "Annexure D".

The Company had spent INR 25.77 Lakhs and INR 29.76 Lakhs in 2014-15 and 2015-16respectively. However due to the corrective actions taken in terms of change in thebusiness model as well as one-time expenses incurred during the current year the Companyhas reported a loss during the year. Hence the Board in the best interest of thestakeholders has not incurred any expenditure on CSR activities during the current year.Moving forward the Company will endeavour to spend on CSR activities in accordance withthe prescribed limits.

Internal Control and Internal Audit

The Company has in place adequate systems of Internal Control to ensure compliance withpolicies and procedures. The Company has a system of carrying out internal audit coveringall business processes to review the internal control systems. The internal control systemand mechanism is reviewed periodically by the Audit Committee to make it robust so as tomeet the challenges of the business.

Vigil Mechanism

The Company has a vigil mechanism in placed named as Whistle Blower Policy to reportconcerns to the management about unethical behavior actual or suspected fraud orviolation of the Codes of conduct. The details of the Whistle Blower Policy is explainedin the Corporate Governance Report and also posted on the website of the Company.

Related Party Transactions

The related party transactions per the Companies Act 2013 and SEBI (ListingObligations and Disclosure Requirements) Regulations 2015 during the financial year endedMarch 31 2017 are given below. Suitable disclosure as required by the Indian AccountingStandards has been made in the notes to the Financial Statements.

The company purchased a land parcel from Gateway Distriparks Limited for Rs.2.0ficrores at Krishnapatanam in the ordinary course of business. The above transactionhas been conducted at the prevailing market prices after getting a valuation from anindependent valuer.

Particulars of Loans Given Investments Made Guarantees Given or Security Provided bythe Company

The Company has not given any loan or any guarantee or security.

Extract of Annual Return

The details forming part of the extract of the Annual Return in form MGT 9 is annexedherewith as "Annexure E".

Employee Stock Option Scheme

The details of stock options as on 31 March 2017 under the Snowman ESOP Scheme 2012 isset out in the "Annexure F" to the Directors' Report.

Human Resources

The Company is committed to provide a healthy environment to all employees and thusdoes not tolerate any discrimination and/ or harassment in any form. The Company has inplace a Prevention of Sexual Harassment (POSH) policy in line with the requirements of theSexual Harassment of Women at Workplace (Prevention Prohibition and Redressal) Act 2013.No complaints were received by the Company during the period under review.

The total number of employees as on 31 March 2017 was 362 as against 401 as on 31 March2016.

Particulars of Employees

Information in accordance with Section 197 of the Companies Act 2013 read with Rule 5of the Companies (Appointment and

Remuneration of Managerial Personnel) Rules 2014 in respect of the employees of theCompany is annexed herewith as "Annexure G"

Disclosure under Section 134 (3) (m) of the Companies Act 201ficonservation of Energy

The Company continues to give the highest priority for conservation of energy by usinga mix of technology changes process optimization methods and other conventional methodson an ongoing basis.

Technology Absorption

The Company continues to lay emphasis on development and innovation of in-housetechnological and technical skills to meet the specific customer requirements. E3 orts arealso being made to upgrade the existing standards and to keep pace with the advances intechnological innovations.

Foreign Exchange Earnings and Outgoing

i) Expenditure in foreign currency : Nil
(2015-16: Rs. 78560)
ii) Earnings in foreign currency : Nil

Acknowledgements

The Board of Directors thank all the stakeholders of the Company including itscustomers shareholders bankers vendors for their continued support and assistance andlook forward to having the same support in our future endeavours. The Directors also placeon record their sincere appreciation for significant contributions made by the employeestowards the success and growth of the Company

For and on behalf of the Board of Directors
For Snowman Logistics Limited
Place: New Delhi Prem Kishan Dass Gupta
Date: May 17 2017 Chairman