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Kesar Terminals & Infrastructure Ltd.

BSE:533289  |  NSE:KTILEQ  |  58888:  |  IND:Warehousing/Supply Chain/Road Transport  |  ISIN code:INE096L01025  |  SECT:Logistics

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You can view full text of the Director's Report for Kesar Terminals & Infrastructure Ltd.
Director Report
Mar2015   Mar 2016

To,

The Shareholders

Kesar Terminals & Infrastructure Ltd.

Dear Members,

The Directors present to you the 8th Annual Report and the Audited Statement of Accounts of the Company for the year ended 31st March, 2016.

STANDALONE FINANCIAL RESULTS

(Rs. in Lac)

2015-16

2014-15

Profit before interest, depreciation & taxation

2685.55

2568.73

Less: Interest and Finance Charges

275.58

236.47

Profit before Depreciation & taxation

2409.97

2332.26

Less: Depreciation

194.44

227.07

Profit before tax

2215.53

2105.19

Less: Provision for Taxation

(i) Income Tax - Current

663.19

645.25

(ii) Income Tax - Deferred

(1.64)

9.35

Profit after tax and Profit available for appropriation

1553.98

1450.59

Appropriation:

Less:

(i) Transfer to General Reserve

500.00

500.00

(ii) Proposed Dividend on Equity Share

52.53

183.86

(iii) Corporate Tax on Dividends

10.69

37.43

(iv) Depreciation as per New Companies Act, 2013, - Net of Deferred Tax

-

14.43

Profit after appropriation

990.76

714.87

Add: Balance brought forward from previous year

2601.69

1886.82

Balance carried forward to Balance Sheet

3592.45

2601.69

For the year 2015-16, there is a profit after tax of Rs.1553.98 lac as against Rs.1450.59 lac in the previous year. DIVIDEND

The Directors are pleased to recommend a dividend of Re.1.00 per Equity Share (10%) of Rs.10/- each on 52,53,1 13 Equity Shares of the Company for the year 2015-16 (previous year Rs.3.50 per Equity Share - 35%). The dividend payout will be Rs.52.53 lac, excluding dividend distribution tax of Rs.10.69 lac.

WORKING FOR THE CURRENT YEAR

During the year under review, your Company achieved a turnover of Rs.4396.82 lac, as against Rs.4223.61 lac in the previous year, recording a growth of 4.10%. The Company recorded an increase of 9.12% in its profit after tax, which grew from Rs.1450.59 lac to Rs.1553.98 lac. The Company''s healthy performance was attributed to better realization in terminal tank age charges and improvement in the average commercial utilization charges of tanks.

SUBSEQUENT FINANCIAL YEAR 2016-17

For the financial year 2016-17, the demand for tankage is expected to remain firm. The two new bulk liquid storage terminals that came up in Pipavav port have not significantly impacted demand for tankage at Kandla. However, the terminal users have been resisting annual increase in rental charges, which was being accepted in the past.

EXPANSION / MODERNISATION

The Company has been exploring new avenues to optimize and expand its present capacity at its Terminals at Kandla. However as the issue of transfer of lease of land in favour of the Company post demerger is yet to take place, no favourable response is coming from KPT for construction of new capacities. During the year, the Company proposes to convert further of its existing Mild Steel tanks into Stainless Steel tanks based on the market demand.

The Company has about 10 acres of land on long term lease basis at Kakinada port in Andhra Pradesh. The Company plans to put up both Dry Cargo Warehousing and Bulk Liquid Terminal facilities at Kakinada. Necessary statutory permissions are being obtained from various State Government bodies including a No objection Certificate (NOC) from the District Magistrate for putting up the proposed facilities.

The Company has plans to set up a Container Freight Station [CFS], Bonded Warehouse and Bulk Liquid terminal at Pipavav. The preliminary work at Pipavav is expected to commence after Phase I of the Composite Logistics Hub Project of the Subsidiary Company, Kesar Multimodal Logistics Ltd. (KMLL) stabilizes its operation.

SUBSIDIARY Company

The % shareholding, of the Company along with its Nominees in the Equity Share Capital of Kesar Multimodal Logistics Ltd. (KMLL) is above 50%. Hence there is a Holding - Subsidiary relationship between the Company & KMLL. The Annual Report of the Company does not contain the individual financial statements of KMLL, but contains the audited consolidated financial statements of the Company and KMLL. The Annual Accounts of the Subsidiary Company, along with the related information, is available for inspection at the Company''s registered office. Particulars under AOC-1 forms part of the notes to the financial statements annexed herewith.

CONSOLIDATION FINANCIAL STATEMENTS:

The Consolidated Financial Statements of the Company prepared as per Accounting Standard AS 21, consolidating the Company''s accounts with its subsidiary have also been included as part of this Annual Report.

COMPOSITE LOGISTICS HUB PROJECT AT MADHYA PRADESH

The Multimodal Composite Logistics Hub project is set up by Kesar Multimodal Logistics Ltd. (KMLL), the Subsidiary of the Company, at Powarkheda under a Concession Agreement signed by KMLL with Madhya Pradesh State Agricultural Marketing Board (Mandi Board) on a Design, Build, Finance, Operate and Transfer (DBFOT) basis through Public Private Participation (PPP). The Hub covers an area of 88.3 acres, which includes development of an entire range of infrastructure including rail sidings for cargo and container movement, rail-side warehouses, Inland Container Depot (ICD), Cold Storage, food grains warehouse & development of common facilities for putting up agri-processing units. This Project will be developed in 2 phases out of which the 1st phase has become operational.

The West Central Railway, Jabalpur, Madhya Pradesh has notified the Private Freight Terminal [PFT] of KMLL served by Powarkheda (PRKD) station of Bhopal Division as a Greenfield PFT.

KMLL has been appointed as the Custodian of the import/export of goods received at ICD of KMLL by the Office of the Principal Commissioner of Customs, Central Excise & Service Tax, Bhopal (Madhya Pradesh), the exporters & importers from the catchment area of the Hub will be now able to complete all Customs formalities at this location that were earlier required to be done at the Port. The Rail Terminal Operations and movement of goods train has started from the Hub of KMLL.

The facilities at the Hub also permit transportation of food grains, soya extract, vegetables and fruits from this location to any location in India by rail within 24 hours. This location, which is situated at nearly the centre of Indian Railway map, offers an opportunity to the manufacturers of bulk commodities, such as cement, steel, fertilizer etc. to quickly move their cargo from their manufacturing points to the Terminal for storage and onward distribution. The manufacturers of FMCG or white goods can also use the location as a central storage and distribution point for pan India distribution of their products. This will be a desired location for such pan India distribution once GST becomes a reality.

The facilities at the Hub also permits rail transportation of ICD containers from surrounding areas to the major ports like JNPT, Mundra & vice-versa for both, exports & imports thereby saving costly road freight, besides reducing pollution of truck movement.

SHARE CAPITAL

The paid up Equity Share Capital as on 31.3.2016 was Rs.5.25 crore. During the year under review, the Company has not issued any shares. The Board has recommended issue of Bonus Shares, subject to approval of Shareholders, by capitalization of Rs.21,01,250/- (Rupees Twenty One Lac One Thousand Two Hundred Fifty Only) out of the Free Reserves of the Company, as an increase in the Equity Share Capital of the Company held by each such Member, and not as income or in lieu of dividend, credited as 2,10,125 new fully paid up Equity Shares of Rs.10/- as Bonus Shares in proportion of One (1) new Equity Share of Rs.10/- for every Twenty Five (25) existing fully paid Equity Shares of Rs.10/- each held by the Members.

Since, the operations of the Company has grown significantly during the last few years, it has generated considerable interest in the trading of the Company''s Equity Shares in the market. This coupled with the general positive economic environment, the market price of the Company''s shares have also increased significantly. In order to improve the liquidity of the Company''s shares in the stock market and to make it affordable to the small investors, the Directors have recommended sub-dividing the Face Value of the Equity Shares of the Company. Accordingly, the Bonus Shares as and when allotted will be adjusted as to its face value.

BOARD MEETINGS

During the year 5 (five) Board Meetings and 4 (four) Audit Committee Meetings were convened and held. The details of which are given in the Corporate Governance Report. The intervening gap between the Meetings was within the period prescribed under the Companies Act, 2013.

DIRECTORS & KEY MANAGERIAL PERSONNEL

Pursuant to Section 152 of the Companies Act, 2013, Mrs. M H Kilachand, Non Executive Director of the Company retires by rotation at the ensuing Annual General Meeting and being eligible, offers herself for reappointment. As per the SEBI (Listing Obligation & Disclosure Requirements) Regulations 2015, brief profile of Mrs. M H Kilachand retiring by rotation forms part of the Corporate Governance Report.

All the Independent Directors have given declarations that they meet the criteria of independence as laid down under Section 149(6) of the Companies Act, 2013 and the SEBI (LODR) Regulations 2015.

Pursuant to the provisions of Regulation 25 of the SEBI (LODR) Regulations 2015, the Company has formulated a programme for familiarising the Independent Directors with the Company, their roles, rights, responsibilities in the Company, nature of the industry in which the Company operates, business model of the Company etc through various initiatives. The details of the aforementioned programme is available at the Company''s website www.kesarinfra.com/Investor''s Corner/Policies.

MATERIAL CHANGES & COMMITMENTS AFFECTING FINANCIAL POSITION BETWEEN END OF THE FINANCIAL YEAR & DATE OF THIS REPORT:

Shri H R Kilachand, ceased to be the Executive Chairman & Director of the Company with effect from 29.4.2016 on his resignation due to his engagement in other business activities. Consequent to the resignation of Shri H R Kilachand, the Board of Directors had appointed Shri A S Ruia, Independent Director, as Chairman of the Company with effect from 29.4.2016.

Based on the recommendation of the Nomination & Remuneration Committee and subject to approval of the Shareholders, on 29.4.2016, the Board had appointed Shri R H Kilachand, as Whole-Time Director designated as Executive Director of the Company. Prior to his appointment, Shri R H Kilachand was working with the Company as Vice President.

Consequent to the resignation of Shri Bhautesh Shah, Shri Dilip Maharana was appointed as Company Secretary with effect from 26.5.2016 pursuant to Section 203 of the Companies Act, 2013.

BOARD EVALUATION / APPOINTMENT AND REMUNERATION POLICY FOR DIRECTORS AND SENIOR MANAGEMENT

Pursuant to the provisions of the Companies Act, 2013, the Board carried out an annual Performance Evaluation of its own performance, the Directors individually as well as the evaluation of the working of its Audit & Nomination & Remuneration Committees.

The Board has, on the recommendation of the Nomination & Remuneration Committee framed a policy for selection and appointment of Directors, Senior Management and their remuneration. The Remuneration Policy is stated in the Corporate Governance Report. The details of the Nomination & Remuneration Policy are available on the website of the Company www.kesarinfra.com/Investor''s Corner/Policies.

DIRECTORS'' RESPONSIBILITY STATEMENT

Pursuant to the requirement of Section 134(3)(c) of the Companies Act, 2013 the Board of Directors to the best of their knowledge hereby state:

i) that in preparation of the annual accounts for the financial year ended on 31st March, 2016, the applicable accounting standards have been followed along with proper explanation relating to material departures;

ii) that the Directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent, so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit for that period;

iii) that the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

iv) that the Directors have prepared the Annual Accounts for the financial year ended on 31st March, 2016 on a going concern basis.

v) that the Directors have laid down proper internal financial controls in place and that such internal financial controls are adequate and were operating effectively.

vi) that the Directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

RELATED PARTY TRANSACTIONS

The details of contracts or arrangements with related parties referred to in Section 188 (1) of the Companies Act, 2013 in form AOC-2 is annexed herewith as Annexure "A".

A policy of Related Party Transactions as approved by the Audit Committee and the Board of Directors is uploaded on the website of the Company www.kesarinfra.com/Investor''s Corner / Policies.

PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS

Details of Loans, Guarantees and Investments covered under the provisions of Section 186 of the Companies Act, 2013 are given in the notes to the Financial statements.

EXTRACT OF ANNUAL RETURN

The details forming part of the extract of the Annual Return in form MGT 9 is annexed herewith as Annexure "B".

SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS

There are no significant and material orders passed by the regulators or courts or tribunals impacting the going concern status and Company''s operations in future.

MANAGEMENT DISCUSSION & ANALYSIS REPORT AND CORPORATE GOVERNANCE REPORT

The Management Discussion & Analysis Report, is annexed and forms part of this Annual Report. The Company has complied with the Corporate Governance requirements as stipulated under Regulation 34 of the SEBI (LODR) Regulations, 2015. A separate section on Corporate Governance, along with a certificate from the auditors confirming the compliance, is also annexed and forms part of the Annual Report.

INSIDER TRADING

In compliance with the SEBI regulation on prevention of Insider Trading, your Company has framed a comprehensive code which lays down guidelines and advises the Directors and employees of the Company on procedures to be followed and disclosures to be made, while dealing in securities of the Company. During the year under review, the Company adopted Code of Practices and Procedures for Fair Disclosure of Unpublished Price Sensitive Information and the Code of Conduct for Prohibition of Insider Trading in accordance with SEBI (Prohibition of Insider Trading) Regulations, 2015.

SEXUAL HARASSMENT POLICY

The Company has constituted an Internal Complaint Committee (ICC) for prevention and redressal of complaints / grievances on the sexual harassment of women at work places. During the year under review no incident had taken place.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

The particulars under Section 134(3)(m) of the Companies Act, 2013 with respect to conservation of energy, technology absorption is not applicable to the Company. During the year under review, there were no foreign Exchange Earnings (Previous year Nil) and Foreign Exchange Outgo stood at Rs.20,80,406/- (Previous Year Rs.3,45,398/-).

FIXED DEPOSITS

As per the Companies Act, 2013, the Company is not eligible to raise Fixed Deposits in terms of Section 73 of the Act. Hence, the Company has not accepted / renewed Fixed Deposits w.e.f. 1.4.2014.

Further, as per Section 74(1) of the Companies Act, 2013, the Company was required to repay the existing Fixed Deposits on or before 31.3.2015. However, as per Section 74(2) of the Act, the Company had filed a petition with the Company Law Board, Mumbai Bench for extension of time to repay Fixed Deposits. The approval for the same is awaited.

As on 31.3.2016, the outstanding Fixed Deposit principal amount is Rs.69,90,000/-. Rs.2,52,000 remained unclaimed in respect of 7 Fixed Deposit holders.

AUDITORS

M/s Haribhakti & Co. LLP, Chartered Accountants, were appointed as Statutory Auditors of the Company to hold office till conclusion of the Annual General Meeting to be held in the calendar year 2019. In terms of the provisions of the Section 139(1) of the Company''s Act 2013, the appointment of M/s Haribhakti & Co. LLP, Chartered Accountants is placed for ratification by the Shareholders.

AUDITORS'' REPORT

There are no qualifications, reservations or remarks in the Auditors Report.

INTERNAL CONTROL SYSTEM & INTERNAL AUDITORS

The Company has an adequate Internal Control System. All transactions are properly authorised, recorded and reported to the Management. The Company has Independent Auditors M/s. Ashok Jayesh & Co., Chartered Accountants to review critical areas of operations. The Audit Reports are reviewed periodically by the management and the Audit Committee of the Board and appropriate measures are taken to improve the process.

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 has appointed M/s Ragini Chokshi & Co., Practicing Company Secretary to undertake the Secretarial Audit of the Company. The Report of the Secretarial Audit Report is annexed herewith as Annexure- "C". There are no qualifications, reservations or remarks in the Secretarial Audit Report.

CORPORATE SOCIAL RESPONSIBILITY

As the Company meets with one of the criteria of Section 135(1) of the Companies Act, 2013, it has constituted a CSR Committee. The composition and functions of the CSR Committee has been detailed in the Corporate Governance Report. The Company has undertaken CSR activities in accordance with Schedule VII of the Companies Act, 2013. The Annual Report on CSR activities is annexed herewith as Annexure-" D".

EMPLOYEES

Relation with the employees remained cordial throughout the year. Your Directors place on record their sincere appreciation for the excellent spirit and commendable progress showcased by the entire team of the Company working at its Terminals and Offices.

The information required pursuant to Section 197(12) of the Companies Act, 2013, read with Rule 5(1) of The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, in respect of employees on the payroll of the Company in India, is provided as Annexure-" E" which forms part of this report.

The information required pursuant to Section 197 read with Rule 5(2)&(3) of The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 in respect of employees of the Company, will be provided upon request. In terms of Section 136 of the Act, the Report and Accounts are being sent to the Members and others entitled thereto, excluding the information on employees'' particulars which is available for inspection by the Members at the Registered Office of the Company during business hours on working days of the Company up to the date of the ensuing Annual General Meeting. Any member interested in obtaining such particulars may write to the Company Secretary at the registered office of the Company.

ACKNOWLEDGEMENT

Your Directors wish to place on record their grateful appreciation for the assistance and cooperation extended by the Banks, Financial Institutions, Customers and the wholehearted support extended by the shareholders during the year.

By Order of the Board of Directors

Mumbai

1st July, 2016 A S RUIA

CHAIRMAN DIN:00296622

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