REPORT OF THE BOARD OF DIRECTORS To The Members, Your Directors have pleasure in presenting their 28th Annual Report on the business and operations of the Company together with the Audited statement of Accounts of the Company for the year ended March 31, 2015. OPERATIONAL REVIEW The Gross revenue from Operations was Rs. 1273.07 Millions for the year under review as against Rs. 1194.95 Millions for the previous year. The operations for the year resulted in to a net profit of Rs. 0.79 Millions as against net profit of Rs. 1.28 Millions in the previous year. During the year, Company earned net cash profit of Rs. 163.35 Millions. DIVIDEND In view of insufficient profit earned during the year under review, your Directors do not recommend any dividend during the year under review. FUTURE OUTLOOK The oil, gas and chemical logistics business continues to show good potential as India's consumption of petroleum, LPG and chemicals increases. The Company is poised to take advantage of these growth opportunities by setting up additional capacities of liquid and oil terminals at various ports with intermodal transport connectivity. The Company is in process of refurbishment of tanks/ tank farm, connecting to new jetties and laying a pipeline from the shallow jetty at JNPT. Under Chemical division also the Company is taking various steps to improve the sales along with cost conservation measures to improve profitability. MATERIAL CHANGES & COMMITMENTS AFFECTING THE FINANCIAL POSITION OF THE COMPANY There have been no material changes and commitments affecting the financial position of the Company which have occurred between the end of the financial year of the Company to which the financial statements relate and the date of this report. SHARE CAPITAL The paid up equity share capital of the Company as on March 31, 2015 was Rs. 51.78 lacs. During the year under review, the Company has not issued shares with differential voting rights nor granted stock options nor sweat equity. BOARD OF DIRECTORS AND ITS MEETINGS The Company has a professional Board with right mix of knowledge, skills and expertise with an optimum combination of executive and independent Directors including one woman Director. The Board provides strategic guidance and direction to the Company in achieving its business objectives and protecting the interest of the Stakeholders. One meeting of the Board of Directors is held in each quarter. Additional meetings of the Board/ Committees are convened as may be necessary for proper management of the business operations of the Company. During the year five Board Meetings and 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 and Clause 49 of the listing Agreement. DECLARATION OF INDEPENDENT DIRECTORS All independent Directors have declared and affirmed their compliance with the independence criteria as mentioned in Section 149(6) of the Companies Act, 2013 and Clause 49 of the listing agreement in respect of their position as an Independent Director of the Company. DIRECTORS/ KEY MANAGERIAL PERSONNEL (KMPs) APPOINTMENT OR RESIGNATION During the year under review, following changes occurred in the position of Directors/ KMPs of the Company: • Ms. Jagruti Gaikwad (DIN 07177542) was appointed as an additional Woman Director in the capacity of Independent Director of the Company w.e.f. March 31, 2015 pursuant to the provisions of Section 149(1) of the Companies Act, 2013 and listing agreement. • Mr. Nalinakshan Kolangaradath (00006570) resigned as Independent Director of the Company on February 12, 2015 and re-appointed as Additional Director in the capacity of Independent Director of the Company w.e.f. February 13, 2015. This was done to comply the procedure as per the MCA guidelines for surrender of duplicate DIN (DIN 00114069) of Mr. Nalinakshan, which he was obtained in 2007, at the time of his appointment in GBL, by mistake. Pursuant to the provisions of Section 161 of the Companies Act, 2013, Ms. Jagruti Gaikwad (DIN 07177542) holds office upto the ensuing Annual General Meeting. The Company has received a notice along with the requisite deposit from a member of the Company proposing the candidature of Ms. Jagruti Gaikwad for the appointment as Independent Director of the Company not liable to retire by rotation. Necessary resolution is being proposed in the notice of the ensuing Annual General Meeting for the approval of the members for appointment of Ms. Jagruti Gaikwad as an independent director of the Company for a term of 5 consecutive years with effect from March 31, 2015 pursuant to Section 149 of the Companies Act, 2013. Pursuant to the provisions of Section 161 of the Companies Act, 2013, Mr. Nalinakshan (00006570) holds office upto the ensuing annual general meeting. The Company has received a notice along with the requisite deposit from a member of the Company proposing the candidature of Mr. Nalinakshan for the appointment as Independent Director of the Company not liable to retire by rotation. Necessary resolution is being proposed in the notice of the ensuing Annual General Meeting for the approval of the members for appointment of Mr. Nalinakshan as an independent Director of the Company for a term of 5 consecutive years with effect from February 13, 2015 pursuant to section 149 of the Companies Act, 2013. In accordance with Section 152 of the Companies Act, 2013 and Articles of Association of the Company, Mr. Rishi Pilani (DIN 00901627), shall retire by rotation as Director at the ensuing Annual General Meeting and being eligible, offers himself for re-appointment. • Mr Ramesh Pilani (DIN 00901506) resigned as the Chief Executive Officer (CEO) of the Company and re-designated and appointed as Chief Financial Officer (CFO) of the Company w.e.f. May 30, 2015. • Company has appointed Ms. Ekta Dhanda as Company Secretary and Compliance officer as per Section 203 of the Companies Act, 2013 and listing agreement w.e.f March 16, 2015. A brief profile of the above-named Directors seeking appointment/ re-appointment at the ensuing Annual General Meeting of the Company has been provided in the notice of the Annual General Meeting. AUDIT COMMITTEE The Audit Committee is constituted in line with the regulatory requirements mandated by the Companies Act, 2013 and Clause 49 of the Listing Agreement. The details of the Committee and its terms of reference are set out in the Corporate Governance Report forming part of the Board's Report. NOMINATION AND REMUNERATION COMMITTEE The Nomination and Remuneration Committee is constituted in line with the regulatory requirements mandated by the Companies Act, 2013 and Clause 49 of the Listing Agreement. The details of the Committee and its terms of reference are set out in the Corporate Governance Report forming part of the Board's Report. DIRECTOR'S RESPONSIBILITY STATEMENT In terms of Section 134 (5) of the Companies Act, 2013, the Directors would like to state that: i) In the preparation of the annual accounts, the applicable accounting standards have been followed. ii) The directors have selected such accounting policies and applied them consistently and made judgments and estimates that were 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 or loss of the Company for the year under review. iii) The directors have taken proper and sufficient care for the maintenance of adequate accounting records inaccordance with the provisions of this Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities. iv) The directors have prepared the annual accounts on a going concern basis. v) The directors had laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively. vi) The directors had devised proper system to ensure compliance with the provisions of all applicable laws and that such system were adequate and operating effectively. PERFORMANCE EVALUATION OF BOARD, COMMITTEES & INDIVIDUAL DIRECTORS A formal evaluation of the performance of the Board, it's Committees, the Chairman and the individual Directors was carried out for the year 2014-15 led by the Nomination & Remuneration Committee. As part of the evaluation process, the performance of non-independent Directors, the Chairman and the Board was done by the independent Directors. The performance evaluation of the respective Committees and that of independent and non-independent Directors was done by the Board excluding the Director being evaluated. The Directors expressed satisfaction with the evaluation process. REMUNERATION POLICY 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. DEPOSITS Your Company has not accepted any deposits within the meaning of Section 73 of the Companies Act, 2013 and the Companies (Acceptance of Deposits) Rules, 2014. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS Details of loans and investments by the Company to other body corporate or persons are given in notes to the financial statements. RELATED PARTY TRANSACTIONS All transactions entered with Related Parties for the year under review were on arm's length basis and in the ordinary course of business and as such provisions of Section 188 of the Companies Act, 2013 are not attracted. Thus, disclosure in Form AOC-2 is not required. Further, there are no material related party transactions during the year under review with the Promoters, Directors or Key Managerial Personnel. All Related Party Transactions are placed before the Audit Committee as also to the Board for approval. As required under Clause 49 of the Listing Agreement, the Company has formulated a policy on dealing with Related Party Transactions. Details of related party transactions are given in the Annexure to notes to financial statments. SUBSIDIARY COMPANIES The Company does not have any subsidiary. CODE OF CONDUCT The Board of Directors has approved a Code of Conduct which is applicable to the Members of the Board and all employees in the course of day to day business operations of the Company. The Code lays down the standard procedure of business conduct which is expected to be followed by the Directors and the designated employees in their business dealings and in particular on matters relating to integrity in the work place,in business practices and in dealing with stakeholders. The Code gives guidance through examples on the expected behavior from an employee in a given situation and the reporting structure. All the Board Members and the Senior Management personnel have confirmed compliance with the Code. VIGIL MECHANISM / WHISTLE BLOWER POLICY The Company has in place a whistle blower policy, to support the Code of conduct of the Company. This policy documents the Company's commitment to maintain an open work environment in which employees, consultants and contractors are able to report instances of unethical or undesirable conduct, actual or suspected fraud or any violation of Company's Code of conduct at a significantly senior level without fear of intimidation or retaliation. PREVENTION OF INSIDER TRADING The Company has adopted a Code of Conduct for Prevention of Insider Trading with a view to regulate trading in securities by the Directors and designated employees of the Company. The Code prohibits the purchase or sale of Company shares by the Directors and the designated employees while in possession of unpublished price sensitive information in relation to the Company and during the period when the Trading Window is closed. The Board is responsible for implementation of the Code. All Board Directors and the designated employees have confirmed compliance with the Code. AUDITORS & AUDITORS' REPORT M/s. Samria & Co, Chartered Accountants (Registration number 109043W), were re-appointed as the Statutory Auditors of the Company to hold office from the conclusion of the 27th Annual General Meeting (AGM) held on September 30, 2014 until the conclusion of the fifth consecutive AGM of the Company to be held in the year 2019 (subject to ratification of their appointment by the members at every AGM held after the AGM held on September 30, 2014. As required under the provisions of Section 139(1) of the Companies Act, 2013, the Company has received a written consent from M/s. Samria & Co, Chartered Accountants to their appointment and a certificate, to the effect that their appointment, if made, would be in accordance with the Companies Act, 2013 and the rules framed thereunder and that they satisfy the criteria provided in Section 141 of the Companies Act, 2013. Members are requested to ratify the appointment of the Statutory Auditor as aforesaid and fix their remuneration. DIRECTORS' RESPONSE ON QUALIFICATION MENTIONED IN AUDIT REPORT In preceding years, Company has granted some of the business advances to the associate Companies without passing special resolutions. The Company will take necessary steps to ensure that outstanding recoverable payments will be recovered as soon as possible and accordingly, a special resolution seeking shareholders' approval is included, as Postal ballot resolution, in the ensuing Annual General Meeting. SECRETARIAL AUDIT During the year under review, M/s VKM & Associates, Practicing Company Secretary who was appointed as the Secretarial Auditor of the Company has issued the audit report in respect of the secretarial audit of the Company for the financial year ended March 31, 2015. The Secretarial Audit Report which forms a part of the Annual Report is self explanatory and requires no further comments. COST AUDITOR& COST AUDIT REPORT In terms of the Section 148 of the Companies Act, 2013 read with Companies (Cost Records and Audit) Rules, 2014, the Company is required to maintain cost accounting records and get them audited every year. The Board had, on the recommendations of audit committee appointed M/s. S K Agarwal, Cost Accountants, as cost auditors of the Company for the financial year 2015-16 at a fee of Rs. 1.35 lacs (Rupees One Lac Thirty Five Thousand only) plus applicable taxes and out of pocket expenses subject to the ratification of the said fees by the shareholders at the ensuing Annual General Meeting. Accordingly, a resolution seeking shareholders ratification for the remuneration payable to M/s. S K Agarwal & Associates, Cost Accountants, is included in the Notice convening the Annual General Meeting. The Cost audit report for financial year 2014-15 would be filed with the Central Government within prescribed timeline. EXTRACT OF THE ANNUAL RETURN The details forming part of the extract of the Annual Return in Form MGT-9, as required under Section 92 of the Companies Act, 2013, in included in this Report as Annexure II and forms an integral part of this Report. PARTICULARS PURSUANT TO SECTION 197(12) AND THE RELEVANT RULES During the year under review, your Company enjoyed cordial relationship with workers and employees at all levels. The Company regards its employees as great asset. In terms of the provisions of Section 197(12) of the Act read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, a statement containing the disclosures pertaining to remuneration and other details as required under the Act and the above Rules are provided in the Annual Return. For the particulars of employees as required to be disclosed in the Directors' Report in accordance with the Provisions of Section 197 of the Companies Act, 2013 read with Rule 5 of the Companies (Appointment & Remuneration of Managerial Personnel) Rules, 2014, the Directors state that the Company does not have any employee, who (i) if employed throughout the financial year, was in receipt of remuneration for that year which, in the aggregate, was not less than 60,00,000/- rupees per annum; (ii) if employed for a part of the financial year, was in receipt of remuneration for any part of that year, at a rate which, in the aggregate, was not less than 5,00,000/- rupees per month; (iii) if employed throughout the financial year or part thereof, was in receipt of remuneration in that year which, in the aggregate, or as the case may be, at a rate which, in the aggregate, is in excess of that drawn by the managing director or whole-time director or manager and holds by himself or along with his spouse and dependent children, not less than two percent of the equity shares of the Company. DISCLOUSRE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013 In accordance with the provisions of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and the Rules made there under, the Company formulated an internal Policy on Sexual Harassment at Workplace (Prevention, Prohibition and Redressal) during the year under review. An internal Complaint committee has been set up to redress complaints received regarding sexual harassment. All woman employees (permanent, contractual, temporary, trainees) are covered under this policy. During the year under review there were no complaints received by the Company related to sexual harassment. ENERGY CONSERVATION, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO Information pursuant to Section 134 (3)(m)of the Companies Act, 2013, read with the Companies (Disclosure of Particulars in the Report of the Board of Directors) Rules, 2014 relating to the foregoing Matters is given in the Annexure I forming part of this report. CORPORATE GOVERNANCE AND MANAGEMENT DISCUSSION & ANALYSIS REPORTS The Corporate Governance and Management Discussion & Analysis Report, which form an integral part of this Report, are set out as separate Annexures, together with the Certificate from the auditors of the Company regarding compliance with the requirements of Corporate Governance as stipulated in Clause 49 of the Listing Agreement. INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY The Company has an adequate internal control system, commensurate with the size, scale and complexity of its operations. The scope of the Internal Audit function outsourced to V K BAHETI & Co., Chartered Accountants as of current is well defined in the engagement letter of the Internal Auditor duly approved by the Audit Committee. To maintain its objectivity and independence, the Internal Auditor reports to the Audit Committee. The Internal Auditor evaluates the adequacy of the internal control system in the Company on the basis of Statement of Operations Procedure, instruction manuals, accounting policy and procedures. CASH FLOW STATEMENT In conformity with the provision of Clause 32 of the Listing Agreement the cash flow statement for the year ended March 31, 2015 is annexed hereto. AWARDS & RECOGINITION Your Company has awarded for the third consecutive year an award for handling the highest quantity of Liquid Cargo (Non-PSU) at Jawaharlal Nehru (JN) port. MATERIAL AND SIGNIFICANT ORDERS PASSED BY REGULATORS & COURTS No significant and material orders have been passed by any regulators or courts or tribunals against the Company impacting the going concern status and Company's operations in future. REFERENCE TO BIFR In earlier years net worth of the Company had been fully eroded, as a result Company had approached to the Board for Industrial & Financial Restructuring (BIFR) for protection provided under The Sick Industrial Company's (Special Provisions) Act, 1985 and the Company was declared as sick unit vide order of BIFR passed in May, 2010 vide reference no.42/2009 wherein the board has appointed IDBI as Operating Agency (OA) which has submitted the revival scheme to BIFR. In April, 2013 Draft rehabilitation scheme (DRS) was circulated to public for suggestion and objections. As per the directions of BIFR, in December, 2014 Operating Agency (OA) submitted the revised final DRS incorporating some of the changes suggested by BIFR for its sanction, and very soon BIFR will sanction the said DRS. LEGAL CASES Company had filed civil and criminal cases against various parties for recovery of dues. As per the legal opinion and management perception, Company will recover the substantial amount from the defaulting parties. Some of the parties and suppliers have also filled cases against the Company as briefed in contingent liabilities. ACKNOWLEDGEMENTS The Board of Directors wishes to place on record its appreciation for the commitment, dedication and hard work done by the employees in the Company and the cooperation extended by Banks, Government authorities, customers and shareholders of the Company and looks forward to a continued mutual support and co-operation. For and on behalf of the Board, Rishi Pilani Chairman & Managing Director Date: August 14, 2015 Place: Mumbai |