DIRECTORS' REPORT Dear Shareowners, Your Directors have pleasure in presenting the Thirty First Annual Report on the performance of your Company and the audited statement of accounts for the financial year ended on March 31, 2015. Operating Results and Business During the year under review, your Company recorded Gross Receipts of Rs.11.43 crore vis-a-vis Rs.76.34 crore in the previous year. Your Company has recorded net loss of Rs.13.69 crore vis-a-vis a net loss of Rs.18.30 crore in the previous financial year. Dividend Your Directors have not recommended any dividend on Equity Shares for the year under review. Transfer of Amount to Investor Education and Protection Fund Pursuant to the provisions of Section 205A (5) of the Companies Act, 1956, final dividend for the year 2006-07 which remained unpaid /unclaimed for a period of 7 years, amounting to Rs.1,74,483/- has been transferred by the Company to the Investors' Education and Protection Fund (IEPF). 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. Significant and Material Orders passed by the Regulators or Courts There are no significant material orders passed by the Regulators /Courts which would impact the going concern status of the Company and its future operations. Extract of Annual Return The details forming part of the extract of the Annual Return in form MGT-9 is annexed herewith as "Annexure A". Directors/Key Managerial Personnel In terms of Articles of Association of the Company, Mr. Kamlesh Kumar Agarwal, Director of the Company retires by rotation at the ensuing AGM and being eligible, offers himself for re-appointment at the ensuing AGM. The brief resume of Mr. Kamlesh Kumar Agarwal, Director who is to be re-appointed at the ensuing AGM , nature of his expertise in specific functional areas, names of companies in which he holds directorship, committee membership/ chairmanship etc., are furnished in the notes to the Notice forming part of the Annual Report. In terms of provisions of Section 149 of the Companies Act, 2013 and Clause 49 of the Listing Agreement and based on the recommendations of Nomination and Remuneration Committee of the Board of Directors, Mrs. Kumkum Agarwal (DIN:00944021) was appointed as Additional Director of the Company w.e.f. March 31, 2015. Mrs. Kumkum Agarwal holds the office of Additional Director till the conclusion of the Annual General Meeting. The Board of Directors of the Company recommends her appointment as Director of the Company liable to retire by rotation. The brief resume of Mrs. Kumkum Agarwal, Additional Director who is to be appointed at the ensuing AGM as Director liable to retire by rotation, nature of his expertise in specific functional areas, names of companies in which he holds directorship, committee membership/ chairmanship etc., are furnished in the notes to the Notice forming part of the Annual Report. All Independent Directors of the Company have given declaration that they meet with the criteria of independence as prescribed both under sub-section (6) of Section 149 of the Companies Act, 2013 and under Clause 49 of the Listing Agreement with the BSE. Mr. H.P. Prabhu, Independent Director of the Company resigned from the Board w.e.f. May 20, 2015. The Board of Directors had on the recommendation of the Audit Committee and Nomination & Remuneration Committee appointed Mr. Prafulla Kumar Sinha as Chief Financial Officer of the Company w.e.f. March 31, 2015. Change of name of the Company The Board of Directors of the Company vide Circular Resolution dated August 24, 2015 had approved change of name of the Company from the current name of "ABG Infralogistics Limited" to "Starlog Enterprises Limited" and filed the application for the same with Registrar of Companies, Maharashtra, Mumbai. The Registrar of Companies, Maharashtra, Mumbai vide its letter dated August 26, 2015 gave its approval for availability of the proposed name. The change in name of the Company shall benefit the Company with an independent identity as well as encompassing the diverse business prospects of the Company. The Board of Directors of the Company recommends the change of name of the Company. Board Evaluation Pursuant to the provisions of Companies Act, 2013 and Clause 49 of the Listing Agreement, the Board has 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 manner in which evaluation has been carried out has been explained in the Corporate Governance Report. Nomination and 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. Meetings During the year 10 Board Meetings and 6 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' Responsibility Statements: Pursuant to the requirements under Section 134(3)(c) of Companies Act, 2013, with respect to Directors' Responsibility Statement, it is hereby confirmed that: i) in the preparation of the Annual Accounts for the year ended March 31, 2015, the applicable Accounting Standards have been followed and there is no material departure from the same; ii) 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 as at March 31, 2015 and of the loss of the Company for the year ended on that date; iii) the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; iv) the Directors have prepared the accounts for the year ended on March 31, 2015 on a going concern basis; v) the internal financial controls were in place and that the financial controls were adequate and were operating effectively; and vi) 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. Auditors and Auditors' Report M/s. M.M. Chaturvedi & Co, Chartered Accountants, the Statutory Auditors of the Company retire at the ensuing AGM and are eligible for re-appointment. They have furnished a certificate regarding their eligibility for re-appointment as Statutory Auditors of the Company. The Board recommends their re-appointment from the conclusion of the ensuing AGM until the conclusion of the next AGM of the Company. The Notes on Financial Statements referred to in the Auditors' Report are self-explanatory and do not call for any further explanation. 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 Shravan A Gupta & Associates, a firm of Company Secretaries in Practice to undertake the Secretarial Audit of the Company. The Report of the Secretarial Audit Report is annexed herewith as "Annexure B". Related Party Transactions In terms clause 49 of the Listing Agreement, Board of Directors of your Company has approved Related Party Transactions Policy on dealing with Related Party Transactions. The policy may be accessed at the web-link <http://abgworld.com/html/Corporate.html> All related party transactions that were entered into during the financial year were on an arm's length basis and were in the ordinary course of business. There are no materially significant related party transactions made by the Company with Promoters, Directors, Key Managerial Personnel or other designated persons which may have a potential conflict with the interest of the Company at large. All Related Party Transactions are placed before the Audit Committee as also the Board for approval. Prior omnibus approval of the Audit Committee is obtained on a quarterly basis for the transactions which are of a foreseen and repetitive nature. The transactions entered into pursuant to the omnibus approval so granted are audited and a statement giving details of all related party transactions is placed before the Audit Committee and the Board of Directors for their approval on a quarterly basis. The statement is supported by a Certificate from the MD and the CFO. The details of related party transactions entered into by the Company are provided in Form AOC-2 annexed herewith as "Annexure C". Business Risk Management Pursuant to the requirement of Section 134 of the Companies Act, 2013, a risk management policy has been framed by the Company indicating the identification of risk related to the business of the Company which may threaten the existence of the Company. This policy defines the risk management approach across the organization at various levels including documentation and reporting. Vigil Mechanism/Whistle Blower Policy The company has framed a Vigil Mechanism policy to deal with instance of fraud and mismanagement, if any. The details of the policy is explained in the Corporate Governance Report and also posted on the website of the Company. Familiarisation Programme of Independent Directors Your Company has adopted a "Familiarisation Programme for Independent Directors" to familiarise them with the Company, their roles, rights, responsibilities in the Company, nature of industry in which the Company operates, business model of the Company, etc. Your Company aims to provide its Independent Directors, insight into the Company enabling them to contribute effectively. The details of familiarisation programme may be accessed at the web-link <http://abgworld.com/html/Corporate.html> As a part of its familiarisation programme of Independent Directors, the Company also organized a formal training for its Independent Directors. Consolidated Financial Statements The Audited Consolidated Financial Statements based on the Financial Statements received from subsidiaries as approved by their respective board of directors have been prepared in accordance with Accounting Standard (AS) viz. AS 21, AS 23 and AS 27 issued by the Institute of Chartered Accountants of India form part of this Annual Report. Corporate Governance The Company is committed to maintain the highest standards of corporate governance and adhere to the corporate governance requirements set out by SEBI. The report on corporate governance as stipulated under Clause 49 of the Listing Agreement forms part of the Annual Report. The requisite certificate from the Auditors of the Company confirming compliance with the conditions of corporate governance as stipulated under the aforesaid Clause 49, is attached to the report on corporate governance. Subsidiaries The Company has the following subsidiaries: 1. ABG Kolkata Container Terminal Private Limited 2. Kandla Container Terminal Private Limited 3. ABG Ports Limited 4. ABG Projects & Services Limited (U.K.) 5. West Quay Multiport Private Limited The following are the step down subsidiaries of the Company: 1. India Ports & Logistics Private Limited (formerly ABG Container Handling Private Limited) 2. ABG Turnkey Private Limited 3. Dakshin Bharat Gateway Terminal Private Limited During the year under review the following companies which were subsidiaries until last year have become Jointly Controlled Companies: 1. ALBA Asia Private Limited 2. Haldia Bulk Terminals Private Limited 3. ALBA Marine Private Limited 4. Tuticorin Coal Terminal Private Limited 5. Vizag Agriport Private Limited 6. ALBA Ennore Private Limited Associate Company 1. South West Port Limited The description of operation of your Subsidiaries, Jointly Controlled Entities and Associates Companies is briefly described below: ABG Kolkata Terminal Private Limited (ABGKCTPL) during the year under review the operations of ABGKCTPL at berth no 4 and 8 of Netaji Subhash Dock of Kolkata Port Trust were closed on 21st November 2014 at 6.00 a.m. pursuant to the completion of the contract awarded to ABGKCTPL for a period of 10 years. On completion of the contract, ABG Infralogistics Limited has purchased the 49% shareholding held by PSA India Pte Limited in ABG Kolkata Container Terminal Private Limited. Post share purchase the Company holds 99.97% of the shareholding of ABG Kolkata Container Terminal Private Limited. Kandla Container Terminal Private Limited was incorporated for operating the Container Terminal at Kandla Port on BOT basis. It terminated its contract with Kandla Port Trust vide its letter dated November 9, 2012 due to the failure of Kandla Port Trust in meeting its obligations as per the license agreement. Kandla Port Trust has taken over the Terminal. The matter is under arbitration. ALBA Asia Private Limited is operating Mobile Harbour Cranes (MHCs) at New Mangalore and Visakhapatnam ports. The aggregate volume handled by the MHCs at Vishakhapatnam was 3.18 million metric tonnes compared to 4.9 million metric tonnes in the previous year. The aggregate volume handled by the MHCs at New Mangalore was 1.05 million tonnes compared to 0.8 million in the previous year. ALBA Marine Private Limited obtained a stevedoring License from V.O. Chidambaranar Port Trust ("VOCPT") for undertaking the stevedoring activities. The Company is finalising the business model for stevedoring activities at VOCPT and Visakhapatnam Port Trust. Tuticorin Coal Terminal Private Limited ("TCTPL") has achieved more than 80% progress in development of NCB-II berth at Tuticorin. There has been delay in commissioning of project due to pending clearances from Government of India. If all clearances are received, Company will be able to commence operation by second half of the financial year. This terminal will cater to the needs of the thermal power plants in the vicinity of Tuticorin. West Quay Multiport Private Limited ("WQMPL") signed a 30 year Concession Agreement with Visakhapatnam Port Trust, for developing WQ-6 berth for handling the dry bulk cargo on DBFOT basis. The Company has started the commercial operations at the WQ6 Terminal in August, 2015. Vizag Agriport Private Limited ("VAPL") signed a 30 year Concession Agreement with Visakhapatnam Port Trust, for developing the EQ-7 berth for handling the bulk fertiliser cargo on DBFOT basis. This berth will be one of the largest fully mechanised fertilizer berth in Public Private Partnership in India. The project is presently under implementation. Haldia Bulk Terminals Private Limited ("HBT") was incorporated for operating bulk cargo at Haldia Port. Due to breaches of Kolkata Port Trust (KoPT) and its renunciation of acting as required under the Agreement, the Company terminated its contract with KoPT on October 31, 2012. During the year, the Company received relief from Kolkata High Court that it can take out the operating fixed assets from the premises of KoPT and can deploy them for business purpose at any other location in India. The Company is exploring the possibility of deploying its assets for generating revenues. Dakshin Bharat Gateway Terminal Private Ltd. (DBGT) signed a 30 year Concession Agreement with the V.O. Chidambaranar Port Trust ("VOCPT") for conversion of Eighth Berth at V.O.Chidambaranar Port at Tuticorin as a Container Terminal on BOT basis. The project is presently under implementation.Presently it handles containers using vessel gears till the terminal is equipped in terms of the Concession Agreement. Fixed Deposit Your Company has not accepted any Fixed Deposits within the meaning of sections 73 of the Companies Act,2013 from the public during the year ended on March 31, 2015. Particulars of Employees The information required pursuant to Section 197 read with Rule 5 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 on any working days between 10.00 am to 12.00 noon upto the date of the ensuing AGM. If any Member is interested in obtaining a copy thereof, such Member may write to the Company Secretary in this regard. Pecuniary relationships with Independent Directors The Company paid sitting fees to Independent Directors (IDs) for attending the meetings. The sitting fees paid Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo Considering the nature of business activities being carried out by the Company, the Directors have nothing to report regarding conservation of energy and technology absorption required to be furnished pursuant to Section 134(3)(m) of the Companies Act, 2013, read with Rule 8 of The Companies (Accounts) Rules, 2014.The information related to Foreign Exchange Earnings and Outgo is provided in the Notes to Accounts forming part of the Annual Report. Acknowledgement Your Directors would like to express their sincere appreciation for the support and co-operation extended by bankers, financial institutions, regulatory bodies, government authorities, shareholders and specifically the contribution made by the employees of the Company in the operations of the Company during the year under review. Your Directors look forward to their continued unstinted support. For and on behalf of the Board of Directors Kamlesh Kumar Agarwal Chairman Date: August 26, 2015 Place: Mumbai |