DIRECTORS' REPORT TO THE MEMBERS, SHAHI SHIPPING LIMITED (Formerly known as SKS Logistics Limited) The directors submit annual report of Shahi Shipping Limited (the "Company") along with the audited financial statements for the financial year ended March 31, 2015. 2.Dividend In view of the losses incurred during the year under review, your Board of Directors has not recommended any dividend. 3.Company's performance Income from operations during the current year was Rs. 18.44 Crore as against Rs.19.40 Crore in the previous year. The decline in income was about 4.95% as compared to the previous year. During year under review, finance cost was further reduced to Rs. 2.44 Crores from Rs.2.90 Crores. Your company continues with its task to rebuild business with long term goals based on its intrinsic strength in terms of its strong brand, quality of service, customer relationships and streamlining operations. 4.Human resource development Your Company treats its "human resources" as one of its most important assets. Your Company continuously invests in attraction, retention and development of talent on an ongoing basis. A number of programs that provide focused people attention are currently underway. Your Company thrust is on the promotion of talent internally through job rotation and job enlargement. 5.Subsidiary companies The Company has two subsidiaries, namely SKS waterways Ltd. & Royal Logistics (Ship) Ltd. which has not yet started their operations. Hence, the consolidated financial statement of the Shahi Shipping Limited and its subsidiaries SKS waterways Ltd, Royal Logistics (Ship) Ltd has not been prepared. 6.Directors' responsibility statement Pursuant to Section 134(5) of the Companies Act, 2013, the board of directors, to the best of their knowledge and ability, confirm that: i.In the preparation of the annual accounts, the applicable accounting standards have been followed and there are no material departures; ii.They 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 of the Company for that period; iii.They have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; iv.They have prepared the annual accounts on a going concern basis; v.They have laid down internal financial controls to be followed by the Company and such internal financial controls are adequate and operating effectively; vi. They have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively. Based on the framework of internal financial controls and compliance systems established and maintained by the Company, work performed by the internal, statutory and secretarial auditors and external consultants and the reviews performed by management and the relevant board committees, including the audit committee, the board is of the opinion that the Company's internal financial controls were adequate and effective during the financial year 2014-15 7.Directors and key managerial personnel The Board approved the appointments of Mr. Venkatasubramanian Iyer Shivaraman and Ms. Lavina Chatur Kripalani as an Independent director of the Company, who will hold the office upto the date of ensuing Annual General Meeting and who have offered themselves for appointment. The Company has received declarations from Mr. Venkatasubramanian Iyer Shivaraman and Ms. Lavina Chatur Kripalani, Independent Directors of the Company confirming that they meet the criteria of independence as prescribed both under the Act and Clause 49 of the Listing Agreement with the Stock Exchanges. During the period, the non-executive directors of the Company had no pecuniary relationship or transactions with the Company. The resolutions seeking approval of the Members for the appointment of Mr. Venkatasubramanian Iyer Shivaraman and Ms. Lavina Chatur Kripalani have been incorporated in the notice of the forthcoming annual general meeting of the Company along with brief details about them. The Company has received a notice under Section 160 of the Act along with the requisition towards proposing the appointment of Mr. Venkatasubramanian Iyer Shivaraman and Ms. Lavina Chatur Kripalani. The members at their EOGM held on 14th February, 2015, have also re-appointed Mr. Sarvesh Kumar Shahi as the Managing Director of the Company for the period of three years with effect from April 01, 2014 to March 31, 2017. Mr. Medioma Bhada, Mr. Bansilal Bhagchand Bhawsar, Mr. Subhash Kumar and Mr. Ghanshyam Choudhary, resigned as a Director of the Company with effect from March 14, 2015. The Directors placed on record their appreciation of their valuable contributions as member of the Board during their tenure as a Director of the Company. Board Evaluation The board of directors has carried out an annual evaluation of its own performance, Board committees and individual directors pursuant to the provisions of the Act and the corporate governance requirements as prescribed by Securities and Exchange Board of India ("SEBI") under Clause 49 of the Listing Agreements ("Clause 49"). The performance of the Board was evaluated by the Board after seeking inputs from all the directors on the basis of the criteria such as the Board composition and structure, effectiveness of board processes, information and functioning, etc. In a separate meeting of independent Directors, performance of non-independent directors, performance of the board as a whole and performance of the Chairman was evaluated, taking into account the views of executive directors and non-executive directors. The same was discussed in the board meeting that followed the meeting of the independent Directors, at which the performance of the Board, its committees and individual directors was also discussed. Meetings A calendar of Meetings is prepared and circulated in advance to the Directors. During the year Six 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. Policy on directors' appointment and remuneration and other details The Company's policy on directors' appointment and remuneration and other matters provided in Section 178(3) of the Act has been disclosed in the corporate governance report, which forms part of the directors' report. 8.Internal financial control systems and their adequacy The details in respect of internal financial control and their adequacy are included in the Management Discussion & Analysis, which forms part of this report. 9.Audit committee The details pertaining to composition of audit committee are included in the Corporate Governance Report, which forms part of this report. 10.Auditors The Auditors, M/s. N. D. Heda & Co. Chartered Accountants, Mumbai retire at the ensuing Annual General Meeting and, being eligible, offer themselves for reappointment for a period of Two Years from the conclusion of this Annual General Meeting [AGM] till the conclusion of 27th AGM. 11.Auditors' report Notes to Accounts and Auditors remarks in their report are self-explanatory and do not call for any further comments. 12.Particulars of loans, guarantees and investments Particulars of loans given, investments made, guarantees given and securities provided along with the purpose for which the loan or guarantee or security is proposed to be utilized by the recipient are provided in the standalone financial statement. 13.Transactions with related parties All the Related Party Transactions are entered on arm's length basis and in ordinary course of business. All the transactions are in compliance with the applicable provisions of the relevant Acts. There are no related party transactions entered by the Company which may have potential conflict with the interest of the Company at large. Your Directors draw attention of the members to Note No 22(Sub clause 17) of financial statement which sets out related party disclosures. 14.Extract of annual return As provided under Section 92(3) of the Act, the extract of annual return is given in Annexure I in the prescribed Form MGT-9, which forms part of this report. 15.Particulars of employees The information required under Section 197 of the Act read with rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, report and accounts are being circulated to all the shareholders excluding the aforesaid information. The Shareholders interested in obtaining this information may write to Compliance Officer of the Company. 16.Disclosure requirements As per Clause 49 of the listing agreements entered into with the stock exchanges, corporate governance report given in Annexure IV with auditors' certificate thereon and management discussion and analysis are attached, which form part of this report. The Auditor Certificate on Corporate Governance Report do contains qualification with respect to the optimum combination of Board of Directors and other committee of the Board, the Board would like to clarified that the Company had appointed Two Directors (Mr. I.V. Shivraman and Ms. Lavina Kriplani) w.e.f. April 25, 2015 to comply with the optimum combination of Board of Directors and Minimum Numbers of Directors for other committee of the Board. The Company has formulated and published a Vigil Mechanism Policy to provide Vigil Mechanism for employees including directors of the Company to report genuine concerns. The provisions of this policy are in line with the provisions of the Section 177(9) of the Act and the revised Clause 49 of the Listing Agreements with stock exchanges. 17.Deposits from public The Company has not accepted any deposits from public and as such, no amount on account of principal or interest on deposits from public was outstanding as on the date of the balance sheet. 18.Secretarial Audit Report In terms of Section 204 of the Act and Rules made there under, M/s. Neville Daroga & Associates, Practicing Company Secretary have been appointed Secretarial Auditors of the Company. The report of the Secretarial Auditors is enclosed as Annexure II to this report. The Secreterial Auditors' Report do contains qualification with respect to that the Board would like to clarify that; 1.The Company is in process of Appointment of Company secretary as required under section 203(1) (ii) of the Companies Act 2013 and Clause 47(a) of the Listing Agreement. 2.The delays in effecting transfer of Unclaimed Dividend to IEPF were caused due to oversight in calculation of days. 3.Mr. Ghyamshayam Chaudhary has been appointed as director mistakenly which is being rectified by the Directors by filing relevant forms of Resignation with ROC. 4.The Company had appointed Two Directors (Mr. I V Shivraman and Ms. Lavina Kriplani) on April 25, 2015 to comply with the Minimum Numbers of Directors as per the Act. 5.The promoters will take effective steps for converting their shares in demat Form as required under 19.Management Discussion and Analysis The Management Discussion and Analysis forms part of this Annual Report for the year ended 31st March, 2015. 20.Obligation of company under the sexual harassment of women at workplace (prevention, prohibition and redressal) Act, 2013 In order to prevent sexual harassment of women at work place a new act The Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 has been notified on 9th December, 2013. Under the said Act every company is required to set up an Internal Complaints Committee to look into complaints relating to sexual harassment at work place of any women employee. Company has adopted a policy for prevention of Sexual Harassment of Women at workplace and has set up Committee for implementation of said policy. During the year Company has not received any complaint of harassment. 21.Transfer of Amounts to Investor Education and Protection Fund In terms of the provisions of Section 123 of the Companies Act, 2013 the amount of dividend not encashed or claimed within 7 (Seven) years from the date of its transfer to the unpaid dividend account, is required to be transferred to the Investor Education and Protection Fund ("IEPF") established by the Central Government. Accordingly, the unclaimed dividend in respect of financial year 2006-07 was transferred to the IEPF in July, 2015. The unclaimed dividend in respect of financial year 2007-08 is in the process of being transferred to the IEPF in accordance with the provisions of Section 123 of the Companies Act, 2013. 22.Conservation of energy, technology absorption, foreign exchange earnings and outgo. Pursuant to the notification No GSR 1029 dated 31-12-1988; companies are required to furnish prescribed information regarding conservation of energy and technology absorption. However this does not apply to your company as the shipping industry is not included in the schedule to the relevant rules. The details, however, as regards Foreign exchange earnings and out go are given below. (a)Foreign Exchange earned: NIL (b)Foreign Exchange outgo: 23,193/23. Listing with Stock Exchanges: The Company confirms that it has paid the Annual Listing Fees for the year 2014-2015 to BSE where the Company's Shares are listed. 24.Corporate Social Responsibility (CSR): During the year pursuant to the provisions of section 135 read with Schedule VII of the Companies Act, 2013 the company does not fall under the criteria of CSR Policy. Hence the company has not contributed towards CSR Activity. 25.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 Company believes in "Zero Tolerance" against bribery, corruption and unethical dealings / behaviors of any form and the Board has laid down the directives to counter such acts. The code laid down by the Board is known as "code of business conduct" which forms an Appendix to the Code. The Code has been posted on the Company's website www.shahilogistics.com. 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. All Management Staff were given appropriate training in this regard. 26.Internal Controls The Company has an adequate system of internal controls commensurate with size, scale and complexity of its operations. Conscious efforts are in place on a continuous basis to ensure that all its assets are safeguarded and protected against loss from unauthorized use and disposal and that all transactions are authorized, recorded and financial statements show a true and fair picture of the state of affairs of the Company. Compliance is in place as regards to statutory and regulatory requirements. The internal controls system of the Company are monitored and evaluated by external and internal audit, reviewed by Management and Audit Committee of the Board of Directors. Auditor's observations in confirmation to policy in force have also been received. 27.Acknowledgement The directors thank the Company's employees, customers, vendors, investors and various others stakeholders for their continuous support. The directors also thank the government of India, the governments of various states in India and concerned government departments / agencies for their co-operation. On behalf of the board of directors Sarvesh Kumar Shahi Chairman and Managing Director (DIN: 00359535) PLACE : Mumbai DATE : August 14, 2015 |