DIRECTORS' REPORT To The Members Your Directors have pleasure in presenting the 32th Annual Report of the Company together with Audited Accounts for the year ended 31st March, 2015. FINANCIAL PERFORMNCE The company has sales of Rs 1,26,83,23,590/- in the current year as compared to last year sales Rs 1,10,57,75,658/- . NUMBER OF BOARD MEETING Eleven Board Meetings were held during the year, as against the minimum requirement of four meetings. Dividend Your Company is in a phase of development where it is financially prudent to build up a healthy reserve base so as to serve as a source for meeting the financial requirements of the company for the effectuation of its plans in the years to come. It is keeping with this financial policy that your directors have decided to plough back the profits of the company into its business rather than declaring dividend for the financial year 2014-15. It is felt that a sound financial base in the company would in the long run lead to improved share valuations, culminating into maximization of returns for the shareholders. MANAGEMENT DISCUSSION & ANALYSIS AND REVIEW OF OPERATIONS AND FUTURE LAW OVERVIEW The financial statements have been prepared in compliance with the requirements of the Companies Act, 2013, guidelines issued by the Securities and Exchange Board of India (SEBI) and the Generally Accepted Accounting Principles (GAAP) in India. Our Management accepts responsibility for the integrity and objectivity of these financial statements, as well as for the various estimates and judgments used therein. The estimates and judgments relating to the financial statements have been made on a prudent and reasonable basis, so that the financial statements reflect in a true and fair manner the form and substance of transactions, and reasonably present our state of affairs, profits and cash flows for the year. INDUSTRY STRUCTURE & DEVELOPMENT India is today considered as a Sunrise Industry for the logistics players of the world because of the size of the market and the untapped potential in the market. The country today is only to the tune of 3.5% of the global logistics market. With increased competition, every market player is keen to make their mark by aiming for the share of the logistics pie. Influenced by the success of the global players in the Indian market, the Indian counterparts are also gearing up for the challenges, by providing a spectrum of services & offerings. Logistics in the Indian context would mean providing services such as transportation, warehousing, distribution, order & inventory management. Logistics costs in India are about 13-14% of GDP, as against 8.7% in the US, 11% in Europe, 12% in Japan and 18% in China. The current market size for the trucking logistics is 50 billion dollars with around 2.5-3 million trucks moving within the country per day. Transporters with a fleet less than or equal to five trucks constitute a share of around 80% of the total revenue in 2014-15 with the scenario not being very different from 2008-09. The overall logistics scenario looks quite encouraging with the road freight industry witnessing a year on year growth rate of 20%. Similarly the rail & air freight industry also growing every year by 15%. Meanwhile, the sea freight industry growth rate has been 18% and the express logistics & supply chain logistics promising an enterprising growth of 35%. SEGMENT WISE PERFORMANCE The Company operates in only one segment i.e. Transportation, and therefore, has no separate reportable segments. OUTLOOK Your Company has since last few years taken initiatives to broaden its fleet base to minimize the risks and maximize the gains. In its effort in this regard, the Company is in talks to acquire two more vessels for international charter. With expansion of fleet the Company would be in a better position to maximize its gains from the buoyant markets. RISKS AND CONCERNS The Company in its endeavor to minimize the risks associated with its type of business is employing competent team of professionals and is focused towards implementation of modern shore based management practices. In order to mitigate the risks the Company has taken various steps to limit the various factors that emanate risks. These factors include: • Insurance • Proper credit check of the client portfolio • Supporting customers, growth and competitiveness CAUTIONARY STATEMENT Statements in the Management Discussion and Analysis describing the Company's strategies on business, projections and estimates are forward looking statements. The actual results may vary from those expressed or implied, depending upon economic conditions, Government policies, regulations, tax laws and other incidental factors. DEPOSITS During the year under review the Company has not accepted any money from the public as Deposits. PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES In current year there are no related party transactions. MEETING OF INDEPENDENT DIRECTOR During the year under review, an annual Independent Directors meeting was convened on March 16, 2015, to review the performance of the Non-Independent/ Non-Executive Directors including the Chairman of the Board and performance of the Board as a whole. The Non- Independent Directors did not take part in the meeting. DECLARATION BY THE INDEPENDENT DIRECTORS The company has received the qualification statement from the independent directors as per section 149(6) of the companies act, 2013. EVALUATIONS OF DIRECTORS, BOARD AND COMMITTEES Pursuant to the provisions of the Act and the corporate governance requirements as prescribed by SEBI under Clause 49 of the Equity Listing Agreement, the Board of Directors ("Board") has carried out an annual evaluation of its own performance, and that of its Committees and individual Directors. The performance of the Board and individual Directors was evaluated by the Board seeking inputs from all the Directors. The performance of the Committees was evaluated by the Board seeking inputs from the Committee Members. The Nomination and Remuneration Committee ("NRC") reviewed the performance of the individual Directors. A separate meeting of Independent Directors was also held to review the performance of Non-Independent Directors; performance of the Board as a whole and performance of the Chairperson of the Company, taking into account the views of Executive Directors and Non-Executive Directors. This was followed by a Board meeting that discussed the performance of the Board, its Committees and individual Directors. The criteria for performance evaluation of the Board included aspects like Board composition and structure; effectiveness of Board processes, information and functioning etc. The criteria for performance evaluation of Committees of the Board included aspects like composition of Committees, effectiveness of Committee meetings etc. The criteria for performance evaluation of the individual Directors included aspects on contribution to the Board and Committee meetings like preparedness on the issues to be discussed, meaningful and constructive contribution and inputs in meetings etc. In addition the Chairperson was also evaluated on the key aspects of his role. KEY MANAGERIAL PERSONNEL During the year under review, the Company has designated following personnel as KMPs as per the definition under Section 2(51) and Section 2013 of the Act. • Mr. Anil Thukral, Managing Director • Mr. Arun Kapoor, Chief Financial Officer. • Mr. Kulbhushan Verma, Company Secretary. REMUNERATION POLICY The Company has in place a Remuneration Policy for the Directors, Key Managerial Personnel and other employees, pursuant to the provisions of the Act and Clause 49 of the Listing Agreement. ADEQUACY OF INTERNAL CONTROLS The Company has adequate and effective internal control systems commensurate with the size of its operations and has complied with the various statutes of the Government and statutory authorities.. Internal Audit has been entrusted to an external auditor and periodical review is being carried out. The Audit Committee meets regularly to review the adequacy of internal controls. INSURANCE AND RISK MANGEMENT The Company has in October 2014 constituted a Risk Management Committee (RMC) which has been entrusted with responsibility to assist the Board in (a) Overseeing the Company's risk management process and controls, risk tolerance and capital liquidity and funding. (b) Setting strategic plans and objectives for risk management and review of risk assessment of the Company (c) Review the Company's risk appetite and strategy relating to key risks, including credit risk, liquidity and funding risk, market risk, product risk and reputational risk, as well as the guidelines, policies and processes for monitoring and mitigating such risks. The Committee has also approved and adopted Risk Committee Charter. The Company has adopted a Risk Management Policy in accordance with the provisions of the Companies Act, 2013 (hereinafter referred to as the Act) and Clause 49 of the Listing Agreement. It establishes various levels of accountability and overview within the Company, while vesting identified managers with responsibility for each significant risk. The Board takes responsibility for the overall process of risk management in the organisation. Through Enterprise Risk Management programme, Business Units and Corporate functions address opportunities and the attendant risks through an institutionalized approach aligned to the Company's objectives. This is facilitated by internal audit. The business risk is managed through cross functional involvement and communication across businesses. The results of the risk assessment and residual risks are presented to the senior management. Prior to constituting the RMC, the Audit Committee was reviewing business risk areas covering operational, financial, strategic and regulatory risks. EMPLOYEES STOCK OPTION SCHEME During the year there are no ESOPs and ESPs. AUDITORS M/s. AM & Associates, Chartered Accountants, be appointed as statutory auditors of the Company. The Company has received a certificate under section 139 of the Companies Act, 2013 to the effect that their appointment, if made, will be within the prescribed limit. The Audit Committee has also recommended their re-appointment. AUDITOR'S REPORT The Auditors in their report have referred to the notes forming parts of Accounts. The said notes are self-explanatory and need not require any further clarifications. The suggestion given by them have taken note for future operation. SECRETARIAL AUDIT AND THE APPOINTMENT OF SECRETARIAL AUDITOR Pursuant to the provisions of Section 204 of the Act and The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company has appointed M/s Nitin Grover & Co., a firm of Company Secretaries in practice to undertake the Secretarial Audit of the Company. The Report of the Secretarial Audit is annexed herewith as Annexure-6. The Secretarial Audit Report does not contains any qualifications, reservation or adverse remarks. COST AUDIT The cost audit is not applicable on our company. BUY BACK OF SHARES The Company has not made any offer to Buy Back its shares. PARTICULARS OF EMPLOYEES No employee of the Company is covered under section 197(12) of the Companies Act, 2013 read with the Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 as amended to date. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION & FOREIGN EXCHANGE EARNINGS & OUTGO Information's furnished in Annexure "1" and forms part of this report. REPORT ON CORPORATE GOVERNANCE As stipulated by clause 49 of the Listing Agreement, the Report on Corporate Governance is given separately in this Annual Report. The Certificate of M/s. Nitin Grover & Company , Company Secretary in Practice, regarding the Compliance of Clause 49 of the Listing Agreement is enclosed herewith and form part of Directors' Report. EXTRACT OF THE ANNUAL RETURN As provided under Section 92(3) of the Act, the details forming part of the extract of the Annual Return in Form MGT 9 is annexed herewith as Annexure-5. DIRECTORS' RESPONSIBILITY STATEMENT In accordance with the provisions of section 134(5) the Board confirm and submit the Director's Responsibility Statement:- 1. In the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures: 2. The directors had 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 and loss of the company for that period; 3. The directors had taken proper and sufficient care for the maintenance of adequate accounting records for safeguarding the assets of the company. 4. The directors had prepared the annual accounts on a going concern basis. 5. The directors, in the case of a listed company, had laid down internal financial controls to be followed by the company and that such internal financial controls are adequate and were operating effectively. "Internal financial controls" means the policies and procedures adopted by the company for ensuring the orderly and efficient conduct of its business, including adherence to company's policies, the safeguarding of its assets, the prevention and detection of the frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information. 6. The directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively. VIGIL MECHANISM The Company has adopted a Whistle Blower Policy establishing vigil mechanism, to provide a formal mechanism to the Directors and employees to report their concerns about unethical behavior, actual or suspected fraud or violation of the Company's Code of Conduct or ethics policy. The Policy provides for adequate safeguards against victimization of employees who avail of the mechanism and also provides for direct access to the Chairman of the Audit Committee. It is affirmed that no personnel of the Company has been denied access to the Audit Committee. COMPLIANCE WITH PROVISION OF SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION ND REDRESSAL) ACT, 2013 The Company has zero tolerance for sexual harassment at workplace and has adopted a Policy on prevention, prohibition and redressal of sexual harassment at workplace in line with the provisions of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and the Rules there under for prevention and redressal of complaints of sexual harassment at workplace. The Company is committed to providing equal opportunities without regard to their race, caste, sex, religion, colour, nationality, disability, etc. All women associates (permanent, temporary, contractual and trainees) as well as any women visiting the Company's office premises or women service providers are covered under this policy. All employees are treated with dignity with a view to maintain a work environment free of sexual harassment whether physical, verbal or psychological. LISTING FEES The Company has paid listing fees to BSE before 30th April, 2015. ACKNOWLEDGEMENT The Directors acknowledge with gratitude the support given to the Company by the dealers, customers and suppliers, shareholders and investors who indeed deserve a special mention for their faith and confidence reposed by them in the Company. By order of the Board For MFL India Limited (Anil Thukral) Managing Director DIN - 01168540 (Sheetal Thukral) Whole Time Director DIN - 01168506 Place: New Delhi Date: 4th September, 2015 |