kesar terminals & infrastructure ltd share price Directors report


Dear Members,

Your Directors are pleased to present to you the 15th Annual Report and the audited financial statements (standalone and consolidated) of the Company for the year ended 31st March, 2023.

FINANCIAL PERFORMANCE AND STATE OF THE COMPANYS AFFAIRS

The standalone financial performance of the Company for the year ended 31st March, 2023 is summarized below: (Rs In Lakhs)

Particulars

2022-23 2021-22

Revenue from Operations

3,349.65 3,251.03
Other Income 22.66 107.09

Profit/loss before Depreciation, Finance Costs, Exceptional items and Tax Expense

1,705.75 1,618.32
Less: Depreciation/ Amortisation/ Impairment 366.01 386.82

Profit /loss before Finance Costs, Exceptional items and Tax Expense

1,339.74 1,231.50
Less: Finance Costs 741.91 702.48

Profit /loss before Exceptional items and Tax Expense

597.83 529.02
Add/(less): Exceptional items - (6,858.33)

Profit / (loss) before Tax Expense

597.83 (6,329.31)
Less: Tax Expense (Current & Deferred) 170.00 953.38

Profit / (loss) for the year (1)

427.83 (7,282.69)

Total Comprehensive Income/ (loss) (2)

(2.20) 3.18

Total Profit / (loss) for the year (1+2)

425.63 (7,279.51)

Balance of profit / (loss) for earlier years

2,901.74 10,348.33
Transfer to General Reserves - 0
Dividend paid on Equity Shares - 163.90
Profit/ (Loss) for the year 427.83 (7,282.69)

Balance carried forward

3,329.57 2,901.74

During the financial year under review, the Companys revenue from operations was Rs 3,349.65 Lakhs as compared to Rs 3,251.03 Lakhs for the previous year. The profit for the year after tax stood at Rs 427.83 Lakhs as against loss of Rs 7,282.69 Lakhs for the previous financial year.

The revenue of the Company on a consolidated basis was Rs 3,696.46 Lakhs as compared to Rs 4,253.15 Lakhs for the previous year. The loss for the year after tax stood at Rs1,384.64 Lakhs for the financial year under review as against loss after tax of Rs 2,945.53 Lakhs for the previous financial year. There is no change in the nature of the Business of the Company.

BUSINESS OPERATIONS

The Company is in the business of bulk liquid storage and logistics. The Company is listed on the BSE Limited. Honble Mumbai High Court, vide its Order dated 12th March, 2010 had approved the Scheme of Arrangement under Section 391 to 394 of the Companies Act, 1956 pertaining to the Demerger of Storage undertaking of Kesar Enterprises Limited (Demerged Company) into Kesar Terminals & Infrastructure Limited (Resulting Company) on a going concern basis. The Company has over 60 years of experience in handling different types of petroleum, petro chemical, hazardous and non-hazardous liquids.

The Company has 2 terminals at Kandla, Gujarat. The tanks at Terminal No. I are situated right in front of the Jetties ensuring quick and smooth loading and off-loading of bulk liquids at a high pumping rate. Multiple Jetty Lines permit simultaneous discharge of cargo from more than one vessel at any time.

The Company operates in a single segment. The Management expects a significant improvement in the revenues and business of the Company.

DIVIDEND:

During the year under review, since the Company was under Corporate Insolvency & Resolution Process ("CIRP"), no dividend on the equity shares of the Company has been recommended by the Board. The Dividend Distribution Policy is not applicable to the Company in accordance with the SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015.

TRANSFER TO RESERVE

During the year under review, there was no amount transferred to reserves by the Company.

SUBSEQUENT FINANCIAL YEAR 2023-24

The thruput has dropped by 0.02% but the revenue of the Company in the financial year 2022-23 has increased by 3.03% only as compared to previous financial year. In spite of increase in price competition and also one more chemical handling terminal has been added at Kandla. Aegis Vopac and Friends formed a consortium named AVTL which is having 240 tanks with a storage of 0.8 MMT storage in total, the revenue increased due to increase of utilization by way of increase in dedicated storage. This large capacity of AVTL gives them a leverage to dominate the market at Kandla. It is expected that the Company would strive to achieve better revenues during the coming year. However, the development of better infrastructure and reduced demurrages at nearby Ports like Mundra / Hazira may affect the business of the Company. Further, the uncertainty in respect of lease rentals payable to Kandla Port is likely to continue to affect the bottom line.

EXPANSION PLANS

The Company has plans to invest on safety and modernization like Tankfarm Management System ("TFMS") etc. after the renewal of the lease with Deendayal Port Trust("DPT"). The Company has plans to develop liquid storage tanks on the east coast of India. However, presently the import of chemicals is very low at Kakinada. We are keeping a close watch on the developments at the east coast particularly at Kakinada. At Pipavav, at present the viability of a new liquid terminal is not there and therefore we are exploring the possibility liquidating the asset. The Company has plan to set up a Bulk Terminal at another place based on the opportunity and market.

WHOLLY- OWNED SUBSIDIARY COMPANY

The Company has a wholly- owned subsidiary - Kesar Multimodal Logistics Limited ("KMLL"), a material subsidiary of the Company, as per Regulation 16 of Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 ("the Listing Regulations"). There has been no material change in the nature of the business of the subsidiary.

The Company has adopted a Policy for determining Material Subsidiaries in terms of Regulation16(1)(c) of the Listing Regulations. The Policy, as approved by the Board, is uploaded on the Companys website at https:// www.kesarinfra.com/policies.

During the year under review, no Company has become or ceased to be a subsidiary of the Company. The Company does not have any associate or joint venture Company. Pursuant to the provisions of Section 129(3) of the Companies Act, 2013("The Act"), a statement containing the salient features of financial statements of the Companys subsidiary in Form No. AOC-1 is attached to the financial statements of the Company.

Further, pursuant to the provisions of Section 136 of the Act, the financial statements of the Company, consolidated financial statements along with relevant documents and separate audited financial statements in respect of the subsidiary, is available on the Companys website on https://www.kesarinfra.com/annual-reports.

CONSOLIDATED FINANCIAL STATEMENTS

In accordance with the provisions of the Act & Regulation 33 of the Listing Regulations and applicable Indian Accounting Standards ("Ind AS"), the audited Consolidated Financial Statements of the Company for the financial year 2022-23, together with the Auditors Report forms part of this Annual Report.

KESAR MULTIMODAL LOGISTICS LIMITED

Composite Logistics Hub Project of Kesar Multimodal Logistics Limited (KMLL), the wholly- owned subsidiary primarily deals with warehousing of food grains, cold storage for fruits & vegetables etc. Custom approved export import container depot and Indian Railway approved private freight Terminal. KMLL has incurred substantial losses during the financial years ended 31.03.2023 & 31.03.2022. During the financial year under review, the total income of the Company decreased to Rs 346.81 Lakhs as compared to Rs 1,002.12 Lakhs in the previous financial year. Originally, the Project of developing Composite Logistics Hub was conceived with Term Loans from 3 Banks and the Promoters contribution (the Company). Further, the scope of the project increased due to the 2 - way rail connectivity and certain changes prescribed by the Railways which included more safety features, which resulted in the increase in the cost of the project from about Rs 14,867.20 lakhs to about Rs 21,991.93 lakhs. The revised means of financing envisaged additional contribution from the Promoter of about Rs 2,591 Lakhs and additional debt of around Rs 4,534 lakhs. Two of the 3 Banks reappraised the project and sanctioned their share of additional loans of Rs 3,390 Lakhs. However, one Bank did not sanction its share of Rs 1,144 lakhs. Consequently, the two Banks did not disburse even their share of the sanctioned term loan of Rs 3,390 lakhs, which is not in accordance with the RBI Guidelines on Consortium lending, as a result of which KMLL had to complete the requisite work with the additional funds inducted by the Company. Thus, slow pick up of the business and funding gap created by non-sanction of the additional term loans by one Bank, resulted in a shortage of funds. There was overdue of interest and principal amounts towards the Banks of KMLL. Consequently, KMLL had requested its Banks to restructure the Term Loans. In the Consortium meeting held on 20.11.2017, the Banks had invoked Strategic Debt Restructuring (SDR) wherein a part of the Term Loans were to be converted into equity share capital so that the Banks hold 51% of KMLLs shares post conversion. Later, in the Consortium meeting held on 17.01.2018, the Banks had confirmed that the SDR had been approved by the respective competent authorities of the majority of the Banks. However, Reserve Bank of India [RBI] vide its circular dated 12.02.2018 withdrew the SDR Scheme with immediate effect and accordingly the account of KMLL had been classified as Non-Performing Asset [NPA], thereafter Bank of Baroda, erstwhile Dena Bank has recalled the loans from KMLL and invoked the Corporate Guarantee given by the Company, which has been contested by the Company.

SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS

Lenders of Kesar Multimodal Logistics Limited ("KMLL") had filed a Company Petition section 7 of the Insolvency & Bankruptcy Code, 2016 ("IBC, 2016") against the borrower i.e. KMLL and the Corporate Guarantor i.e. the Company in November 2020 with National Company Law Tribunal("NCLT") Mumbai under the IBC, 2016. The same had been admitted by the NCLT vide

Order dated 17.02.2022 against KMLL and Order dated 07.03.2022 against the Company. Shri Prashant Jain Interim resolution professional/Resolution Professional was appointed. The Lenders of KMLL had also filed an Original Application before the Debt

Recovery Tribunal ("DRT") Jabalpur against the Company and KMLL.

KMLL has entered into a One Time Settlement ("OTS") with the Banks & accordingly, Form FA was received by the Resolution Professional from the Applicant Bank- Bank of Baroda in accordance with Regulation 30A of IBBI (Insolvency Resolution Process of Corporate Persons) Regulation, 2016 for withdrawal of the applications admitted for Corporate Insolvency Resolution Process ("CIRP") of the Company & KMLL, the Committee of Creditors ("COC") Meetings were held on 7th September, 2022 for the Company & KMLL. The resolution was discussed in the COC meetings & the resolution was put to vote from 8th September, 2022 at 03:00 p.m. to 12th September, 2022 at 07:00 p.m. for the Company & KMLL. The said Resolution was passed by 99.84% & 100% voting of the members of the COC in favour of the Resolution for both the Companies, respectively.

Pursuant to section 134(3)(q) read with Rule 8(5)(xii) of the Companies (Accounts) Rules, 2014, the details of difference between amount of the valuation at the time OTS of KMLL and valuation done while taking loan from Banks is not applicable as the Banks loan were sanctioned on the basis of Project report, no valuation was possible as the project of KMLL was yet to start. The NCLT orders for the withdrawal of Corporate Insolvency Resolution Process were passed on 19.09.2022 & 04.10.2022 for KMLL & the Company respectively. Except as disclosed above, no other orders have been passed by the Regulators or Courts or Tribunals impacting the going concern status and the Companys operation.

POSTAL BALLOT

The Company has passed a Special Resolution through Postal ballot on 8th December, 2022 for the sale / disposal / transfer upto 100% equity and/or preference stake in Kesar Multimodal Logistics Limited.

SALE OF SUBSIDIARY

The Board of Directors of the Company has accepted the Final Binding Offer ("FBO") given by DP World Multimodal Logistics Private Limited ("DPW") for the proposed transfer of 100% equity and/or preference stake of Kesar Multimodal Logistics Limited to DPW as per the terms of the FBO which is subject to the execution of Share Subscription & Purchase Agreement and fulfillment of certain Conditions Precedents.

SHARE CAPITAL

The Authorised Share Capital of the Company is Rs 15,00,00,000/- divided into 2,50,00,000 Equity Shares of Rs 5/- each aggregating to Rs 12,50,00,000 and 25,00,000 Redeemable Preference Shares of Rs 10/- each aggregating to Rs 2,50,00,000. The paid-up Share Capital of the Company is 1,09,26,475 Equity Shares of Rs 5/- each aggregating to Rs 5,46,32,375. No shares were allotted in the Financial Year 2022-23. During the financial year 2022-23, there was no change in the authorized, issued, subscribed and paid-up share capital of the Company.

NUMBER OF MEETINGS OF BOARD

During the year under review, 5 (Five) Board Meetings were held. The details of the meetings of the Board of Directors of the Company held and attended by the Directors during the financial year 2022-23 are given in the Corporate Governance Report forming part of this Annual Report. The maximum interval between any two meetings did not exceed 120 days, as prescribed under the Act and the Listing Regulations. The Company has provided a video conferencing facility ("VC") to Board/Committee members to attend the meeting through VC or in person.

COMMITTEES OF THE BOARD

As on 31st March, 2023, the Board has Audit Committee, Nomination & Remuneration Committee, Stakeholders Relationship Committee and Corporate Social Responsibility Committee. During the year, all recommendations of the Committees of the Board have been accepted by the Board. A detailed note on the composition of the Board and its Committees meetings held during the year and its terms of reference is provided in the Corporate Governance Report forming part of this Annual Report.

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 that: (i) in preparation of the annual accounts for the financial year ended on 31st March, 2023, the applicable accounting standards have been followed along with proper explanation relating to material departures; (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 at the end of the financial year and of the Loss for that period; (iii) 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) the Directors have prepared the annual accounts for the financial year ended on 31st March, 2023 on a going concern basis; and (v) the Directors had Iaid down proper internal financial controls in place and that such internal financial controls are adequate and are 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.

DIRECTORS & KEY MANAGERIAL PERSONNEL Directors

In compliance with Section 152 of the Act and the Articles of Association of the Company, Shri Jayanto Kumar Devgupta, Non- executive Director (DIN:00515391) retires by rotation and being eligible, offers himself for re- appointment. Based on the performance evaluation and recommendation of Nomination and Remuneration Committee("NRC"), the Board of Directors recommends his re- appointment as Non-Executive Director of the Company, liable to retire by rotation. A resolution seeking shareholders approval for his re-appointment along with a brief profile of Shri Jayanto Kumar Devgupta forms part of the Notice of the 15th AGM.

Mrs. Nilima Ashok Mansukhani (DIN:6964771) was appointed as an Independent Director on the Board of Directors ("Board") of the Company with effect from 21st May, 2018 by members at the 10th Annual General Meeting held on 27th September, 2018 to hold office for the first consecutive term commencing from 27th September, 2018 and ending at the AGM of the Company to be held in the year 2023. Accordingly, the approval of the members is being sought at this 15th AGM for the reappointment of Mrs. Nilima Ashok Mansukhani as an Independent Director through Special Resolution, prior to expiry of her term. The Board has recommended for her re- appointment. The Board on the basis of recommendation of the NRC and considering the skills and experience possessed by Mrs. Nilima Ashok Mansukhani, is of the opinion that she is a person of integrity and possesses the relevant skills, expertise, experience (including proficiency) and capabilities identified to continue as an Independent Director of the Company and is Independent of the Management of the Company.

Mrs. Nilima Ashok Mansukhani has consented to and is not disqualified from being re-appointed as an independent Director in terms of Section 164 of the Act read with applicable rules made thereunder. She is not debarred from holding the office of Director by virtue of any order issued by SEBI or any other such authority.

Brief profile and other disclosures and details required as per the Act and the Listing Regulations are given in the explanatory statement to the AGM Notice. Shri Anilkumar Sushilkamar Ruia, Independent Director (DIN:00296622) of the Company has resigned vide his letter dated 29th August, 2022, due to his present state of health, which was received by the Company on 5th September, 2022. Hence the effective date of resignation is 5th September, 2022. As a result of his resignation, Shri Anilkumar Ruia also ceased to be the members of the Audit Committee, Nomination & Remuneration Committee & Stakeholders Relationship Committee. The Company has also received confirmation from Shri Anil Kumar Ruia that there is no other material reason for his resignation other than one mentioned in his resignation letter dated 29th August, 2022. He was associated with the Company since 21st January 2008. The Company has immensely benefitted from his experience, vision and leadership during his tenure as a Director and a valued Member of the Board.

Declarations by Independent Directors

All the Independent Directors on the Board of the Company have submitted their respective declarations confirming that they meet the criteria of independence as mentioned in Regulation 16(1)(b) of the Listing Regulations read with Section 149(6) of the Companies Act, 2013 and that they are not aware of any circumstance or situation, affecting their status as Independent Directors of the Company.

Independent Directors databank registration

The Company has received declarations from all the Independent Directors of the Company confirming that they have registered their names in the Independent Directors databank maintained by the Indian Institute of Corporate Affairs (IICA) as prescribed by MCA.

A Separate meeting of the Independent Director of the Company was held on 13th February, 2023.

Board Evaluation

Pursuant to the requirement of the Act and Listing Regulations and considering criteria specified in the SEBI Guidance Note on Board Evaluation, the Board has carried out an annual evaluation of its own performance and that of its committees including performance of the Directors Individually through a structured questionnaire, feedback from each Director was obtained as part of performance evaluation. The Board has also carried out the evaluation of the performance of all the individual directors, the Executive Chairman & Nonexecutive director of the Company.

The performance evaluation of Individual Directors including the Executive Chairman, was done based on the criteria such as professional conduct, roles and functions, discharge of duties and their contribution to Board/Committees/Senior Management. The questionnaire prepared for evaluation of the Board as a whole and its committees also covered various aspects such as structure and composition, effectiveness of the Board process, information, roles and responsibilities and functioning of the Board and its Committees, establishment and determination of responsibilities of Committees, the quality of relationships between the Board and the management.

The performance evaluation of the non- Independent Directors viz., the Executive Chairman & Non- executive Director and the Board as a whole was carried out by the Independent Directors at their separate meeting held on 13th February, 2023, taking into account the views of the Executive Director and the Non- executive Director.

Key Managerial Personnel

Shri Debasis Bhattacharya was appointed as the Chief Executive Officer of the Company with effect from 13.02.2023. In accordance with the provisions of Section 2(51) and 203 of the Act read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, Shri Vipul Doshi, Chief Financial Officer, Shri Debasis Bhattacharya, Chief Executive Officer and Mrs. Sarika Singh, Company Secretary are the Key Managerial Personnel (‘KMPS) of the Company as on 31st March, 2023.

Shri Navlesh Kumar, Chief Executive Officer (CEO) of the Company resigned w.e.f.13th January, 2023.

Nomination and Remuneration Policy

The Board has framed a Policy for selection and appointment of Directors, Senior Management and their remuneration. The salient features of the Policy and changes therein are set out in the Corporate Governance Report which forms part of this Annual Report. The details of the Nomination & Remuneration Policy are available on the website: https://www.kesarinfra.com/policies

Familiarization Program

The monthly report on the working of the Company is placed before the Board Meeting on a quarterly basis by the Chief Executive Officer of the Company. The Directors are provided with documents, information and briefings to enable them to have a better understanding of the Company, its operations, and the industry in which it operates. All the Independent Directors of the Company are made aware of their roles and responsibilities at the time of their appointment/reappointment through a formal letter of appointment. Details of familiarization program imparted to the Independent Directors are available on the Companys website: https://www.kesarinfra.com/policies.

AUDITORS

Statutory Auditors and Statutory Audit Report

Pursuant to Section 139 and other applicable provision of the Companies Act, 2013 M/s. Chandabhoy & Jassoobhoy, Chartered Accountants (Firm Registration No. 101647W) were appointed as Statutory Auditor of the Company to hold office for a term of 5 years i.e. from the conclusion of 11th AGM till the conclusion of 16th AGM (to be held during calendar year 2024).

The reports of the Statutory Auditors on Standalone and Consolidated Ind AS Financial Statements forms part of this Annual Report. The Auditors in their report to the members have given qualified opinion and the response of the Company with respect to it is as follows: a) We draw attention to Note 33 of the standalone Ind AS financial statements in respect of litigation with the Deendayal Port Trust (DPT) in respect of their demand of transfer/upfront fees and increase in lease rentals for the leasehold lands and renewal of the said leases. As stated in Note, the Letters Patent Appeal (LPA) / Special Civil Application (SCA) filed by the Company has been dismissed by the Honble Gujarat High Court and the Company has filed Special Leave Petition (SLP) in Honble Supreme Court of India against the order of Honble Gujarat High Court. However, pending the decision of the Honble Supreme Court of India, no provision/adjustments have been made in the standalone Ind AS financial statements in respect of incremental liability or any impact on the leased assets recognised in the financial statements being the same currently not ascertainable and depreciation on assets constructed on lease hold land has been continued to be charged as per the rates prescribed in Schedule II of the Companies Act 2013 and right to use lease assets are continued to be recognised based on the lease period as already determined and recognised in earlier years.

The final outcome of the matter may have impact on the profits of the Company as well as the Right to use Lease assets recognized by the Company. b) We draw attention to Note 34 of the standalone Ind AS financial statements with regard to Companys non-current investment in and other non-current loan to Kesar Multimodal Logistics Limited (KMLL), a wholly owned subsidiary company, aggregatingRs 9803.04 lakhs andRs 5441.93 lakhs respectively as at March 31, 2023. As stated in the said note, KMLL has incurred substantial losses till current year and the net worth of KMLL has been fully eroded. In view of the huge losses in KMLL and pendency of Insolvency and Bankruptcy Code, 2016 (IBC) proceedings, during the quarter ending 31.03.2022, the management as prudent accounting practice, had taken a view to make provision for impairment of loans and Investments ofRs 6,858.33 Lakhs @ 50% of the total loans and investments outstanding as on 31.03.2022. Also, the management had taken a decision not to book the notional interest income as per IND AS on investments in KMLL (i.e. 0% preference shares and Interest free Unsecured Loans) and notional commission on corporate guarantee given on Loans taken by KMLL w.e.f. 01.04.2021. Further, the Company has during the year decided to divest upto 100 % equity and/or preference stake in KMLL and the Company took the Shareholders approval to enable the proposed divestment. Subsequently the company received an offer for sale of equity and/or preference stake of KMLL from the prospective buyer which is accepted by the company and which is subject to the execution of definitive agreements in agreed form, the fulfilment of conditions precedent and necessary approvals from the regulatory/statutory authorities. As stated in the note, the management will consider a final call of further provisions / write off / write back of its carrying value of investments and loans in KMLL once the proposed divestment is concluded. The above will have an impact on the profit and carrying values of these non-current investments and loans. c) We draw attention to Note 34 of the standalone Ind AS financial statements in respect of the petition filed by lenders of the Subsidiary Company (KMLL) against the Company being a corporate guarantor for the borrowings availed by the Subsidiary Company, KMLL from lenders. As stated in the note, the total outstanding loans (including interest) availed by the KMLL from Banks as at 31.03.2023 is Rs 16,737.93 Lakhs (March 31, 2022,Rs 17,110.02 Lakhs). There were defaults in repayments of the borrowings by KMLL to its lenders. The Company petition filed u/s 7 of the Insolvency and Bankruptcy Code,2016 (IBC) by the lenders of KMLL (Borrower) against the KMLL and the Company, being the Guarantor in view of default, was admitted by the NCLT vide Order dated 17.02.2022 against KMLL and vide Order dated 07.03.2022 against the company. However, pursuant to the sanction of the One Time Settlement (OTS) by the lenders and the subsequent filing of form 12A by RP for the withdrawal of CIRP (Corporate Insolvency Resolution Process), NCLT vide its Order dated 19.09.2022 in case of KMLL and 04.10.2022 in case of the Company, withdrew the CIRP. KMLL has made part payments towards OTS and there are overdues as on 31.03.2023. However, no provision has been made in the books of account in respect of liability if any that may arise on account of the invocation of the Corporate Guarantee with respect to pending repayment obligations under OTS by KMLL towards lenders.

The Management reply for the above observations are as follows: a. Impact is not ascertainable as the Company is contesting DPT Demands in Honble Supreme Court where hearing is pending. b. Impact is not ascertainable as the Company is in advance stage of divesting upto 100% equity and/or preference stake in KMLL. However as a prudent accounting practice, provision of Rs 6,858.33 Lakhs @ 50% of total loans and investments is made. c. Impact is not ascertainable as the KMLL has already made part payments towards the OTS and it is seeking more time from the lenders for repayment of OTS dues. Also, the Company is in advance stage of divesting upto 100% equity and/ or preference stake in KMLL.

Internal Auditors

The Company has an adequate Internal Control System. All transactions are properly authorized, recorded and reported to the Management.

The Company had appointed M/s. S V Shah & Associates., Chartered Accountants as its Internal Auditors in accordance with the provisions of Section 138(1) of the Companies Act, 2013 for the Financial Year 2022-23. The Audit Committee reviews the observations made by the Internal Auditors in their Report on a yearly basis.

Secretarial Auditors & Secretarial Audit Report

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 Secretaries to undertake the Secretarial Audit of the Company for the Financial Year 2022-23. The Secretarial Audit Report for the Financial Year 2022-23 contains following observation:

- As per regulation 33(3) of SEBI (LODR) Regulations, 2015 Company had filled financial results for the financial year ended March 31, 2022 with the delay of 52 days.

Delay in submission of the financial results was due to the applicability of Companies Auditors Report Order (CARO), 2020 & latest amendments in Schedule Ill to the Companies Act, 2013 read with Companies (Accounts) Rules, 2014, the numerous additional disclosures were required to be made by the Company in its Financial Statements & Board Report. The Company has made good the non-compliance by submitting the financial results and paying the fine which was imposed by BSE.

The Secretarial Audit Report for the financial year ended 31st March, 2023 is set out in "Annexure A" to this Report.

Secretarial Audit of Material unlisted Indian Subsidiary

As per Regulation 24A of the Listing Regulations, Secretarial Audit of the material subsidiary Kesar Multimodal Logistics Limited has been conducted for the financial year 2022-23 by M/s. Amit R Dadheech & Associates, Practicing Company Secretaries. The Audit Report contains no qualification, reservation or adverse remark. The Secretarial Audit Report of the material subsidiary for the financial year ended 31st March, 2023, is annexed herewith and marked as "Annexure A1" to this Report.

Reporting of Frauds by Auditors

During the year under review, neither the Statutory Auditors nor the Secretarial Auditor has reported to the Audit Committee, under Section 143(12) of the Companies Act, 2013, any instances of fraud committed against the Company by its officers or employees, the details of which would need to be mentioned in the Boards Report.

RELATED PARTY TRANSACTIONS

All Related Party Transactions are placed before the Audit Committee and were in accordance with the related party transactions policy of the Company. All transactions entered into by the Company during the year under review with related parties were in the ordinary course of business and on arms length basis in terms of provisions of the Act. Omnibus approvals are taken for transactions which are repetitive in nature. A quarterly statement of all Related Party Transactions is placed before the Audit Committee for review at every meeting, specifying the nature, value and terms and conditions of the transactions. Pursuant to an amendment in the SEBI (LODR) (Sixth Amendment) Regulations, 2021, the Company has revised the Related Party Transaction policy on 8th February, 2022. A Policy on materiality of related party transactions and dealing with related party transactions as approved by the Board is posted on the Companys website: www.kesarinfra.com/ policies. None of the transactions with related parties fall under the scope of Section 188(1) of the Act. Accordingly, the disclosure of related party transactions as required under Section 134(3)(h) of the Act in Form AOC-2 is not applicable to the Company for the financial year 2022-23.

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.

ANNUAL RETURN

The Annual Return of the Company as on 31st March, 2023 in Form MGT-7 in accordance with Section 92(3) read with Section 134(3)(a) of the Act and the Companies (Management and Administration) Rules, 2014, is available on the website of the Company at https://www.kesarinfra.com/annual-reports .

MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANCIAL POSITION OF THE COMPANY

Except as disclosed above in this report, there were no material changes or commitments affecting the financial position of the Company which have occurred between the end of the financial year and the date of this report.

INTERNAL FINANCIAL CONTROL SYSTEMS AND ITS ADEQUACY

The Company has an appropriate internal control system for its various functions with the ultimate objective of improving the efficiency of operations, better financial management and compliance with the applicable laws. The internal financial control system of the Company is supplemented with yearly internal audits, regular reviews by the management and checks by Statutory Auditors. During the year under review, no material observation has been made by the Internal Auditor or Statutory Auditors of the Company in relation to the efficiency and effectiveness of such controls.

RISK MANAGEMENT

Your Company has a robust risk management framework to identify, evaluate and mitigate business risks. The Company has in place a Risk Management Policy. A detailed statement indicating the development and implementation of a risk management policy for the Company, including identification of various elements of risk appears in the Management Discussion and Analysis Report.

MAINTENANCE OF COST RECORDS

The provisions relating to maintenance of Cost Records as specified by the Central Government under Section 148 of the Companies Act, 2013 is not applicable to the Company.

MANAGEMENT DISCUSSION & ANALYSIS REPORT AND CORPORATE GOVERNANCE REPORT

The Management Discussion & Analysis Report is annexed and forms part of this Annual Report. Pursuant to Regulation 34(3) of the Listing Regulations, Corporate Governance Report containing the details as required under Schedule(V)(C) of the said Regulations along with a certificate from the Secretarial Auditors of the Company confirming the compliance of the conditions of corporate governance by the Company as required under Schedule (V)(E) of the said Regulations is annexed hereto and forms an integral part of this Report.

CHIEF EXECUTIVE OFFICER AND CHIEF FINANCIAL OFFICER CERTIFICATE

In terms of the Listing Regulations, a certificate, as prescribed in Part B of Schedule II of the said Regulations, has been obtained from Shri Debasis Bhattacharya, Chief Executive Officer ("CEO") (w.e.f. 13.02.2023) and Shri Vipul Doshi, Chief Financial Officer ("CFO") for the financial year 2022-23 with regard to the financial statements and other matters. The said certificate forms part of the report on Corporate Governance.

INSIDER TRADING

In compliance with the SEBI (Prohibition of Insider Trading) Regulations, 2015 the Company has framed a comprehensive code which lays down guidelines and advises the Directors, Key Managerial Personnel and other designated persons of the Company on procedures to be followed and disclosures to be made, while dealing in securities of the Company. The Company had 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 the SEBI (Prohibition of Insider Trading) Regulations, 2015.

DISCLOSURE AS PER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013

The Company has a policy in place in line with the requirements of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. The Company has constituted an Internal Complaints Committee ("ICC") for prevention and redressal of complaints/ grievances on the sexual harassment of women at workplaces. All employees (permanent, contractual, temporary, trainees) are covered under this policy. The following is a summary of sexual harassment complaints received and disposed of during the year: (a) Number of complaints pending at the beginning of the year; Nil (b) Number of complaints received during the year: Nil (c) Number of complaints disposed off during the year: Nil (d) Number of cases pending at the end of the year: Nil

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

Disclosures under Section 134(3)(m) of the Companies Act, 2013 pertaining to conservation of energy, technology absorption, foreign exchange earnings and outgo, are not applicable to the Company during the year under review.

Foreign Exchange Earnings and Outgo

The Foreign Exchange earned in terms of actual inflows during the year and the Foreign Exchange outgo during the year in terms of actual outflows: During the financial year, the Companys foreign exchange earnings were Rs Nil (Previous Year: NIL) and outgo was Rs Nil (Previous Year: 0.71 lakh).

INSURANCE

The Company has taken adequate insurance for all its properties.

DEPOSITS

As per the Companies Act, 2013, the Company has not taken deposits in terms of Section 73 of the Act.

UNCLAIMED DIVIDEND/TRANSFER OF SHARES TO IEPF

As per Section 124(5) of the Companies Act, 2013, any money transferred by the Company to the unpaid dividend account and remaining unclaimed for a period of seven years from the date of such transfer shall be transferred to a fund called the Investor Education and Protection Fund (Fund) set up by the Central Government. Accordingly, the unpaid/unclaimed dividends (interim) for the financial year 2014-15 had already been transferred by the Company to the said Fund. Unpaid/ unclaimed dividend for the financial year 2015-16 shall become due for transfer to the said Fund on 9th September, 2023. Members are requested to verify their records and send their claim, if any, for the financial year 2015-16, before such amount becomes due for transfer to the Fund. Communication will be sent to the members, who have not yet claimed dividend for the financial year 2015-16 requesting them to claim the same as well as unpaid dividend, if any, for the subsequent years. During the FY 2022-23, the Company has transferred unclaimed dividend for the FY 2014-15 of Rs 2,64,124 to the IEPF.

The Company has uploaded the details of unclaimed dividend on the Companys website at www.kesarinfra.com. During the year under review, the Company transferred 5257 (Previous Year: 4234) equity shares of the face value of Rs 5 each in respect of 73 (Previous Year: 49) shareholders to the demat account of the IEPF Authority held with NSDL. Details of such shareholders, whose shares are transferred to the IEPF and their unpaid dividends for the subsequent years are available on the website of the Company at www.kesarinfra.com.

REGISTRAR & SHARE TRANSFER AGENT

Link Intime India Pvt. Ltd is the Registrar and Share Transfer Agent of the Company.

SECRETARIAL STANDARDS

The Company has complied with the applicable Secretarial Standards i.e., SS-1 relating to Meetings of the Board of Directors and SS-2 relating to General Meetings, respectively.

WHISTLEBLOWER/VIGIL MECHANISM POLICY

The Whistle Blower Policy of the Company, adopted by the Board, provides mechanism to its directors, employees and other stakeholders to raise concerns about any violation of legal or regulatory requirements, misrepresentation of any financial statement and to report actual or suspected fraud or violation of the Code of Conduct of the Company.

The Policy allows the whistleblowers to have direct access to the Chairman of the Audit Committee in exceptional circumstances and also protects them from any kind of discrimination or harassment. The Whistle Blower Policy of the Company can be accessed at the website: https://www.kesarinfra.com/policies.

It is hereby confirmed that no personnel have been denied access to the audit committee.

CORPORATE SOCIAL RESPONSIBILITY

Pursuant to the provisions of Section 135 of the Companies Act, 2013 read with the Companies (Corporate Social Responsibility Policy) Rules, 2014, the Company has modified its CSR policy to align with the statutory amendments. The Companys CSR policy is available on the Companys web link at www.kesarinfra.com/policies.

The composition and functions of the CSR Committee have 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 B".

PARTICULARS OF EMPLOYEES AND RELATED DISCLOSURES

Relation with the employees remained cordial throughout the year. The 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, is provided as "Annexure-C" 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 made available to any shareholder on request, as per provisions of section 136(1) of the said Act.

ACKNOWLEDGEMENT:

The Directors wish to place on record their grateful appreciation for the assistance and co-operation extended by Banks, Financial Institutions, Customers and the wholehearted support extended by the Shareholders and Employees of the Company during the year.

For and on Behalf of the Board of Directors

For Kesar Terminals & Infrastructure Limited

Harsh Rajnikant Kilachand

Place: Mumbai Executive Chairman
Date: 29.05.2023 DIN: 00294835