Lancer Containers Lines Ltd Directors Report.

To,

The Members,

Lancer Container Lines Limited

Your Directors are pleased to present the 9th Annual Report (5th AGM - Post IPO) on the operations of the Company and the accounts for the Financial Year ended 31st March 2020.

1. Financial Statements and Results

The Companys financial performance for the year under review along with previous years figures is given hereunder: (Amount in Rs. Crs.)

Particulars 2019-20 2018 -19
Revenue from Operations 265.26 197.41
Other Income 0.80 0.55
Total income 266.06 197.96
Expenses 255.21 186.26
Profit Before Tax 10.85 11.70
Net Profit After Tax 8.01 8.22
Earnings per Share # 7.97 8.18

# EPS numbers are in actuals.

2. Brief description of the Companys working during the year.

During the year under review your Company has reported total income of Rs. 266.06 Crs compared to the previous year income of Rs. 197.96 Crs., registering a growth of 34.40 %. Net profit after tax is at Rs. 8.01 Crs compared to previous year net profit after tax of Rs. 8.22 Crs. registering a marginal decrease of 2.55% over the previous year. The financial parameters of the company are as listed under: - Revenues at Rs. 266.06 crores, up 34.04% YoY.

EBIDTA Rs.22.32 crores up by 8.9% despite higher operating expenses.

PAT at Rs. 8.01crores, , marginally down 2.6% YoY.

3. Dividend

Given the growth phase of the Company and the continuous need of funds towards capex spending, your Company is required to deploy the surplus funds towards growth funding. Hence as a matter of financial prudence, your Directors do not propose a dividend for the financial year ended 31st March, 2020.

4. Transfer to Reserve

The Net Profit after tax of Rs. 8.01 Crs for the FY 19-20 have been retained in the Profit and Loss Account.

5. Change in capital Structure

During the year under review your Company has not issued any shares of any category. Thus there is no change in Capital structure of the Company.

6. Committee

Audit Committee

The Audit Committee comprises Suresh Babu Sankara as Chairman, Narayanan M Variyam and Vijayshri Krishnan Anup as the members. The Committee is assigned role, powers and responsibilities as provided under Regulation 18 of the SEBI (Listing Obligations And Disclosure Requirements) Regulations, 2015 Agreement and Section 177 of the Companies Act, 2013. There is no such incidence where Board has not accepted the recommendation of the Audit Committee during the year under review.

During the year under review, 4 (Four) Audit Committee meetings were held on 20th May 2019, 13th August 2019, 07th November 2019, and 12th February, 2020.

Stakeholders Relationship Committee

The Stakeholders Relationship Committee comprises Suresh Babu Sankara as Chairman, Narayanan M Variyam and Vijayshri Krishnan Anup as the members. The Committee is constituted to supervise and ensure Share Transfer related matters and to look after the Stakeholders Grievances. During the year under review, 1 (One) meeting of Stakeholders Relationship Committee was held on 12th February, 2020.

Nomination and Remuneration Committee

The Nomination and Remuneration Committee comprises Suresh Babu Sankara as Chairman and Narayanan M Variyam and Vijayshri Krishnan Anup as the members. The Committee is formed for the purpose of recommending the Nomination and Remuneration and evaluation of the Directors performance. During the year under review, 1 (One) meeting of Nomination and Remuneration Committee was held on 12th February, 2020.

Corporate Social Responsibility Committee

The Board of Directors at its meeting held on 4th July 2018 at its registered office has constituted the Corporate Social Responsibility Committee u/s. 135 (1) of the Companies Act,2013 read with Companies (Corporate Social Responsibility Policy) Rules, 2014. The Corporate Social Responsibility Committee comprises of Abdul Khalik Chataiwala as Chairman, Praful Jain, Narayanan Moolanghat Variyam and Suresh Babu Sankara as members.

As mandated under Section 135 of the Companies Act, 2013 the Company was required to spend towards CSR activities in the FY 2019 -20 to the tune of Rs. 15,34,186/-.The details of the expenditure are mentioned is CSR report annexed to the report.

Independent Directors Meeting

As required under Clause 8 (1) of Schedule 4 to the Companies Act 2013, a meeting of the Independent Directors without the attendance of Non-Independent Directors and the members of the management was held on 12th February, 2020.

7. Board Meetings.

The Board of Directors met 8 times during the year as follows: -

Date of Meeting Board Strength No. of Directors Present
1 20/05/2019 6 5
2 05/07/2019 6 5
3 13/08/2019 6 5
4 29/08/2019 6 4
5 14/10/2019 5 3
6 07/11/2019 5 3
7 24/12/2019 5 3
8 12/02/2020 6 6

8. Details of Directors and Key Managerial Personnel

Sr. Name of Directors & No. Key Managerial Personnel DIN/PAN Category cum designation No. of shares held as on 31st March, 2020
1 Abdul Khalik Abdul Kadar Chataiwala 01942246 Chairman & Managing Director 39,24,120
2 Suresh Babu Sankara 02154784 Independent Director Nil
3 Manesh Sudhakaran Vadakkath 03153583 Executive Director 1,200
4 Harish Parameswaran 05249722 Executive Director Nil
5 Vijayshri Krishnan Anup 07258233 Independent Director Nil
6 Narayanan Moolanghat Variyam 08109682 Independent Director Nil
7 Sumit Sharma COHPS0112N Company Secretary Nil
8 Narayanan Kutty Parakattil AUAPP4209J Chief Executive Officer 8
9 Amol Mohan Shirke 08681663 Additional Executive Director Nil
10 Praful Jain 08000808 Additional Executive Director Nil
11 Ranjana Sandeep Shinde AIGPG1277P Chief Financial Officer Nil
12 Rajeev Bhavnani AHJPB5054F Chief Financial Officer Nil

Note:

Amol Mohan Shirke and Praful Jain were appointed as an Additional Executive Director on 12th February 2020 in a board meeting held on that date.

Manesh Sudhakaran Vadakkath, Executive Director resigned with effect from 03rd February, 2020. Harish Parameswaran, Executive Director resigned with effect from 24th September, 2019. Rajeev Bhavnani resigned as Chief Financial officer with effect from 20th May, 2019 Ranjana Sandeep Shinde appointed on post of Chief Financial Officer with effect from 29th August, 2019.

Sumit Sharma was appointed as Company Secretary with effect from 20th May, 2019.

9. Director Responsibility Statement

The Directors Responsibility Statement referred to in clause 134(3)(c) of the Companies Act, 2013, state that

(a) in the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures;

(b) 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;

(c) the Directors had 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;

(d) the Directors had prepared the annual accounts on a going concern basis; and

(e) With respect to section 134(3) (ca) there were no frauds reported by auditors under subsection (12) of section 143 other than those which are reportable to the Central Government.

(f) the Directors have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively.

(g) 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.

10. Related Party Transactions:

All related party transactions that were entered into during FY 2019-20 were on an arms length basis and were in the ordinary course of business and disclosed in the financial Statements. There were no materially significant related party transactions made by the Company with Promoters, Directors, KMPs or Body Corporate(s), which had a potential conflict with the interest of the Company at large. Accordingly, the disclosure of related party transactions as required under the provisions of Section 134(3)(h) of the Act in Form AOC-2 is not applicable. The Directors draw attention of the members to notes to Financial Statements which sets out related party disclosures.

All Related Party transaction are uploaded on Companys website and same has been intimated to Stock exchange for period ended 31st March 2020 and the link for the same is below:

Company Website: http://www.lancermarine.in/SEIntimation.pdf Bombay Stock Exchange Website: https://www.bseindia.com

11. Statutory Auditors reports and comments thereon

Soman Uday & Co. (FRN: - 110352W), Chartered Accountants is the Statutory Auditor for the year under review. There are no qualifications or adverse remarks in the Auditors Report which require any clarification/ explanation. The Notes on financial statements are self-explanatory and needs no further explanation.

12. Secretarial Audit Report and comments thereon

M/s. Geeta Canabar & Associates (M No. 8702), Company Secretaries in practice, have been appointed to undertake the Secretarial Audit of the Company pursuant to the provisions of Section 204 of the Companies Act, 2013 and the Companies (Appointment and Remuneration of Managerial personnel) Rules 2014 read with regulation 24A of SEBI LODR regulations 2015 as amended from time to time. There are no qualifications or adverse remarks in the Secretarial Auditors Report, which require any clarification/ explanation from board of directors or Companys management. The Report of the Secretarial Auditor is annexed to the Boards Report as Annexure I.

As required under SEBI LODR Regulations 2015, a compliance certificate from Practicing Company Secretary regarding compliance of conditions of Corporate Governance is annexed herewith, (Annexure II).

13. Vigil Mechanism

Your Company believes in promoting a fair, transparent, ethical and professional work environment. The Board of Directors of the Company pursuant to the provisions of Section 177 of the Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, has framed "Vigil Mechanism" for Directors and employees of the Company for reporting the genuine concerns or grievances or cases of actual or suspected, fraud or violation of the Companys code of conduct and ethics policy. The Vigil Mechanism Policy has been uploaded on the website of the Company at www.lancermarine.in under http://www.lancermarine.in/Policies.html

14. Disclosure required under Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014.

1. Ratio of the remuneration of each Director to the median remuneration of the employees for the FY 2019-20 and percentage change in the remuneration of each Director in the FY 2019-20:

Name of the Director Designation Ratio of remuneration of the Director to the median remuneration % increase in Remuneration
Abdul Khalik Chataiwala Chairman & Managing Director 25.57 114.29
Praful Jain Executive Director 0.68 -
Amol Mohan Shirke Executive Director 0.59 -
Harish Parameswaran Executive Director 3.40 2.96
Manesh Sudhakaran Vadakkath Executive Director 18.75 57.14

Note:

??Amol Mohan Shirke and Praful Jain were appointed as an Additional Executive Director on 12th February 2020 in a board meeting held on that date. ??Manesh Sudhakaran Vadakkath, Executive Director resigned with effect from 03rd February, 2020. ??Harish Parameswaran, Executive Director resigned with effect from 24th September, 2019.

2. Percentage increase in the remuneration of Chief Executive Officer, Chief Financial Officer and Company Secretary in the FY 2019-20: -

Name Designation % Increase in Remuneration
Narayanan Kutty Parakattil Chief Executive Officer 8.96
Ranjana Sandeep Shinde Chief Financial Officer -
Sumit Sharma Company Secretary & Compliance Officer -
Rajeev Bhavnani Chief Financial Officer -

Note:

??Rajeev Bhavnani resigned as Chief Financial officer with effect from 20th May, 2019

??Ranjana Sandeep Shinde appointed on post of Chief Financial Officer with effect from 29th August, 2019. ??Sumit Sharma was appointed as Company Secretary with effect from 20th May, 2019.

3. There were 254 permanent employees on the rolls of the Company at the end of the FY 2019-20.

4. The median remuneration of employees of the Company increased by 8.81 % in the FY 2019-20 compared to the median in FY 2018-19.

5. The increment given to each individual employee is based on the employees potential, experience as also their performance and contribution to the Companys progress over a period of time and also as per market trend.

6. Average percentile increase in the salaries of employees other than the managerial personnel in the 2019-20 was 21.27% and the percentile increase in the managerial remuneration was 63.81% in 2019-20.

7. Affirmation: Remuneration paid to Directors, KMP and other employees is as per the remuneration policy of the Company.

Disclosure required under Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is as follows: -

Sr. No. Name Designation Monthly Remuneration (Amount in Rs) Nature of Employment Educational Qualification Experience Date of Joining Age of Employee Previous Employment Equity Shares Held (in%) Whether employee is related to the Director
1 Abdul Khalik Chataiwala Chairman & Managing Director 7,50,000 * Permanent MBA 32 Years 07.03.2011 55 years NA 39.06 -
2 Smitha Manesh Manager- Customer Service (Middle East) 2,00,000 Permanent B.Com 8 Years 01.11.2012 41 Years NA 0.11 -
3 Fauzan Chataiwala Senior Manager 1,50,000 Permanent B.Com 5.5 Years 01.03.2015 22 Years N.A 1.59 Son of Abdul Khalik Chataiwala
4 Nagender Vashishth Director Northern Region 1,62,111 Permanent MBA-International marketing 12 Years 11.11.2014 37 Years Opal Asia Logistics 0.00 -
5 Amol Mohan Shirke Director 1,44,620 Permanent B.Com 19 years 13.06.2016 35 Years Ceyline Logistics 0.00 -
6 Tarannum Chataiwala Sr. Manager- Admin. 1,25,000 Permanent B.Com 7 Years 01.04.2012 44 Years N.A 10.37 Wife of Abdul Khalik Chataiwala

 

7 Shyam Gangaram Lalwani Director Gujarat Region 1,23,192 Permanent B.Com 14 Years 01.05.2012 35 Years Radiant Maritime Pvt Ltd 0.00 -
8 Praful Jain Director 1,50,000 Permanent MBA 12 Years 01.11.2019 34 Years Reliance 0.00 -
9 Ranjana S. Shinde CFO 1,25,000 Permanent M.Com(gdca) 15 Years 05.07.2019 46 Years New Globe logistics llp 0.00 -
10 Probodh Kumar General Manager 1,50,000 Permanent PGDPM(COMPUTER APPLICATION) 26 16.09.2019 51 Years Radiant Maritime Pvt Ltd 0.00 -

15. Sexual Harassment

There was no case filed during the year, under the Sexual Harassment of Women at workplace (Prevention, Prohibition & Redressal) Act, 2013. Further the Company ensures that there is a healthy and safe atmosphere for every women employee at the workplace and made the necessary policies for safe and secure environment for women employees. Further your Company has complied with constitution of Internal Complaint Committee.

16. Extract of Annual Return

Pursuant to Section 92(3) of the Companies Act, 2013 and Rule 12(1) of the Companies (Management and Administration) Rules, 2014, Annual Return in MGT - 7 is also placed on our website at www.lancermarine.in under Investor relations Corporate Announcement.

17. Details of significant and material orders passed by the Regulators or Courts or Tribunals impacting the going concern status and Companys operations in future.

There are no material orders passed by the Regulators or Courts or Tribunals impacting the going concern status and Companys operations in future. We however bring to the attention of the members, matters which are in the nature of disputes & their associated claims. For all the below stated matters the Company has or is in the process of refuting the incorrect and invalid claims.

Party Name Details of Claim Current Status
V Cube Logistics Private Limited, Ahmedabad. Claim of Rs. Rs.15,66,315 in the NCLT court of Mumbai towards refund of advance and interest thereon. The case has been settled

18. Deposits:

During the year, the Company has not accepted any deposits under Chapter V - Acceptance of Deposits by Companies under the Companies Act, 2013.

19. Particulars of loans, guarantees or investments under Section 186 of Companies Act:

The Company has not given any loans or guarantees covered under the provision of Section 186 of the Companies Act, 2013. There is no investment and guarantee made during the year which falls under the definition of Section 186.

20. Declaration of Independent Directors:

The Independent Directors have submitted their affirmation to the Board that they fulfill all the requirements as stipulated in Section 149(6) of the Companies Act, 2013 so as to qualify themselves to be appointed as Independent Directors under the provisions of the Companies Act, 2013 and the relevant rules.

21. Board Evaluation:

In compliance with the provisions of Companies Act, 2013 and listing compliances, the Board carried out at an annual evaluation of its own performance and individual Directors. It also evaluated the performance of its committees. The evaluation inter alia covered different aspects viz. composition of the Board and its Committees, qualifications, performance, interpersonal skills, submissions done by the Director in varied disciplines related to the Companys business.

22. Conservation of energy, technology absorption and foreign exchange earnings and outgo:

a) Conservation of Energy

The Company has always been conscious of the need for conservation of energy and has been sensitive in making progress towards this initiative. Adequate measures are always taken to ensure optimum utilization and maximum possible saving of energy at the offices of the Company.

b) Technology Absorption

The Company continues to integrate the latest proficient technology, innovations and improvement as introduced. The Company has invested significant resources in technological capabilities and has developed a scalable technology system. Your Company has rolled out EBMS system to keep a track of end to end delivery of services to the client.

c) Foreign Exchange Earning and Outgo

During the period under review the foreign exchange earnings and outflow were as follows:

Earnings: $ 2,767,601.18 Outflow: $2,290,588.09

23. Adequacy of Internal Financial Controls:

The Company has adequate internal financial controls in place with reference to financial statements. These are continually reviewed by the Company to strengthen the same wherever required. The internal control systems are supplemented by internal audit carried out by an independent firm of Chartered Accountants and periodical review by the Management. The Audit Committee of the Board addresses issues raised by both, the Internal Auditors and the Statutory Auditors.

24. Remuneration policy and criteria for selection of candidates for appointment as Directors, key managerial personnel and senior leadership positions.

The Company has in place a policy for remuneration of Directors, Key Managerial Personnel and Employees of senior leadership Position as well as well-defined criteria for the selection of candidates for appointment to the said positions which has been approved by the Board. The Policy broadly lays down the guiding principles, philosophy and the basis for payment of remuneration to the executive and non-executive Directors (by way of sitting fees), Key Managerial Personnel. The criteria for selection of candidates for the above positions cover the various factors and attributes which are considered by the Nomination & Remuneration Committee and the Board of Directors while making a selection of the candidates. The above policy along with the criteria for selection is available at the website of the Company at http://www.lancermarine.in/Policies.html.

25. Risk Management.

The Risk Management Policy with reference to Section 134 (3) (n) and Section 177 (4) (vii) of the Companies Act, 2013, the guidelines prescribed for risk management committee is not applicable to the Company. Nevertheless, the Company does assess the various risks faced by it in its various areas of operations and mitigates them from time to time.

26. Acknowledgement.

The Company wishes to thank its investors, banking community, rating agencies and stock exchanges for their support. The Company would like to take this opportunity to express sincere thanks to all its valued customers, vendors, agents and suppliers for their continued support and patronage. The Directors express their deep sense of appreciation to all the employees whose outstanding professionalism, commitment and initiative has made the organizations growth and success possible and continue to drive its progress. Finally, the Board of Directors wish to express their gratitude to the members for their trust and support.