Lancer Containers Lines Ltd Directors Report.

To,

The Members,

Lancer Container Lines Limited

Your directors are pleased to present the 8th Annual Report (4th AGM - Post IPO) on the operations of the Company and the accounts for the Financial Year ended 31st March 2019.

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 2018 -19 2017 -18
Revenue from Operations 197.41 109.45
Other Income 0.55 1.26
Total income 197.96 110.71
Expenses 186.26 101.45
Profit Before Tax 11.70 9.26
Net Profit After Tax 8.22 6.86
Earnings per Share # 8.18 9.78

# 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. 197.96 Crs compared to the previous year income of Rs. 110.71 Crs., registering a growth of 78.8 %. Net profit after tax is at Rs. 8.22 Crs compared to previous year net profit after tax of Rs. 6.86 Crs. registering an increase of 20.03 % over the previous year. The increased profits during the year have been achieved due to better performance on the parameters as listed under: -

• Revenues at Rs.197.96 crores, up 78.8 % YoY.

• EBIDTA at Rs.20.5 crores up 46.7% YoY despite higher operating expenses.

• PAT at Rs.8.22 crores, up 20.03 % 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, 2019.

4. Transfer to Reserve

The Net Profit after tax of Rs. 8.22 Crs for the FY 18-19 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 Clause 52 of the Equity Listing 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.

Further it may be noted that Gajanand Ruia who was a member of the audit committee during the year has resigned with effect from 28th March, 2019 on account of health reasons. The disclosures as required under the guidelines have been made to the stock exchange. During the year under review, 7 (Seven) Audit Committee meetings were held on 13th April 2018, 21st April 2018, 05th June 2018, 13th August 2018, 13th November 2018, 13th Feb, 2019, 28th March 2019.

• 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 28th March 2019.

• 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 21st April 2018.

• 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, Harish Parameswaram 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 2018 -19 to the tune of Rs. 831,000. The company during the year spent Rs. 400,000 towards promotion of education & Rs. 431,000 towards medical treatment of chronic conditions of the poor and needy patients. Your company believes in giving back to the society in which it operates and remains committed towards making a difference to the needy people through it CSR initiatives.

• 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 28th March 2019.

7. Board Meetings.

The Board of Directors met 14 times during the year as follows: -

Sl. No. Date of Meeting Board Strength No. of Directors Present
1 13/04/2018 7 7
2 21/04/2018 7 7
3 05/06/2018 8 4
4 14/06/2018 8 7
5 04/07/2018 8 7
6 25/07/2018 8 6
7 13/08/2018 8 7
8 23/08/2018 8 6
9 09/10/2018 8 6
10 14/11/2018 7 3
11 03/01/2019 7 5
12 13/02/2019 7 5
13 28/03/2019 7 5
14 29/03/2019 6 4

8. Details of Directors and Key Managerial Personnel

Name of Directors . & Key Managerial Personnel DIN/PAN Category cum designation Member of Audit Committee No. of shares held as on 31st March, 2019
Abdul Khalik Abdul Kadar Chataiwala 01942246 Chairman & Managing Director No 39,24,120
Suresh Babu Sankara 02154784 Independent Director Chairman of Audit Committee NIL
Manesh Sudhakaran Vadakkath 03153583 Executive Director No 1,200
Harish Parameswaran 05249722 Executive Director No NIL
Vijayshri Krishnan Anup 07258233 Independent Director Yes NIL
Narayanan Moolanghat Variyam 08109682 Independent Director Yes NIL
Sumit Sharma COHPS0112N Company Secretary & Compliance Officer No NIL
Narayanan Kutty Parakattil AUAPP4209J Chief Executive Officer No 8

Note:

• Narayanan Moolanghat Variyam was appointed as an Independent Director on 13th April 2018 via

postal Ballot, details of which is available on BSE & Company website.

• Sumit R Sharma was appointed as Company Secretary & Compliance Officer on 20th May 2019.

• Fauzan Chataiwala, Executive Director resigned with effect from 09th October 2018.

• Gajanand Harvilas Ruia, Independent Director resigned with effect from 28th March 2019.

• Rajeev Bhavnani resigned from post of Chief Financial Officer with effect from 20th May 2019.

• Anchal Gupta, Company Secretary & Compliance Officer, resigned with effect from 05th April 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) 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.

(f) 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 2018-19 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 2019 and the link for the same is below:

• Company Website: http://www.lancermarine.in/SEIntimation.pdf

• Bombay Stock Exchange Website:

https://www.bseindia.com/xml-data/corpfiling/AttachHis/91c57d0c-f645-4e89-8992-dce7f0d9a4ee.pdf

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 2018-19 and percentage change in the remuneration of each Director in the FY 201819:

Name of the Director Designation Ratio of remuneration of the Director to the median remuneration % increase in Remuneration
Abdul Khalik Chataiwala Chairman & Managing Director 12.99 41.02
Manesh Sudhakaran Vadakkath Executive Director 12.99 28.05
Harish Parameswaran Executive Director 5.00 22.48

• For Fauzan Chataiwala, the Ratio of remuneration of the director to the median remuneration is 3.25 and % increase in Remuneration is 19.29

2. Percentage increase in the remuneration of Chief Executive Officer, Chief Financial Officer and Company Secretary in the FY 2018-19: -

Name Designation % Increase in Remuneration
Narayanan Kutty Parakattil Chief Executive Officer 29.09
Rajeev Bhavnani Chief Financial Officer 41.62
Anchal Gupta Company Secretary & Compliance Officer 8.99

3. There were 173 permanent employees on the rolls of the Company at the end of the FY 201819.

4. The median remuneration of employees of the Company increased by 34.76 % in the FY 201819 compared to the median in FY 2017-18.

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. 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 5,50,000 * Permanent MBA 31 Years 07.03.2011 55 years NA 39.06 Father of Fauzan Chataiwala
2 Manesh Sudhakaran Vadakkath Executive Director 3,50,000 Permanent B.Com 21 Years 09.05.2016 45 Years Radiant Maritime Pvt.Ltd. Negligible No
3 Smitha Manesh Manager- Customer Service (Middle East) 1,50,000 Permanent B.Com 7 Years 01.11.2012 41 Years NA 0.12 Wife of Manesh Sudhakaran Vadakkath
4. Fauzan Chataiwala Executive Director 1,50,000 # Permanent B.Com 4.5 Years 01.03.2015 22 Years N.A 1.59 Son of Abdul Khalik Chataiwala
5. Harish Parameswaran Executive Director 1,36,756 Permanent MBA 19 Years 21.12.2015 44 Years Citi Bank - No
6. Nagender Vashishth Deputy General Manager- North 1,33,900 Permanent MBA- International marketing 11 Years 11.11.2014 37 Years Opal Asia Logistics No
7. Amol Mohan Shirke General Manager 1,18,000 Permanent B.Com 18 years 13.06.2016 35 Years Ceyline Logistics No
8. Rajeev Bhavnani Chief Financial Officer 1,01,800 Permanent MBA 26 Years 30.10.2017 48 Years Vardhaman Plastochem Pvt.Ltd. No.
9. Tarannum Chataiwala Sr. Manager- Admin. 1,00,000 Permanent B.Com 6 Years 01.04.2012 44 Years N.A 10.37 Wife of Abdul Khalik Chataiwala
10. Shyam Gangaram Lalwani Deputy General Manager- Gujarat 98,250 Permanent B.Com 13 Years 01.05.2012 35 Years Radiant Maritime Pvt Ltd No

* With effect from Dec 2018 # Till Oct 2018

15. Sexual Harassment

There was no case filled 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, an extract of annual return in MGT 9 (Annexure III) is attached to this Report. The same document 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
Structural Insulation & Glazing company (P) Ltd, Lucknow. Claim filed in court of Lucknow for Rs.25,35,670 towards detention, ground rent, duties, other charges, cost of litigation, interest and damages towards incorrect port of destination code entered in IGM. The company has taken suitable steps to defend its position and interest and believes that these cases have no merits and are invalid claims.
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. Two hearings have been completed, but the petition has not yet been admitted by the Honourable Court. The court has asked the petitioner to give the C forms as demanded by us in our various correspondence with the petitioner.

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: $ 4,219,090

• Outflow: $ 4,680,404

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 Directors wish to express their gratitude to the members for their trust and support.

For and on behalf of the Board of Directors Lancer Container Lines Limited
Sd/-
Abdul Khalik Chataiwala
Place: Navi Mumbai Chairman & Managing Director
Date: 29th August, 2019 (DIN:- 01942246)