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Lancer Container Lines Limited
Your Directors have pleasure in presenting the 7th Annual Report (3rd AGM - Post IPO) on the business and operations of the Company and the accounts for the Financial Year ended March 31, 2018.
1. Financial Statements and Results
The Companys financial performance for the year under review along with previous years figures is given hereunder:
|Particulars||2017 -18||2016 - 17|
|(Amount in Rs. Crs)||(Amount in Rs. Crs )|
|Revenue from Operations||109.44||77.6|
|Less : Expenses||101.45||77.29|
|Profit Before Tax||9.26||2.05|
|Net Profit After Tax||6.85||1.68|
|Earnings per share #||9.78||2.96|
# 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.110.71 Crs. for the current year as compared to the previous year income of Rs. 79.34 Crs., registering a growth of 40%. Net profit after tax is at Rs.6.85 Crs compared to previous year profit of Rs.1.68 Crs. registering an increase of 3.08 times over the previous year. The increased profits during the year have been achieved due to better performance on the parameters as listed under; a) Increase in Gross Profit Margin by 3.20% in FY18 v/s FY17 due to reduction in cost of services. b) Reduction in employee costs by 0.76%, finance costs by 0.83%, depreciation cost by 1.18%, other expenses by 0.94% in FY18 v/s FY17. (As a percentage to sales).
Your Directors do not recommend any dividend for the financial year ended March 31, 2018.
4. Transfer to Reserve
The Profit after tax for the financial year FY 2017-18 amounting to Rs. 6.85 Crs. have been transferred to Reserves. During the year, the company also received share premium of Rs.1.62 Crs on the warrants issued on preferential basis and utilized reserves to the tune of Rs. 3.77 Crs. for the issue of bonus shares and amortization of lease of Rs. 0.10 Crs.
5. Change in Capital
Increase in Authorized Share Capital
During the year under review, the Authorized Share Capital of the Company was increased from Rs. 11,00,00,000/- (Rupees Eleven crores only) divided into 1,10,00,000 (One crore ten Lakh) equity shares of Rs. 10/- (Rupees Ten only) each to Rs. 15,00,00,000/- (Rupees fifteen crores only) divided into 1,50,00,000 (One Crore fifty lakhs) equity shares of Rs. 10/- (Rupees Ten only) each, ranking Pari Passu with the existing equity shares and consequently CLAUSE V of Memorandum of Association was altered. The said increase in authorized share capital and Alteration of Memorandum of Association was approved by the Members in their Extra-Ordinary General Meeting held on 18th August, 2017.
6. Migration of Equity Shares from BSE SME Platform to BSE Mainboard Platform
The board is pleased to inform that as per notice dated 8th May, 2018 issued by Bombay Stock Exchange the equity shares of Company which were listed on the BSE SME Platform has been migrated & admitted to dealings on the Mainboard with effect from 10th May, 2018.
7. Increase in Paid Up Share Capital
A) During the previous financial year (FY 2016 - 2017) the members in their Extra-Ordinary General Meeting had approved the issuance of 570,000 warrants on preferential basis at the pricing of Rs. 38.45 per warrant determined as per Chapter VII of SEBI (Issue of Capital And Disclosure Requirements) Regulations, 2009. Pursuant to the payment of the amounts under the warrants by the allottees, the company has during the financial year under review converted these 570,000 warrants into 570,000 equity shares. These shares are ranking pari-passu with the old equity shares of the company. The total paid up capital post conversion increased to Rs.6,27,94,000.
B) During the year under review, the members also approved the Issue of bonus shares of face value of Rs. 10/- each in ratio 3:5 i.e in the proportion of three (3) equity shares for every five (5) equity shares held by them respectively as on the Record Date in their Extra-Ordinary General Meeting held on 21st December, 2017. Pursuant to the approval by the members, 37,67,640 Bonus Equity Shares of Rs. 10/- each were issued and allotted on January 05, 2018. These shares are ranking pari-passu with the old equity shares of the company. Total paid up capital after issue increased to Rs.10,04,70,400.
As on 31st March 2018, the total Paid up capital of company is Rs.10,04,70,400. Apart from the above the Company has not issued shares with differential voting rights nor granted stock options nor sweat equity.
8. Allotment of Shares
During the year under the review the company has allotted 5,70,000 shares pursuant to the conversion of the warrants allotted on preferential basis as stated above in Point No. 7(A) above. Further the company has issued bonus shares in the proportion of three (3) equity shares for every five (5) equity shares held as stated above in Point No. 7(B) above.
The Audit Committee comprises Mr. Suresh Babu Sankara as Chairman, Mr. Gajanand Harivilas Ruia, Narayanan M Variyam and Ms. Vijayshri Krishnan 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. During the year under review, six Audit Committee meetings were held on 3rd May 2017,16th August, 2017,28th August, 2017, 30th October, 2017 and 13th November,2017.
Stakeholders Relationship Committee
The Stakeholders Relationship Committee comprises Mr. Suresh Babu Sankara as Chairman, Mr. Gajanand Harivilas Ruia and Ms. Vijayshri Anup Krishnan 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, Stakeholders Relationship Committee meeting was held on 24th November, 2017
Nomination and Remuneration Committee
The Nomination and Remuneration Committee comprises Mr. Suresh Babu Sankara as Chairman and Mr. Gajanand Harivilas Ruia and Ms. Vijayshri Krishnan 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, 3(three) Nomination and Remuneration meetings were held on 28th August, 2017 ,30th October, 2017 and 26th February, 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 constitute the following members:
|Abdul Khalik Abdul||Chairperson||Managing Director|
|Fauzan Abdul||Member||Executive Director|
|Suresh Babu||Member||Non-Executive independent Director|
10. Directors and Key Managerial Personnel
A) Mr. Fauzan Abdul Khalik Chataiwala (DIN- 07376603), Director who retires by rotation and, being eligible for re-appointment, offers himself for re-appointment is part of the agenda of the current Annual General Meeting.
B) Mr. Suresh Babu Sankara, Mr. Gajanand Harivilas Ruia and Ms. Vijayshri Anup Krishnan are appointed as an Independent Directors of the Company for a period of 5 years.
C) Appointment of Mr. Narayanan M Variyam (DIN: 08109682) as Independent Non-Executive Director on 19th July 2018 has been approved by members in a postal Ballot conducted pursuant to the Regulation 110 of Companies Act 2013 and Rule 22 Of The Companies (Management And Administration) Rules, 2014.
D) On the recommendation of the Audit Committee, the board has appointed Mr. Rajeev Bhavnani as a Chief Financial Officer with effect from 30th October, 2017.
11. Internal Control and Its adequacy
The Board at its meeting held on 28th August, 2017 had appointed Ganesh Natarajan and Associates as internal auditor and replaces N.S Bhosle & Company, Chartered Accountants with effect from 1st August, 2017. The company has an adequate internal controls and processes in place with respect to its financial statements which provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements. These controls and processes are driven through various policies, procedures and certifications. The processes and controls are reviewed periodically by internal auditor. The Company has a mechanism of testing the controls at regular intervals for their design and operating effectiveness to ascertain the reliability and authenticity of financial information.
12. Corporate Social Responsibility [CSR]
The provisions of the CSR expenditure and Composition of Committee, as provided in the Section 135 of the Companies Act, 2013 will become effective from Financial Year 2018-19 and hence the spending on CSR activities will be executed in the financial year of FY 2018-19. The company has adopted the policy of Corporate Social Responsibility and uploaded the same on website.
13. Corporate Governance
For the full period under review (FY 2017-18), the Company was listed on BSE-SME platform and hence the requirements of Corporate Governance are not applicable to the company. However, since the company has been migrated to the Main board of the BSE, the requirements of Corporate governance are applicable from the ensuing financial year i.e. FY 2018-19. Your company is well placed to be in compliance with the corporate governance norms prescribed under the Companies Act, 2013, particularly, in relation to appointment of Independent Directors to our Board and constitution of Board-level committees. Your company also undertakes to take all necessary steps to comply with all the requirements of the SEBI Listing Regulations.
14. Particulars of Employees
In terms of the provision of section 197(12) of the Companies Act ,2013 read with Rule 5(2) & (3) of the Companies (Appointment & Remuneration of Managerial Personnel) Rules, 2014 requiring particulars of the employees in receipt of remuneration in excess of Rs.1.02 Crs per year to be disclosed in the Report of Board of Directors are not applicable to the Company as none of the employees was in receipt of remuneration in excess of Rs. 1.02 Crs during the financial year 2017-18. Particulars of Employees as required to be disclosed under Rule 5(1) and (2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is annexed herewith as "Annexure I".
15. Related Party Transaction:
All related party transactions, if any, that were entered into during the financial year were on an arms length basis and were in the ordinary course of business. Particulars of contract or arrangements with related parties is annexed herewith in Form AOC 2 as "Annexure II".
16. Number of Board Meeting conducted during the year under review.
The Company had conducted total 14 Board meetings on the following dates 20th April, 2017, 4th May, 2017, 18th July 2017, 16th August 2017, 19th August 2017, 28th August 2017, 31st August 2017, 1st September 2017, 30th October 2017, 14th November 2017, 24th November 2017, 23rd December 2017, 5th January 2018, and 1st March 2018 during the financial year under review.
17. Statutory Auditors
M/s. Soman Uday & Co, Chartered Accountants, Mumbai (FRN: 110352W) has been appointed and approved by members as the Statutory auditor for the company till the concluding of the members meeting (AGM) for financial year FY 2017-2018. It is proposed in the notice to this AGM for approval of members to appoint M/s Soman Uday & Co as statutory auditor to hold the office from the conclusion of this AGM until the conclusion of the Annual General Meeting of the members to be held for the financial year ending on 31st March, 2019. M/s Soman Uday has given his consent letter along with required certificate under Section 141 to the effect that their appointment, if made, would be within the limits specified under Section 139 of the Companies Act, 2013.
18. Auditors Report
The observation made in the Auditors Reports read with relevant notes thereon are self-explanatory and hence, do not call for any further comments under Section 134 of the Companies Act, 2013.
19. Secretarial Audit Report
In terms of Section 204 of the Companies Act, 2013 and Rules made there under, the board have appointed M/s. Geeta Canabar & Associates, Practicing Company Secretary as the Secretarial Auditors of the Company. The report of the Secretarial Auditors is enclosed as Annexure III to this report. The report is self-explanatory and do not call for any further comments.
20. 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 link.
21. Sexual Harassment
There was no case filled during the year, under the sexual harassment of women at workplace (Prevention, Prohibition & Redressal) Act, 2013. Further 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.
22. Extract of Annual Return
As required 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 as a part of this Annual Report is enclosed as Annexure IV. The same document is also placed on our website at www.lancermarine.in under http://www.lancermarine.in/MGT%209.pdf .
23. Material changes and commitments, if any, affecting the financial position of the company which have occurred between the end of the financial year of the company to which the financial statements relate and the date of the report The company has entered into an agreement dated 3rd April 2018 to purchase an additional office located at Mayuresh Chambers, Unit No. H02-2, H02-3 and H02-4, Plot no~ 60, Sector 11, CBD Belapur, Navi Mumbai - 400614. Each of the unit have 3 floors. A total area of 9270 sq. feet of carpet area (3090 Sq. feet * 3 units) would be available to the company to house its expanding operations as it seeks to increase the fleet size and business verticals.
24. 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 has been no material order 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.
In the Court of Civil Judge (Senior Division), at Lucknow:
M/s Banaras Glasses (P) Ltd (Herein after referred to as Customer) having registered office at 126/31, Shalimar square, BN road Lalbagh, Lucknow, has filed petition in the court of civil judge (senior division) Lucknow against our company for mandatory Injection and recovery of damages. With respect of this, the customer has filed a suit for Rs. 27,41,652/- and interest there-on from the date of filing the suit to the actual date of payment of the above amount by the company. The company believes that the case has no merits and is an incorrect and invalid claim.
In the Court of Civil Judge (Senior Division), at Thane:
Vardhaman Wires and Polymers Limited (Herein after referred to as Shipper) having registered office at Plot No.662/II, Savali Lamdapura Road, Taluka Savali, Village Majusar, Dist, Baroda- 3971 770 has filed a suit in the court of civil judge (senior division) Thane, against our company for recovery of losses caused due to damage to their cargo. The company had provided a container to the shipper for export from ex Nhava Sheva to Jebel Ali on Shippers LOAD / STOW / COUNT basis in which case, Lancer does not have any responsibility as regards the condition of cargo. Accordingly Bills of Lading had been issued based on SAID TO CONTAIN clause (i.e. as per information provided by the Shipper). As per the shipper at the time the goods reached the destination, they have been found to be damaged by water seepage and thus they have filed a claim of Rs. 42,00,000 as damages including the cost of the goods and various other costs and interest thereon till the date of payment. The company is in the process of filing our response to prove that the claim is incorrect and invalid.
Proceedings against our Company
Our Company has voluntarily filed an application dated March 19, 2016 for compounding of offences for non-compliance under section 42 of the Companies Act, 2013 i.e. delay in allotment of shares within prescribed timeline and not opening a separate bank account for receipt of share application money. The said application is in process with the relevant authority.
The Company has received a demand notice in April 2018 from the Assistant Commissioner of Sales tax, Raigad Division with respect to the Sales Tax assessment for financial year 2011-12. The demand notice is issued for an amount of Rs. 10,066,786/- (inclusive of Tax, penalty and interest) pertaining to an input tax credit for Rs. 41,51,252/- wrongly availed by one of our customers during financial year 2011-12. We have already filed an appeal with Deputy Commissioner of Sales Tax, Belapur Div. VAT-006 against the order.
During the year, the Company has not accepted any deposits under the Companies Act, 2013.
25. Particulars of loans, guarantees or investments under Section 186.
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.
26. Declaration of Independent Directors
The Independent Directors have submitted their disclosures 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.
27. Management Discussion and Analysis
The Management Discussion and Analysis for the year ended 31 March 2018 forms part of this Annual Report as Annexure V.
28. 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, inter-personal skills, submissions done by the Director in varied disciplines related to the Companys business.
29. Conservation of energy, technology absorption and foreign exchange earnings and outgo
Conservation of Energy
No specific investment has been made in reduction in energy consumption.
As the company has not acquired any technology, the question of absorption of technology does not apply to the company.
Foreign Exchange Earning and Outgo
During the period under review the foreign exchange earnings and outflow were as follows:
1) Earnings USD 21,49,773.00
2) Outflow USD 21,28,277.00
30. Human Resources
Given that we are in the service industry employees remain the backbone of our service delivery and differentiation. Employees are engorged to contribute their best and appraised given feedback at regular intervals. During the year we added approximately 30 employees. Employees are given a proper orientation, training, rotation under a structured program.
31. Directors 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 had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effective.
Your Company and its directors acknowledge with gratitude the support and co-operation received from the Members/ shareholders of the Company, Bankers, Local Bodies, Customers, Suppliers, Executives, Financial Institution and Central and State Governments.
|Place: Mumbai||By order of the Board of Directors|
|Date: 23rd August, 2018||Abdul Khalik Chataiwala|
|DIN Number - 01942246|