DIRECTORS' REPORT To The Members, Your Directors are pleased to present the Twenty Eighth Annual Report of your Company together with the Audited Statement of Accounts and the Auditors' Report of your company for the financial year ended, 31st March, 2016. DIVIDEND Your Company proposes a Dividend of 13% for the year 20152016. The dividend will be paid to the Members whose name appear in the Register of Members as on 21st July, 2016 and in respect of shares held in dematerialized form, it will be paid to members whose names are furnished by National Securities Depository Limited and Central Depository Services (India) Limited, as beneficial owners as on that date. REVIEW OF OPERATIONS During the year, your Company acquired three container vessels namely M.V. SSL Bharat, M. V. SSL Chennai and M. V. SSL Visakhapatnam. M. V. SSL Visakhapatnam which is a sister vessel of M. V. SSL Gujarat was acquired in March, 2016. Thus the total tonnage owned by your Company sums upto over 13,500 teus. With these acquisitions, your Company owns a fleet of 9 vessels with a total dead weight of over 1,90,000 Your Company has deployed all the vessels on the Indian Coast. Presently the services extend till Jebel Ali. In line with the Sagarmala Project introduced by the Ministry of Shipping, your Company offers services on the entire Indian coast. Your Company's consolidated total income increased from Rs. 548 crore to Rs. 601 crore recording an increase of 9.67% in the top line. The consolidated Net Profit has reduced from Rs. 61.75 crore to Rs. 49.50 crore. The stand alone total income increased from Rs. 292 crore to Rs. 318 crore. The fixed assets has increased from Rs. 174 crore to Rs. 252 crore registering a growth of 45% with an average fleet age of 20.33 years. The secured loan has increased from Rs. 99.40 crore to Rs. 160.44 crore, the interest cost has increased from Rs. 7.06 crore to Rs. 8.91 crore thereby securing a debt equity ratio of 0.71 times. There has been an increase in the overall tonnage carried by the Company. In fact, the tonnage carried by your Company is 64% higher in the current year as compared to 2014-2015. However, the profits have been impacted by the reduction in the freight rates in the domestic as well as international trade. STATUTORY AUDITORS M/s. PKF Sridhar & Santhanam LLP (Firm Registration No.003990S/S200018), Chartered Accountants, retire at the conclusion of the 28th Annual General Meeting and offer themselves for re-appointment. They have confirmed their eligibility and willingness to accept office, if re-appointed. SECRETARIAL AUDITORS 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 D. M. Zaveri & Co. a firm of Company Secretaries in Practice to undertake the Secretarial Audit of the Company. The Report of the Secretarial Audit Report is annexed herewith as Annexure I. The Secretarial Audit Report does not contain any qualification, reservation or adverse remark. The Company has complied with the provisions of Section135 of the Companies Act, 2013 pertaining to Corporate Social Responsibility except Section 135(5). The Company has informed that the unspent amount of CSR during the year under report has been apportioned and is intended to be utilized in a phased manner in future upon identification of suitable projects within the Company's CSR Policy. RELATED PARTY TRANSACTIONS During the period under review, all transactions entered into by the Company with the Related Parties were at arm's length and in the ordinary course of business as required under section 188 of the Companies Act, 2013. There was no material transaction with any Related Party. The Company has entered into transactions with related parties as entered in Form No. AOC-2 annexed to this report as Annexure II. The Related Party Transactions have a prior approval of the Audit Committee. EXTRACT OF ANNUAL RETURN Pursuant to section 134(3)(a) and Section 92(3) of Companies Act, 2013 read with relevant Rules framed there under, the extract of Annual Return as on 31st March, 2016 forms part of this Report as Annexure III. MANAGEMENT DISCUSSION AND ANALYSIS A detailed review of the operations, performance and future outlook of the Company and its business is given in the Management Discussion and Analysis appearing as Annexure IV to this Report. REPORT ON CORPORATE GOVERNANCE As required by Regulation 34(3) of the SEBI Regulations, a detailed Report on Corporate Governance is given as Annexure V to this Report along with the Auditors' Certificate on its compliance by the Company and applicable certification of the Chief Executive Officer and Chief Financial Officer and Declaration by the Managing Director affirming compliance with Code of Conduct for the year under review LOANS, GUARANTEE AND INVESTMENTS Details of Loans, Guarantees and Investments are given in the Notes to Financial Statements TRANSFER TO RESERVES For the financial year ended 31st March, 2016, your Company has not transferred any amount to Reserves. INVESTOR EDUCATION AND PROTECTION FUND In accordance with provisions of the Companies Act, 2013, an amount of Rs. 7.81 lacs being unclaimed dividend for the year ended 31st March, 2008 was transferred during the year to the Investor Education and Protection Fund established by the Central Government. SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR OTHERS There are no significant and material orders passed by the regulators or others. DIRECTORS AND KEY MANAGERIAL PERSONNEL The Company has 11 Directors consisting of 5 Non Independent Directors including 2 Whole Time Directors and 6 Independent Directors. Mr. S. Mahesh retires by rotation at the ensuing Annual General Meeting, and being eligible, offers himself for re-appointment. This appointment forms part of the Notice of the Annual General Meeting and the Resolution is recommended for your approval. Profile of Mr. S. Mahesh is given in the Report on Corporate Governance forming part of this Report. All the Independent Directors have affirmed their Independence under Section 149(6) of the Companies Act, 2013. The Company has obtained requisite declaration to that effect from the said Directors. The Company has received declarations from all the Independent Directors of the Company confirming that they meet the criteria of independence as prescribed both under the Act and SEBI Regulations. The Company has devised a Policy for performance evaluation of Independent Directors, Board, Committees and other individual Directors which include criteria for performance evaluation of the non-executive directors and executive directors. BOARD MEETINGS During the year 2015-16, the Board met six times. Detailed information is provided in the Report on Corporate Governance, which forms part of this Annual Report. CORPORATE SOCIAL RESPONSIBILITY In compliance with Section 135 of the Companies Act, 2013 and Rules read thereunder, the Company has formed a Committee for Corporate Social Responsibility (CSR). The members of the Committee met on 21st March, 2016. The Transworld Group has been undertaking the Social Responsibility over a period now. Thus the Company is dedicated to the Social Responsibility. It aspires to undertake a social cause thereby making a difference to the Society in its own way. The Company has identified education and child care as its area for CSR and will shortly commence its activities. During the year, an amount of Rs. 40.51 lacs has been apportioned for the CSR. Cumulatively an amount of Rs. 48.13 is apportioned for CSR. RISK MANAGEMENT The Company has a Risk Management Policy in place wherein all associated business risks are factored, identified and assessed. In accordance with the provisions of Regulation 21 of SEBI (Listing Obligation and Disclosure Requirements) Regulations, 2015, the Company has a Committee for periodically evaluating the various risks. The Company has introduced several improvements to drive a common integrated view of risks, optimal risk mitigation responses and efficient management of internal control and assurance activities. VIGIL MECHANISM In line with Regulation 22 of SEBI (Listing Obligation and Disclosure Requirements) Regulations, 2015, the Company has adopted a Whistle Blower Policy. The mechanism encourages the Whistle Blower to report genuine concerns or grievances. It also provides adequate safeguard to the Whistle Blower against victimization. The Policy on Whistle Blower may be accessed on the Company's website at www.transworld.com/shreyas POLICY ON SEXUAL HARRASMENT The Company has adopted Charter Under The Sexual Harrasment of Women at Workplace (Prevention, Prohibition And Redressal) Act, 2013. During the year ended 31st March, 2016, the Company has not received any complaints pertaining to Sexual Harrasment. QUALITY Quality, integrity and safety have been core to the Company. We firmly believe that the pursuit of excellence is one of the most critical components for success in the competitive market and therefore, consistently strive to adhere to the highest quality standards. The Standard ISO 9001:2008 is valid up to 30th October, 2016. FIXED DEPOSITS: The Company has not accepted fixed deposits from the public during the year under review. SUBSIDIARY COMPANY: The Company has one wholly owned subsidiary as on 31st March, 2016, Shreyas Relay Systems Limited. Mr. Amitabha Ghosh, Non Executive Independent Director has been appointed as the Nominee Director of the Company in Shreyas Relay Systems Limited. CONSOLIDATED ACCOUNTS The Consolidated Financial Statements are prepared in accordance with the relevant Accounting Standards prescribed under Section 133 of the Act read with Rule 7 of the Companies (Accounts) Rules, 2014. DIRECTORS' RESPONSIBILITY STATEMENT: In terms of clause (c) of sub-section (3) of Section 134 of the Companies Act, 2013, the Directors hereby state that: (a) In the preparation of the annual accounts for the year ended 31-03-2016, the applicable accounting standards had been followed along with proper explanation relating to material departures; (b) Appropriate accounting policies were selected and applied consistently. The Directors 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) Proper and sufficient care was taken 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 annual accounts are prepared on a going concern basis; and (e) Internal financial controls are laid down and followed by the company and that such internal financial controls are adequate and were operating effectively. (f) Proper systems are devised to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively. PARTICULARS OF EMPLOYEES AND RELATED DISCLOSURES In terms of the provisions of Section 197(12) of the Act read with Rules 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, a statement showing the names and other particulars of the employees drawing remuneration in excess of the limits set out in the said rules need to be provided in the Annual Report. However, having regard to the provisions of the first proviso to Section 136(1) of the Act and as advised, the Annual Report excluding the aforesaid information is being sent to the members of the Company. The said information is available for inspection at the registered office of the Company during working hours and any member interested in obtaining such information may write to the Company Secretary and the same will be furnished on request. Disclosures pertaining to remuneration and other details as required under Section 197(12) of the Act read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014: 1. The Ratio of Remuneration of each Director to the Median Remuneration of the employees for the year 2015-16 The percentage increase in the Median Remuneration of employees in the year 2015-16: 14.40% 4. The No. of permanent employees on the rolls of the Company: 32 5. The explanation on the relationship between average increase in Remuneration and Company performance: (i) Average increase in Remuneration: 22.21% (ii) Company has reported Net Profit of Rs. 48.68 Crores in F.Y.15-16 6 Comparison of Remuneration of Key Managerial Personnel against the performance of the Company (i) Total Remuneration of Key Managerial Personnel: Rs. 3.92 Crores (ii) Company Performance: Company has reported Net Profit of Rs. 48.68 Crores in F.Y 15-16. The Remuneration of KMPs to the Net Profit works out to 8.05%. 7. i. Variations in the Market Capitalisation of the 10. The Key Parameters for any variable Component of Remuneration availed by Directors: The remuneration paid to Chairman & Managing Director includes Commission (upto 3%) as a percentage of profits. 11. The Ratio of The Remuneration of the Highest paid Director to that of the employees who are not Directors but receive Remuneration in Excess of the highest paid Director during the Year: NA 12. The Remuernation paid to the Key Managerial Personnel is as per the Nomination and Remuneration Policy of the Company CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO: Under the Notification No.GSR 1029, dated 31st December, 1988, companies are required to furnish prescribed information regarding conservation of energy and technology absorption. This, however, does not apply to your Company, as the shipping industry is not included in the Schedule to the relevant rules. ACKNOWLEDGEMENTS Your Directors thank the Company's Clients, Vendors, Charterers, Business Associates, Main Line Operators, Investors, Shareholders and Bankers for their continued support during the year. It will be your Company's endeavor to build and nurture strong links with them based on mutuality, respect and co-operation with each other. Your Directors take this opportunity to thank all employees for their hard work, dedication and commitment. The enthusiasm and unstinting efforts of the employees have enabled the Company to remain at the forefront of the industry despite increased competition from several existing and new players. Your Directors place on record their appreciation for the support and continued co-operation that the Company received from the Government of India, the Ministry of Shipping, the Ministry of Finance, the Ministry of Corporate Affairs, the Directorate General of Shipping, the Mercantile Marine Department, the Stock Exchanges, the Reserve Bank of India, the Central Board of Excise and Customs, and other Government agencies. Your Directors also express their sincere thanks to the Indian National Shipowners Association, Port Authorities, Insurance Companies, Protection and Indemnity clubs for their continued support during the year For and on behalf of the Board of Directors S. Ramakrishnan Chairman & Managing Director Place: Mumbai Date: 26th May, 2016 |