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Snowman Logistics

BSE: 538635|NSE: SNOWMAN|ISIN: INE734N01019|SECTOR: Transport & Logistics
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Download Annual Report PDF Format 2016 | 2015
Directors Report Year End : Mar '17    Mar 16

Dear Members,

The Board of Directors presents the Annual Report of the Company together with the Audited Statements of Account for the financial year ended 31 March 2017.

The Company crossed 1 lakh pallet capacity with the commencement of operations at the Cochin Warehouse, reconfirming its position as the market leader in the temperature controlled logistics industry. While 2016-17 was a year of consolidation and correction, the company believes that the initiatives taken during the year has positioned itself towards a growth Trajectory.

Financial Performance

(Rs.in lakhs)

Particulars

2016-17

2015-16

Growth

Pallet Capacity

1,03,600

98,500

5%

Fleet Strength

293

422

-31%

Revenue From Operations

18,924

22,486

-16%

Other Income

79

278

-72%

Total Income

19,003

22,764

-17%

EBITDA

3,636

4,865

-25%

EBITDA%

19%

22%

PBT

-1,549

1,176

-232%

PBT%

-8%

5%

PAT

-493

2,054

-124%

PAT%

-3%

9%

Management Discussion & Analysis Operations

During the year the Company recorded sales of Rs. 18,924 lakhs as compared to Rs. 22,486 lakhs, a decrease of 16%. EBITDA Rs. 3,636 lakhs as against Rs. 4,865 which is a decrease of 25%. Due to higher incidences of interest & depreciation on account of expansion & exceptional items, PBT has dropped from Rs. 1,176 lakhs to a loss of Rs. 1,549 lakhs, and PAT from Rs. 2,054 lakhs to a loss of Rs. 493 lakhs.

Temperature controlled warehousing continued to be the core strength of the Company and the focus area of our business due to its huge potential. The second vertical of the Company viz transportation functioned as an enabler to provide a one stop solution to the temperature controlled logistics requirement of our clients.

Outlook

The outlook for the Company for the coming years continues to be positive. Most of the customers have indicated robust growth plans which augurs well for the growth of the Company. The introduction

of GST by the Government will also work in the Company''s favour as customers will now see more value in utilizing the services of organized players like Snowman.

Competition

Temperature controlled logistics industry continues to be heavily fragmented with a large part of the requirement being addressed by unorganized players. Increased industry awareness has brought in several new players in the recent times. However, Snowman with its one lakh plus pallets of warehousing capacity spread across the country and fleet of 293 trucks traversing the length and breadth of the country is in an unique leadership position. The Company will strengthen its position by offering customized logistics solutions to its large base of customers.

Cautionary Statement

Statements made in this report, particularly those which relate to Management Discussion and Analysis, describing the Company''s objectives, projections, estimates and expectations may constitute forward looking statements within the meaning of applicable laws and regulations. Actual results might vary materially from those either expressed or implied.

Utilization of the IPO Proceeds

The proceeds of the IPO successfully brought out by the company in 2014, have been used for setting up of temperature controlled and ambient warehouses, long term working capital and for General Corporate Purposes. The summary of utilization of net IPO proceeds is as follows:

Particulars

Amount (In Rs.)

Issue Proceeds

1,97,42,83,786

Less: Issue expenses

13,84,40,409

Net proceeds from IPO

1,83,58,43,377

Amount utilized 2014-15

1,20,38,98,171

Amount utilized 2015-16

61,09,44,247

Amount utilized 2016-17

2,10,00,959

Balance to be utilized

Nil

Share Capital

The paid-up share capital of your company is 167,087,995 equity shares of Rs.10/- each. There were no changes during the year.

Dividend

Keeping in mind the Company''s growth plans and hence the need to conserve cash, the Board of Directors have not recommended any dividend for the year.

Board of Directors

As on date, the Board of Directors of the Company comprises eight Directors of which four are Non-Executive Independent Directors in terms of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and Section 149(6) of the Companies Act, 2013.

All Independent Directors have given declarations that they meet the criteria of independence as laid down under Section 149(6) of the Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

The information related to remuneration of director as required under Section 197(12) of the Act is given at the end of the report.

Nomination, Remuneration and Board Evaluation Policy

The Nomination, Remuneration and Board Evaluation Policy contains the criteria for determining qualifications, positive attributes and independence of a director and policy relating to the remuneration for the directors, key managerial personnel and other employees of the Company. The Nomination and Remuneration Policy forms part of this report as Annexure C and are also available on the website of the Company.

Board Evaluation

Pursuant to the provisions of the Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations,

2015, the Board has carried out an annual evaluation of its own performance, the Directors individually as well as the evaluation of the working of its Audit, Nomination & Remuneration Committee. The manner in which the evaluation has been carried out has been explained in the Corporate Governance Report.

Meetings

During the year 4 (Four) Board Meetings and 4 (Four) Audit Committee Meetings were convened and held, the details of which are given in the Corporate Governance Report. The intervening gap between the Meetings was within the period stipulated under the Companies Act, 2013.

Directors'' Responsibility Statement

In terms of Section 134(3)(c) of the Companies Act, 2013, with respect to Directors'' Responsibility Statement it is hereby confirmed 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 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.

Corporate Governance

As per SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, a detailed report on corporate governance practices followed by the Company together with the certificate from the Company''s Statutory Auditors confirming compliance forms part of this report as Annexure A

Auditors Statutory auditors

The term of the current auditor M/s Price Waterhouse, is due to come to an end at the forthcoming Annual General Meeting (AGM) and a new statutory auditor to be appointed in their place. The Audit Committee members and Board after evaluating several proposals have decided to recommend M/s S R Batliboi & Co, LLP as the statutory auditor for a period of five years from the forthcoming AGM.

Secretarial Audit

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 Mr.

Nagendra D Rao, Practicing Company Secretary to undertake the Secretarial Audit of the Company. The report is annexed herewith as Annexure B

Insider Trading Regulations

Based on the requirements under SEBI (Prohibition of Insider Trading) Regulations, 1992, as amended from time to time, the code of conduct for prohibition of insider trading, as approved by the Board is in force by the Company. The Company also adopts the concept of Trading Window Closure, to prevent its Directors, Officers, designated employees and other employees from trading in the securities of the Company at the time when there is unpublished price sensitive information.

The Board has appointed Mr. A. M. Sundar, Chief Financial Officer and Company Secretary as the Compliance Officer under the Code.

Corporate Social Responsibility (CSR)

The Annual Report on CSR activities is annexed herewith as Annexure D

The Company had spent INR 25.77 Lakhs and INR 29.76 Lakhs in 2014-15 and 2015-16 respectively. However due to the corrective actions taken in terms of change in the business model as well as one-time expenses incurred during the current year, the Company has reported a loss during the year. Hence the Board in the best interest of the stakeholders has not incurred any expenditure on CSR activities during the current year. Moving forward the Company will Endeavour to spend on CSR activities in accordance with the prescribed limits.

Internal Control and Internal Audit

The Company has in place adequate systems of Internal Control to ensure compliance with policies and procedures. The Company has a system of carrying out internal audit, covering all business processes to review the internal control systems. The internal control system and mechanism is reviewed periodically by the Audit Committee to make it robust so as to meet the challenges of the business.

Vigil Mechanism

The Company has a vigil mechanism in placed named as Whistle Blower Policy to report concerns to the management about unethical behavior, actual or suspected fraud or violation of the Codes of conduct. The details of the Whistle Blower Policy is explained in the Corporate Governance Report and also posted on the website of the Company.

Related Party Transactions

The related party transactions per the Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 during the financial year ended March 31, 2017 are given below. Suitable disclosure as required by the Indian Accounting Standards has been made in the notes to the Financial Statements.

The company purchased a land parcel from Gateway Distriparks Limited for Rs. 2.03 Crores at Krishnapatanam in the ordinary course of business. The above transaction has been conducted at the prevailing market prices after getting a valuation from an independent valuer.

Particulars of Loans Given, Investments Made, Guarantees Given or Security Provided by the Company

The Company has not given any loan or any guarantee or security.

Extract of Annual Return

The details forming part of the extract of the Annual Return in form MGT 9 is annexed herewith as Annexure E

Employee Stock Option Scheme

The details of stock options as on 31 March 2017 under the Snowman ESOP Scheme 2012 is set out in the Annexure F to the Directors'' Report.

Human Resources

The Company is committed to provide a healthy environment to all employees and thus does not tolerate any discrimination and/ or harassment in any form. The Company has in place a Prevention of Sexual Harassment (POSH) policy in line with the requirements of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. No complaints were received by the Company during the period under review.

The total number of employees as on 31 March 2017 was 362 as against 401 as on 31 March 2016.

Particulars of Employees

Information in accordance with Section 197 of the Companies Act, 2013 read with Rule 5 of the Companies (Appointment and

Remuneration of Managerial Personnel) Rules, 2014 in respect of the employees of the Company is annexed herewith as Annexure G

Disclosure under Section 134 (3) (m) of the Companies Act, 2013 Conservation of Energy

The Company continues to give the highest priority for conservation of energy by using a mix of technology changes, process optimization methods and other conventional methods, on an ongoing basis.

Technology Absorption

The Company continues to lay emphasis on development and innovation of in-house technological and technical skills to meet the specific customer requirements. Efforts are also being made to upgrade the existing standards and to keep pace with the advances in technological innovations.

Acknowledgements

The Board of Directors thank all the stakeholders of the Company including its customers, shareholders, bankers, vendors for their continued support and assistance and look forward to having the same support in our future endeavors. The Directors also place on record, their sincere appreciation for significant contributions made by the employees towards the success and growth of the Company

For and on behalf of the Board of Directors

For Snowman Logistics Limited

Place: New Delhi Prem Kishan Dass Gupta

Date: May 17, 2017 Chairman

Annexure A

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