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Shahi Shipping Ltd.

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Annual Report

For Year :
2017 2015 2014 2013 2012 2011 2010 2009 2008

Director’s Report

To,

The Members,

Shahi Shipping Limited

The Directors are pleased to present herewith the 27th Annual Report of Shahi Shipping Limited (the “Company”) along with the Audited Financial Statements for the financial year ended March 31, 2017.

1. FINANCIAL STATEMENT

( Rs. In Lacs)

Particulars

2016-2017

2015-2016

Profit Before Interest, Depreciation, Exceptional Items & Tax

332

215

Less: Interest and Finance Charges

121

149

Less: Provision for Depreciation

210

294

Profit/(Loss) before Tax

1

(228)

Less: Exceptional Items

-

201

Profit/(Loss) before Tax after Exceptional Items

1

(429)

Less: Provision for Taxation:

Current Tax

-

-

Taxation of Earlier years

1

(1)

Deferred Tax

(57)

178

Profit/(Loss) After Tax

(55)

(252)

2. DIVIDEND

On account of losses incurred during the year under review, your board does not recommend any dividend.

3. COMPANY’S PERFORMANCE

During the year under review, income from operations was Rs. 19.11 Crore as against Rs. 14.59 Crore in the previous year. The income from operations was increased about 31% as compared to the previous year. Through continuous cost control measures, during the year under review, company could able to reduce its finance cost to Rs. 1.21 Crores from Rs. 1.48 Crores as compared to previous year. Your board has continued with its task to rebuild company’s business with cost control measures to attain its long term goals by capitalizing company’s intrinsic strength like brand, quality of service, customer relationship through streamlining existing operations.

4. AMOUNT TRANSFERRED TO RESERVE

On account of losses incurred during the year under review, your directors do not recommended to transfer any amount to reserves.

5. HUMAN RESOURCE DEVELOPMENT

Your Company treats its “human resources” as one of its most important assets. Your Company continuously invests in attraction, retention and development of talent on an ongoing basis. A number of programs that provide focused people attention are currently underway. Your Company thrust is on the promotion of talent internally through job rotation and job enlargement.

6. SUBSIDIARY COMPANIES

The Company has two subsidiaries, namely SKS waterways Ltd. & Royal Logistics (Ship) Ltd., which have not commenced their operations. Hence, the consolidated financial statement of the Shahi Shipping Limited and its subsidiaries SKS waterways Ltd, Royal Logistics (Ship) Ltd has not been prepared.

7. DIRECTORS’ RESPONSIBILITY STATEMENT

Pursuant to Section 134(3) (c) of the Companies Act, 2013, the board of directors, to the best of their knowledge and ability, confirm that:

i. In the preparation of the annual accounts, the applicable accounting standards have been followed and there are no material departures;

ii. they 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 of the Company for that period;

iii. they have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

iv. they have prepared the annual accounts on a going concern basis;

v. they have laid down internal controls to be followed by the Company and such internal controls are adequate and operating effectively;

vi. they have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

8. DIRECTORS AND KEY MANAGERIAL PERSONNEL

The Board and its Committees have most appropriate composition, pursuant to the provisions of Companies Act, 2013 read with SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

The Board of Directors at their meeting held on 30th May, 2017, re-appointed Mr. Sarvesh Kumar Shahi as Managing Director for a period of (3) three years, with effect from 1st April, 2017 subject to approval of members in the ensuing annual general meeting. Keeping in view his experience and expertise, a resolution is proposed in the notice convening Annual General Meeting for the re-appointment of Mr. Sarvesh Kumar Shahi as Managing Director, on terms & conditions detailed in the resolution.

Mr. Chandresh Kumar Mishra were appointed as an additional Independent director of the Company w.e.f. 14th November, 2016 who will holds the office up to the date of ensuing Annual General Meeting and who have offered themselves for appointment. Ms. Lavina Chatur Kripalani, has resigned as an independent director w.e.f. 9th August, 2016.

The Company has received declarations from Mr. Chandresh Kumar Mishra, Independent Directors of the Company confirming that they meet the criteria of independence as prescribed both under Section 149(6) of the Companies Act, 2013 read with SEBI (Listing Obligation & Disclosure Requirements) Regulations, 2015. The resolutions seeking approval of the Members for the appointment of Mr. Chandresh Kumar Mishra for a period of (5) five years have been incorporated in the notice of the forthcoming annual general meeting of the Company along with brief details about him.

During the period, the non-executive directors of the Company had no pecuniary relationship or transactions with the Company.

The Board of Directors through resolution passed by circulation on September 1, 2016 has appointed Mr. Nungavaram Vaidyanathan Agandeswaran (Membership No. A7966) as Whole Time Company Secretary & Compliance Officer of the Company.

9. BOARD EVALUATION

The Nomination and Remuneration Committee has defined evaluation criteria for the performance evaluation of the Board, its Committees and individual director(s).

Pursuant to the provisions of the Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the board of directors has carried out an annual evaluation of its own performance, Board committees and individual directors.

The performance of the Board was evaluated by the Board after seeking inputs from all the directors on the basis of the criteria such as the Board composition and structure, effectiveness of board processes, information and functioning, advisory role and contribution in the decision making etc.

At the separate meeting of independent directors held on 21st March, 2017, performance of non-independent directors, performance of the board as a whole and performance of the Chairman was evaluated objectively, taking into account the views of executive directors and non-executive directors.

10. INDEPENDENT DIRECTOR

(i) Declaration from Independent Directors

The Board has received declaration from all the Independent Directors of the Company confirming that they meet the criteria of independence as prescribed both under the Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

(ii) Criteria for Performance Evaluation

Nomination and Remuneration Committee has laid down various criteria for performance evaluation of Independent Directors.

(iii) Details of familiarization Programme

The details of programme for familiarization of Independent Directors with the Company, their roles, rights, responsibilities in the Company, nature of the industry in which the Company operates, business model of the Company and related matters are put up on the website of the Company at the www.shahilogistics.com

11. MEETINGS

A calendar of Meetings is prepared and circulated in advance to the Directors.

During the Financial year 2016-2017, four (04) Board Meetings and four (04) Audit Committee Meetings were convened and held. The details of meetings held are given in the Corporate Governance Report. The intervening gap between the Meetings was within the period prescribed under the Companies Act, 2013.

12. POLICY ON DIRECTORS’ APPOINTMENT AND REMUNERATION AND OTHER DETAILS

The Board has, on the recommendation of the Nomination and Remuneration Committee, framed and adopted the policy for selection and appointment of Directors, Key Managerial Personnel, senior management and their remuneration. The policy lays down criteria for selection of directors, key managerial personnel and senior management like, qualification, requisite expertise, relevant experience and integrity of the directors, etc. The remuneration policy lays down the entitlements of remuneration to non-executive directors such as sitting fees and such other remuneration as permissible under the provisions of Companies Act, 2013.

Remuneration to Managing Director and Whole-Time Director(s) consists of monthly salary, allowances, perquisites, bonus, commission and other allowable retirement benefits. As per the Policy, the remuneration/compensation to Managing Director /Whole Time Director/Key Managerial Personnel shall be recommended by the Nomination and Remuneration Committee to the Board for its approval.

In respect of key managerial personnel and senior management, the remuneration will consist of fixed pay and incentive pay. The fixed pay shall include monthly remuneration, employer’s contribution to Provident Fund, contribution to pension fund, pension schemes, etc. as decided from to time and the incentive pay shall be decided based on the balance between performance of the Company and performance of the Key Managerial Personnel and Senior Management.

The Nomination and Remuneration Policy is available on the Company’s website www.shahilogistics.com

13. INTERNAL FINANCIAL CONTROL SYSTEMS AND ITS ADEQUACY

In view of board, the Company has adequate Internal Control, commensurate with the size and nature of its operations. Further, based on observations of the Statutory Auditors, on the internal financial control with reference to the financial statement the necessary steps have been taken to establish the same.

14. EXTRACT OF ANNUAL RETURN

As provided under Section 92(3) of the Companies Act, 2013 read with the Companies (Management and Administration) Rules, 2014, the extract of annual return is given in Annexure - I in the prescribed Form MGT-9, which forms part of this report.

15. DETAILS OF COMMITTEES OF THE BOARD

At present, the Board has three committees, namely the Audit Committee, Nomination and Remuneration Committee and Stakeholders’ Relationship Committee. The Composition of various committees is as per the applicable provisions of the Companies Act, 2013 along with the Rules and Securities Exchange Board of India (Listing obligations & Disclosure Requirements) Regulations, 2015. The brief details of various committees, terms of reference is provided separately in the Corporate Governance report.

16. AUDIT COMMITTEE

Audit Committee of the Board has been constituted as per Section 177 of the Companies Act, 2013 and rule 6 of the Companies (Meetings of Board and its Powers) Rules, 2014 and read with Regulation 18 of the Listing Regulations, 2015. The details pertaining to composition of audit committee are included in the Corporate Governance Report, which forms part of this report. All the recommendations made by the Audit Committee during the year were accepted by the Board of Directors of the Company.

17. STAKEHOLDERS RELATIONSHIP COMMITTEE

The Stakeholders Relationship Committee has been constituted as per section 178 (5) of the Companies Act, 2013 read with Regulation 20 of the Listing Regulations, 2015. The Stakeholders Relationship Committee shall consider and resolve the grievances of the security holders of the company including complaints related to transfer of shares, non-receipt of balance sheet and non-receipt of dividend etc. The details pertaining to composition of Stakeholders Relationship committee are included in the Corporate Governance Report, which forms part of this report.

18. NOMINATION AND REMUNERATION COMMITTEE

Nomination and Remuneration Committee of the Board has been constituted as per Section 178 of the Companies Act, 2013 and rule 6 of the Companies (Meetings of Board and its Powers) Rules, 2014 and read with Regulation 19 of the Listing Regulations, 2015. The details pertaining to composition of Nomination and Remuneration Committee, terms of reference and other particulars are included in the Corporate Governance Report, which forms part of this report.

19. AUDITORS

In accordance with the provisions of Section 139 of the Companies Act, 2013, the present Statutory Auditors M/s. N. D. Heda & Co, Chartered Accountants, Mumbai (Firm Registration No.103604W) have completed their term as stipulated under Section 139 of the Companies Act, 2013 and therefore shall vacate office at the Conclusion of the forthcoming 27th Annual General Meeting.

The Company is proposing to appoint M/s. B. P. Shah & Co., Chartered Accountants, Mumbai (Firm Registration No. 109517W), as Statutory Auditors for a period of 5 years commencing from the conclusion of 27th Annual General Meeting till the conclusion of 32nd Annual General Meeting. M/s. B. P. Shah & Co., have consented their appointment and confirmed that their appointment, if made, would be within the limits mentioned under Section 141(3) (g) of the Companies Act, 2013 and relevant Rules framed there under.

The Audit Committee and the Board of Directors at their respective meetings recommend the appointment M/s. B. P. Shah & Co., Chartered Accountants, Mumbai (Firm Registration No. 109517W) as Statutory Auditors for a period of 5 years commencing from the 27th Annual General Meeting till the conclusion of 32nd Annual General Meeting.

The Board of Directors wish to place on record its sincere appreciation for the invaluable contribution of M/s. N. D. Heda & Co, Chartered Accountants during their tenure as Statutory Auditors of the Company.

20. AUDITORS’ REPORT

Notes to Accounts and Auditors remarks in their report are self-explanatory.

The Statutory Auditors’ Report do contains disclaimer in matter of adequacy of internal financial controls with reference to the financial statement. Your board have take due note of such observation, and would be taking steps towards strengthening of control riders, desirable to your company and its business. Your board would like to roll out on effective financial control system to facilitate smooth and efficient functioning of the activities of business paving way for compliance of internal control norms stated in the guidance note on ‘Audit of Internal Financial Controls over Financial Reporting’ issued by the Institute of Chartered Accountants of India.

Your board has appointed M/s. Wandrekar & Co, Chartered Accountants as Internal Auditor, to strengthen internal audit as well as an internal control system. Your board, constantly devising ways and means to strengthen internal financial controls with reference to the financial statement.

21. INTERNAL AUDITOR:

The Company has appointed M/s. Wandrekar & Co., Chartered Accountants, Mumbai as an Internal Auditor of the Company, for the three financial years, covering period FY 2015-16 to 2017-18, to undertake Internal Audit, of the financial affairs of the Company and matters connected therewith and report to Audit Committee of the Board, the Statutory Auditor, on the relevant matters.

22. SECRETARIAL AUDIT REPORT

In terms of Section 204 of the Act and Rules made there under, M/s. Neville Daroga & Associates, Practicing Company Secretary have been appointed as Secretarial Auditors of the Company. The report of the Secretarial Auditors is enclosed as Annexure - II to this report.

The Secretarial Auditors’ Report do contains qualification, in respect of which your board would like to clarify that;

1. The Company has appointed a Whole Time Company Secretary on 1st September, 2016 as required under section 203(1)(ii) of the Companies Act 2013.

2. The Company has appointed Whole Time Company Secretary as Compliance Officer on 1st September, 2016 as required under regulation 6(1) of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015.

3. The promoters will take effective steps for converting their physical sharing in demat form as required under SEBI regulations.

23. PARTICULARS OF LOANS, GUARANTEES AND INVESTMENTS UNDER SECTION 186

There was no loan given or guarantee given or investment made or security provided pursuant to Section 186 of the Companies Act, 2013 during the year under review and hence the said provisions are not applicable.

24. PARTICULARS OF CONTRACT OR ARRANGEMENT WITH RELATED PARTY

There were no Related Party Transactions (RPTs) entered into by the Company during the financial year, which attracted the provisions of section 188 of the Companies Act, 2013. There being no ‘material’ related party transactions as defined under regulation 23 of SEBI Listing Regulations, 2015, there are no details to be disclosed in Form AOC-2 in that regard.

25. PARTICULARS OF EMPLOYEES

Disclosures pertaining to remuneration and other details as required under Section 197(12) of the Companies Act, 2013 read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules,

2014 and a statement showing the names and other particulars of the top ten employees of the Company in terms of remuneration drawn pursuant to Rule 5(2) and Rule 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are provided in the Annexure-III to this Report.

In terms of the provision of Section 197(12) of the Companies Act, 2013 read with rule 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 every employee drawing remuneration in excess of the Limits set out in the said rules are not applicable to the Company as no Employees were employed during the year, drawing remuneration Rs. 1,02,00,000/- per annum, or Rs. 8,50,000/- per month, the ceiling limits prescribed under the said rule.

26. SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS

There are no significant and material orders passed by the regulators or courts or tribunals impacting the going concern status and Company’s operations in future.

27. CORPORATE GOVERNANCE & MANAGEMENT DISCUSSION AND ANALYSIS REPORT:

The Company has complied with all the mandatory requirements of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. The Management Discussion and Analysis and Corporate Governance Report together with Auditors’ Certificate thereon form part of this Report and annexed separately.

As observed by Statutory Auditors with reference to Corporate Governance Audit for FY 2016-17, as to an intermittent vacancy caused by resignation dated 9th August, 2016, of an independent director and effect thereof as to composition of three committees with minimum three members, till same vacancy being filled up on 14th November, 2016. Your directors would like to clarify that, subsequent aforesaid refereed resignation of an independent director who was also member of three committees, the talent search committee, under able guidance of nomination committee members have taken effects to identify right candidate for filling up said post of an independent director.

Pursuant to Section 149 read with Clause VI of the Schedule IV of the Companies Act, 2013, which states that vacancy of independent director who resign or is removed from the Board of the Company shall be replaced by new independent director within a period of not later more than one hundred and eighty days from the date of such resignation/ removal, as the case may be. Further Pursuant to regulation 24 (6) of SEBI ( Listing Obligation and Disclosure Requirements), 2015, which mandates for replacement of vacancy caused by resignation, not later than three months or next immediate next board meeting. Your board has filled up said vacancy in immediate practical next meeting of board of directors, which is within 120 days, the maximum gap between two board meetings.

28. VIGIL MECHANISM/WHISTLE BLOWER POLICY FOR THE DIRECTORS AND EMPLOYEES

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 employees including directors of the Company for reporting the genuine concerns or grievances or cases of actual or suspected, fraud or violation of the Company’s code of conduct and ethics policy. The Vigil Mechanism/Whistle Blower Policy is available on the Company’s website www.shahilogistics.com

29. DEPOSITS FROM PUBLIC

Your Company has not accepted any deposits from public and as such, no amount on account of principal or interest on deposits from public was outstanding as on the date of the balance sheet.

30. OBLIGATION OF COMPANY UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013

The Company has in place an Anti-Sexual Harassment Policy in line with the requirements of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. An Internal Complaints Committee (ICC) has been set up to redress complaints received regarding sexual harassment. All employees (permanent, contractual, temporary, trainees) are covered under this Policy. The Policy is gender neutral. During the year, the committee has not received any complaint of harassment.

31. TRANSFER OF AMOUNTS TO INVESTOR EDUCATION AND PROTECTION FUND

In terms of the provisions of Section 123 of the Companies Act, 2013 the amount of dividend not en-cashed or claimed within 7 (Seven) years from the date of its transfer to the unpaid dividend account, is required to be transferred to the Investor Education and Protection Fund (“IEPF”) established by the Central Government. Shares on which dividend remains unclaimed for seven consecutive years will be transferred to the IEPF as per section 124 of the Companies Act, 2013 and the applicable rules there under. The Members advised to get their dividend encashed their dividend warrant for the period 2010-2011 and 2011-2012.

32. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO

Pursuant to the notification No GSR 1029 dated 31-12-1988; companies are required to furnish prescribed information regarding conservation of energy and technology absorption. However this does not apply to your company as the shipping industry is not included in the schedule to the relevant rules. The details, however, as regards Foreign exchange earnings and out go are given below.

(a) Foreign Exchange earned Rs. 7,25,603/-

(b) Foreign Exchange outgo Rs. 10,22,550/33.

LISTING WITH STOCK EXCHANGES:

Your Company confirms that, it has paid the Annual Listing Fees for the year 2016-2017 to BSE Limited, the stock exchange where the Company’s shares are listed.

34. DISCLOSURES UNDER SECTION 134(3)(L) OF THE COMPANIES ACT, 2013

Except as disclosed elsewhere in this report, no material changes and commitments which could affect the Company’s financial position have occurred between the end of the financial year of the Company and date of this report.

35. CORPORATE SOCIAL RESPONSIBILITY (CSR)

During the year pursuant to the provisions of section 135 read with Schedule VII of the Companies Act, 2013 the company does not fall under the criteria of CSR Policy. Hence the company has not contributed towards CSR Activity.

36. ACKNOWLEDGEMENT

Your Directors express their sincere thanks to all customers, vendors, investors, shareholders, shipping agents, bankers, insurance companies, consultants, advisors, Central and State Government(s) for their consistent support and encouragement to the Company.

Your Directors also sincerely acknowledge the significant contributions made by all the employees through their dedicated services to the Company.

For and on behalf of the Board of Directors

Sarvesh Kumar Shahi Hema Kiran Thakur

Chairman & Managing Director Director

DIN: 00359535 DIN: 01363454

Date : July 10, 2017

Place: Mumbai

Director’s Report