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Sical Logistics Ltd.

BSE: 520086 | NSE: SICAL |

Represents Equity.Intra - day transactions are permissible and normal trading is done in this category
Series: EQ | ISIN: INE075B01012 | SECTOR: Transport & Logistics

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Annual Report

For Year :
2018 2017 2016 2015 2014 2013 2012 2011 2010

Director’s Report

The Directors are pleased to present this Sixty Third Annual Report of your company and the audited financial statements for the year ended 31st March, 2018.

FINANCIAL REVIEW

The stand-alone financial results for the year ended 31st March, 2018 are summarised below.

[Rs. In lakhs]

Year ended 31 March

2018

2017

Sales and other income

97462

75215

Profit before interest, depreciation and tax

12831

12466

Interest

3316

2349

Cash Profit

9515

10117

Depreciation

4395

2720

Profit before tax

5120

7397

Provision for tax

2254

2743

Net profit

2866

4554

Earnings per share [EPS] in ‘ [after exceptional items]

5.15

8.19

DIVIDEND

With a view to conserve the available resources that are required for implementing the long term Mine Developer and Operator contracts bagged by the Company and for the other projects, it has been proposed by the Board of Directors to defer the declaration of dividends for the financial year 2017-18.

RESERVES

Debenture redemption reserve of Rs. 5 crores has been created for the financial year 2017-18 in accordance with the provisions of Rule 18[7] of the Companies [Share Capital and Debenture] Rules, 2014.

FRESH ISSUE OF SHARES / DEBENTURES

The Company has not issued any shares / securities which are convertible into equity shares or Non-convertible debentures during the financial year 2017-18.

FIXED DEPOSITS

The Company has not invited any deposits from public. There are no unclaimed deposits which were matured as on 31st March, 2018.

UNCLAIMED DIVIDENDS

Pursuant to the provisions of the Companies Act any dividend amount which remains unpaid or unclaimed for a period of 7 years will have to be transferred to the Investor Education and Protection Fund of the Central Government. The Company does not have any amount lying under unclaimed dividend as on 31st March, 2018 and hence the said provisions are not applicable.

PERFORMANCE

The company’s revenues for financial year 2017-18 was Rs. 97462 lakhs as against Rs.75215 lakhs in the previous year which is higher by 29.58%. Profit After Tax was Rs. 2866 lakhs as against Rs.4554 lakhs in the previous year. The overburden removal contracts in the mining areas and the integrated logistics contract continued to be the major contributor for the growth of the company.

The highlights on the performance of various divisions of the company duringthe financial year 2017-18 is provided below:

INTEGRATED LOGISTICS

The contract for movement of coal from Mahanadhi Coal Fields in Odisha to the power plant of NLC at Tuticorin through road-rail-sea movement continued its operations during the year under review and handled 1.2 MMT of raw coal. The coal washery operations which begun in February, 2017 continued to perform better and has handled 0.95 MMT of washed coal.

SURFACE MINING OF COAL AND OVERBURDEN REMOVAL CONTRACTS

The Company’s operation of surface mining of coal and transportation at Bharatpur for the second term and the continued operations at Lajkura and Samaleswari mines in Odisha and the Jhingurda mine at Madhya Pradesh continued its improved performance strengthening the Company’s position in the mining activities. The company owns around 382 fleet of own equipments for executing the various contracts. The Company has handled 9.0 million metric tones of coal and 30.7 million cubic metres of overburden during the year as against 9.5 million metric tonnes of coal and 19.7 million cubic meters of overburden in the previous financial year 2016-17.

MINE DEVELOPER AND OPERATOR CONRACTS [MDO]

The Mine Developer and Operator contract awarded by the West Bengal Power Development Corporation Limited for the Tara East and West Mines for a contract value of Rs.1500 crores over a period of 7 years is expected to commence its activities during the current financial year 2018-19 subject to receiving all regulatory approvals.

The Company in association with Ambey Mining Private Limited and Godavari Commodities Limited have bagged the Mine Developer and Operator Contract by the Damodar Valley Corporation for the Tubed Mines during the year and accordingly have incorporated a new SPV with 51% stake. This contract is expected to acheive a revenue of Rs.10,000 crores [including taxes] over a period of 20 years which is a long term in nature and provide stable revenue contribution to the company’s growth.

PORT HANDLING

During the year under review, this division performed stevedoring activities at the Ports of Chennai, Tuticorin, Mangalore, Vizagand Ennore.The Company handled coal and other bulk commodities at these ports. Volume handled during the current year is 15.05 million MTs as against 17.20 million MT in the previous year.

ROAD LOGISTICS

The Road Logistics division extends movement of cargo through trucks/trailers and has a clientele operating in petroleum, construction, steel, fertiliser and chemical and power sectors. This division also provides services for the performance of company’s integrated logistics and overburden removal sectors for removal and movement of coal from the coalfields. The Company has been focussing in obtaining contracts which would increase revenues and contribute to the profitability. The Division bagged a contract for movement of coal awarded by the Raichur Thermal Power Station in Karnataka and bagged a contract from a leading multinational company based in Hong Kong for movement of project cargo.

SUPPLY CHAIN SOLUTIONS

The Supply Chain Solutions division comprises of various services offering to consumer goods industry, cold chain, warehousing and industry distribution logistics. The cold chain segment operates with a combination of owned and hired refrigerated vehicles from various distribution centres across the country. Latest technologies including GPS based tracking have been implemented for absolute monitoring and in ensuring prompt delivery. The Company has during the financial year acquired the controlling stake in Patchems Private Limited a company with wide experience in the handling and distribution of pharma and FMCG products. The Company has also acquired controlling stake during the year PNX Logistics Private Limited engaged in providing parttruck load and express movement of goods in orderto strengthen its PAN India presence in the supply chain solutions.

SUBSIDIARIES AND JOINT VENTURES

As on 31st March, 2018, the Company has the following subsidiaries and joint venture companies

1 Sical IronOre TerminalsLimited

2 Sical Infra AssetsLimited

3 Sical Multimodal and RailTransport Limited [subsidiary of Sical Infra Assets Limited]

4 Sical Iron Ore Terminal [Mangalore] Limited

5 SicalAdamsOffshoreLimited

6 Norsea Offshore India Limited

7 Sical MiningLimited

8 Sical Bangalore Logistics Park Limited [subsidiary of Sical Infra Assets Limited]

9 Patchems Private Limited [acquired controlling stake in financial year 2017-18]

10 PNX Logistics Private Limited [acquired controlling stake in financial year 2017-18]

11 Sical SaumyaMiningLimited

12 Develecto Mining Limited [Incorporated during the financial year 2017-18]

13 Bergen Offshore Logistics Pte Ltd [Overseas subsidiary]

14 Norsea Global Offshore Pte Ltd [subsidiary of Bergen Offshore Logistics Pte Ltd]

Joint Venture Companies

1 PSA SicalTerminalsLimited

2 Sical Sattva Rail Terminals Private Limited [a JV between Sical Multimodal and Rail Transport Limited and Sattva Logistics Private Limited]

PERFORMANCE / DETAILS OF SUBSIDIARIES / JOINT VENTURES 1. Sical Iron Ore Terminals Limited

The Company had already completed the construction activities for an iron ore terminal at the Kamarajar Port [erstwhile Ennore Port] in 2010 but however could not commence its commercial operations due to the ban imposed on the export of iron ore from out of the Karnataka Region. In order to utilize the idle terminal, the company made constant requests to the Kamarajar Port and Ministry of Shipping to allow handling of alternate cargoes in the terminal. Accordingly, Kamarajar Port invited bids for modifying the existing iron ore terminal also to handle coal and Sical Iron Ore Terminals Limited emerged as the successful bidder and a fresh licence agreement was signed on 11th July, 2016. The Project has received environmental clearance. Now the Company shall commence its project activities forthe modification of the terminalto also handle coaland commence its operations thereafter.

2. Sical Infra Assets Limited [SIAL] and Sical Multimodal and Rail Transport Limited [SMART]

SIAL is in the business of providing transportation to various parties. The SIAL’s subsidiary, Sical Multimodal and Rail Transport Limited has two divisions viz. Container rail and Container Freight Stations. The company moves containers through railon Pan India basis.The contract with HCLfortransportation of copper concentrates to various destinations was continued during the year under review. The company also handled export cargo in its pursuit to engage in the EXIM business. The project activities relating to development of its own rail terminals ICD/CFS at Chennai and Bangalore are in progress. The Company has a JV with 50% stake in Sical Sattva Rail Terminals Private Limited which operates the Melpakkam terminal. The performance of the rail division continues to be challenging due to the increased haulage charges payable to Railways and stiff competition from other ContainerTrain Operators and has to compete with the movement of cargo by road.

CFS operations were continued at Chennai, Tuticorin and Vizag. The total volume handled during 2017-18 was 142403 TEUs as against 122807 TEUs in the previous fiscal. Due to certain policy decisions by the Government of India, this sector faces certain challenges and the company is taking all efforts to enhance its performance.

To achieve effective performance of the railterminals, a subsidiary company was incorporated in May 2016 underthe name and style of Sical Bangalore Logistics Park Limited forthe purpose of taking care of the Bengaluru ICD terminal operations. Subsequent to this, the Board of Directors of both the subsidiaries viz. Sical Multimodal and Rail Transport Limited and Sical Bangalore Logistics Park Limited proposed a Scheme of Arrangement [Demerger] for hiving off the Bangalore ICD to the newly incorporated company and filed an application before the National Company Law Tribunal, Southern Region, Chennai for the approval of the Scheme of Arrangement [Demerger], The same was approved by the NCLT Vide its order passed in the month of December, 2017. The Companies are in the process of completing the demerger related activities.

3. Sical Iron Ore Terminal [Mangalore] Limited

A concession agreement was entered with New Mangalore Port in 2009 for setting up of mechanised iron ore terminal and operation and maintenance at the Mangalore Port. Since there remains a ban on the movement and export of iron ore from out of Karnataka region, required cargo cannot be generated and hence approached the Port authorities for allowing to handle multi purpose cargoes in the berth. Since this was not agreed to, the Company was left with no choice but to issue a termination notice on force majeure condition and the New Mangalore Port authorities had referred the matter to arbitration. The arbitral tribunal has passed an award in favour of the company during the financial year under review.

4. Sical Adams Offshore Limited

This company was formed with intent to venture into offshore segment. The Company is Looking at operations in this direction.

5. Norsea Offshore India Limited

This company owns and operates a cutter suction dredger Sical Portofino carrying dredging activities for various ports as and when dredging contracts are received. The company is contemplating to hive-off its dredging business to the parent company Sical Logistics Limited through a scheme of arrangement [demerger] so that the same can be effectively carried out by Sical with its expertise in the offshore segment. This company proposes to concentrate on its othertransportation business activities.

6. Sical Saumya Mining Limited

This subsidiary was formed in association with Saumya Mining Limited for the purpose of executing the overburden removal contract awarded by the Mahanadhi Coal Fields, Odisha for the operations at coal mines located at Samaleshwari and Lajkurato handle 37 and 53 million CBM in 3 and 5 years respectively. The activities at Samaleshwari and Lajkura mines continued during the financial year.

7. Sical Mining Limited

The company has been incorporated during the previous fiscal for carrying out the Mine Developer and Operator contract of West Bengal Power Development Corporation Limited for the Tara [East] mines in West Bengal. The company is in the process of completing pre-project activities to commence operations.

8. Bergen Offshore Logistics Pte Ltd and Norsea Global Offshore Pte Ltd

The overseas subsidiary of the Company Bergen Offshore Logsitics Pte Ltd and the wholly owned subsidiary of Bergen viz. Norsea Global Offshore Pte Ltd have their offices in Singapore. These companies do not have any operations.

9. PSA Sical Terminals Limited

This is a joint venture company with Ports of Singapore Authority in which Sical has a shareholding of 37.5%. This company operates a container terminal at Tuticorin Port and has handled 495264 TEUs during the year under review. The challenge faced by this Company has been the royalty payable being higher than the tariff allowed to be charged, which was disputed and the Company has received a favourable arbitral award, where royalty model would change into revenue share model, which is in accordance with 2013 guidelines of Ministry of Shipping. The said Arbitral Award was challenged before the District Court by Tuticorin Port and the District Court has upheld the Arbitral Award in favour of the Company. The said District Court Order was challenged byTuticorin Port before the High Court of Madras at Madurai Bench and the order was in theirfavour. Now the company has preferred an appeal before the Honourable Supreme Court of India against the Order of Madurai Bench of the Hon’ble High Court of Madras .

10. Develecto Mining Limited

The company was incorporated during the year under reviewfor executing the project of Mine Developer cum Operator for the Tubed Mines awarded by the Damodar Valley Corporation. The company has been formed in order to comply with the bid requirements along with Ambey Mining Private Limited and Godavari Commodities Limited. This is a long term contract which would spread over a 20 years plus period and would earn a revenue of Rs.10000 crores over the stipulated period.

SUBSIDIARY COMPANIES FINANCIAL STATEMENTS

As per Section 129[3] of the Companies Act, 2013 read with Rule 5 of the Companies [Accounts] Rules, 2014, the Company has prepared consolidated financial statement and the same is being laid before the members for their approval at the ensuing Annual General Meeting. Also a separate statement containing the salient features of the financial statement of the subsidiaries and joint ventures in Form AOC-1 is attached along with the financial statements.

AWARDS AND ACCOLADES

During the year under review the Company received the following awards :

Best Cold Chain Application - Hospitality Award at the Global Logistics Excellence Awards for the Cold Chain Division Emerging 3PL Warehousing Company of the Year Award for the Supply Chain Solutions Division

Merit certificate by Chennai Port Trust for unloading highest volume of dolomite in a day as well as handling tonnage of cargo during the financial year 2016-17.

DIRECTORS

The Company has 08 [eight] directors consisting of

04 [four] Independent Directors

03 [three] non-executive director [including 1 woman director] and

01 [one] executive director INDEPENDENT DIRECTORS

In terms of the definition of Independence of Directors as prescribed under Regulation 17 of the SEBI [Listing Obligations and Disclosure Requirements] Regulations, 2015 and Section 149[6] of the Companies Act, 2013 and based on the confirmation / disclosures received from the Directors, the following Non-Executive Directors are Independent Directors as on 31st March, 2018.

1. Mr.H.R.Srinivasan

2. Mr.Harady Rathnakar Hegde

3. Mr. S. Ravinarayanan

4. Mr.Sudhir V Kamath

WHOLE-TIME DIRECTOR

Mr. Kush S Desai is the Whole-time Director.

CHAIRMAN OF THE BOARD

Mr. R. Ram Mohan is the Chairman of the Board.

NON-INDEPENDENT NON-EXECUTIVE DIRECTORS

The following directors are considered to be non-independent non-executive directors

1. Mr. Sunil Deshmukh

2. Ms. Shweta Shetty [Woman Director]

APPOINTMENT / RESIGNATION OF DIRECTORS

There were no fresh appointments / resignations took place during the year under review.

DIRECTOR RETIRING BY ROTATION

In terms of Section 152 of the Companies Act, 2013, Mr. R. Ram Mohan, being longest in the office shall retire at the ensuing AGM and being eligible to be re-appointed, offers himself for re-appointment.

NUMBER OF THE MEETINGS OF THE BOARD

The Board met 11 times during the financial year 2017-18. Detailed information on the meetings of the Board are included in the report on Corporate Governance which forms part of the Directors Report.

Additionally several committee meetings were held including Audit Committee which met 04 [four] times during the year. COMMITTEES OF THE BOARD

The Company has several committees which have been established as a part of the best corporate governance practices and are in compliance with the requirements of the relevant provisions of applicable laws and statutes.

The Company has the following committees of the Board

- Audit Committee

- Stakeholders Relationship Committee

- Corporate Social Responsibility Committee

- Nomination and Remuneration Committee

- Risk Mitigation Committee

- Management Committee

The details with respect to the composition, powers, roles, terms of reference of relevant mandatory committees are given in detail in the Report on Corporate Governance which forms part of the Directors Report.

CORPORATE SOCIAL RESPONSIBILITY COMMITTEE

In compliance with Section 135 of the Companies At, 2013 read with Companies [Corporate Social Responsibility Policy] Rules, 2014, the Company has established a Corporate Social Responsibility [CSR] Committee and statutory disclosures with respect to the CSR Committee and an Annual Report on CSR Activities form part of this Report as Annexure - 1.

PERFORMANCE EVALUATION OF THE BOARD

In accordance with Section 178 of the Companies Act, 2013 and Regulation 17 of the SEBI [Listing Obligations and Disclosure Requirements] Regulations ,2015 [earlier Clause 49 [IV ] of the Listing Agreement], the Company has laid down a Nomination and Remuneration Policy. Further to this, the manner in which formal annual evaluation of the directors, the Board and Board level committees are to be carried out were devised by the Committee. Accordingly, the evaluation of the performance of the members of the Board, Board level committee and the Board as a whole were carried out at the meeting of the available independent directors and the board of the directors on 11th May, 2018.

CORPORATE GOVERNANCE

The Company is committed to achieve the highest standards of Corporate Governance and strives to comply with the requirements as set by the Regulators / applicable laws.

A separate section providing a Report on the Corporate Governance as stipulated under Regulation 34 [3] and Schedule V [c] of the SEBI [Listing Obligations and Disclosure Requirements] Regulations, 2015 is attached as an Annexure to this report. The said report on corporate governance also contains certain disclosures required under the Companies Act, 2013.

A certificate from the Statutory Auditors M/s. SRSV & Associates, Chartered Accountants conforming compliance to the conditions of Corporate Governance as stipulated under Regulation 34[3] of the SEBI [Listing Obligations and Disclosure Requirements] Regulations, 2015 is annexed to the Report.

MANAGEMENT DISCUSSION AND ANALYSIS

A Management Discussion and Analysis Report pursuant to Schedule V [B] of the SEBI [Listing Obligations and Disclosure Requirements] Regulations, 2015 is furnished as an Annexure to this report.

VIGIL MECHANISM

The Company has implemented a Vigil Mechanism / Whistle Blower Policy pursuant to which Whistle Blowers are allowed to raise concerns relating to Reportable Matters [as defined in the Policy], Further the policy encourages whistle blowers to bring the genuine concerns or grievances and provides for adequate safeguards against victimisation of Whistle Blower who avail of such mechanism and also provides for direct access to the Chairman of the Audit Committee, in exceptional circumstances. The functioning of the vigil mechanism is reviewed by the Audit Committee from time to time. None of the whistle blowers were denied access to the Audit Committee of the Board of Directors. The details of Vigil Mechanism / Whistle Blower Policy are available on the website of the Companywww.sical.com.

RISK MANAGEMENT POLICY

The Board has implemented the risk management policy for effective management of risks that are envisaged on the conduct of business wherein all material risks faced by the company are identified and assessed and evolves assessment of controls and policies and put in place procedure for monitoring, mitigating and reporting risk on a periodic basis.

CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES

AH related party transactions thatwere entered into duringthefinancial yearwere inthe ordinary course of business of the Company and were on arm’s length basis. There were no materially significant related party transactions entered into by the Company with the Promoters, Directors, Key Managerial Personnel or other persons which may have a potential conflict with the interest of the Company. The details of such related party transactions in Form AOC-2 is furnished as Annexure-2 to this Report.

Considering the nature of the industry in which the Company operates, related party transactions are in the ordinary course of business on an arm’s length basis. AH such related party transactions are placed before the Audit Committee for approval, wherever applicable. Prior omnibus approvalfor normal transactions is also obtained from the Audit Committee for the related party transactions which are of repetitive in nature as well for the normal transactions which can not be foreseen and accordingly the required disclosures are made to the Committee on a quarterly basis in terms of the approval of the Committee.

The policy on Material Related Party Transactions and also on dealing with the Related Party Transactions as approved by the Board of Directors is uploaded on the website of the Company and the link for the same is http://www.sical.com/policy.

PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS UNDER SECTION 186 OF THE COMPANIES ACT, 2013

Corporate guarantees were provided to banks / financial institutions / Port authorities for the financial facilities availed by the company’s subsidiaries / due performance of contracts by the subsidiaries, after obtaining due approval from the shareholders through postal ballot wherever such transactions are considered to be material related party transactions. The Corporate Guarantees as provided during the financial year 2017-18 are furnished below.

S.

No.

Name of the Bank / Financial Institution

Name of the Corporate Body on whose behalf guarantee has been given

Relationship

Purpose

Amount in Rs.Crores

Date of Execution / approval by the Board of Sical

Kamarajar Port

Sical Iron Ore Terminals Limited

Subsidiary

For providing guarantee to the extent of Rs. 500 crores by the Port for availing credit facility from banks / financial institutions by the company for the execution of the modification at the iron ore terminal at Ennore

40.00

16.08..2017

YES Bank Limited

Sical Iron Ore Terminals Limited

Subsidiary

For availing enhanced financial facility for the modification project

600.00 [additional 250 crores from the earlier one provided]

30.09.2017

RBL Bank Limited

PNX Logistics Private Limited

Subsidiary

For credit facilities provided to the subsidiary

33.00

10.11.2017

RBL Bank Limited

Sical Saumya Mining Limited

Subsidiary

For the working capital demand facilities provided to the subsidiary

25.00

27.03.2018

The Company subscribed for 5100 equity shares ofRs.10 each in Develecto Mining Limited during the year under review.

The closing balances to the amounts extended as loans / advances to subsidiaries as per Section 186 of the Companies Act, 2013 as at 31st March, 2018 are furnished in the financials under the caption related party transactions - Notes to Accounts 26 [iv] which may be taken as due compliance underthis clause.

INTERNAL FINANCIAL CONTROL SYSTEMS AND THEIR ADEQUACY

The Company has laid down set of standards, processes and structure which enables to implement internal financial control across the organisation and ensure that the same are adequate and operating effectively. The statutory auditors M/s. SRSV& Associates LLP have provided their report on the internal financial control as part of their audit report.

Further more, the Company has appointed M/s. Sundar, Srini, Sridhar, Chartered Accountants as the internal auditors for carrying out internal audit functions based on the comprehensive plans formulated in advance.

[a] Statutory Auditors

M/s. SRSV&Associates LLP, Chartered Accountants retire at the conclusion of the ensuingAnnualGeneralMeeting. In this connection, the Audit Committee and Board of Directors have recommended for the approval of the shareholders at the ensuing AGM the appointment of SRSV & Associates Chartered Accountants with Firm Registration No.015041S as the Statutory Auditors of the Company for the current financial year 2018-19 on a remuneration to be decided by the Board or Committee thereof.

[b] Secretarial Auditors and Secretarial Audit Report

Pursuant to Section 204 of the Companies Act, 2013, Mr. R. Kannan, Practicing Company Secretary, Chennai was appointed the Secretarial Auditor for the financial year 2017-18. The report of the Secretarial Auditor for the FY 2017-18 is annexed to this report as Annexure - 3.

There are no audit qualifications in the Statutory Auditors Report and SecretarialAudit Report.

MATERIAL CHANGES AND COMMITMENT AFFECTING FINANCIAL POSITION OF THE COMPANY

There are no material changes and commitments affecting the financial position of the company which has occurred between the end of the financial year of the company i.e. 31st March, 2018 and the date of the Directors Report i.e. 03rd August, 2018.

EMPLOYEE REMUNERATION

1. The statement containing particulars of the names of top ten employees in terms of remuneration drawn as required under Sec 197[2][i] of the Companies Act, 2013 is included in Annexure - 4 to this report and the details relating to employees as required under Section 197[2] [ii] of the Companies Act, 2013 read with Rule 5[2] of the Companies [Appointment and Remuneration of Managerial Personnel] Rules, 2014 as amended is not applicable since none of the employees are in receipt of remuneration exceeding Rs.1.02 crores p.a. or Rs. 8,50,000 per month during the financial year 2017-18.

2. The ratio of the remuneration of each director to the median employee’s remuneration and other details in terms of sub-section 12 of Section 197 of the Companies Act, 2013 read with Rule 5[1] of the Companies [Appointment and Remuneration of Managerial Personnel] Rules, 2014 are forming part of this report as Annexure - 4.

STATUTORY DISCLOSURES

[1] The disclosures to be made under sub-section [3][m] of Section 134 of the Companies Act, 2013 read with Rule 8[3] of the Companies [Accounts] Rules, 2014 are furnished below.

Since the company is engaged in providing logistics services, the details as to conservation of energy and technology absorption are not applicable.

A. CONSERVATIONOF ENERGY : NA

B. TECHNOLOGY ABSORPTION : NA

C. FOREIGN EXCHANGE EARNINGS AND OUTGO

Total Foreign Exchange : Earned : Rs.1229 lakhs

Used : Rs.4580 lakhs

[2] No significant and material orders were passed by the regulators or courts or tribunals impacting the going concern status and company’s operations in future.

[3] There were no complaints received / cases filed under Section 22 of the Sexual Harrassment of Women at Workplace [Prevention, Prohibition and Redressal] Act, 2013.

[4] No stock options were issued to the Directors of the Company.

EXTRACTS OF ANNUAL RETURN

Pursuant to sub-section 3[a] of Section 134 and sub-section [3] of Section 92 of the Companies Act, 2013 read with Rule 12 of the Companies [Management and Administration] Rules, 2014, the extracts of the Annual Return as at March 31, 2018 forms part of this report as Annexure -5. However as per the amended provisions of the Companies [Amendment] Act, 2017 the details have been posted in the website www.sical.com also.

DIRECTORS RESPONSIBILITY STATEMENT

Pursuant to the requirement of Section 134[5] of the Companies Act, 2013, 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 judgements 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.

[c] the directors had taken proper and sufficient care forthe maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 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.

[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.

ACKNOWLEDGEMENT

The Directors wish to thank the Port Authorities, Governmental Agencies, company’s bankers, financial institutions, customs authorities, foreign collaborators, suppliers, statutory regulators, investors, customers, employees and all stakeholders for their continued support and patronage.

For and on behalf of the Board

R. Ram Mohan

Place: Bengaluru Chairman

Date :03rd August,2018 DIN:02506342

Director’s Report