DIRECTORS'REPORT To, The Members, Your Directors have pleasure in presenting the Thirty Fourth Annual Report on the business and operations of the Company together with the Audited Statement of Accounts for the Financial Year ended 31 st March, 2015 and the report of the Auditors thereon. 2. DIVIDEND The Company has recommended a Dividend of Rs.1.50/- per Equity Share i.e., at the rate of 15% of the Equity Share Capital of the Company. The proposal is subject to the approval of shareholders at the Annual General Meeting to be held on 14th September, 2015. The Register of Members and Share Transfer Books will remain closed on 27.08.2015(one day) for the purpose of payment of the Dividend for the Financial Year ended March 31 , 2015, and the Annual General Meeting. 3. STATE OF COMPANY'S AFFAIRS OF THE COMPANY DURING THE YEAR During the year under review, the Company has earned an income of Rs. 2,78,30,82,899/- as compared to Rs. 2,30,34,90,137/- during the previous year and . the expenditure incurred amounted to Rs. 2,59,97,49,133/- as against Rs. 212,22,23,435/-during the previous year. The depreciation provided for the reporting year was Rs. 2,60,91,987/-as compared to Rs. 1,56,34,498/- during the previous year. Hence, Net Profit after tax was amounted to Rs. 10,20,20,864/- as compared to Rs. 10, 89,20,048/- during the previous year. The Company has achieved these results by availing the opportunities in exports of marine foods to various countries and maintaining the stabilized dollar value. Still, the efforts of Managerial Directors & Key Managerial Personnel have been continuing for effective operations and increasing the business of the Company by improving the exports to various countries. The Company has identified viable parties for increasing the exports and the business of the Company by adding more products for exporting to various other countries. Further, after the acquisition of the Fully Owned Subsidiary Company, this year the Company has achieved in adding more new business activity of tuna fishing. Hence, the Company expects more business and profits in the years to come. 4. PERFORMANCE AND FINANCIAL POSITION OF EACH OF THE SUBSIDIARIES, ASSOCIATES AND JOINT VENTURE COMPANIES INCLUDED IN THE CONSOLIDATED FINANCIAL STATEMENT. In compliance with the requirement of Section 2(87) of the Companies Act, 2013, Directors' Report along with the Statement of Accounts of Continental Fisheries India Private Limited, the Subsidiary of your Company, for the year ended 31st March 2015 are appended to the Annual Report. Continental Fisheries India Private Limited Continental Fisheries India Private Limited is a Wholly Owned Subsidiary of the Company, which has been established with an objective of deep sea fishing. The Statement containing the salient features of the financial statement of Subsidiary as per sub- section (3) of Section 129 of the Companies Act, 2013 in Form AOC -1 is herewith annexed as Annexure -1 to this report. 5. PARTICULARS OF CONTRACTS OR ARRANGEMENTS MADE WITH RELATED PARTIES All contracts / arrangements / transactions entered by the Company during the financial year with related parties were in the ordinary course of business and on an arm's length basis. During the year, the Company had not entered into any contract / arrangement / transaction with related parties which could be considered material in accordance with the policy of the Company on materiality of related party transactions. Particulars of contracts or arrangements with related parties referred to in Section 188(1) of the Companies Act, 2013, in the prescribed Form AOC-2, is appended as Annexure - 2 to the report. These have been discussed in detail in the Notes to the Standalone Financial Statements in this Annual Report. 6. DEPOSITS The Company has not accepted any fixed deposits attracting the provisions of the Companies Act, 2013 and, as such, no amount of principal or interest was outstanding as on the Balance Sheet date. 7. STATUTORY AUDITORS: At the Annual General Meeting held on September 30% 2014, M/s. K.P.Rao Associates, Chartered Accountants, were appointed as Statutory Auditors of the Company to hold office till the conclusion of the Annual General Meeting to be held in the calendar year 2017 subject to ratification of Shareholders in every Annual General Meeting. Accordingly a resolution seeking Members' ratification on appointment of M/s. K.P. Rao Associates., Chartered Accountants, Hyderabad as statutory auditors ' of the Company for the Financial Year 2015-16 is included at Item No. 4 of the Notice convening the 34m Annual General Meeting. As required under Clause 49 of the Listing Agreement. 8. AUDITORS'REPORT The Notes on financial statement referred to in the Auditors' Report are self-explanatory and do not call for any further comments. The Auditors' Report does not contain any qualification, reservation or adverse remarks. 9. SECRETARIAL AUDITOR Shri Satyanarayana. A, Practicing Company Secretary, ASN Associates, Company Secretaries, was appointed to conduct the Secretarial Audit of the Company for the financial year 2014-15, as required under Section 204 of the Companies Act, 2013 and Rules there under. The Secretarial Audit Report for FY 2014-15 forms part of the Annual Report as Annexure - 3 to the Board's report. The Secretarial Audit Report does not contain any qualification, reservation or adverse remark. The Board has appointed Satyanarayana A, ASN Associates, Practicing Company " Secretaries, as secretarial auditor of the Company for the financial year 2015-16. 10. INTERNAL AUDITORS The Board of Directors based on the recommendations of the Audit Committee have re- appointed CA R.S. V.Raman, Chartered Accountant, Visakhapatnam, who is acting in independent manner and also responsible for regulatory and legal requirements relating to operational processes and internal systems. He reports directly to the Board of Directors. 11. AWARDS/CERTIFICATIONS: CRISIL has assigned CRISIL BBB-/Stable Credit Rating for Bank Loan facilities for Long Term Loan and CR1SILA3+ Credit Rating for short term Loan facilities provided by the Bank. 12. CREDIT & GUARANTEE FACILITIES: The Company has been availing Packing Credit limits and Term Loan and other facilities from Bank of India, Main Branch, Visakhapatnam. 13. PARTICULARS REGARDING ENERGY CONSERVATION, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO: - Your Company continues to explore all possible avenues to reduce energy consumption. The particulars as prescribed under Sub - Section (3)(m) of Section 134 of the Companies Act, 2013 read with Rule 8 of the Companies (Accounts)Rules, 2014 is enclosed as Annexure - 4 to the Board's Report. 14. MANAGEMENT DISCUSSION ANALYSIS Management Discussion & Analysis is given as an Annexure - 5. The Board has been continuing its efforts and taken the required steps in the following 1.Industry Structure and Development 2. Growth strategy. 3. Segment-wise Performance 4. Internal Control Systems and their adequacy 5. Strengths, Weaknesses, Opportunities and Threats 6. Financial performance with respect to operational performance 7. Material developments in human resources / industrial relations 8. Strict Compliances 9. Talent Management, Leadership Development, and Talent Retention 10. Learning and Development 15. CORPORATE GOVERNANCE The Company is committed to maintain the highest standards of Corporate Governance and adhere to the corporate governance requirements set out by SEBI. The Company has also implemented several best corporate governance practices as prevalent globally. The report on Corporate Governance as stipulated under the Listing Agreement forms an integral part of this Report as Annexure - 6. . Auditors' Certificate on Corporate Governance As required by Clause 49 of the Listing Agreement, the Auditors' Certificate on Corporate Governance is enclosed as Annexure - 7 to the Board's Report. Board diversity The Company recognizes and embraces the importance of a diverse board in its success. We believe that a truly diverse board will leverage differences in thought, perspective, knowledge, skill, regional and industry experience, cultural and geographical background, age, ethnicity, race and gender, which will help us, retain our competitive advantage. 16. CORPORATE SOCIAL RESPONSIBILITY (CSR) . The Corporate Social Responsibility Committee (CSR Committee) has formulated and recommended to the Board, a Corporate Social Responsibility Policy (CSR Policy) indicating the activities to be undertaken by the Company, which have been approved by the Board. The key philosophy of all CSR initiatives of the Company is guided by three core commitments of Scale, Impact and Sustainability. The Company has identified two focus areas of engagement which are as under: 1. Health: Affordable solutions for healthcare through improved access, awareness and health seeking Behavior, Sanitation. 2. Skill Development: Access to quality education, training and skill enhancement. The Company would also undertake other need based initiatives in compliance with Schedule VII to the Act. During the year, the Company has spent Rs. 6,57,730/- on CSR activities. The Annual Report on CSR activities is annexed herewith marked as Annexure - 8. 17. EXTRACT OF ANNUAL RETURN . In accordance with Section 134(3) (a) ofthe CompaniesAct, 2013, an extract of the Annual Return in the Form No. MGT - 9 is appended as Annexure - 9 to the Board's report. 18. INTERNAL FINANCIAL CONTROLS The Board has adopted the policies and procedures for ensuring the orderly and efficient conduct of its business, including adherence to the Company's policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness ofthe accounting records, and the timely preparation of reliable financial disclosures. 19. DIRECTORS AND KEY MANAGERIAL PERSONNEL Shri T.Vaisaraj had been continuing as the Managing Director of the Company. The Company has re-appointed Shri. GV.V. Satyanarayana on 30th September, 2014 fora period of 3(Three) years w.e.f 01.10.2014. In accordance with the provisions of the Act and the Articles of Association of the Company, Smt. Jeeja Vaisaraj, Non- Executive Director of the Company, retire by rotation at the ensuing Annual General Meeting and being eligible have offered herself for re-appointment As on the date of this Report, the Company's Board consists of the following Independent Directors: 1. Shri. Venkateshwara Rao Kamireddi 2. Shri. Sirangu Rajaram 3. Shri. DilipAnantBiwalkar- (Resigned w.e.f. 07.02.20T5) During the Year, the Company has appointed Ms. Swaroopa Meruva as the Company Secretary and ComplianceOfficeroftheCompany w.e.f. 07.02.2015. A brief profile of the Directors of the Company is annexed herewith as Annexure 10 to this report 20. PARTICULARS OF EMPLOYEES AS PERSECTION 197(12) UNDER RULE 5(2) OF THE COMPANIES (APPOINTMENT AND REMUNERATION OF MANAGERIAL PERSONNEL) RULES, 2014 • Particulars of employees as required in accordance with the provisions of Section 197(12) of the Companies Act, 2013, read with Rule 5(1) and Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are not given as your Company has not paid any remuneration attracting these provisions -The same has been annexed to this Board Report s Annexure -11 21. DIRECTORS' RESPONSIBILITY STATEMENT AS REQUIRED UNDER SECTION 134 (3) (C) OF THE COMPANIES ACT, 2013 The financial statements are prepared in accordance with the Section 133 of the Companies Act, 2013 read with Rule 7 of the Companies(Accounts) Rules, 2014, the Provisions of the Act (to the extent notified) and guidelines issued by Securities Exchange Board of India (SEBI). There are no material departures from prescribed accounting standards in the adoption of these standards. The Directors confirm that: (a) In the preparation of the annual accounts for the Financial Year ended March 31, 2015, the applicable accounting standards had been followed along with proper explanation relating to material departures; ¦ (6) The directors have 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 towards the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets ofthe company and for preventing and detecting fraud and other irregularities; (d) The directors have prepared the annual accounts on a going concern basis; and (e) The directors have laid down internal financial controls, which are adequate and are operating effectively. (/) The directors have devised proper systems to ensure compliance. 22. DECLARATION BY INDEPENDENT DIRECTORS -. Every Independent Director, at the first meeting ofthe Board in which he participates as a Director and thereafter at the first meeting of the Board in every financial year, gives a declaration that he meets the criteria of independence as provided under law. The declaration is annexed to the Board Report as Annexure-12 23. DETAILS OF SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALS IMPACTING THE GOING CONCERN STATUS AND COMPANY'S OPERATIONS IN FUTURE There were no significant and material Orders passed by the Regulators or Courts or Tribunals impacting the going concern status and Company's operations in future, 24. MATERIAL CHANGES AND COMMITMENT IF ANY AFFECTING THE FINANCIAL POSITION OF THE COMPANY OCCURRED BETWEEN THE END OF THE FINANCIAL YEAR TO WHICH THESE FINANCIAL STATEMENTS RELATE AND THE DATE OF THE REPORT No material changes and commitments affecting the financial position ofthe Company occurred between the ends of the financial year to which this financial statement relate on the date of this report. 25. VIGIL MECHANISM FOR DIRECTORS AND EMPLOYEES The Vigil Mechanism of the Company, which also incorporates a whistle blower policy in terms of the Listing Agreement, includes an Ethics & Compliance Task Force comprising senior executives of the Company. Protected disclosures can be made by a whistle blower through an e-mail, or dedicated telephone line or a letter to the Task Force or to the Chairman of the Audit Committee. 26. RISK MANAGEMENT POLICY During the year, the Company manages monitors the principal risks and uncertainties that can impact its ability to achieve its strategic objectives. The Company's management systems, organizational structures, processes, standards, code of conduct and behaviors together form the Coastal Management System that governs how the Group conducts the business of the Company and manages associated risks. 27. PARTICULARS OF LOANS, GUARANTEES AND INVESTMENTS PURSUANT TO SECTION 186 OF THE COMPANIES ACT, 2013 The particulars of loans, guarantees and investments have been disclosed in the financial statements. 28. CONSOLIDATED FINANCIAL STATEMENTS In accordance with Accounting Standard AS-21, the Consolidated Financial Statements are furnished herewith and form part of this Report and Accounts. These statements have been prepared on the basis of audited financial statements received from the Subsidiary Company as approved by their Board of Directors. 29. PERFORMANCE EVALUATION Pursuant to the provisions ofthe Companies Act, 2013 and Clause 49 ofthe Listing Agreement, the Board has carried out an annual performance evaluation of its own performance, the directors individually as well as the evaluation of the working of its Audit, Nomination & Remuneration and Compliance Committees. The manner in which the evaluation has been carried out has been explained in the Corporate Governance Report. 30. INSURANCE All the assets of the Company wherever necessary and to the extent required have been adequately insured. 31. EMPLOYEE RELATIONS The relationship with the staff and workers continued to be cordial during the entire year. The Directors wish to place on record their appreciation ofthe valuable work done and co-operation extended by them at all levels. Further, the Company is taking necessary steps to recruit the required personnel from time to time. 32. STATUTORY COMPLIANCE The Company has complied with the concerned provisions relating to statutory compliance with regard to the affairs ofthe Company in all aspects. 34. GENERAL . Your Directors state that no disclosure or reporting is required in respect of the following items as there were no transactions on these items during the year under review a. Neither the Managing Director nor the Whole Time Director of the Company receives any remuneration or commission from any of its subsidiary. b. Issue of Equity Shares with differential rights as to Dividend, voting. c. Issue of Shares (including sweat equity shares) to employees ofthe Company under any scheme. Your Directors further state that during the year The internal compliants committee have been constituted with 2 woman members and a male member and under review, there were no cases filed pursuant to the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. 35. LISTING WITH STOCK EXCHANGES: The Company confirms that it has paid the Annual Listing Fees for the year 2015-2016 to BSE, ASE and DSE where the Company's Shares are listed. 36. - ACKNOWLEDGEMENTS: Your Directors wish to place on record their appreciation of the continuous assistance and co-operation extended to your Company by the Customers, suppliers, dealers, Financial Institutions, Customs Authorities, Local Bodies, Overseas Bodies, other Corporate Bodies & Authorities and other Agencies. Your Directors also have pleasure in placing on record their appreciation for the assistance extended by the Company's Bankers viz. Bank of India, Visakhapatnam. Your Directors also wish to acknowledge the continued support and confidence reposed in the management by the shareholders. Your Directors also wish to place on record and sincerely acknowledge the services rendered by the employees at all levels. Thanks are also extended to our advisors, professionals, well-wishers and all other persons dealing with the Company. By Order of the Board For COASTAL CORPORATION LIMITED Sd/-(T. VALSARAJ) MANAGING DIRECTOR Sd/- (GV.V. SATYANARAYANA) DIRECTOR-FINANCE Place: Visakhapatnam Date : 18.07.2015 |