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Coastal Corporation Ltd.

BSE:501831  |  58888:cora  |  IND:Shrimp Feed/Processing  |  ISIN code:INE377E01016  |  SECT:Aquaculture

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You can view full text of the Director's Report for Coastal Corporation Ltd.
Director Report
Mar2014   Mar 2018

To,

The Members,

The Directors have pleasure in presenting their Thirty Seventh Annual Report on the business and operations of the Company together with the Audited Statement of Accounts for the Financial Year ended 31st March, 2018 and the report of the Auditors thereon.

1. FINANCIAL SUMMARY (STANDALONE) (Rs. in Lakhs)

Particulars

Year Ended 31.03.2018 Rs.

Year Ended 31.03.2017 Rs.

Revenue from Operations

50695.54

47163.50

Other Income

305.43

252.80

Total Income

51000.97

47416.30

Profit before Taxation

3893.52

2174.01

Current Tax

1385.00

820.00

Deferred Tax Credit/(Charge)

1.99

13.59

Profit After Tax(PAT)

2506.53

1340.42

Total Other Comprehensive Income net of tax

(8.63)

89.46

Total Other Comprehensive Income for the year net of tax

2497.90

1429.88

Earnings Per Equity Shares of the Face Value of Rs. 10/- each: Basic & Diluted

98.26

56.25

2. DIVIDEND

The interim dividend of Rs.1.50/- per share declared by the Board of Directors of the Company on 7th April 2018, on 25,42,200 equity shares of Rs.10/- each paid to the shareholders, be and is hereby approved as final dividend for the year ended 31 March 2018.

3. AWARDS & RECOGNITIONS

Your Company was presented FIEO Regional Export Award for the year 2015-16 under the Category of “Top Multi Product Exporter in Andhra Pradesh (Silver) on 18th January, 2018 by Shri.M. Venkaiah Naidu, Hon’ble Vice President of India.

During the year under review the company has also received “SILVER” rating under Zero Effect - Zero Defect certification scheme of Ministry of Micro, Small & Medium Enterprises.

4. PERFORMANCE AND FINANCIAL POSITION OF EACH OF THE SUBSIDIARIES, ASSOCIATES AND JOINT VENTURE COMPANIES INCLUDED IN THE CONSOLIDATED FINANCIAL STATEMENT.

Continental Fisheries India Private Limited

Continental Fisheries India Private Limited is a wholly owned subsidiary of the Company. The operational performance of the Company is as below:

(Rs. in Lakhs)

Particulars

2017-18

2016-17

Revenue from operations

3150.99

nil

Profit for the year after meeting all expenses

(before Interest, Depreciation & Tax)

61.82

(5.08)

Less:

Interest

51.85

Depreciation and other write offs

6.60

5.95

Deffered Tax

1.49

0.53

Net Profit/Loss

1.88

(11.56)

Seacrest Seafoods Inc.

Seacrest Seafoods Inc. is a Wholly Owned Subsidiary of the Company which has been established in the Year 2015 in the State of Delaware, U.S.A, with an objective to import and sell sea foods in the American Markets. The operational performance of the Company is as below:

(Rs. in Lakhs)

Particulars

2017-18

2016-17

Revenue from operations

8481.78

4719.89

Profit for the year after meeting all expenses (before Interest, Depreciation & Tax)

339.19

108.50

Less:Operating expenses

459.06

467.58

Net Loss

(119.77)

(359.08)

The Statement containing the salient features of the financial statement of Subsidiaries as per subsection (3) of Section 129 of the Companies Act, 2013 in Form AOC - 1 is herewith annexed as Annexure - 1 to this report.

5. NUMBER OF MEETINGS OF THE BOARD

Four (4) meetings of the board were held during the year. For details of the meetings of the board, please refer to the corporate governance report, which forms part of this report.

6. 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.

There are no materially significant related party transactions made by the Company with Promoters, Directors, Key Managerial Personnel or other designated persons which may have a potential conflict with the interest of the Company at large.

All related party transactions are placed before the Audit Committee as also the Board for approval. Prior omnibus approval of the Audit Committee is obtained as per SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 for the transactions which are of a foreseen and repetitive nature. The Company has developed a Policy on Related Party Transactions for the purpose of identification and monitoring of such 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 this report.

These have been discussed in detail in the Notes to the Standalone Financial Statements in this Annual Report.

7. 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 of the Balance Sheet date.

8. STATUTORY AUDITORS

M/s. K.P. Rao & Co, Chartered Accountants, Bangalore (Firm Reg. No. 03135S) will be re-appointed as Statutory Auditors, to hold office from the conclusion of this Annual General Meeting till the next Annual General Meeting. The Auditor’s observations are suitably explained in notes to the Accounts and are self-explanatory.

9. 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. ASN Associates, a firm of Company Secretaries in Practice to undertake the Secretarial Audit of the Company. The Secretarial Audit Report is annexed herewith as Annexure-3 to this report.

10. INTERNAL AUDITORS

The Board of Directors based on the recommendations of the Audit Committee have appointed M/s. K.P Rao Associates, Chartered Accountants, Hyderabad for the financial year 2018-19, who has to act in an independent manner and also responsible for regulatory and legal requirements relating to operational processes and internal systems.

11. CREDIT & GUARANTEE FACILITIES

The Company has been availing Packing Credit limits and Term Loan and other facilities from Bank of India, Main Branch, Visakhapatnam.

12. PARTICULARS REGARDING ENERGY CONSERVATION, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

The information on conservation of energy, technology absorption and foreign exchange earnings and outgo stipulated under Section 134(3)(m) of the Companies Act, 2013 read with Rule 8 of The Companies (Accounts) Rules, 2014, is annexed herewith as Annexure-4 to this report.

13. MANAGEMENT DISCUSSION ANALYSIS

Pursuant to the provisions of Regulation 34(2) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 a report on Management Discussion & Analysis is herewith annexed as “Annexure 5” to this report.

14. CORPORATE GOVERNANCE

The Company has been making every endeavor to bring more transparency in the conduct of its business. As per the requirements of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, a compliance report on Corporate Governance for the year 2017-18 and a Certificate from the Statutory Auditors of the Company are furnished which form part of this Annual Report as Annexure - 6 & 7.

15. CORPORATE SOCIAL RESPONSIBILITY (CSR)

The Company as part of its Corporate Social Responsibility (CSR) initiative, undertook projects like sanitation development, facilitating pure drinking water, health care to the identified rural areas around the factory at Yelamanchili, Andhra Pradesh.

The Report on CSR activities is annexed herewith as Annexure-8 to this report. The CSR Policy is posted on the website of the Company.

16. EXTRACT OF ANNUAL RETURN

In accordance with Section 134(3)(a) of the Companies Act, 2013, an extract of the Annual Return in the Form No. MGT - 9 is appended as Annexure-9 to the Board’s report.

17. DIRECTORS AND KEY MANAGERIAL PERSONNEL

The Board of Directors has appointed Mr. Kalyanaraman P.R as an Additional Director (Non- Executive Independent Category) of the Company who holds office till the ensuing Annual General Meeting. The Board based on the recommendation of Nomination and Remuneration Committee considered the appointment of Mr. Kalyanaraman P.R as an Independent Director subject to the approval of shareholders. Accordingly a resolution seeking approval of shareholders for his appointment as an Independent Director for a period of five years is included at Item No. 5 of the Notice convening the Annual General Meeting.

In accordance with the provisions of Section 152 of the Companies Act, 2013, Mrs. Jeeja Valsaraj, Director of the Company retire by rotation and being eligible, have offered herself for re appointment.

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

There was no resignation / appointment and removal of any Key Managerial Personnel during the year.

Shri. S. Rajaram has resigned to the position of Independent Director of the Company w.e.f. 13th February, 2018.

A brief profile of the Directors of the Company is annexed herewith as Annexure-10 to this report.

18. PARTICULARS OF EMPLOYEES AS PER SECTION 197(12) UNDER RULE 5(2) OF THE COMPANIES (APPOINTMENT AND REMUNERATION OF MANAGERIAL PERSONNEL) RULES, 2014

The information required pursuant to Section 197 read with Rule 5 of The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 in respect of employees of the Company is herewith annexed as Annexure - 11 to this report.

19. DIRECTORS’ RESPONSIBILITY STATEMENT AS REQUIRED UNDER SECTION 134 (3) (C) OF THE COMPANIES ACT, 2013

Pursuant to Section 134 (5) of the Companies Act, 2013, your Directors confirm that to the best of their knowledge and belief and according to the information and explanation obtained by them,

(a) In the preparation of the annual accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures;

(b) 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 the Companies Act, 2013 for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities;

(d) The annual accounts for the financial year 2017-18 have been prepared on a going concern basis;

(e) The directors have laid down internal financial controls, which are adequate and are operating effectively; and

(f) The directors have devised proper systems to ensure compliance.

20. SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS / COURTS OR TRIBUNALS

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.

21. MATERIAL CHANGES AND COMMITMENT

There were no material changes and commitments affecting the financial position of the Company that have occurred between the end of the Financial Year 2017-18 of the Company and the date of the report.

22. VIGIL MECHANISM / WHISTLE BLOWER POLICY

The Company has a Whistle Blower Policy framed to deal with instance of fraud and mismanagement, if any in the Group. The details of the Policy are explained in the Corporate Governance Report and also posted on the website of the Company (www.coastalcorp.co.in).

23. RISK MANAGEMENT

The Company reviews the process of risk management in your Company. Risk management is interlinked with the annual planning exercise. During the year, the Company manages monitors the principal risks and uncertainties that can impact its ability to achieve its strategic objectives.

24. POLICY ON DIRECTORS’ APPOINTMENTS AND REMUNERATION, INCLUDING CRITERIA FOR DETERMINING QUALIFICATIONS, POSITIVE ATTRIBUTES, ETC.

Policy on Director’s Appointment and Remuneration and other matters

(a) Procedure for Nomination and Appointment of Directors:

The Nomination and Remuneration Committee has been formed pursuant to and in compliance with Regulation 19 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and pursuant to Section 178 of the Companies Act, 2013. The main object of this Committee is to identify persons who are qualified to become directors and who may be appointed in senior management of the Company, recommend to the Board their appointment and removal and shall carry out evaluation of every Director’s performance, recommend the remuneration package of both the Executive and the Non-Executive Directors on the Board and also the remuneration of Senior Management, one level below the Board. The Committee reviews the remuneration package payable to Executive Director(s) and recommends to the Board the same and acts in terms of reference of the Board from time to time.

On the recommendation of the Nomination and Remuneration Committee, the Board has adopted and framed a Remuneration Policy for the Directors, Key Managerial Personnel and other employees pursuant to the provisions of the Companies Act, 2013 and SEBI Listing Regulations.

The remuneration determined for Executive Directors is subject to the recommendation of the Nomination and Remuneration Committee and approval of the Board of Directors. The Executive Directors are compensated partly by way of salary and partly by way of profit sharing percentage and the Non-Executive Directors are entitled to sitting fees for the Board/Committee Meetings. The remuneration paid to Directors, Key Managerial Personnel and all other employees is in accordance with the Remuneration Policy of the Company.

The Nomination and Remuneration Policy and other matters provided in Section 178(3) of the Act and Regulation 19 of SEBI Listing Regulations have been disclosed in the Corporate Governance Report, which forms part of this Report.

The details of Policy on Directors’ appointment and Remuneration (i.e. Nomination and Remuneration Policy), and the criteria for determining qualifications, positive attributes, independence of directors are included in the Report on Corporate Governance forming part of the Board’s Report. Further, the information about the elements of remuneration package of individual directors is provided in the extract of the Annual Return in Form MGT-9 enclosed herewith the Board’s Report.

25. 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.

26. ANNUAL EVALUATION OF BOARD PERFORMANCE AND PERFORMANCE OF ITS COMMITTEES AND OF DIRECTORS

Pursuant to the provisions of the Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Board has carried out the annual performance evaluation of its own performance, the Directors individually as well as the evaluation of the working of its Audit and other Committees.

An exercise was carried out to evaluate the performance of individual Directors including the Chairman of the Board, who were evaluated on parameters such as level of engagement and contribution, independence of judgement, safeguarding the interest of the Company and its minority shareholders etc.

The performance evaluation of the Independent Directors was carried out by the entire Board. The performance evaluation of the Chairman and the Non Independent Directors was carried out by the Independent Directors who also reviewed the performance of the Secretarial Department. The Directors expressed their satisfaction with the evaluation process.

27. PREVENTION, PROHIBITION AND REDRESSAL OF SEXUAL HARASSMENT AT WORK PLACE

Your Company strongly supports the rights of all its employees to work in an environment free from all forms of harassment. The Company has also constituted an Internal Committee, known as Anti Sexual Harassment Committee to address the concerns and complaints of sexual harassment and to recommend appropriate action. The Committee aims to provide protection to Employees at the workplace and prevent and redress complaints of sexual harassment and for matters connected or incidental thereto, with the objective of providing a safe working environment, where Employees feel secure. During the year there were no cases filed pursuant to the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.

28. HUMAN RESOURCES:

Your Company considers its Human Resources as the key to achieve its objectives. Keeping this in view, your Company takes utmost care to attract and retain quality employees. The employees are sufficiently empowered and such work environment propels them to achieve higher levels of performance. The unflinching commitment of the employees is the driving force behind the Company’s vision. Your Company appreciates the spirit of its dedicated employees.

29. DECLARATION BY INDEPENDENT DIRECTORS:

Mr. K. Venkateswara Rao, Mr. M.V. Suryanarayana and Mr. Kalyanaraman P.R, Independent Directors of the company had submitted their declaration that they meet the criteria of independence as per Section149 (6) of the Companies Act, 2013.

30. INTERNAL CONTROL SYSTEMS & THEIR ADEQUACY:

The Board has adopted policies and procedures for ensuring the orderly and efficient conduct of its business, including adherence to the Company’s policies, safeguarding of its assets, prevention and detection of frauds and errors, accuracy and completeness of the accounting records, and timely preparation of reliable financial disclosures.

31. ACKNOWLEDGEMENTS:

Your Directors take this opportunity to express their sincere appreciation to the shareholders, customers, bankers, suppliers and other business associates for their excellent support and cooperation extended by them.

Your Directors gratefully acknowledge the ongoing co-operation and support provided by the Central and State Governments, Stock Exchanges, SEBI, RBI and other Regulatory Bodies.

On behalf of the Board

For COASTAL CORPORATION LIMITED

Sd/-

(T. VALSARAJ)

MANAGING DIRECTOR

Sd/-

Place: Visakhapatnam (G.V.V. SATYANARAYANA)

Date: 31.07.2018 DIRECTOR-FINANCE

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