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Directors Report of Coastal Corporation Ltd.

Mar 31, 2014

The Members

Coastal Corporation Limited

Visakhapatnam.

The Directors have pleasure in presenting the Thirty Third Annual Report on the business and operations of the Company together with the Audited Statement of Accounts for the Financial Year ended 31st March, 2014 and the report of the Auditors thereon.

1. FINANCIAL RESULTS :

Year Ended Year Ended 31.03.2014 31.03.2013 Rs. Rs.

Sales 206,06,04,498 143,14,60,283

Interest 22,05,238 5,32,501

Other Income including Operating Income 24,06,80,401 15,41,28,435

Total Income 230,34,90,137 158,61,21,219

Less : Expenditure 212,22,23,435 149,38,20,496

Profit before Depreciation and Taxation 18,12,66,702 9,23,00,723

Less : Depreciation 1,56,34,498 1,00,19,198

Profit before Taxation 16,56,32,204 8,22,81,525

Less: Provision for Tax 5,66,90,231 3,01,90,639

Less: Prior Period Adjustments 21,926 5,890

Net Profit After Ta x & Prior period adjustments (a 10,89,20,048 5,20,84,996

Balance brought forward from last year(b) 10,30,86,063 7,40,01,067

Less : Transfer to General Reserve(c) 1,60,00,000 1,00,00,000

Less : Transfer to Capital Redemption Reserve(d) - 1,30,00,000

Balance Carried to Balance Sheet(a b-c-d) 19,60,06,111 10,30,86,063



2. REVIEW OF OPERATIONS :

During the year under review, the Company has earned an income of Rs. 230,34,90,137/- as compared to Rs 158,61,21,219/- during the previous year and the expenditure incurred amounted to Rs.212,22,23,435/- as against Rs. 149,38,20,497/- during the previous year. The deprecia- tion provided for the reporting year was Rs.1,56,34,498/- as compared to Rs. 1,00,19,198/- during the previous year. Hence, Net Profit after tax was amounted to Rs.10,89,20,048/- as compared to Rs. 5,20,84,995/- during the previous year. The Company has achieved these results by availing the opportunities in export of marine products 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, the Company has taken the necessary steps to add more new business activities of tuna fishing, processing and exporting to USA, Europe and Japan after acquiring the company as fully owned subsidiary company. Hence, the Company expects more business and prof- its in the years to come.

3. DIVIDEND:

The Company has not recommended any dividend in view of maintaining sound cash liquidity position for immediate requirements of the business, working capital for increasing the busi- ness of the Company and also to maintain the debt equity ratio for availing more loan/credit facilities from the banks and financial institutions from time to time.

4. CREDIT & GUARANTEE FACILITIES:

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

5. AWARDS/CERTIFICATIONS:

CRISIL has assigned CRISIL BBB-/Stable Credit Rating for Bank Loan facilities for Long Term Loan and CRISIL A3 Credit Rating for short term Loan facilities provided by the Bank.

6. DEPOSITS:

The Company has not accepted any Deposits from the public attracting the provisions of Section 58A of the Companies Act, 1956 during the financial year.

7. INSURANCE:

All the assets of the Company wherever necessary and to the extent required have been adequately insured.

8. 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 of the valuable work done and co-operation extended by them at all levels. Further, the Company has been in touch relating to recruitment of required personnel from time to time.

9. PARTICULARS AS PER SECTION 217(2A) OF THE COMPANIES ACT, 1956:

Particulars of employees as required by the Provisions of Section 217(2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975 are not given as your Company has not paid any remuneration attracting these provisions.

10. PARTICULARS REGARDING ENERGY CONSERVATION, TECHNOLOGY ABSORPTION ETC:

Your Company continues to explore all possible avenues to reduce energy consumption.

As your Company is covered in the Schedule to the Companies (Disclosures of Particulars in the Report of the Board of Directors) Rules, 1988, read with Section 217(1)(e) of the Companies Act, 1956, the details under Form ''A'' are furnished as an Annexure-I.

11. FOREIGN EXCHANGE EARNINGS AND OUTGO:

In accordance with the provisions of Section 217(1)(e) of the Companies Act, 1956, read with the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988, the information relating to foreign exchange earnings and outgo is provided as under :

Particulars 2013-2014 2012-2013 Rs. Rs.

Foreign Exchange Earnings (FOB) 1,98,31,86,504/- 96,26,31,954/-

Expenditure incurred in Foreign Currency :

1. Antidumping Fee 5,86,70,529/- 95,96,139/-

2. Marine Rejection Insurance 32,86,130/- 52,51,320/-

3. Export Claims 2,97,438/- 6,78,566/-

4. Commission 3,62,495/- 3,32,247/-

5. B.A.P. Audit fee 3,49,377/- 2,95,994/-

6. Travelling Expenses 8,55,979/- 1,12,168/-

7.Shrimp Council Sponsorships USA 191,729/- Nil

8. Avalon Risk Management insurance Agency LLC 43,54,761/- Nil

9. Imported Spares (including for Capital Goods spares worth of Rs. 23,06,880/- have been received) 1,07,80,234/- Nil

12. DIRECTORS'' RESPONSIBILITY STATEMENT:

Pursuant to the requirement under Section 217(2AA) of the Companies Act, 1956 with respect to Directors Responsibility Statement, it is hereby confirmed that:

i. in the preparation of the annual accounts for the year ended 31st March, 2014, the applicable accounting standards had been followed along with proper explanation relating to material departures ;

ii. the Directors have 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 as on 31st March, 2014 and of the profit or loss of your Company for that period;

iii. the Directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities, and;

iv. The Directors had prepared the annual accounts for the financial year ended 31st March, 2014 on a going concern basis.

13. DIRECTORS:

(a) Pursuant to the provisions of Section 152 of the Companies Act, 2013(the Act") and the Articles of Association of the Company Smt. Jeeja Valsaraj retires by rotation at the ensuing Annual General Meeting and being eligible, offer herself for re-appointment. Notice convening the Annual General Meeting includes the proposal for his re -appointment as a Director

(b) As on the date of this report, the Company''s Board consists of the following Non-Execu- tive Independent Directors:

1. Sri Sirangu Rajaram

2. Prof.Kamireddi Venkateswara Rao

3. Sri Dilip Anant Biwalkar

The Period of office of the above mentioned Directors was liable to determination by retirement of Directors by rotation under the erstwhile Companies Act, 1956. In terms of Section 149 and other applicable provisions of the Companies Act, 2013, the aforementioned Directors are being eligible and offer themselves for appointment, are proposed to be appointed as Indepen- dent Directors for a term of 5 (Five) consecutive years commencing upto 29th September, 2019.

Brief profile of the proposed appointees together with other disclosures in terms of clause 49 of the Listing Agreement are part of the Annexure to the Notice of the 33rd Annual General Meeting.

14. Corporate Social Responsibility (CSR):

Pursuant to the provisions of Section 135 of the Companies Act, 2013 read with the Companies (Corporate Social Responsibility Policy) Rules, 2014, the Company has consti- tuted a CSR Committee. The Company has formulated a CSR Policy for adoption.

15. CORPORATE GOVERNANCE:

Corporate Governance is given as an Annexure-II.

16. MANAGEMENT DISCUSSION AND ANALYSIS:

Management Discussion & Analysis is given as an Annexure-III

17. COMPLIANCE CERTIFICATE:

The Compliance Certificate referred to in the proviso to sub-Section (1) of Section 383A of the Companies Act, 1956 was obtained and enclosed as Annexure-IV.

18. INTERNAL AUDIT:

The Internal Audit of the Company is done by 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. His name has been recommended for re-appoint- ment as Internal Auditors of the company for the Financial Year 2014-15.

19. AUDITORS:

The present Statutory Auditors of the Company CA V.V.S. Bhagavan, Chartered Accountant, Hyderabad, (Membership No. 8571 ) retire at the conclusion of the ensuing Annual General Meeting and being eligible for re-appointment. But, he has given his consent for appointment of M/s.K.P.Rao Associates, Chartered Accountants, Hyderabad due to organizational conve- nience. The Company has received a certificate to the effect that their appointment, if made, will be within the limits under Section 141 of the Companies Act, 2013. In view of this, the Board recommends the appointment of M/s.. K.P.Rao Associates, Chartered Accountants, Hyderabad as Statutory Auditors of the Company for the next 3 (Three) years from i.e. 2014-15 to 2016-17.

20. AUDITORS'' REPORT:

The Auditor''s Report is self Explanatory and does not require any comments from the Board of Directors.

21. COST ACCOUNTING RECORDS:

Pursuant to the provisions of Section 233B of the Companies Act, 1956 and in terms of General Circular No. 15/2011 dated 11th April''2011 and with the prior approval of the Central Government, M/s. A.S.Rao&Co., Practicing Cost Accountants, Visakhapatnam were appointed as Cost Auditors of the Company to conduct audit of Cost Records of Packaged Food Prod- ucts for the year ended 31st March''2014, Cost Audit Reports would be submitted to the Central Government within the prescribed time.

Pursuant to Rule 5 of the Companies (Cost Audit Report) Rules, 2011 cost Audit Reports for Packaged Food Products for the year ended 31st March''2013 were filed with the Central Government.

22. STATUTORY COMPLIANCE:

The Company has complied with the concerned provisions relating to statutory compliance with regard to the affairs of the Company in all aspects.

23. 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 Institu- tions, Customs Authorities, Local Bodies, Overseas Bodies, other Corporate Bodies & Au- thorities 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 confi- dence 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/- Place: Visakhapatnam (G.V.V. SATYANARAYANA) Date :30.08.2014 DIRECTOR-FINANCE


Mar 31, 2010

To The Members of Coastal Corporation Limited

The Directors have pleasure in presenting the TWENTY-NINTH Annual Report on the business and operations of the Company together with the Audited Statement of Accounts for the Financial Year ended 31s1 March, 2010 and the report of the Auditors thereon.

1. FINANCIAL RESULTS :

Year Ended Year Ended 31.03.2010 31.03.2009

Sales 23,39,10,537.00 21,02,90,163-00

Work Contract Receipts -- --

Interest 95709-00 6,56,153-00

Other Income 3,78,67,066-00 2,94,95,419-00

Total Income 27,18,73,312-00 24,04,41,735-00

Less: Expenditure 25,98,78,808-00 23,25,00,443-00

Profit before Depreciation and Taxation 1,19,94,504-00 79,41,292-00

Tess: Depreciation 34,09,639-00 29,20,934-00

Profit before Taxation 85,84,865-00 50,20,358-00

Less: Provision for Tax (15,51,909-00) (10,76,712.00)

Less: Prior Period Adjustments -- (9,22,982)

Net Profit for the Year 70,32,956.00 48,66,628-00

2. REVIEW OF OPERATIONS :

During the year under review, the Company has earned an income of Rs.27,18,73,312- 00 as compared to Rs.24,04,41,735-00 during the previous year and the expenditure incurred amounted to Rs.25,98,78,808-00 as against Rs.23,25,00,443-00 during the previous year. The depreciation provided for the reporting year was Rs.34,09,639-00 as compared to Rs.29,20,934-00 during the previous year. Hence, Net Profit after tax was amounted to Rs.70,32,956.00 as compared to Rs.48,66,628-00. during the previous year.

The efforts taken by the Directors as well as efficient and effective services given to its valuable customers is clearly evident with the rise of the turnover, the Company is continuing in the line of profit. However, your Directors have making all possible ways and means for increasing the business of the company and also striving to control Overheads. Hence, the Company expects more profits in the years to come.

3. DIVIDEND:

In view of meeting the working capital requirements for the business, the present financial scenario and also in order to conserve the resources for future requirements & plans, your Directors have not recommended any dividend for the financial year ended March 31, 2010.

4. PREFERENTIAL SHARES :

During the period under review the Company has issued and alloted 6.5% 13,00,000 (Thirteen lakhs) Redeemable Preference Shares of Rs. 10/- (Rupee Ten only) each at par.

5. CREDIT & GUARANTEE FACILITIES:

The Company has been availing Packing Credit limits and Term Loan facilities from Bank of India, Overseas Branch, Visakhapatnam from time to time and ICICI Bank Limited for other Term Loans for the business requirements.

6. DEPOSITS:

The Company has not invited or accepted any Deposits from the public during the Financial year.

7. INSURANCE:

All the assets of the Company wherever necessary and to the extent required have been adequately insured.

8. EMPLOYEE RELATIONS:-

The Company has been in touch relating to recruitment of required personnel at all levels, for operations of the Company and to render services efficiently and effectively. The Board wishes to place on record their sincere appreciation to their employees at all levels for their commitment dedication for the growth and development of the Company.

9. PARTICULARS AS PER SECTION 217(2A) OF THE COMPANIES ACT, 1956:

Particulars of employees as required by the Provisions of Section 217(2A) of the Companies Act, 1956 read with the Companies {Particulars of Employees) Rules, 1975 are not given as your Company has not paid any remuneration attracting these provisions.

10. PARTICULARS REGARDING ENERGY CONSERVATION, TECHNOLOGY ABSORPTION ETC:

Your Company continues to explore all possible avenues to reduce energy consumption.

As your Company is covered in the Schedule to the Companies (Disclosures of particulars in the report of the Board of Directors) Rules, 1988, read with Section 217(1)(e) of the Companies Act, 1956, the details under Form ’A' are furnished as an annexure-1.

11. FOREIGN EXCHANGE EARNINGS AND OUTGO:

During the period under review, the Company has earned Foreign Exchange to the tune of Rs. 19,46,00,253/- (FOB) and has not incurred any amount in Foreign Exchange.

12. DIRECTORS’ RESPONSIBILITY STATEMENT:

Pursuant to the requirement under Section 217(2AA) of the Companies Act, 1956 with respect to Directors Responsibility Statement, it is hereby confirmed that:

i. in the preparation on of the annual accounts for the year ended 31st March, 2009. the applicable accounting standards had been followed along with proper explanation relating to material departures ;

ii. 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 as on 31 March, 2009 and of the profit or loss of your Company for that period;

iii. the Directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities, and;

iv. the Directors had prepared the annual accounts for the financial year ended 31st March, 2010 on a going concern basis.

13. THE BOARD:

The Board of Directors of the Company is duly constituted. Sri Venkateswara Rao Kamireddy, Director of the Company retires by rotation at the forthcoming Annual General Meeting and being eligible, offers himself for re-appointment.

The Board confirms that none of the Directors of the Company is disqualified from being appointed as Director in terms of clause (g) to sub-section (1) of Section 274 of the Companies Act, 1956 and necessary declarations have been obtained from all the Directors in this regard.

14. CORPORATE GOVERNANCE:

Corporate Governance is given as an Annexure to the Directors Report.

15. MANAGEMENT DISCUSSION AND ANALYSIS:

This has been dealt with in the separate Annexure to this Report.

16. COMPLIANCE CERTIFICATE:

The Compliance Certificate referred to in the proviso to sub-Section (1) of Section 383A of the Companies Act, 1956 was obtained.

17. AUDITORS:

The present Statutory-y Auditors of the Company Sri V.V.S. Bhagavan, Chartered Accountant, Hyderabad, retire at the conclusion of the ensuing Annual General Meeting and being eligible for re-appointment. The Company has received a letter from him to the effect that his appointment if made, would be within the limits prescribed under Section 224(1-B) of the Companies Act, 1956 and that he is not disqualified for such appointment within the meaning of Section 226 of the Companies Act, 1956. The Audit Committee and the Board of Directors recommend the appointment of Sri V.V.S. Bhagavan, Chartered Accountant, Hyderabad as Statutory Auditors of the Company for the financial year 201D-11.

18. STATUTORY COMPLIANCE:

The Company has complied with the concerned provisions relating to statutory compliance with regard to the affairs of the Company in all aspects.

19. 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, Bankers, Financial Institutions, Customs Authorities, Local Bodies, Overseas Bodies, other Corporate Bodies & Authorities and other Agencies. 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

(T.VALSARAJ)

MANAGING DIRECTOR

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

Date : 22.06.2010 DIRECTOR

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