To,
The Members,
Your Directors are having immense pleasure in presenting the Forty 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, 2024 and the report of the Auditors thereon.
1. Financial summary
(Rs. in lakhs)
2. Summary of Operations & State of Company's Affairs
On a consolidated basis, the Company's total revenue for FY 2024 was Rs. 43555.70 Lakhs as compared to the previous year revenue of Rs. 35272.45 Lakhs. The profit after tax (PAT) attributable to shareholders and non-controlling interests for FY 2024 and FY 2023 was Rs. 521.71Lakhs and Rs. 793.57Lakhs, respectively.
On a Standalone basis, the Company's total revenue for FY 2024 was Rs. 42336.06 Lakhs as compared to the previous year revenue of Rs. 33681.72 Lakhs. The profit after tax (PAT) attributable to shareholders and non-controlling interests for FY 2024 and FY 2023 was Rs. 878.47 Lakhs and Rs. 958.32 Lakhs, respectively.
The standalone and consolidated financial statements of the Company for the financial year ended March 31, 2024, have been prepared in accordance with the Indian Accounting Standards (Ind AS) as notified by the Ministry of Corporate Affairs and as amended from time to time.
3. Share Capital
As on 31st March, 2024 the authorized capital of the Company is Rs. 15,00,00,000/- (Rupees fifteen crores only) divided into 1,50,00,000 (one crores fifty lakhs) equity shares of Rs. 10/-each .
In the year 2022 the Company issued 19,29,800 partly paid-up equity shares on rights issue basis to all the existing shareholders of the company in the ratio of 6:1 pursuant to the offer letter dated 25th August, 2022 at an issue price of Rs. 225/- per equity share.
During the last year the company collected an amount of Rs. 56.25/- on 2nd Call and Rs. 112.5/- on 1st Call reminders per equity share.
The paid-up capital of the Company as on 31st March 2024 stands at Rs. 13,39,54,460/- divided into 1,33,95,446 fully paid- up equity shares (Rs. 10/- per share).
4. Dividend
The Company has voluntarily formulated a Dividend Distribution Policy which has been duly approved by the Board of Directors and is available on the Company's website at: www.coastalcorp.co.in
The Board of Directors of the Company at their meeting held on the 14th day of August, 2024 recommended a Dividend of Rs. 1.2/- i.e., 12% on the nominal value of Equity Share of Rs. 10/- each which shall be declared subject to the shareholders' approval at this Annual General Meeting. The dividend will be paid to all the eligible shareholders as on the book closure dates. As per the amended Income Tax Act, 1961, no dividend distribution tax was payable by the Company. Hence the dividend was taxable in the hands of the shareholders subject to tax deduction at source at the applicable rates. The dividend recommended is in accordance with the principles and criteria as set out in the dividend distribution policy.
5. Amount to be carried to reserves
The Company has not transferred any amount to the reserves during the current financial year.
6. Employee stock option plans (ESOP)
There were no Options granted or vested or any shares issued on vesting during the year under the CCL ESOP Scheme - 2021("CCL Scheme - 2021").
7. Subsidiaries/Associates and joint ventures
The Company has the following three wholly owned subsidiaries:
I) Continental Fisheries India Limited
II) Sea crest Sea foods Inc.
III) Coastal Biotech Private Limited
There has been no material change in the nature of the business of the subsidiaries. There are no associates or joint venture companies within the meaning of Section 2(6) of the Companies Act, 2013 ("Act").
Pursuant to Section 129(3) of the Companies Act, 2013, a separate statement containing salient features of the financial statement of both the subsidiaries of the Company is annexed in the format of AOC-1 as Annexure - 1 to the Financial Statements of the Company.
The accounts of the above subsidiaries have been considered in the consolidated financial results of the Company. The Annual Audited Financial Statements of each of the subsidiary companies are placed on the Company's website.
8. Particulars of contracts or arrangements made with related parties
All contracts / arrangements / transactions entered by the Company during FY24 with related parties were on an arm's length basis and in the ordinary course of business and approved by the Audit Committee. Certain transactions, which were repetitive in nature, were approved through omnibus route.
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 Financial Statements in this Annual Report.
9. Deposits
The Company has not accepted any deposit from the public falling within the ambit of Section 73 of the Companies Act, 2013 and the Companies (Acceptance of Deposits) Rules, 2014.
10. Statutory auditors & auditor's report
M/s. Brahmayya & Co., Chartered Accountants, Visakhapatnam (Registration No.000513S) auditors of the Company hold office until the conclusion of this ensuing 43rd Annual General Meeting. The Company has received confirmation from the Statutory Auditors to the effect that their appointment if made, will be in accordance with the limits specified under the Act and the firm satisfies the criteria specified in Section 141 of the Act read with Rule 4 of the Companies (Audit and Auditors) Rules, 2014 The Board of Directors of the Company on the recommendation of the Audit Committee has re-appointed M/s. Brahmayya & Co., Chartered Accountants, Visakhapatnam (Registration No.000513S) as the Statutory Auditors of the Company pursuant to Section 139 of the Act for a second term 5 (five) years to hold office from the conclusion of the ensuing AGM till the conclusion of 48th AGM of the Company to be held in the year 2029, subject to approval by the Members at the ensuing AGM. The Board recommends to seek consent of its members at the ensuing AGM on re-appointment of M/s. Brahmayya & Co. as Statutory Auditors for tenure of 5 (five) years, to examine and audit the accounts of the Company during the said period.
There is a qualification made by the Statutory Auditors in their report on the Financial Statements of the Company for the Financial Year ended March 31, 2024.
Details of Audit Qualification:
Attention is invited to Note No.6 to the accompanying audited standalone financial results, regarding non-provision of impairment loss allowance on investment made in "M/s. Seacrest Seafoods lnc.," wholly owned foreign subsidiary company amounting to Rs. 2476.50 lakhs as on 31.03,2024, as in the opinion of the Board of Directors the said jinvestment does not suffer any impairment loss, as the company has accepted offer of "buy-back" at par from the said subsidiary made on 25th April 2024, which is expected to be completed within 12 months from the date of offer. We are unable to express an opinion on the same.
Boards / Management Explanation:
As per the Indian laws the company M/s Coastal Corporation Limited has to create provision for impairment for the loss on investment of shares when the value of the investment had become negative in the investee co. The present investment ln subsidiary M/s Seacrest seafood is negative thereby we have to provide impairment loss in M/s Coastal Corporation Limited, but in the present case the company has accepted the proposal for buyback of shares by subsidiary at par value in a span of 6 to 9 months which is a matter of no loss for M/s Coastal Corporation Limited. Hence, we were of the opinion not to provide impairment loss in the books of accounts as explained above.
11. 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 Mr. A.V.V.S.S.Ch.B. Sekhar Babu Sekhar Babu, Practicing Company Secretary, Visakhapatnam to undertake the Secretarial Audit of the Company. The Secretarial Audit Report is annexed herewith as Annexure-3 to this report. The same does not contain any adverse remarks. The Company has appointed Mr. A.V.V.S.S.Ch.B. Sekhar Babu, Practicing Company Secretary, Visakhapatnam as the Secretarial Auditor for the Financial Year 2024-2025.
Secretarial audit report of material subsidiary:
As per regulation 24(1) of SEBI Listing Regulations, the Company is required to annex the secretarial audit report of its material unlisted subsidiary to its Annual Report. Coastal Biotech Private Limited (CBPL) have been identified as Material Unlisted Subsidiary of the Company for FY24 and accordingly the Company is annexing the Secretarial Audit Report of CBPL as Annexure-3A.
Compliance with secretarial standard:
The Company has Complied with the applicable Secretarial Standards (as amended from time to time) on meetings of the Board of Directors issued by The Institute of Company Secretaries of India and approved by Central Government under section 118(10) of the Companies Act, 2013.
12. Internal auditors
The Board of Directors based on the recommendations of the Audit Committee have appointed M/s. Jaya & Lakshmi, Chartered Accountants, Visakhapatnam for the financial year 2024-25. who has to act in an independent manner and also responsible for regulatory and legal requirements relating to operational processes and internal systems. They report directly to the Board of Directors.
13. Credit & guarantee facilities
The Company has been availing Packing Credit limits and Term Loan and other facilities from Bank of India and HDFC Bank Visakhapatnam.
14. 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.
15. 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.
16. Corporate governance
As per Regulation 34 of the Listing Regulations, a separate Report on corporate governance practices followed by your Company, along with a certificate from Practicing Company Secretary, on compliance with corporate governance norms under the Listing Regulations, forms part of this Annual Report as Annexure - 6, 7 & 8.
17. Corporate social responsibility (CSR)
The brief outline of the Corporate Social Responsibility (CSR) Policy of the Company and the initiatives undertaken by the Company on CSR activities during the year are set out in Annexure - 9 of this Report. The policy is available on Company's website at www.coastalcorp.co.in.
18. Annual return
Pursuant to Section 92(3) of the Act and Rule 12 of the Companies (Management and Administration) Rules, 2014, the Annual Return for FY24 is uploaded on the website of the Company and the same is available on www.coastalcorp.co.in.
19. Directors and key managerial personnel
The below mentioned Director were to re-appoint in terms of applicable provisions of Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 at the 43rd Annual General Meeting to be held on September 27th 2024:
(i) Mrs. Jeeja Valsaraj who was liable to retire by rotation shall be re-appointed.
Mr K. Venkateswara Rao (DIN: 01678973), a Non-Executive Non-Independent Director, ceased to be a Director of the Company with effect from 30th August, 2024, upon completion of his two consecutive terms as per the applicable provisions under the Companies Act, 2013 and SEBI Regulations.
The Board places on record its sincere appreciation for his contributions and extends gratitude to Mr. K. Venkateswara Rao for his invaluable service as a Director on the Board. His insightful contributions have played a pivotal role in steering the Company's strategic direction and fostering growth.
Appointments/Re-appointments at this Annual General Meeting
In accordance with the provisions of Section 152 of the Companies Act, 2013, Mrs. Jeeja Valsaraj, Director of the Company retires by rotation and being eligible, has offered herself for re appointment.
As per the requirements of Regulation 36(3) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (as amended) and Clause 1.2.5 of the Secretarial Standard 2 (Revised) as issued by the Institute of Company Secretaries of India, a statement containing the requisite details of re-appointments is given below:
(i) Mrs. Jeeja Valsaraj (01064411):
Key Managerial Personnel
In terms of Section 203 of the Act, the Key Managerial Personnel (KMPs) of the Company during FY 2023-24 are:
• Mr. Valsaraj Thottoli, Vice-Chairman and Managing Director
• Mr. G.V.V. Satyanarayana, Chief Financial Officer, Whole time Director designated as Director-Finance
• Ms. Swaroopa Meruva, Company Secretary
There was no resignation and removal of any Key Managerial Personnel during the year.
A brief profile of the directors of the company is annexed herewith as Annexure - 10 to this report.
20. Particulars of employees as per section 197(12) under rule 5(2) of the companies (appointment and remuneration of managerial personnel) rules, 2014
Disclosure pertaining to remuneration and other details as required under Section 197(12) of the Act read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is annexed to the Report as Annexure-12 Statement containing particulars of top 10 employees and the employees drawing remuneration in excess of limits prescribed under Section 197 (12) of the Act read with Rule 5(2) and (3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is provided in the Annexure forming part of this report.
21. Directors' responsibility statement as required under section 134 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 ability confirm that:
(a) In the preparation of the annual accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures;
(b) They 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) They have 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) They have prepared the annual accounts for the financial year 2023-24 on a going concern basis;
(e) They have laid down internal financial controls to be followed by the Company and such internal financial controls are adequate and are operating effectively; and
(f) They have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.
Based on the framework of internal financial controls and compliance systems established and maintained by the Company, the work performed by the internal, statutory and secretarial auditors and external consultants, including the audit of internal financial controls over financial reporting by the statutory auditors and the reviews performed by management and the relevant board committees, including the audit committee, the Board is of the opinion that the Company's internal financial controls were adequate and effective during FY 2023-24.
22. Significant and material orders passed by the regulators/courts or tribunals
There are no significant material orders passed by the Regulators or Courts or Tribunal, which would impact the going concern status of the Company and its future operation.
23. Change in the nature of business, material changes and commitment:
During the year under review, there is no change in nature of the business of the Company. There were no material changes and commitments affecting the financial position of the Company that have occurred between the end of the financial year to which the financial statements relate and the date of this report unless otherwise stated in the report.
24. Vigil mechanism / whistle blower policy
The Company believes in the conduct of the affairs of its constituents in a fair and transparent manner by adopting the highest standards of professionalism, honesty, integrity and ethical behaviour. Pursuant to Section 177(9) of the Act, a vigil mechanism was established for directors and employees to report concerns about unethical behavior, actual or suspected fraud, or violation of the Company's Code of Conduct and Ethics. The policy is posted on the website of the Company www.coastalcorp.co.in
25. Risk management
The Board oversees Company's processes for determining risk tolerance and review management's action and comparison of overall risk tolerance to established levels. The framework is designed to enable risks to be identified, assessed and mitigated appropriately. Major risks identified by the businesses and functions are systematically addressed through appropriate actions on a continuous basis.
26. Policy on directors' appointments and remuneration, including criteria for determining qualifications, positive attributes, etc.
The Company's policy (salient features) on Directors' remuneration and other matters provided in Section 178(3) of the Companies Act, 2013 has been briefly disclosed hereunder and in the Report on Corporate Governance, which is a part of this Report.
Selection and procedure for nomination and appointment of directors
The NRC is responsible for developing competency requirements for the Board based on the industry and strategy of the Company. The Board composition analysis reflects in-depth understanding of the Company, including its strategies, environment, operations, financial condition and compliance requirements.
The NRC conducts a gap analysis to refresh the Board on a periodic basis, including each time a Director's appointment or re- appointment is required. The NRC reviews and vets the profiles of potential candidates vis-a-vis the required competencies, undertakes due diligence and meeting potential candidates, prior to making recommendations of their nomination to the Board.
Criteria for determining qualifications, positive attributes and independence of a director
In terms of the provisions of Section 178(3) of the Act, and Regulation 19 of the SEBI Listing Regulations, the NRC has formulated the criteria for determining qualifications, positive attributes and independence of Directors, the key features of which are as follows:
• Qualifications - The Board nomination process encourages diversity of thought, experience, knowledge, age and gender. It also ensures that the Board has an appropriate blend of functional and industry expertise.
• Positive Attributes - Apart from the duties of Directors as prescribed in the Act the Directors are expected to demonstrate high standards of ethical behaviour, communication skills and independent judgment. The Directors are also expected to abide by the respective Code of Conduct as applicable to them. Independence - A Director will be considered independent if he/she meets the criteria laid down in Section 149(6) of the Act, the Rules framed thereunder and Regulation 16(1)(b) of the SEBI Listing Regulations.
The Directors affirm that the remuneration paid to Directors, KMPs and employees is as per the Remuneration Policy of the Company.
27. Particulars of loans, guarantees and investments pursuant to section 186 of the companies act, 2013
Pursuant to section 186 of the companies act, 2013 and schedule V of the listing regulations, disclosure on particulars relating to loans, advances, guarantees and investments are provided as part of the financial statements.
28. Annual evaluation of board performance and performance of its committees and of directors
The annual evaluation process of the Board of Directors, Individual Directors and Committees was conducted in accordance with the provisions of the Act and the SEBI Listing Regulations.
29. 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 zero tolerance for sexual harassment at Workplace. Internal Complaints Committee ('ICC') is in place for all works and offices of the Company to redress complaints received regarding sexual harassment. During the year there were no cases filed pursuant to the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.
30. Internal control systems & their adequacy:
The details in respect of internal financial control and their adequacy are included in the Management Discussion and Analysis, which is a part of this report.
31. Number of meetings of the board & committee
Ten (10) meetings of the board were held during the year. Details of composition, terms of reference and number of meetings held in FY24 for the aforementioned Committees are given in the Report on Corporate Governance, which forms a part of this Report. Further, during the year under review, all recommendations made by the various Committees have been accepted by the Board.
32. Committees:
The details pertaining to the composition of the Committees and its Meetings are included in the Corporate Governance Report, which is a part of this report.
33. General
i. The Auditor's Report doesn't contain any information in relation to fraud.
ii. The provision of Cost audit as per section 148 doesn't applicable on the Company.
iii. No application has been made or any proceeding is pending under the IBC, 2016.
34. Statement on declaration from independent directors:
The Company has received necessary declarations from all Independent Directors of the Company in accordance with the provisions of Section 149(7) of the Companies Act, 2013 confirming that they meet the criteria of independence as prescribed under Section 149(6) of the Companies Act, 2013.
35. Acknowledgements:
The Directors wish to convey their appreciation to all of the Company's employees for their contribution towards the Company's performance. The Directors would also like to thank the members, employee unions, customers, dealers, suppliers, bankers, governments and all other business associates for their continuous support to the Company and their confidence in its management.