To, The Members of Allcargo Logistics Limited
The Directors take pleasure in presenting the Twentieth Annual Report
of the Company together with Audited Statement of Accounts for the year
ended March 31, 2013.
Your Company's performance during the year under review is summarized
(Rs. in Lakhs)
For the Year Ended
Particulars March 31,
2013 March 31, 2012
(12 months) (15 months)
Sales & Other Income 108,233 113,157
Proft Before Interest,
Depreciation and Taxes 27,177 36,005
Interest 2,673 5,055
Depreciation 11,676 8,904
Provision For Tax 1,273 3,640
Proft After Tax 11,555 18,406
Proft brought forward from
previous year 46,219 31,939
Amount available for Appropriations 57,774 50,345
Interim Dividend 1,305
Tax on Interim Dividend 212
Proposed Dividend 1,883 653
Tax on Dividend 320 106
Transfer to General Reserve 1,156 1,850
Proft carried to Balance Sheet 54,332 46,219
REVIEW OF OPERATIONS
The year under review was challenging and opportunistic for your
Company as macroeconomic environment continued to remain unstable and
volatile and slow down of the Indian as well as global economy.
In-spite of all odds and adversities, your Company has achieved the
growth which is grossly attributable to Company's customer-centric
approach and its ability to innovate customer specifc solutions, focus
on pricing and aggressive marketing strategy, disciplined project
exEcutions, focused management approach, prudent fnancial and human
resources management and ensuring better control over cost.
Overall, the company is on a strong growth path and its efforts to
improve effciency, productivity and proftability will improve overall
returns. Members are requested to refer Management Discussion and
Analysis Report annexed to this report for detailed segment wise
Considering the proftable performance of the Company during the year
under review, your Directors are pleased to recommend a dividend @ 75%
i.e. Rs. 1.50 per equity share of Rs. 2 each.
The Dividend, if approved by the members at the ensuing Annual General
Meeting, will absorb a sum of Rs. 2,218 lakhs including dividend
The operating performance of various subsidiaries were also affected
due to the macroeconomic environment being unstable and volatile but
nevertheless the subsidiaries put their best efforts to sustain such
turbulent times and achieved sustainable growth during the year under
During the year under review, your Company has increased the stake in
following subsidiary companies:
(i) Acquired balance 15% stake in Ecu Line (Johar Bahru) SDN BHD,
Malaysia as a result Ecu Line (Johar Bahru) SDN BHD has become 100%
subsidiary of Ecuhold NV
(ii) Acquired balance 10.07% stake in aEcu Line (Indian Ocean Island)
Ltd, Mauritius as a result aEcu Line (Indian Ocean Island) Ltd has
become 100% subsidiary of Ecuhold NV
(iii) Acquired 9.75% stake in Translogistik International Spedition
Gmbh by HCL Logistics NV. Pursuant to such acquisition of additional
stake, total holding in Translogistik International Spedition Gmbh
increased to 80.27%
The stand-alone audited fnancial statements of all subsidiaries
operating in India and Overseas are not attached to this report in view
of the general exemption granted under Section 212 of the Companies
Act, 1956 by the Ministry of Corporate Affairs, Government of India
vide its Circular No.51/12/2007- CL-III dated February 8, 2011 and
February 21, 2011. The statement pursuant to Section 212 of the
Companies Act, 1956 relating to the subsidiary companies along with a
statement of fnancial highlights of subsidiaries operations providing
relevant details are attached and form part of this Annual Report.
The Company will make available the Annual Accounts of the subsidiary
companies and related information to any member of the Company and its
subsidiaries who may be interested in obtaining the same. The annual
accounts of the subsidiary companies will also be kept open for
inspection by any investor at the registered offce of the Company and
its subsidiary companies.
CONSOLIDATED FINANCIAL STATEMENTS
As required under the Listing Agreement with the Stock Exchanges, the
attached Consolidated Financial Statements of the Company and all its
subsidiaries have been prepared in accordance with the Accounting
Standard AS-21 -Consolidated Financial Statements read with Accounting
Standard AS 23-Accounting for Investment in Associates and Accounting
Standard AS 27-Financial Reporting of interest in joint Ventures, which
includes fnancial results of its subsidiaries, joint ventures and
associate companies and forms part of this Annual Report.
EMPLOYEES STOCK OPTION PLAN 2006
Disclosures pursuant to Clause 12 of the SEBI (Employee Stock Option
Scheme and Employee Stock Purchase Scheme) Guidelines, 1999, relating
to the Company's ESOP Scheme as on March 31, 2013 are set out in
Annexure II annexed to this report. The Company has not granted any new
stock options to its employees during the year under review. The ESOP
Scheme had a validity period of 7 years from the date of its formation
and accordingly has expired on January 11, 2013.
A certifcate from the Statutory Auditors of the Company M/s. B S R &
Co., Chartered Accountants, Mumbai and M/s Appan & Lokhandwala
Associates, Chartered Accountants, Mumbai, with respect to the
implementation of Company's ESOP Scheme, will be placed before the
Members at the ensuing Annual General Meeting and a copy of the same
shall be available for inspection at the Registered Offce of the
Company on all working days, except Saturday and Sunday, between 11.00
a.m. to 2.00 p.m., upto the date of Annual General Meeting.
SHARE CAPITAL AND LISTING OF SHARES
During the year under review, your Company has, in accordance with the
provisions of Sections 77A, 77AA and 77B and all other applicable
provisions of the Companies Act 1956 and the provisions contained in
the SEcurities and Exchange Board of India (Buy Back of SEcurities)
Regulations, 1998, bought back 4,136,449 equity shares of Rs. 2 each from
the open market through stock exchanges at an average price of Rs. 139.69
per equity shares for an aggregate consideration of Rs. 57.78 crore
(exclusive of Brokerage, Service Tax, SEcurities Transaction Tax, Stamp
Duty, Exchange Transaction Charges and SEBI fees), being approximately
77.05% of the Maximum Offer Size of Rs. 75 crores. The Company has
extinguished all the Equity Shares so bought back as aforesaid.
Pursuant to the buyback of equity shares, the total paid up capital of
the Company has reduced from Rs. 261,094,644 comprising of 130,547,322
equity shares of Rs. 2 each fully paid to Rs. 252,821,746 comprising of
126,410,873 equity shares of Rs. 2 each fully paid.
The Equity Shares of the Company are listed and traded in compulsory
dematerialized form on the BSE Limited and the National Stock Exchange
of India Limited. Your Company has paid the Annual Listing fees and
Annual Custody fees to the Stock Exchanges and Depositories up-to-date.
AMALGAMATION OF MHTC LOGISTICS PVT.LTD
Your Board of Directors at its meeting held on February 14, 2012 had
approved de-merger of the Project Division of MHTC Logistics Pvt. Ltd.,
the wholly owned subsidiary of the Company, in favour of the Company
effective from April 01, 2012, subject to necessary approvals of the
stake holders and the Hon'ble Bombay High Court. However, the Board of
Directors of the Company at its meeting held on August 7, 2012
reconsidered its earlier decision of de-merger and approved
amalgamation of MHTC Logistics Pvt. Ltd. with the Company effective
from April 01, 2012 ("The Appointed Date"), subject to obtaining
necessary approvals of the stake holders and the Hon'ble Bombay High
The Company has obtained the approval of the Members to the Scheme of
Arrangement at the Court convened general meeting held on February 25,
2013. Pending the approvals of the Hon'ble Bombay High Court and other
statutory and regulatory authorities, the effect of the Scheme of
Arrangement has not been given in the audited fnancial statements for
the year under review.
AWARDS AND RECOGNITION
The year under review was very special for your Company as it has
received many awards and recognitions for the signifcant contribution
made by your Company in development and growth of the logistic
- Mr. Shashi Kiran Shetty, the Chairman and Managing Director of the
Company, felicitated as the Global Indian Maritime Personality by
Maharashtra Chamber of Commerce, Industry and Agriculture (MACCIA);
Hall of Fame for being the First Indian Global Forwarder by FFFAI;
Crowned as the News Maker of the Year - MALA Awards 2012
- "Most Well Diversifed Business Enterprise" - Citi Commercial Bank &
- LCL CONSOLIDATOR OF THE YEAR AWARD at the South East CEO Conclave and
- Winner of HEAVY LIFT Mover of the YEAR 2012 - MALA Awards 2012
- Outstanding Contribution in Logistics (Infrastructure Category) Award
by EPC World Awards 2012
- Freight Forwarder of the Year- Project Cargo award at 4th CONquEST
- Allcargo Shipping Co. Pvt. Ltd, the wholly owned subsidiary of the
Company, adjudged 'Best Shipping Line of the Year - Break Bulk
Operator' at the Gujarat Star Awards
- "Leadership and Innovation" category award by International Women
Leadership Forum (IWLF) Award to Ms. Shantha Martin (Individual
Your Company believes that winning of such recognitions was due to the
hard work, passion and spirit of team work of the employees and
thoughtful leaders, whose novel thinking and innovative approach have
led them to attain excellence in their feld. These awards are a
testimony to the commitment to the stakeholders of the Company and
seamless integrated logistics solutions.
The Board of Directors of the Company has co-opted Prof. Jayaraman
Ramachandran as Additional Director on the Board of the Company u/s 260
of the Companies Act, 1956. Prof. Ramachandran is a Non ExEcutive
Independent Director and shall hold offce upto the date of the ensuing
Annual General Meeting. The Company has received notice u/s 257 of the
Companies Act, 1956 from a member proposing his candidature for the
offce of Director at the ensuing Annual General Meeting of the Company.
The Board recommends his appointment at the ensuing Annual General
Mr. Satish Gupta, Independent Non ExEcutive Director, has resigned as
Director of the Company w.e.f. May 20, 2013. Your Board places on
record its deep appreciation for the valuable services and guidance
given by Mr. Satish Gupta during his tenure as Director of the Company.
In accordance with the provisions of the Companies Act, 1956 and that
of Articles of Association of the Company, Mrs. Arathi Shetty, Mr.
Adarsh Hegde and Mr. Mohinder Pal Bansal, Directors of the Company,
retire by rotation at this Annual General Meeting. Being eligible, they
offer themselves for re-appointment. The Board recommends their
Brief resume of Prof. Ramachandran, Mrs. Arathi Shetty, Mr. Adarsh
Hegde and Mr. Mohinder Pal Bansal as required in terms of Clause 49 of
the Listing Agreement with the Stock Exchanges, are included in the
Corporate Governance Report annexed to this Annual Report.
M/s B S R & Co., Chartered Accountants, Mumbai (Firm Registration No.
101248W), and M/s. Appan & Lokhandwala Associates, Chartered
Accountants, Mumbai, (Firm Registration No. 117040W) the Statutory
Auditors of the Company, retire at the conclusion of this Annual
General Meeting. M/s B S R & Co. and M/s Appan & Lokhandwala
Associates, being eligible, have expressed their willingness for
re-appointment at the ensuing Annual General Meeting,
The Company has received a letter from M/s B S R & Co and M/s Appan &
Lokhandwala Associates, to the effect that their appointment, if made,
would be within the prescribed limits under section 224(1B) of the
Companies Act, 1956. The Audit Committee and Board of Directors
recommend re-appointment of M/s B S R & Co and M/s Appan & Lokhandwala
Associates, as Statutory Auditors of the Company to hold offce from the
conclusion of the ensuing Annual General Meeting till the conclusion of
the next Annual General Meeting and to fx their remuneration.
The Company has an adequate internal audit system implemented by an
in-house department and supported by independent Chartered Accountant
frms to carry out audit of various branches and functions of the
Company and its subsidiaries.
Systems, procedures and processes are being upgraded / implemented to
further strengthen the existing internal control measures, procedures
and processes to increase operational effciencies and to safeguard the
Company from any fraud, misrepresentation and non-compliance with
The Ministry of Corporate Affairs vide notifcation dated June 3, 2011
and as amended from time to time has notifed the Companies (Cost
Accounting Records) Rules, 2011 which applies to your Company. The
Company has appointed Mr. Sharad Marathe, a member of the Institute of
Cost Accountants of India and a practicing Cost Accountant (Certifcate
of Practice No 5008), for auditing the Cost Accounting Records in
respect of its Container Freight Station, Warehousing and Equipment
Renting business divisions and providing Compliance Report for the year
ended March 31, 2013 under the aforesaid Rules. The Compliance Report
so obtained by the Company shall be fled with the Central Government on
or before dues date prescribed under the aforesaid Rules or as may be
extended by the Ministry of Corporate Affairs.
During the year under review, your Company has not accepted any
deposits within the meaning of Section 58A and Section 58AA of the
Companies Act, 1956 and rules made thereunder.
SAFETY, HEALTH AND ENVIORNMENT
Your Company believes in safety and health enrichment of its employees
and committed to provide a healthy and safe workplace for all its
employees at each work location. Successfully managing Health & Safety
risks is an essential component of our business strategy. The Company
has identifed Health & Safety risk arising from its activities and has
put proper systems, processes and controls mechanism to mitigate them.
The Company has been taking various safety and welfare measures to
protect its employees, equipments and other assets from any possible
loss and / or damages. To implement such safety and welfare measures,
the Company has formulated various policies such as Drug & Alcohol
Policy, Occupational Health Policy, Driver & Vehicle Safety Policy,
Mobile Telephone Policy, Smoking Policy etc.
The Equipment Hire Division is OHSAS compliant and a member of the
globally recognized Lifting Equipment Engineers Association (LEEA, uK)
and ISO certifed. All Container Freight Station (CFS) / Inland
Container Depot (ICD) are certifed for Occupational Health & Safety
Management Systems (OHSAS)
The following safety measures are being taken at various locations:
- Fire & Safety drills are conducted for all employees and SEcurity
- All Fire hydrants are monitored strictly, as the preparedness for fre
- All equipments are tested periodically to verify its safe load
working condition. Fitness certifcates are issued based on the
compliance of the safety norms.
- Safety Awareness Campaign, Safety week, Environment day are being
held / celebrated at each location to improve the awareness of
- Regular training/skits to staff, and contractors, to inculcate
importance of safety among them.
- Created checks and awareness among drivers about negatives of alcohol
and drug consumptions and impact of families.
- Accident prone routes identifed and supervisors allocated have
control over the vehicle movement.
- OHSAS audits and Fire & Safety audits are conducted by competent
agencies at regular intervals.
- Fortnightly visit by Doctors to offce for medical counseling to
- HazMat training is provided to all CFS employees.
- Medical Health check-up of all employees are conduced at regular
- CCTV & Safety alarms are installed at each locations
- All equipments are adequately insured and mandatorily ensured with
- Each equipment is put through comprehensive quality Audit & Testing
to ensure strong compliance to Maintenance, Safety and Reliability
aspects as per specifcations by various OEMs.
- Green initiatives are taken at various locations to protect the
CORPORATE SOCIAL RESPONSIBILITY
Your Company has committed itself to making a difference in the lives
of underprivileged and economically challenged citizens of our country.
Allcargo's Corporate Social Responsibility (CSR) initiatives, through
'Avashya Foundation' a non proft organization and in collaboration with
various NGOs across India, believes in nurturing inclusive development
with a human touch. Your Company's CSR activities focus is to take each
initiative beyond philanthropy and promote people centric inclusive
development with the active participation of the community at all
levels. Allcargo's CSR initiatives aim to support:
- Natural Disaster Relief by providing immediate and life essential
supply of water, food and medicine to regions of India effected by
natural disasters such as drought, food, earthquakes, and other
- Health Care by providing critical medical assistance for curative and
preventive health care. Essential and life saving medicines and medical
treatment are being made available to all underprivileged and
economically challenged section of the society across rural and urban
regions of India.
- Education for children and adults across the underprivileged and
economically challenged sections of the rural as well as urban society.
Created a platform for fnancial assistance, student's scholarships &
adoption programs, parents awareness campaigns and education support
- Women Empowerment by providing a platform for all women across the
varied sections of the society for making a better living through
education, skills development and employment programs, to support
themselves and their families.
- Environmental Sustainability by focusing on creating awareness
towards sustainable environmental practices in terms of infrastructure
development, alternative energy, conservation of resources and training
people to be more conscious, responsible and accountable to the
For more details on CSR activities of the Company, members are
requested to read the Corporate Social Responsibility Section of this
DIRECTORS RESPONSIBILITY STATEMENT
Pursuant to Section 217(2AA) of the Companies Act, 1956, the Directors
(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 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 at March 31, 2013 and of the proft of the Company for
the year ended on that date;
(c) the Directors had taken proper and suffcient care for the
maintenance of adequate accounting records in accordance with the
provisions of this Act for safeguarding the assets of the Company and
for preventing and detecting fraud and other irregularities; and
(d) the Directors had prepared the annual accounts on a going concern
Your Company has been benchmarking itself with well established
Corporate Governance practices besides strictly complying with the
requirements of Clause 49 of the Listing Agreement. Given the emerging
pivotal role of Independent Directors in bringing about good
governance, your Company continues its efforts in utilizing their
expertise and involving them in all critical decision making processes.
A separate report on Corporate Governance together with requisite
certifcate from M/s. Mehta & Mehta, Practicing Company Secretaries,
confrming compliance with the provisions of Corporate Governance as
stipulated in Clause 49 of the Listing Agreement is annexed and forms a
part of the Annual Report.
The declaration regarding compliance with the Code of Conduct
prescribed by the Company for Directors and Management Personnel forms
part of the report on Corporate Governance.
PARTICULARS OF CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND
FOREIGN EXCHANGE EARNINGS AND OUTGO
Information as required under 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, are set out in Annexure I annexed
to this report.
PARTICULARS OF EMPLOYEES
In terms of the provisions of Section 217(2A) of the Companies Act,
1956, read with the Companies (Particulars of Employees) Rules, 1975 as
amended, the names and other particulars of the employees are required
to be set out in the Directors Report. However, as per the provisions
of Section 219(1)(b)(iv) of the Companies Act, 1956 the Annual Report
excluding the aforesaid information is being sent to all the members of
the Company and others entitled thereto. A member, who is interested in
obtaining such particulars, may write to the Company Secretary at the
registered offce of the Company.
Your Directors take this opportunity to place on record their gratitude
for the valuable support and co-operation extended during the year by
the Government of India, Governments of various countries, the
concerned State Governments and other Government Departments and
Agencies, the Stakeholders, Business Associates including Bankers,
Financial Institutions, Vendors and Service Providers.
Your Board also wishes to place on record their appreciation for the
dedication and commitment shown by the employees at all levels who have
contributed to the success of your Company.
For and on behalf of the Board of Directors
Shashi Kiran Shetty
Chairman & Managing Director
Date: May 29, 2013