ISIN No INE418H01029 Mkt Cap.(Cr.) 3807.27 Book Value 151.35 Face Value 2.00
52WeekH/L 377/220 Price/BookValue 2.00 EPS 19.03 P/E 15.87
Price 302.05 Bookclosure 10/08/2015 Div Yield 0.66 M/L 1
You can view full text of the latest Director's Report for the company.
Year End : 2015/03 
Dear Members,

The Directors take pleasure in presenting the Twenty Second Annual Report on the business and operations of the Company together with Audited Financial Statements of the Company both on standalone and consolidated basis, for the year ended March 31, 2015.

STATE OF THE COMPANY'S AFFAIRS

Allcargo Logistics Limited, a part of the Avvashya Group, is a leading Indian multinational Company providing integrated logistics solutions worldwide. The Company offers specialized logistics services across global Multimodal Transport Operations (NVOCC, LCL and FCL), Pan India Container Freight Stations (CFS), Inland Container Depots (ICD), Project & Engineering Solutions (P&E), Ship Owning & Chartering and 3PL & Warehousing services. Our benchmarked quality standards, standardized processes and operational excellence across all our service verticals and facilities, have enabled the Company to emerge as a leading player across these segments.

Your Company has a strong global footprint through its multinational Multimodal Transport Operation Arms-Ecu Line (headquartered in Belgium, Europe), world's largest Less than Container Load (LCL) service provider, Econocaribe Consolidators (headquartered in Miami, USA), NVOCC leader and Rotterdam based Full Container Load (FCL) Marine Agencies specializing in FCL services.

The Company currently operates out of 200 plus offices in 90 plus countries and is supported by an even larger network of franchisee offices across the globe. Presently, your Company is one of India's largest publicly owned logistics Company, listed on BSE Limited (BSE) and National Stock Exchange of India Limited (NSE) and is categorized under S&P BSE Midcap and CNX Nifty 500 indices. Your Company has a fleet of 784 Equipments comprising of 143 Cranes, 584 Trailers, 36 Reach Stackers and 21 Forklifts.

Your Company has made remarkable progress in achieving a major milestone of its mission plan of being a USD 1 Billion Company during the year under review. The year under review was good for the Company as micro and macro-economic situation improved during the year, thus boosting the Company's performance. The performance was further strengthened on account of the robust measures undertaken by the Company at all levels such as focus on pricing and aggressive marketing strategy, disciplined project executions, focused management approach, prudent financial and human resources management, better control over cost and consistent follow-up for receivables.

Detailed information on the Business overview and outlook of the Company is provided in the Management Discussion & Analysis Report which forms part of this Annual report.

Financial Highlights

Your Company's financial performance for the year ended March 31, 2015 is summarized below:

                                                         (RS. in Lakhs)

Particulars                                     Consolidated Results
                                                for the year ended
                                             March             March 
                                             31, 2015          31, 2014

Sales and Other Income                        568,141           489,593

Profit before Interest, Depreciation/
Amortization and Taxes                         52,798            42,781

Interest                                        5,347             5,632

Depreciation and other Amortization            15,737            17,546

Profit Before Tax                              31,714            19,603

Provision for Tax                               6,996             4,159

Profit After Tax                               24,718            15,444

Profit attributable to Minority Interest        (923)             (511)

Share of Profit of Associates                     194                 -

Profit after minority interest                 23,989            14,933

Profit brought forward from previous year      93,615            81,422

Profit Available for Appropriations           117,197            96,406
Appropriations :

Proposed Final Dividend                         1,765             1,891

Tax on Final Dividend                             359               321

Interim Dividend                                  756                 -

Tax on Interim Dividend                           129                 -

Transfer to General Reserve                         -               561

Transfer to Tonnage Tax Reserve                    42                18

Transfer to Capital Redemption Reserve              -                 -

Profit Carried to Balance Sheet               114,146            93,615

                                                         (RS. in Lakhs)

Particulars                                     Standalone Results
                                                for the year ended
                                             March             March 
                                             31, 2015          31, 2014

Sales and Other Income                        117,921           102,204

Profit before Interest, Depreciation/
Amortization and Taxes                         27,434            23,371

Interest                                        3,800             2,863

Depreciation and other Amortization            11,086            13,475

Profit Before Tax                              12,548             7,033

Provision for Tax                               2,799             1,421

Profit After Tax                                9,749             5,612

Profit attributable to Minority Interest            -                 -

Share of Profit of Associates                       -                 -

Profit after minority interest                      -                 -

Profit brought forward from previous year      57,113            54,322

Profit Available for Appropriations            66,560            59,886
Appropriations :

Proposed Final Dividend                         1,765             1,891

Tax on Final Dividend                             359               321

Interim Dividend                                  756                 -

Tax on Interim Dividend                           129                 -

Transfer to General Reserve                         -               561

Transfer to Tonnage Tax Reserve                     -                 -

Transfer to Capital Redemption Reserve              -                 -

Profit Carried to Balance Sheet                63,551            57,113
Consolidated Performance

During the year under review, your Company achieved total revenue of RS. 568,141 Lakhs against a total revenue of RS. 489,593 Lakhs during the previous year, representing a year-on-year growth of 16%. The growth was mainly attributable to the increase in revenues across all lines of business.

The Company's Earnings before Interest, Tax and Depreciation (EBITDA) stood at RS. 52,798 Lakhs as at March 31, 2015 as compared to RS. 42,781 Lakhs in the previous year, a growth of 23%.

The Net Profit after Taxes and Minority Interest increased by 61% and stood at RS. 23,989 Lakhs as at March 31, 2015 as compared to RS. 14,933 Lakhs in the previous year.

Standalone Performance

During the year under review, your Company achieved total revenue of RS. 117,921 Lakhs as compared to RS. 102,204 Lakhs in the previous year, representing a year-on-year growth of 15%. The growth is mainly attributable to increase in revenue across all lines of business.

The Company's Earnings before Interest, Tax and Depreciation (EBITDA) stood at RS. 27,434 Lakhs during the year as compared to RS. 23,371 Lakhs during the previous year, representing a growth of 17%.

The Net Profit after Tax of the Company increased by 74% during the year and stood at RS. 9,749 Lakhs as compared to RS. 5,612 Lakhs in the previous year.

For detailed segment wise performance, Members are requested to refer Management Discussion and Analysis which forms part of this Annual Report.

CHANGES IN THE NATURE OF BUSINESS, IF ANY

During the year under review, your Company continued to provide integrated logistics services to its customers and hence, there was no change in the nature of business or operations of the Company which impacted the financial position of the Company.

TRANSFER TO RESERVES

Your Company does not propose to transfer any amount to its reserves, except as required under any statute, out of the profits of the Company for the year ended March 31, 2015.

DIVIDEND

A constant endeavor and one of the primary objectives of the Company is to maximize Members value by achieving sustainable year-on-year growth and to give adequate return in the form of dividend to its Members on their investment made in the Company. Since the Initial Public Offering in the year 2006, your Company has been regularly paying dividend to its Members, including interim dividend based on the profits of the Company.

During the year under review, your Company had declared and paid an interim dividend of RS. 0.60 per equity share of RS. 2 each fully paid up, representing 30% on the total paid up capital of the Company amounting to RS. 756 Lakhs.

Considering the profitable performance of the Company for the year under review, your Directors are pleased to recommend a final dividend of RS. 1.40 per equity share of RS. 2 each fully paid up, representing 70% on the total paid up capital of the Company. The dividend, if approved by the Members at the ensuing Annual General Meeting, will absorb a sum of RS. 2,124 Lakhs including dividend distribution tax.

The total dividend payout comprising of interim and final dividend, if approved, to the Members, for the financial year 2014-15 would be 100% (RS. 2 per equity share of RS. 2 each fully paid up) on the total paid up capital of the Company as compared to 75% (RS. 1.50 per equity share of RS. 2 each fully paid up) in the previous year.

The final dividend payout is subject to approval of the Members at the ensuing Annual General Meeting.

PUBLIC DEPOSITS

During the year under review, your Company has not accepted, invited and/or received any deposits from the public within the meaning of Sections 73 and 76 of the Companies Act, 2013 read with the Companies (Acceptance of Deposits) Rules, 2014, as amended from time to time.

SHARE CAPITAL AND LISTING OF SHARES

During the year under review, your Company has not issued any class of shares and hence, there has been no change in the issued, subscribed and paid up share capital of the Company. The issued, subscribed and paid up share capital of the Company as on March 31,2015, amounted to RS. 252,095,524 (Rupees Twenty Five Crores Twenty Lakhs Ninety Five Thousand Five Hundred and Twenty Four only) consisting of 126,047,762 Equity Shares of RS. 2 each fully paid up.

Your Company's equity shares are listed and traded in compulsory dematerialized form on BSE Limited and National Stock Exchange of India Limited. The Company has paid the Annual Listing fees for the financial year 2015-16 to the respective Stock Exchanges. Annual Custody/Issuer fee for the financial year 2015-16 will be paid by the Company to National Securities Depository Limited and Central Depository Services (India) Limited on receipt of the invoices from them.

AWARDS AND RECOGNITION

Your Company has consistently delivered and exceeded customer expectations in its deliverables and performance. Our achievements in maintaining quality are evident from the credentials and recognitions that have been awarded over the years. During the year under review, your Company has been conferred with many accolades and appreciations for significant contribution made in development and growth of the logistic industry.

* Allcargo Logistics Limited ("Allcargo") is among India's top 4 companies in the Logistics sector to have been featured in Dun & Bradstreet's edition of Top 500 Companies in India;

* Allcargo was conferred with the following three awards at Maritime and Logistics Awards 2014 (MALA) for outstanding performance:

* Indian Logistics MNC of the Year;

* Project Cargo Mover of the Year;

* Women Professional of the Year - Ms. Shantha Martin, CEO - ISC, Middle East, Africa (S & E).

* Allcargo received Container Freight Station Operator of the Year (Specific) Award and Most Diversified Logistics Company of the Year Award at the Gujarat Star Awards, 2014;

* Allcargo ranked at #209 in India's Biggest Non-Financial Companies category across 500 companies, whereas your Company ranked #10 in the category 'Most Subsidiaries' across 50 companies. Allcargo is also ranked at #49 in the category 'Biggest Donors' across 70 companies in India by 'Business World' in the Top 500 companies across India list;

* Allcargo was awarded with the 'Best Project Logistics Company of the Year' and Mr. Shashi Kiran Shetty, Chairman & Managing Director of the Company was felicitated with the 'Lifetime Achievement Award' at the '8th Express Logistics & Supply Chain Conclave';

* Mr. Shashi Kiran Shetty, Chairman & Managing Director, was conferred with highest civilian honour from the Royalty of Belgium the 'Distinction of Commander of the Order of Leopold II' by H. M. King Philippe of Belgium;

* Allcargo has been awarded 'Asia's Most Promising Brand' in the logistics space for 2013-14 by World Consulting & Research Corporation (WCRC), a leading brand consulting firm and KPMG India; and

* Ms. Shantha Martin, CEO - ISC, Middle East, Africa (S & E), has been awarded the 'Business Leader Award' at the annual World Women Leadership Congress & Awards, 2015 (WWLCA).

Your Company believes that our awards and recognitions are due to the hard work, enthusiasm 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 field. These awards are a testimony of our commitment to the stakeholders of the Company and providing seamless integrated logistics solutions to our customers.

BOARD OF DIRECTORS

a. Number of Meetings of the Board of Directors

Your Board of Directors ("Board") meet at regular intervals at least four times in a year with a maximum time gap of not more than 120 days between two consecutive Meetings. Date of the Board Meetings are decided and communicated to the Directors well in advance. In case of exigencies or urgency of matters, resolutions are passed by circulation for such matters as permitted by law. The Board takes note of the resolutions passed by circulation at its subsequent Meeting. Additional Meetings of the Board are held as and when deemed necessary by the Board. Board Meetings are generally held at the Registered Office of the Company.

The agenda of the Meeting along with the explanatory notes and relevant papers thereof are generally sent 7 (seven) days in advance to the Directors to enable them to take informed decisions pursuant to the provisions of Companies Act, 2013 and the Listing Agreement with the Stock Exchanges.

During the year under review, 5 (five) Board Meetings were held on May 24, 2014, June 12, 2014, August 7, 2014, November 13, 2014 and February 12, 2015. The details of attendance of each Director at the Board Meetings is given in the 'Report on the Corporate Governance' which forms part of this Annual Report.

b) Director Retiring by Rotation

In accordance with the provisions of the Companies Act, 2013 and the Articles of Association of the Company, Mr. Shashi Kiran Shetty (DIN:00012754), Director of the Company, retires by rotation at ensuing Annual General Meeting and being eligible, offers himself for reappointment. The Board recommends his reappointment as Director liable to retire by rotation at the ensuing Annual General Meeting.

c) Appointment/Reappointment of Chairman & Managing Director

Pursuant to Clause 49 of the Listing Agreement with the Stock Exchanges and applicable provisions of the Companies Act, 2013, the performance evaluation of Mr. Shashi Kiran Shetty, Chairman & Managing Director was carried out as per the criteria set by the Nomination and Remuneration Committee and based on its recommendation, the Board of Directors of your Company reappointed Mr. Shetty as the Chairman & Managing Director of the Company for the period of 5 years w.e.f. April 1, 2015, subject to approval of the Members at the ensuing Annual General Meeting.

As per Clause 49 of the Listing Agreement with the Stock Exchanges and Secretarial Standard-2 issued by the Institute of Company Secretaries of India, the brief profile and other relevant details of Mr. Shashi Kiran Shetty is given in the Explanatory Statement to the Notice. The Members are requested to refer the same.

d) Appointment of Independent Directors

Pursuant to Clause 49 of the Listing Agreement with the Stock Exchanges and provisions of Section 149 of the Companies Act, 2013, your Company has requisite number of Independent Directors on its Board. Thus, the Company has complied with the requirements of the said provisions for appointment of Independent Directors during the year under review.

e) Statement on declaration given by Independent Directors u/s 149 (6) of the Companies Act, 2013

The Company has received declarations from all the Independent Directors of the Company confirming that they meet the criteria of independence as prescribed under Sub-section (6) of Section 149 of the Companies Act, 2013 and Clause 49 of the Listing Agreement with the Stock Exchanges.

f) Directors/Key Managerial Personnel appointed/resigned during the year

During the year under review, Mr. Kaiwan Kalyaniwalla, Non-Executive Director of the Company resigned from the Board w.e.f. October 30, 2014 and Mr. Umesh Shetty, Executive Director of the Company, resigned from the Board w.e.f. November 6, 2014. Your Board of Directors would like to place on record their appreciation for the valuable contribution of Mr. Kaiwan Kalyaniwalla and Mr. Umesh Shetty during their association with the Company.

Your Company has Key Managerial Personnel comprising of Mr. Shashi Kiran Shetty, Chairman & Managing Director, Mr. Adarsh Hegde, Whole Time Director, Mr. Jatin Chokshi, Chief Financial Officer and Mr. Shailesh Dholakia, Company Secretary.

COMMITTEES OF THE BOARD

Your Company has 7 (Seven) Committees of the Board of Directors, as given below, in compliance with the Corporate Governance practices followed by the Company, the requirements of the relevant provisions of the Companies Act, 2013 and Rules made thereunder and the Listing Agreement with the Stock Exchanges.

* Audit Committee;

* Nomination and Remuneration Committee;

* Stakeholders' Relationship Committee;

* Corporate Social Responsibility Committee;

* Strategy Committee;

* Finance, Risk and Legal Committee; and

* Executive Committee.

Details of compositions, meetings, terms of reference of the Committees and attendance of Committee Members at each Meeting are given in the 'Report on Corporate Governance' of the Company which forms part of this Report.

RECOMMENDATION OF AUDIT COMMITTEE

During the year under review, there were no instances of non-acceptance of any recommendation of the Audit Committee by the Board of Directors.

NOMINATION AND REMUNERATION COMMITTEE

The Nomination and Remuneration Committee of the Board has framed a policy on Directors, Key Managerial Personnel and other Senior Management Personnel appointment and remuneration including criteria for determining qualifications, positive attributes, independence of a Director and other related matters in accordance with Section 178 of the Companies Act, 2013 read with the applicable Rules made thereunder and Clause 49 of the Listing Agreement with the Stock Exchanges.

The composition of Committee, terms of reference, policy on Directors, Key Managerial Personnel and other Senior Management Personnel appointment and remuneration including criteria for determining qualifications, positive attributes, and independence of a Director are given in detail in the section of Nomination and Remuneration Committee in the 'Report of Corporate Governance' of the Company which forms part of this Report.

CORPORATE SOCIAL RESPONSIBILITY COMMITTEE

Your Company has constituted Corporate Social Responsibility Committee and formulated Corporate Social Responsibility (CSR) Policy in compliance with the provisions of Section 135 of the Companies Act, 2013 read with the Companies (Corporate Social Responsibility Policy) Rules, 2014 and Schedule VII of the Companies Act, 2013. The statutory disclosures with respect to the composition of CSR Committee, CSR Policy, CSR initiatives and programs and amount spent on CSR activities are given in the 'Annual Report on Corporate Social Responsibility of the Company' as Annexure 1 which forms part of this Report. The CSR Policy can be accessed on the website of the Company (http://www.allcargologistics.com/investor-relations/ overview.aspx).

PERFORMANCE EVALUATION OF THE BOARD, ITS COMMITTEES, INDIVIDUAL DIRECTORS AND CHAIRMAN

As required under the Companies Act, 2013 and Clause 49 of the Listing Agreement with the Stock Exchanges, the Nomination and Remuneration Committee of the Board has set a criteria for performance evaluation of the Board, its Committees, Individual Directors and Chairman of the Company. Based on the criteria set by the Nomination and Remuneration Committee, questionnaire relating to performance evaluation of the Board, its Committees, individual Directors and Chairman of the Company was circulated to concerned Directors of the Company to provide their frank and unbiased comments/rating. Further, to eliminate biasness and to protect the confidentiality of comments/rating given during the performance evaluation process, an outside firm of experts was appointed to provide a report on the response received from Directors. The report of the expert firm was forwarded to the Chairman of the Nomination and Remuneration Committee for review and further evaluation.

Similarly, formal evaluation of performance of Non-Independent Directors, the entire Board and the Chairman of the Company taking into consideration views of Executive and Non-Executive Directors of the Company was carried by the Independent Directors at their separate Meeting by using questionnaire method and the outcome of such evaluation was sent to the Chairman of the Nomination and Remuneration Committee. Final outcome of formal evaluation carried by the Nomination and Remuneration Committee and Independent Directors was placed before the Board for its review and further actions.

Based on the outcome of performance evaluation, further measures/actions have been suggested to improve and strengthen the effectiveness of the Board, its Committees and contribution and participation by Individual Directors.

The criteria of formal annual evaluation of the Board, its Committees, Individual Directors and Chairman are given in detail in the 'Report on Corporate Governance' of the Company which forms part of this Report.

CORPORATE GOVERNANCE

Your Company has been benchmarking itself with well-established Corporate Governance practices besides strictly complying with the requirements of revised Clause 49 of the Listing Agreement with the Stock Exchanges. Given the emerging pivotal role of Independent Directors in bringing about good governance, your Company continued its efforts in utilizing their expertise and involving them in all critical decision making processes.

A separate Report on Corporate Governance together with requisite certificate obtained from M/s. Mehta & Mehta, Practicing Company Secretaries, confirming compliance with the provisions of Corporate Governance as stipulated in Clause 49 of the Listing Agreement with the Stock Exchanges forms part of this Report.

MANAGEMENT DISCUSSION AND ANALYSIS

Management Discussion and Analysis on the business outlook and performance review for the year ended March 31, 2015, as stipulated under Clause 49 of the Listing Agreement with the Stock Exchanges, is presented in a separate report which forms part of this Annual Report.

VIGIL MECHANISM

The Company has implemented a Whistle Blower Policy pursuant to which the Whistle Blower can raise concerns relating to Reportable Matters (as defined in the policy) such as unethical behaviour, breach of Code of Conduct, actual or suspected fraud, ethics policy, any other malpractice, impropriety or wrongdoings, illegality, non-compliance of any law, and retaliation against the Directors and employees, etc. Further, the mechanism adopted by your Company encourages the Whistle Blower to report genuine concerns or grievances, provides adequate safeguards against victimization of Whistle Blower, who avail of such mechanism and also provides for direct access to the Chairman of the Audit Committee, in exceptional circumstances. The functioning of the Vigil Mechanism is reviewed by the Audit Committee from time to time.

During the year under review, the Company has not received any complaint through Vigil Mechanism.

None of the Whistle Blowers have been denied access to the Audit Committee of the Board. The details of the Whistle Blower Policy are explained in the 'Report on Corporate Governance' and are available in the section of Investor Relations on the website of the Company (http://www.allcargologistics.com/investor-relations/overview.aspx).

RISK MANAGEMENT POLICY

Your Company is engaged in the business of providing integrated logistics business solutions for National and International Trade, Warehousing, Transportation and handling of all kinds of Cargo, running Inland Container Depots, Container Freight Stations and Shipping Agents. Thus, your Company is prone to inherent business risks like any other organisation. With the objective to identify, evaluate, monitor, control, manage, minimize and mitigate identifiable business risks, your Board of Directors have formulated and implemented a Risk Management Policy.

The Company has adopted ISO 31000 frame work for risk management. Under the guidance of the Board, the Chief Assurance and Risk Executive facilitate dedicated risk workshops for each business vertical and key support functions wherein risks are identified, assessed, analysed and accepted/mitigated to an acceptable level within the risk appetite of the Company. The risk registers are also maintained and reviewed from time to time for risk mitigation plans and changes in risk weightage, if any. The Audit Committee of the Company monitors and manages the risks of the Company and reviews the risk registers of each business vertical and key support functions at least once in a year. Fraud Risk Assessment is also part of overall risk assessment. In every Audit Committee Meeting, the Chief Assurance and Risk Executive makes a presentation on risk assessment and minimization procedures undertaken as aforesaid.

The purpose of risk management is to achieve sustainable business growth, protect Company assets, safeguard shareholder investments, ensure compliance with applicable laws and regulations and avoid major surprises of risks.

The Policy is intended to ensure that an effective risk management framework is established and implemented within the Company.

SUBSIDIARIES, ASSOCIATES & JOINT VENTURE COMPANIES.

During the year under review, the following companies have become or ceased to be Subsidiaries, Joint Ventures and/or Associates:

COMPANIES WHICH BECAME SUBSIDIARIES/JOINT VENTURES/ASSOCIATES:

Sr. Subsidiaries No.

1 Allcargo Logistics LLC

2 Allcargo Logistics Lanka (Private) Limited

3 Transindia Logistics Park Private Limited (became a wholly owned subsidiary)

4 FMA-Line France S.A.S

5 S.H.E. Maritime Services Limited, UK (became a wholly owned overseas subsidiary)

Joint Ventures & Associates

6 FCL Marine Agencies Gmbh (Hamburg)

7 FCL Marine Agencies Gmbh (Bermen)

8 FCL Marin Agencies Belgium (BVBA)

9 Fasder S.A.

10 Ecu Logistics Peru SAC

COMPANIES WHICH CEASED TO BE SUBSIDIARIES/JOINT VENTURES/ASSOCIATES:

Sr. Subsidiaries No.

1 Translogistik Internationale Spedition GmbH

2 ELV Multimodal C.A. (Merged with Administradora House Line)

3 Flamingo Line do Brasil Ltda

4 Ecu Enterprises Ltd.

5 Ecu Line Global Ltd.

6 Ecu Line China Ltd.

The Policy for determining Material Subsidiary as approved by the Board of Directors is uploaded on the website of the Company. (http://www.allcargologistics.com/investor-relations/overview.aspx)

A Statement containing the salient features of the financial statements including the performance and financial position of each of the Subsidiaries, Joint Ventures and Associates pursuant to the provisions of the Companies Act, 2013, is given in the prescribed Form AOC -1 as Annexure 2 which forms part of this Report.

CONSOLIDATED FINANCIAL STATEMENTS

Pursuant to Section 129 of the Companies Act, 2013 and the Listing Agreement with the Stock Exchanges, the attached Consolidated Financial Statements of the Company and all its Subsidiaries, Joint Ventures and Associates 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 AS 27-Financial Reporting of interest in joint ventures, which includes financial results of all its Subsidiaries, Joint Ventures and Associates.

PARTICULARS OF LOANS, GUARANTEES, SECURITIES AND INVESTMENTS

Your Company is engaged in the business of providing infrastructural facilities as defined under Schedule VI of the Companies Act, 2013. Hence, the provisions of Section 186 of the Companies Act, 2013 are not applicable to your Company to the extent of loans given or guarantees/securities provided or investments made by the Company. However, the particulars of loans given, guarantees/ securities provided and investments made by the Company during the year under review, are provided as Annexure 3 which forms part of this Report.

PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES WITH JUSTIFICATION FOR SUCH CONTRACTS

All related party transactions that were entered into by the Company during the year under review were on an arm's length basis and in the ordinary course of business except the appointment of Mr. Umesh Shetty and Mr. Armin Kalyaniwalla in the office or place of profits under Section 188 of the Companies Act, 2013, for which the Members approval was obtained by the Company. 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 were placed before the Audit Committee and also before the Board, as the case may be for approval. Prior omnibus approval of the Audit Committee has been obtained for the transactions which are of a foreseen and repetitive nature. The transactions entered into pursuant to the omnibus approval so granted are certified by the Management and a statement giving details of all related party transactions entered are placed before the Audit Committee for its review on quarterly basis.

A policy of Related Party Transactions as approved by the Audit Committee and the Board of Directors is uploaded on the website of the Company (http://www.allcargologistics.com/investor-relations/overview.aspx).

The related party transactions that were entered during the financial year 2014-15, are given in the notes to financial statements as per Accounting Standard-18, which form part of this Annual Report.

In accordance with the recommendation of the Nomination and Remuneration Committee, the Board of Directors of your Company reappointed Mr. Armin Kalyaniwalla, relative of Mr. Kaiwan Kalyaniwalla, Non-Executive Director (upto October 30, 2014), as CEO of Projects Division of the Company for the period of 3 (Three) years commencing from January 1, 2015 to December 31, 2017, under Section 188(1)(f) of the Companies Act, 2013. The Members of the Company approved reappointment of Mr. Armin Kalyaniwalla, at the 21st Annual General Meeting held on August 7, 2014.

In accordance with the recommendation of the Nomination and Remuneration Committee, the Board of Directors of your Company reappointed Mr. Umesh Shetty, brother and relative of Mr. Shashi Kiran Shetty, Chairman & Managing Director, as CEO of Projects & Engineering Solutions Division of the Company for the period of 3 (Three) years commencing from January 1, 2015 to December 31, 2017, under Section 188(1)(f) of the Companies Act, 2013. The Members of the Company approved reappointment of Mr. Umesh Shetty, through postal ballot on December 30, 2014.

The particulars of transactions related to the appointment of above related parties are given in the prescribed Form AOC-2 as Annexure 4 which forms part of this report.

INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY

The Board has laid down Internal Financial Controls (IFC) and believes that the same are commensurate with the nature and size of its business. Business is however dynamic. The Board is seized of the fact that IFC are not static and are in fact a fluid set of tools which evolve over time as the business, technology and fraud environment changes in response to competition, industry practices, legislation, regulation and current economic conditions. There will therefore be gaps in the IFC as Business evolves. The Company has a process in place to continuously identify such gaps and implement newer and/or improved controls, wherever the effect of such gaps would have a material effect on the Company's operations.

The Internal Audit Department check and assess the effectiveness and adequacy of internal control system in the Company, its compliance with operating systems, accounting procedures and policies at all locations of the Company including its branches and subsidiaries. Based on the report of internal audit function, process owners undertake corrective action in their respective areas and thereby strengthen the controls. Significant audit observations and corrective actions thereon are presented to the Audit Committee of the Board.

STATUTORY AUDITORS AND AUDIT REPORT

M/s. BSR & Co. LLP, Chartered Accountants, the joint Statutory Auditors of the Company, hold office until the conclusion of ensuing Annual General Meeting and have expressed their unwillingness to be reappointed as joint Statutory Auditors of the Company at the ensuing Annual General Meeting of the Company.

With a view to bring the statutory audit function of the Company and its overseas subsidiaries under common umbrella of connected audit firm and in recognition of regulatory changes in India and also with a view to remain at the forefront of the governance, the Company has received a special notice under Section 140(4)(i) of the Companies Act, 2013 from a Member of the Company proposing a resolution at the ensuing Annual General Meeting for appointment of M/s. S. R. Batliboi & Associates LLP, Chartered Accountants, Mumbai, (FRN:101049W) as the joint Auditors of the Company in place of M/s. BSR & Co. LLP, the retiring Auditor.

Your Company has received consent cum eligibility letter from M/s. S. R. Batliboi & Associates LLP, Chartered Accountants, (FRN:101049W) expressing their willingness to be appointed as joint Statutory Auditors of the Company and to the effect that their appointment, if made, would be within the prescribed limits under Section 141(3)(g) of the Companies Act, 2013 and that they are not disqualified for appointment. Accordingly, the Audit Committee and the Board of Directors of the Company have, subject to approval of the Members, recommended change in the Statutory Auditors of the Company. A resolution proposing appointment of M/s. S. R. Batliboi & Associates LLP as the joint Statutory Auditors of the Company pursuant to Section 139 of the Companies Act, 2013 is given in the Notice. Accordingly, the Audit Committee and Board of Directors recommended their appointment as joint Statutory Auditors of the Company to hold office from the conclusion of the ensuing Annual General Meeting till the conclusion of 27th Annual General Meeting and to fix their remuneration.

M/s. BSR & Co. LLP, over the past 4 years, have successfully met the challenges that the size and scale of the Company's operations pose for Auditors and have maintained the highest level of governance, rigour and quality in their audit. The Board places on record its appreciation for the services rendered by M/s. BSR & Co. LLP as the joint Statutory Auditors of the Company.

M/s. Appan & Lokhandwala Associates, Chartered Accountants, Mumbai, (FRN:117040W), were appointed as joint Statutory Auditors of the Company at the 21st Annual General Meeting and accordingly holds their office till the conclusion of ensuing Annual General Meeting. Being eligible, they have expressed their willingness for reappointment as joint Statutory Auditors of the Company at the ensuing Annual General Meeting.

The Company has received consent cum eligibility letter from M/s. Appan & Lokhandwala Associates, Chartered Accountants to the effect that their appointment, if approved, would be within the prescribed limits under Section 141 (3)(g) of the Companies Act, 2013 and that they are not disqualified for appointment. Accordingly, the Audit Committee and Board of Directors recommended their reappointment as joint Statutory Auditors of the Company to hold office from the conclusion of the ensuing Annual General Meeting till the conclusion of next Annual General Meeting and to fix their remuneration.

The Notes on Financial Statement referred to in the Auditors' Report are self-explanatory and do not call for any further comments.

There are no audit qualifications, reservations, adverse remarks or disclaimers made by the Statutory Auditors in their Report.

There is no incident of fraud to be reported by the Auditors to the Audit Committee and Board during the year under review.

SECRETARIAL AUDITORS AND SECRETARIAL AUDIT REPORT

Pursuant to Section 204 of the Companies Act 2013, your Company had appointed M/s. Mehta & Mehta, Practicing Company Secretaries, Mumbai as its Secretarial Auditors to conduct the Secretarial Audit of the Company for the financial year 2014-15. The Company provided all assistance and facilities to the Secretarial Auditor for conducting its audit. The Report of Secretarial Auditor for the financial year 2014-15 is annexed to this report as Annexure 5 which forms part of this Report.

There are no audit qualifications, reservations, adverse remarks or disclaimers made by the Secretarial Auditor in its Report.

MATERIAL CHANGES AND COMMITMENT AFFECTING FINANCIAL POSITION WHICH HAVE OCCURRED BETWEEN THE END OF THE FINANCIAL YEAR OF THE COMPANY TO WHICH THE FINANCIAL STATEMENTS RELATE AND THE DATE OF THE REPORT

There are no material changes and commitments, affecting the financial position of the Company, which have occurred between the end of the financial year of the Company i.e. March 31, 2015 and the date of the Directors' report i.e. June 15, 2015.

PARTICULARS OF EMPLOYEES

The information required pursuant to Section 197(12) of the Companies Act, 2013, read with Rule 5 of The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, in respect of employees on the payroll of the Company in India, is provided as Annexure 6 which forms part of this report.

None of the employees who are posted and working in a country outside India, not being Directors or their relatives, draw remuneration more than RS. 60,00,000 (Rupees Sixty Lakhs Only) per annum or RS. 5,00,000 (Rupees Five Lakhs Only) per month.

During the year under review, the Managing Director of the Company have received remuneration of SGD 360,135 from Singapore based Subsidiary Company. The Whole Time Directors of the Company have not received any commission or remuneration from Subsidiary Companies.

In terms of Section 136 of the Companies Act, 2013, the Annual Report and Audited Financial Statements are being sent to the Members and others entitled thereto, excluding the information on employees' particulars which is available for inspection by the Members at the Registered Office of the Company during business hours on working days of the Company up to the date of the ensuing Annual General Meeting. If any Member is interested in obtaining a copy thereof, such Member may write to the Company Secretary in this regard.

The Nomination and Remuneration Committee of the Company has affirmed at its Meeting held on May 21, 2015 that the remuneration paid to Executive Directors, Non-Executive Directors and other Senior Management Employee is as per the remuneration policy of the Company.

EMPLOYEES STOCK OPTION PLAN (ESOP)

The Company's Employee Stock Option Plan 2006 (ESOP) expired on January 11,2013. Thus, the disclosure relating to ESOP of the Company pursuant to Rule 12(9) of the Companies (Accounts) Rules, 2014 and Clause 12 of the SEBI (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999, are not required.

CREDIT RATING

Your Company continues to enjoy top-notch credit rating for its long term and short term credit facilities obtained from various Banks. CRISIL has reaffirmed the Company's rating AA-/Stable for its long term debt and A1 for its short term debt. The rating denotes high degree of safety regarding timely servicing of financial obligation. Your Company has also received A1 rating from CARE for its Commercial Paper issue.

SAFETY, HEALTH AND ENVIRONMENT

Your Company inclined towards bringing safety and environment awareness among its safety measures. It also believes in safety and health enrichment of its employees and committed to provide a healthy and safe workplace for all its employees. Successfully managing Health & Safety risks is an essential component of our business strategy. The Company has identified 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 initiatives and participating in programs of safety and welfare measures to protect its employees, equipment's 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 Project & Equipments division of Allcargo has successfully renewed its OHSAS 18001:2007 Standards Certification as well as Lifting Equipment Engineers Association (LEEA) Certification. It is a testimony that the Company is maintaining very high safety standards as well as ensures the use of quality equipment's and followed the best Health & Safety practices as per LEEA standards.

The following safety measures are being taken at various locations:

* Fire & Safety drills are conducted for all Employees and Security Personnel.

* All Fire hydrants are monitored strictly, as the preparedness for emergency.

* All equipment's are tested periodically to verify its safe load working condition. Fitness Certificates are issued based on the compliance of the safety norms.

* Safety Awareness Campaign, Safety week, Environment day are being held/celebrated at each workplace to improve the awareness of employee.

* Regular training/skills 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 identified 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 office for medical counseling to employees.

* HazMat training and Terrorist Threat Awareness training are provided to all Container Freight Stations employees.

* Medical Health check-up of all employees are conducted at regular intervals

* CCTV & Safety alarms are installed at each locations

* All equipment's are mandatory ensured with PUC.

* Each equipment is put through comprehensive Quality Audit & Testing to ensure strong compliance to Maintenance, Safety and Reliability aspects as per specifications by various OEMs.

* Green initiatives are taken at various locations to protect the environment.

SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALS IMPACTING THE GOING CONCERN STATUS AND COMPANY'S OPERATION IN FUTURE.

During the year under review, no significant and material orders have been passed against the Company by any Regulators or Courts or Tribunals impacting the Company's going concern status and operations in future.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

The information on Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo as stipulated under Section 134(3)(m) of the Companies Act, 2013 read with Rule 8 of The Companies (Accounts) Rules, 2014, is provided as Annexure 7 which forms part of this Report.

DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013

Your Company has adopted an Anti-Sexual Harassment Policy in line with the requirements of The Sexual Harassment of Women at the Workplace (Prevention, Prohibition & Redressal) Act, 2013. A Complaints Committee (CC) has been set up to redress complaints received regarding sexual harassment of women at workplace. All employees (permanent, contractual, temporary, trainees) are covered under this policy.

The Company has not received any complaints of sexual harassment of women at workplace from any employees during the year under review.

EXTRACT OF ANNUAL RETURN

In accordance with the provisions of Section 134(3)(a) of the Companies Act, 2013 and Rule 12 of the Companies (Management and Administration) Rules, 2014, as amended from time to time, an extract of the Annual Return of the Company for the year ended March 31, 2015, is provided in the prescribed Form MGT - 9 as Annexure 8 which forms part of this Report.

DIRECTORS RESPONSIBILITY STATEMENT

Pursuant to Section 134(3)(c) read with Section 134(5) of the Companies Act, 2013, the Board of Directors to the best of their knowledge and ability confirm that-

a) in the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures, if any;

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, 2015 and of the profit of the Company for the year ended on that date;

c) the Directors had taken proper and sufficient 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;

d) the Directors had prepared the annual accounts on a going concern basis;

e) the Directors had laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively; and

f) the Directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively.

ACKNOWLEDGEMENTS

Your Directors take this opportunity to place on record their gratitude for the valuable support and co-operation extended by the Government of India, Governments of various countries, concerned State Governments, other Government Departments, Authorities and Agencies, the Stakeholders, Business Associates, Banks, Financial Institutions, Customers, Vendors and Service Providers during the year.

Your Directors also wish to place on record the deep appreciation for the hard work, dedication and commitment shown by the employees at all levels. The enthusiasm and unstinting efforts of the employees have enabled the Company to remain as industry leaders.

                            For and on behalf of the Board of Directors

                                                    Shashi Kiran Shetty
                                           Chairman & Managing Director
                                                         (DIN:00012754)
Place: Mumbai Date: June 15, 2015