ISIN No INE418H01029 Mkt Cap.(Cr.) 4377.07 Book Value 99.18 Face Value 2.00
52WeekH/L 222/151 Price/BookValue 1.80 EPS 9.44 P/E 18.88
Price 178.15 Bookclosure 10/08/2017 Div Yield 1.12 M/L 1
You can view full text of the latest Director's Report for the company.
Year End : 2016/03 

To,

The Members of Allcargo Logistics Limited

The Directors take pleasure in presenting the Twenty Third Annual Report on the business and operations of the Company, both on standalone and consolidated basis, together with Audited Financial Statements of the Company for the year ended March 31, 2016.

STATE OF THE COMPANY’S AFFAIRS

Your Company has projected to achieve USD 2 billion revenue by the year 2020. During the year under review, your Company successfully achieved the goals and targets set for the financial year 2015-16 though it was challenging year as factors like rough market conditions, fall in export and import volumes, low inflationary pressures and very low investments both by private and public sector affected the performance of the Company. Your Company’s performance for the financial year 2015-16 was mainly attributable to the robust measures undertaken by your 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 and better control over cost, consistent follow-up for receivables, lower depreciation of assets and reduced interest costs on account of restructuring/repayment of outstanding loans.

Major highlights of the state of your Company’s affairs during the year under review are given as under:

- To increase market share in Container Freight Station business and for better management, optimum utilization of resources and cost control, your Board of Directors has at its meeting held on February 13, 2016 approved acquisition of the Container Freight Station business undertaking of Transindia Logistic Park Private Limited (wholly owned subsidiary of the Company) situated at Uran, Raigad, as a going concern on slump sale basis, subject to determination of valuation by an independent value and receipt of necessary statutory and regulatory approvals.

- With a view to achieve significant presence in the Contract Logistics, E-commerce Logistics businesses and to consolidate Freight Forwarding business, your Board of Directors has at its meeting held on May 20, 2016 approved sale of Contract Logistics business of the Company and Freight Forwarding and Custom Clearance businesses of its wholly owned subsidiary Hindustan Cargo Limited, as a going concern on slump sale basis to Avvashya CCI Logistics Pvt. Ltd (“ACCI”) for consideration other than cash in the form of equity shares of ACCI equivalent to the fair value of the aforesaid businesses as determined by the Independent Valier. Further, the Company has also acquired additional controlling stake in ACCI for consideration of approximately ' 130 Crore. ACCI is a joint venture between Hindustan Cargo Ltd., CCI Logistics Ltd. and your Company. The ultimate aim of bringing these businesses under one Company is to synergise and expand the Warehousing, Freight Forwarding, Custom Clearance and other logistics services thereby providing a one stop and state of the art Integrated Logistics solutions to our valued customers. This new milestone will help us in not only achieving our vision to become USD 2 billion entity by 2020, but also channelize the fragmented logistics market in India.

- Your Board of Directors has at its meeting held on March 14, 2016 in principally approved setting up of rail linked Logistics Park in the Jhajjar district of Haryana. The facility is expected to be operational by 2018, subject to receipt of necessary statutory and regulatory approvals and rail connectivity. The move is in line with the Company’s business expansion plan. The project will comprise of rail linked private freight terminal catering to railway cargo movement, free trade warehousing zone, domestic tariff area and other related activities over approximately 200 acres of freehold agricultural land, which is in close proximity to Dedicated Freight Corridor at Jhajjar, Haryana. The Jhajjar project will enable the Company to cater needs of providing end to end logistics solutions to customers in Northern belt.

- Your Company proposes to raise funds up to INR 300 Crore by issue of Secured Non-Convertible Redeemable Debentures on private placement basis in one or more tranches pursuant to the approval of the shareholders through postal ballot voting dated May 9, 2016 for the purpose of expansion and development of its existing businesses, future acquisitions, capital expenditure, working capital and other general business requirements.

- Your Company’s overseas subsidiaries namely ECU Line, Econocaribe and China Consolidation Services have changed their identity to “ECU Worldwide” to consolidate various brands across the world under one powerful global brand. The objective is to reassure, re-energize and bring modernity. It provides the Company with the impetus to deliver more, to fulfill clients’ needs even more, create new products and proactively propose solutions to surpass their expectations and help achieve our ambitious growth targets.

Detailed information on the business overview and outlook and state of the affairs of the Company is provided in the Management Discussion & Analysis Report as required under Regulation 34 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, forming part of this Report.

Consolidated Performance:

FINANCIAL HIGHLIGHTS

Your Company’s financial performance during the year under review is summarized below:

(Rs, in Lakh)

Consolidated Results for

Standalone Results for

Particulars

financial year

financial year

| 2015-161

2014-15

2015-16 |

2014-15

Sales & Other Income

571,424

568,141

124,617

117,921

Profit before Interest, Depreciation/ Amortization and Taxes

54,832

52,798

27,556

27,434

Interest

4,249

5,347

2,548

3,800

Depreciation and other Amortization

15,286

15,737

10,031

11,086

Profit Before Tax

35,297

31,714

14,977

12,548

Provision for Tax

6,998

6,996

2,562

2,799

Profit After Tax

28,299

24,718

12,415

9,749

Profit attributable to Minority Interest

(862)

(923)

-

-

Share of Profit of Associates

389

194

-

-

Profit after minority interest

27,826

23,989

12,415

9,749

Profit brought forward from previous year

114,146

93,615

63,551

57,113

Profit Available for Appropriations

141,972

117,197

75,966

66,560

Appropriations :

Proposed Final Dividend

-

1765

-

1765

Tax on Final Dividend

-

359

-

359

Interim Dividend

3,781

756

3,781

756

Tax on Interim Dividend

489

129

489

129

Transfer to General Reserve

-

-

-

-

Transfer to Tonnage Tax Reserve

-

42

-

-

Transfer to Capital Redemption Reserve

-

-

-

-

Profit Carried to Balance Sheet

137,702

114,146

71,696

63,551

Your Company earned total revenue of Rs, 571,424 Lakh during the year under review against a total revenue of Rs, 568,141 Lakh in the previous year, representing marginal growth of 1% on year-on-year basis.

The Earnings before Interest, Depreciation, Tax and Appropriations (EBIDTA) recorded at Rs, 54,832 Lakh as at March 31, 2016 as compared to Rs, 52,798 Lakh in the previous year, with nominal growth of 4% on year to year basis.

The Net Profit after taxes and minority interest was higher by 16% and stood at Rs, 27,826 Lakh as at March 31, 2016 as compared to Rs, 23,989 Lakh in the previous year.

Standalone Performance:

Your Company achieved total revenue of Rs, 124,617 Lakh as compared to Rs, 117,921 Lakh in the previous year, representing a year-on-year growth of 6% supported by increase in volumes and revenue across all business segment.

The Earnings before Interest, Depreciation, Tax and Appropriations (EBITDA) remains flat and stood at Rs, 27,556 Lakh in the current year as compared to Rs, 27,434 Lakh during the previous year.

During the year under review, the Company registered growth of 28% in the Net Profit after Tax which stood at Rs, 12,415 Lakh as compared to Rs, 9,749 Lakh in the previous year.

For detailed segment wise performance, Members are requested to refer to the Management Discussion and Analysis Report annexed to this Report.

CHANGES IN THE NATURE OF BUSINESS, IF ANY

Your Company continues to provide Integrated Logistics Solutions to its customers and hence, there was no change in the nature of business or operation of the Company which impacted the financial position of the Company during the year under review.

TRANSFER TO RESERVES

Your Company does not propose to transfer any amount to its Reserves out of the profits of the Company for the year ended March 31, 2016.

DIVIDEND

With the primary objective to enrich and maximize shareholders value, your Company has been regularly paying dividend to its shareholders, including interim dividend based on the profits of the Company.

Your Company has declared and paid two interim dividends during the year under review, first interim dividend of Re.1/-per equity share representing 50% on the total paid up capital of the Company in the month of November, 2015 and second interim dividend of Re.1/- per equity share representing 50% on the expanded paid-up capital in the month of March, 2016, aggregating to a total dividend of Rs, 2/- per equity share of Rs, 2/- each fully paid up representing 100% on the total paid up capital of your Company. The total dividend payout during the year under review was Rs, 3,781 Lakh excluding dividend distribution tax.

In view of interim dividend declared on March 14, 2016, your Directors do not recommend any final dividend for the year under review.

PUBLIC DEPOSITS

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

SHARE CAPITAL AND LISTING OF SHARES

To encourage the participation of small investors by making equity shares of the Company more affordable to the retail investors, enjoy the rewards of the growth of the Company and increase liquidity of the equity shares, your Board of Directors at its meeting held on November 5, 2015 recommended Bonus issue of Equity Shares of the Company in the ratio of 1:1 and the same was approved by the shareholders of the Company through postal ballot voting dated December 23, 2015.

With a view to accommodate the issue and allotment of Bonus Equity Shares, the Authorized Share Capital of your Company has been increased from Rs, 355,000,000/- (Rupees Thirty Five Crore Fifty Lakh only) divided into 177,475,000 (Seventeen Crore Seventy Four Lakh Seventy Five Thousand) Equity Shares of Rs, 2/each (Rupees Two only) and 500 (Five Hundred), 4% Cumulative, Redeemable, Preference Shares of Rs, 100/- each (Rupees One Hundred only) to Rs, 550,000,000/- (Rupees Fifty Five Crore only) divided into 274,975,000 (Twenty Seven Crore Forty Nine Lakh Seventy Five Thousand) Equity Shares of Rs, 2/- each (Rupees Two only) and 500 (Five Hundred), 4% Cumulative, Redeemable, Preference Shares of Rs, 100/- each (Rupees One Hundred Only).

Accordingly, your Company has issued and allotted 126,047,762 Equity Shares of Rs, 2/- each fully paid as Bonus Shares in the ratio 1:1 on January 1, 2016, to the shareholders holding equity shares as on record date December 31, 2015. Consequently, the issued, subscribed and paid-up share capital of the Company increased and stood at Rs, 504,191,048/- (Rupees Fifty Crore Forty One Lakh Ninety One Thousand Forty Eight only) consisting of 252,095,524 (Twenty Five Crore Twenty Lakh Ninety Five Thousand Five Hundered Twenty Four) Equity Shares of Rs, 2/- each fully paid. The said Bonus Shares are listed and traded on BSE Limited (BSE) and National Stock Exchange of India Limited (NSE) w.e.f January 5, 2016.

Your Company’s Equity Shares are listed and traded in compulsory dematerialized form on BSE and NSE. The Company has regularly paid the Annual Listing fees to the respective Stock Exchanges. Annual Custody/Issuer fee for the financial year 2016-17 has been paid by the Company to National Securities Depositories Limited and Central Depository Services (India) Limited.

BOARD OF DIRECTORS a) Number of Meetings of the Board of Directors

Your Board of Directors (“Board”) meets 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. The Board also meets in every calendar quarter. 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 Meetings 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, Secretarial Statndard-1 and the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, as amended from time to time.

During the year under review, the Board of your Company met 7 (seven) times on May 21, 2015, June 15, 2015, August 10, 2015, November 5, 2015, January 1, 2016, February 13, 2016 and March 14, 2016 respectively. The details of attendance of each Director at the Board Meetings are given in the ‘Report on the Corporate Governance’ which forms part of this Report.

b) Director Retiring by Rotation

In accordance with the provisions of the Companies Act, 2013 and the Articles of Association of the Company, Mrs. Arathi Shetty (DIN:00088374), Director of the Company, retires by rotation at ensuing Annual General Meeting and being eligible, offers herself for reappointment. The Board recommends her reappointment as Director liable to retire by rotation at the ensuing Annual General Meeting.

c) Appointment of Joint Managing Director

Pursuant to applicable provisions of the Companies Act, 2013 and rules made there under and the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, as amended from time to time, based on the performance evaluation of Mr. Adarsh Hegde (DIN:00035040), 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 appointed Mr. Adarsh Hegde (DIN:00035040) as the Joint Managing Director of the Company for a period of 5 (five) years w.e.f. July 1, 2016, subject to approval of the shareholders at the ensuing Annual General Meeting.

As per Regulation 36 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and Secretarial Standard-2 issued by the Institute of Company Secretaries of India, the brief profile and other relevant details of Mr. Adarsh Hegde (DIN:00035040) and Mrs. Arathi Shetty (DIN:00088374) are given in the Explanatory Statement to the Notice and Report on Corporate Governance which forms part of this Report. The shareholders are requested to refer the same.

d) Appointment of Independent Directors

Pursuant to the provisions of Section 149 of the Companies Act, 2013 and Regulation 17 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, as amended from time to time, 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 with the criteria of independence as prescribed under Sub-Section (6) of Section 149 of the Companies Act, 2013 and under Regulation 16 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, as amended from time to time.

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

During the year under review, the Blackstone GPV Capital Partners (Mauritius) V-K Ltd, Blackstone GPV Capital Partners (Mauritius) V-L Ltd, Blackstone GPV Capital Partners (Mauritius) V-M Ltd and Blackstone GPV Capital Partners (Mauritius) V-N Ltd, existing Investors of the Company withdrew their nomination of Mr. Akhilesh Gupta (DIN: 00359325), as Nominee Director from the Board of the Company with effect from February 10, 2016. Your Directors would like to place on record their deep appreciation for the valuable contribution of Mr. Akhilesh Gupta (DIN: 00359325) during his association with the Company.

During the year under review, 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 8 (eight) Committees of the Board of Directors, as given below, in compliance with the Corporate Governance practices followed by the Company and the requirements of the relevant provisions of the Companies Act, 2013 and rules made thereunder and the SEBI (Listing Obligations and Disclosure Requirements) Regulation, 2015, as amended from time to time;

i. Audit Committee;

ii. Nomination and Remuneration Committee;

iii. Stakeholders’ Relationship Committee;

iv. Corporate Social Responsibility Committee;

v. Strategy Committee;

vi. Finance, Risk and Legal Committee;

vii. Executive Committee; and

viii. Resource Raising Committee (Special Purpose Committee)

Details of compositions, meetings, terms of reference of the Committees and attendance of the Committee Members at each of the Meetings 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 no acceptance of any recommendation of the Audit Committee by the Board of Directors.

REMUNERATION POLICY

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 there under and which is in line with Regulation 19 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, as amended from time to time.

Extract of the Remuneration Policy on Directors, Key Managerial Personnel and other Senior Management Personnel appointment and their remuneration is given as below:

Remuneration of Executive Members of the Board:

Executive Members of the Board shall be paid remuneration which shall comprise of fixed monthly basic salary, perquisites such as furnished/unfurnished housing accommodation, car with or without chauffeur, telephone for office as well as personal use, reimbursement of medical expenses, leave travel concession, club membership, personal accident insurance, health insurance, stock options, statutory and non-statutory allowances such as education allowances, personal allowances, travel allowances, subscription allowances etc. as may be recommended by the Nomination and Remuneration Committee/Board of Directors and approved by the Members of the Company from time to time. Executive Members of the Board shall also be eligible for commission out of net profit depending upon the adequacy of profit of the Company in a particular year and such commission shall be linked to the Executive Members of the Board’s achievement of its budgeted performance as well as overall Company’s achievement of budgeted performance of that particular year.

However, the overall remuneration of Executive Members of the Board, where there are more than one, shall not exceed 10% of the net profit calculated in the manner as provided under the provisions of the Companies Act, 2013 and Rules framed there under, and shall not exceed 5% in case there is 1 (one) Executive Members of the Board. In the event of loss or inadequacy of profit in any financial year during the currency of tenure of services of the Executive Members of the Board, the payment of remuneration shall be governed by the applicable limits prescribed under the provisions of the Companies Act, 2013 and Rules framed there under, as amended from time to time.

Executive Members of the Board be employed under service contracts on the terms and conditions and remuneration as recommended by the Nomination and Remuneration Committee and the Board and approved by the Members of the Company at the General Meeting. No severance fees or compensation for loss of office shall be paid to Executive Members of the Board in case of voluntary or non-voluntary termination of their services. Executive Members of the Board shall not be eligible to receive any sitting fees for attending any meeting of the Board of Members or Committee thereof.

Remuneration of Non-Executive Members of the Board:

The remuneration payable to the Non-Executive Members of the Board shall be as determined and approved by the Board based on the time devoted, contribution made in the progress and guiding the Company for future growth. Aggregate of such sum shall not exceed 1% of net profit of the year or such sum as may be prescribed by the Government from time to time, calculated in accordance with the provisions of the Companies Act, 2013 and relevant Rules framed there under. The remuneration in the form of profit commission payable to Non-Executive Members of the Board shall be in addition to the sitting fees payable to them for attending meetings of the Board and/or Committees thereof and reimbursement of expenses for participation in the Board and other meetings. An Independent Director shall not be entitled to any stock option issued or proposed to be issued by the Company. The performance of the Non-Executive Members shall be reviewed by the Board on an annual basis.

Remuneration of Senior Management Personnel:

The Company believes that a combination of fixed and performance-linked pay to the Senior Management Personnel ensure that the Company can attract and retain key employees. At the same time, the Senior Management Personnel are given an incentive to create shareholder value through partly incentive-based pay. The Board of Directors sets the terms within the frames of the contracts based on the recommendation of the Nomination & Remuneration Committee for Senior Management Personnel.

The Nomination & Remuneration Committee shall submit proposals concerning the appointment and remuneration of the Senior Management Personnel and ensures that the remuneration is in line with industry standard in comparable companies. Such proposals then shall be submitted to the Board for approval. The remuneration of the members of the Executive Management may consist of the following components:

- Fixed Salary;

- Performance linked incentive/bonus;

- Stock options;

- Personal benefits, e.g. Company provided accommodation, Company car, telephone, broadband, newspapers, etc.

There shall be no agreed redundancy pay/compensation for voluntary or non-voluntary termination of services except as specially agreed in writing by the Company and the concerned Senior Management Personnel. Senior Management Personnel shall not be eligible to receive any remuneration for directorships held in Avvashya Group of Companies.

The criteria for determining qualifications, positive attributes, and independence of a Director is given in the ‘Report on 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, as amended from time to time. 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 (www.allcaraoloaistics.com/ investors#investor-corporate-policies).

WHISTLE BLOWER POLICY/ VIGIL MECHANISM

Your Company has adopted 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 behavior, 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 Whistle Blower Policy is available in the section of Investor Relations on the website of the Company (www.allcaraoloaistics.com/investors#investor-corporate-policies).

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 organization. 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, analyzed and accepted / mitigated to an acceptable level within the risk appetite of the organization. The risk registers are also maintained and reviewed from time to time for risk mitigation plans and changes in risk weight age, if any. Audit Committee monitors risk management activities of each business vertical and key support functions. Fraud Risk Assessment is also part of overall risk assessment. In Audit Committee meeting, Chief Assurance and Risk Executive make presentation on risk assessment and minimization procedures.

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.

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

As required under the Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulation, 2015, the Nomination and Remuneration Committee of the Board had set 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 for the financial year 2015-16 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 consulting firm was appointed to provide a report on the response received from Directors. The report of the expert 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 for the financial year 2015-16 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, for the financial year 2015-16, further measures/actions have been suggested to improve and strengthen the effectiveness of the Board, its Committees and contribution and participation by the Individual Directors.

The criteria of formal annual evaluation of the Board, its Committees, Individual Directors and Chairman is given 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 Regulations 17 to 27 and any other applicable Regulation of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, as amended from time to time. 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 per the SEBI (Listing Obligations and Disclosure Requirements) Regulations,2015, annexed to this Report.

MANAGEMENT DISCUSSION AND ANALYSIS

The Management Discussion and Analysis Report on the business outlook and performance review for the year ended March 31, 2016, as stipulated Regulation 34 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, is presented in a separate report which forms part of this Report.

SUBSIDIARIES, ASSOCIATES & JOINT VENTURE COMPANIES

During the year under review, the following Companies have become or ceased to be Subsidiaries, Wholly OwnedSubsidiaries, Joint Ventures and/or Associates of the Company:

Sr.

No.

Name of Company

Subsidiaries/ Wholly Owned Subsidiaries / Associates/Joint Ventures

1

ACEx Logistics Limited

Wholly Owned Subsidiary

2

Eculine Worldwide Logistics Co. Ltd.

Wholly Owned Subsidiary

3

FMA-LINE Nigeria Ltd.

Wholly Owned Subsidiary

4

Ecu Worldwide (Uganda)

Wholly Owned Subsidiary

5

Love All Sports Holdings FZE*

Associate

6

Credo Shipping Indian Agencies Pvt. Ltd. (Strike-off)*

Wholly Owned Subsidiary

*ceased to be the Wholly Owned Subsidiaries/Associates of the Company during the year under review.

The Policy for determining Material Subsidiary as approved by the Board of Directors is uploaded on the website of the Company (www.allcargologistics.com/investors#investor-corporate-policies).

A Statement containing the salient features of the financial statements including the performance and financial position of each Subsidiaries, Joint Venture and Associates Companies as per the provisions of the Companies Act, 2013 and rules made there under, as amended from time to time is provided 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 Regulation 33 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, 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 Accounting Standard AS 27-Financial Reporting of interest in Joint Ventures, which includes financial results of its Subsidiaries, Joint Ventures and Associate Companies.

PARTICULARS OF LOANS, GUARANTEES, SECURITIES AND INVESTMENTS

Your Company is engaged in the business of providing Integrated Logistics Solutions which falls under the Infrastructural Facilities categorized 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. However, in terms of the Corporate Governance practices followed by the Company, 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

Pursuant to the provisions of Section 188 of the Companies Act, 2013 and rules made there under, all the related party transactions entered into by the Company with its related parties during the financial year 2015-16 were on an arm’s length basis and in the ordinary course of business except the acquisition of Container Freight Station (CFS) business undertaking from Transindia Logistic Park Pvt. Ltd. (“TLPPL”), the wholly owned subsidiary of the Company, as a going concern on a slump sale basis. There were no materially significant related party transactions made by the Company with Promoters, Directors, Key Managerial Personnel or Senior Management Personnel that had any potential conflict with the interest of the Company at large during the year under review.

All related party transactions were placed before the Audit Committee and if required, also before the Board for approval. Prior omnibus approval of the Audit Committee was 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 the Consultant and a statement giving details of all related party transactions entered is placed before the Audit Committee for its review on a quarterly basis.

A policy on materiality of related party transactions and also on dealing with related party transactions as approved by the Audit Committee and the Board of Directors is uploaded on the website of the Company (www.allcargologistics.com/ investors#investor-corporate-policies).

The related party transactions that were entered during the financial year 2015-16, are given in the notes to financial statements as per Accounting Standard 18 (AS 18), which form part of the Annual Report.

The purchase of CFS business undertaking from TLPPL, a wholly owned subsidiary of the Company falls within the ambit of related party transaction as defined under Section 188 (1)(b) of the Companies Act, 2013. Accordingly, the Audit Committee and Board have at their meeting dated February 13,

2016, approved the acquisition of CFS business from TLPPL. As per the provision of Section 188 of the Companies Act, 2013 read with rules made there under and the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, as amended from time to time, the requirement of obtaining approval of shareholders is not applicable for transactions entered into between holding Company and its wholly owned subsidiary Company whose accounts are consolidated with such holding Company and placed before the shareholders at the general meeting for approval. Hence, your Company was not required to obtain shareholders approval for the said transaction.

The particulars of contract or arrangements related to acquisition of CFS business from TLPPL is given in 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. Based on the framework of internal financial controls, work performed by the internal, statutory and external consultants, including audit of internal financial controls over financial reporting by the Statutory Auditors, and the reviews performed by the Management and Audit Committee, your Board is of the opinion that the Company’s internal financial controls were adequate and effective during financial year 2015-16 for ensuring the orderly and efficient conduct of its business including adherence to the Company’s policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of accounting records and timely preparation of reliable financial disclosures.

STATUTORY AUDITORS AND AUDIT REPORT

M/s. Appan & Lokhandwala Associates, Chartered Accountants, (Firm Registration No. 117040W), the Joint Statutory Auditors of the Company, hold office until the conclusion of ensuing Annual General Meeting. In view of adoption of auditors rotational policy as required under the provisions of the Companies Act, 2013 and rules made there under and subject to approval of shareholders of the Company at ensuing Annual General Meeting, the Audit Committee and the Board have recommended the appointment of M/s. Shaparia Mehta & Associates LLP Chartered Accountants, (Firm Registration No. 112350W/ W-100015) as Joint Statutory Auditors of the Company in place of the retiring Joint Statutory Auditors M/s. Appan & Lokhandwala Associates, Chartered Accountants, to hold office from the conclusion of 23rd Annual General Meeting till the conclusion of 28th Annual General Meeting and fix their remuneration.

Your Company has received a consent cum eligibility letter from M/s. Shaparia Mehta & Associates LLP, Chartered Accountants, 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.

The Board place on record its appreciation for the services rendered and valuable contribution made by M/s. Appan & Lokhandwala Associates, while discharging their duties as Joint Statutory Auditors of the Company and further strengthening and developing audit processes, procedures and controls during their tenure as Joint Statutory Auditors of the Company.

M/s. S. R. Batliboi & Associates LLP, Chartered Accountants, (Firm Registration No. 101049W/E300004), were appointed as Joint Statutory Auditors of the Company at the 22nd Annual General Meeting to hold office from the conclusion of 22nd Annual General Meeting of the Company up to the conclusion 27th Annual General Meeting subject to ratification of their appointment by shareholders at every Annual General Meeting.

Your Company has received consent cum eligibility letter from M/s. S. R. Batliboi & Associates LLP, Chartered Accountants, to the effect that their appointment, if ratified, 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 have recommended ratification of 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 24th Annual General Meeting and to fix their remuneration.

The Notes on Financial Statements 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 was no such incident of fraud required to be reported by the Statutory 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 and rules made there under, 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 2015-16. The Company provided all assistance and facilities to the Secretarial Auditor for conducting their audit. The Report of Secretarial Auditor for the financial year 2015-16 in terms of Section 204 of the Companies Act, 2013 is annexed to this Report as Annexure 5.

The Secretarial Audit Report does not contain any audit qualifications, reservations, adverse remarks or disclaimers.

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, that have occurred during the end of the financial year of the Company i.e. March 31, 2016 and the date of the Directors’ report i.e. June 30, 2016.

PARTICULARS OF EMPLOYEES

Details of employee’s remuneration as 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, is provided in 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, 6,000,000/- (Rupees Sixty Lakh only) per annum or Rs, 500,000/- (Rupees Five Lakh only) per month.

During the year under review, none of Directors of the Company or their relatives have received any remuneration from overseas 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 20, 2016 that the remuneration paid to Executive Directors, Nonexecutive Directors and other Senior Management Employee is as per the remuneration policy of the Company.

EMPLOYEES STOCK OPTION PLAN

The Company’s Employee Stock Option Plan 2006 (ESOP) expired on January 11, 2013. Thus, disclosures relating to the 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 have credit rating which denotes high degree of safety regarding timely servicing of financial obligation. Your Company has received following credit rating for its long term and short term credit facilities, Commercial Paper and proposed Non-Convertible Debentures from various credit rating agencies:

Name of Credit Rating Agency(ies)

Instrument / Facility

Rating

ICRA Limited

Non-Convertible

Debentures

(Proposed)

ICRA AA (Stable)

Credit Analysis & Research Limited

CARE AA

CRISIL Limited

CRISIL AA-/ Positive

Credit Analysis & Research Limited

Commercial

Paper

CARE A1

CRISIL Limited

Long Term Debt

CRISIL AA-/ Positive

Short Term Debt

CRISIL A1

SAFETY, HEALTH AND ENVIORNMENT

Your Company is inclined towards bringing safety and environment awareness among its safety measures. It also believes in safety and health enrichment of its employees and is 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, Business Continuity and Disaster Recovery Plan (Fire Safety Policy), Mobile Telephone Policy, Smoking Policy etc.

The Project & Equipments division of your Company 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 and 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 location 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 and Safety audits are conducted by competent agencies at regular intervals.

- Fortnightly visit by Doctors to office for medical counseling to employees.

- Haz Mat training is provided to all CFS employees.

- Terrorist Threat Awareness Training is provided to CFS employees.

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

- CCTV and Safety alarms are installed at each locations.

- All equipment’s are mandatory ensured with PUC.

- Each equipment is put through comprehensive Quality Audit and 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 (‘Act’). A Complaints Committee 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.

Sr.

No.

Particulars

Events

1

No. of Complaints of Sexual Harassment pending at the beginning of the year

NIL

2

No. of Complaints of Sexual Harassment received during the year

NIL

3

No. of Complaints of Sexual Harassment disposed off during the year

NIL

4

No. of Complaints of Sexual Harassment pending for more than 90 days

NIL

5

No. of Awareness Program about Sexual Harassment Policy conducted and held at workplace

2

6

Nature of Action taken by the Employer or District Officer

NIL

No action was required to be taken by the Company as there were no complaints relating to sexual harassment received during the year under review.

During the year under review, your Company has submitted its Annual Report on the cases of sexual harassment at workplace to District Officer, Mumbai, pursuant to Section 21 of the aforesaid Act and rules made there under.

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, 2016, 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, 2016 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 thank the Government of India, Governments of various countries, concerned State Governments, other Government Authorities, Departments and Agencies, the Stakeholders, Business Associates, Banks, Financial Institutions, Customers, Vendors and Service

Providers for the valuable support and co-operation extended by them during the year.

Your Directors would also like to place on record their sincere thanks and appreciation for the contribution, consistent hard work, dedication and commitment of our employees at all levels.

For and on behalf of the Board of Directors of

Allcargo Logistics Limited

Shashi Kiran Shetty

Chairman & Managing Director

Place: Mumbai (DIN: 00012754)

Date: June 30, 2016