ISIN No INE418H01029 Mkt Cap.(Cr.) 3047.83 Book Value 142.25 Face Value 2.00
52WeekH/L 272/59 Price/BookValue 1.70 EPS 11.85 P/E 20.41
Price 241.80 Bookclosure 06/08/2014 Div Yield 0.62 M/L 1
You can view full text of the latest Director's Report for the company.
Year End : 2013/03 
To, The Members of Allcargo Logistics Limited

The Directors take pleasure in presenting the Twentieth Annual Report of the Company together with Audited Statement of Accounts for the year ended March 31, 2013.

FINANCIAL HIGHLIGHTS

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

                                                  (Rs. in Lakhs)
                                             For the Year Ended 
Particulars                         March 31,
                                    2013          March 31, 2012
                                   (12 months)   (15 months)

Sales & Other Income                 108,233       113,157

Proft Before Interest, 
Depreciation and Taxes                27,177        36,005

Interest                               2,673         5,055

Depreciation                          11,676         8,904

Provision For Tax                      1,273         3,640

Proft After Tax                       11,555        18,406

Proft brought forward from 
previous year                         46,219        31,939
Amount available for Appropriations 57,774 50,345

Appropriations:

Interim Dividend                                     1,305

Tax on Interim Dividend                                212

Proposed Dividend                      1,883           653

Tax on Dividend                          320           106

Transfer to General Reserve            1,156         1,850

Proft carried to Balance Sheet        54,332        46,219
REVIEW OF OPERATIONS

The year under review was challenging and opportunistic for your Company as macroeconomic environment continued to remain unstable and volatile and slow down of the Indian as well as global economy. In-spite of all odds and adversities, your Company has achieved the growth which is grossly attributable to Company's customer-centric approach and its ability to innovate customer specifc solutions, focus on pricing and aggressive marketing strategy, disciplined project exEcutions, focused management approach, prudent fnancial and human resources management and ensuring better control over cost.

Overall, the company is on a strong growth path and its efforts to improve effciency, productivity and proftability will improve overall returns. Members are requested to refer Management Discussion and Analysis Report annexed to this report for detailed segment wise performance.

APPROPRIATIONS

Considering the proftable performance of the Company during the year under review, your Directors are pleased to recommend a dividend @ 75% i.e. Rs. 1.50 per equity share of Rs. 2 each.

The Dividend, if approved by the members at the ensuing Annual General Meeting, will absorb a sum of Rs. 2,218 lakhs including dividend distribution tax.

SUBSIDIARY COMPANIES

The operating performance of various subsidiaries were also affected due to the macroeconomic environment being unstable and volatile but nevertheless the subsidiaries put their best efforts to sustain such turbulent times and achieved sustainable growth during the year under review.

During the year under review, your Company has increased the stake in following subsidiary companies:

(i) Acquired balance 15% stake in Ecu Line (Johar Bahru) SDN BHD, Malaysia as a result Ecu Line (Johar Bahru) SDN BHD has become 100% subsidiary of Ecuhold NV

(ii) Acquired balance 10.07% stake in aEcu Line (Indian Ocean Island) Ltd, Mauritius as a result aEcu Line (Indian Ocean Island) Ltd has become 100% subsidiary of Ecuhold NV

(iii) Acquired 9.75% stake in Translogistik International Spedition Gmbh by HCL Logistics NV. Pursuant to such acquisition of additional stake, total holding in Translogistik International Spedition Gmbh increased to 80.27%

The stand-alone audited fnancial statements of all subsidiaries operating in India and Overseas are not attached to this report in view of the general exemption granted under Section 212 of the Companies Act, 1956 by the Ministry of Corporate Affairs, Government of India vide its Circular No.51/12/2007- CL-III dated February 8, 2011 and February 21, 2011. The statement pursuant to Section 212 of the Companies Act, 1956 relating to the subsidiary companies along with a statement of fnancial highlights of subsidiaries operations providing relevant details are attached and form part of this Annual Report.

The Company will make available the Annual Accounts of the subsidiary companies and related information to any member of the Company and its subsidiaries who may be interested in obtaining the same. The annual accounts of the subsidiary companies will also be kept open for inspection by any investor at the registered offce of the Company and its subsidiary companies.

CONSOLIDATED FINANCIAL STATEMENTS

As required under the Listing Agreement with the Stock Exchanges, the attached Consolidated Financial Statements of the Company and all its subsidiaries have been prepared in accordance with the Accounting Standard AS-21 -Consolidated Financial Statements read with Accounting Standard AS 23-Accounting for Investment in Associates and Accounting Standard AS 27-Financial Reporting of interest in joint Ventures, which includes fnancial results of its subsidiaries, joint ventures and associate companies and forms part of this Annual Report.

EMPLOYEES STOCK OPTION PLAN 2006

Disclosures pursuant to Clause 12 of the SEBI (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999, relating to the Company's ESOP Scheme as on March 31, 2013 are set out in Annexure II annexed to this report. The Company has not granted any new stock options to its employees during the year under review. The ESOP Scheme had a validity period of 7 years from the date of its formation and accordingly has expired on January 11, 2013.

A certifcate from the Statutory Auditors of the Company M/s. B S R & Co., Chartered Accountants, Mumbai and M/s Appan & Lokhandwala Associates, Chartered Accountants, Mumbai, with respect to the implementation of Company's ESOP Scheme, will be placed before the Members at the ensuing Annual General Meeting and a copy of the same shall be available for inspection at the Registered Offce of the Company on all working days, except Saturday and Sunday, between 11.00 a.m. to 2.00 p.m., upto the date of Annual General Meeting.

SHARE CAPITAL AND LISTING OF SHARES

During the year under review, your Company has, in accordance with the provisions of Sections 77A, 77AA and 77B and all other applicable provisions of the Companies Act 1956 and the provisions contained in the SEcurities and Exchange Board of India (Buy Back of SEcurities) Regulations, 1998, bought back 4,136,449 equity shares of Rs. 2 each from the open market through stock exchanges at an average price of Rs. 139.69 per equity shares for an aggregate consideration of Rs. 57.78 crore (exclusive of Brokerage, Service Tax, SEcurities Transaction Tax, Stamp Duty, Exchange Transaction Charges and SEBI fees), being approximately 77.05% of the Maximum Offer Size of Rs. 75 crores. The Company has extinguished all the Equity Shares so bought back as aforesaid.

Pursuant to the buyback of equity shares, the total paid up capital of the Company has reduced from Rs. 261,094,644 comprising of 130,547,322 equity shares of Rs. 2 each fully paid to Rs. 252,821,746 comprising of 126,410,873 equity shares of Rs. 2 each fully paid.

The Equity Shares of the Company are listed and traded in compulsory dematerialized form on the BSE Limited and the National Stock Exchange of India Limited. Your Company has paid the Annual Listing fees and Annual Custody fees to the Stock Exchanges and Depositories up-to-date.

AMALGAMATION OF MHTC LOGISTICS PVT.LTD

Your Board of Directors at its meeting held on February 14, 2012 had approved de-merger of the Project Division of MHTC Logistics Pvt. Ltd., the wholly owned subsidiary of the Company, in favour of the Company effective from April 01, 2012, subject to necessary approvals of the stake holders and the Hon'ble Bombay High Court. However, the Board of Directors of the Company at its meeting held on August 7, 2012 reconsidered its earlier decision of de-merger and approved amalgamation of MHTC Logistics Pvt. Ltd. with the Company effective from April 01, 2012 ("The Appointed Date"), subject to obtaining necessary approvals of the stake holders and the Hon'ble Bombay High Court.

The Company has obtained the approval of the Members to the Scheme of Arrangement at the Court convened general meeting held on February 25, 2013. Pending the approvals of the Hon'ble Bombay High Court and other statutory and regulatory authorities, the effect of the Scheme of Arrangement has not been given in the audited fnancial statements for the year under review.

AWARDS AND RECOGNITION

The year under review was very special for your Company as it has received many awards and recognitions for the signifcant contribution made by your Company in development and growth of the logistic industry.

- Mr. Shashi Kiran Shetty, the Chairman and Managing Director of the Company, felicitated as the Global Indian Maritime Personality by Maharashtra Chamber of Commerce, Industry and Agriculture (MACCIA); Hall of Fame for being the First Indian Global Forwarder by FFFAI; Crowned as the News Maker of the Year - MALA Awards 2012

- "Most Well Diversifed Business Enterprise" - Citi Commercial Bank & Economic Times.

- LCL CONSOLIDATOR OF THE YEAR AWARD at the South East CEO Conclave and Awards 2012

- Winner of HEAVY LIFT Mover of the YEAR 2012 - MALA Awards 2012

- Outstanding Contribution in Logistics (Infrastructure Category) Award by EPC World Awards 2012

- Freight Forwarder of the Year- Project Cargo award at 4th CONquEST 2013.

- Allcargo Shipping Co. Pvt. Ltd, the wholly owned subsidiary of the Company, adjudged 'Best Shipping Line of the Year - Break Bulk Operator' at the Gujarat Star Awards

- "Leadership and Innovation" category award by International Women Leadership Forum (IWLF) Award to Ms. Shantha Martin (Individual capacity)

Your Company believes that winning of such recognitions was due to the hard work, passion and spirit of team work of the employees and thoughtful leaders, whose novel thinking and innovative approach have led them to attain excellence in their feld. These awards are a testimony to the commitment to the stakeholders of the Company and seamless integrated logistics solutions.

DIRECTORS

The Board of Directors of the Company has co-opted Prof. Jayaraman Ramachandran as Additional Director on the Board of the Company u/s 260 of the Companies Act, 1956. Prof. Ramachandran is a Non ExEcutive Independent Director and shall hold offce upto the date of the ensuing Annual General Meeting. The Company has received notice u/s 257 of the Companies Act, 1956 from a member proposing his candidature for the offce of Director at the ensuing Annual General Meeting of the Company. The Board recommends his appointment at the ensuing Annual General Meeting.

Mr. Satish Gupta, Independent Non ExEcutive Director, has resigned as Director of the Company w.e.f. May 20, 2013. Your Board places on record its deep appreciation for the valuable services and guidance given by Mr. Satish Gupta during his tenure as Director of the Company.

In accordance with the provisions of the Companies Act, 1956 and that of Articles of Association of the Company, Mrs. Arathi Shetty, Mr. Adarsh Hegde and Mr. Mohinder Pal Bansal, Directors of the Company, retire by rotation at this Annual General Meeting. Being eligible, they offer themselves for re-appointment. The Board recommends their re-appointment.

Brief resume of Prof. Ramachandran, Mrs. Arathi Shetty, Mr. Adarsh Hegde and Mr. Mohinder Pal Bansal as required in terms of Clause 49 of the Listing Agreement with the Stock Exchanges, are included in the Corporate Governance Report annexed to this Annual Report.

AUDITORS

M/s B S R & Co., Chartered Accountants, Mumbai (Firm Registration No. 101248W), and M/s. Appan & Lokhandwala Associates, Chartered Accountants, Mumbai, (Firm Registration No. 117040W) the Statutory Auditors of the Company, retire at the conclusion of this Annual General Meeting. M/s B S R & Co. and M/s Appan & Lokhandwala Associates, being eligible, have expressed their willingness for re-appointment at the ensuing Annual General Meeting,

The Company has received a letter from M/s B S R & Co and M/s Appan & Lokhandwala Associates, to the effect that their appointment, if made, would be within the prescribed limits under section 224(1B) of the Companies Act, 1956. The Audit Committee and Board of Directors recommend re-appointment of M/s B S R & Co and M/s Appan & Lokhandwala Associates, as Statutory Auditors of the Company to hold offce from the conclusion of the ensuing Annual General Meeting till the conclusion of the next Annual General Meeting and to fx their remuneration.

INTERNAL AUDIT

The Company has an adequate internal audit system implemented by an in-house department and supported by independent Chartered Accountant frms to carry out audit of various branches and functions of the Company and its subsidiaries.

Systems, procedures and processes are being upgraded / implemented to further strengthen the existing internal control measures, procedures and processes to increase operational effciencies and to safeguard the Company from any fraud, misrepresentation and non-compliance with statutory requirements.

COST AUDIT

The Ministry of Corporate Affairs vide notifcation dated June 3, 2011 and as amended from time to time has notifed the Companies (Cost Accounting Records) Rules, 2011 which applies to your Company. The Company has appointed Mr. Sharad Marathe, a member of the Institute of Cost Accountants of India and a practicing Cost Accountant (Certifcate of Practice No 5008), for auditing the Cost Accounting Records in respect of its Container Freight Station, Warehousing and Equipment Renting business divisions and providing Compliance Report for the year ended March 31, 2013 under the aforesaid Rules. The Compliance Report so obtained by the Company shall be fled with the Central Government on or before dues date prescribed under the aforesaid Rules or as may be extended by the Ministry of Corporate Affairs.

PUBLIC DEPOSITS

During the year under review, your Company has not accepted any deposits within the meaning of Section 58A and Section 58AA of the Companies Act, 1956 and rules made thereunder.

SAFETY, HEALTH AND ENVIORNMENT

Your Company believes in safety and health enrichment of its employees and committed to provide a healthy and safe workplace for all its employees at each work location. Successfully managing Health & Safety risks is an essential component of our business strategy. The Company has identifed Health & Safety risk arising from its activities and has put proper systems, processes and controls mechanism to mitigate them.

The Company has been taking various safety and welfare measures to protect its employees, equipments and other assets from any possible loss and / or damages. To implement such safety and welfare measures, the Company has formulated various policies such as Drug & Alcohol Policy, Occupational Health Policy, Driver & Vehicle Safety Policy, Mobile Telephone Policy, Smoking Policy etc.

The Equipment Hire Division is OHSAS compliant and a member of the globally recognized Lifting Equipment Engineers Association (LEEA, uK) and ISO certifed. All Container Freight Station (CFS) / Inland Container Depot (ICD) are certifed for Occupational Health & Safety Management Systems (OHSAS)

The following safety measures are being taken at various locations:

- Fire & Safety drills are conducted for all employees and SEcurity personnel.

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

- All equipments are tested periodically to verify its safe load working condition. Fitness certifcates are issued based on the compliance of the safety norms.

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

- Regular training/skits to staff, and contractors, to inculcate importance of safety among them.

- Created checks and awareness among drivers about negatives of alcohol and drug consumptions and impact of families.

- Accident prone routes identifed and supervisors allocated have control over the vehicle movement.

- OHSAS audits and Fire & Safety audits are conducted by competent agencies at regular intervals.

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

- HazMat training is provided to all CFS employees.

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

- CCTV & Safety alarms are installed at each locations

- All equipments are adequately insured and mandatorily ensured with PuC.

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

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

CORPORATE SOCIAL RESPONSIBILITY

Your Company has committed itself to making a difference in the lives of underprivileged and economically challenged citizens of our country. Allcargo's Corporate Social Responsibility (CSR) initiatives, through 'Avashya Foundation' a non proft organization and in collaboration with various NGOs across India, believes in nurturing inclusive development with a human touch. Your Company's CSR activities focus is to take each initiative beyond philanthropy and promote people centric inclusive development with the active participation of the community at all levels. Allcargo's CSR initiatives aim to support:

- Natural Disaster Relief by providing immediate and life essential supply of water, food and medicine to regions of India effected by natural disasters such as drought, food, earthquakes, and other calamities.

- Health Care by providing critical medical assistance for curative and preventive health care. Essential and life saving medicines and medical treatment are being made available to all underprivileged and economically challenged section of the society across rural and urban regions of India.

- Education for children and adults across the underprivileged and economically challenged sections of the rural as well as urban society. Created a platform for fnancial assistance, student's scholarships & adoption programs, parents awareness campaigns and education support infrastructure.

- Women Empowerment by providing a platform for all women across the varied sections of the society for making a better living through education, skills development and employment programs, to support themselves and their families.

- Environmental Sustainability by focusing on creating awareness towards sustainable environmental practices in terms of infrastructure development, alternative energy, conservation of resources and training people to be more conscious, responsible and accountable to the environment.

For more details on CSR activities of the Company, members are requested to read the Corporate Social Responsibility Section of this Annual Report.

DIRECTORS RESPONSIBILITY STATEMENT

Pursuant to Section 217(2AA) of the Companies Act, 1956, the Directors confrm that:

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

(b) the Directors had selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at March 31, 2013 and of the proft of the Company for the year ended on that date;

(c) the Directors had taken proper and suffcient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; and

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

CORPORATE GOVERNANCE

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

A separate report on Corporate Governance together with requisite certifcate from M/s. Mehta & Mehta, Practicing Company Secretaries, confrming compliance with the provisions of Corporate Governance as stipulated in Clause 49 of the Listing Agreement is annexed and forms a part of the Annual Report.

The declaration regarding compliance with the Code of Conduct prescribed by the Company for Directors and Management Personnel forms part of the report on Corporate Governance.

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

Information as required under Section 217(1)(e) of the Companies Act, 1956 read with the Companies (Disclosure of particulars in the report of Board of Directors) Rules, 1988, are set out in Annexure I annexed to this report.

PARTICULARS OF EMPLOYEES

In terms of the provisions of Section 217(2A) of the Companies Act, 1956, read with the Companies (Particulars of Employees) Rules, 1975 as amended, the names and other particulars of the employees are required to be set out in the Directors Report. However, as per the provisions of Section 219(1)(b)(iv) of the Companies Act, 1956 the Annual Report excluding the aforesaid information is being sent to all the members of the Company and others entitled thereto. A member, who is interested in obtaining such particulars, may write to the Company Secretary at the registered offce of the Company.

ACKNOWLEDGEMENTS

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

Your Board also wishes to place on record their appreciation for the dedication and commitment shown by the employees at all levels who have contributed to the success of your Company.

                            For and on behalf of the Board of Directors

                            Shashi Kiran Shetty

                            Chairman & Managing Director
Place: Mumbai

Date: May 29, 2013