The Members of
Allcargo Logistics Limited
The Directors present their Twenty Fourth Annual Report along with the AuditedFinancial Statements for the financial year ended March 31 2017.
(Rs in lakhs)
|Particulars ||Consolidated ||Standalone |
| ||FY2016-17 ||FY2015-16 ||FY2016-17 ||FY2015-16 |
|Income || || || || |
|Revenue from operations ||558336 ||564052 ||117359 ||120568 |
|Other income ||3994 ||2511 ||1847 ||3283 |
|Finance income ||538 ||287 ||795 ||935 |
|Total Income ||562868 ||566850 ||120001 ||124786 |
|Expenses || || || || |
|Cost of services rendered ||377780 ||379352 ||74371 ||76369 |
|Employee benefits expense ||94194 ||91849 ||9523 ||10800 |
|Depreciation and amortisation expenses ||16617 ||20063 ||9837 ||10031 |
|Finance costs ||3242 ||4078 ||2373 ||2564 |
|Other Expenses ||39871 ||42463 ||10179 ||10482 |
|Total expenses ||531704 ||537805 ||106283 ||110246 |
|Profit before share of profit from associates joint ventures and tax ||31164 ||29045 ||13718 ||14540 |
|Share of profit from associates and joint ventures ||378 ||696 ||- ||- |
|Profit before tax ||31542 ||29741 ||13718 ||14540 |
|Tax expense: || || || || |
|-Current tax ||7886 ||7902 ||3888 ||3575 |
|-Deferred tax ||(123) ||(2919) ||(802) ||(1138) |
|Profit for the year ||23779 ||24758 ||10632 ||12103 |
|Other comprehensive income || || || || |
|Items that will not be reclassified subsequently to Profit and Loss: || || || || |
|Re-measurement (loss)/gain on defined benefit plans ||(127) ||185 ||(50) ||78 |
|Items that will be reclassified subsequently to Profit and Loss: || || || || |
|Exchange difference on translation of foreign operations ||(5961) ||2752 ||- ||- |
|Income tax effect ||110 ||- ||- ||- |
|Other Comprehensive Income for the year net of tax ||(5978) ||2937 ||(50) ||78 |
|Total Comprehensive income for the year net of tax ||17801 ||27695 ||10582 ||12181 |
|Profit attributable to || || || || |
|- Equity holders of the parent ||23182 ||23987 ||- ||- |
|- Non-controlling interests ||597 ||771 ||- ||- |
|Other comprehensive income attributable to: || || || || |
|- Equity holders of the parent ||(5978) ||2937 ||- ||- |
|- Non-controlling interests ||- ||- ||- ||- |
|Total comprehensive income attributable to: || || || || |
|- Equity holders of the parent ||17204 ||26924 ||- ||- |
|- Non-controlling interests ||597 ||771 ||- ||- |
Pursuant to the notification dated February 16 2015 issued by the Ministry ofCorporate Affairs the Company has adopted the Indian Accounting Standards (Ind AS')notified under the Companies (Indian Accounting Standards) Rules 2015 with effect fromApril 1 2016. Financial Statements for the year ended and as at March 31 2016 have beenrestated to conform to Ind AS. Ind AS has replaced the existing Indian GAAP prescribedunder the Section 133 of the Companies Act 2013 (the Act') read with Rule 7 of theCompanies (Accounts) Rules 2014. Notes to the Financial Statements provide furtherexplanation on the transition to Ind AS.
For the year under review the Directors have recommended a dividend of Rs 2 per equityshare (100%) on the paid-up capital of the Company (previous year two interim dividends ofRs 1/- each per equity share) amounting to Rs 5914 lakhs including Dividend DistributionTax resulting in payout of 56% of standalone profits for FY2016-17 of the Company.
The payment of the said Dividend is subject to approval of the Members at the ensuingAnnual General Meeting (AGM') of the Company.
In accordance with Regulation 43A of SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015 (the Listing Regulations') the Company hasformulated a Dividend Distribution Policy' and the same has been hosted on theCompany's website http://www.allcargologistics.com/ investors#investor-corporate-policies.The Dividend Distribution Policy of the Company is annexed as Annexure-1.
TRANSFER TO RESERVES
The Company proposes to keep the entire amount of Rs 10582 lakhs in the RetainedEarnings.
The revenue from operations for FY2016-17 Rs 558336 lakhs a decrease of 1% over theprevious year Rs 564052 lakhs. The decrease in revenue was mainly on account ofregrouping of subsidiaries to joint ventures as per Ind AS.
The Earnings before Interest Depreciation Tax and Amortisation (EBIDTA) stood at Rs51023 lakhs a decrease of 4% as compared to Rs 53186 lakhs earned in the previous year.The Profit for the year attributable to the shareholders and non-controlling interest wasRs 23779 lakhs lower by 4% as compared to Rs 24758 lakhs of the previous year.
The revenue from operations for FY2016-17 Rs 117359 lakhs declined by 3% over theprevious year Rs 120568 lakhs. EBIDTA stood at Rs 25928 lakhs a decrease of 4% ascompared to Rs 27135 lakhs earned in the previous year.
The Profit after taxes was Rs 10632 lakhs lower by 12% as compared to Rs 12103 lakhsof the previous year.
The Company operates mainly into three segments i.e. (i) Multimodal TransportOperations; (ii) Container Freight Stations/Inland Container Depots and (iii) Project andEngineering Solutions. For detailed segment wise performance Members are requested torefer to the Management Discussion and Analysis Report' which forms part of theAnnual Report.
Multimodal Transport Operations (MTO)
MTO segment of the Company involves Non Vessel Owning Common Carrier(NVOCC') operations related to Less than Container Load (LCL') consolidationand Full Container Load (FCL') forwarding activities in India and across the worldthrough overseas subsidiaries of Ecu Worldwide.
Allcargo is amongst the leading players in the global LCL consolidation marketwith a strong network across 160 plus countries and 300 plus offices covering over 4000port pairs across the world.
The Company has grown successfully with judicious mix of organic and inorganicgrowth through merger and acquisition strategies.
Container Freight Stations (CFS)/ Inland Container Depots (ICD)
The CFS/ICD segment operations cater to the handling of import/export cargocustoms clearance and other related ancillary services.
The Company operates CFS and ICD facilities at JNPT-Nhava Sheva ChennaiMundra Dadri and Kheda.
Project and Engineering Solutions (P&E)
This segment operates in the project logistics equipment leasing and coastalshipping.
P&E segment provides integrated end-to-end project engineering and logisticservices through a diverse fleet of owned/rented special equipments like hydraulic axlescranes trailers barges reach-stackers forklifts and ships to carry bulk and OverDimensional/Over Weight cargos as well as project engineering solutions across varioussectors.
Contract logistics is one of the fastest growing sub-sector of logistics inIndia and is poised to grow substantially post implementation of the Goods and ServiceTax.
The Company had a presence in this segment since last few years. In FY2016-17the Company expanded and strengthened its presence in this segment by acquiring majorequity stake in Avvashya CCI Logistics Private Limited (ACCI').
ACCI is one of the predominant player in this segment managing activities forkey clients in Chemicals Auto and Engineering Pharma Fashion and Retail sectors.
This segment is scalable and growth oriented.
STATE OF THE COMPANY'S AFFAIRS
Major highlights of state of the Company's affairs during the year under review aregiven as under:
Even though last year was challenging due to factors like volatile marketconditions demonetization low inflationary pressures and the impact of regulatorychanges the Company was able to maintain growth attributable to some of the robustmeasures undertaken at all levels. The measures include value based commercial dealsaggressive marketing strategy disciplined project executions innovation anddigitalization cost optimization prudent financial and human resources management.
Details of organic and inorganic growth strategy of the Company during the yearunder review are given below: a. The Company along with Hindustan Cargo Limited(HCL' a wholly owned subsidiary of the Company) had transferred their contractlogistics business and freight forwarding business to ACCI as a going concern on a slumpsale basis for a consideration other than cash in the form of equity stake of 6.63% and10.57% respectively in ACCI pursuant to the Business Transfer Agreement dated June 172016 executed amongst them. The Company had also acquired 43.93% equity shares in ACCI fora cash consideration of Rs 13000 lakhs. Post this transaction the Company and HCLcollectively own 61.13% in ACCI w.e.f. June 29 2016. b. The Company has completedacquisition of CFS business undertaking of Transindia Logistic Park Private Limited(TLPPL' a wholly owned subsidiary of the Company) situated at JNPT Nhava ShevaUran Raigad as a going concern on a slump sale basis for a total consideration of Rs8050 lakhs effective from January 1 2017. This acquisition enabled the Company tooperate under single brand umbrella at JNPT which benefits the Company to operate at costeffectiveness and also ensures optimum utilization of resources. c. The Kolkata Port Trustallotted the land to the Company for constructing and operating CFS. The Company hasstarted the construction of CFS and once it becomes operational the Company will havepresence at eastern coast of India. This CFS is expected to be operational in FY2017-18.d. The Company is also pursuing project to set up the Logistic Park at Jhajjar Haryanaand is in the process of completing all regulatory requirements for this project.
Detailed information on the Business overview outlook and state of the affairs of theCompany is provided in the Management Discussion and Analysis Report' as requiredunder Regulation 34 of the Listing Regulations which forms part of the Annual Report.
CHANGES IN THE NATURE OF BUSINESS IF ANY
The Company continued to provide integrated logistics services to its customers andhence there was no change in the nature of business or operations of the Company whichimpacted the financial position of the Company during the year under review.
MATERIAL CHANGES AND COMMITMENTS AFFECTING FINANCIAL POSITION OF THE COMPANY
There are no material changes and commitments affecting the financial position of theCompany subsequent to close of FY2016-17 till the date of this Report.
SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALS
During the year under review no significant and material orders have been passed byany Regulator or Court or Tribunal which would impact going concern status of the Companyand its future operations.
The Cash flows from operations were positive Rs 35852 lakhs (as at March 31 2016 Rs44016 lakhs). Spend on capex was Rs 16796 lakhs. The borrowing of the Company asat March 31 2017 stood at Rs 58964 lakhs (as at March 31 2016 Rs 51327 lakhs). Cashand bank balances including investment in mutual funds stood at Rs 27245 lakhs (as atMarch 31 2016 Rs 26289 lakhs).The Net Debt to Equity stood at 0.18 times (as at March31 2016 0.14 times).
The Cash flows from operations were positive Rs 17920 lakhs (as at March 31 2016 Rs19720 lakhs). Spend on capex was Rs 8445 lakhs. The borrowing of the Company asat March 31 2017 stood at Rs 36334 lakhs (as at March 31 2016 Rs 19493 lakhs). Cashand bank balances including investment in mutual funds stood at Rs 6124 lakhs (as atMarch 31 2016 Rs 7678 lakhs). The Net Debt to Equity stood at 0.23 times (as at March31 2016 0.09 times).
During the year under review the Company spent Rs 12567 lakhs (including transactioncost) for Buy Back of 6400000 equity shares.
The Company continues to have credit rating which denotes high degree of safetyregarding timely servicing of financial obligation. The Company has received the followingcredit ratings for its long term and short term credit Bank Loan facilities CommercialPaper and proposed Non-Convertible Debentures from various credit rating agencies:
|Rating Agency ||Rating ||Instrument / Facility |
|ICRA ||ICRA AA (Stable) || |
| || ||Non-Convertible |
|CARE ||CARE AA || |
| || ||Debentures (Proposed) |
|CRISIL ||CRISIL AA-/Positive || |
|CARE ||CARE A1+ ||Commercial Paper |
| ||CRISIL AA-/Positive ||Long Term Bank Loan |
|CRISIL || || |
| ||CRISIL A1+ ||Short Term Bank Loan |
During the year under review the Company has not accepted any deposits from the publicfalling within the meaning of Sections 73 and 76 of the Act and the Rules framedthereunder.
As at March 31 2017 the Authorised Share Capital of the Company is Rs 550000000/-divided into 274975000 equity shares of Rs 2/- each and 500 4% Cumulative RedeemablePreference Shares of Rs 100/- each.
During the year under review the Company bought back 6400000 equity shares of Rs 2/-each representing 2.54% of the outstanding equity shares of the Company at a priceof Rs 195/- per equity share for an aggregate amount of ` 12480 lakhs (excludingtransaction cost) through tender offer mechanism pursuant to the provisions of Section 68of the Act read with Rules framed thereunder and SEBI (Buyback of Securities) Regulations1998. The Buyback size was 9.17% of the total fully paid up equity share capital and freereserves including securities premium as per the Audited Financial Statements of theCompany for the year ended March 31 2016. This Buyback was completed on January 11 2017.
Upon completion of the Buyback the issued subscribed and paid-up share capital of theCompany was Rs 491391048/- divided into 245695524 equity shares of Rs 2/- each.
Reclassification of Promoters
Pursuant to Regulation 31A of the Listing Regulations some of the Promoters of theCompany were reclassified in the public category for which the approval of the Members ofthe Company was sought through postal ballot on March 22 2017. Further the approval ofthe Stock Exchanges viz. BSE Limited and National Stock Exchange of India Limited for thereclassification was obtained on April 7 2017.
CORPORATE GOVERNANCE REPORT
A separate section on the Corporate Governance forming part of the Board's Reporttogether with requisite certificate obtained from the Practicing Company Secretaryconfirming compliance with the provisions of Corporate Governance as stipulated inRegulation 34 read along with Schedule V of the Listing Regulations is included in theAnnual Report.
BOARD OF DIRECTORS
Number of meetings of the Board of Directors
During the year under review 9 (nine) Board meetings were convened and held thedetails of which are provided in the Corporate Governance Report'.
The details of the composition of the Committees meetings held attendance ofCommittee members at such meetings and other relevant details are provided in theCorporate Governance Report'.
Recommendation of Audit Committee
During the year under review there were no instances of non-acceptance of anyrecommendation of the Audit Committee of the Company by the Board of Directors.
On the recommendation of the Nomination and Remuneration Committee (NRC') MrKaiwan Kalyaniwalla (DIN:00060776) was appointed as an Additional Non-Executive Directorof the Company with effect from August 10 2016. In accordance with Section 161 of theAct Mr Kalyaniwalla holds office upto the date of the ensuing AGM and being eligibleoffer his candidature for appointment as Director.
In accordance with Section 152 of the Act and the Articles of Association of theCompany Mr Adarsh Hegde (DIN:00035040) Director of the Company retires by rotation atensuing AGM and being eligible offers himself for reappointment.
Attention of the Members is invited to the relevant items in the Notice of the 24th AGMand the explanatory statement thereto.
The Company has received declarations from all Independent Directors confirming thatthey meet the criteria of independence as prescribed under Section 149(6) and (7) of theAct and Regulation 16 of the Listing Regulations.
Pursuant to Sections 134 and 178 of the Act and Regulations 17 and 19 of the ListingRegulations NRC has set the criteria for performance evaluation of the Board itsCommittees individual Directors and Chairman of the Company the same are given in detailin the Corporate Governance Report'.
Based on the criteria set by NRC the Board has carried out annual evaluation of itsown performance its Committees and individual Directors for FY2016-17. The questionnaireson performance evaluation were prepared in line with the Guidance Note on Board Evaluationdated January 5 2017 issued by SEBI.
The parameters for performance evaluation of Board includes the roles andresponsibilities of the Board timeliness for circulating the board papers content andthe quality of information provided to the Board attention to the Company's long termstrategic issues risk management overseeing and guiding major plans of actionacquisitions etc.
The performance of the Board and individual Directors was evaluated by the Boardseeking inputs from all the Directors. The performance of the Committees was evaluated bythe Board seeking inputs from the Committee members. NRC reviewed the performance ofindividual Directors separate meeting of the Independent Directors was also held toreview the performance of Non-Independent Directors performance of the Board as a wholeand performance of the Chairman of the Company taking into accounts the views of JointManaging Director and Non-Executive Directors. Thereafter at the Board meeting theperformance of the Board its Committees and individual Directors has been discussed anddeliberated. The Board of Directors expressed their satisfaction towards the processfollowed by the Company for evaluating the performance of the Directors Board and itsCommittees.
KEY MANAGERIAL PERSONNEL
During the year under review pursuant to the provisions of Sections 196 197 and otherapplicable provisions of the Act read with the Rules framed thereunder Mr Adarsh Hegdewas appointed as Joint Managing Director of the Company for a period of five years w.e.f.July 1 2016.
Considering the industry benchmark the current and future revision if any in theRemuneration of Mr Hegde NRC and the Board have recommended revision in the Basic SalaryScale of Mr Hegde to the maximum of Rs 30 lakhs p.m. from the existing maximum BasicSalary Scale of Rs 20 lakhs p.m. w.e.f. April 1 2017.
Attention of the Members is invited to the relevant item in the Notice of the 24th AGMand the explanatory statement thereto. Mr Shailesh Dholakia resigned as Company Secretaryof the Company w.e.f. June 30 2016.
Ms Shruta Sanghavi has been designated as Company Secretary of the Company w.e.f.November 7 2016 on the recommendation of NRC.
As at March 31 2017 the following are the Key Managerial Personnel of the Company:
Mr Shashi Kiran Shetty Chairman and Managing Director;
Mr Adarsh Hegde Joint Managing Director;
Mr Jatin Chokshi Chief Financial Officer; and
Ms Shruta Sanghavi Company Secretary.
NRC has framed a policy on Directors Key Managerial Personnel and other SeniorManagement Personnel appointment and remuneration including criteria for determiningqualifications positive attributes independence of a Director and other related mattersin accordance with Section 178 of the Act and the Rules framed thereunder and Regulation19 of Listing Regulations the criteria as aforesaid is given in the CorporateGovernance Report'. The Remuneration Policy of the Company is annexed as Annexure 2.
WHISTLE BLOWER POLICY/ VIGIL MECHANISM
The Company has adopted a Whistle Blower Policy and established the necessary VigilMechanism which is in line with the Regulations 18 and 22 of the Listing Regulations andSection 177 of the Act. Pursuant to the Policy the Whistle Blower can raise concernsrelating to Reportable Matters (as defined in the Policy) such as unethical behaviorbreach of Code of Conduct or Ethics Policy actual or suspected fraud any othermalpractice impropriety or wrongdoings illegality non-compliance of any law andretaliation against the Directors and employees etc. Further the mechanism adopted by theCompany encourages the Whistle Blower to report genuine concerns or grievances to theAudit Committee and provides for adequate safeguards against victimization of WhistleBlower who avail of such mechanism and also provides for direct access to the Chairman ofthe Audit Committee in appropriate or exceptional cases. The Audit Committee oversees thefunctioning of the same. The Whistle Blower Policy is hosted on the Company's websitehttp://www. allcargologistics.com/investors#investor-corporate-policies. During the yearunder review the Company has not received any complaint through Vigil Mechanism. It isaffirmed that no personnel of the Company has been denied access to the Audit Committee.
RISK MANAGEMENT POLICY
The Company is engaged in the business of providing integrated logistics businesssolutions for National and International Trade Warehousing Transportation and handlingof all kinds of Cargo running Inland Container Depots Container Freight Stations andShipping Agents._ Thus_ the Company_ is_ prone_ to_ inherent_ business_ risks_ like_ any_other_ organisation. With the objective to identify evaluate monitor control manageminimize and mitigate identifiable business risks the Board of Directors have formulatedand implemented a Risk Management Policy.
The Company has adopted ISO 31000 framework for risk management. Under the guidance ofthe Board the Chief Assurance and Risk Executive facilitates dedicated risk workshops foreach business vertical and key support functions where in risks are identified assessedanalysed and accepted/mitigated to an acceptable level within the risk appetite of theorganization. The risk registers are also maintained and reviewed from time to time forrisk mitigation plans and changes in risk weightage if any. The Audit Committee monitorsrisk management activities of each business vertical and key support functions. Fraud RiskAssessment is also part of overall risk assessment. In the Audit Committee meeting ChiefAssurance and Risk Executive makes the presentation on risk assessment and minimizationprocedures.
The purpose of risk management is to achieve sustainable business growth protect theCompany's assets safeguard shareholders investments ensure compliance with applicablelaws and regulations and avoid major surprises of risks. The Policy is intended to ensurethat an effective risk management framework is established and implemented within theCompany.
INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY
The Board has laid down Internal Financial Controls and believes that the same arecommensurate with the nature and size of its business. Based on the framework of internalfinancial controls_ work performed by the internal statutory and_ external consultantsincluding audit of internal financial controls over financial reporting by the statutoryauditors and the reviews performed by the Management and the Audit Committee_ the Boardis of the opinion that the Company's internal financial controls were adequate andeffective during FY2016-17 for ensuring the orderly and efficient conduct of its businessincluding adherence to the Company's policies the safeguarding of its assets theprevention and detection of frauds and errors the accuracy and completeness of accountingrecords and timely preparation of reliable financial disclosures.
MANAGEMENT DISCUSSION AND ANALYSIS REPORT
Management Discussion and Analysis Report on the business outlook and performancereview for the year ended March 31 2017 as stipulated in Regulation 34 read withSchedule V of the Listing Regulations is available as a separate section which forms partof the Annual Report.
BUSINESS RESPONSIBILITY REPORT
Pursuant to Regulation 34(2)(f) of the Listing Regulations the Business Responsibilityinitiatives taken on environmental social and governance perspective in the prescribedformat is available as a separate section of the Annual Report and also hosted on theCompany's website http://www.allcargologistics. com/investors#financials-annual-reports.
CORPORATE SOCIAL RESPONSIBILITY INITIATIVES
The brief outline of the Corporate Social Responsibility (CSR) Policy of the Companyand initiatives undertaken by the Company on CSR activities during the year are set out inAnnexure 3 of this Report in the format prescribed in the Companies (CorporateSocial Responsibility) Rules 2014. The CSR Policy is hosted on the Company's websitehttp://www. allcargologistics.com/investors#investor-corporate-policies.
CONSOLIDATED FINANCIAL STATEMENTS
A statement containing the salient features of the Financial Statements including theperformance and financial position of each Subsidiaries Joint Ventures and Associatescompanies as per the provisions of the Act is provided in the prescribed
Form AOC -1 is annexed as Annexure 4.
Pursuant to Section 129 of the Act and Regulation 33 of the Listing Regulations theattached Consolidated Financial Statements of the Company and all its Subsidiaries JointVentures and Associate Companies have been prepared in accordance with the applicable IndAS provisions.
The Company will make available the said Financial Statements and related detailedinformation of the subsidiary companies upon the request by any Member of the Company.These Financial Statements will also be kept open for inspection by any Member at theRegistered Office of the Company during business hours on working days up to the date ofthe ensuing AGM.
Pursuant to the provisions of Section 136 of the Act the Standalone and ConsolidatedFinancial Statements of the Company along with relevant documents and separate auditedaccounts in respect of subsidiaries are available on the website of the Company.
SUBSIDIARIES JOINT VENTURES AND ASSOCIATES COMPANIES
During the year under review the names of the select overseas subsidiary companieshave been changed to align with the brand name ECU Worldwide.
During the year under review the following companies have become or ceased to beSubsidiaries Joint Ventures and/or Associates of the Company:
|Sr. ||Name of Company ||Relationship ||Change ||Effective |
|No. || || || ||Date |
|1 ||Avvashya CCI Logistics ||Subsidiary ||Acquired ||29.06.2016 |
| ||Private Limited* || || || |
|2 ||FCL Marine Agencies ||WOS ||Acquired ||07.09.2016 |
| ||Belgium bvba || ||balance shares ||50% |
|3 ||Ecu-Tech bvba ||Subsidiary ||Liquidated ||13.09.2016 |
|4 ||Ecu-Line Hungary Kft. ||Subsidiary ||Liquidated ||08.12.2016 |
|5 ||Oconca Shipping (HK) Ltd ||WOS ||Acquired ||30.12.2016 |
|6 ||Oconca Container Line ||WOS ||Acquired || |
| ||S.A. Ltd. || || || |
|7 ||Ecu Worldwide Canada Inc ||WOS ||Acquired balance shares ||01.01.2017 |
| || || || ||30% |
* As per Ind AS classified as Joint Venture
Further Asia Line Limited became indirect subsidiary of the Company w.e.f. March 302017 and Ecu International (Asia) Private Limited became direct subsidiary of the Companyw.e.f. March 31 2017.
The Policy for determining Material Subsidiary as approved by the Board is hosted onthe Company's website http://www.allcargologistics.com/investors#investor-corporate-policies.
PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES
All related party transactions / contracts / arrangements that were entered into by theCompany during the year under review were on an arm's length basis and in the ordinarycourse of business and were in compliance with applicable provisions of the Act and theListing Regulations. There are no material significant related party transactions made bythe Company with Promoters Directors Key Managerial Personnel or Senior ManagementPersonnel which may have a potential conflict with the interest of the Company at large.
All related party transactions were placed before the Audit Committee for its approvaland noting on quarterly basis. Prior omnibus approval of the Audit Committee is obtainedfor the transactions which are foreseen and of a repetitive nature. The transactionsentered into with related parties are certi_ed by the Management and the independentchartered accountant that the same are in the ordinary course of business and at arm'slength basis.
The Policy on materiality of Related Party Transactions and also on dealing withRelated Party Transactions as approved by the Board is hosted on the Company's websitehttp:// www.allcargologistics.com/investors#investor-corporate-policies.
The details of related party transactions that were entered during FY2016-17 are givenin the notes to the Financial Statements as per Ind AS 24 which forms part of the AnnualReport.
The details of acquisition of CFS business undertaking of TLPPL completed during theyear under review are set out in Form AOC-2 pursuant to Section 134(3)(h) of theAct and Rules framed thereunder is annexed as Annexure 5.
PARTICULARSOFLOANSGUARANTEESSECURITIES AND INVESTMENTS
The Company is engaged in the business of providing integrated logistics services whichfalls under the infrastructural facilities as categorized under Schedule VI of the Act.Hence the provisions of Section 186 of the Act are not applicable to the Company to theextent of loans given guarantees or securities provided. However as a good governancepractice of the Company the details of loans given guarantees and securities providedare annexed as Annexure 6. Details of investments made are provided in the Notes tothe Financial Statements.
Statutory Auditors and their Report
M/s S R Batliboi & Associates LLP Chartered Accountants were appointed as JointStatutory Auditors of the Company by the Members at the 22nd AGM held on August 10 2015to hold office upto the conclusion of 27th AGM of the Company to be held in the year 2020subject to ratification by the Members at every AGM held thereafter. Further M/s ShapariaMehta & Associates LLP Chartered Accountants were appointed as Joint StatutoryAuditors of the Company by the Members at the 23rd AGM held on August 10 2016 to holdoffice upto the conclusion of 28th AGM of the Company to be held in the year 2021 subjectto ratification by the Members at every AGM held thereafter.
M/s S R Batliboi & Associates LLP and M/s Shaparia Mehta & Associates LLP haveunder Sections 139 and 141 of the Act and Rules framed thereunder furnished certificatesof their eligibility and consent for their appointment. The said Joint Statutory Auditorshave confirmed that they hold valid certificates issued by the Peer Review Board of theInstitute of Chartered Accountants of India as required under the Listing Regulations. Theratification of appointment of the Joint Statutory Auditors is being sought from theMembers of the Company at the ensuing AGM.
Further the reports of the Joint Statutory Auditors along with the notes on theFinancial Statements are enclosed to this Report. The observations made in the Auditors'Report are self-explanatory and therefore do not call for any further comments.
The Auditors' Reports do not contain any qualification reservation adverse remarks ordisclaimer.
Pursuant to Section 204 of the Act and Rules framed thereunder the Company hasappointed Ms Dipti Mehta of M/s Mehta & Mehta a firm of Company Secretaries inpractice to undertake the Secretarial Audit of the Company for FY2016-17. The Report ofSecretarial Auditor in Form MR-3 for FY2016-17 is annexed as Annexure 7.
The Secretarial Audit Report does not contain any qualification reservation adverseremark or disclaimer.
No instance of fraud has been reported by the Auditors.
PARTICULARS OF EMPLOYEES
The details of employees remuneration as required under Section 197(12) of the Actread with Rule 5(1) of the Companies (Appointment and Remuneration of ManagerialPersonnel) Rules 2014 is annexed as Annexure 8.
The statement containing particulars of employees as required under Section 197(12) ofthe Act read with Rule 5(2) and (3) of the Companies (Appointment and Remuneration ofManagerial Personnel) Rules 2014 forms part of this Report. Further in terms of Section136 of the Act the Annual Report and the Audited Financial Statements are being sent tothe Members and others entitled thereto excluding the aforesaid statement. The saidstatement is available for inspection by the Members at the Registered Office of theCompany during business hours on working days up to the date of the ensuing AGM. If anyMember is interested in obtaining a copy thereof such Member may write to the CompanySecretary in this regard. None of the employees who are posted and working in a countryoutside India not being Directors or their relatives draw remuneration more than thelimits prescribed under Rule 5(3) of the Companies (Appointment and Remuneration ofManagerial Personnel) Rules 2014.
During the year under review none of Directors of the Company or their relatives hasreceived any remuneration from the Subsidiary companies.
SAFETY HEALTH AND ENVIRONMENT
The Company is committed towards bringing safety and environment awareness among itsemployees. It also believes in safety and health enrichment of its employees and committedto provide a healthy and safe workplace for all its employees. Successfully managingHealth and Safety risks is an essential component of our business strategy. The Companyhas identified Health and Safety risk arising from its activities and has put propersystems processes and controls mechanism to mitigate them.
The Company has been taking various initiatives and participating in programs of safetyand welfare measures to protect its employees equipments and other assets from anypossible loss and/or damages. To implement such safety and welfare measures the Companyhas formulated various policies such as Drug and Alcohol Policy Occupational HealthPolicy Driver and Vehicle Safety Policy Fire Safety Policy Mobile Telephone PolicySmoking Policy etc.
The Project and Equipments division of the Company has successfully renewed its OHSAS18001:2007 Standards Certification as well as Lifting Equipment Engineers Association
(LEEA) Certification. It is a testimony that the Company is maintaining very highsafety standards as well as ensures the use of quality equipments and follow the bestHealth and Safety practices as per LEEA standards.
The following safety measures are taken at various locations:
Fire and Safety drills are conducted for all employees and security personneland all Fire hydrants are monitored strictly as the preparedness for emergency.
Safety Awareness Campaign Safety week Environment day are held/celebrated ateach location to improve the awareness of employees.
Each equipment is put through comprehensive Quality Audit and Testing to ensurestrong compliance to Maintenance Safety and Reliability aspects as per the specificationsby various Original Equipments Manufacturer. All equipments are mandatorily ensured withPUC. Fitness certificates are issued based on the compliance of the safety norms.
Regular training/skills to staff and contractors to inculcate importance ofsafety amongst them. Further handling of Hazardous Material training and Terrorist ThreatAwareness Training are provided to all CFS employees.
Created checks and awareness among drivers about negatives of alcohol and drugconsumptions and impact on their families.
Accident prone routes identified and supervisors allocated to have control overthe vehicle movement.
OHSAS audits and Fire and Safety audits are conducted by competent agencies atregular intervals.
Fortnightly visit by Doctors to office for medical counseling of employees.Further Medical Health check-up of all employees are conducted at regular intervals.
CCTV and Safety alarms are installed at each locations.
Green initiatives are taken at various locations to protect the environment.
CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION FOREIGN EXCHANGE EARNINGS AND OUTGO
The information on Conservation of Energy Technology Absorption Foreign ExchangeEarnings and Outgo as stipulated under Section 134(3)(m) of the Act and Rules framedthereunder is annexed as Annexure 9.
DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION PROHIBITIONAND REDRESSAL) ACT 2013
The Company has in place an Anti-Sexual Harassment Policy in line with the requirementsof the Sexual Harassment of Women at the Workplace (Prevention Prohibition and Redressal)Act 2013. The Complaints Committee redresses the complaint received regarding sexualharassment of women at workplace. All employees (permanent contractual temporarytrainees) are covered under this Policy.
During the year under review no complaints of sexual harassment were received and twoAwareness Program about Sexual Harassment Policy were conducted and held at workplace.
The Company has submitted its Annual Report on the cases of sexual harassment atworkplace to District Officer Mumbai pursuant to Section 21 of the aforesaid Act andrules framed thereunder.
EXTRACT OF ANNUAL RETURN
Pursuant to Section 92(3) of the Act and Rules framed thereunder an extract of theAnnual Return in Form MGT9 is annexed as Annexure 10.
DIRECTORS' RESPONSIBILITY STATEMENT
Pursuant to Section 134(3)(c) read with Section 134(5) of the Act the Board to thebest of their knowledge and ability confirm that -
a) in the preparation of the annual accounts the applicable accounting standards havebeen followed along with proper explanation relating to material departures if any;
b) they have selected such accounting policies and applied them consistently and madejudgments and estimates that are reasonable and prudent so as to give a true and fair viewof the state of affairs of the Company as at March 31 2017 and of the profit for thatperiod;
c) they have taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of this Act for safeguarding theassets of the Company and for preventing and detecting fraud and other irregularities;
d) they have prepared the annual accounts on a going concern basis;
e) they have laid down internal financial controls to be followed by the Company andthat such internal financial controls are adequate and were operating effectively; and
f) they have devised proper systems to ensure compliance with the provisions of allapplicable laws and that such systems are adequate and operating effectively.
The Directors wish to place on record their appreciation for the continued co-operationand support extended to the Company by customers vendors regulators banks financialinstitutions rating agencies stock exchanges depositories auditors legal advisorsconsultants business associates during the year. The Directors also conveys theirappreciation to employees at all levels for their contribution dedicated services andconfidence in the management.
For and on behalf of the Board of Directors
| ||Shashi Kiran Shetty |
| ||Chairman and Managing Director |
|Place : Mumbai ||(DIN: 00012754) |
|Date : May 22 2017 || |