AQUA LOGISTICS LIMITED
ANNUAL REPORT 2011-2012
The Members of
Aqua Logistics Limited
Your Directors are pleased to present the Thirteenth Annual Report of the
Company along with Audited Statement of Accounts for the period ended on
31st March, 2012.
Your Company's performance during the year under review is summarized
(Rs. in Lacs)
Particulars For the year ended
Sales & Other Income 31298.97 38215.29
Profit Before Depreciation, Interest and Taxes 1735.95 3661.76
Interest and Financial Charges 1178.27 725.00
Depreciation 386.84 388.37
Profit before Tax 170.84 2548.39
Provision For Tax 40.00 141.56
Deferred Tax Liability 15.47 120.13
Profit after Tax Before Prior Period Item (NET) 115.37 2286.70
Prior Period Items (NET) 0.00 47.70
Profit After Tax 115.37 2239.00
Profit brought forward from Previous Year 6038.37 3,799.37
Profit carried to Balance Sheet 6153.74 6038.37
REVIEW OF OPERATIONS
During the year, your Company has registered Income from operations of
Rs.31,035.01 lacs as compared to Rs. 38,087.93 lacs in the previous year.
Profit before Depreciation, Interest and Tax (PBDIT) has decreased from Rs.
3661.76 lacs for the year ended March 31, 2011 to Rs. 1735.95 lacs showing
the decrease of 52.59%. During FY 2012, your Company has recorded PBDIT of
5.55% of the income from operations as against 9.58% during FY 2011. The
reduction in operating margin is due to decrease in income from operation..
During the year, Profit after Tax (PAT) has decreased from Rs. 2239.00 lacs
for the FY 2011 to Rs. 115.37 lacs in FY 2012 due to decrease in income
from operations. During FY 2012 your Company recorded PAT margin of 0.37%
as against 5.86% for FY 2011.
The Directors of your Company are currently doing their best to improve the
Company's earning and the results show up in the ensuing quarters.
BUSINESS & FUTURE OUTLOOK
Business is not usual due to the changing trends and volatile market
conditions. Your Company is making enormous efforts to streamline all its
business verticals; be it Distribution of Resources to various verticals or
the strategy itself. Allocation of resources is currently being done based
on the latest information and purely based on cash-flows. The expected
effect is to increase in our clientele base and to improve customer
satisfaction, trust and collaborate more with clients on their specific
demands and requirement. This is truly a differentiator at Aqua Logistics
Changes are taking place as you are reading this on Strategic Level,
Operational & Tactical Levels. Aqua Logistics has gone through all the
different eras starting from just being a logistics support provider on to
becoming a truly world class SCM Company. Aqua Logistics understands the
need to specialize and is poised to becoming a fully integrated SCM Company
so that more and more clients stay focused on their core competencies and
let the SCM handled by Aqua Logistics. More focus being laid on
understanding Customer's manufacturing, installation and service management
processes. So, the focus for the future shall be on controlling cost and
improving services of customers. Special Focus shall be laid on
productivity measures to utilize more of our capacities and all the above
with unmatchable speed and eficiency is assured to our clients and
In order to conserve the profits of the business of the company, to meet
the growing funding requirements, your Directors have not recommended any
dividend for the year under report.
Your Company has neither invited nor accepted any deposits from public,
within the meaning of section 58A of the Companies Act, 1956 and Rules made
In accordance with the General Circular no. 2/2011 File no. 51/12/2007-CL-
III dated 8th February, 2011 issued by the Ministry of Corporate Affairs,
Government of India, granting general exemption to the Companies Under
Section 212 (8) of the Companies Act, 1956 the Balance Sheet, Profit and
Loss Account and other Reports and statement of the Subsidiary Companies
are not being attached with the Balance Sheet of the Company. A summary of
the financial information of the subsidiary companies is also attached to
the Annual Report of the Company.
AMOUNT TO BE CARRIED TO RESERVES
Since it is not proposed to declare any dividend, the entire amount of
Rs.115.37 lacs is proposed to be transferred to the Reserves of the
M/s. Anil Nair & Associates, Chartered Accountants, Chennai, the Statutory
Auditors of the Company, retires at the conclusion of this Annual General
Meeting. They have furnished a certificate stating that their appointment
if made will be within the limits laid down u/s 224 (1B) of the Companies
Act, 1956. The Board recommends re-appointment of M/s. Anil Nair &
Associates as Statutory Auditors of the Company for the current financial
year and to fix their remuneration.
The notes to the Annual Accounts of the Company, referred to in the
Auditor's Report are self - explanatory and do not require any clariication
from the Board.
Pursuant to the provisions of the Companies Act, 1956 and Articles of
Association of the Company, Mr. S.S. Balakrishnan who has appointed to fill
the casual vacancy which was arising out of resignation of Mr. V.S.
Narayanan is liable to retire by rotation at the ensuring Annual General
Meeting of the Company and being eligible, have offered himself for
Mr. V. S. Narayanan resigned as Director with effect from 5th December,
2011 due to his personal works. The Board placed on record appreciation of
his service to the Company during his tenure of directorship.
DIRECTORS' RESPONSIBILITY STATEMENT
Pursuant to the requirement under section 217 (2AA) of the Companies
(Amendment) Act, 2000, with respect to Directors' responsibility statement,
it is hereby confirmed:
1. that in the preparation of the accounts for the financial year ended
31st March, 2012, the applicable accounting standards have been followed
along with proper explanation relating to material departures;
2. that the directors have 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 at the end of the financial year and of the profit or loss of the
Company for the period under review;
3. that the directors have taken proper and sufficient care for the
maintenance of adequate accounting records in accordance with the
provisions of the Companies Act, 1956 for safeguarding the assets of the
Company and for preventing and detecting fraud and other irregularities;
4. that the Directors have prepared the accounts for the financial year
ended 31st March, 2012 on a going concern basis.
PARTICULARS OF CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN
EXCHANGE EARNINGS AND OUTGO
PARTICULARS UNDER SECTION 217(1)(e) OF THE COMPANIES ACT, 1956
Conservation of Energy
The Operations of the Company do not consume high levels of energy.
Adequate measures have been taken to conserve energy everywhere. Your
Company uses latest technology and energy efficient equipments. As energy
cost forms a very small part of the total costs, the impact on cost is not
Technology Absorption, Adaptation and Innovation
Your Company is in an Industry, which demands absorption of emerging
technologies and trends so as to cater to the needs of its esteemed
Clients. Your Company has developed methods for absorption and adaptation
of new / emerging / developing technologies, in consonance with the needs
of its Clients and its own requirements.
Foreign Exchange Earnings and Outgo
The Earnings in Foreign Exchange were ? 278.96 lacs (Previous Year ? 61.87
lacs) as against Expenditure incurred in Foreign Currency of ? 238.05 Lacs
(Previous Year ? 936.17 lacs). Since the Company does not own any
manufacturing facilities, the other particulars under the Companies
(Disclosure of Particulars in the Report of the Board of Directors) Rules,
1988 are not applicable.
PARTICULARS OF EMPLOYEES
None of employees has received remuneration/salary exceeding the limit as
stated in Section 217(2A) of the Companies Act, 1956 read with the
Companies (Particulars of Employees) Rules, 1975 as amended.
Your Directors hereby wish to place on record their appreciation of the
significant contribution made by each and every employee of the Company.
The Directors also thank all other stakeholders for their support and
encouragement. Your Directors look forward to your continued support in the
years to come.
For and on behalf of the Board of Directors
Place : Mumbai Chairman
Dated : 4th September, 2012
MANAGEMENT DISCUSSION AND ANALYSIS
I. Economic Outlook
The growth prospects of the logistics industry are linked to the macro-
economic indicators of the country such as GDP, domestic consumption,
exports, and imports. With the Indian economy aiming to achieve a GDP
growth rate of 9 %, which in turn would augment the growth of its
international trade, the logistics industry in the country will grow
further in importance. India's Gross Domestic Product at constant prices
has almost quadrupled in the last two decades. From a slower average annual
growth rate of 5.6% in the 1990s to a moderately faster average annual
growth rate of 7.7% in the first decade of 2000, the growth journey has
excited many investors both in India and abroad. The latter part of 2000s
particularly in the period 2008-09 to 2010-11 recorded an average annual
growth of 8.3%
The slowdown we witnessed in 2011-12 is expected to be temporary as the
fundamentals of Indian economy are evaluated to be strong with high
investment rate of 36% and growing domestic demand. IMF Economic Outlook
forecasts the Indian GDP to be growing at 8.1% till 2016.
Indian Logistics Industry
Logistics cost in India is estimated to be 13% of GDP, which is much higher
than the developed economies like USA which spends around 10% of its GDP as
logistics cost and Japan which spends 11% of its GDP for the same. The
reason for this high spending is attributed to poor infrastructure
facilities, lack of implementation of IT in logistics and unnecessary check
points at the National highways which wastefully increases the
transportation costs. India can save upto US$ 7.13 Billion each year in the
event of a reduction in logistics cost by 1%.
Indian logistics industry is approx. 3% of the global logistics and is
highly fragmented so far. Logistics industry comprises of three major
segments - transportation, storage and value added services. Based on the
analysis of various sub - segments in the Indian context on various
comparative factors, Companies in the storage and the value added service
segments are well - placed to capitalize on growing Indian economy.
The evolving business landscape and increasing competition across
industries, is creating the need for more efficient and reliable logistics
services than what exists today. The growth drivers for the Industry can be
summarized as follows -
* GDP growth and rise of 3PL services - Most companies across industries
like automotive, electronics, FMCG and pharmaceutical sectors are
increasingly opting to outsource their logistics requirements to
specialized 3PLs. This has created a demand for a range of logistics
services which will benefit the productivity and eficiency of the customers
* Investments in infrastructure - Given the current thrust on
infrastructure investments, the growth and efficiency of Logistics Service
Providers as well as their customers will be positively impacted. The
government has planned investments in infrastructure development amounting
Rs 20,00,000 Crore in the next 5 years. This will prove to be a major
beneit for the logistics industry.
* Qualified work force - There has been a sudden transformation in the
scale and scope of activities within the logistics sector. This growth rate
needs to be supported with a parallel growth of skilled and trained
manpower. Attracting and retaining talent is a major problem faced by
Companies in the logistics business. There is a need to incorporate a high
degree of professionalism in the functioning and approach of the Companies
in this business.
* GST Implementation to Accelerate India's growth on Logistics front -
Goods & Services Tax (GST) to be implemented in FY13 would do away with
multiple taxations and other complexities that the logistics providers have
to deal with in different states of India. This will boost investments in
large warehouses with latest technologies thereby gaining economies of
scale. This in turn will increase the attractiveness of integrated
logistics companies, which can provide end - to - end logistics solutions.
* Emergence of new Storage Models - Several players in India such as
Multimodal Logistics Park (MMLP), Mega Food Parks (MFP) and Free Trade
Warehousing Zones (FTWZ), have announced next generation storage models.
These large scale projects are expected to significantly improve the
quality of warehousing and storage space in the Country, while allowing the
Customers to reduce costs through economies of scale, government incentives
offered and optimal usage of multiple modes of transportation.
Risks and Concerns
Adequate measures have been adopted by your Company to combat various
risks, including business risks (competition, consumer preferences,
technology changes), financial risks (cost, credit, liquidity, foreign
exchange), operational risks (system, process, people) and regulatory and
Your Company has a well-established risk management framework which covers
aspects of financial and operational controls. Risks are identified through
formal Risk management discussions with the active involvement of
functional managers and senior management personnel at both operational and
Internal Control Systems and their adequacy
Your Company has appropriate internal control system for business
processes, with regards to efficiency of operations, financial reporting,
compliance with applicable laws and regulations.
Clearly defined roles and responsibilities down the line for all managerial
positions have been institutionalised. All operating parameters are
monitored and controlled. The Company has also put in place a well -
defined organisation structure, clear authority levels and detailed
internal guidelines for conducting business transactions.
Material developments in Human Resources
People are one of your Company's biggest strength. Your Company has been
able to fine-tune talent with modern technologies and ever changing
corporate environment. Your Company firmly believes that people make the
organisation and that a sense of belonging would inculcate the spirit of
dedication and loyalty amongst them. Your Company recruits professionals of
high academic achievement, experience and behavioural competencies across
operations, supply chain consulting and marketing functions.
Certain statements made in the Management Discussion and Analysis Report
relating to the Company's objectives, projections, outlook, expectations,
estimates and other issues may constitute 'forward looking statements'
within the meaning of applicable laws and regulations. Actual results may
differ from such expectations, projections, and so on, whether express or
implied. Several factors could make a significant difference to the
Company's operations. Important development that could affect your
Company's operations include climatic conditions, macro-economic conditions
affecting demand and supply, government regulations, taxation, natural
calamities and so on, over which the Company does not have any direct