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Allcargo Logistics Ltd.

BSE: 532749 Sector: Others
NSE: ALLCARGO ISIN Code: INE418H01029
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VOLUME 40727
52-Week high 249.00
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P/E 19.51
Mkt Cap.(Rs cr) 5,962
Buy Price 242.50
Buy Qty 164.00
Sell Price 242.80
Sell Qty 1.00
OPEN 246.00
CLOSE 245.25
VOLUME 40727
52-Week high 249.00
52-Week low 113.20
P/E 19.51
Mkt Cap.(Rs cr) 5,962
Buy Price 242.50
Buy Qty 164.00
Sell Price 242.80
Sell Qty 1.00

Allcargo Logistics Ltd. (ALLCARGO) - Auditors Report

Company auditors report

TO THE MEMBERS OF ALLCARGO LOGISTICS LIMITED

Report on the Audit of the Standalone Ind ASFinancial Statements

Opinion

We have audited the accompanying standalone Ind AS financial statementsof Allcargo Logistics Limited ("the Company") which comprise the Balance sheetas at March 31 2020 the Statement of Profit and Loss including the statement of OtherComprehensive Income the Cash Flow Statement and the Statement of Changes in Equity forthe year then ended and notes to the standalone Ind AS financial statements including asummary of significant accounting policies and other explanatory information.

In our opinion and to the best of our information and according to theexplanations given to us the aforesaid standalone Ind AS financial statements give theinformation required by the Companies Act 2013 as amended ("the Act") in themanner so required and give a true and fair view in conformity with the accountingprinciples generally accepted in India of the state of affairs of the Company as at March31 2020 its profit including other comprehensive income its cash flows and the changesin equity for the year ended on that date.

Basis for Opinion

We conducted our audit of the standalone Ind AS financial statements inaccordance with the Standards on Auditing (SAs) as specified under section 143(10) of theAct. Our responsibilities under those Standards are further described in the 'Auditor'sResponsibilities for the Audit of the Standalone Ind AS Financial Statements' section ofour

report. We are independent of the Company in accordance with the 'Codeof Ethics' issued by the Institute of Chartered Accountants of India together with theethical requirements that are relevant to our audit of the financial statements under theprovisions of the Act and the Rules thereunder and we have fulfilled our other ethicalresponsibilities in accordance with these requirements and the Code of Ethics. We believethat the audit evidence we have obtained is sufficient and appropriate to provide a basisfor our audit opinion on the standalone Ind AS financial statements.

Key Audit Matters

Key audit matters are those matters that in our professional judgmentwere of most significance in our audit of the standalone Ind AS financial statements forthe financial year ended March 312020. These matters were addressed in the context of ouraudit of the standalone Ind AS financial statements as a whole and in forming our opinionthereon and we do not provide a separate opinion on these matters. For each matter belowour description of how our audit addressed the matter is provided in that context.

We have determined the matters described below to be the key auditmatters to be communicated in our report. We have fulfilled the responsibilities describedin the Auditor's responsibilities for the audit of the standalone Ind AS financialstatements section of our report including in relation to these matters. Accordingly ouraudit included the performance of procedures designed to respond to our assessment of therisks of material misstatement of the standalone Ind AS financial statements. The resultsof our audit procedures including the procedures performed to address the matters belowprovide the basis for our audit opinion on the accompanying standalone Ind AS financialstatements.

Key audit matters How our audit addressed the key audit matter
Recoverability of trade receivables (as described in Note 7.3 of the standalone Ind AS financial statements)
The gross balance of trade receivables as at 31 March 2020 amounted to Rs38163 lakhs against which the Company has recorded expected credit loss provision of Rs6752 lakhs. The collectability of trade receivables is a key element of the Company's working capital management. As part of our audit procedures:
• We obtained an understanding of the Company's policies and processes relating to monitoring of trade receivables and review of credit risk of customers evaluated the design and tested the operating effectiveness of financial controls in this area relevant to our audit.
The Company has a formal policy for evaluation of recoverability of receivables and recording of impairment loss which is applied at every period-end. In accordance with Ind AS 109 the Company applies expected credit loss (ECL) model for measurement and recognition of impairment loss on trade receivables which is based on the credit loss incurred in the past current conditions and forecasts of future conditions. In calculating expected credit loss the Company has also considered customer accounts as well as experience with collection trends and current economic and business conditions and has taken into account estimates of possible effect from the pandemic relating to COVID -19.
• Examined the management's assessment of the customers' financial circumstances and ability to repay the debt.
• Circularized requests for balance confirmations on sample basis and examined responses.
• Obtained evidence of receipts from customers.
• Inspected relevant contracts and correspondence with the customers on sample basis assessment of their creditworthiness with reference to publicly available information where applicable.
• Evaluated management's estimates and the inputs used by management for development of the ECL model analysis of ageing of receivables assessment of material overdue individual trade receivables including specific customer balances and sector exposure.
The Company's disclosures are included in Note 2.2(e) Note 2.2(r) and Note 7.3 to the financial statements which outlines the accounting policy for determining the allowance for doubtful debts and details of the period on period movement in gross and net trade receivables. • We tested the mathematical accuracy and computation of the allowances by using the same input data used by the Company.
Income Taxes - recoverability of deferred tax assets (as described in Note 8 of the standalone Ind AS financial statements)
At March 312020 the Company had net deferred tax assets of Rs3746 lakhs which include Minimum Alternate Tax (MAT) of Rs10889 lakhs paid in accordance with the income-tax provisions. MAT is recognized as deferred tax asset in the balance sheet based on a judgment that it is probable that the future economic benefit in the form of availability of set off against future income tax liability will be realized. Some of the Company's units are located in tax-free zone/ area from which the profit earned is not subject to income- tax and this results in the Company being subject to paying MAT. The recognition of MAT and its subsequent assessment of recoverability within the allowed time frame involves significant estimate of the financial projections availability of sufficient taxable income in the future and significant judgements in the interpretation of tax regulations and tax positions adopted by the management based on which we determined MAT to be a key audit matter. As part of our audit procedures:
• We evaluated the Company's accounting policies with respect to recognition of tax credits in accordance with Ind AS 12 "Income Taxes".
• We obtained an understanding of the process relating to recognition and assessment of recoverability of deferred tax asset and evaluated the design and tested the operating effectiveness of financial controls in this area relevant to our audit.
• We have evaluated the Company's assumptions and estimates in relation to the likelihood of generating sufficient future taxable income based on most recent budgets and plans prepared by management principally by performing sensitivity analysis and evaluated and tested the key assumptions used to determine the amounts recognized.
• We assessed the reasonableness of management's business plans considering the relevant economic and industry indicators.
The Company's disclosures are included in Note 2.2(f) and Note 8 to the financial statements which outlines the accounting policy for taxes and details of the period on period movement in deferred tax assets and liabilities.
• We involved our tax specialists who evaluated the Company's tax positions.
• We have tested the mathematical accuracy of tax calculation and the MAT balance.
• We assessed the disclosures in accordance with the requirements of Ind AS 12 "Income Taxes".
Provisions and contingent liabilities including taxation related matters (as described in Note 26 of the standalone Ind
AS financial statements)
The Company is contesting direct tax indirect tax and legal cases and management exercises judgment in estimating the likelihood of any liability crystalizing on the Company. The evaluation of management's judgments including those that involve estimations in assessing the likelihood that a pending claim will succeed or a liability will arise and the quantification of the potential financial settlement have been identified as key audit matter during the current year audit. Evaluation of the outcome of the direct tax indirect tax and legal cases and whether the risk of loss is more likely than not or remote requires significant judgment by management. As part of our audit procedures:
• We evaluated the Company's policy and processes for direct tax indirect tax and legal cases.
• We evaluated the design and tested the operating effectiveness of the Company's controls over the assessment of litigation and disclosures thereof.
• We examined regulatory correspondence to assess development in all pending cases against the Company.
• We discussed the status and potential exposures in respect of significant litigation and claims with the Company's internal legal team including their views on the likely outcome of each litigation and claim and the magnitude of potential exposure and sighted any relevant opinions given by the Company's advisors.
The Company's disclosures are included in Note 2.2(o) 2.2(p) and Note 26 to the financial statements which outlines the accounting policy for contingent liabilities and details of pending legal and direct and indirect tax litigation disclosed as contingent liabilities.
• For tax matters we involved our tax specialists to assess management's application and interpretation of tax legislation affecting the Company and to consider the quantification of exposures and settlements arising from the disputes with the tax authorities in the various tax jurisdictions.
Impact on adopting India Accounting Standard 116 Leases (as described in Note 3 and Note 32 of the standalone Ind AS financial statements)
Ind AS 116 replaces the existing standard Ind AS 17 and specifies how an Ind AS reporter will recognize measure present and disclose leases. The standard provides a single lessee accounting model requiring lessees to recognize assets and liabilities for all leases unless the lease term is 12 months or less or the underlying asset has a low value. As part of our audit procedures:
• We assessed the management evaluation of the application of Ind AS 116 and tested the resulting impact on the balance sheet and income statement. We have assessed whether the accounting regarding leases is consistent with the definitions of Ind AS 116
The Company has adopted Ind AS 116 "Leases" with effect from April 01 2019 using modified retrospective method and has recognised Right-of-Use (ROU) asset in Property Plant and Equipment (PP&E) amounting to Rs8422 lakhs and a corresponding lease liability of Rs8149 lakhs as on date of transition i.e. April 12019. Operating lease expenses which were recognised as other expenses in previous year are now recognised as depreciation expense for the ROU and the finance cost for interest accrued on lease liability in the financial statement for the year ended on March 312020. including factors such as lease term discount rate and measurement principles.
• We assessed the design and operating effectiveness of key financial controls pertaining to the determination of the Ind AS 116 transition impact disclosures.
• We assessed the Company's evaluation on the identification of leases based on the contractual agreements and our knowledge of the business.
• We read a sample of contracts to assess whether leases have been appropriately identified agreed the inputs used in the quantification to the lease agreements the discount rate applied and performed computation checks.
As at March 31 2020 the Company had ROU of Rs6906 lakhs and lease liability of Rs6966 lakhs.
The implementation of Ind AS 116 is considered a key audit matter due to judgment required in the assumptions and estimates made related to assessment of lease term and determination of appropriate discount rates.
• We assessed the discount rates applied.
• We assessed the disclosures with the requirements of Ind AS 116 including disclosures relation to transition.
The Company's disclosures are included in Note 2.2(m) Note 3 and Note 32 to the financial statements which outlines the accounting policy for leases and details of the period on period movement in ROU and lease liability.
Accounting for the Business Transfer Agreement (“BTA") and subsequent divestment (as described in Note 37 of the standalone Ind AS financial statements)
During the year the Company transferred its warehouses and other assets of Logistics Park Business ('Business Undertaking") to some of its wholly owned subsidiaries ('WOS') by way of a Business Transfer Agreement (BTA) under slump sale arrangement. Accordingly the financial statements include gain arising on account of transfer of Business Undertakings under the BTA of Rs8858 lakhs net of cost of transfers. As part of our audit procedures
• We read the BTA SSPA and framework agreement.
• We evaluated management assessment in relation to conditions precedent.
• We obtained the bank statement to verify the receipt of consideration.
• We tested the reconciliation of the net assets disposed to underlying accounting records.
Further the Company entered into a framework agreement and securities subscription and purchase agreement ('SSPA") with BRE Asia Urban Holdings Limited ('Investor") for divestment of its stake in the identified WOS. The divestment is expected in a phase manner over the next 12 months subject to satisfaction of customary closing conditions and achievement of certain milestone as prescribed in the transaction documents.
• We evaluated the recognition of divestment gain and the gain recorded on fair valuation of the balance investment held by the Company in the divested WOS.
• We obtained the put option valuation report prepared by the valuation specialist engaged by the management. We have also involved our valuation specialist to assess the valuation methodology and assumptions used.
The framework agreement specified that if certain Conversion Conditions Precedent specified in the relevant SSPA are not satisfied within the period stipulated therein the Company together with the identified WOS shall acquire the debentures and equity held by the Investor in the specified WOS in accordance with the terms and conditions of Agreement and in the event of failure of which the Investor will be entitled to exercise the Investor's Put Option as set out in framework agreement. • We assessed the disclosures included in the financial statements in accordance with the applicable accounting standards.
On satisfaction of the condition precedent as specified in the relevant SSPA the Company has divested its control in certain WOS. The financial of the Company includes gain arising of Rs677 lakhs on account of equity stake sold and Rs75 lakhs on account of fair valuation of remaining equity stake in respect of these WOS.
We considered the above transaction to be a key audit matter as these divestments had a significant effect on the Financial Statements. In addition Company is exposed to contingencies on account of the Investor Put Option which cannot be estimated with certainty and the assessment as to whether or not a liability should be recognised and whether amounts can be reliably estimated requires management to form significant judgment.
The Company's disclosures are included in Note 37 to the financial statements which outlines the accounting policy for divestments and details of the said transaction.

Information Other than the Financial Statementsand Auditor's Report Thereon

The Company's Board of Directors is responsible for the otherinformation. The other information comprises the information included in the Annualreport but does not include the standalone Ind AS financial statements and our auditor'sreport thereon.

Our opinion on the standalone Ind AS financial statements does notcover the other information and we do not express any form of assurance conclusionthereon.

In connection with our audit of the standalone Ind AS financialstatements our responsibility is to read the other information and in doing so considerwhether such other information is materially inconsistent with the financial statements orour knowledge obtained in the audit or otherwise appears to be materially misstated. Ifbased on the work we have performed we conclude that there is a material misstatement ofthis other information we are required to report that fact. We have nothing to report inthis regard.

Responsibilities of Management for the StandaloneInd AS Financial statements

The Company's Board of Directors is responsible for

the matters stated in section 134(5) of the Act with respect to thepreparation of these standalone Ind AS financial statements that give a true and fair viewof the financial position financial performance including other comprehensive incomecash flows and changes in equity of the Company in accordance with the accountingprinciples generally accepted in India including the Indian Accounting Standards (Ind AS)specified under section 133 of the Act read with the Companies (Indian AccountingStandards) Rules 2015 as amended. This responsibility also includes maintenance ofadequate accounting records in accordance with the provisions of the Act for safeguardingof the assets of the Company and for preventing and detecting frauds and otherirregularities; selection and application

of appropriate accounting policies; making judgments and estimates thatare reasonable and prudent; and the design implementation and maintenance of adequateinternal financial controls that were operating effectively for ensuring the accuracy andcompleteness of the accounting records relevant to the preparation and presentation ofthe standalone Ind AS financial statements that give a true and fair view and are freefrom material misstatement whether due to fraud or error.

In preparing the standalone Ind AS financial statements management isresponsible for assessing the Company's ability to continue as a going concerndisclosing as applicable matters related to going concern and using the going concernbasis of accounting unless management either intends to liquidate the Company or to ceaseoperations or has no realistic alternative but to do so.

The Board of Directors are also responsible for overseeing theCompany's financial reporting process.

Auditor's responsibilities for the Audit of thestandalone ind As Financial statements

Our objectives are to obtain reasonable assurance about whether thestandalone Ind AS financial statements as a whole are free from material misstatementwhether due to fraud or error and to issue an auditor's report that includes our opinion.Reasonable assurance is a high level of assurance but is not a guarantee that an auditconducted in accordance with SAs will always detect a material misstatement when itexists. Misstatements can arise from fraud or error and are considered material ifindividually or in the aggregate they could reasonably be expected to influence theeconomic decisions of users taken on the basis of these standalone Ind AS financialstatements.

As part of an audit in accordance with SAs we exercise professionaljudgment and maintain professional skepticism throughout the audit. We also:

• Identify and assess the risks of material misstatement of thestandalone Ind AS financial statements whether due to fraud or error design and performaudit procedures responsive to those risks and obtain audit evidence that is sufficientand appropriate to provide a basis for our opinion. The risk of not detecting a materialmisstatement resulting from fraud is higher than for one resulting from error as fraudmay involve collusion forgery intentional omissions misrepresentations or the overrideof internal control.

• Obtain an understanding of internal control relevant to theaudit in order to design audit procedures that are appropriate in the circumstances. Undersection 143(3)

(i) of the Act we are also responsible for expressing our opinion onwhether the Company has adequate internal financial controls with reference to financialstatements in place and the operating effectiveness of such controls.

• Evaluate the appropriateness of accounting policies used and thereasonableness of accounting estimates and related disclosures made by management.

• Conclude on the appropriateness of management's use of the goingconcern basis of accounting and based on the audit evidence obtained whether a materialuncertainty exists related to events or conditions that may cast significant doubt on theCompany's ability to continue as a going concern. If we conclude that a materialuncertainty exists we are required to draw attention in our auditor's report to therelated disclosures in the financial statements or if such disclosures are inadequate tomodify our opinion. Our conclusions are based on the audit evidence obtained up to thedate of our auditor's report. However future events or conditions may cause the Companyto cease to continue as a going concern.

• Evaluate the overall presentation structure and content of thestandalone Ind AS financial statements including the disclosures and whether thestandalone Ind AS financial statements represent the underlying transactions and events ina manner that achieves fair presentation.

We communicate with those charged with governance regarding amongother matters the planned scope and timing of the audit and significant audit findingsincluding any significant deficiencies in internal control that we identify during ouraudit.

We also provide those charged with governance with a statement that wehave complied with relevant ethical requirements regarding independence and tocommunicate with them all relationships and other matters that may reasonably be thoughtto bear on our independence and where applicable related safeguards.

From the matters communicated with those charged with governance wedetermine those matters that were of

most significance in the audit of the standalone Ind AS financialstatements for the financial year ended March 31 2020 and are therefore the key auditmatters. We describe these matters in our auditor's report unless law or regulationprecludes public disclosure about the matter or when in extremely rare circumstances wedetermine that a matter should not be communicated in our report because the adverseconsequences of doing so would reasonably be expected to outweigh the public interestbenefits of such communication.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor's Report) Order 2016("the Order") issued by the Central Government of India in terms of sub-section(11) of section 143 of the Act we give in the "Annexure 1" a statement on thematters specified in paragraphs 3 and 4 of the Order.

2. As required by Section 143(3) of the Act we report that:

(a) We have sought and obtained all the information and explanationswhich to the best of our knowledge and belief were necessary for the purposes of ouraudit;

(b) In our opinion proper books of account as required by law havebeen kept by the Company so far as it appears from our examination of those books;

(c) The Balance Sheet the Statement of Profit and Loss including theStatement of Other Comprehensive Income the Cash Flow Statement and Statement of Changesin Equity dealt with by this Report are in agreement with the books of account;

(d) In our opinion the aforesaid standalone Ind AS financialstatements comply with the Accounting Standards specified under Section 133 of the Actread with Companies (Indian Accounting Standards) Rules 2015 as amended;

(e) On the basis of the written representations received from thedirectors as on March 312020 taken on record by the Board of Directors none of thedirectors is disqualified as on March 312020 from being appointed as a director in termsof Section 164 (2) of the Act;

(f) With respect to the adequacy of the internal financial controlsover financial reporting of the Company with reference to these standalone Ind ASfinancial statements and the operating effectiveness of such controls refer to ourseparate Report in "Annexure 2" to this report;

(g) In our opinion the managerial remuneration for the year endedMarch 31 2020 has been paid

/ provided by the Company to its directors in accordance with theprovisions of section 197 read with Schedule V to the Act;

(h) With respect to the other matters to be included in the Auditor'sReport in accordance with Rule 11 of the Companies (Audit and Auditors) Rules 2014 asamended in our opinion and to

the best of our information and according to the explanations given tous:

i. The Company has disclosed the impact of pending litigations on itsfinancial position in its standalone Ind AS financial statements - Refer Note 26 to thestandalone Ind AS financial statements;

ii. The Company did not have any long-term contracts includingderivative contracts for which there were any material foreseeable losses;

iii. There has been no delay in transferring amounts required to betransferred to the Investor Education and Protection Fund by the Company during the yearended March 312020

For S.R. Batliboi & Associates LLP
Chartered Accountants
ICAI Firm Registration Number: 101049W/E300004
per Govind Ahuja
Partner
Membership Number: 048966
UDIN: 20048966AAAABI2730
Place of Signature: Mumbai
Date: June 30 2020

Annexure 1 to the Independent Auditor's ReportRe: Allcargo Logistics Limited ('the Company1)

Referred to in Paragraph 1 under the heading“Report on

other legal and regulatory requirements" of our report of

even date

(i) (a) The Company has maintained proper records

showing full particulars including quantitative details and situationof fixed assets.

(i) (b) The Company has a regular programme of physical

verification of its fixed assets by which heavy equipment's areverified annually and all other fixed assets are verified over the period of three yearswhich in our opinion is reasonable having regard to the size of the Company and thenature of its assets. No material discrepancies were noticed on such verification.

(i) (c) According to the information and explanations

given by the management the title deeds of immovable propertiesincluded in fixed assets are held in the name of the Company except for the freehold landparcels at Nagpur for which title deeds are held in the name of director as a trustee andwould be transferred to Company in due course subsequent to completion of registrationformalities.

(ii) The inventory has been physically verified by the managementduring the year. In our opinion the frequency of verification is reasonable. No materialdiscrepancies were noticed on such physical verification.

(iii) According to the information and explanations given to us theCompany has not granted any loans secured or unsecured to companies firms LimitedLiability Partnerships or other parties covered in the register maintained under Section189 of the Companies Act 2013. Accordingly the provisions of clause 3(iii)(a) (b) and(c) of the Order are not applicable to the Company and hence not commented upon.

(iv) In our opinion and according to the information and explanationsgiven to us there are no loans investments guarantees and securities granted inrespect of which provisions of section 185 and 186 of the Act are applicable and hence notcommented upon.

(v) The Company has not accepted any deposits within the meaning ofSections 73 to 76 of the Act and the Companies (Acceptance of Deposits) Rules 2014 (asamended). Accordingly the provisions of clause 3(v) of the Order are not applicable.

(vi) To the best of our knowledge and as explained the CentralGovernment has not specified the maintenance of cost records under Section 148(1) of theAct for the services of the Company.

(vii) (a) The Company is regular in depositing with

appropriate authorities undisputed statutory dues including providentfund employees' state insurance income-tax sales-tax duty of custom goods and servicetax cess and other statutory dues applicable to it. The provisions relating to duty ofexcise are not applicable to the Company.

(b) According to the information and explanations given to us noundisputed dues in respect of provident fund employees' state insurance income-tax dutyof custom goods and service tax cess and other statutory dues were outstanding at theyear end for a period of more than six months from the date they became payable.

(c) According to the records of the Company the dues outstanding ofincome-tax sales-tax service tax duty of custom value added tax and cess on account ofany dispute are as follows:

Nature of Statue Nature of Dues Amount (Rs in lakhs) Period to which the amount relates Forum where dispute is pending
The Finance Act 1994 Service tax 277 2007-08 to 2011-12 Ahmedabad CESTAT
The Finance Act 1994 Service tax 123 2012-13 to 2013-14 Mumbai CESTAT
The Custom Act 1962 Custom duty 8 2009 Mumbai CESTAT
The Central Sales Tax Act 1956 CST 32 2008-09 Deputy Commissioner of Sales Tax (Appeal) Maharashtra
MP Entry Tax Act 1976 Entry Tax 41 2010-11 Deputy Commissioner Commercial Tax Jabalpur
The Income Tax Act 1961 Income Tax 6729 2004-05 to 200910 Supreme Court (refer note 26 of Standalone Financial Statement)
The Income Tax Act 1961 Income Tax 7737 2012-13 to 201516 Commissioner of Income Tax (Appeal)
The Income Tax Act 1961 Income Tax 193 2016-17 Commissioner of Income Tax (Appeal)

(viii) In our opinion and according to the information and explanationsgiven by the management the Company has not defaulted in repayment of dues to banks or tothe debenture holders.

(ix) In our opinion and according to the information and explanationsgiven by the management the Company has utilized the monies raised by way of term loansfor the purposes for which they were raised.

(x) Based upon the audit procedures performed for the purpose ofreporting the true and fair view of the financial statements and according to theinformation and explanations given by the management we report that no fraud by theCompany or no material fraud on the Company by the officers and employees of the Companyhas been noticed or reported during the year.

(xi) According to the information and explanations given by themanagement the managerial remuneration has been paid / provided in accordance with therequisite approvals mandated by the provisions of section 197 read with Schedule V to theAct.

(xii) In our opinion the Company is not a nidhi Company. Thereforethe provisions of clause 3(xii) of the order are not applicable to the Company and hencenot commented upon.

(xiii) According to the information and explanations given by themanagement transactions with the related parties are in compliance with section 177 and188 of the Act 2013 where applicable and the details have been disclosed in the notes tothe financial statements as required by the applicable accounting standards.

(xiv) According to the information and explanations given to us and onan overall examination of the balance sheet the Company has not made any preferentialallotment or private placement of shares or fully or partly convertible debentures duringthe year under review and hence reporting requirements under clause 3(xiv) are notapplicable to the Company and hence not commented upon.

(xv) According to the information and explanations given by themanagement the Company has not entered into any non-cash transactions with directors orpersons connected with him as referred to in section 192 of the Act.

(xvi) According to the information and explanations given to us theprovisions of section 45-IA of the Reserve Bank of India Act 1934 are not applicable tothe Company.

For S.R. Batliboi & Associates LLP
Chartered Accountants
ICAI Firm Registration Number: 101049W/E300004
per Govind Ahuja
Partner
Membership Number: 048966
UDIN: 20048966AAAABI2730
Place of Signature: Mumbai
Date: June 30 2020

ANNEXURE 2 referred to in Paragraph 2 under theReport on Other Legal and Regulatory Requirements of our report of even date

Report on the Internal Financial controls under clause (i) ofsub-section 3 of section 143 of the companies Act 2013 (“the Act")

We have audited the internal financial controls over financialreporting of Allcargo Logistics Limited ("the Company") as of March 31 2020 inconjunction with our audit of the standalone financial statements of the Company for theyear ended on that date.

Management's Responsibility for InternalFinancial controls

The Company's Management is responsible for establishing andmaintaining internal financial controls based on the internal control over financialreporting criteria established by the Company considering the essential components ofinternal control stated in the Guidance Note on Audit of Internal Financial Controls OverFinancial Reporting (the "Guidance Note") issued by the Institute of CharteredAccountants of India ("ICAI"). These responsibilities include the designimplementation and maintenance of adequate internal financial controls that were operatingeffectively for ensuring the orderly and efficient conduct of its business includingadherence to the Company's policies the safeguarding of its assets the prevention anddetection of frauds and errors the accuracy and completeness of the accounting recordsand the timely preparation of reliable financial information as required under theCompanies Act 2013.

Auditor's Responsibility

Our responsibility is to express an opinion on the Company's internalfinancial controls over financial reporting with reference to these standalone financialstatements based on our audit. We conducted our audit in accordance with the Guidance Noteand the Standards on Auditing as specified under section 143(10) of the Companies Act2013 to the extent applicable to an audit of internal financial controls and both issuedby the ICAI. Those Standards and the Guidance Note require that we comply with ethicalrequirements and plan and perform the audit to obtain reasonable assurance about whetheradequate internal financial controls over financial reporting with reference to thesestandalone financial statements was established and maintained and if such controlsoperated effectively in all material respects.

Our audit involves performing procedures to obtain audit evidence aboutthe adequacy of the internal financial controls over financial reporting with reference tothese standalone financial statements and their operating effectiveness. Our

audit of internal financial controls over financial reporting includedobtaining an understanding of internal financial controls over financial reporting withreference to these standalone financial statements assessing the risk that a materialweakness exists and testing and evaluating the design and operating effectiveness ofinternal control based on the assessed risk. The procedures selected depend on theauditor's judgment including the assessment of the risks of material misstatement of thefinancial statements whether due to fraud or error.

We believe that the audit evidence we have obtained is sufficient andappropriate to provide a basis for our audit opinion on the internal financial controlsover financial reporting with reference to these standalone financial statements.

Meaning of Internal Financial Controls OverFinancial Reporting With Reference to these Financial Statements

A company's internal financial control over financial reporting withreference to these standalone financial statements is a process designed to providereasonable assurance regarding the reliability of financial reporting and the preparationof financial statements for external purposes in accordance with generally acceptedaccounting principles. A company's internal financial control over financial reportingwith reference to these standalone financial statements includes those policies andprocedures that (1) pertain to the maintenance of records that in reasonable detailaccurately and fairly reflect the transactions and dispositions of the assets of thecompany; (2) provide reasonable assurance that transactions are recorded as necessary topermit preparation of financial statements in accordance with generally acceptedaccounting principles and that receipts and expenditures of the company are being madeonly in accordance with authorisations of management and directors of the company; and (3)provide reasonable assurance regarding prevention or timely detection of unauthorisedacquisition use or disposition of the company's assets that could have a material effecton the financial statements.

Inherent Limitations of Internal Financial Controls Over FinancialReporting With Reference to these standalone Financial statements

Because of the inherent limitations of internal financial controls overfinancial reporting with reference to these standalone financial statements including thepossibility of collusion or improper management override of controls materialmisstatements due to error or fraud may occur and not be detected. Also projections ofany evaluation

of the internal financial controls over financial reporting withreference to these standalone financial statements to future periods are subject to therisk that the internal financial control over financial reporting with reference to thesestandalone financial statements may become inadequate because of changes in conditions orthat the degree of compliance with the policies or procedures may deteriorate.

Opinion

In our opinion the Company has in all material respects adequateinternal financial controls over financial reporting with reference to these standalonefinancial statements and such internal financial controls over financial reporting withreference to these standalone financial statements were operating effectively as at March31 2020 based on the internal control over financial reporting criteriaestablished by the Company considering the essential components of internal control statedin the Guidance Note issued by the ICAI.

For S.R. Batliboi & Associates LLP

Chartered Accountants

ICAI Firm Registration Number: 101049W/E300004

per Govind Ahuja
Partner
Membership Number: 048966
UDIN: 20048966AAAABI2730
Place of Signature: Mumbai
Date: June 30 2020

.