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Gati Ltd.

BSE: 532345 Sector: Services
NSE: GATI ISIN Code: INE152B01027
BSE 00:00 | 16 Sep 140.30 0






NSE 00:00 | 16 Sep 140.25 -0.05






OPEN 142.00
VOLUME 60178
52-Week high 179.70
52-Week low 43.70
Mkt Cap.(Rs cr) 1,725
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 142.00
CLOSE 140.30
VOLUME 60178
52-Week high 179.70
52-Week low 43.70
Mkt Cap.(Rs cr) 1,725
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Gati Ltd. (GATI) - Director Report

Company director report

Dear Members

Your Directors present the report of the Business and Operations of your Company(‘the Company' or ‘Gati') along with the audited financial statements for thefinancial year ended MarcRs 31 2020. The Consolidated Performance of your Company and itssubsidiaries has been referred to wherever required.

1) Financial Highlights

The summarized standalone and consolidated financial results of the Company for thefinancial year ended MarcRs 31 2020 as compared to the previous year are as under:

Particulars Standalone Consolidated
F.Y. 2019-20 F.Y. 2018-19 F.Y. 2019-20 F.Y. 2018-19
Total Income 4455* 5424* 17249 18792
Profit/(Loss) before Finance Cost (53) 447 489 1103
Depreciation & Amortization
Expenses Exceptional items & Tax Expenses
Less: Finance cost 125 151 536 453
Less : Depreciation and Amortization 37 40 437 295
Profit/(Loss) before tax & (215) 256 (484) 355
Exceptional items
Less: Exceptional items - - - -
Profit/(Loss) before tax (215) 256 (484) 355
Less: Tax expenses 363^ 13 358^ 124
Profit/(Loss) after tax (578) 243 (843) 230
Attributable to Owners of the company (578) 243 (783) 183
Non –controlling Interest - - (60) 47
Add: other comprehensive Income (net of Tax) (05) (19) (13) (31)
Total comprehensive income (583) 224 (855) 199
Attributable to
Owners of the company (583) 224 793 155
Non –controlling Interest - - 62 44

*Includes dividend income from GKEPL. ^Tax related to earlier years.

2) Dividend

In view of the loss for the year ended the Directors do not recommend any dividend onthe equity shares of the Company for the financial year ended MarcRs 31 2020.

3) Impact of COVID-19

The country witnessed lockdown being implemented in India in the second fortnight ofMarch'2020. There were also restrictions of varying extent across larger part of theworld due to the COVID-19 pandemic. Due to lockdown situation in India we wereprohibited from full scale of services to end customers in March which continued tillMid-April'2020. Operations resumed gradually by end April'2020 and gradually increased inMay'2020. Complete halt in the economic activities during the initial phase of thelockdown has impacted the demand in the month of April'2020 however the same startedpicking up from May'2020. Company has initiated various cost control measures acrossverticals with strict monitoring of costs under each head to reduce the impact onprofitability of the company going forward. Amidst the crisis the safety of our employeeshas been our top-most priority and the Company has taken several measures to ensure theirwell-being.

4) Review of Operations


During the year under review at consolidated level your Company achieved a revenue ofRS 17249 mn EBITDA of RS 489 mn PBT of H -484 mn and PAT of H -843 mn as against

a revenue of RS 18792 mn EBITDA of RS 1103 mn PBT of RS 335 mn and PAT of RS 230 mnrespectively in the previous year.


At standalone level your Company recorded revenue of RS 4455 mn EBITDA of H -53 mnPBT of H -215 mn and PAT of H -578 mn as against revenue of RS 5424 mn EBITDA of RS 447mn PBT of RS 256 mn and PAT of RS 243 mn in the previous year.

5) Company's performance

Gati Import Export Trading Limited (GIETL)

Gati Import Export Trading Limited (GIETL) subsidiary is uniquely positioned to provideexcellent connectivity and regional access to global enterprises and operate highlycomplex inventory management systems. The revenue rose from RS 1095 Mn in FY 2018-19 toRS 1190 Mn in FY 2019-20.

Our Approach has been to provide high margin Importer of Record (IOR) services foroverseas sellers looking to grow their e-Commerce business in India and profitabledomestic services for sellers looking for customized inventory ownership model with leaninventory model & End-to-End supply chain solutions.

Freight Forwarding

The Freight forwarding business has significantly declined due to the Global slowdownChina trade lanes were also impacted due to the Pandemic concern in this region. Wewitnessed large scale disruptions in supply chains and demand resulting in cancellation oforder as exporters were not able to ship goods during the 4th quarter of FY 2019-20.

Gati Kausar India Limited (GKIL)

The Indian cold chain market is growing at a steady pace with more organized players inthe fray and Integrated logistics is the customers need today i.e. Primary movement >SCM Warehousing > secondary distribution.

With the Impact of Covid -19 in the last quarter of the Financial year Jan - Mar 2020the frozen food business like Ice-creams RTE and QSR was badly hit with containment zonesacross India and is expected to revive in Financial Year Jan - Mar 2021. The F&V /Pharma Markets are growing steadily. The company's Top line de-grew from RS 439 Mn in FY2018-19 to RS 414 Mn in FY 2019-20 due to Covid 19 Impacting Q4.

EBITDA grew from RS 25 Mn in FY 2018-19 to RS 39.5 Mn in FY 2019-20 due to tightercontrol on costs and other operational parameters.

Going forward your company endeavours to do more of integrated supply chain Managementand ensure customer delight by adding value proposition to their products.

E- Commerce

The E-Commerce industry has been growing across various regions. This demand has alsodriven entry of several competitors particularly the last mile deliveries players. TheE-Commerce companies also invested and strengthened their in-house logistic wing.Profitable growth has been the key challenge in the E-Commerce logistics and your companyhas significantly worked upon resource rationalization and targeting profitable sectorsand products. During the year under review the e-Commerce division of your company hasrecorded revenue of RS 127 Crores as against RS 178 Crores in the previous period.

Gati-Kintetsu Express Private Limited (GKEPL)

GKEPL for the last 3 decades is India's proven leader in imparting ExpressDistribution and Supply Chain Solutions and offers an unmatched service offering thatblends local experience with global expertise. During the year under review GKEPLrecorded revenue of RS 11640 Mn EBITDA of RS 528 Mn and PAT of H (78)

Mn against a revenue of RS 12335 Mn EBITDA of RS 754 mn and PAT of RS 270 Mn in theprevious year.

The Global Pandemic and the following lockdown has made a severe impact on the Indianlogistics sector that is facing several challenges related to labour shortages cargocapacity manufacturing slowdown order delays and stuck shipments and demand and supplyshocks. The manufacturing halt is one of the major reasons for a reduced demand forlogistics services that is expected to have a downward pressure on prices acrosswarehousing freight and logistics. With the economy picking up pace in FY 2021 thelogistics industry is expected to grow with due the push from the retail e-commerce andmanufacturing sectors. Your company has been significantly driving strategic actions tore-position its growth by focusing on Key Enterprise accounts (KEA) SME and RetailIndustry diversification and driving end-to-end solutions for the customers. Also thereis a significant drive on the part of your company for cost reduction & operationalefficiency improvement. On the operations front your company is planning to furtherincrease its capacity and capability by adding more pin codes & operating units toserve a larger customer base efficiently.


Consequent to the change in the ownership of the Company the company has enhanced thebranding to an "End to End Solution provider to our customer". Gati Updates wasa newer initiatives where Company reached out to all our customers sharing with them aboutGati's newer changes Improvement Product & Services. Company has also transformedthe customer facing team into Key Enterprise Management Small and medium accounts andRetail accounts. This has created a better positioning about the Company into the threecustomer segmentation which are the most critical for India logistic market. We have alsoincreased the Business partners and channel partner network further enhancing our networkand reach for our customer.

6) Consolidated Financial Statements

During the year the Board of Directors reviewed the affairs of the subsidiaries. Inaccordance with Section 129(3) of the

Companies Act 2013 ("the Act") your company has prepared the consolidatedfinancial statements of the Company which forms part of this Annual Report in compliancewith applicable provisions of the Act read with the Rules made thereunder applicableaccounting standards and the provisions of Securities and Exchange Board of India (ListingObligations and Disclosure Requirements) Regulations 2015 (hereinafter referred to as the"Listing Regulations"). A separate statement containing the salient features offinancial statement of all subsidiaries of the Company in the prescribed Form AOC – 1forms a part of consolidated financial statements in compliance with Section 129(3) andother applicable provisions if any of the Act read with Rule 5 of the Companies(Accounts) Rules 2014 as amended. The said Form also highlights the financialperformance of each of the subsidiaries included in the consolidated financial statementsof the Company pursuant to Rule 8(1) of the Companies (Accounts) Rules 2014 as amended.

In accordance with Section 136 of the Act the financial statements of the subsidiarycompanies are available for inspection by the members at the Registered Office of theCompany during the business hours on all days except Saturdays Sundays and publicholidays upto the date of the Annual General Meeting (‘AGM'). Any member desirous ofobtaining a copy of the said financial statements may write to the Company Secretary atthe Registered Office of the Company. The financial statements including the consolidatedfinancial statements and all other documents required to be attached to this report havebeen uploaded on the website of the Company i.e.

7) Reserves

No amount transferred to Reserves in view of the losses of the Company at the end ofthe financial year.

8) Fixed deposits (FD)

As on MarcRs 31 2020 fixed deposits of your Company stood at RS 135.73 mn out ofwhich RS 8.93 mn remain unclaimed and there were no overdue deposits as on that date.During the year under review your Company has accepted deposits to the tune of RS 45.22mn. There was no default in repayment of deposits or payment of interest thereon duringthe year and there are no deposits which are in non-compliance with the requirements ofthe Act. The current fixed deposits carry a rating of "CARE BBB" issued by CARERatings Limited. Further the Board of Directors of the Company has decided at its meetingheld on September 14 2020 not to accept the new Fixed Deposits and renew any existingFixed Deposits.

9) Directors and Key Managerial Personnel (KMP) i. Appointment/Resignation/Cessation ofDirector:

The Board upon the recommendation of the Nomination and Remuneration Committee in itsMeeting held on August 02 2019 has approved the appointment of Mr. Sushil Kumar

Jiwarajka (DIN: 00016680) and Dr. Savita Date Menon (DIN: 08528271) as an AdditionalDirectors (Independent) with effect from August 02 2019 and the same were approved by theShareholders of the Company in their Annual General Meeting held on September 25 2019.Further the Board upon the recommendation of the Nomination and Remuneration Committeein its Meeting held on February 04 2020 has approved the appointment of Mr. Shashi KiranShetty (DIN: 00012754) and Mr. Kaiwan Kalyaniwalla (DIN: 00060776) as Additional Directors(Non-Executive) with effect from February 04 2020 and recommends the same for theapproval by the Shareholders of the Company in the ensuing Annual General Meeting of theCompany.

Furthermore after the end of the financial year the Board upon the recommendation ofthe Nomination and Remuneration Committee in its Meeting held on July 03 2020 hasapproved the appointment of Ms. Cynthia D'Souza (DIN: 00420046) Mr. Mohinder Pal Bansal(DIN: 01626343) and Mr. Dinesh Kumar Lal (DIN: 00037142) as an Additonal Directors(Independent) with effect from July 03 2020 for a first term of 5 (Five) years and Mr.Adarsh Hegde (DIN: 00035040) & Mr. Jatin Chokshi (DIN: 00495015) as AdditonalDirectors (Non-Executive) with effect from July 03 2020 and recommends the same for theapproval by the Shareholders of the Company in the ensuing Annual General Meeting of theCompany.

The Company has received consent in writing from all seven to act as Director in FormDIR- 2 and intimation in Form DIR-8 to the effect that they are not disqualified u/s164(2) of the Act to act as Directors. Mr. Shashi Kiran Shetty (DIN: 00012754) Mr.Kaiwan Kalyaniwalla (DIN: 00060776) Ms. Cynthia D'Souza (DIN: 00420046) Mr. Mohinder PalBansal (DIN: 01626343) Mr. Dinesh Kumar Lal (DIN: 00037142) Mr. Adarsh Hegde (DIN:00035040) and Mr. Jatin Chokshi (DIN: 00495015) are eligible to be appointed as Directorsof the Company and their appointment requires the approval of Members at the ensuingAnnual General Meeting. During the year Ms. Sheela Bhide (DIN: 01843547) IndependentDirector of the Company ceased as a Director whose term as an Independent Director wasexpired on August 04 2019 as she had conveyed her intention of not to seek re-appointmentas an Independent Director of the Company for a further term. Further Mr. Sushil KumarJiwarajka (DIN: 00016680) and Mr. Sunil Kumar Alagh (DIN: 00103320) have resigned from theBoard of the Company with effect from December 05 2019.

Further subsequent to the closure of the reporting financial year Dr. P S Reddy (DIN:00608915) resigned from the position of the Independent Director of the Company witheffect from July 08 2020 due to his personal reasons and Mr. K L Chugh (DIN: 00140124)resigned from the position of the Independent Director and Chairman of the Company witheffect from July 24 2020 due to his age ill health and stressful work environment. Boththe Independent Directors as detailed above have been associated with the Company formore than two decades. Mr. Shashi Kiran Shetty has now been appointed as the new Chairmanof the Company with effect from July 24 2020. Furthermore subsequent to the closure ofthe reporting financial year Mr. Mahendra Kumar Agarwal (DIN: 00179779) resigned from theposition of the Managing Director Founder & CEO of the Company with effect fromSeptember 28 2020 pursuant to the Share Purchase Agreement entered by him along with twoother Promoter group members ("Sellers") with Allcargo Logistics Limited("Acquirer") on December 05 2019. Mr. Adarsh Hegde (DIN: 00035040) and Mr.Jatin Chokshi (DIN: 00495015) were also resigned from the position of Additional Non– Executive and Non-Independent Director of the Company with effect from October 052020 due to their personal reasons.

ii. Re-appointment of Director:

During the year the Company has re-appointed Mr. K L Chugh Mr. N Srinivasan Mr. SunilAlagh Dr. PS Reddy and Mr. PN Shukla as Independent Directors of the Company for a secondterm of two consecutive years with effect from August 04 2019.

iii. Retirement by Rotation:

In accordance with the provisions of Section 152 of the Act read with Companies(Management & Administration) Rules 2014 and Articles of Association of the CompanyMr. Yasuhiro Kaneda (DIN: 07619127) Director of the Company who retires by rotation atthe ensuing Annual General Meeting and being eligible has offered himself forre-appointment and the Board recommends his re-appointment.

In compliance with Regulation 36(3) of the Listing Regulations brief resume of all theDirectors proposed to be appointed / re-appointed forms part of the notes and explanatorystatement to the Notice of the ensuing Annual General Meeting.

iv. Key Managerial Personnel:

Pursuant to resignation of Mr. Manoj Gupta Chief Financial Officer (CFO) of theCompany on July 31 2018 and Mr. Amit Pathak Company Secretary and Compliance officer ofthe Company on December 31 2018 Mr. Peter H. Jayakumar was appointed as a CFO of theCompany with effect from May 28 2019 and Mrs. T.S. Maharani was appointed as a CompanySecretary and Compliance officer of the Company with effect from August 02 2019.Subsequently Mr. Rohan Mittal the Chief Transformation Officer of the Company has alsobeen appointed as the new CFO in the place of Mr. Peter H. Jayakumar who has stepped downas CFO on account of his Superannuation with effect from October 09 2020.

10) Particulars of Employees and related disclosures

The remuneration paid to your Directors is in accordance with the Nomination andRemuneration Policy formulated in accordance with Section 178 of the Act and Regulation 19of the Listing Regulations. The salient aspects covered in the

Nomination and Remuneration Policy have been outlined in the Corporate GovernanceReport which forms part of this report.

The information required under section 197 of the Act read with Companies (Appointmentand Remuneration of Managerial Personnel) Rules 2014 (including any statutorymodification(s) or re-enactment(s) thereof for the time being in force) in respect ofDirectors/employees of the Company is set out in the Annexure –A to thisreport.

11) Declaration by Independent Directors

Pursuant to sub section (6) of Section 149 of the Act and Regulation 16(1)(b) of theListing Regulations all the Independent Directors of your Company have given declarationthat they have met the criteria of independence as required under the Act and theregulations.

12) Remuneration Policy

Your Directors have on the recommendation of the Nomination & RemunerationCommittee framed a policy for selection and appointment of Director(s) Senior ManagementPersonnel and their remuneration. The Remuneration Policy forms part of the CorporateGovernance Report.

13) Board Evaluation

Pursuant to the provisions of the Act and the Listing Regulations the evaluation ofall the directors and the Board as a whole was conducted based on the criteria andframework adopted by the Board and in line with the Guidance Note on Board Evaluationissued by the Securities and Exchange Board of India on January

5 2017. The evaluation process has been explained in the Corporate Governance Report.

14) Board Committees

Detailed Composition of the Board committees namely Audit Committee Nomination andRemuneration Committee Corporate Social Responsibility Committee StakeholdersRelationship Committee and Investment Committee number of meetings held during the yearunder review and other related details are set out in the Corporate Governance Reportwhich forms a part of this Report.

15) Audit committee

The details pertaining to the composition of the audit committee are included in theCorporate Governance Report which is a part of this report.

All the recommendations made by the Audit Committee were accepted by the Board ofDirectors of the Company.

16) Particulars of Loans Guarantees and Investments

The particulars of Loans given Investments made and guarantee provided by the Companyunder Section 186 of the Act read with the Companies (Meetings of Board and its Powers)Rules 2014 as at MarcRs 31 2020 forms part of the Financial Statements.

17) Corporate Social Responsibility (CSR)

In terms of section 135 and Schedule VII of the Act read with Companies (CorporateSocial Responsibility Policy) Rules 2014 made thereunder the Board of Directors of yourCompany have constituted a CSR Committee. The brief outline of the Corporate SocialResponsibility (CSR) Policy of your Company and the initiatives undertaken on CSRactivities during the year are set out in Annexure-B of this report in the formatprescribed in the Companies (Corporate Social Responsibility Policy) Rules 2014. Thepolicy is available on the Company's website.

During the year Company has spent RS 3.32 Lakhs on CSR Activities.

The Company proposed to spend the CSR amount in this financial year on the Projectssubmitted by different CSR partners to the Company but the company could implement veryminimal activities during the year and planned to execute in phased manner by thefinancial year end based on the improvement of the cash flow position of the Company.Additionally the COVID-19 crisis and sudden lock down all over the country impacted thebusiness operations of the Company and thereby the identified projects could not be takenup any further.

18) Related Party Transactions

In line with the requirements of the Act and Listing Regulations your Company hasformulated a Policy on Related Party Transactions which is also available on the Company'swebsite at The Policy intends to ensurethat proper reporting approval and disclosure processes are in place for all transactionsbetween the Company and Related Parties.

Related party transactions that were entered during the financial year were on an arm'slength basis and were in the ordinary course of business. There were no material relatedparty transactions i.e. transactions exceeding 10% of the annual consolidated turnover asper the last audited financial statement were entered during the year by your Company.Accordingly the disclosure of Related Party Transactions as required under Section134(3)(h) of the Act in Form AOC-2 is not applicable. The details of the transactions withrelated parties are provided in Note No. 46 to the Financial Statements.

19) Meetings of the Board and Committees

Eleven Meetings of the Board of Directors were held during the year. For details of themeetings of the Board please refer to the report on Corporate Governance which formspart of this report.

20) Vigil Mechanism

The existing Whistle-blower Policy has been revised and the same being approved andadopted by Board of Directors of the

Company in compliance with the provisions of Section 177(10) of the Act and Regulation22 of the Listing Regulations. The revised Whistle-blower Policy is being made availableon the website of your company at

21) Policy on prevention of Sexual Harassment at Workplace

As per the requirement of the Sexual Harassment of Women at Workplace (PreventionProhibition & Redressal) Act 2013 (‘POSH Act') and Rules made thereunder yourCompany has complied with the provisions related to the Constitution of InternalComplaints Committee (ICC). The Company has taken several initiatives across theorganization to build awareness amongst employees about the Policy and the provisions ofPrevention of Sexual Harassment of Women at Workplace Act.

No complaint on sexual harassment was received during the year.

22) Familiarisation Programme for Independent Directors

Pursuant to the Listing Regulations the Company shall familiarise the IndependentDirectors with the Company their roles rights responsibilities in the Company natureof the industry in which the Company operates business model of the Company etc. Thedetails of the Familiarisation programme process for the Independent Directors forms partof the Corporate Governance Report.

23) Directors' Responsibility Statement

Pursuant to the requirement under section 134(5) of the Act with respect to theDirectors' Responsibility Statement relating to the Company (Standalone) it is herebyconfirmed: a) That in the preparation of the Accounts for the financial year ended MarcRs31 2020 the applicable accounting standards and schedule III of the Act (including anystatutory modification(s) or re-enactment(s) for the time being in force) have beenfollowed along with the proper explanation relating to material departure; b) That theDirectors have selected such accounting policies and applied them consistently and madejudgments and estimates that were reasonable and prudent so as to give a true and fairview of the state of affairs of the Company as at MarcRs 31 2020 and of the profit andloss of the Company for the financial year ended MarcRs 31 2020; c) That proper andsufficient care has been taken for the maintenance of adequate accounting records inaccordance with the provisions of the Act (including any statutory modification(s) orre-enactment(s) for the time being in force) for safeguarding the assets of the Companyand for preventing and detecting fraud and other irregularities; d) That the accounts havebeen prepared on ‘going concern' basis; e) The directors had laid down internalfinancial controls to be followed by the company and such internal financial controls areadequate and the Company is constantly endeavouring to improve the standards of internalcontrol in various areas and taking steps to strengthen the internal control system tomake it commensurate and effective with the nature of its business; f) The directors havedevised proper systems to ensure compliance with the provisions of all applicable laws andsuch systems are adequate and operating effectively.

24) Extract of Annual Return

Pursuant to sub-section (3) of Section 92 of the Act read with Rule 12 of theCompanies (Management and Administration) Rules 2014 the extract of the Annual Return asat MarcRs 31 2020 in Form MGT-9 is set out in Annexure-C to the Board's Report.The said return is also available on the website of the Company at the link:

25) Risk Management Policy

The company has a well-defined process in place to ensure appropriate identificationand treatment of risks. Risk identification exercise is inter-woven with the annualplanning cycle which ensures both regularity and comprehensiveness. The identification ofrisk is done at strategic business operational and process levels. While the mitigationplan and actions for risks belonging to strategic business and key critical operationalrisks are driven by senior leadership for rest of the risks operating managers drivesthe conception and subsequent auctioning of mitigation plans.

All risks are well integrated with functional and business plans and are reviewed on aregular basis by the senior leadership. The Company through its risk management processaims to contain the risks within its risk appetite. There are no risks which in theopinion of the Board threaten the existence of the Company. However some of the riskswhich may pose challenges are set out in the Management Discussion and Analysis whichforms part of this Annual Report.

26) Internal Financial Controls

Your Company has established and maintained a framework of internal financial controlsand compliance systems. Based on the framework of internal financial controls andcompliance systems established and maintained by the Company the work performed by theinternal statutory and secretarial auditors and external consultants including the auditof internal financial controls over financial reporting by the statutory auditors and thereviews performed by management and the relevant board committees including the auditcommittee the Board is of the opinion that the Company's internal financial controls wereadequate and your Company is constantly endeavouring to improve the standards of internalcontrol in various areas and taking steps to strengthen the internal control system tomake it commensurate and effective with the nature of its business.

Further the statutory auditors of your company have also issued an attestation reporton internal control over financial reporting (as defined in Section 143 of Act) for thefinancial year ended MarcRs 31 2020 which forms part to the Statutory Auditors Report.

27) Investor Education and Protection Fund

Pursuant to the applicable provisions of the Act read with Investor Education andProtection Fund Authority (Accounting Audit Transfer and Refund) Rules 2016 (‘theRules') all unpaid or unclaimed dividend are required to be transferred by the company tothe IEPF established by the Central Government after the completion of seven years.Further according to the Rules the share in respect of which dividend has not been paidor claimed by the shareholders for seven consecutive years or more shall also betransferred to demat account created by the IEPF Authority. Accordingly the company hastransferred the unpaid or unclaimed dividends of RS 656624/- pertaining to InterimDividend for the financial year 2011-12 and RS 645719/- pertaining to Final Dividend forthe financial year 2011-12. Further the Company is in the process of transferring thecorresponding shares which could not be transferred as per the requirement of IEPF rulesdue to technical glitch and lockdown in the nation as an impact of Covid-19. The detailsare also available on our website i.e.

28) Auditors a) Statutory Auditors

M/s. Singhi & Co. Chartered Accountants (Firm Registration No. 302049E) wereappointed as Statutory Auditors of the Company at the 22nd AGM till theconclusion of the 27th AGM. The standalone and consolidated financialstatements of the Company have been prepared in accordance with the Indian AccountingStandards prescribed under Section 133 of the Act read with relevant rules issuedthereunder (Ind AS) and other accounting principles generally accepted in India. TheAuditors' Report for the financial year ended MarcRs 31 2020 on the financial statementof the Company is a part of this Annual Report. The Auditors have given a qualifiedopinion as described below:

On Standalone Financial Statements :

(i) Auditors Qualification given regarding operational advances to few parties underthe head "Basis for Qualified Opinion" in Auditor's Report on Standalonefinancial statements read with note no. 48 of the Standalone financial statements isself-explanatory. (ii) Independent Auditor has also drawn attention in their report foremphasis of matter regarding loans given to a subsidiary read with Note no. 46(D) to theStandalone financial statements is self-explanatory.

On Consolidated Financial Statements

(i) Auditors Qualification given in point no. (i)(ii) and (iii) under the head"Basis of Qualified Opinion" in the Auditors Report on consolidated financialstatements read with note no.5556 & 57(b) of the consolidated financial statementsare self-explanatory and do not call for any further comments.

(ii) Independent Auditors has also drawn attention in their report on materialuncertainty related to going concern matter and note 58(a) and 58(b) of the consolidatedfinancial statements are self-explanatory.

(iii) Independent Auditors has also drawn attention in their report for Emphasis ofmatter which read with note no. 57(a) to the consolidated financial statements of theCompany is self-explanatory.

Internal Financial controls:

Annexure A to consolidated financial statement of Independent Auditor's report underthe head Basis of Qualified opinion refers to the operating effectiveness of InternalFinancial Control over financial reporting of a subsidiary i.e. Gati-Kintetsu Express (P)Ltd. as follows: a) Contract revenue mapping in Information technology system; b)Integration between various functional software relating to Sales and expenses with theaccounting in software.

Board comments: a) Regarding contract revenue mapping the subsidiary i.e.Gati-Kintetsu Express (P) Ltd has initiated the implementation of Digital contract system.b) Regarding Integrating of certain functional software with the accounting softwarenecessary steps have been taken with continuing reconciliation.

b) Secretarial Audit

Pursuant to the provisions of Section 204 of the Act and the Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014 your Company has appointed M/s. DVM& Associates LLP as the Secretarial Auditor of the Company for FY 2019-20 toundertake the Secretarial Audit of your Company. The Report of the Secretarial Audit isannexed as Annexure – D. The Secretarial Auditors have given a qualifiedopinion which is described as below: (a) Company has not appointed common IndependentDirector in the unlisted material subsidiary Gati- Kintetsu Express Private Limitedafter the resignation of Independent Director on the Board of the Company w.e.f. December05 2019.

(b) There was delay in appointment of Key Managerial Personnel viz CompanySecretary and Compliance Officer and Chief Financial Officer by the Company within theStatutory Period as mentioned under Section 203 of the Act.

(c) The Company have not complied with the timelines of giving newspaper advertisementbefore transfer of shares to IEPF Account. (d) The Board of Directors have takencertain business decisions before it is being recommended by the audit committeewhich are mandatory in nature.

Board's Comment:

(a) Due to the transition process and change in the control of the Management theCompany has not been able to appoint the common Independent Director in the unlistedmaterial subsidiary of the Company after the resignation of Independent Director on theBoard of the Company w.e.f. December 05 2019. However w.e.f. October 05 2020 the samehas been complied with.

(b) The Company Secretary & Compliance officer of the Company resigned w.e.f.December 31 2018 and was not filled up within the due time provided in the Act and theListing Regulations. Further the Board of Directors in its meeting held on August 022019 appointed Mrs. T.S. Maharani as the Company Secretary & Compliance officer of theCompany w.e.f. August 02 2019. Furthermore the position of the Chief Financial Officerfell vacant from August 01 2018 till May 27 2019 the Board of Directors in its meetingheld on May 28 2019 appointed Mr. Peter H Jayakumar as the Chief financial officer of theCompany w.e.f May 28 2019. (c) The delay was inadvertent by oversight.

(d) This is with regard to the appointment of the Company Secretary & theCompliance Officer as per (b) above. Further M/s. DVM & Associates LLP PractisingCompany Secretaries carries out Reconciliation of Share Capital Audit every quarter andthe report thereon is submitted to the Stock Exchanges.

29) Conservation of Energy Technology Absorption and Foreign Exchange Earnings &Outgo

The above information as required under the Act is annexed as

Annexure – E.

30) Employees Stock Option Scheme

Your Company has two Employee Stock Option Schemes namely ESOS 2006 & ESOS 2007.During the year Company allotted 70500 Equity shares pursuant to Employee Stock Options.The Schemes are in line with the SEBI (Share Based Employee Benefits) Regulations 2014("SBEB Regulations") and there have been no material changes to the schemesduring the financial year 2019-20. The Company has received a Annual Report 2019-20 49 certificatefrom the Auditors of the Company that the Schemes are implemented in accordance with theSBEB Regulations and the resolutions passed by the members. The certificate would beavailable at the Annual General Meeting for inspection by members. The details as requiredto be disclosed under the SBEB Regulations and certificate from Auditors are put on theCompany's website and may be accessed at:

31) Change in Capital Structure and Listing at Stock Exchanges

The equity shares of your Company continue to be listed and traded on the BSE Limited(BSE) and National Stock Exchange of India Limited (NSE). Further during the year underreview Company has issued and allotted 13333340 Equity Shares of the Company at a priceof RS 75/- per share of RS 2/- face value each including premium of RS 73/- per shareaggregating to RS 1000000500/- to Allcargo Logistics Limited through preferential issueunder Section 62(1)(c) of the Act read with Companies (Share Capital and Debentures)Rules 2014 made thereunder and as per Securities and Exchange Board of India (Issue ofCapital and Disclosure Requirements) Regulations 2018 as amended from time to time andpursuant to the Share Subscription Agreement dated December 05 2019 entered between theCompany the Allcargo Logistics Limited ("Subscriber") and the Mr. MahendraKumar Agarwal TCI Finance Limited and Mahendra Investment Advisors Private Limited("Promoters"). The Company has obtained the necessary In-principle approvalsfrom the BSE & NSE for the issue and allotment of fresh equity shares and the sameshares were traded in the BSE & NSE with effect from MarcRs 06 2020.

Furthermore during the financial year under review 70500 equity shares were allottedon exercise of the options vested under the Employee Stock Option Scheme.

Consequently the Equity Share Capital of your Company increased from RS 217084274/-comprising of 108542137 equity shares of RS 2/- each to RS 243891954/- comprising of121945977 equity shares of Rs 2/- each as on MarcRs 31 2020.

32) Change of Registrar and Share Transfer Agent of the Company

Post closure of the reporting period Company has terminated the services of KfinTechnologies Private Limited (formerly known as Karvy Fintech Private Limited) asRegistrar & Share Transfer Agent and has appointed Link Intime India Private Limitedas Registrar & Share Transfer Agent with effect from August 18 2020.

33) Company's Policies

The details of the policies approved and adopted by the Board are provided in Annexure- F to this report.

34) Corporate Governance

Your Company is committed to maintain the high standards of corporate governance andadhere to the corporate governance requirements set out by Securities and Exchange Boardof India. The Report on corporate governance as stipulated under the Listing Regulationsforms part of the Annual Report and is annexed as Annexure - G. The requisitecertificate from the

Practicing Company Secretary confirming compliance with the conditions of corporategovernance as stipulated under the aforesaid Regulations forms part of this report.

35) Management Discussion and Analysis (MD&A)

Management Discussion and Analysis Report for the financial year under review asstipulated under Regulation 34(2)(e) of the Listing Regulations is presented in aseparate section and forms part of the Annual Report.

36) Business Responsibility Report (BRR)

Business Responsibility Report for the financial year under review as stipulated underRegulation 34(2)(f) of the Listing Regulations is presented in a separate section andforms part of the Annual Report.

37) General

Your Directors state that no disclosure or reporting is required in respect of thefollowing items as there were no transactions on these items during the financial yearunder review:

1. Issue of equity shares with differential rights as to dividend voting or otherwise.

2. Issue of shares (including sweat equity shares) to employees of your Company underany scheme save and except ESOS referred to in this Report.

3. No significant or material orders were passed by the Regulators or Courts orTribunals which impact the going concern status and Company's operations in future.

4. During the period under review none of the Auditors of the Company have reportedany fraud as specified under the second proviso of Section 143(12) of the Act (includingany statutory modification(s) or re-enactment(s) thereof for the time being in force).

5. The Company has complied with Secretarial Standards i.e. SS-1 and SS-2 relating toMeetings of the Board of Directors and General Meetings issued by the Institute ofCompany Secretaries of India.

6. There were no material changes commitments affecting the financial position of yourCompany between the end of financial year (MarcRs 31 2020) and the date of the report(November 04 2020).

7. Company is not required to maintain cost records under Section 148(1) of the Act.

8. The policy for determining material subsidiaries of the Company has been provided onthe Company's website at

38) Acknowledgment

Your Directors thank various departments of Central and State Government Organizationsand Agencies for the continued help and co-operation extended by them to your company.Your Directors also gratefully acknowledge all stakeholders of the Company viz. memberscustomers dealers vendors Financial Institutions banks and other business partners forthe excellent support received from them during the year and the financial contributionand significant support from the largest shareholder Allcargo Logistics Limited. YourDirectors place on record their sincere appreciation to all employees of the Company fortheir unstinted commitment and continued contribution to the Company.

For and on behalf of the Board
Shashi Kiran Shetty
Place: Hyderabad Chairman
Date: November 04 2020 DIN: 00012754