The Members of
Allcargo Logistics Limited
Your Directors take pleasure in presenting the Twenty First Annual Report of the Company, both on Standalone and Consolidated basis, together with Audited Statement of Accounts for the year ended March 31, 2014.
Your Company's performance during the year under review is summarized below:
For the Year Ended
|March 31, 2014||March 31, 2013||March 31, 2014||March 31, 2013|
|Sales & Other Income||102,204||108,235||489,593||399,245|
|Profit Before Interest, Depreciation / Amortization and Taxes||23,371||27,171||42,781||42,234|
|Depreciation & other amortisation||13,475||11,676||17,546||14,735|
|Profit Before Tax||7,033||12,828||19,603||23,354|
|Provision For Tax||1,421||1,273||4,159||5,121|
|Profit After Tax||5,612||11,555||15,444||18,233|
|Profit attributable to Minority Interest||-||-||(511)||(1,294)|
|Share of Profit of Associates||-||-||-||35|
|Profit brought forward from previous year||54,322||46,219||81,422||67,456|
|Amount available for Appropriations||59,886||57,774||96,409||84,881|
|Tax on Dividend||321||320||321||320|
|Transfer to General Reserve||561||1,156||561||1,156|
|Transfer to Tonnage Tax Reserve||-||-||18||-|
|Transfer to Capital Redemption Reserve||-||83||-||101|
|Profit carried to Balance Sheet||57,113||54,332||93,615||81,422|
REVIEW OF OPERATIONS
The year under review was very challenging for your Company as macroeconomic environment continued to remain unstable and volatile and slow down of the Indian as well as global economy affected the trade flows. These uncontrollable factors have impacted performance of your Company under review. However your Company continued to remain focused on its strategic goals and in order to further strengthen the LCS and FCL business globally, your Company has made two major acquisitions outside India viz. 100% stake in US based Econocaribe Consolidators and 75% stake in Netherland based FCL Marine Agencies.
Econocaribe Consolidatores, established in 1968, is a leading Less then Container Load (LCL) consolidator (NVOCC) in the United States. With its headquarters in Miami, Florida, Econocaribe Consolidators has 9 offices in the United States and 22 receiving terminals throughout the United States and Canada, as well as partners across the world. Econocaribe Consolidators specializes in freight consolidation and Full Container Load (FCL) services to Latin America, the Caribbean, Europe, the Mediterranean, the Middle East, Africa and Asia. They also offer import LCL/FCL transportation services from around the world into the United States and Puerto Rico. Ecu Line offices had been working since last 6 years in the United States, engaging Econocaribe Consolidators as its agent. This acquisition now enables Ecu Line to complete its service offerings, both in terms of global capabilities and coverage. The acquisition also increases Ecu Line's foot hold in the US market, which will facilitate growth into and out of US market and rest of the world being the largest economy in the world.
FCL Marine Agencies Rotterdam is a leading neutral NVO service provider in FCL segment, operating in Europe, USA and Canada. With Ecu-Line's global leadership as a neutral LCL provider with network across 90 countries and 200 own offices globally, its acquisition of FCL Marine Agencies Rotterdam, is a step forward to consolidate its global leadership and cater to its customer's request for a neutral Full Container Load (FCL) service through its global network and benchmark services. Taking into consideration the evolving global requirements of customers, Ecu-Line has taken this step to provide them with world class FCL services.
Both these acquisitions have been successfully integrated with the Company. In addition, your Company has continued to put in serious efforts to strengthen its customer-centric approach and its ability to innovate customer specific solutions to focus on pricing and aggressive marketing strategy and to undertake disciplined project executions, coupled with prudent financial and human resources management and better control over costs. The Government has also recently taken a number of measures to fast track infrastructure and industrial growth. It is expected that the years ahead would bring new opportunities in the key business areas that your Company is focused on.
Your Company has earned total revenue of Rs 489,593 Lakhs and earned a net profit after minority interest of Rs 14,933 Lakhs as compared to revenue of Rs 399,245 Lakhs and net profit after minority interest of Rs 16,974 Lakhs in preceding financial year, representing growth of 23% in total revenue & drop of 12% in net profit. The growth in revenue is mainly on account of increase in volume which includes the two acquisition made during the year under review. Drop in net profit was mainly attributable to increased finance cost and one time write off of goodwill arising out of the merger of MHTC Logistics Pvt.Ltd. with the Company. Earning before interest, tax and depreciation (EBITDA) is Rs 42,781 Lakhs as compared to Rs 42,234 Lakhs in preceding financial year, representing marginal growth of 1%.
Your Company has earned total revenue of Rs 102,204 Lakhs and earned a net profit of Rs 5,612 Lakhs as compared to revenue of Rs 108,235 Lakhs and net profit of Rs 11,555 Lakhs in the preceding financial year, representing drop of 6% in total revenue & drop of 51% in net profit. The drop in net profit was mainly attributable to the one time write off arising out of the merger of MHTC Logistics Pvt.Ltd. with the Company and increase in finance cost. Earnings before interest, tax and depreciation (EBITDA) is Rs 23,371 Lakhs as compared to Rs 27,171 Lakhs in preceding financial year, representing drop of 14%. The drop in EBITDA is mainly on account of increase in finance cost.
The company is now coming back on a strong growth path having exited the year with a one billion dollar turnover rate and its efforts to improve efficiency, productivity and profitability will improve overall returns. For detailed segment wise performance, members are requested to refer to the Management Discussion and Analysis Report annexed to this report.
Considering the performance of the Company during the year under review, your Directors are pleased to recommend a dividend @ 75% i.e. Rs 1.50 per equity share of Rs 2 each.
The Dividend, if approved by the members at the ensuing Annual General Meeting, will absorb a sum of 2,212 Lakhs including dividend distribution tax.
The operating performance of various subsidiaries were also affected since the macroeconomic environment remain unstable and volatile but nevertheless the subsidiaries put their best efforts to sustain such turbulent times and achieved sustainable growth during the year under review.
Considering the Group's policy on gaining 100% control over the affairs of subsidiary companies across the globe, your Company has acquired / increased its stake in following indirect subsidiary companies, during the year under review.
i. Acquired balance 40% stake in Ecu Line Australia Pty Ltd as a result Ecu Line Australia Pty Ltd has become 100% subsidiary of Ecuhold NV;
ii. Acquired balance 40% stake in Ecu Line New Zealand Ltd as a result Ecu Line New Zealand Ltd has become 100% subsidiary of Ecuhold NV;
iii. Increased stake to 90% by acquiring 10% stake in Translogistik Internationale Spedition GmbH, Germany;
iv. Acquired 75% stake in FCL Marine Agencies BV, Netherland;
v. Acquired balance 30% stake in Ecu-Line Peru SA and Flamingo Line del Peru SA and as a result Ecu-Line Peru SA and Flamingo Line del Peru SA have become 100% subsidiary of Ecuhold NV;
vi. Acquired balance 49% stake in Ecu-Line Switzerland GmbH as a result Ecu-Line Switzerland GmbH has become 100% subsidiary of Ecuhold NV;
vii. Increased stake to 82% by acquiring 19% stake in SHE Maritime Services Ltd.;
viii. Acquired 100% stake in Econocaribe Consolidators, Inc., Econoline Storage Corp. and ECI Customs Brokerage through Prism Global, LLC, the wholly owned subsidiary of Ecuhold NV;
During the year under review, your Company has divested its stake in the following joint venture companies, as they are no longer relevant to its requirements .
i. Divested stake held in Transworld Logistics & Shipping Services LLC, a joint venture company;
ii. Divested stake held in Sealand Warehousing Pvt.Ltd. and Gujarat Integrated Maritime Complex Pvt.Ltd.
The stand-alone audited financial statements of all subsidiaries operating in India and Overseas are not attached to this report in view of the general exemption granted under Section 212 of the Companies Act, 1956 by the Ministry of Corporate Affairs, Government of India vide its Circular No.51/12/2007- CL-III dated February 8, 2011 and February 21, 2011. The statement pursuant to Section 212 of the Companies Act, 1956 relating to the subsidiary companies along with a statement of financial highlights of subsidiaries operations providing relevant details are attached and form part of this Annual Report.
The Company will make available the Annual Accounts of the subsidiary companies and related information to any member of the Company and its subsidiaries who may be interested in obtaining the same. The annual accounts of the subsidiary companies will also be kept open for inspection by any investor at the registered office of the Company and its subsidiary companies.
CONSOLIDATED FINANCIAL STATEMENTS
As required under the Listing Agreement with the Stock Exchanges, the attached Consolidated Financial Statements of the Company and all its subsidiaries have been prepared in accordance with the Accounting Standard AS-21 -Consolidated Financial Statements read with Accounting Standard AS 23-Accounting for Investment in Associates and Accounting Standard AS 27-Financial Reporting of interest in joint Ventures, which includes financial results of its subsidiaries, joint ventures and associate companies and forms part of this Annual Report.
EMPLOYEES STOCK OPTION PLAN 2006
Disclosures pursuant to Clause 12 of the SEBI (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999, relating to the Company's ESOP Scheme as on March 31, 2014 are set out in Annexure II annexed to this report. The ESOP Scheme had a validity period of 7 years from the date of its formation and accordingly has expired on January 11, 2013.
A certificate from the Statutory Auditors of the Company M/s. B S R & Co. LLP, Chartered Accountants, Mumbai and M/s Appan & Lokhandwala Associates, Chartered Accountants, Mumbai, with respect to the implementation of Company's ESOP Scheme, will be placed before the Members at the ensuing Annual General Meeting and a copy of the same shall be available for inspection at the Registered Office of the Company on all working days, except Saturday and Sunday, between 11.00 a.m. to 2.00 p.m., upto the date of Annual General Meeting.
AMALGAMATION OF MHTC LOGISTICS PVT.LTD
The Scheme of Arrangement between the Company, MHTC Logistics Pvt. Ltd., and their respective shareholders and creditors made u/s 391 to 394 of the Companies Act, 1956 read with section 78, 100 to 103 of the Companies Act, 1956, for amalgamation of MHTC Logistics Pvt.Ltd., the wholly owned subsidiary of the Company, with the Company was sanctioned by the Hon'ble Bombay High Court vide order dated December 6, 2013. Pursuant to the said Court order, MHTC Logistics Pvt.Ltd. the wholly owned subsidiary of the Company, has been amalgamated with the Company with effect from April 1, 2012 ("The Appointed Date"). The authenticated copies of the Court order along with the Scheme have been filed with the Registrar of Companies, Mumbai, Maharashtra by the Company and MHTC Logistics Pvt.Ltd. on January 24, 2014 and accordingly the Scheme has become effective from that date. Accordingly, the financial statements of MHTC Logistics Pvt. Ltd. for the year ended March 31, 2014, have been considered in the financial statements of the Company.
The Company has carried out the accounting treatment prescribed in the Scheme as approved by the Hon'ble Bombay High Court. The required disclosures for accounting of Scheme as per the "Pooling of Interest Method" as given under Accounting Standard 14 (AS 14) "Accounting for Amalgamations" as prescribed under the Companies (Accounting Standards) Rules 2006 have been provided. Accordingly in accordance with the approved Scheme:
a) Gh e Company has taken over all the assets aggregating to Rs 3,540 Lakhs and liabilities aggregating to Rs 2,081 Lakhs at their respective book values. As per the Scheme the identity of reserves of MHTC is required to be maintained by the Company as on the Appointed Date aggregating to Rs 1,438 Lakhs. On cancellation of investments made by the Company in MHTC against the share capital and the net assets of MHTC taken over as on the Appointed Date there was a deficit of Rs 3,410 Lakhs which has been debited to the "Goodwill Account" of the Company.
b) The Goodwill has been amortized fully during the financial year 2013-14.
c) G ri or to the Appointed Date, MHTC was holding 373,491 equity shares of the Company. As a consequence of and as per the approved Scheme of Arrangement the aforesaid investment of MHTC in the Company has been cancelled and accordingly the share capital of the Company stands reduced by Rs 7 Lakhs and the Securities Premium Account of the Company stands reduced by Rs 635 Lakhs.
d) I n terms of the Scheme, the Appointed Date of the amalgamation being April 01, 2012, the net loss of the MHTC during the financial year 2012-13 aggregating to Rs 88 Lakhs has been transferred, to the extent not accounted already, to the surplus in the Statement of Profit and Loss in the books of the Company upon amalgamation.
e) N o further consideration is payable or receivable on implementation of the Scheme as it involves amalgamation of a wholly owned Subsidiary with the Company.
SHARE CAPITAL AND LISTING OF SHARES
Pursuant to the Scheme of Arrangement between the Company, MHTC Logistics Pvt. Ltd., and their respective shareholders and creditors made u/s 391 to 394 of the Companies Act, 1956 read with section 78, 100 to 103 of the Companies Act, 1956, becoming effective, equity shares held by MHTC Logistics Pvt.Ltd. in the Company has been cancelled and accordingly the issued, subscribed and paid up share capital of the Company stands reduced from Rs 252,842,506 divided into 126,421,253 equity shares of Rs 2 each fully paid to Rs 252,095,524 divided into 126,047,762 equity shares of Rs 2 each fully paid.
The Equity Shares of the Company are listed and traded in compulsory dematerialized form on the BSE Limited and the National Stock Exchange of India Limited. Your Company has paid the Annual Listing fees and Annual Custody fees to the Stock Exchanges and Depositories up-to-date.
AWARDS AND RECOGNITION
The year under review was very special for your Company as it has received many awards and recognitions for the significant contribution made by your Company in development and growth of the logistic industry.
Gl l cargo Logistics was awarded as the 'LCL Consolidator of the Year in Northern India' at North India Multimodal Logistics Awards, 2014;
Gl l cargo's NVOCC division was conferred with 'LCL Consolidator of the Year' award, at the 5th edition of the South East Cargo & Logistics Awards 2013;
Gl l cargo's NVOCC division was awarded 'LCL Consolidator of the Year' at Cargo & Logistics Awards 2014;
Gl l cargo Logistics was awarded the 'Best CFS Operations' by Indian Chamber of Commerce (ICC) at the ICC Supply Chain and Logistics Excellence Awards 2014;
Gl l cargo's CFS at JNPT Transindia Logistics Park' was awarded with 'Container Freight Station Operator of the Year'
at the Maritime and Logistics Awards (MALA) 2013;
Gl l cargo's IT & CFS teams were honoured with the 'EDGE (Enterprise Driving Growth & Excellence through IT) Award' by Information Week for the RFID Project implementation at CFS locations;
Gl l cargo's equipment division was awarded 'Best Service Provider' by D P World consecutively for the 2nd time;
Gl l cargo's Project and Engineering division was awarded with 'Heavy Lift Mover of the Year' at the Maritime and Logistics Awards (MALA) 2013;
Gn dia's leading investment journal Dalal Street in its 'Elite 100' list of top 100 companies across India, ranked Allcargo Logistics at #91;
Gn the listing of 'The Economic Times - India's Biggest 500 Companies', Allcargo Logistics was listed at #221 amongst the top 500 biggest companies across India. Last year Allcargo was ranked at #226;
G usinessworld in its 'The BW Real 500' listing ranked Allcargo 216th among India's Top 500 Non-Financial companies and also ranked Allcargo 9 among companies with most number of subsidiaries;
Gvvashya house, the corporate headquarters of Allcargo, received Leed India for Core & Shell Silver Rating' from Indian Green Building Council for achieving Green Building Standards;
A llcargo's Corporate Social Responsibility (CSR) initiatives under the Avashya Foundation was conferred with 'Corporate Social Responsibility' at the Maritime and Logistics Awards (MALA) 2013;
Gl l cargo's Executive Chairman Mr. Shashi Kiran Shetty was conferred with 'Business Leader & Visionary of the Year' award at the Maritime and Logistics Awards (MALA) 2013;
G aharashtra Chambers of Commerce Industry & Agriculture (MACCIA) and IBN Lokmat, conferred Mr. Shashi Kiran Shetty with 'Excellence in the Logistics, Transport and Hospitality' Award';
G usiness World in its nationwide survey ranking 'India's Most Valueable CEOs' ranked Mr. Shashi Kiran Shetty at 61 position amongst the top performers in the country.
G r. Shashi Kiran Shetty was conferred with 'Business Leader of the Year' by CHEMTECH Foundation at the 'Leadership Excellence Award 2014;
Ms. Shantha Martin, CEO - ISC, Middle East, Africa (S&E) was conferred 'CEO of the Year' award at the International Women's Leadership Forum's Women's Leadership & Innovation Awards, 2014;.
Your Company believes that winning of such recognitions was due to the hard work, passion and spirit of team work of the employees and thoughtful leaders, whose novel thinking and innovative approach have led them to attain excellence in their field. These awards are a testimony to the commitment to the stakeholders of the Company and seamless integrated logistics solutions.
In accordance with the provisions of the Companies Act, 2013 and that of Articles of Association of the Company, Mr. Kaiwan Kalyaniwalla and Mr. Umesh Shetty, Directors of the Company, retire by rotation at this Annual General Meeting. Being eligible, they offer themselves for re-appointment. The Board recommends their re-appointment.
In accordance with the provision of the erstwhile provisions of the Companies Act, 1956 and that of Articles of Association of the Company, Mr. Keki Elavia and Mr. Hari Mundra, Non-Executive Independent Directors, retire at the ensuing Annual General Meeting. The Company has received notices in writing from members proposing Mr. Keki Elavia and Mr. Hari Mundra for appointment as Independent Directors of the Company for a fixed term of 5 years upto March 31, 2019. The Board recommends their appointment at the ensuing Annual General Meeting.
Mr. Mohinder Pal Bansal and Prof. Jayaraman Ramachandran were appointed as Non-Executive Independent Directors of the Company liable to retire by rotation in accordance with the provision of the erstwhile provisions of the Companies Act, 1956. The Company has received notices in writing from members proposing Mr. Mohinder Pal Bansal and Prof. Jayaraman Ramachandran for appointment as Independent Directors of the Company for a fixed term of five years upto March 31, 2019. The Board recommends their appointment at the ensuing Annual General Meeting.
The Company has received declarations from all the Independent Directors of the Company confirming that they meet with the criteria of independence as prescribed both under sub-section (6) of Section 149 of the Companies Act, 2013 and under Clause 49 of the Listing Agreement with the Stock Exchanges.
Brief resume of directors seeking appointment and re-appointment as required in terms of Clause 49 of the Listing Agreement with the Stock Exchanges, are included in the Corporate Governance Report annexed to this Annual Report.
M/s B S R & Co.LLP, Chartered Accountants, Mumbai (ICAI Registration No. 101248W), and M/s. Appan & Lokhandwala Associates, Chartered Accountants, Mumbai, (ICAI Registration No. 117040W) the Statutory Auditors of the Company, retire at the conclusion of this Annual General Meeting. M/s B S R & Co.LLP and M/s Appan & Lokhandwala Associates, being eligible, have expressed their willingness for re-appointment at the ensuing Annual General Meeting,
The Company has received letters from M/s B S R & Co.LLP and M/s Appan & Lokhandwala Associates, to the effect that their appointment, if made, would be within the prescribed limits under section 141(3)(g) of the Companies Act, 2013. The Audit Committee and Board of Directors recommend re-appointment of M/s B S R & Co.LLP and M/s Appan & Lokhandwala Associates, as Statutory Auditors of the Company to hold office from the conclusion of the ensuing Annual General Meeting till the conclusion of the next Annual General Meeting and to fix their remuneration.
The Notes on Financial Statements referred to in the Auditors' Report are self explanatory and do not call for any further comments.
The Company has an adequate internal audit system implemented by an in-house department and supported by independent Chartered Accountant firms to carry out audit of various branches and functions of the Company and its subsidiaries.
Systems, procedures and processes are being upgraded / implemented to further strengthen the existing internal control measures, procedures and processes to increase operational efficiencies and to safeguard the Company from any fraud, misrepresentation and non-compliance with statutory requirements.
During the year under review, your Company has not accepted any deposits within the meaning of Section 58A and Section 58AA of the Companies Act, 1956 and rules made thereunder.
Your Company continues to have highest domestic credit rating for its long term and short term credit facilities obtained from various Banks. CRISIL has re-affirmed AA-/Stable for its long term debt and A1+ for its short term debt. The rating denotes high degree of safety regarding timely servicing of financial obligation.
SAFETY, HEALTH AND ENVIORNMENT
Your Company believes in safety and health enrichment of its employees and committed to provide a healthy and safe workplace for all its employees at each work location. Successfully managing Health & Safety risks is an essential component of our business strategy. The Company has identified Health & Safety risk arising from its activities and has put proper systems, processes and controls mechanism to mitigate them.
The Company has been taking various safety and welfare measures to protect its employees, equipments and other assets from any possible loss and / or damages. To implement such safety and welfare measures, the Company has formulated various policies such as Drug & Alcohol Policy, Occupational Health Policy, Driver & Vehicle Safety Policy, Mobile Telephone Policy, Smoking Policy etc.
The Equipment Hire Division is OHSAS compliant and a member of the globally recognized Lifting Equipment Engineers Association (LEEA, UK) and ISO certified. All Custom Freight Station (CFS) / Inland Container Depot (ICD) are certified for Occupational Health & Safety Management Systems (OHSAS)
The following safety measures are being taken at various locations:
Fire & Safety drills are conducted for all employees and Security personnel.
All Fire hydrants are monitored strictly, as the preparedness for fire emergency.
All equipments are tested periodically to verify its safe load working condition. Fitness certificates are issued based on the compliance of the safety norms.
A afety Awareness Campaign, Safety week, Environment day are being held / celebrated at each location to improve the awareness of employee.
Aegular training/skills to staff, and contractors, to inculcate importance of safety among them.
A re ated checks and awareness among drivers about negatives of alcohol and drug consumptions and impact of families.
Ac cident porn routes identified and supervisors allocated have control over the vehicle movement.
A H SAS audits and Fire & Safety audits are conducted by competent agencies at regular intervals.
Ao rtnightly visit by Doctors to office for medical counseling to employees.
A azMat training is provided to all CFS employees.
Terrorist Threat Awareness Training is provided to CFS employees
Medical Health check-up of all employees are conduced at regular intervals
A CTV & Safety alarms are installed at each locations
All equipments are mandatory ensured with PUC.
Each equipment is put through comprehensive Quality Audit & Testing to ensure strong compliance to Maintenance, Safety and Reliability aspects as per specifications by various OEMs.
A re en initiatives are taken at various locations to protect the environment.
CORPORATE SOCIAL RESPONSIBILITY
Your Company has committed itself to making a difference in the lives of underprivileged and economically challenged citizens of our country. Allcargo's Corporate Social Responsibility (CSR) initiatives, through 'Avashya Foundation' a non profit organization and in collaboration with various NGOs across India, believes in nurturing inclusive development with a human touch. Your Company's CSR activities focus is to take each initiative beyond philanthropy and promote people centric inclusive development with the active participation of the
Shashi Kiran Shetty , Chairman & Managing Director
Adarsh Hegde , Director
Keki Elavia , Director
M P Bansal , Director
Company Head Office / Quarters:
6th Floor Avashya House,
CST Road Kalina Santacruz (E),
Phone : Maharashtra-91-22-66798100/26675800 / Maharashtra-
Fax : Maharashtra-91-22-66798195 / Maharashtra-
E-mail : email@example.com
Web : http://www.allcargologistics.com
|Scheme Name||No. of Shares|
|Edelweiss ELSS Fund (G)||14,997|
|Sahara R.E.A.L Fund (G)||4,000|
|Goldman Sachs CNX 500 Fund (G)||321|
|Goldman Sachs CNX 500 Fund (G)||321|
|Goldman Sachs CNX 500 Fund (G)||319|