Aegis Logistics

The Directors have pleasure in presenting the 51st Annual Report and
 Audited Statement of Accounts of the Company for the year ended 31st
 March, 2008.
 
 FINANCIAL PERFORMANCE
 
                                                       (Rs. in crores)
                                              2007-08        2006-07
 
 Sales and Other Income                        376.45         243.73
 
 Gross Profit (before interest 
 and depreciation)                              61.79          33.28
 
 Profit before tax                              50.10          27.75
 
 Provision for taxation -Current                 5.21           3.65
 
 - Fringe Benefit                                0.28           0.20
 
 - Deferred                                      8.64           0.31
 
 - MAT Credit Entitlement                       (3.12)
 
 Met Profit after tax                           39.09          23.59
 
 Balance in P & L A/C                           82.34          65.62
 
 Profit available for distribution             121.43          89.21
 
 OPERATING PERFORMANCE
 
 The Company earned gross profit before interest, depreciation and tax
 of Rs. 61.79 crores during the financial Year under review. Profits
 before tax stood at Rs. 50.10 crores. Met profit after tax was Rs.
 39.09 crores.
 
 LIQUID LOGISTICS DIVISION
 
 The division continued good performance amidst rising volumes of
 Imports and Exports and increased capacity of Refineries in the
 adjoining area. The Company is maintaining its site with upgraded
 technology and continuous improvement programme. The addition of the
 new site in Trombay (Trombay 2) boosted group capacity in 2007-08 by
 46%. Consequently, revenues in the division as a whole rose by 40%.
 Volumes in all product categories including chemicals, petrochemicals
 and petroleum were very strong and in addition, key Oil PSU customers
 such as BPCL and HPCL greatly expanded their use of Aegiss Port
 Infrastructure & Logistics facilities.
 
 The Company continues to put substantial efforts and resources into
 promoting Responsible Care.  A Kaizen programme has resulted in
 substantial improvements in the Companys operations and is being
 rolled out in other sites over time.
 
 The Company is approaching world class productivity levels at its
 Mumbai operations.
 
 The Companys new terminal at Kochi is now being integrated into the
 Aegis network through upgradation of the facilities to Aegis standards.
 
 The new initiative of the Company in the area of Operating and
 Maintenance (O&M) of third party facilities is progressing well
 although with lower percentage in overall Group revenues.
 
 GAS DIVISION
 
 The LPG division achieved revenue growth of 68 %. While this was
 related partly to increased international gas prices being passed on to
 customers and Demerged Undertaking of Hindustan Aegis LPQ Ltd. vested
 into the company; significant volume growth was also achieved in the
 propane market to industrial customers. In the Gas logistics business
 for oil PSU customers, a growing throughput during the year resulted in
 a large jump in service revenues.
 
 The Companys entry into the auto LPG retail business continued to
 gather pace under the brand Aegis Autogas. The network is currently
 being rolled out in 8 states including Maharashtra, Gujarat, Karnataka,
 Rajasthan, Madhya Pradesh, Andhra Pradesh, Tamil Nadu and Kerala.
 Continued diversion of domestic cooking gas cylinders into autos
 remains a problem as this displaces legitimate auto LPG.
 
 DIVIDEND
 
 During the Financial Year under review an interim dividend of 25% was
 declared and paid.
 
 The Directors are pleased to recommend Final Equity Dividend of 20%
 i.e. Rs. 2/- per Share (previous year Rs. 2.50 per Share) for the year
 ended 31st March, 2008, which if approved at the forthcoming Annual
 General Meeting will be paid in proportion to the amount paid up or
 credited as paid up to those Equity Shareholders of the Company whose
 names appear on the Register of Members as on date of Annual General
 Meeting.
 
 ALLOTMENT OF FURTHER SHARES
 
 The Scheme of Arrangement entered into by the Company for Demerger of
 the Throughput Activity Undertaking of Hindustan Aegis LPG Ltd., into
 the Company was approved by the Members and Creditors of and further
 sanctioned by the Honble High Court, Gujarat by its Order dated 12th
 February, 2008, with effect from the appointed date i.e. 1st April,
 2007.
 
 Accordingly, assets and liabilities of the Demerged Undertaking were
 transferred to and vested into the Company at book value. In
 consideration and pursuant to the Scheme of Arrangement new equity
 shares were issued to the eligible shareholders of Hindustan Aegis LPG
 Ltd. in the ratio of 1:3 aggregating to 36,00,001 new shares, which are
 being listed on Bombay Stock Exchange Ltd. and National Stock Exchange
 of India Ltd. With this allotment, the Issued, Subscribed and Paid up
 equity shares stands increased to 19,940,585 equity shares from
 16,34-0,584 equity shares.
 
 OUTLOOK FOR THE COMPANY
 
 The buoyancy in the volumes of both imports and exports, expansion of
 capacities at various major ports shows excellent potential for growth
 of the Logistics division. Discussions held with Oil PSUs & other major
 customers, indicated large requirements for the future. Company is
 poised and plans to take advantage of this opportunity by building a
 national network of marine terminals in major and minor Ports by
 further expanding capacity in Mumbai as well as through acquisition
 and/or Greenfield projects. The Company has positioned itself as a
 leading national player in the industry.
 
 The consumption of LPG is likely to grow in India despite the increased
 availability of natural gas. This is because of the ease of
 transporting LPG unlike natural gas which requires huge investment in
 infrastructure such as pipelines. All segments of the LPG business,
 namely domestic cooking gas, commercial LPG, industrial LPG and auto
 LPG retailing are expected to see significant growth. The Company is
 steadily expanding its presence in two of these segments - Industrial
 LPG and Autogas retailing with plans to set up a 100 strong network of
 dedicated auto LPG stations well underway.
 
 FINANCE
 
 The Company is in a sound financial position with key ratios indicating
 sound financials. Low financial gearing coupled with required Net Worth
 will enable the Company to undertake Greenfield projects.  Company
 continues to have Credit Rating of AA- in respect of Long Term Debt
 (including secured Non Convertible Debentures/Term Loan) and PI+ for
 Short Term Debt for Commercial paper, etc.
 
 CONSOLIDATED FINANCIAL STATEMENTS
 
 As required under the Listing Agreements with the Stock Exchange(s)
 Consolidated Financial Statements of the Company is attached. The
 Consolidated Financial Statements have been prepared in accordance with
 Accounting Standard 21 issued by the Institute of Chartered Accountants
 of India.
 
 FIXED DEPOSITS
 
 Fixed Deposits received from Shareholders, Employees and Public in
 general as at the close of the financial year amounted to Rs.454.55
 lacs. Deposits of Rs. 19.75 lacs which fell due for repayment before
 the close of the Financial year, remained unclaimed by the depositors
 at the close of the accounting year. There were no overdue deposits
 other than those unclaimed at the year end.
 
 EMPLOYEE STOCK OPTION SCHEME
 
 Apropos to approval of shareholders in the Extraordinary General
 Meeting held on October 29, 2007 the Company introduced Aegis
 Logistics Ltd. Employee Stock Option Scheme - 2007 for grant of stock
 options maximum upto 1% of issued and paid up capital i.e. 1,63,406
 options.
 
 The options granted have since been waived by the Compensation
 Committee of Directors on receipt of request from grantee expressing
 unwillingness to exercise the options. There being no active options
 existed as on Balance Sheet date under the said scheme, disclosures
 being not relevant have not been made.
 
 CORPORATE GOVERNANCE
 
 A report on Corporate Governance, together with a certificate of
 compliance from the Auditors, forms part of this report.
 
 LISTING OF EQUITY SHARES
 
 The Companys Equity Shares are listed on the Bombay Stock Exchange
 Ltd. and national Stock Exchange of India Ltd. The Company has paid the
 Listing Fees for the period of 1st April, 2008 to 31st March, 2009.
 
 The delisting application made to the Delhi Stock Exchange Association
 Ltd., pursuant to shareholders resolution dated 29th September, 2005
 for voluntary delisting in compliance of SEBI Delisting Guidelines, is
 still pending and hence the listing fees from the year 2007-08 is not
 paid.
 
 DIRECTORS
 
 Mr. R. K. Chandaria was appointed as Vice Chairman 6f Managing Director
 and Mr. A. K. Chandaria was appointed as Managing Director with effect
 from March 31, 2008.
 
 Mr. V. M. Pandya was appointed as an Additional Director on the Board
 of the Company w.e.f. 29th May, 2008.
 
 Mr. S. K. Hazra, ceased to be the Director of the Company having put
 more than 10 years of service. Mr. V.  B. Gangar resigned from the
 directorship of the Company. The Board sincerely acknowledges their
 efforts and dedication during their tenure.
 
 Mr. K. M. Chandaria, Mr. R. R Chandaria and Mr. K. S. Nagpal retire by
 rotation and being eligible offer themselves for re-appointment.
 
 AUDITORS
 
 The Auditors of the Company M/s. Deloittee Haskins & Sells, Chartered
 Accountants, Mumbai, retire at the ensuing Annual General Meeting and
 being eligible offer themselves for re-appointment.
 
 PARTICULARS OF EMPLOYEES
 
 In terms of the provisions of Section 217(2A) of the Companies Act,
 1956 read with the Companies (Particulars of Employees) Rules, 1975 as
 amended, the name and other particulars of the employees are required
 to be set out in the Annexure to the Directors Report. However as per
 the provisions of Section 219(l)(b)(iv) of the said Act, the Annual
 Report excluding the aforesaid information is being sent to all the
 Members of the Company and others entitled thereto. Members who are
 interested in obtaining such particulars may write to the Company at
 its Corporate Office.
 
 HEALTH, SAFETY & ENVIRONMENT (HSE) AND RESPONSIBLE CARE
 
 The Company continues to be the first and the only Independent Qas and
 Chemical Logistics Company in the country to achieve three coveted
 Certifications, i.e. ISO 9001, ISO 14001 and OHSAS 18001.
 
 The Company received Responsible Care Logo from Indian Chemical
 Council. It thus achieved another distinction in its HSE awareness by
 being the first Logistics Company in the country to be awarded the
 prestigious Responsible Care Logo.
 
 The Companys executives attended various workshops, seminars on HSE,
 some being organized by the Company personnel themselves.
 
 The Company continues to extend support to various Industry forums e.g.
 Bombay Chamber of Commerce and Industry, Indian Chemical Council etc.
 in the field of HSE and Infrastructure.
 
 CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, EXPORTS & FOREIGN
 EXCHANGE EARNINGS AND OUTGO
 
 Particulars required to be furnished pursuant to Section 217(l)(e) of
 the Companies Act, 1956 read with Companies (Disclosure of Particulars
 in the Report of Board of Directors) Rules, 1988 :
 
 (i) Part A & B of the Rules, pertaining to conservation of energy &
 technology absorption are not applicable to the Company.
 
 (ii) Foreign Exchange earnings & outgo are provided in Note Mo. B 13E &
 B 13 Q of Schedule 18 forming part of the Accounts.
 
 DIRECTORS RESPONSIBILITY STATEMENT
 
 The Directors would like to inform the Members that the Audited
 Accounts for the financial year ended 31st March, 2008 are in full
 conformity with the requirement of the Companies Act, 1956. The
 Financial Results are audited by the Statutory Auditors, Messrs
 Deloitte Haskins & Sells. The Directors further confirm that:
 
 (i) in the preparation of the Annual Accounts, the applicable
 accounting standards have been followed;
 
 (ii) the accounting policies are consistently applied and reasonable,
 prudent judgment and estimates are made so as to give a true and fair
 view of the state of affairs of the Company at the end of the Financial
 Year and of the profits of the Company for that period;
 
 (iii) the Directors have taken proper and sufficient care for the
 maintenance of adequate accounting records in accordance with the
 provisions of the Act for safeguarding the Assets of the Company and
 for preventing and detecting fraud and other irregularities;
 
 (iv) the Directors have prepared the Annual Accounts on a going concern
 basis.
 
 APPRECIATION
 
 The Board of Directors gratefully acknowledge the assistance, support
 and co-operation received from the authorities of Mumbai Port Trust,
 Bankers, Central and State Government Depts., Shareholders, Suppliers,
 Customers and the Employees.
 
                                       For and on behalf of the Board
 
 Place : Mumbai                                       K. M. Chandaria
 Dated : 29th May, 2008                                      Chairman