1. We have audited the attached Balance Sheet of Allcargo Global
Logistics Limited as at December 31,2007 and also the Profit and Loss
Account and the Cash Flow Statement of the Company for the year ended
on that date, both annexed thereto. These financial statements are the
responsibility of the Companys management. Our responsibility is to
express an opinion on these financial statements based on our audit.
2. We have conducted our audit in accordance with auditing standards
generally accepted in India. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatements. An audit
includes examining, on a test basis, evidence supporting the amounts
and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made
by management as well as evaluation of the overall financial statement
presentation. We believe that our audit provides a reasonable basis for
3. As required by the Companies (Auditors Report) Order 2003, (herein
after referred to as the Order) issued by the Central Government in
terms of Section 227(4A) of the Companies Act, 1956, we give in the
Annexure, a statement on the matters specified in paragraphs 4 & 5 of
the said Order.
4. Further to our comments in the annexure referred to in paragraph 3
above, we report that:
i. We have obtained all the information and explanations, which to the
best of our knowledge and belief were necessary for the purpose of the
ii. In our opinion, proper books of account as required by law have
been kept by the Company so far as appears from our examination of
iii. The Balance Sheet, Profit and Loss Account and Cash Flow Statement
dealt with by this report are in agreement with the books of account;
iv. In our opinion the Balance Sheet, Profit & Loss Account and Cash
Flow Statement, dealt with by this report, complies with the Accounting
Standards referred to in the Companies (Accounting Standard) Rules,
2006, issued by Central Government, read together with sub-section (3C)
of Section 211 of the Companies Act, 1956;
v. Reference is drawn to the note 11 of Schedule 21, regarding the
change in method of charging depreciation on Commercial Vehicles given
on Lease, from written down value method to straight line method for
the year ended December 31, 2007 . If the Company had continued
depreciating the above asset on written down value method, the Profit
after Tax would have been Rs. 579,590 thousand instead of Rs.597,835
thousand Reserves & Surplus would have been Rs.3,598,210 thousand
instead of Rs.3,616,454 thousand Fixed Assets would have been
Rs.2,067,501 thousand instead of Rs.2,100,867 thousand Deferred Tax
Liability would have been Rs. 90,250 thousand instead of Rs.101,591
thousand and MAT Credit Entitlement account would have been Rs.30,472
thousand instead of Rs. 26,692 thousand;
vi. In our opinion and to the best of our information and according to
the explanations given to us, the said financial statements together
with the notes thereon and attached thereto give in the prescribed
manner the information required by the Companies Act, 1956, and give a
true and fair view in conformity with the accounting principles
generally accepted in India :
(a) in the case of balance sheet, of the state of affairs of the
Company as at December 31, 2007;
(b) in the case of the profit and loss account, of the profit for the
year ended on that date; and
(c) in the case of the cash flow statement, of the cash flows for the
year ended on that date.
5. On the basis of written representations received from the directors
as on December 31,2007 and taken on record by the Board of Directors,
we report that none of the Directors is disqualified as on December 31,
2007 from being appointed as a director in terms of clause (g) of
sub-section (1) of Section 274 of the Companies Act, 1956.
i) a. The Company has maintained proper records showing full
particulars including quantitative details and situation of fixed
b. All the assets have not been physically verified by the management
during the year but there is a regular programme of verification,
which, in our opinion, is reasonable having regard to the size of the
Company and the nature of its assets. No material discrepancies were
noticed on such verification.
c. Fixed Assets disposed off during the year were not substantial and
therefore do not affect going concern assumption.
ii) a. Inventory has been physically verified by the management during
the year. In our opinion, the frequency of verification is reasonable.
b. The procedures of physical verification of inventory followed by
the management are reasonable and adequate in relation to the size of
the Company and the nature of its business.
c. The Company is maintaining proper records of inventories and no
material discrepancies were noticed on physical verification.
iii) a. The Company had granted an unsecured loan to a company listed
in the register maintained under Section 301 of the Companies Act,
1956. The maximum amount during the year was Rs. 2,35,89 thousand. At
the year-end, the outstanding balance of the loan granted was Nil.
b. In our opinion, the rate of interest and other terms and conditions
of the Loan was not, prima facie, prejudicial to the interest of the
c. The Company has not taken any loans, secured or unsecured, from
companies, firms or other parties listed in the register maintained
under Section 301 of the Companies Act, 1956.
iv) In our opinion and according to the information and explanations
given to us there are adequate internal control procedures commensurate
with the size of the Company and the nature of its business with regard
to purchase of fixed assets and with regard to sale of goods and supply
of services. During the course of the audit, we have not observed any
continuing failure to correct major weaknesses in internal controls.
v) a. According to the information and explanations given to us, we are
of the opinion that the transactions that need to be entered into the
register maintained under Section 301 of the Companies Act, 1956 have
been so entered.
b. In our opinion and according to the information and explanations
given to us, the transactions made in pursuance of contracts or
arrangements entered in the register maintained under Section 301 of
the Companies Act, 1956 and exceeding the value of rupees five lakhs in
respect of any party during the year have been made at prices which are
reasonable having regard to prevailing market prices at the relevant
vi) As the Company has not accepted any deposits from the public,
paragraph 4 (vi) of the Order is not applicable.
vii) In our opinion, the Company has an internal audit system
commensurate with the size and nature of its business.
viii) To the best of our knowledge and as explained, the Central
Government has not prescribed maintenance of cost records under clause
(d) of sub-section (1) of Section 209 of the Companies Act, 1956 for
the products of the Company.
ix) a. According to the records examined by us, the Company is
generally regular in depositing undisputed statutory dues including
provident fund, investor education and protection fund, Employees
State Insurance, income tax, wealth tax, sales tax, service tax,
customs duty, excise duty, cess and other statutory dues applicable to
it with the appropriate authorities.
b. According to the information and explanation given to us, and the
records examined by us, there are no dues of Income tax, Sales tax,
Customs duty, Wealth tax, Excise duty, Service tax or cess which have
not been deposited on account of any dispute, other than those stated
Sr. No. Name of the Statute Period to which
the amount relates
1 Income Tax Act 2002-2003
2 Income Tax Act 2003-2004
Amount disputed Amount paid
Rs. in 000s Rs.
x) The Company does not have accumulated losses as at the end of the
year and the Company has not incurred cash losses during the current
and the immediately preceding financial year.
xi) In our opinion and according to the information and explanations
given to us, the Company has not defaulted in repayment of dues to a
financial institution, bank or debenture holders.
xii) As the Company has not granted any loans and advances on the basis
of security by way of pledge of shares, debentures and other
securities, paragraph 4 (xii) of the Order is not applicable.
xiii) As the Company is not a chit fund/nidhi/mutual benefit
funds/society to which the provisions of special statute relating to
chit fund are applicable, paragraph 4(xiii) of the Order is not
xiv) In our opinion, the Company has maintained proper records of the
transactions and contracts in respect of investments purchased and sold
during the year and timely entries have been made therein. The
investments made by the Company are held in its own name.
xv) In our opinion, the terms and conditions on which the Company has
given guarantees for loans taken by others from banks or financial
institutions are not prejudicial to the interest of the Company.
xvi) In our opinion, the term loans have been applied for the purpose
for which they were raised.
xvii) According to the information and explanations given to us and on
an overall examination of the balance sheet and cash flows of the
Company, we report that funds raised on short-term basis have not been
used for long-term investment. No long-term funds have been used to
finance short-term assets except permanent working capital.
xviii) The Company has not made preferential allotment of shares to
parties covered in the register maintained under Section 301 of the
Companies Act, 1956.
xix) As the Company has not issued any debentures, paragraph 4(xix) of
the Order is not applicable.
xx) The Company has not raised any money through a public issue during
xxi) Based upon the audit procedures performed and information and
explanations given by the management, we report that no fraud on or by
the Company has been noticed or reported during the course of our audit
for the year ended December 31, 2007.
For Appan & Lokhandwala Associates
Place : Mumbai Partner
Dated : June 26, 2008 Membership No.38378