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Allcargo Logistics Ltd.

BSE: 532749 | NSE: ALLCARGO |

Represents Equity.Intra - day transactions are permissible and normal trading is done in this category
Series: EQ | ISIN: INE418H01029 | SECTOR: Transport & Logistics

BSE Live

Aug 02, 16:00
212.55 14.70 (7.43%)
Volume
AVERAGE VOLUME
5-Day
408,365
10-Day
301,264
30-Day
181,326
943,720
  • Prev. Close

    197.85

  • Open Price

    201.90

  • Bid Price (Qty.)

    0.00 (0)

  • Offer Price (Qty.)

    0.00 (0)

NSE Live

Aug 02, 15:59
212.35 14.75 (7.46%)
Volume
AVERAGE VOLUME
5-Day
3,918,425
10-Day
3,449,681
30-Day
2,262,379
6,474,688
  • Prev. Close

    197.60

  • Open Price

    200.00

  • Bid Price (Qty.)

    212.35 (10826)

  • Offer Price (Qty.)

    0.00 (0)

Annual Report

For Year :
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Director’s Report

Your Directors are pleased to present their fourteenth annual report together with audited accounts for the 9 months period/ year ended on December 31, 2006. FINANCIAL HIGHLIGHTS Your Company delivered a healthy performance in cash generation during the period under review driven by the business performance, enhanced capacity of Nhava Sheva CFS and efficient collection system. In the context of a significant increase in interest rates, your Company managed the investments prudently by judiciously deploying cash surplus in a balanced portfolio of safe and liquid instruments; returns earned were higher than market benchmarks. Your Companys performance during the period under review, is summarized below: Rs. in million Particulars This Period Previous Year Sales & other income 2,293.40 2,748.64 Profit before interest, depreciation and taxes 512.04 626.73 Interest (11.52) (23.17) Depreciation (29.32) (62.30) Profit before exceptional items and taxation 471.20 541.26 Provision for tax (83.11) (46.94) Profit after tax 430.83 494.32 Profit brought forward from previous year 264.44 195.76 Prior period adjustments for taxes and expenses (0.90) (8.09) Dividend (91.15) (103.09) Tax on dividend (12.78) (14.45) Transfer to general reserve (45.00) (300.00) Profit carried to balance sheet 545.44 264.45 The stand alone audited financials of Companys 67 subsidiaries in India and abroad are not attached to this Report as your Company has been exempted from doing so by the Department of Company Affairs, Government of India pursuant to Section 212(8) of the Companies Act, 1956 for the period under review. Operations Though the figures of the current period are not comparable with that of the previous year, the Company has witnessed moderate growth in revenues and operating profit on account of increase in volumes both in NVOCC and CFS segments. AUDIT QUALIFICATIONS Post-acquisition of ECU Hold N.V., your Company changed the policy of charging depreciation on assets from Written Down Value method to internationally accepted Straight Line method. However, your Company continues to follow Written Down Value method of charging depreciation on commercial vehicles given on lease. APPROPRIATIONS Considering good performance, your Company declared and paid two interim dividends - Rs. 2.50 per share in November 2006 and Rs. 21- per share in March 2007. The total dividend payout for the 9 months period/ year ended on December 31, 2006, works out to Rs. 4.50 per share (45% on the equity shares of the face value of Rs. 10/-). The Directors recommend that the aforesaid interim dividends aggregating to Rs. 4.50 per share be declared as final dividend for the 9 months period/year ended on December 31, 2006. Your Company has transferred Rs. 45 million to General Reserve from the Net Profits After Tax for the financial year under review. INITIAL PUBLIC OFFER Your Companys Initial Public Offering of equity shares (Issue) received a good response from investor fraternity as a result of which the Issue was oversubscribed by 7.64 times. Your Company raised Rs. 1403.33 million through the Issue in June 2006, the amount utilized as on March 31, 2007, as per the Objects to the Issue is Rs. 1284.62 million and the balance amount of Rs.118.71 million has been invested in permissible securities pending utilization. The Company vide special resolution passed at the Extra-ordinary General Meeting held on January 5, 2007, has permitted the Board of Directors to utilize IPO proceeds for financing or part financing acquisition of land at various strategic locations in India other than those mentioned in the IPO Prospectus dated June 12, 2006 and for setting up of Container Freight Stations, Inland Container Depots, Warehouses (Bonded or otherwise) and other similar projects thereon. BUSINESS OVERVIEW Multimodal Transport Operations: Since 1998, when your Company commenced Multimodal Transport Operations, it has emerged as one of the leading consolidators for Less Than Container Load (LCL). Your Company also handles sizable volumes of Full Container Load (FCL) cargo. As a Multimodal Transport Operator, your Company offers end-to-end freight services for export and import cargo, utilizing multiple modes of transport like sea, road and rail. Your Company pioneered Multi-City Consolidation (MCC) which involves movement of cargo from hinterland locations to the CFS at gateway ports for exports and vice versa for imports. After acquisition of ECU Hold N.V. (ECU) in June 2006, your Company has emerged as a true Indian MNC and has strengthened its position to serve its customers logistics needs across the globe. ECU is a transnational organization with tried and tested systems and quality procedures that ensure the highest standards of cargo handling across its network of 110 offices in 56 countries and franchisees and agents at 203 locations in 120 countries. ECU acquisition has benefited your Company in terms of achieving enhanced operational efficiency due to reduction in transit time and multiple cargo handling and in getting best freight rates for its clients. Your Company also has a joint venture with the Transworld Group in New Jersey, USA to cater to the US markets in MTO segment. Your Company has also gained expertise in handling project cargo, which is a specialized activity requiring detailed planning and technical knowledge. The comprehensive project handling service includes designing and execution of customized solutions tailored to meet specific customer requirements for the transport of high value specialized equipments such as oil field equipments, power plants and similar projects from one location to another using multiple modes of transport. These assignments are generally handled on a turnkey contract basis. Container Freight Stations: Your Company provides port-related logistics support services through its Container Freight Station (CFS) located at Nhava Sheva, Indias largest container port. Our CFS, which is a custom notified area, is equipped with sophisticated technology, high quality equipment, an advance fire fighting system, comprehensive generator back-up, CCTV and VHF for round-the- clock security. It has a closed warehouse, designed as per international warehousing standards and a four acre area reserved exclusively for parking of trucks and trailers. At CFS, range of services such as storage, handling, stuffing, consolidation, customs duty assessments, etc. are provided in addition to allied services like sorting, bar coding, shrink-wrapping and palletalisation. During the period under review, your Company has completed third phase of the CFS at Koproli, which now has a capacity to handle 120,000 TEUs per annum. Your Company has set up two more CFSs each at Chennai and Mundra. Each of these CFSs has been set up on 9 acres of land having a capacity of handling 52,000 TEUs per annum in the first phase. The Customs Authorities have issued notifications declaring both these CFSs as customs notified area and both these CFSs have become operational in April 2007. Going ahead, your Company has a very ambitious plan of setting up few more CFSs/ICDs at various other strategic locations in the country. Towards this end, your Company has already acquired land in Hosur, Goa, Nagpur, Andhra Pradesh, Madhya Pradesh and is on look out to acquire more in northern region. ACQUISITIONS At the beginning of the financial year under review, your Company was holding 49.99% stake in ECU Hold N.V. (ECU), a Belgian global Non Vessel Owning Common Carrier (NVOCC) player having presence in 56 countries. During the period under review, your Company acquired the balance 50.01% stake in ECU, through Allcargo Belgium N.V., a wholly owned investment subsidiary of your Company incorporated in Belgium. Thus, from June 20, 2006, ECU has become a wholly owned subsidiary of your Company. Your Company also acquired 100% equity stake in Hindustan Cargo Limited (HCL) from Thomas Cook (India) Limited with effect from January 9, 2007. HCL is predominantly into air freight business. Your Company was always aspiring to grow in this challenging high growth business and the Board of Directors felt HCL as an ideal vehicle to fulfill its aspirations. SUBSIDIARY COMPANIES Indian Subsidiaries: 1. Contech Transport Services Pvt. Ltd. (CTSPL) was incorporated in 1993, to carry on the business of international freight forwarding, clearing and shipping agents, multimodal transport operator and owning of various transport equipments. 2. ECU International (Asia) Pvt. Ltd. (EIAPL) was incorporated in 2005, to provide BPO and KPO services to ECU International N.V., a 100% subsidiary of ECU Hold N.V. 3. Hindustan Cargo Ltd. (HCL) was incorporated in 1993. HCL is predominantly into air freight business. Your Company acquired entire paid up share capital in HCL on January 9, 2007. Foreign subsidiaries: Your Company has the following foreign subsidiaries which are into NVOCC business: 1 Allcargo Belgium N.V. 2 RMK N.V. 3 ECU Hold N.V. 4 ECU International N.V. 5 ECU-Line Hong Kong Ltd. 6 ECU Line - Guangzhou 7 ECU Line Philippines Inc. 8 ECU Line Singapore Pte. Ltd. 9 ECU Line (Thailand) Co. 10 ECU Line Middleeast LLC 11 ECU Line Abu Dhabi LLC 12 ECU Line Doha W.L.L 13 Euro Centre - Dubai 14 ECU Line (Johar Bahru) Sdn Bhd 15 ECU Line Japan Ltd. 16 ECU Line Vietnam 17 ECU-Line Panama S.A. 18 ECU-Line Paraguay S.A. 19 ECU-Line Peru S.A. 20 ECU Logistics do brasil itda 21 ECU-Line Canada Inc. 22 ECU Line Chile S.A. 23 ECU Line De Columbia S.A. 24 Conecli International 25 ECU Line Del Ecuador S.A. 26 Flamingo Line El Salvador 27 ECU Line Guatemala 28 CELM Logistics S.A. De C.V. 29 ECU-Line Uruguay 30 ELV Multimodal C.A. 31 ECU Australia Pvt. Ltd. 32 ECU Line New Zealand Ltd. 33 ECU Line Denmark A/S 34 Scanca Finland 35 ECU Line Italy TRC 36 Scanca Norway 37 Scanca Sweden 38 ECU-Line (Germany) GmbH 39 ECU-Line UK Ltd. 40 ECU-Line Polska Sp. z.o.o. UL 41 ECU-Line Romania SRL 42 ECU-BRO N.V. 43 ECU-TECH BVBA 44 ECU-LINE N.V. 45 ECU-LOGISTICS N.V. 46 ECU-TRANS N.V. 47 ECU LINE Rotterdam 48 D & E Transport 49 Eurocentre SCI 50 ECU Line Turkey 51 ECU Line Mediterranean 52 ECU Line Italia SRL 53 ECU Line Jordan 54 ECU Line Kenya 55 ECU Line (IOI) Ltd. 56 ECU-Line Malta Ltd. 57 ECU Line Maroc 58 ECU Line Spain S.L. 59 ECU Line Tunesia 60 ECU Line Egypt 61 ECU LINE SA (Pty.) Ltd. 62 ELWA (GH) Ltd. 63 ECU Line Ivory Coast 64 ECU Line Algerie 65 ECU Line Zimbabwe (Pty.) Ltd. QUALITY, HEALTH & SAFETY Your Company follows the practice of conducting in-house seminars and workshops by inviting well known experts in the respective fields, on the matters relating to health and safety measures. Training is being imparted at Container Freight Stations of the Company for efficient and diligent handling of hazardous, heavy and multi- dimensional cargo. Your Company also conducts periodic trainings for testing effectiveness of Fire Fighting Systems and other Safety Equipment installed at CFSs. FIXED DEPOSITS During the year, your Company has not accepted any deposits within the meaning of the provisions of Section 58A of the Companies Act, 1956. DEPOSITORY SYSTEM Your Companys equity shares are available for dematerialization through National Securities Depository Limited and Central Depository Services (India) Limited. As of December 31, 2006, 18.56% of the equity shares of your Company were held in dematerialized form. CHANGE IN FINANCIAL YEAR During the period under review, your Company changed its financial year from April-March to calendar year, to fall in line with that of its subsidiaries. Thus, this report and accounts is for the 9 months period/year ended on December 31, 2006. DIRECTORS Mr. Satish Gupta and Mr. Keki Elavia, Directors of the Company retire by rotation at the ensuing Annual General Meeting and being eligible offer themselves for re-appointment. The resolution for the re-appointment of Mrs. Arathi Shetty, Executive Director is proposed to be moved at the ensuing Annual General Meeting for the approval of the shareholders. The brief resume of Mr. Satish Gupta, Mr. Keki Elavia and Mrs. Arathi Shetty as required in terms of Clause 49 of the Listing Agreement with the Stock Exchanges, is included in the Corporate Governance Report as annexed to this Annual Report. DIRECTORS RESPONSIBILITY STATEMENT Pursuant to Section 217(2AA) of the Companies Act, 1956, the Directors confirm that: (a) in the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material confirm; (b) the directors had selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at December 31, 2006 and of the profit of the Company for the year ended on that date; (c) the directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; (d) the directors had prepared the annual accounts on a going concern basis. ALLCARGO EMPLOYEES STOCK OPTION PLAN 2006 (ESOP 2006) Pursuant to the applicable requirements of the Securities and Exchange Board of India (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999 (the SEBI guidelines), your Company has framed and instituted ESOP-2006 to attract, retain, motivate and reward its employees and to enable them to participate in the growth, development and success of the Company. Your Company granted stock options to be adjusted for the subsequent bonus issue prior to its Initial Public Offering of equity shares, to its permanent employees and to few of the permanent employees of its foreign subsidiaries at varying numbers depending upon their grades. CORPORATE GOVERNANCE The Securities and Exchange Board of India (SEBI) has prescribed certain corporate governance standards vide Clause 49 of the Listing Agreement with stock exchanges. Your Directors reaffirm their commitments to these standards and a detailed Report on Corporate Governance together with the Auditors Certificate on its compliance is annexed hereto. MANAGEMENT DISCUSSION AND ANALYSIS Management Discussion and Analysis covering the following points is annexed to this Report : Industry Structure and Developments Discussion on financial performance with respect to operational performance Segment-wise performance Human resources and industrial relations Opportunities and threats & risks and concerns Internal control systems and their adequacy Outlook The same is appended as Annexure to the Directors Report. AUDITORS M/s. Appan & Lokhandwala Associates, Chartered Accountants, Mumbai, who are the statutory auditors of your Company, retire at the conclusion of 14th Annual General Meeting. You are requested to appoint auditors for the current financial year and to fix their remuneration. The retiring auditors, M/s. Appan & Lokhandwala Associates, Chartered Accountants are eligible for re-appointment. In terms of the provisions of the Companies Act, 1956, the Board also seeks shareholders approval for the appointment of branch auditors for the existing branches/divisions of your Company and which may be opened/acquired in future, in India or abroad. ACKNOWLEDGEMENTS The Directors thank the Companys customers, vendors, investors, consultants, business associates and bankers for their support and co- operation to the Company. The Directors are thankful to the Government of India, Governments of various countries, the concerned State Governments and other Government Departments and Agencies for their co-operation. The Directors acknowledge the hard work and persuasive efforts made by every member of Allcargo family across the world and also express their sincere gratitude to the shareholders for their continuing confidence in the Company. For and on behalf of the Board of Directors Place : Mumbai Shashi Kiran Shetty Dated : April 24, 2007 Chairman & Managing Director

Director’s Report