Annual Report 2019-2020 CORPORATE INFORMATION

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Annual Report 2019-2020 CORPORATE INFORMATION GATI: NOW PART OF THE ALLCARGO POWER Annual Report 2019-2020 CORPORATE INFORMATION Board of Directors Chief Financial Officer Bankers/FI Shashi Kiran Shetty Mr Sheetal Gulati Axis Bank Ltd. Chairman and Managing Director Group Chief Financial Officer (w.e.f. November 08, 2019) Citi Bank NA Adarsh Hegde Mr Deepal Shah DBS Bank Ltd. Joint Managing Director Chief Financial Officer HDFC Bank Ltd. Arathi Shetty Non-executive Director Company Secretary and e Honkong and Sanghai Compliance Officer Banking Corporation Ltd. Malini adani Mr Devanand Mojidra Independent Director Kotak Mahindra Bank Ltd. Company Secretary (upto April 03, 2020) Standard Chartered Bank Ms Bhavika Shah Kaiwan Kalyaniwalla Compliance Officer Yes Bank Ltd. Non-executive Director (upto June 30, 2020) RBL Bank Ltd. Internal Auditor Mohinder Pal Bansal BNP Paribas Mr Mukundan K V Independent Director ING Belgium NV Hari L Mundra Statutory Auditors KBC Bank NV Independent Director M/s S R Batliboi & Associates LLP (upto April 01, 2020) ICICI Bank Ltd. Mathew Cyriac Secretarial Auditors Qatar National Bank (Q.S.P.C) M/s Parikh & Associates Independent Director Axis Finance Limited Cynthia Dsouza Standard Chartered Solicitors and Legal Advisors Independent Director Investments and Loans (w.e.f. June 30, 2020) M/s Maneksha & Sethna (India) Limited Registered Office 6th Floor, Avvashya House, CST Road, Kalina, Santacruz (East), Mumbai 400 098. Tel.: 022-6679 8100 | www.allcargologistics.com | CIN: L63010MH2004PLC073508 Registrar and Share Transfer Agent M/s Link Intime India Private Limited, C 101, 247 Park, L B S Marg, Vikhroli (West), Mumbai 400 083. Tel.: 022-4918 6000 | Fax: 022-4918 6060 | www.linkintime.co.in | E-mail: [email protected] 27th Annual General Meeting Wednesday, September 09, 2020 | 2:00 p.m. (IST) onwards Forward-looking Statement In this Annual Report, we have disclosed forward-looking information to enable investors to comprehend our prospects and take investment decisions. is report and other statements - written and oral - that we periodically make contain forward-looking statements that set out anticipated results based on the management’s plans and assumptions. We have tried, wherever possible, to identify such statements by using words such as ‘anticipate’, ‘estimate’, ‘expects’, ‘projects’, ‘intends’, ‘plans’, ‘believes’, and words of similar substance in connection with any discussion of future performance. We cannot guarantee that these forward-looking statements will be realised, although we believe we have been prudent in our assumptions. e achievements of results are subject to risks, uncertainties and even inaccurate assumptions. Should known or unknown risks or uncertainties materialise, or should underlying assumptions prove inaccurate, actual results could vary materially from those anticipated, estimated or projected. Readers should keep this in mind. We undertake no obligation to publicly update any forward-looking statement, whether as a result of new information, future events or otherwise. CONTENTS CORPORATE OVERVIEW Key Highlights 02 Key Milestones 03 Combining Strenghts For Limitless Possibilities 04 Chairman’s Message 07 Our Five Year Snapshot 12 Key Differentiators / Value Proposition 14 GROWING SCALE OF OPERATIONS Non-vessel Operating Common Carrier 17 Container Freight Stations & Inland Container Depot Facilities 18 Projects And Engineering Solutions 19 E-commerce Logistics 20 Contract Logistics 21 Logistics Parks 22 Crane Rentals 23 Board of Directors 24 Management Team 26 Making and Enduring Societal Difference 30 Awards and Recognition 32 STATUTORY REPORTS Notice 33 Board’s Report 47 Management Discussion and Analysis Report 98 Corporate Governance Report 105 Business Responsibility Report 130 FINANCIAL STATEMENTS Standalone Financial Statements 138 Consolidated Financial Statements 207 1 ANNUAL REPORT 2019-20 KEY HIGHLIGHTS World's # 1 LCL consolidator Allcargo Logistics is a global leader in the integrated logistics solutions and the only company in India to offer the Revenue: ` 7,346 Cr widest gamut of logistics services across EXIM and domestic supply chain - operating through more than Top 20 global ocean freight forwarders 300 offices in over 160 countries. We create services that are innovative Over 25 years of excellence and adaptable towards your supply chain needs. For us, logistics is not Countries presence: Over 160 just a service but an opportunity to create solutions that empower businesses globally. We are committed Offices globally: Over 300 towards creating benchmarks of quality and consistency to co-create value for all our stakeholders. 2 CORPORATE OVERVIEW | STATUTORY REPORTS | FINANCIAL STATEMENTS KEY MILESTONES 1993 2010 2018 Started as a cargo handling Acquired two Hong operator at Mumbai Port Kong-based entities Launch of Allcargo Logistics & Industrial Parks 1995 2013 Acquired Econocaribe Launch of Allcargo Greens, Consolidator in USA an organisation-wide sustainability programme Entered into LCL Consolidation - agent of ECU Line 2003 2014 2019 Acquired majority stake in FCL Marine Agencies, Launched one of Entered into Container Rotterdam India’s largest Logistics Freight Station (CFS) Parks, in Jhajjar operations near JNPT port Acquired PAK DA (HK) Logistics Ltd. and Spechem Supply Chain Management 2005 2016 (Asia) Pte Ltd. Acquired stake in Created ACCI - Making a ECU Line strong entry into chemicals warehousing sector 2006 Complete acquisition of ECU Line Consolidated global presence under Listed on BSE Limited and 2020 ECU Worldwide National Stock Exchange ECU Line rebranded as Acquired strategic ECU Worldwide stake in GATI 3 COMBINING STRENGHTS FOR LIMITLESS POSSIBILITIES • In early December 2019, Allcargo Logistics initiated a • Recognising the potential to combine Gati’s strengths strategic decision to acquire Gati, a pioneer in express with its own expertise in ocean transportation and its distribution and Supply Chain Solutions in India. In extentive global network, Allcargo acquired a majority March 2020, the Open Offer saw an overwhelming stake in the company and is now poised to offer subscription from shareholders making Allcargo the global customers end-to-end multi-modal logistics Promoter and single largest shareholder of Gati. is solutions. move catapulted Allcargo into India’s largest logistics company by revenue. • With this strategic acquisition, Allcargo has attained an enviable position in terms of market leadership • Two decades after it was set up to provide courier with its No. 1 position in the global LCL consolidation services between Chennai (then) Madras and Madurai business through its wholly-owned subsidiary, ECU in Tamil Nadu, Gati has expanded into a household Worldwide and an extensive far-reaching network into name in the Indian express logistics market, covering the hinterlands of India with Gati’s domestic express nearly every district—19,000 PIN codes—across the transportation segment. country. In this time, the Hyderabad-based logistics leader has built an enviable roster of customers spanning e-commerce players, small businesses and industry leaders, along with developing unmatched expertise in land and air transportation. 4 SUPPLY CHAIN SOLUTIONS BY Express Logistics Cold Chain Solutions e-Commerce Logistics Air Freight Supply Chain Services SPECIAL SERVICES Bike Express Art Express Student Express Premium Flexilite Desk-to-desk Services Laabh 5 ANNUAL REPORT 2019-20 6 ANNUAL REPORT 2019-20 OUR FIVE YEAR SNAPSHOT FINANCIAL HIGHLIGHTS 8000 600 500 6000 400 4000 300 200 532 510 416 482 545 5,669 5,629 6,088 6,928 7,388 2000 100 0 0 FY16 FY17 FY18 FY19 FY20 FY16 FY17 FY18 FY19 FY20 Total Income* (` Cr) EBITDA* (` Cr) 250 10.00 200 8.00 150 6.00 100 4.00 9.52 9.25 6.97 9.85 9.08 248 238 174 248 234 50 2.00 0 0.00 FY16 FY17 FY18 FY19 FY20 FY16 FY17 FY18 FY19 FY20 Profit After Tax (` Cr) Earnings Per Share *- Includes other Income 12 CORPORATE OVERVIEW | STATUTORY REPORTS | FINANCIAL STATEMENTS OPERATIONAL HIGHLIGHTS 800 700 Europe 16% Asia Pacific 600 39% 500 400 300 America 20% 200 460 508 592 684 737 100 Africa 25% 0 FY16 FY17 FY18 FY19 FY20 MTO (Volume in 000's TEU) Volume Split Cement & Metals 3% 350 Others Chemicals 4% 300 2% Oil & Gas 250 7% 200 Engineering 150 & Infra 44% 100 282 304 295 334 324 50 Logistics, Ports & CFS 0 19% Power FY16 FY17 FY18 FY19 FY20 21% CFS & ICD (Volume in 000's TEU) P&E industry Diversification 13 ANNUAL REPORT 2019-20 KEY DIFFERENTIATORS / VALUE PROPOSITION 14 CORPORATE OVERVIEW | STATUTORY REPORTS | FINANCIAL STATEMENTS Consistent Dividend Track Record 25% Dividend Payout track record ROCE Focused Constant management endeavour to improve the return ratios of the company Focus on Growth Strategic initiatives to focus on high growth segments such as contract logistics and express logistics Market Leadership Position Market leader in LCL Consolidation and CFS business with an ability to generate consistent ROCE of over 25% Low Debt Equity Low Net D/E of 0.53x at consolidated level, which will get further improved with warehousing divestment Strong Volume Growth in MTO & CFS Robust business performance despite adverse market conditions Proven track record in Acquisition, Integration & Turnaround Focusing on identifying value accretive opportunities and leveraging existing expertise to create new synergies Strong Cash Flows Consistent Operating Cash Flow generation over the past ten years 15 ANNUAL REPORT 2019-20 NVOCC CRANE RENTAL CFS-ICD AIR FREIGHT CONTRACT and ILS LOGISTICS LOGISTICS E-COMMERCE PARKS LOGISTICS
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