| To, The Members of Aqua Logistics Limited
The Directors are pleased to present the Fourteenth Annual Report of
the Company along with Audited Statement of Accounts for the period
ended on 31st March, 2013.
FINANCIAL HIGHLIGHTS
Your Company's performance during the year under review is summarized
below:
(Rs. in Lacs)
Particulars For the
year ended For the
year ended
31-03-2013 31-03-2012
Sales & Other Income 26067.98 31298.97
Profit Before Depreciation, Interest, 1915.65 1841.57
Exceptional, Extraordinary Items and Taxes
Interest and Financial Charges 1265.92 1178.27
Depreciation 392.11 386.84
Profit Before Exceptional, Extraordinary Items 257.62 276.46
and Taxes
Exceptional Items 99.93 99.93
Extraordinary Items 2908.59 5.69
Profit / (Loss) Before Tax (2750.90) 170.83
Provision For Tax 0.00 40.00
Deferred Tax Liabilities 89.81 15.47
Profit / (Loss) After Tax (2840.70) 115.36
Profit brought forward from Previous Year 6153.73 6038.37
Profit carried to Balance Sheet 3313.04 6153.74
REVIEW OF OPERATIONS
During the year, your Company has registered a significant volatility
and thereby a lower growth in its overall performance, entirely due to
the extreme weak economic fundamentals within the country and in
overseas market. The broad spectrum of industries in India has gone
through a very bad patch during this fiscal, with top line of
operations and margins shrinking. Logistics industry has been no
exception to this, as its performance largely depends on the GDP growth
within the various segment of industry. Income from operations is Rs
26067.98 lacs as compared to Rs. 31298.97 lacs in the previous year
showing decrease of 16.71%. The decrease in revenue is mainly due to
decrease in revenue from freight forwarding services and largely in
project logistics. However, in-spite of all odds and adversities your
Company has achieved reasonable level of sales targets, which is
grossly attributable to Company's customer-centric approach and its
ability to provide customer specific solutions, customer centric focus
on pricing and innovative marketing strategy, timely project executions
and better control over cost.
Profit before Depreciation, Interest and Tax (PBDIT) has increased from
Rs. 1841.57 lacs for the year ended March 31, 2012 to Rs. 1915.65 lacs
showing a slight growth of operations this fiscal. During FY 2013, your
Company has recorded Net Loss after Tax to Rs. 2840.70 lacs from a PAT
level of Rs. 115.37 lacs in FY 2012 due to loss on sale of Investments
in subsidiary companies.
The Directors of your Company are currently doing their best to improve
the Company's earning and the results will show up in the ensuing
quarters.
BUSINESS & FUTURE OUTLOOK
According to the World Bank's 2012 Logistics Performance Indicator,
India is ranked 46th and is behind countries such as Japan, the United
States, Germany and China. Logistics costs account for around 6-10% of
average retail prices in India as against the global average of 4-5%.
Therefore, there is a clear scope to improve margins by 3-5% by
improving the efficiency of the supply chain and logistics processes.
India is the second largest producer of fruits and vegetables in the
world but, according to the India Tribune, due to inadequate supply
chain and logistics infrastructure and management, two-thirds of the
produce, worth US$ 65 billion in revenue, is wasted or lost in transit
every year.17 In the last few years, India has also been crippled by
rising food inflation rates, predominantly due to high supply chain
costs in the Indian food and grocery industry, estimated at US$ 24
billion. When it comes to temperature-sensitive transportation and
storage, the gap is more glaring. According to industry analysts,
improving the back-end processes in the supply chain and integrating
cold chains can save US$ 15 billion annually while reducing the wastage
of perishable horticulture produce and ensuring additional export
revenue of over US$ 5 billion. In India, 65% of freight traffic moves
on the road network. Road freight volumes have increased at a much
higher rate than the growth of the road network over the last few
years, creating structural issues of capacity and quality. Complex
taxation and the use of different road permits/documents in different
states impose additional constraints on the movement of freight by
road.
Going forward Your Company intends to focus on this opportunity in
creating infrastructure to cater to this segment and is already in the
process of scouting for suitable partners to align with for seizing
this opportunity. This segment of logistics business requires huge
level of investments in infrastructure and is a short to medium term
opportunity with heavy dose of top line business and fantastic bottom
level business opportunity. Your Company is clearly focused on this and
is making the right moves to enter this area.
As far as the existing operations are concerned, Your company is
focused in reducing the lower margin business in the various segments
of logistics operations and focus only on reasonable margin oriented
businesses and is currently focused more in supply chain solutions and
delivery to existing clientele on selective basis. Your Company wants
to certainly restructure the operations from an improved margin
orientation business which only can sustain operations on long term
basis and can also provide value to its valued existing shareholders
and other stake holders.
Your Company is also focused currently in reducing its short and long
term liabilities significantly by aligning with strategic investors so
that the interest burden which is erasing the margins to be retained
can be restored and the operational efficiency can be brought back into
black during this fiscal. Lot of efforts are under way to achieve this
and Your company is confident of achieving this at a reasonable time
frame.
Your Company is completely aware of the weak economic fundamentals
prevailing in the domestic and overseas markets at this point in time.
There is a huge negative sentiment prevailing. But Your Company feels
that these are the best times to initiate and enter newer segments of
logistics businesses which can provide long term value to shareholders
and stake holders. Further, with the economic sentiment within the
country likely to show positive results in the third quarter of this
fiscal, Your Company is confident of restoring back its original glory
of CAGR and PAT.
DIVIDENDS
In order to conserve the profits of the business of the company, to
meet the growing funding requirements, your Directors have not
recommended any dividend for the year under report.
PUBLIC DEPOSITS
Your Company has neither invited nor accepted any deposits from public,
within the meaning of section 58A of the Companies Act, 1956 and Rules
made thereunder.
SUBSIDIARY COMPANIES:
The major part of the Subsidiary Companies have been hived off and sold
during this fiscal to an Overseas Investor and for the balance tiny
subsidiaries, in accordance with the General Circular no. 2/2011 File
no. 51/12/2007-CL-III dated 8th February, 2011 issued by the Ministry
of Corporate Affairs, Government of India, granting general exception
to the Companies Under Section 212 (8) of the Companies Act, 1956 the
Balance Sheet, Profit and Loss Account and other Reports and statement
of the Subsidiary Companies are not being attached with the Balance
Sheet of the Company. The Company will make available the Annual
Accounts of the Subsidiary Companies and the related detailed
information to any shareholder of the seeking such information at any
point of time. The Annual Accounts of the subsidiary companies also
available for inspection by any shareholder at the Registered Office of
the Company and that of the respective subsidiary companies. The
Consolidated Financial Statement of the Company and all the
subsidiaries duly audited by the statutory auditor of the Company are
presented in the Annual Report of the Company.
AMOUNT TO BE CARRIED TO RESERVES
Since it is not proposed to declare any dividend, the entire amount of
Rs. (2840.70) is proposed to be transferred to the Reserves of the
Company.
AUDITORS
M/s. Anil Nair & Associates, Chartered Accountants, Chennai, the
Statutory Auditors of the Company, retires at the conclusion of this
Annual General Meeting. They have furnished a certificate stating that
their appointment if made will be within the limits laid down u/s 224
(1B) of the Companies Act, 1956. The Board recommends re-appointment of
M/s. Anil Nair & Associates as Statutory Auditors of the Company for
the current financial year and to fix their remuneration.
AUDITORS' REPORT
The notes to the Annual Accounts of the Company, referred to in the
Auditor's Report are self - explanatory and do not require any
clarification from the Board except with regard to the following:
Though there are no qualifications in the Auditors Report there are
certain issues which have been highlighted viz financial stress on the
Company which is reflected by statutory dues are in arrears, dues to
banks and a financial institution are pending. In order to overcome the
situation, Your Company is focused currently in reducing its short and
long term liabilities significantly by aligning with strategic
investors so that the interest burden which is erasing the margins to
be retained can be restored and the operational efficiency can be
brought back into black during this fiscal. Lot of efforts are under
way to achieve this and Your company is confident of achieving this at
a reasonable time frame.
DIRECTORS
Pursuant to the provisions of the Companies Act, 1956 and Articles of
Association of the Company, Mr. B. S. Radhakrishnan is liable to
retire by rotation at the ensuring Annual General Meeting of the
Company and being eligible, have offered himself for reappointment.
DIRECTORS' RESPONSIBILITY STATEMENT
Pursuant to the requirement under section 217 (2AA) of the Companies
(Amendment) Act, 2000, with respect to Directors' responsibility
statement, it is hereby confirmed:
1. that in the preparation of the accounts for the financial year
ended 31st March, 2013, the applicable accounting standards have been
followed along with proper explanation relating to material departures;
2. that the directors have 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 at the end of the financial year and of the
profit or loss of the Company for the period under review;
3. that the directors have taken proper and sufficient care for the
maintenance of adequate accounting records in accordance with the
provisions of the Companies Act, 1956 for safeguarding the assets of
the Company and for preventing and detecting fraud and other
irregularities;
4. that the Directors have prepared the accounts for the financial
year ended 31st March, 2013 on a going concern basis.
PARTICULARS OF CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND
FOREIGN EXCHANGE EARNINGS AND OUTGO
PARTICULARS UNDER SECTION 217(1) (e) OF THE COMPANIES ACT, 1956
Conversion of Energy
The Operations of the Company do not consume high levels of energy.
Adequate measures have been taken to conserve energy everywhere. Your
Company uses latest technology and energy efficient equipments. As
energy cost forms a very small part of the total costs, the impact on
cost is not material.
Technology Absorption, Adaptation and Innovation
Your Company is in an Industry, which demands absorption of emerging
technologies and trends so as to cater to the needs of its esteemed
Clients. Your Company has developed methods for absorption and
adaptation of new / emerging / developing technologies, in consonance
with the needs of its Clients and its own requirements.
FOREIGN EXCHANGE EARNINGS AND OUTGO
The Earnings in Foreign Exchange were Rs.23.15 lacs (Previous Year
Rs.278.96 lacs) as against Expenditure incurred in Foreign Currency of
Rs. 24.51 (Previous Year Rs. 238.05 lacs). Since the Company does not
own any manufacturing facilities, the other particulars under the
Companies (Disclosure of Particulars in the Report of the Board of
Directors) Rules, 1988 are not applicable.
PARTICULARS OF EMPLOYEES
None of employees has received remuneration/salary exceeding the limit
as stated in Section 217(2A) of the Companies Act, 1956 read with the
Companies (Particulars of Employees) Rules, 1975 as amended.
ACKNOWLEDGEMENTS
Your Directors hereby wish to place on record their appreciation of the
significant contribution made by each and every employee of the
Company. The Directors also thank all other stakeholders for their
support and encouragement. Your Directors look forward to your
continued support in the years to come.
For and on behalf of the Board of Directors
Place: Mumbai Chairman
Dated: 14th August, 2013
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