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Auditor Report of Allcargo Logistics Ltd.

Mar 31, 2016

To the Members of Allcargo Logistics Limited

Report on the Financial Statements

We have audited the accompanying standalone financial statements of Allcargo Logistics Limited (“the “Company”), which comprise the Balance Sheet as at March 31, 2016, the Statement of Profit and Loss and Cash Flow Statement for the year then ended, and a summary of significant accounting policies and other explanatory information.

Management’s Responsibility for the Financial Statements

The Company’s Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 (“the Act”) with respect to the preparation of these standalone financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with accounting principles generally accepted in India, including the Accounting Standards specified under section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and the design, implementation and maintenance of adequate internal financial control that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditor’s Responsibility

Our responsibility is to express an opinion on these standalone financial statements based on our audit. We have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made there under. We conducted our audit in accordance with the Standards on Auditing, issued by the Institute of Chartered Accountants of India, as specified under Section 143(10) of the Act. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial control relevant to the Company’s preparation of the financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by the Company’s Directors, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the standalone financial statements.

Opinion

In our opinion and to the best of our information and according to the explanations given to us, the standalone financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India of the state of affairs of the Company as at March 31, 2016, its profit and its cash flows for the year ended on that date.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor’s report) Order,

2016 (“the Order”) issued by the Central Government of India in terms of sub-section (11) of section 143 of the Act, we give in the Annexure 1, a statement on the matters specified in paragraphs 3 and 4 of the Order.

2. As required by section 143(3) of the Act, we report that:

(a) We have sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purpose of our audit;

(b) In our opinion proper books of account as required by law have been kept by the Company so far as it appears from our examination of those books;

(c) The Balance Sheet, Statement of Profit and Loss and Cash Flow Statement dealt with by this Report are in agreement with the books of account;

(d) In our opinion, the aforesaid standalone financial statements comply with the Accounting Standards specified under section 133 of the Act, read with Rule

7 of the Companies (Accounts) Rules, 2014;

(e) On the basis of written representations received from the directors as on March 31, 2016, and taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2016, from being appointed as a director in terms of section 164 (2) of the Act;

(f) With respect to the adequacy of the internal financial controls over financial reporting of the Company and the operating effectiveness of such controls, refer to our separate Report in “Annexure 2” to this report; and

(g) With respect to the other matters to be included in the Auditor’s Report in accordance with Rule 11 of

the Companies (Audit and Auditors) Rules, 2014, in our opinion and to the best of our information and according to the explanations given to us:

i. The Company has disclosed the impact of pending litigations on its financial position in its financial statements - Refer Note 30 to the financial statements;

ii. The Company did not have any long-term contracts including derivative contracts for which there were any material foreseeable losses; and

iii. There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company. Re: Allcargo Logistics Limited (“the Company”)

(i) (a) The Company has maintained proper records showing full particulars, including quantitative details and situation of fixed assets.

(i) (b) The Company has a regular programme of physical verification of its fixed assets by which heavy equipments and other vehicles are verified annually and all other fixed assets are verified over the period of three years, 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.

(i) (c) According to the information and explanations givenby the management, the title deeds of immovable properties, included in fixed assets are held in the name of the Company except for freehold land at Nagpur, aggregating Rs, 746 lakhs, for which title deeds are held in name of Director as a trustee and would be transferred to Company in due course, subsequent to completion of registration formalities.

(ii) The inventory has been physically verified by the management during the year. In our opinion, the frequency of verification is reasonable. No material discrepancies were noticed on such physical verification.

(iii) (a) The Company had in the past granted loans to three

companies covered in the register maintained under section 189 of the Act. In our opinion and according to the information and explanations given to us, the terms and conditions of such loans are not prejudicial to the company’s interest.

(b) The Company has granted loans, to the companies covered in the register maintained under section 189 of the Act. The loans granted are re-payable on demand. Two of the companies have repaid the loan during the year and we are informed that the

(c) According to the records of the Company, the dues outstanding of income-tax, sales-tax, service tax, duty of custom, duty of excise , value added tax and cess on account of any dispute, are as follows:

Nature of Statue

Nature of

Amount

Period to which the

Forum where dispute is

Dues

(Rs, in lakhs)

amount relates

pending

The Finance Act, 1994

Service tax

2

2003-04 to 2006-07

Mumbai CESTAT

The Finance Act, 1994

Service tax

277

2007-08 to 2011-12

Ahmadabad CESTAT

The Finance Act, 1994

Service tax

3

2008-09 to 2010-11

Commissioner of Service tax, (Appeal) Bhopal

The Finance Act, 1994

Service tax

1

2008-09

Commissioner of Service

tax, (Appeal) Bhopal

The Custom Act 1962

Custom duty

2

2004

CESTAT

The Custom Act 1962

Custom duty

181

2004

CESTAT

The Custom Act 1962

Custom duty

28

2009

CESTAT

Company has not demanded repayment of loan from one of the other companies, and thus, there has been no default on the part of the company to whom the money has been lent. The payment of interest has been regular for all the companies.

(c) There are no amounts of loans granted to companies, listed in the register maintained under section 189 of the Act which are outstanding for more than ninety days.

(iv) In our opinion and according to the information and explanations given to us, there are no loans, investments, guarantees, and securities granted in respect of which provisions of section 185 and 186 of the Act are applicable and hence not commented upon.

(v) The Company has not accepted any deposits from the public.

(vi) To the best of our knowledge and as explained, the Company is not in the business of sale of any goods. Therefore, in our opinion, the provisions of clause 3(vi) of the Order are not applicable to the Company.

(vii) (a) Undisputed statutory dues including provident fund,

employees’ state insurance, income-tax, sales tax, service tax, custom duty, value added tax, cess and other material statutory dues have generally been regularly deposited with the appropriate authorities though there has been a slight delay in a few cases. The provisions relating to excise duty are not applicable to the Company.

(b) According to the information and explanations given to us, no undisputed amounts payable in respect of provident fund, employees’ state insurance, income-tax, service tax, sales-tax, duty of custom, duty of excise, value added tax, cess and other material statutory dues were outstanding, at the year end, for a period of more than six months from the date they became payable.

(viii) In our opinion and according to the information and explanations given by the management, the Company has not defaulted in repayment of dues to banks.

(ix) In our opinion and according to the information and explanations given by the management, the Company has utilized the monies raised by way of term loans for the purposes for which they were raised.

(x) Based upon the audit procedures performed for the purpose of reporting the true and fair view of the financial statements and according to the information and explanations given by the management, we report that no fraud by the company or no fraud / material fraud on the Company by the officers and employees of the Company has been noticed or reported during the year.

(xi) According to the information and explanations given by the management, the managerial remuneration has been paid / provided in accordance with the requisite approvals mandated by the provisions of section 197 read with Schedule V to the Act.

(xii) In our onion, the Company is not a nidhi Company. Therefore, the provisions of clause 3(xii) of the order are not applicable to the Company and hence not commented upon.

(xiii) According to the information and explanations given by the management, transactions with the related parties are in compliance with section 177 and 188 of the Act, 2013 where applicable and the details have been disclosed in the notes to the financial statements, as required by the applicable accounting standards.

(xiv) According to the information and explanations given to us and on an overall examination of the balance sheet, the Company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures during the year under review and hence, reporting requirements under clause 3(xiv) are not applicable to the Company and hence not commented upon.

(xv) According to the information and explanations given by the management, the Company has not entered into any noncash transactions with directors or persons connected with him as referred to in section 192 of the Act.

(xvi) According to the information and explanations given to us, the provisions of section 45-IA of the Reserve Bank of India Act, 1934 are not applicable to the Company.

Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section 143 of the Act

We have audited the internal financial controls over financial reporting of Allcargo Logistics Limited (“the Company”) as of March 31, 2016 in conjunction with our audit of the standalone financial statements of the Company for the year ended on that date.

Management’s Responsibility for Internal Financial Controls

The Company’s Management is responsible for establishing and maintaining internal financial controls based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India. These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to the Company’s policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Act.

Auditor’s Responsibility

Our responsibility is to express an opinion on the Company’s internal financial controls over financial reporting based on our audit. We conducted our audit in accordance with the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting (the “Guidance Note”) and the Standards on Auditing as specified under section 143(10) of the Act, to the extent applicable to an audit of internal financial controls, both applicable to an audit of Internal Financial Controls and, both issued by the Institute of Chartered Accountants of India. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls over financial reporting was established and maintained and if such controls operated effectively in all material respects.

Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls system over financial reporting and their operating effectiveness. Our audit of internal financial controls over financial reporting included obtaining an understanding of internal financial controls over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the internal financial controls system over financial reporting.

Meaning of Internal Financial Controls Over Financial Reporting

A company’s internal financial control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal financial control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the Company are being made only in accordance with authorizations of management and directors of the Company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the Company’s assets that could have a material effect on the financial statements.

Inherent Limitations of Internal Financial Controls Over Financial Reporting

Because of the inherent limitations of internal financial controls over financial reporting, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may occur and not be detected. Also, projections of any evaluation of the internal financial controls over financial reporting to future periods are subject to the risk that the internal financial control over financial reporting may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Opinion

In our opinion, the Company has, in all material respects, an adequate internal financial controls system over financial reporting and such internal financial controls over financial reporting were operating effectively as at March 31,2016, based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India.

For S.R. Batliboi & Associates LLP For Appan & Lokhandwala Associates

Chartered Accountants Chartered Accountants

ICAI Firm Registration No. 101049W/E300004 ICAI Firm Registration No. 117040W

per Kalpesh Jain per M. Subramanian

Partner Partner

Membership No. 106406 Membership No. 111106

Mumbai Mumbai

May 20, 2016 May 20, 2016


Mar 31, 2015

Report on the Standalone Financial Statements

We have audited the accompanying standalone financial statements of Allcargo Logistics Limited ("the Company"), which comprise the Balance Sheet as at 31 March 2015 and the Statement of Profit and Loss and the Cash Flow Statement for the year then ended, and a summary of the significant accounting policies and other explanatory information.

Management''s Responsibility for the Standalone Financial Statements

The Company''s Board of Directors is responsible for the matters stated in sub-section 5 of Section 134 of the Companies Act, 2013 ("the Act") with respect to the preparation of these standalone financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014.

This responsibility includes 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 frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditors'' Responsibility

Our responsibility is to express an opinion on these standalone financial statements based on our audit.

We have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made there under.

We conducted our audit in accordance with the Standards on Auditing issued by Institute of Chartered Accountants of India specified under sub-section 10 of Section 143 of the Act. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the standalone financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the financial statements. The procedures selected depend on the auditors'' judgment, including the assessment of the risks of material misstatement of the standalone financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial control relevant to the Company''s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the operating effectiveness of entity''s internal controls. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the Management, as well as evaluating the overall presentation of the standalone financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the standalone financial statements.

Opinion

In our opinion and to the best of our information and according to the explanations given to us, the aforesaid standalone financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the state of affairs of the Company as at 31 March 2015 and its profit and its cash flows for the year ended on that date.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor''s Report) Order, 2015 (''the Order''), issued by the Central Government of India in exercise of powers conferred by sub-section (11) of Section 143 of the Act, we enclose in the Annexure, a statement on the matters specified in paragraphs 3 and 4 of the Order.

2. As required by sub-section (3) of Section 143 of the Act, we report that:

(a) we have sought and obtained all the information and explanations, which to the best of our knowledge and belief, were necessary for the purposes of our audit;

(b) in our opinion, proper books of account as required by law have been kept by the Company so far as it appears from our examination of those books;

(c) the Balance Sheet, the Statement of Profit and Loss and the Cash Flow Statement dealt with by this Report are in agreement with the books of account;

(d) in our opinion, the aforesaid standalone financial statements comply with the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014;

(e) on the basis of the written representations received from the Directors as on 31 March 2015 taken on record by the Board of Directors, none of the Directors is disqualified as on 31 March 2015 from being appointed as a Director in terms of sub-section 2 of Section 164 of the Act; and

(f) with respect to the other matters to be included in the Auditors'' Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, in our opinion and to the best of our information and according to the explanations given to us:

1. the Company has disclosed the impact of pending litigations on its financial position in its standalone financial statements - Refer Note 30 to the standalone financial statements;

2. the Company did not have any long-term contracts including derivative contracts for which there were any material forseeable losses ; and

3. there has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company.

ANNEXURE TO THE INDEPENDENT AUDITORS’ REPORT - 31 MARCH 2015

With reference to the Annexure referred to in the Independent Auditors'' Report to the Members of Allcargo Logistics Limited (''the Company'') on the standalone financial statements for the year ended 31 March 2015, we report the following:

(i) (a) The Company has maintained proper records showing full particulars, including quantitative details and situation of fixed assets.

(b) The Company has a regular programme of physical verification of its fixed assets by which heavy equipments and other vehicles are verified annually and all other fixed assets are verified over a period of three years. In our opinion, this periodicity of physical verification is reasonable having regard to the size of the Company and the nature of its assets. In accordance with the above programme, the Company has verified the relevant fixed assets during the year and we are informed that no material discrepancies were noticed on such verification, which have been adjusted.

(ii) (a) The inventory has been physically verified by the management during the year. In our opinion, the frequency of such verification is reasonable.

(b) The procedures for the physical verification of inventories 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. The discrepancies noticed on verification between the physical stocks and the book records were not material and these have been dealt with in the books of account.

(iii) The Company has not granted any loans, secured or unsecured, to companies, firms or other parties covered in the register maintained under Section 189 of the Act. Accordingly, paragraphs (iii) (a) and (b) of the Order are not applicable to the Company.

(iv) In our opinion and according to the information and explanations given to us, and having regard to the explanation that certain services rendered are for the specific requirements of certain buyers and, there is an adequate internal control system commensurate with the size of the Company and the nature of its business with regard to purchase of fixed assets and inventories and with regard to sale of goods and services. We have not observed any major weaknesses in the internal control system during the course of the audit.

(v) In our opinion, and according to the information and explanations given to us, the Company has not accepted deposits as per the directives issued by the Reserve Bank of India under the provisions of Sections 73 to 76 or any other relevant provisions of the Act and the rules framed there under. Accordingly, paragraph (v) of the Order is not applicable to the Company.

(vi) As informed to us by the management, the Central Government has not prescribed the maintenance of cost records under Section 148 of the Act for any of the goods sold and services/activities rendered by the Company.

(vii) (a) According to the information and explanations given to us and on the basis of our examination of the records of the Company, amounts deducted/accrued in the books of account in respect of undisputed statutory dues including Provident fund, Employees'' State Insurance, Sales tax, Wealth tax, Service tax, duty of Customs, Value added tax, Cess, Professional tax and other material statutory dues have been regularly deposited during the year by the Company with the appropriate authorities in all cases during the year. As explained to us, the Company did not have any dues on account of duty of Excise.

According to the information and explanations given to us and on the basis of our examination of the records of the Company, amounts deducted/accrued in the books of account in respect of income tax have generally been regularly deposited with the appropriate authorities, though there has been a slight delay in a few cases.

According to the information and explanations given to us, no undisputed amounts payable in respect of Provident Fund, Employees'' State Insurance, Income-tax, Sales tax, Wealth tax, Service tax, duty of Customs, duty of Excise, Value added tax, Cess, Professional tax and other material statutory dues were in arrears as at 31 March 2015 for a period of more than six months from the date they became payable.

(b) According to the information and explanations given to us, there are no dues of sales tax, wealth tax and cess which have not been deposited with appropriate authorities on account of any disputes.

According to the information and explanations given to us, the following statutory dues have not been deposited by the Company on account of disputes:

Name of Nature of Amount Demanded Amount not the Statute dues (RS.in Lakhs) Deposited Under Disputes (RS.in Lakhs)

The Finance Service tax 2 1 Act 2004

The Finance Service tax 3 2 Act 2004

The Finance Service tax 88 72 Act 2004

The Finance Service tax 277 277 Act 2004

The Finance Service tax 3 3 Act 2004

The Finance Service tax 1 1 Act 2004

The Custom Custom duty 2 2 Act 1962

The Custom Custom duty 181 181 Act 1962

The Custom Custom duty 28 28 Act 1962

The Income Income Tax 1,520 1,520 Act 1961

Rajasthan Entry Tax 67 - local Area Act, 1999

Name of Period to Which Forum where dispute the Statute the amount relates is pending

The Finance 2003-04 to 2006-07 CESTAT Act 2004

The Finance April 2008 to CERA Act 2004 September 2008

The Finance February 2004 to Commissioner of Act 2004 March 2009 Service tax, Mumbai

The Finance 2007-08 to 2011-12 Commissioner of Act 2004 Service tax, Ahmedabad

The Finance 2008-09 to 2010-11 Commissioner of Act 2004 Service tax,(Appeal) Indore

The Finance 2008-09 Commissioner of Act 2004 Service tax,(Appeal) Indore

The Custom 2004 CESTAT Act 1962

The Custom 2004 CESTAT Act 1962

The Custom 2009 CESTAT Act 1962

The Income AY 2010-11 CIT (Appeals) Tax Act 1961

Rajasthan AY 2009-10 The Deputy local Area Commissioner Act, 1999 Appeal (1st)

(c) According to the information and explanations given to us and on the basis of our examination of the records of the Company, the amount required to be transferred to Investor Education and Protection Fund in accordance with the relevant provisions of the Companies Act, 1956 (1 of 1956) and rules made thereunder has been transferred to such fund within time.

(viii) The Company does not have any accumulated losses at the end of the financial year. The Company has not incurred any cash losses in the current year and the immediately preceding financial year.

(ix) In our opinion and according to the information and explanations given to us, the Company has not defaulted in repayment of dues to its banks and financial institutions. The Company did not have any outstanding dues to any debenture holders during the year.

(x) According to the information and explanations given to us, the terms and conditions on which the Company has given guarantee for loan taken by subsidiaries from banks are not prima facie prejudicial to the interests of the Company.

(xi) In our opinion and according to the information and explanations given to us, the term loans taken by the Company have been applied for the purpose for which they were raised.

(xii) According to the information and explanations given to us, no fraud on or by the Company has been noticed or reported during the course of our audit.

For B S R & Co. LLP For Appan & Lokhandwala Associates Chartered Accountants Chartered Accountants Firm''s Registration Firm''s Registration No: 117040W No: 101248W/W-100022

Aniruddha Godbole M. Subramanian Partner Partner Membership No: 105149 Membership No: 111106

Mumbai Mumbai 21 May 2015 21 May 2015


Mar 31, 2014

Report on the financial statements

We have audited the accompanying financial statements of Allcargo Logistics Limited (''the Company''), which comprise the Balance sheet as at March 31, 2014 and the Statement of Profit and loss and the Cash flow statement for the year then ended, and a summary of significant accounting policies and other explanatory information.

Management''s responsibility for the financial statements

The Management is responsible for the preparation of these financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the Accounting Standards referred to in sub-section (3C) of Section 211 of the Companies Act, 1956 ("the Act”) read with the General Circular 15/2013 dated 13 September 2013 of the Ministry of Corporate Affairs in respect of Section 133 of the Companies Act, 2013. This responsibility includes the design, implementation and maintenance of internal control relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditors'' responsibility

Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with the Standards on Auditing issued by the Institute of Chartered Accountants of India. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor''s judgement, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the Company''s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity''s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Opinion

In our opinion and to the best of our information and according to the explanations given to us, the financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:

(a) in the case of the Balance sheet, of the state of affairs of the Company as at March 31, 2014;

(b) in the case of the Statement of Profit and loss, of the Profit of the Company for the year ended on that date; and

(c) in the case of the Cash flow statement, of the cash flows of the Company for the year ended on that date.

Emphasis of matter

Without qualifying our report, we draw attention to note 46 of the financial statements regarding the Scheme of Arrangement (''the Scheme'') sanctioned by the Hon''ble High Court of Judicature at Mumbai. The Scheme permits the Company to adjust the deficit of Rs. 3,410 Lakhs arising against cancellation of Investment against the share capital of the amalgamating company to goodwill, which is considered to be an override to the relevant provisions of Accounting Standard 14 (AS 14) Accounting for Amalgamations''. Had such deficit not being adjusted to goodwill, the Company would have reflected such deficit of Rs. 3,410 Lakhs to general reserve account. Our opinion is not qualified in respect to this matter.

Report on other legal and regulatory requirements

1. As required by the Companies (Auditor''s Report) Order, 2003 (''the Order''), issued by the Central Government of India in terms of sub-section (4A) of Section 227 of the Act, we give in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the Order.

2. As required by Section 227(3) of the Act, we report that:

(a) we have obtained all the information and explanations, which to the best of our knowledge and belief, were necessary for the purposes of our audit;

(b) 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 those books;

(c) the Balance sheet, the Statement of Profit and loss and the Cash flow statement dealt with by this report are in agreement with the books of account;

(d) in our opinion, the Balance sheet, the Statement of Profit and loss and the Cash flow statement comply with the Accounting Standards referred to in sub-section (3C) of Section 211 of the Act, read with General Circular 15/2013 dated September 13, 2013 of the Ministry of Corporate Affairs in respect of Section 133 of the Companies Act, 2013; and

(e) on the basis of written representations received from the directors of the Company as at March 31, 2014, and taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2014 from being appointed as a director in terms of clause (g) of sub-section (1) of Section 274 of the Act.

ANNEXURE TO THE INDEPENDENT AUDITORS'' REPORT - MARCH 31, 2014

With reference to the Annexure referred to in the Independent Auditors'' Report to the Members of Allcargo Logistics Limited (''the Company'') on the financial statements for the year ended March 31, 2014, we report the following:

(i) (a) The Company has maintained proper records showing full particulars, including quantitative details and situation of fixed assets.

(b) The Company has a regular programme of physical verification of its fixed assets by which heavy equipments and other vehicles are verified annually and all other fixed assets are verified over a period of three years. In our opinion, this periodicity of physical verification is reasonable having regard to the size of the Company and the nature of its assets. In line with the above program, the Company has verified the above fixed assets during the year and we are informed that no material discrepancies were noticed on such verification.

(c) Fixed assets disposed off during the year were not substantial and therefore, do not affect the going concern assumption.

(ii) (a) The inventory, other than stocks lying with third parties, has been physically verified by the management during the period. In our opinion, the frequency of such verification is reasonable. For stocks lying with third parties at the year end, written Confirmations has been obtained.

(b) The procedures for physical verification of inventories 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. The discrepancies noticed on verification between the physical stocks and the book records were not material and these have been dealt with in the books of account.

(iii) (a) The Company has granted unsecured loans to a body corporate covered in the register maintained under Section 301 of the Companies Act, 1956 (''the Act''). The maximum amount outstanding during the year was Rs. 10 Lakhs and the year-end balance was Nil. The Company has not granted loans, secured or unsecured to firms or other parties covered in the register maintained under Section 301 of the Act. In our opinion and according to the information and explanation given to us, the outstanding current account is not considered by the Company and accordingly do not fall under purview of loans.

(b) In our opinion, the rate of interest and other terms and conditions on which the loans have been granted to a body corporate covered in the register maintained under Section 301 of the Act are not, prima facie, prejudicial to the interests of the Company.

(c) Loans granted to a body corporate listed in the register maintained under Section 301 of the Act are repaid during the year. The borrower has been regular in repaying the principal amounts as demanded and in the payment of interest.

(d) There are no overdue amounts of more than rupees one lakh in respect of the loans granted to a body corporate listed in the register maintained under Section 301 of the Act.

(e) According to the information and explanations given to us, the Company has not taken any loans, secured or unsecured, from companies, firms or parties covered in the register maintained under Section 301 of the Act. Accordingly, paragraphs 4 (iii) (e) to 4(iii) (g) of the Order are not applicable.

(iv) In our opinion and according to the information and explanations given to us, and having regard to the explanation that certain services rendered are for the specific requirements of certain buyers and that purchases of certain items of fixed assets are for the Company''s specific requirements and suitable alternative sources are not available to obtain comparable quotations, there is an adequate internal control system commensurate with the size of the Company and the nature of its business with regard to purchase of fixed assets and inventories and with regard to the sale of goods and services. We have not observed any major weakness in the internal control system during the course of the audit.

(v) (a) In our opinion and according to the information and explanations given to us, the particulars of contracts or arrangements referred to in Section 301 of the Act have been entered in the register to be maintained under that section.

(b) In our opinion and according to the information and explanations given to us, and having regard to the explanation that certain services rendered are for the specific requirements of certain buyers and suitable alternative sources are not available to obtain comparable quotations, the transactions made in pursuance of contracts or arrangements in the register maintained under Section 301 of the Act 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 time. However, on the basis of information and explanations provided, the same appear reasonable.

(vi) The Company has not accepted any deposits from the public during the year.

(vii) In our opinion, the Company has an internal audit system commensurate with its size and the nature of its business.

(viii) As informed to us by the management, the Central Government has not prescribed the maintenance of cost records under Section 209(1)(d) of the Act for any of the goods sold and services / activities / rendered by the Company.

(ix) (a) According to the information and explanations given to us and on the basis of our examination of the records of the Company, amounts deducted/accrued in the books of account in respect of undisputed statutory dues of Provident fund, Investor Education and Protection Fund, Employees'' State Insurance, Income-tax, Sales tax, Wealth tax, Service tax, Customs duty, Excise duty, Cess and other material statutory dues have generally been regularly deposited during the period by the Company with the appropriate authorities, though there are slight delays in few cases.

According to the information and explanations given to us, no undisputed amounts payable in respect of Provident fund, Investor Education and Protection Fund, Employees'' State Insurance, Income tax, Sales tax, Wealth tax, Service tax, Customs duty, Excise duty, Cess and other material statutory dues were in arrears as at March 31, 2014 for a period of more than six months from the date they became payable.

(b) According to the information and explanations given to us, there are no dues of Sales tax, Wealth tax and Cess which have not been deposited with the appropriate authorities on account of any disputes.

According to the information and explanations given to us, the following statutory dues have not been deposited by the Company on account of disputes:



Name of the Nature of Demand Amount not period to Forum where Status of Dues (Rs. in deposited the amount dispute Lakhs on account relates is pending of demand (Rs. in Lakhs)

The Finance Act, 1994 Penalty 2 2 2002 Commissio ner of Central Excise and Service Tax Appellate Tribunal

Service tax 3 2 Apr-08 to Sep-08 CERA

Service tax 1,043 1,043 2004-05 to 2009-10 Commissio ner of Service tax, Chennai

The Customs Act, 1962 Custom 181 181 2004 Commissio ner of Duty Customs

Custom 28 28 2009 Commissio ner of Duty Customs

Custom 2 2 2002 Appellate Tribunal Duty

Rajasthan Local Area Act, 1999 Entry tax 72 72 FY 2009-10 Rajasthan including Commercial Tax interest and Department penalty

The Income Tax Act,1961 Income Tax 6,729 6,729 A.Y. 2003-04 to High Court 2009-10

The Income Tax Act,1961 Income Tax 3,498 1,191 A.Y 2010-11 Commiss ioner of Income Tax (Appeals)

(x) The Company does not have any accumulated losses as at the end of the financial year. The Company has not incurred any cash losses in the current year 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 banks. The Company did not have any outstanding dues to any financial institution or debenture holders during the year.

(xii) According to the information and explanations given to us, the Company has not granted any loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

(xiii) In our opinion, and according to the information and explanations given to us, the Company is not a chit fund or a nidhi/ mutual benefit fund/ society.

(xiv) According to the information and explanation given to us, the Company is not dealing or trading in shares, securities, debentures and other investments.

(xv) According to the information and explanations given to us, the terms and conditions on which the Company has given guarantees for loans taken by subsidiaries from banks and others are not prima facie prejudicial to the interests of the Company.

(xvi) In our opinion and according to the information and explanations given to us, the term loans taken by the Company 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 of the Company, we are of the opinion that the funds raised on short term basis have not been used for long term purposes.

(xviii) The Company has not made any preferential allotment of shares during the year to companies/firms/parties covered in the register maintained under Section 301 of the Act.

(xix) The Company did not have any outstanding debentures during the year.

(xx) The Company has not raised any money by public issue during the year.

(xxi) According to the information and explanations given to us, no fraud on or by the Company has been noticed or reported during the course of our audit.

For B S R & Co. LLP For Appan & Lokhandwala Associates

Chartered Accountants Chartered Accountants

Firm''s Registration No: 101248W Firm''s Registration No: 117040W

Aniruddha Godbole M. Subramanian

Partner Partner

Membership No: 105149 Membership No: 111106

May 24, 2014 May 24, 2014

Mumbai Mumbai


Mar 31, 2013

Report on the fnancial statements

We have audited the accompanying fnancial statements of Allcargo Logistics Limited (''the Company''), which comprise the Balance sheet as at 31 March 2013 and the Statement of proft and loss and the Cash fow statement for the year then ended, and a summary of signifcant accounting policies and other explanatory information.

Management''s responsibility for the fnancial statements

The Management is responsible for the preparation of these fnancial statements that give a true and fair view of the fnancial position, fnancial performance and cash fows of the Company in accordance with the Accounting Standards referred to in sub-section (3C) of Section 211 of the Companies Act, 1956 ("the Act"). This responsibility includes the design, implementation and maintenance of internal control relevant to the preparation and presentation of the fnancial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditors'' responsibility

Our responsibility is to express an opinion on these fnancial statements based on our audit. We conducted our audit in accordance with the Standards on Auditing issued by the Institute of Chartered Accountants of India. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the fnancial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the fnancial statements. The procedures selected depend on the auditor''s judgement, including the assessment of the risks of material misstatement of the fnancial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the Company''s preparation and fair presentation of the fnancial statements in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by management, as well as evaluating the overall presentation of the fnancial statements.

We believe that the audit evidence we have obtained is suffcient and appropriate to provide a basis for our audit opinion.

Opinion

In our opinion and to the best of our information and according to the explanations given to us, the fnancial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:

(a) in the case of the Balance sheet, of the state of affairs of the Company as at 31 March 2013;

(b) in the case of the Statement of proft and loss, of the proft of the Company for the year ended on that date; and

(c) in the case of the Cash fow statement, of the cash fows of the Company for the year ended on that date.

Report on other legal and regulatory requirements

1. As required by the Companies (Auditor''s Report) Order, 2003 (''the Order''), issued by the Central Government of India in terms of sub-section (4A) of Section 227 of the Act, we give in the Annexure a statement on the matters specifed in paragraphs 4 and 5 of the Order.

2. As required by Section 227(3) of the Act, we report that:

(a) we have obtained all the information and explanations, which to the best of our knowledge and belief, were necessary for the purposes of our audit;

(b) 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 those books;

(c) the Balance sheet, the Statement of proft and loss and the Cash fow statement dealt with by this report are in agreement with the books of account;

(d) in our opinion, the Balance sheet, the Statement of proft and loss and the Cash fow statement comply with the Accounting Standards referred to in sub-section (3C) of Section 211 of the Act; and

(e) on the basis of written representations received from the directors of the Company as at 31 March 2013, and taken on record by the Board of Directors, none of the directors is disqualifed as on 31 March 2013 from being appointed as a director in terms of clause (g) of sub-section (1) of Section 274 of the Act.

Annexure to the Independent AudItors'' report - 31 MArCh 2013

With reference to the Annexure referred to in the Independent Auditors'' Report to the Members of Allcargo Logistics Limited (''the Company'') on the fnancial statements for the year ended 31 March 2013, we report the following:

(i) (a) The Company has maintained proper records showing full particulars, including quantitative details and situation of fxed assets.

(b) The Company has a regular programme of physical verifcation of its fxed assets by which all fxed assets are verifed over a period of three years. In our opinion, this periodicity of physical verifcation is reasonable having regard to the size of the Company and the nature of its assets. In accordance with the policy, the Company has physically verifed certain fxed assets during the year and we are informed that no discrepancies were noticed on such verifcation.

(c) Fixed assets disposed off during the year were not substantial and therefore, do not affect the going concern assumption.

(ii) (a) The inventory, other than stocks lying with third parties, has been physically verifed by the management during the period. In our opinion, the frequency of such verifcation is reasonable. The procedures for physical verifcation of inventories followed by the management are reasonable and adequate in relation to the size of the Company and the nature of its business.

(b) The Company is maintaining proper records of inventories. The discrepancies noticed on verifcation between the physical stocks and the book records were not material and these have been dealt with in the books of account.

(iii) (a) The Company has granted unsecured loans to a body corporate covered in the register maintained under Section 301 of the Companies Act, 1956 (''the Act''). The maximum amount outstanding during the year was Rs. 5,077 lakhs and the year-end balance was Rs. 9.8 lakhs. The Company has not granted loans, secured or unsecured to frms or other parties covered in the register maintained under Section 301 of the Act. In our opinion and according to the information and explanation given to us, the Company does not consider the reimbursement of costs charged and outstanding to fall under preview of loans.

(b) In our opinion, the rate of interest and other terms and conditions on which the loans have been granted to a body corporate covered in the register maintained under Section 301 of the Act are not, prima facie, prejudicial to the interests of the Company.

(c) Loans granted to a body corporate listed in the register maintained under Section 301 of the Act are repayable on demand. The borrower has been regular in repaying the principal amounts as demanded and in the payment of interest.

(d) There are no overdue amounts of more than rupees one lakh in respect of the loans granted to a body corporate listed in the register maintained under Section 301 of the Act.

(e) According to the information and explanations given to us, the Company has not taken any loans, secured or unsecured, from companies, frms or parties covered in the register maintained under Section 301 of the Act. Accordingly, paragraphs 4 (iii) (e) to 4(iii) (g) of the Order are not applicable.

(iv) In our opinion and according to the information and explanations given to us, and having regard to the explanation that certain services rendered are for the specialised requirements of certain buyers and that purchases of certain items of fxed assets are for the Company''s specialised requirements and suitable alternative sources are not available to obtain comparable quotations, there is an adequate internal control system commensurate with the size of the Company and the nature of its business with regard to purchase of fxed assets and inventories and with regard to the sale of goods and services. We have not observed any major weakness in the internal control system during the course of the audit.

(v) (a) In our opinion and according to the information and explanations given to us, the particulars of contracts or arrangements referred to in Section 301 of the Act have been entered in the register to be maintained under that section.

(b) In our opinion and according to the information and explanations given to us, and having regard to the explanation that certain services rendered are for the specialised requirements of certain buyers and suitable alternative sources are not available to obtain comparable quotations, the transactions made in pursuance of contracts or arrangements in the register maintained under Section 301 of the Act and exceeding the value of Rupees fve 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 time. However, on the basis of information and explanations provided, the same appear reasonable.

(vi) The Company has not accepted any deposits from the public during the year.

(vii) In our opinion, the Company has an internal audit system commensurate with its size and the nature of its business.

(viii) We have broadly reviewed the books of account maintained by the Company pursuant to the rules prescribed by the Central Government for maintenance of cost records, to the extent applicable to the activities undertaken by the Company, under Section 209(1) (d) of the Act and are of the opinion that prima facie, the prescribed accounts and records have been made and maintained. However, we have not made a detailed examination of the records.

(ix) (a) According to the information and explanations given to us and on the basis of our examination of the records of the Company, amounts deducted/accrued in the books of account in respect of undisputed statutory dues of Provident fund, Employees'' State Insurance, Investor Education and Protection Fund, Income-tax, Sales tax, Wealth tax, Service tax, Customs duty, Excise duty and other material statutory dues have generally been regularly deposited during the period by the Company with the appropriate authorities, though there are slight delays in few cases.

According to the information and explanations given to us, no undisputed amounts payable in respect of Provident fund, Employees'' State Insurance, Investor Education and Protection Fund, Income tax, Sales tax, Wealth tax, Service tax, Customs duty, Excise duty and other material statutory dues were in arrears as at 31 March 2013 for a period of more than six months from the date they became payable.

(b) According to the information and explanations given to us, there are no dues of Sales tax, Wealth tax and Cess which have not been deposited with the appropriate authorities on account of any disputes.

(x) The Company does not have any accumulated losses as at the end of the fnancial year. The Company has not incurred any cash losses in the current year and immediately preceding fnancial period.

(xi) In our opinion and according to the information and explanations given to us, the Company has not defaulted in repayment of dues to banks. The Company did not have any outstanding dues to any fnancial institution or debenture holders during the year.

(xii) According to the information and explanations given to us, the Company has not granted any loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

(xiii) In our opinion, and according to the information and explanations given to us, the Company is not a chit fund or a nidhi/ mutual beneft fund/ society.

(xiv) According to the information and explanations given to us, the Company is not dealing or trading in shares, securities, debentures and other investments.

(xv) According to the information and explanations given to us, the terms and conditions on which the Company has given guarantees for loans taken by subsidiaries from banks and others are not prima facie prejudicial to the interests of the Company.

(xvi) In our opinion and according to the information and explanations given to us, the term loans taken by the Company 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 of the Company, we are of the opinion that the funds raised on short term basis have not been used for long term purposes.

(xviii) The Company has not made any preferential allotment of shares during the year to companies/frms/parties covered in the register maintained under Section 301 of the Act.

(xix) The Company did not have any outstanding debentures during the year.

(xx) The Company has not raised any money by public issue during the year.

(xxi) According to the information and explanations given to us, no fraud on or by the Company has been noticed or reported during the course of our audit.

For B s r & Co. For Appan & Lokhandwala Associates

Chartered Accountants Chartered Accountants

Firm''s Registration No: 101248W Firm''s Registration No: 117040W

Vijay Bhatt M.Subramanian

Partner Partner

Membership No: 036647 Membership No: 111106

Place : Mumbai Date : May 29, 2013


Mar 31, 2012

We have audited the attached Balance Sheet of Allcargo Logistics Limited (formerly known as All cargo Global Logistics Limited) ('the Company') as at March 31, 2012, and the related Profit and Loss Account and the Cash Flow Statement for the fifteen months period ended on that date, annexed thereto. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audit.

We 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 misstatement. 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 evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

1. As required by the Companies (Auditor's Report) Order, 2003 ('the Order'), issued by the Central Government of India in terms of sub-section (4A) of Section 227 of the Companies Act, 1956 ('the Act'), we enclose in the Annexure, a statement on the matters specified in paragraphs 4 and 5 of the said Order.

2. Further to our comments in the Annexure referred to above, we report that:

a) We have obtained all the information and explanations, which to the best of our knowledge and belief, were necessary for the purposes of our audit;

b) 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 those books;

c) The Balance Sheet, the Profit and Loss Account and the Cash Flow Statement dealt with by this report are in agreement with the books of account;

d) I n our opinion, the Balance Sheet, the Profit and Loss Account and the Cash Flow Statement dealt with by this report comply with the Accounting Standards referred to in sub-section (3C) of Section 211 of the Act;

e) A n the basis of written representations received from the Directors as of March 31, 2012 and taken on record by the Board of Directors, we report that none of the Directors is disqualified as on March 31, 2012 from being appointed as a Director in terms of clause (g) of sub-section (1) of Section 274 of the Act;

f) As more fully explained in note 26.3 to the financial statements, the Company has paid remuneration aggregating to Rs. 37,726 thousand (previous year: Rs. 24,340 thousand) for the period from January 1, 2011 to March 31, 2012 to relatives of certain directors, which is subject to approval of the Central Government as per the requirements of Section 314 of the Companies Act, 1956. The Company has made necessary application in respect of the same; and

g) I n our opinion and to the best of our information and according to the explanations given to us, subject to the effect of the matter included in the paragraph (f) above, the said financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:

(i) in the case of the Balance Sheet, of the state of affairs of the Company as at March 31, 2012;

(ii) I n the case of the Profit and Loss Account, of the profit of the Company for the fifteen months period ended on that date; and

(iii) I n the case of the Cash Flow Statement, of the cash flows of the Company for the fifteen months period ended on that date.

ANNEXURE TO THE AUDITORS' REPORT

(Referred to in our report of even date)

(i) (a) The Company has maintained proper records showing full particulars, including quantitative details and situation of fixed assets.

(b) The Company has a regular programme of physical verification of its fixed assets by which all fixed assets are verified over a period of two years. In our opinion, this periodicity of physical verification is reasonable having regard to the size of the Company and the nature of its assets. In accordance with the policy, the Company has physically verified certain fixed assets during the period and we are informed that no material discrepancies were noticed on such verification.

(c) Fixed assets disposed off during the period were not substantial, and therefore, do not affect the going concern assumption.

(ii) (a) The inventory has been physically verified by the management during the period. In our opinion, the frequency of such verification is reasonable. The procedures for physical verification of inventories followed by the management are reasonable and adequate in relation to the size of the Company and the nature of its business.

(b) The Company is maintaining proper records of inventory. The discrepancies noticed on verification between the physical stocks and the book records were not material and these have been dealt with in the books of account.

(iii) (a) The Company has granted unsecured loans to a body corporate covered in the register maintained under Section 301 of the Companies Act, 1956 ('the Act'). The maximum amount outstanding during the year was Rs. 604,387 thousand and the year-end balance was Rs. 507,799 thousand. The Company has not granted loans, secured or unsecured to firms or other parties covered in the register maintained under Section 301 of the Act. In our opinion and according to the information and explanation given to us, the Company does not consider the reimbursement of costs charged and outstanding to fall under preview of loans.

(b) I n our opinion, the rate of interest and other terms and conditions on which the loans have been granted to the body corporate covered in the register maintained under Section 301 of the Act are not, prima facie, prejudicial to the interest of the Company.

(c) Loans granted to the body corporate listed in the register maintained under Section 301 of the Act are repayable on demand. The borrowers have been regular in repaying the principal amounts as demanded and in the payment of interest.

(d) There are no overdue amounts of more than rupees one lakh in respect of loans granted to the body corporate listed in the register maintained under Section 301 of the Act.

(e) According to the information and explanations given to us, the Company has not taken any loans, secured or unsecured, from companies, firms or parties covered in the register maintained under Section 301 of the Act. Accordingly, paragraphs 4 (iii) (e) to 4(iii) (g) of the Order are not applicable.

(iv) In our opinion and according to the information and explanations given to us, except that certain services rendered are of a specialized nature and are rendered to specific buyers and as explained suitable alternative sources are not available to obtain comparable quotations, there is an adequate internal control system commensurate with the size of the Company and the nature of its business with regard to purchase of fixed assets and inventories and with regard to the sale of goods and services. We have not observed any major weakness in the internal control system during the course of the audit.

(v) (a) In our opinion and according to the information and explanations given to us, the particulars of contracts or arrangements referred to in Section 301 of the Act have been entered in the register to be maintained under that section.

(b) In our opinion and according to the information and explanations given to us, except that certain services rendered are of a specialized nature and are rendered to specific buyers and suitable alternative sources are not available to obtain comparable quotations, the transactions made in pursuance of contracts or arrangements in the register maintained under Section 301 of the Act 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 time. However, on the basis of information and explanations provided, the same appear reasonable.

(vi) The Company has not accepted any deposits from the public during the period.

(vii) In our opinion, the Company has an internal audit system commensurate with its size and the nature of its business.

(viii) As informed to us by the management, the Central Government has not prescribed the maintenance of cost records under Section 209(1) (d) of the Act for any of the goods and services / activities sold / rendered by the Company.

(ix) (a) According to the information and explanations given to us and on the basis of our examination of the records of the Company, amounts deducted/accrued in the books of account in respect of undisputed statutory dues of Provident Fund, Employees' State Insurance, Investor Education and Protection Fund, Income-tax, Sales tax, Wealth Tax, Service Tax, Customs Duty, Excise Duty, Cess and other material statutory dues have generally been regularly deposited during the period by the Company with the appropriate authorities, though there are slight delays in few cases.

According to the information and explanations given to us, no undisputed amounts payable in respect of Provident fund, Employees' State Insurance, Investor Education and Protection Fund, Income Tax, Sales Tax, Wealth tax, Service Tax, Customs Duty, Excise Duty, Cess and other material statutory dues were in arrears as at March 31, 2012 for a period of more than six months from the date they became payable.

(b) According to the information and explanations given to us, there are no dues of Sales tax, Wealth tax and Cess which have not been deposited with the appropriate authorities on account of any disputes.

According to the information and explanations given to us, the following statutory dues have not been deposited by the Company on account of disputes:

Name of the Statute Nature of the Amount Period to Forum where dispute Due (Rs000) amount is pending relates The Finance Act, 1994 Service tax plus 217 2006-07 to 2009-10 Commissioner of Central Excise interest and and Service Tax Appellate penalty Tribunal

Penalty 150 2002 Commissioner of Central Excise and Service Tax Appellate Tribunal

Service tax 201 Apr-08 to Sep-08 CERA

Service tax 104,336 2004-05 to 2009-10 Commissioner of Service tax, Chennai

Service tax 9,030 2004-2009 Deputy Commissioner of Service tax, Raigad district

The Customs Act, 1962 Custom Duty 18,100 2004 Commissioner of Customs

Penalty 200 2011-2012 Commissioner of Customs

The Income Tax Act,1961 Income Tax 547,860 A.Y. 2003-04 to 2009-10 Income Tax Appel late Tribunal

(x) The Company does not have any accumulated losses as at the end of the financial period. The Company has not incurred any cash losses in the current period and 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 banks. The Company did not have any outstanding dues to any financial institution or debenture holders during the period.

(xii) According to the information and explanations given to us, the Company has not granted any loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

(xiii) In our opinion, and according to the information and explanations given to us, the Company is not a chit fund or a nidhi/ mutual benefit fund/ society.

(xiv) According to the information and explanations given to us, the Company is not dealing or trading in shares, securities, debentures and other investments.

(xv) According to the information and explanations given to us, the terms and conditions on which the Company has given guarantees for loans taken by subsidiaries from banks and financial institutions are not prima facie prejudicial to the interest of the Company.

(xvi) I n our opinion and according to the information and explanations given to us, the term loans taken by the Company 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 of the Company, we are of the opinion that the funds raised on short term basis have not been used for long term purposes.

(xviii) The Company has not made any preferential allotment of shares during the period to companies/firms/parties covered in the register maintained under Section 301 of the Act.

(xix) The Company did not have any outstanding debentures during the period.

(xx) The Company has not raised any money by public issue during the period.

(xxi) According to the information and explanations given to us, no fraud on or by the Company has been noticed or reported during the course of our audit.

For Appan & Lokhandwala Associates For B S R & Co.

Chartered Accountants Chartered Accountants

Firm's Registration No: 117040W Firm's Registration No: 101248W

M.Subramanian Vijay Bhatt

Partner Partner

Membership Number: 111106 Membership No: 036647

Place : Mumbai

Dated : May 30, 2012


Dec 31, 2010

1. We have audited the attached Balance Sheet of Allcargo Global Logistics Limited as at December 3 I, 2010 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 basisforouropinion.

3. As required by the Companies (Auditors Report) Order, 2003 (the Order), as amended, issued by the Central Government of India in terms of sub-section (4A) of Section 227 of the Companies Act, 1956 (the Act), we give in the Annexure, a statement on the matters specified in paragraphs 4 and 5 of the said Order.

4. Furtherto 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 forthe purpose of the audit;

ii. In our opinion, proper books of account as required by law have been kept by the Company so far as appears from ourexamination ofthose books;

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 and Loss Account and Cash Flow Statement, dealt with by this report, comply 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 21 I ofthe Companies Act, 1956;

v. 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 ofthe balance sheet, ofthe state of affairs ofthe Company as at December 3 1, 2010;

b. in the case ofthe profit and loss account, ofthe profit for the year ended on that date; and

c. in the case ofthe cash flow statement, ofthe cash flows forthe year ended on that date.

5. On the basis of written representations received from the directors and taken on record by the Board of Directors, we report that none ofthe Directors is disqualified as on December 31, 2010 from being appointed as a director in terms of clause (g) of sub-section (I )of Section 274 ofthe Companies Act, 1956.

ANNEXURE TO THE AUDITORS REPORT

i) a. The Company has maintained proper records showing full particulars including quantitative details and situation of fixed assets.

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 duringthe year were not substantial and therefore do not affect the 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) According to the information and explanations given to us, the Company has neither granted nortaken any loans secured or unsecured, to or from companies, firms or other parties covered in the register maintained under Section 301 of the Companies Act, 1956. Accordingly provisions of clause (iii) b, (iii) c, (iii) d, (iii) f and (iii) g of the Order are not applicable..

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. Duringthe 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 duringthe year have been made at prices which are reasonable having regard to prevailing market prices at the relevant time.

vi) As the Company has not accepted any deposits from the public, paragraph 4 (vi)ofthe 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 (I) of Section 209 of the Companies Act, 1956 forthe 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 material 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 hereunder:

Period to which the Amount Disputed Sr. No Name of the Statute amount relates Rs. in thousands

Income Tax Act Assessment years 672,860

2003-04, 2004-05, 2005-06, 2006-07, 2007-08, 2008-09 and 2009-10



Name Amount Paid Forum where Rs. in thousands pending

Income Tax Act 125,000 Appellate Authority upto Tribunal Level

x) The Company does not have accumulated losses as at the end of the year and the Company has not incurred cash losses duringthe current and the immediately precedingfinancial 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) ofthe Order is not applicable.

xiii) As the Company is not a chit fund/nidhi/mutual benefit fund/society to which the provisions of special statute relating to chit fund are applicable, paragraph 4(xiii) ofthe Order is not applicable.

xiv) In our opinion, the Company has maintained proper records ofthe 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 except investments of Rs.4,500 thousand and Rs.I9I,3I7 thousand continued to be held in the name of demerged entity and merged entity respectively.

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 ofthe Company.

xvi) In ouropinion, the term loans have been applied forthe purpose for which they were raised.

xvii) According to the information and explanations given to us and on an overall examination ofthe balance sheet and cashflows ofthe 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) The Company did not have any outstanding debentures duringthe year. Accordingly, paragraph 4 (xix) ofthe Order is not applicable.

xx) The Company has not raised any money through a public issue duringthe year.

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 duringthe course of our audit forthe year ended December 31, 2010.

For Appan & Lokhandwala Associates

Chartered Accountants (Registration No.: 117040W)

SR Palaniappan

Place: Mumbai Partner

Dated: April 05, 2011 Membership No. 38378


Dec 31, 2009

1. We have audited the attached Balance Sheet of Allcargo Global Logistics Limited as at December 31, 2009 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 Company’s 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 our opinion.

3. As required by the Companies (Auditors’ Report) Order, 2003 (‘the Order’), as amended, issued by the Central Government of India in terms of sub-section (4A) of Section 227 of the Companies Act, 1956 (‘the Act’), we give in the Annexure, a statement on the matters specified in paragraphs 4 and 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 audit;

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 those books;

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 and Loss Account and Cash Flow Statement, dealt with by this report, comply 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. 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 the balance sheet, of the state of affairs of the Company as at December 31, 2009;

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 and taken on record by the Board of Directors, we report that none of the Directors is disqualified as on December 31, 2009 from being appointed as a director in terms of clause (g) of sub-section (1) of Section 274 of the Companies Act, 1956.

ANNEXURE TO THE AUDITORS REPORT i) a. The Company has maintained proper records showing full particulars including quantitative details and situation of fixed assets.

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 the 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 outstanding during the year was Rs. 37,122 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 were not prima facie prejudicial to the interest of the Company.

c. In the case of loan granted to the body corporate listed in the register maintained under section 301 of the Companies Act, 1956, the borrower has been regular in the payment of the interest as stipulated. The terms of arrangement do not stipulate any repayment schedule and is repayable on demand. Accordingly, paragraph 4(iii)(c) of the Order is not applicable to the Company in respect of repayment of the principal amount.

d. There is no overdue amount of more than rupees one lakh in respect of the loan granted to a body corporate listed in the register maintained under section 301 of the Companies Act, 1956. Accordingly 4(iii)(d) of the Order is not applicable.

e. 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 of the Act. Therefore, the provisions of sub-clauses (e), (f) and (g) of clause 4(iii) of the Order are not applicable to the Company.

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 time.

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 material 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 hereunder:

Sr. No Name of the Perio to which Amount Disputed Amount Paid Forum where Statue amount relates Rs.in thousands Rs.in pending thousands 1 Income Tax Act Assessment years 650,000 20,000 Appellate Authority 2003-04, 2004-05, 2005-06, 2006-07

2 - 2007-08, 2008-09 Tribunal level and 2009-10

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 fund/society to which the provisions of special statute relating to chit fund are applicable, paragraph 4(xiii) of the Order is

xiv) In our opinion, the Company has maintained proper records of the transacts 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 except investments of Rs. 4,500 thousand continued to be held in the name of demerged entity.

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 investmen. 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) The Company did not have any outstanding debentures during the year. Accordingly, paragraph 4 (xix) of the Order is

xx) The Company has not raised any money through a public issue during the year.

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, 2009.





For Appan & Lokhandwala Associates Chartered Accountants

S P. Palaniappan Place: Mumbai Partner

Dated: April 07, 2010 Membership No.38378