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Notes to Accounts of Allcargo Gati Ltd.

Mar 31, 2018

1) Corporate and general information:

Gati Limited (“the Company”) is a public limited company incorporated in 1995 under provisions of companies Act, 1956 having its Registered and Corporate Office at Plot no.20, Survey no. 12, Kothaguda, Kondapur Hyderabad - 500 084. Telangana, India. The company is primarily engaged in the business of E-commerce logistics, Integrated Freight Forwarding (Domestic and International) and running of fuel stations. The company is listed in the National Stock exchange (NSE) and Bombay Stock exchange (BSE).

a) Terms /Rights attached to Shareholders

The Company has only one class of issued shares i.e. Equity Shares having par value of H2 per share. Each holder of Equity Shares is entitled to one vote per share and ranks pari passu. The dividend proposed by the Board of Directors is subject to the approval of shareholders in the ensuing Annual General Meeting except in case of interim dividend. In the event of liquidation, the equity shareholders are eligible to receive the remaining assets of the Company after payment of all preferential amounts, in proportion to their shareholding.

b) Equity Shares have been reserved for issue under options and contracts/commitments for the sale of shares/ disinvestment as at the Balance Sheet date:

i) 5,94,992 options (Equity Shares of H2 each) are reserved under employee stock option scheme as on 3IMarch, 2018 (Previous year 9,55,303 and 12,34,990 as on 3IMarch, 20I7 and 3IMarch 20I6 respectively) out of this 3,07,992 options, I,64,000 options and 1,23,000 options will vest/allotment in the year 20I8-I9, 20I9-20 & 2020-2I respectively

e) The company has neither allotted any equity shares for consideration other than cash nor has issued any bonus shares nor has bought back any shares during the period of five years preceding the date at which Balance Sheet is prepared.

f) No calls are unpaid by any directors or officers of the company during the year

A The Description, Nature and Purpose of each reserve within equity are as follows:

a) Equity part of FCCB -Compound Instruments: As per IND AS- 32, Foreign currency convertible bonds (FCCB’s) are treated as a compound Financial instrument, which requires segregation of liability and equity component. Therefore, the reserve has been created for equity component which is being utilised at the time of redemption/ conversion and transferred to the free reserves of Other Equity

b) Securities Premium Account: Securities premium account is used to record the premium on issue of equity shares. The same is utilised in accordance with the provisions ofThe Companies Act, 20I3.

c) Tonnage Tax Reserve (Utilised): The Reserve was a statutory reserve which was created and utilized in accordance with the provisions of Section II5VT of Income tax Act I96I to comply with the provisions of Tonnage Tax Scheme’ under Chapter XII-G

d) General Reserve: This reserve is the retained earnings of the company which are kept aside out of the Company’s profit to meet future (known or unknown) obligations.

e) Share option outstanding account: The share options outstanding account is used to record the value of equity- settled share based payment transactions with employees. The amount recorded in the share options outstanding account are transferred to securities premium reserve upon exercise of stock options by employees.

f) Special Reserve: The Hon’ble Andhra Pradesh High Court, approved the Scheme of Arrangement for amalgamation. (The Scheme) vide its order dated I9 March,, 20I3 which interalia, permits creation of a capital reserve to be called Special Reserve to which shall be credited excess of value of assets over value of liabilities on amalgamation of the subsidiaries amounting to H5555.4 Mn to be utilized by the Company to adjust therefrom any capital losses arising from transfer of assets and certain other losses, any balance remaining in the Special Reserve shall be available for adjustment against any future permanent diminution in the value of assets and exceptional items etc. as specified in the scheme as the Board of directors may deem fit.

g) Retained Earnings: Retained earnings comprise of net accumulated profit/(loss) of the company after declaration of dividend.

h) Other Comprehensive Income

i) Equity Instrument through OCI: The company has elected to recognise changes in the fair value of certain investments in equity securities in other comprehensive income. These changes are accumulated within the equity instruments through OCI shown under the head other equity. The company transfer amounts there from to retained earnings when the relevant equity securities are derecognised.

ii) Remeasurement of Defined benefit plan: It comprises of Actuarial losses /(gains) during the reporting period.

2. Disclosure as required under Ind As 19 on Employee Benfits:

Defined contribution

The expense for defined contribution plans amounted to RS. 8.16 Mn and RS. 10.29 Mn for the year ended 31 March, 2018 and 31 March, 2017 respectively Out of these, RS. 9.72 Mn (31 March, 2017 RS. 9.4 Mn) pertains to provident / pension funds and H.0.21 Mn (31 March, 2017 RS. 0.23 Mn) pertains to superannuation fund plan.

Defined benefits - Gratuity

The Company provides for gratuity for employees in India as per the Payment of Gratuity Act, 1972. Employees who are in continuous service for a period of 5 years are eligible for gratuity The amount of gratuity payable on retirement/ termination is the employees last drawn basic salary per month computed proportionately for 15 days salary multiplied for the number of years of service. The gratuity plan is a funded plan and the company makes contributions to recognised funds in India.

These defined benefit plans expose the Company to actuarial risks, such as currency risk, interest risk and market (investment) risk.

The Company expects not to contribute to Gratuity Fund in the next year as the company has surplus balance Inherent risk

The plan is defined benefit in nature which is sponsored by the Company and hence it underwrites all the risk pertaining to the plan. In particular this exposes the Company to actuarial risk such as adverse salary growth, change in demographic experience, inadequate return on underlying plan assets. This may result in an increase in cost of providing these benefits to employees in future. Since the benefits are lump sum in nature, the plan is not subject to longevity risk.

The following tables analyse present value of defined benefit obligations, expense recognised in Statement of Profit and Loss, actuarial assumptions and other information.

(IX) Sensitivity analysis

Reasonably possible changes at the reporting date to one of the relevant actuarial assumptions, holding other assumptions constant, would have affected the defined benefit obligations by the amounts shown below:

Dues to Micro and Small Enterprises have been determined to the extent such parties have been identified on the basis of information collected by the Management. There are no dues unpaid to Micro and Small Enterprises as on 3IMarch, 2018 (Previous year 31 March, 2017)

3. Dividend

Proposed Dividend:

The Board of Directors at its meeting held on 29-05-2018 have recommended a payment of final dividend of H0.90 per equity share of face value of H2 each for the financial year ended 3IMarch, 2018. The same amounts to H97.5I Mn. The liability to be adjusted against retained earnings.

The above is subject to approval at the ensuing Annual General Meeting of the Company and hence not recognised as a liability

B. Measurement of fair values

i. Valuation techniques and significant unobservable inputs

The fair value of cash and cash equivalents, bank balances, trade receivables, loans, investments in Debt instrument, borrowings, trade payables and other financial assets and liabilities approximate their carrying amount largely due to the short-term nature of these instruments. The Company’s loans have been contracted at market rates of interest. Accordingly, the carrying value of such loans approximate fair value.

Investments in equity instruments, which are classified as FVOCI are based on market price at the respective reporting date.

ii. Level 1 fair values

The following table shows a reconciliation from the opening balance to the closing balance for Level I fair values.

C. Financial risk management

The Company has exposure to the following risks arising from financial instruments:

(i) Credit risk

(ii) Liquidity risk

(iii) Market risk

Risk management framework

The Company’s principal financial liabilities includes borrowings, trade payable and other financial liabilities. The main purpose of these financial liabilities is to finance the Company’s operations. The Company’s principal financial assets include trade receivables, cash and cash equivalents and other financial assets that derive directly from its operations.

The Company’s activities expose it to credit risk, liquidity risk and market risk. The Company’s primary risk management focus is to minimise potential adverse effects of market risk on its financial performance.The Company’s exposure to credit risk is influenced mainly by the individual characteristic of each customer and the concentration of risk from the top few customers. The Company’s risk management assessment and policies and processes are established to identify and analyse the risks faced by the Company to set appropriate risk limits and controls, and to monitor such risks and compliance with the same. Risk assessment and management policies and processes are reviewed regularly to reflect changes in market conditions and the Company’s activities.

The major part of company’s profit is dependent upon the dividend income from a subsidary which is related to performance of the subsidiary and dividend distributable by them.

(i) Credit risk

Credit risk is the risk of financial loss to the Company if a customer or counterparty to a financial instrument fails to meet its contractual obligations, and arises principally from the Company’s receivables from customers and loans given. Credit risk arises from cash held with banks and financial institutions, as well as credit exposure to customers, including outstanding accounts receivables. The maximum exposure to credit risk is equal to the carrying value of the financial assets. The objective of managing counterparty credit risk is to prevent losses in financial assets. The Company assesses the credit quality of the counterparties, taking into account their financial position, past experience and other factors.

Trade receivables and loans

As per simplified approach, the Company makes provision of expected credit losses on trade receivables using a provision matrix to mitigate the risk of default payments and makes appropriate provisions at each reporting date whenever is for longer period and involves higher risk. On account of adoption of Ind AS I09, the Company uses expected credit loss model to assess the impairment loss or gain. The Company uses a provision matrix to compute the credit loss allowance for trade receivables.

(ii) Liquidity risk

Liquidity risk is defined as the risk that the Company will not be able to settle or meet its obligations on time or at reasonable price. Prudent liquidity risk management implies maintaining sufficient cash and marketable securities and the availability of funding through an adequate amount of credit facilities to meet obligations when due. The Company’s finance team is responsible for liquidity funding as well as settlement management. In addition, processes and policies related to such risks are overseen by senior management. Management monitors the Company’s liquidity position through rolling forecasts on the basis of expected cash flows. Besides , it generally has certain undrawn credit facilities which can be accessed as and when required ; such credit facilities are reviewed at regular intervals. Thus , no liquidity risk is perceived at present.

The Company’s approach to managing liquidity is to ensure, as far as possible, that it will have sufficient liquidity to meet its liabilities when they are due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the Company’s reputation.

The table below provides details regarding the remaining contractual maturities of financial liabilities at the reporting date based on contractual undiscounted payments.

(iii) Market risk

Market risk is the risk that changes in market prices - such as foreign exchange rates and interest rates - will affect the Company’s income or the value of its holdings of financial instruments. The objective of market risk management is to manage and control market risk exposures within acceptable parameters, while optimising the return.

Interest rate risk

Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The Company exposure to the risk of changes in market interest rates relates primarily to the Company’s long term and short term borrowing with floating interest rates. The Company constantly monitors the credit markets and rebalances its financing strategies to achieve an optimal maturity profile and financing cost.

Sensitivity analysis

Fixed rate instruments that are carried at amortised cost are not subject to interest rate risk for the purpose of sensitive analysis.

A reasonably possible change of I00 basis points in variable rate instruments at the reporting dates would have increased or decreased profit or loss by the amounts shown below:

The sensitivity analysis above has been determined for borrowings assuming the amount of borrowings outstanding at the end of the reporting period was outstanding for the whole year

Equity risk

The Company’s quoted equity instruments are susceptible to market price risk arising from uncertainties about future values of the investment securities. The reports on the equity portfolio are submitted to the Company’s senior management on a regular basis.The senior management reviews and approves all equity investment decisions.

Sensitivity analysis

Investment in equity instruments of the Company are listed on the Bombay Stock Exchange (BSE) and National Stock Exchange (NSE) in India. The table below summaries the impact of increase/decrease of the Nifty 50 index on the Company’s equity and profit for the period. The analysis is based on the assumption that the NSE nifty 50 equity index had increased/decreased by 10% with all other variables held constant, and that all the Company’s equity instruments moved in line with the index.

4. Capital management

The Company’s policy is to maintain a stable and strong capital structure with a focus on total equity so as to maintain investors, creditors and market confidence and to sustain future development and growth of its business. In order to maintain the capital structure the Company monitors the return on capital, as well as the level of dividends to equity shareholders. The Company aims to manage its capital efficiently so as to safeguard its ability to continue as a going concern and to optimise returns to all its shareholders. For the purpose of the Company’s capital management, capital includes issued capital and all other equity reserves attributable to the equity holders and debt includes borrowings.

5. Explanation of Transition to IND AS

As stated in Note 2, the Company has prepared its first financial statements in accordance with Ind AS. For the year ended 3I March, 20I7, the Company had prepared its financial statements in accordance with Companies (Accounting Standards) Rules, 2006, notified under Section I33 of the Act and other relevant provisions of the Act (‘previous GAAP’).

The accounting policies set out in Note 2 have been applied in preparing the financial statements for the year ended 3I March, 20I8 including the comparative information for the year ended 3I March, 20I7 and the opening Ind AS balance sheet on the date of transition i.e. I April 20I6.

In preparing its Ind AS balance sheet as at I April 20I6 and in presenting the comparative information for the year ended 3I March, 20I7, the Company has adjusted amounts reported previously in financial statements prepared in accordance with previous GAAP This note explains the principal adjustments made by the Company in restating its financial statements prepared in accordance with previous GAAP and how the transition from previous GAAP to Ind AS has affected the Company’s financial position, financial performance and cash flows.

Optional exemptions availed and mandatory exceptions

In preparing the financial statements, the Company has applied the below mentioned optional exemptions and mandatory exceptions.

A. Optional exemptions availed

(i) Property, plant and equipment and intangible assets

As per Ind AS I0I an entity may elect to:

(i) measure an item of property, plant and equipment at the date of transition at its fair value and use that fair value as its deemed cost at that date;

(ii) use a previous GAAP revaluation of an item of property plant and equipment at or before the date of transition as deemed cost at the date of revaluation, provided the revaluation was, at the date of revaluation, broadly comparable to:

- fair value

- or cost or depreciated cost under Ind AS adjusted to reflect.

The elections under (i) and (ii) above are also available for intangible assets that meets the recognition criteria in Ind AS 38, Intangible Assets, (including reliable measurement of original cost); and criteria in Ind AS 38 for revaluation (including the existence of an active market). The company has elected to measure certain items of property plant and equipment. At its fair value and use that fair value as its deemed cost at the date of transition to Ind AS. Other items of property plant and equipment have been measured, as for Ind As I6.

(ii) Designation of previously recognised financial instruments

Ind AS I0I permits an entity to designate particular equity investments (other than equity investments in subsidiaries, associates and joint arrangements) as at fair value through other comprehensive income (FVOCI) based on facts and circumstances at the date of transition to Ind AS (rather than at initial recognition). Other equity investments are classified at fair value through profit or loss (FVTPL).

The Company has opted to avail this exemption to designate certain equity investments as FVOCI on the date of transition i.e. I April 20I6 on the basis of facts and circumstances existed at the date of transition to Ind AS.

(iii) Business combinations

Ind AS I0I provides the option to apply Ind AS I03 prospectively from the transition date or from a specific date prior to the transition date. This provides relief from full retrospective application that would require restatement of all business combinations prior to the transition date.

The Company elected to apply Ind AS 103 prospectively to business combinations occurring after its transition date. Business combinations occurring prior to the transition date have not been restated, accordingly Company has elected not to apply Ind-AS I03.

(iv) Investments in Subsidiaries and Associates

The Company has elected either the Indian GAAP carrying amount or fair value at the date of transition as deemed cost for its investment in each subsidiary and associates

(v) Cumulative translation difference

The Company has availed the option of not to adopt policy for maintaining Foreign currency monetary item translation difference (FCMITDA) account. The balance in FCMITD account on the date of transition has been transferred to retained earnings.

(vi) Fair value measurement of financial assets or liabilities at initial recognition

The Company has applied the requirements of Ind AS 109, “Financial Instruments: Recognition and Measurement”, wherever applicable.

B. Mandatory Exceptions

(a) Estimates

As per Ind AS 101, where application of Ind AS requires an entity to make certain estimates that were not required under previous GAAP those estimates should be made to reflect conditions that existed at the date of transition (for preparing opening Ind AS balance sheet) or at the end of the comparative period (for presenting comparative information as per Ind AS).

- Investment in equity instruments carried at FVPL or FVOCI.

- Investment in debt instruments carried at FVPL and,

- Impairment of financial assets based on expected credit loss model.

The Company’s estimates under Ind AS are consistent with the above requirement.

(b) Classification and measurement of financial assets

Ind AS 101 requires an entity to assess classification of financial assets on the basis of facts and circumstances existing as on the date of transition. Further, the standard permits measurement of financial assets accounted at amortised cost based on facts and circumstances existing at the date of transition if retrospective application is impracticable.

Accordingly, the Company has determined the classification of financial assets based on facts and circumstances that exist on the date of transition. Measurement of the financial assets accounted at amortised cost has been done retrospectively.

G. Notes to the reconciliations of equity as at 1 April 2016 and 31 March, 2017 and total comprehensive income for the year ended 31 March, 2017

1) Borrowings

The Company recognised the transaction costs pertaining to the borrowings on a straight line basis over the term of the loan under IGAAP The unamortised portion of such cost was recognised as part of ‘Prepaid expense’ which amounted to RS. 3.74 Mn on the date of transition to IND AS. As per IND AS I09, borrowings are measured at amortised cost and hence, unamortised portion of transaction costs has been adjusted against the amount of borrowings

2) Investments in Subsidiaries and Associate

The Company has availed the option to value investments in subsidiaries and associate as Ind As cost. The Ind As cost has been derived by impairing value of investment as on the date of transition to IND AS separate financial statements from previous GAAP under IGAAP the company has practice of providing provision on investment under permanent dimunision valuation method, on transition to Ind As management has decided to impair the investment based on the report provided from independent valuer

a) Further, on the transition date, Equity and other financial instruments in subsidiary company, has been impaired as per the Independent valuer report and adjusted against retained earnings of H400 Mn.

b) As per requirement of Ind As impairment test should be made at the end of each financial year Further based on the progress of Investee Company’s provision will be adjusted accordingly by taking into account of the progress made by said companies going forward.

3) Discounting of financial asset

Under IGAAP the Company accounted for Security deposit and other receivable balances as Loans and advances measured at cost. Under IND AS, such balances are classified and measured at amortised cost using effective interest rate method. At the date of transition to IND AS, the difference between amortised cost and the IGAAP carrying amount has been recognised in other equity (net of related deferred tax).

4) Deferred tax

IGAAP requires deferred tax accounting using the income statement approach, which focuses on differences between taxable profits and accounting profits for the period. IND AS 12 requires entities to account for deferred tax using balance sheet approach, which focuses on temporary differences between the carrying amount of an asset or liability in the balance sheet and its tax base. This has resulted in recognition of deferred tax on new temporary difference which was not required under IGAAP In addition, the various transitional adjustments leads to temporary differences. According to the accounting policies, the Company has to account for such differences. Deferred tax adjustments are recognised in correlation to the underlying transaction either in other equity or a separate component of equity.

5) Provisions

Under IGAAP proposed dividends including dividend distribution tax (DDT) are recognised as liability in the period in which they relate, irrespective of when they are declared. Under IND AS, a proposed dividend is recognised as a liability by the company in the period in which it is declared by the company (usually when approved by shareholders in a general meeting) or paid.

In case of the Company the declaration of dividend occurs after the period end. Therefore, the liability of RS. 87.72 Mn for the year ended on 31 March, 2016 recorded for dividend has been derecognised against other equity on I April, 2016. Proposed dividend amounting RS. 87.72 Mn which was derecognised as on the transition date. has been recognised in other equity during the year ended 31 March, 2017 as declared and paid.

6) Defined benefit liabilities

Both under IGAAP and IND AS, the Company recognised costs related to its post employment defined benefit plan on an actuarial basis. Under IGAAP the entire cost, including actuarial gains and losses, are charged to the statement of profit and loss. Under IND AS, remeasurements (comprising of actuarial gains and losses, the effect of the asset ceiling, excluding amounts included in net interest on the net defined benefit liability and the return on plan assets excluding amounts in net interest on the net defined benefit liability) are recognised immediately in the balance sheet with a corresponding debit or credit to other comprehensive income (OCI).

7) Trade Receivables

Under IGAAP the Company has created provisions for impairment of receivables which consist only in respect of specific amount for probable losses. Under IND AS 109, requires to recognise allowance on trade receivables and other financial assets of the company ,at an amount equal to the life time expected credit loss or the 12 months expected credit loss based on increase in credit risk. On transition date, impairment for trade receivables made as per Expected credit loss method (ECLM) is 168.9 Mn has been adjusted against retained earnings.

8) Financial Assets

Under IGAAP the Company accounted for long term investments in quoted and unquoted equity shares as investment measured at cost less provision for other than temporary diminution in the value of investments. Under IND AS, the company has designated certain investments as FVTOCI. At the date of transition to IND AS, difference between the instruments at fair value and IGAAP carrying amount has been recognised as a separate component of equity in the FVTOCI reserve, net of related deferred taxes. On 31 March, 2017 fair value on FVTOCI instruments has been routed through OCI. The gain/loss on any future extinguishment of such equity investments will not be reflected in the statement of Profit and loss.

9) Corporate Guarantee

For Subsidiary: Under IGAAP the Company was disclosing the corporate guarantee as Contingent Liability Under IND AS, the Company has recognised the fair value of Corporate Guarantee provided to its subsidiary companies. The fair value of such guarantee as on I April, 2016 been recognised as additional capital investment in its subsidiaries, and is amortised over the period of the guarantee. The impact of amortisation of such fair value of guarantee has been recognised in the statement of profit and loss as interest income for the year ended 3I March, 20I7.

For Other Entity: The Company has recognised the fair value of Corporate guarantee provided to other than subsidiary as ‘guarantee obligation’ as on I April, 20I6 is amortised over the period of the guarantee in subsequent years

10) Share Based Payments

Under IGAAP the Company had recognised the cost of equity settled employee share based payments using the intrinsic value method. Under IND AS, the cost of equity settled share based plan is recognised based on the fair value of the options as at the grant date. Adjustments has been done in to take the additional charge arising due to change from intrinsic value to fair value of ESOS outstanding

11) Foreign Currency Convertible Bond

Foreign currency convertible bonds (FCCB’s) are treated as a compound financial instrument under Ind AS, which contains liability and equity component. This bonds has been spited between liability and equity component. Amortisation of redemption premium and Foreign exchange difference on date of transition, is recognised in opening reserves and changes thereafter are recognised in statement of profit and loss, earlier under IGAAP Redemption premium on FCCB charged to Securities Premium account. (Refer Note 47)

12) Loans

Under IGAAP the Company accounted for interest free loans given to subsidiary as Long term loans and advances measured at cost. Under IND AS, such interest free loans are classified and measured at fair value. The difference between fair value and the IGAAP carrying amount has been recognised as Investments in Subsidiaries on the transition date.

13) Other Comprehensive Income

Under IND AS, all items of income and expenses recognised in a period should be included in profit or loss for the period, unless a standard require or permits otherwise. Items of income and expenses that are not recognised in the statement of Profit or loss but are shown in the Statement of Profit or loss as “Other Comprehensive Income”. Net profit along with Other Comprehensive Income constitutes Total Comprehensive Income. The concept of Other Comprehensive Income did not exist under the IGAAP

14) Fair valuation of Investments

Under Indian GAAP, investments in unquoted and quoted equity shares and debt instrument as investment measured at cost less provision for other than temporary diminution in the value of investments. Under Ind AS, such investments as FVTPL investments and Amortised cost. Ind AS requires FVTPL investments and Amortised cost investments to be measured at fair value. At the date of transition to Ind AS and as on 3I March, 20I7, difference between the instrument’s fair value and Indian GAAP carrying amount has been recognised in the Retained earning and Statement of Profit and Loss net of related deferred taxes.

a) On the transition date, Equity and other financial instruments in promoter companies i.e. other than subsidiary companies, have been impaired based on Independent valuer report and adjusted against retained earnings of RS. 790.I9 Mn

b) As per requirement of Ind As impairment test should be made at the end of each financial yean Further based on the progress of Investee Company’s provision will be adjusted accordingly by taking into account of the progress made by said companies going forward.

15) Fair Valuation of Property,Plant and Equipment

The Company has elected to measure certain items of propetyplant and equipment at its fair value and use that value as it deemed cost at the date of transition to Ind as. Others items of propety, plant and equipment have been measured as per Ind As I6 respectively (Refer note 3d)

6 Advance receivable includes RS. 4I mn due from Air India Limited . The matter was referred to arbitration of the arbitral tribunal and the arbitral tribunal passed an award dated I7 September 20I3 , directing Air India Limited to pay an amount of RS. 266 Mn to the company and to pay interest @I8 % per annum on the awarded amount . Air India preferred an application before the Hon’ble Delhi High court seeking setting aside of award who directed Air India to deposit RS. 225 Mn which as been paid to the company ,pending adjudication of Cross Appeals before the Division Bench of the said Hon’ble High Court at New Delhi. Necessary adjustments, if any will be made in the accounts upon the decision of the Hon’ble High Court of New Delhi. In the circumstances , the dues from air India limited of RS. 4I Mn included in advances receivable are considered good for recovery by the management.

7 Foreign Currency Convertible Bonds :

On 12 December, 201 I, the Company issued 22, I 82 Zero Coupon Unsecured Foreign Currency Convertible Bonds (FCCBs) of US$ I,000 each for an amount of US$ 22.I8 Mn at an redemption price of I32.834I percent of principal amount. On I4 June 20I7 and 08th August 20I7, the Company allotted 1,98,74,225 equity shares of H2/- each against I4,654 FCCBs as per settlement agreement with FCCB holders (Allotment price per share is H38.52/- at an exchange rate of H52.2285/$)and the balance 7,528 FCCBs has been redeemed for an amount of H643.70 Mn as on I4 June 20I7. Expenses related to the issue of shares amounting to H29.56 Mn have been adjusted against Securities Premium. Further liability no longer required against FCCBs and the gain of RS. 487.43Mn (Foreign exchange gain of HI78.20 Mn and Redemption premium part H309.20 Mn ) recognised due to conversion of FCCBs into equity shares.

As per IND AS- 32, Foreign currency convertible bonds (FCCB’s) are treated as a compound Financial instrument, which requires segregation of liability and equity component. Therefore, the reserve has been created for equity component which is being utilised at the time of redemption/ conversion and transferred to the free reserves of Other Equity

8 Previous GAAP figures have been reclassified/ regrouped to conform to the presentation requirements under IND AS and the requirements laid down in Division-II to the Schedule-III of the Companies Act, 20I3

9 The financial statement are approved for issue by the Audit Committee at its meeting held on 28 May, 20I8 and by the Board of Directors at its meeting held on 29 May 20I8.

The accompanying notes are an integral part of the Financial Statements


Mar 31, 2017

Shares reserved for issue under options and contracts/commitments

1. 9,55,303 equity shares (435,000 options newly added during the year ) of Rs.2 each are reserved under employee stock option scheme as on 31st March 2017 (Previous year 12,34,990 as on 31st Mar, 2016). Of this 4,38,553 Options, 2,12,250 Options, 174,000 options and 130,500 Options will vest in the year 2017-18, 2018-19, 2019-20, 2020-21 respectively.

2. On December 12, 2011, the Company issued 22,182 Zero Coupon Unsecured Foreign Currency Convertible Bonds of US$ 1,000 each for an amount of US$ 22.18 Mn. The Bonds are convertible at any time on and after December 31, 2012 up to the close of business on November 13, 2016 by holders of the Bonds into fully paid equity shares with full voting rights with a par value of Rs.2/- each at an initial conversion price of Rs.38.51 per share with a fixed rate of exchange on conversion of Rs.52.2285 to US$. Unless previously converted, redeemed or purchased and cancelled, the Bonds are due for redemption in US dollars at 132.8341 percent of principal amount on or before December 13, 2016 giving a Yield to Maturity of 5.76 percent per annum calculated on semi-annual basis.

3. On allotment of 4,59,117(Previous Year 2,45,400) shares under Employee Stock Option Scheme and transferred from Stock Option Outstanding account.

4. Provision for Pro-rata Premium on redemption of Foreign Currency Convertible Bonds.

5. In respect of options granted under the Companies Employees Stock Options Scheme and in accordance with the guidelines issued by Securities and Exchange Board of India the accounting value of options(based on market value of share on the date of grant of options minus the option price) is accounted as deferred employees compensation which is amortized on a straight line basis over the vesting period. Consequently employee benefit expenses includes Rs.0.19 Mn (previous year Rs.7.24 Mn) being amortization of deferred employee compensation after adjusting for reversal on account of options refunds/lapsed and re-imbursement of discount on option issued to Employees of the subsidiary.

The Hon''ble Andhra Pradesh High Court, approved the Scheme of Arrangement for amalgamation. (the Scheme) vide its order dated 19th March, 2013 which interalia, permits creation of a capital reserve to be called Special Reserve to which shall be credited excess of value of assets over value of liabilities on amalgamation of the subsidiaries amounting to Rs.5,555.4 mn to be utilized by the Company to adjust there from any capital losses arising from transfer of assets and certain other losses, any balance remaining in the Special Reserve shall be available for adjustment against any future permanent diminution in the value of assets and exceptional items etc. as specified in the scheme and as the Board of directors may deem fit. In accordance with the Scheme an aggregate sum of Rs.3,034.1 mn has been adjusted with the Special Reserve till the year 2015-16.

In accordance with the scheme and on professional advice, the Board of Directors carried out the following further adjustments against Special Reserve during the year 2016-17

6. Provision for diminution in the value of Investments in a subsidiary of Rs.3.6 mn.

7. Provision for irrecoverable loans & advances to a subsidiary and an Associate aggregating to Rs.64.4 mn.

8. Irrecoverable loans and advances to a subsidiary of Rs.12.3 mn and to third parties made in earlier years aggregating to Rs.207.4 mn.

9. The above adjustments aggregating Rs.287.7 mn otherwise, required to be debited to the Statement of Profit and loss and adjusted against Special Reserve are not in accordance with Accounting Standard(AS) 5 ''Net Profit or Loss for the period, prior period items and changes in accounting policies'' and Accounting Standard(AS) 13 ''Accounting for Investments''. Had the Scheme not prescribed the above accounting treatment the accounts would have reflected as follows:

10. On transfer of Express Distribution and Supply Chain and Shipping businesses to separate subsidiaries in the year 2011-2012 , the primary operating business of the Company sit in the Balance Sheet as investments in subsidiaries and became major source of income by way of dividend. Accordingly, the Company has been advised that the dividend income of Rs.138.6 mn during the year from subsidiary (Previous year Rs.84.0 mn) and Management Fees of Rs.18.8 Mn during the year (Previous year Rs.24.9 mn) be considered as other operating income. This has no impact on the profit of the year.

11. Pursuant to the notification issued by the Ministry of Corporate Affairs dated 29th December 2011 on Accounting Standard 11, the company has opted to adjust the carrying cost of depreciable fixed assets to amortize the exchange differences on the Long term Foreign Currency Monetary Items over their tenure and the year ended balance in the account was carried forward from year to year in the “Foreign Exchange Monetary Items Translation Difference Account" (FCMITDA). FCMITDA has been fully amortized during the year.

12. There are other amounts due from subsidiaries of Rs.196.7 mn (Previous year Rs.219.9 mn). The above includes Rs.190 mn utilized by the subsidiary for acquiring land. The management is confident of recovery of the amount in due course and no provision is considered necessary for any possible losses that may arise in this behalf.

13. The company has investment of Rs.399.25 mn in equity share capital of the subsidiary Gati Kausar India Limited. On account of continuous losses incurred by the said subsidiary the value of investment is eroded to a considerable extent. The performance of the subsidiary is expected to improve in the near future. Under the circumstances no provision is considered necessary by the management at present for diminution in the value of investments.

14. Loans and Advances includes Rs.41 mn due from Air India Limited. The matter was referred to arbitration of the Arbitral Tribunal and the Arbitral tribunal passed an Award dated 17th September 2013, directing Air India Limited to pay an amount of Rs.268.20 mn to the Company and to pay interest @18% per annum on the awarded amount. Air India preferred an application before the Hon''ble Delhi High Court seeking setting aside of the Award who directed Air India to deposit Rs.220 mn which has been paid to the company. In the circumstances, the dues from Air India Limited of Rs.41 mn included in Loans and Advances, are considered good for recovery by the management.

15. Details of Loans Given, Investments made and Guarantee given covered u/s 186 (4) of the Companies Act, 2013 Investments made are given under the respective heads (Refer Note 12)

Corporate Guarantee given by the company in respect of loans as at 31st March, 2017

16. The Board of Directors of the company has allotted 3,63,117 equity shares on exercise of options by the employees under the employee stock option scheme and 96,000 equity shares to Non-Executive Directors. Consequently the Equity Share Capital of the company increased from 8,77,22,937 equity shares of Rs.2/- each to equity shares 8,81,82,054 of Rs.2/- each during the year.

17. In the assessment for the accounting year ended 31st March 2012, the surplus on transfer of Express Distribution & Supply Chain business of Rs.1,241 mn to a subsidiary has been treated as income and raised demand of Rs.511.3 mn. On appeal, the Commissioner (Appeals) has deleted the addition. The Company has paid Rs.126 mn and also refunds due was adjusted to the tune of Rs.141 mn under protest which is treated as recoverable in books. Since the addition has deleted by the Commissioner Appeals, the said amount to be receivable from Income tax department. Against the order of Commissioner (Appeals), the income tax department has preferred an appeal with Income Tax Appellate Tribunal.

18. Income tax assessment for the accounting year ended 31st March 2014 was completed during the current quarter resulting in disallowance of significant amount of advances written off during the accounting year against which an appeal has been filed. Such disallowances have been adjusted against business losses during the year..

19. The Trustee of the bondholders (FCCBs) had filed a Civil Suit in the Secunderabad Court for specific performance for conversion of bonds into equity and the matter is still pending adjudication. The FCCB redemption has fallen due on 13th December 2016.

20. In accordance with terms of issue of Foreign Currency Convertible Bonds (FCCB) an amount of Rs.1,438.2 mn together with premium on redemption thereof of Rs.472.2 mn are due for redemption to the bondholders on or before December, 2016. The classification of the same as Long Term Liabilities / Provisions has been continued as in earlier years because of the pending litigation as explained in note 37(a) above

21. Disclosure on Specified Bank Notes(SBNs)

During the year, the company had specified notes or other denomination note as defined in the MCA notification G.S.R.308(E) dated 31 March,2017 on the details of specified Bank Notes(SBN) held and transacted during the period from 8 November 2016 to 30 December 2016, the denomination wise SBNs and other notes as per the notification is given below:

22. Related Party Disclosures

23. Related parties with whom transactions have taken place during the period

24. Key Managerial Personnel( KMP):

25. Mr. Mahendra Agarwal (Founder & CEO)

26. Mr Sanjeev Kumar Jain ( Director - Finance) ( Resigned w.e.f 31.10.2016)

27. Mr V S N Raju ( Company Secretary - Resigned w.e.f 28.04.2016)

28. Mr Amit Pathak (Company Secretary- Appointed w.e.f 04.08.2016)

29.The Board of Directors has recommended a dividend of Rs.0.80/- (40%) per equity share for the financial year ended 31st March 2017, which upon approval by the shareholders at the ensuing annual general meeting will be met out of reserves of the company.

30. Significant Accounting Policies

These financial statements have been prepared to comply with the Generally Accepted Accounting Principles in India (Indian GAAP), including the Accounting Standards notified under the relevant provisions of the Companies Act, 2013.

Recognition of Income & Expenditure

31. Income and expenditure are generally recognized on accrual basis in accordance with the applicable accounting standards and provision is made for all known losses and liabilities.

32. Freight Income is accounted when goods are delivered by the Company to customers.

33. Freight expenses are accounted when hired vehicles deliver goods to the Company at destination.

34. Having regard to the size of operations and the nature and complexities of the company''s business, freight received/paid in advance is accounted as income/expenses on payment and interdivisional transfers are eliminated.

35. Year-end liability in respect of claims for loss and damages is provided as calculated by claims recovery agents.

Provident Fund

Provident fund contribution is remitted to appropriate authority. Superannuation Fund

Superannuation fund contribution is remitted to approved trust fund.

Fixed Assets

36. Fixed Assets are stated at cost and / or at revaluation. Cost includes borrowing cost and indirect expenditure capitalized to the extent it relates to the construction activity or incidental thereto.

37. Depreciation is provided on straight line method at rates specified in Schedule II to the companies Act, 2013. Depreciation on addition /deduction is cancelled prorata from /to date of addition / deduction. Individual assets cost up to Rs.5,000/- depreciated fully in the year of acquisition.

Investments

Investments are stated at cost or at the fair value.

Inventories

Petroleum products are valued at lower of cost and net realizable value.

Foreign Exchange Transaction

38. Foreign currency transactions are recorded at average rate for the month.

39. Monetary items in foreign currency at the yearend are converted in Indian currency at the yearend rates. In terms of the amendments to Accounting Standard II on The Effects of Changes in Foreign Exchange Rates, exchange differences relating to long-term monetary items are dealt with in the following manner:

40. Exchange difference relating to the long term monetary items, arising during the year, in so far as they relate to the acquisition of a depreciable capital asset are added to/deducted from the cost of the assets and depreciated over the balance life of the asset.

41. In other cases such differences are accumulated in a “Foreign Currency Monetary Item Transaction Difference Account" and amortized over the balance life of the long-term monetary item, not beyond 31st March 2020.

42. Any Income or expenses on account of exchange difference either on settlement or transaction recognized in the Statement of Profit & Loss.

43. In respect of forward exchange contracts, the difference between the forward rate and exchange rate at the inception of the contract is recognized as income or expenses over the contract.

Taxation

Income tax

Provision for tax is made for both current and deferred taxes. Provision for current income made on the current tax rates based on the working results of the year. The company provides for deferred tax based on the tax effect of timing difference resulting from the recognition of items in the accounts and in estimating its current tax provision. The effect on deferred taxes of a change in tax rate is recognized in the year in which the change is affected.

Impairment of Assets

Impairment of Assets are assessed at each balance sheet date and loss is recognized whenever recoverable amount of an asset is less than its carrying amount.


Mar 31, 2016

Shares reserved for issue under options and contracts/commitments

i) 12,34,990 equity shares of ? 2 each are reserved under employee
stock option scheme as on 31st March 2016 (Previous year 16,03,990). Of
this 6,61,223 options, 4,37,417 Options and 1,36,350 options will vest
in the year 2016-17, 2017-18 and 2018-19 respectively.

ii) On December 12,201 I,the Company issued 22,182 Zero Coupon
Unsecured Foreign Currency Convertible Bonds of US$ 1,000 each for an
amount of US$ 22.18 Mn.The Bonds are convertible at any time on and
after December 3 I, 2012 up to the close of business on November 13,
2016 by holders of the Bonds into fully paid equity shares with full
voting rights with a par value of ? II- each at an initial conversion
price of ?38.5I per share with a fixed rate of exchange on conversion
of ?52.2285 to US$. Unless previously converted, redeemed or purchased
and cancelled, the Bonds will be redeemed in US dollars at 132.8341
percent of principle amount on December 13,2016 giving a Yield to
Maturity of 5.76 percent per annum calculated on semi-annual basis.

(i) On allotment of 2,45,400( Previous Year 2,13,450) shares under Employee Stock Option Scheme and transferred from Stock Option
Outstanding account.

(ii) Provision for Pro-rata Premium on redemption of Foreign Currency
Convertible Bonds.

(iii) In respect of options granted under the Companies Employees Stock
Options Scheme and in accordance with the guidelines issued by
Securities and Exchange Board of India the accounting value of
options(based on market value of share on the date of grant ofl options
minus the option price) is accounted as deferred employees compensation
which is amortised on a straight line basis over the vesting period.
Consequently employee benefit expenses includes ? 7.24 Mn (previous
year ? 8.17 Mn) being amortisation of deferred employee compensation
after adjusting for reversal on account of options refunds/lapsed and
re-imbursement of discount on option issued to Employees of the
subsidiary.

The Hon''ble Andhra Pradesh High Court, approved the Scheme of Arrangement for amalgamation. (The Scheme) vide its order dated
19th March, 2013 which interalia, permits creation of a capital reserve
to be called Special Reserve to which shall be credited excess of value
of assets over value of liabilities on amalgamation of the subsidiaries
amounting to ?5555.43 Mn to be utilized by the Company to adjust
therefrom any capital losses arising from transfer of assets and
certain other losses, any balance remaining in the Special Reserve
shall be available for adjustment against any future permanent
diminution in the value of assets and exceptional items etc. as
specified in the scheme as the Board of directors may deem fit. In
accordance with the Scheme an aggregate sum of ?3034.10 Mn has been
adjusted with the Special Reserve till the year 2014-15.

On transfer of Express Distribution and Supply Chain and Shipping
businesses to separate subsidiaries in the year 201 I -2012, the
primary operating business of the Company sit in the Balance Sheet of
the Company as investments and became major source of income by way of
dividend. Accordingly, the Company has been advised that the dividend
income of ?84.0 Mn during the year from subsidiary (previous year ?
175.0 Mn) and Management Fees of ? 24.9 Mn during the year (Previous
year ? 23.3 Mn) be considered as other operating income. This has no
impact on the profit of the year.

. The company has made investment in Share Capital of ? 3.62 Mn and has other receivables of ? 12.26 Mn (Previous year ? 14.76 Mn)
due from the subsidiary Zen Cargo Movers Pvt. Ltd.The net worth of the
subsidiary has been fully eroded because of losses suffered from year
to year.The business of Zen Cargo is clearing agency business and is
very closely related to the freight forwarding business of the parent
company.The same is in the process of stabilization.The subsidiary will
continue to have the required support from the holding company.The
performance of the subsidiary is expected to improve in the near
future. Under the circumstances no provision is considered necessary by
the management at present for any diminution in the value of
investments and also in respect of possible losses that may arise from
other receivables from the subsidiary.

. There are other amounts due from subsidiaries of? 219.86 Mn (previous year? 223.56 Mn) and from an Associate ? 16.75 Mn (previous
year ? 13.24 Mn).The above includes ? 190.0 Mn utilised by the
subsidiary for acquiring land.The management is confident of recovery
of the amounts in due course and no provision is considered necessary
for any possible losses that may arise in this behalf.

In an earlier year the Company has granted unsecured loan of ? 100 Mn
to a body corporate out of which ? 82.50 Mn along with interest
receivable of ? 39.0 Mn is receivable as on 3 1.03.2016.The net worth
of the body corporate has fully eroded because of losses suffered from
year to year. However, the management is confident of recovery of the
balances due and interest receivable and therefore no provision is
considered necessary for any possible losses that may arise in this
behalf.

. The company has investment of ? 399.25 Mn in equity share capital of the subsidiary Gati Kausar India Limited. On account of continuous
losses incurred by the said company the value of investment by the
company is eroded to a considerable extent.The performance of the
subsidiary is expected to improve in the near future. Under the
circumstances no provision is considered necessary by the management at
present for any diminution in the value of investments and also in
respect of possible losses that may arise from other receivables from
the subsidiary.

Pursuant to the notification issued by the ministry of Corporate
Affairs dated 29th December 201 I on Accounting Standard I I, the
company has opted to adjust the carrying cost of depreciable fixed
assets to amortize the exchange differences on the Long term Foreign
Currency Monetary Items over their tenure. Accordingly as on March
31,2016 ?80.88 Mn has been carried forward in the "Foreign Exchange
Monetary Translation Difference Account" (FCMITDA). Consequently the
net profit is lower by ?83.01 Mn for the year ended 3 I st March 2016.

i. Loans and Advances include ?265.98 Mn due from Air India Limited.The
matter was referred to arbitration of the Arbitral Tribunal and the
Arbitral tribunal passed an Award dated 17th September 2013, directing
Air India Limited to pay an amount of ?268.20 Mn to the Company and to
pay interest @ 18% per annum on the awarded amount. Air India preferred
an application before the Hon''ble Delhi High Court seeking setting
aside of the Award which directed Air India to deposit ? 220 Mn.
Pending disposal of the appeal an amount of ? 220 Mn has since been
made over to the company after the end of the year pursuant to the
order of the division bench of the Honorable High Court of Delhi. In
the circumstances, the dues from Air India Limited of ? 266.0 Mn
included in Loans and Advances, are considered good for recovery by the
management.

. The Board of Directors of the company has allotted 1, 17,400 equity shares on exercise of options by the employees under the employee
stock option scheme and 1,28,000 equity shares to Non-Executive
Directors at a premium of ?26 per share. Consequently the Equity Share
Capital of the company increased from 8,74,77,537 equity shares of ?
II- each to equity shares 8,77,22,937 of ? II- each during the year.

. The company is awaiting clarification from the Reserve Bank of India on various matters pertaining to Foreign Currency Convertible
Bonds issued by the company. In the meanwhile the trustee of the bond
holders has filed a civil suit in the Secunderabad Court for specific
performance, which the company is contesting on various grounds.The
matter is subjudice.

In accordance with terms of issue of Foreign Currency Convertible Bonds
(FCCB) an amount of ? 1471.40 Mn together with premium on redemption
thereof of ?407.60 Mn are due to be payable to the bondholders in
December, 2016.The classification of the same as Long Term Liabilities
/Provisions has been continued as in earlier years because of the
pending litigation as explained in note 37 aboveWith respect to the amendment by Payment of Bonus(Amendment) Act'' 2015
with retrospective effect from 01 -Apr-2014,The company has been
legally advised that in view of the interim orders of several high
courts including that of the Andhra Pradesh High court the above
amendment with retrospective effect is bad in law and in all likelihood
the retrospective applicability may be struck down. In the
circumstances no provision for additional liability , if any, has been
considered necessary in this behalf in the accounts for the year .

41. Related Party Disclosures

a) Related parties with whom transactions have taken place during the
year

i Directors / Key Managerial Personnel(KMP):

1. Mr. Mahendra Agarwal (Founder & CEO)

2. Mr. Sanjeev Kumar Jain ( Director - Finance)

3. Mr.V S N Raju ( Company Secretary)

ii Associates of the Company iv Subsidiaries / Step Down Subsidiaries

1. Gati (Thailand) Ltd. I. Gati Asia Pacific Pte Ltd.

2. Gati Ship Ltd.(Formerly known as Gati Ship Private Limited) 2.
Gati Hong Kong Ltd.

iii Others 3. Gati Cargo Express(Shanghai) Co. Ltd.

1. TCI Finance Ltd. 4. Gati Kausar India Ltd.(Formerly known as
Kausar India Limited)

2. Giri Roadlines & Commercial Trading Pvt. Ltd. 5. Gati Import
Export Trading Ltd.

3. Jubilee Commercials & Trading Pvt. Ltd 6. Zen Cargo Movers Pvt.
Ltd.

4. TCI Hi-ways Pvt. Ltd. 7. Gati Kintetsu Express Pvt Ltd

5. TCI Industries Ltd. 8. Gati Logistics Parks Private Ltd.

6. Mahendra Kumar Agarwal & Sons ( HUF) 9. Gati Projects Private Ltd.

7. Mahendra InvestmentAdvisors Pvt.Ltd.

8. Amrit Jal Ventures Private Ltd.

9. Gati Academy

10. TCI Infrastructure Finance Limited


Mar 31, 2015

Terms/rights attached to equity shares

The Company has only one class of equity shares of par value of Rs. 2 per share. Each holder of equity shares is entitled to one vote per share and ranks pari passu. The dividend proposed by the Board of Directors is subject to approval of the shareholders, except in case of interim dividend. In the event of liquidation, the equity share holders are eligible to receive the remaining assets of the Company, after distribution of all preferential amounts, in proportion of their share holding.

Shares reserved for issue under options and contracts/commitments

i) 16,03,990 equity shares of Rs.2/- each are reserved under employee stock option scheme as on 31st March 2015 (Previous Period 17,06,590). Of this 4,61,532 options, 6,08,326 Options, 3,97,332 options and 1,36,800 will vest in the year 2015-16, 2016-17, 2017-18 and 2018-19 respectively.

ii) On December 12, 2011, the Company issued 22,182 Zero Coupon Unsecured Foreign Currency Convertible Bonds of US$ 1,000 each for an amount of US$ 22,182,000. The Bonds are convertible at any time on and after December 31,2012 up to the close of business on November 13, 2016 by holders of the Bonds into fully paid equity shares with full voting rights with a par value of Rs 2/- each at an initial conversion price of Rs.38.51 per share with a fixed rate exchange on conversion of Rs.52.2285 to US$. Unless previously converted, redeemed or purchased and cancelled, the Bonds will be redeemed in US dollars at 132.8341 percent of principle amount on December 13, 2016 giving yield to maturity of 5.76 percent per annum calculated on semi-annual basis.

(i) On allotment of 2,13,450 ( Previous period 6,81,800) shares under Employee Stock Option Scheme and transferred from Stock Option Outstanding account.

(ii) Provision for Pro-rata Premium on redemption of Foreign Currency Convertible Bonds.

(iii) In respect of options granted under the Companies Employees Stock Options Scheme and in accordance with the guidelines issued by Securities and Exchange Board of India the accounting value of options(based on market value of share on the date of grant of options minus the option price) is accounted as deferred employees compensation which is amortised on a straight line basis over the vesting period. Consequently employee benefit expenses includes Rs.8.17 Mn (previous period credit of Rs.8.45 Mn) being amortisation of deferred employee compensation after adjusting for reversal on account of options refunds/lapsed and on account of re-imbursement of discount on option issued to Employees of the subsidiary.

2 The Hon''ble Andhra Pradesh High Court, vide its order dated 19th March, 2013 approved the Scheme of Arrangement for amalgamation of five wholly owned subsidiaries of Gati Limited (Transferee Company) with effect from 31st March, 2013, the appointed date.

The Scheme permits the Company to create a capital reserve to be called Special Reserve to which shall be credited excess of value of assets over value of liabilities in the books of the transferee Company amounting to Rs.5,555.43 Mn. which shall be utilized by the transferee Company to adjust there from any capital losses arising from transfer of assets and certain other losses, any balance remaining in the Special Reserve shall be available for adjustment against any future permanent diminution in the value of assets and exceptional items etc., as the Board of directors may deem fit.

In accordance with the Scheme

i) The loss of Rs.640 Mn. on sale of investment in 40,00,000 Nos Equity shares of subsidiary Gati Ship Limited was adjusted against Special Reserve in the year 2012-13.

ii) On professional advice, the Board of Directors carried out the following adjustments against Special Reserve during the year 2013-14.

a) The diminution in value of Investment in Gati Asia Pacific Pte Ltd of Rs. 275.05 Mn and in value of Investment in Gati Ship Limited of Rs.1,080.10 Mn has been adjusted against Special Reserve.

b) Irrecoverable advances to subsidiary Gati Ship Limited of Rs. 626.43 Mn and balance consideration receivable for Sale of Investments in shares of subsidiary Gati Ship Limited of Rs.48 Mn was adjusted against Special Reserve.

c) Irrecoverable other advances made in earlier years aggregating to Rs.126.11 Mn was adjusted against Special Reserve.

iii) During the year, 2014-15 on professional advice, the Irrecoverable advances to subsidiary Gati Ship Limited of Rs.238.44 Mn net of Rs3.02 Mn realised on sale of 12,10,000 equity shares of Gati Ship Limited has been adjusted against Special Reserve.

The above adjustment otherwise, required to be debited to the Statement of Profit and Loss and adjusted against Special Reserve are not in accordance with the Accounting Standard (AS) 13 ''Accounting for Investments'' and Accounting Standard (AS) 5 ''Net Profit or Loss for the year, prior period items and changes in accounting policies''. Had the Scheme not prescribed, the above accounting treatment the accounts would have reflected as follows:

3 On transfer of Express Distribution and Supply Chain and Shipping businesses to separate subsidiaries in the year 2011-2012 , the primary operating business of the Company sit in the Balance Sheet of the Company as investments and became major source of income by way of dividend.Accordingly, the Company has been advised that the dividend income of Rs.175 Mn during the year from subsidiaries (previous period Rs. 70 Mn), Net Profit of Rs NIL (previous period Rs. 16.80 Mn on sale of land and Management Fees of Rs. 23.30 Mn during the year (Previous period Rs.30 Mn) be considered as other operating income. This has no impact on the profit of the year.

4 The company has made investment in Share Capital of Rs. 3.62 Million and has other receivables of Rs. 14.76 Million (Previous period Rs.14.76 Million) due from the subsidiary Zen Cargo Movers Pvt. Ltd. The net worth of the subsidiary has fully eroded because of losses suffered from year to year. The business of Zen Cargo is clearing agency business and is very closely related to the freight forwarding business of the parent company. The same is in the process of stabilization. The subsidiary will continue to have the required support from the holding company.The performance of the subsidiary is expected to improve in the near future. Under the circumstances no provision is considered necessary by the management at present for any diminution in the value of investments and also in respect of possible losses that may arise from other receivables from the subsidiary.

5 There are other amounts due from subsidiaries of Rs. 223.56 Mn (previous period Rs.202.34 Mn) and from an Associate Rs.13.24 Mn (previous period 13.22 Mn). The above includes Rs 190 Mn represented by land acquired by a subsidiary. The management is confident of full recovery of other amounts in due course and no provision is considered necessary for any possible losses that may arise in this behalf.

6 In an earlier year the Company has granted unsecured loan of Rs. 100 Million to a body corporate out of which Rs.17.5 Million was realised during the year leaving a balance Rs 82.5 Million along with interest receivable of Rs. 39 Milliion.The net worth of the body corporate has fully eroded because of losses suffered from year to year. However, the management is confident of full recovery of the balances due and interest receivable and therefore no provision is considered necessary for any possible losses that may arise in this behalf.

7 During the year the company sold 12,10,000 equity shares (12.09%) in Gati Ship Ltd. For Rs. 3.02 Mn. Consequently Gati Ship Ltd. ceased to be a subsidiary from May 16, 2014 and is now an associate. Gati Ship Limited has since closed it''s operations.

8 During the year, in compliance with the requirements of Schedule II of the Companies Act 2013 effective 1st April 2014, the company has revised useful life of its fixed assets. In case of asset whose useful life has expired as on 31st March 2014 the carrying value (net of deferred tax of Rs. 1.52 Mn) of the assets amounting to Rs. 2.95 Mn has been adjusted with the opening balance of retained earnings. Accordingly depreciation for the year is higher by Rs. 14.47 Mn and the profit after Tax is lower by the same amount.

9 Pursuant to the notification issued by the Ministry of Corporate Affairs dated 29th December 2011 on Accounting Standard 11, the company has opted to adjust the carrying cost of depreciable fixed assets/ to amortize the exchange differences on the Long term Foreign Currency Monetary Items over their tenure. Accordingly as on March 31,2015 Rs.113.97 Mn has been carried forward in the "Foreign Exchange Monetary Item Translation Difference Account" (FCMITDA). Consequently the net profit is lower by Rs.11.73 Mn for the year ended 31st March 2015.

10 Loans and Advances includes Rs.265.98 Mn due from Air India Limited. The matter was referred to arbitration of the Arbitral Tribunal appointed by the parties. The Arbitral tribunal passed an Award dated 17th September 2013, whereby, it has, inter alia, directed Air India Limited to pay an amount of Rs.268.20 Mn to the Company and to pay interest @18% per annum on the awarded amount. Air India has preferred an application before the Hon''ble Delhi High Court seeking setting aside of the Award and the matter is pending disposal. In the circumstances, the dues from Air India Limited included in Loans and Advances, are considered good for recovery by the management.

11 In veiw of the various deductions admissible under the Income-tax Act, no liability for current tax is estimated for the year. Provision for Deferred tax liability for the year has been made.

12 The Board of Directors of the company has allotted 1,17,450 equity shares on exercise of options by the employees under the employee stock option scheme and 96,000 equity shares to Non-Executive Directors at a premium of Rs.26 per share. Consequently the Equity Share Capital of the company increased from 8,72,64,087 equity shares of Rs 2/- each to equity shares 8,74,77,537 of Rs 2/- each during the year.

13 In response to company''s application to Reserve Bank of India (RBI) seeking permission for part repurchase of FCCBs, RBI vide its letter dated 27th September, 2013 accorded permission while stating that the Company was not eligible borrower under the automatic route and the borrowing be treated as a Foreign Debt. The Company was levied a compounding fee of Rs. 29.59 Mn, which the Company has deposited during the year and is disclosed as an exceptional item in the Statement of Profit and Loss.

14 The company is awaiting clarification from the Reserve Bank of India on various matters pertaining to Foreign Currency Convertible Bonds issued by the company. In the meanwhile the trustee of the bond holders has filed a civil suit in the Secunderabad Court for specific performance, which the company is contesting on various grounds. The matter is subjudice.

15 Particulars 31st March 31st March 2015 2014

a) Contingent Liability not provided for in respect of

(i) Bank Guarantees 11.40 90.33

(ii) Guarantees and Counter Guarantees outstanding 1,040.62 1,379.66

(iii) Income Tax demands disputed in appeals 560.91 -

(iv) Estimated amount of contracts remaining to be - 7.11 executed on capital account and not provided for

16 Related Party Disclosures

Related parties with whom transactions have taken place during the year

i Directors / Key Management Personnel:

1.Mr. Mahendra Agarwal (Founder & CEO)

2.Mr. Sanjeev Kumar Jain (Director - Finance)

3.Mr.V.S.N. Raju (Company Secretary)

ii Associates of the Company

1.Gati (Thailand) Co. Ltd.

2.Gati Ship Ltd. (Formerlly known as Gati Ship Private Limited)

iii Others

1.TCI Finance Ltd.

2.Giri Roadlines & Commercial Trading Pvt. Ltd.

3.Jubilee Commercials & Trading Pvt. Ltd

4.TCI Hi-ways Pvt. Ltd.

5.TCI Industries Ltd.

6.Mahendra Kumar Agarwal & Sons ( HUF)

7.Mahendra Investment Advisors Pvt.Ltd.

8.Amrit Jal Ventures Private Ltd.

9.Gati Academy

10.TCI Infrastructure Finance Limited

11.Gati Infrastructure Sada Mangder Pvt. Ltd.

iv Subsidiaries / Step Down Subsidiaries

1.Gati Asia Pacific Pte Ltd.

2.Gati Hong Kong Ltd.

3.Gati Cargo Express(Shanghai) Co.Ltd.

4.Gati Kausar India Ltd. (Formerlly known as Kausar India Limited)

5.Gati Import Export Trading Ltd.

6.Zen Cargo Movers Pvt. Ltd.

7.Gati Kintetsu Express Pvt Ltd

8.Gati Logistics Parks Private Ltd.

9.Gati Projects Private Ltd.


Mar 31, 2014

1. (Note 28 of Annual Accounts) The Hon''ble Andhra Pradesh High Court, vide its order dated March 19, 2013 approved the Scheme of Arrangement for amalgamation (The Scheme) between the erstwhile wholly owned subsidiaries namely Newatia Commercial & Trading Private Limited, Trymbak Commercial and Trading Private Ltd , Ocimum Commercial and Trading Private Limited, Sumeru Commercial and Trading Private Limited and Gati Express Distribution Limited (Transferor Companies) with Gati Limited (Transferee Company) with effect from March 31,2013, the appointed date.

The Scheme permits the Company to create a capital reserve to be called Special Reserve to which shall be credited excess of value of assets over value of liabilities in the books of the transferee Company amounting to Rs.5555.43 Mn. which shall be utilized by the transferee Company to adjust there from any capital losses arising from transfer of assets and certain other losses, any balance remaining in the Special Reserve shall be available for adjustment against any future permanent diminution in the value of assets and exceptional items etc., as the Board of directors may deem fit.

In accordance with the Scheme

i)The loss of Rs. 640.00 Mn. on sale of investment in 4.00 Mn. Nos Equity shares of subsidiary Gati Ship Limited was adjusted against Special Reserve in the year 2012-13.

ii) During the period, on professional advice, the Board of Directors have carried out the following further adjustments against Special Reserve.

a) The diminution in value of Investment in Gati Asia Pacific Pte Ltd of Rs. 275.04 Mn. and in value of Investment in Gati Ship Limited of Rs. 1080.10 Mn has been adjusted against Special Reserve.

b) Irrecoverable advances to subsidiary Gati Ship Limited of Rs. 626.43 Mn and balance consideration receivable for Sale of Investments in shares of subsidiary Gati Ship Limited of Rs. 48.00 Mn has been adjusted against Special Reserve.

c) Irrecoverable other advances made in earlier years aggregating to Rs. 126.11 Mn has been adjusted against Special Reserve.

2 (Note 29 of Annual Accounts): The Opening Balance of Rs 7.47 Mn. in the provision for contingencies account has been fully adjusted by Write off/Adjustments: (a) Interest Receivable - Rs. 2.57 Mn. (Previous year Rs. 7.59Mn.) (b) Trade Receivables - Rs 4.90Mn. (Previous year Rs. 35.32 Mn.).

3 (Note 30 of Annual Accounts): a) On transfer of Express Distribution and Supply Chain and Shipping businesses to separate subsidiaries in the year 201 1-2012, the primary operating business of the Company sit in the Balance Sheet of the Company as investments and became major source of income by way of dividend.

b) The Company has surplus land which it plans to dispose off in parcels over a period of two to three years as a continuous activity. Accordingly, the Company has been advised that the dividend income of Rs. 70.00 Mn during the period from subsidiaries (previous year Rs. 104.00 Mn) and net profit of Rs. 16.80 Mn on sale of land during the period (previous year Rs. 67.60 Mn) and

c) Management Fees of Rs. 30.00 Mn during the period (Previous year Rs. 33.2 Mn) be considered as other operating income. This has no impact on the profit of the period.

4 (Note 3 I of Annual Accounts): The company has made investment in Share Capital of Rs. 352.27 Mn. and has other receivables of Rs.26.38 Mn. (Previous year Rs 4.06 Mn.) due from the subsidiary Gati Kausar India Ltd. (Formerly known as Kausar India Ltd.) The net worth of the subsidiary has significantly eroded because of losses suffered from year to year. The business of Gati Kausar India Limited is the cold chain solutions which has a lot of potential. Gati Kausar India Limited has always been making cash profits and the losses are only on account of depreciation. The subsidiary will continue to have the required support from the holding company. The performance of the subsidiary is expected to improve in the near future. Under the circumstances no provision is considered necessary by the management at present for any diminution in the value of investments and also in respect of possible losses that may arise on account of other receivables from the subsidiary.

5 (Note 32 of Annual Accounts): The company has made investment in Share Capital of Rs. 3.62 Mn. and has other receivables of Rs. 14.76 Mn (Rs. 13.56 Mn) due from the subsidiary Zen Cargo Movers Pvt. Ltd. The net worth of the subsidiary has fully eroded because of losses suffered from year to year. The business of Zen Cargo is clearing agency business and is very closely related to the freight forwarding business of the parent company. The same is in the process of stabilization. The subsidiary will continue to have the required support from the holding company. The performance of the subsidiary is expected to improve in the near future. Under the circumstances no provision is considered necessary by the management at present for any diminution in the value of investments and also in respect of possible losses that may arise from other receivables from the subsidiary.

6 (a) (Note 33 (a) of Annual Accounts): (a) In an earlier year the Company has granted unsecured loan of Rs. 100.00 Mn to a body corporate which is outstanding as on March 31,2014 along with interest receivable of Rs. 39.00 Mn. The net worth of the body corporate has fully eroded because of losses suffered from year to year. However, the management is confident of full recovery of the dues and interest receivable and therefore no provision is considered necessary for any possible losses that may arise in this behalf. 6(b) (Note 33 (b) of Annual Accounts): There are certain overdue loans and advances from subsidiaries Rs. 202.3 Mn (previous year Rs. 159.1 Mn) and from an Associate Rs. 13.2 Mn (previous year Rs. 13.2 Mn). These loans and advances became overdue on account of the sluggish market conditions and the resultant difficulty in repayment. The management is actively continuing to pursue options for recovery of these dues. The management is confident of full recovery of all dues in due course and no provision is considered necessary for any possible losses that may arise in this behalf.

7 (Note 34 of Annual Accounts): Pursuant to the notification issued by the ministry of Corporate Affairs dated December 29, 2011 on Accounting Standard 11, the company has opted to adjust the carrying cost of depreciable fixed assets/ to amortize the exchange differences on the Long term Foreign Currency Monetary Items over their tenure. Accordingly as on March 31, 2014 Rs. 12.57 Mn. has been carried forward in the "Foreign Exchange Monetary Translation Difference Account" (FCMITDA). Consequently the net profit is lower by Rs.26.01 Mn.forthe period ended March3l20l4.

8 (Note 35 of Annual Accounts): In the year 2009, the Company discontinued Freighter Aircraft operations as per the arrangement with National Aviation Company of India Ltd.( NACIL) (the erstwhile Indian Airlines Ltd., and now Air India Limited) due to continuous failure and defaults by NACIL. The matter was referred to arbitration of the Arbitral Tribunal appointed by the parties. The Arbitral tribunal passed an Award dated September 17,2013, whereby, it has, inter alia, directed Air India Limited to pay an amount of Rs. 268.2 Mn. to the Company and to pay interest @ 18% per annum on the awarded amount. Air India has preferred an application before the Hon''ble Delhi High Court seeking setting aside of the Award and the matter is pending disposal. In the circumstances, the dues from Air India Limited of Rs. 265.9 Mn. included in Loans and Advances, are considered good for recovery by the management.

9 (Note 36 of Annual Accounts): In veiw of the various deductions admissible under the Income-tax Act, there is no liability for current tax for the period. Provision for Deferred tax liability for the period has been made and Deferred tax liability provided in earlier years now found in excess has been reversed. The actual tax liability will be determined on the basis of tax accounting year ended March 31, 2014. (Assessment Year 2014-15).

10 (Note 37 of Annual Accounts): The Board of Directors of the company has allotted the equity shares on exercise of options at a premium of Rs. 33.05 per share granted to Employees 6,29,300 shares and Non-Executive Directors 52,500 shares. Consequently the Equity Share Capital of the company increased from 8,65,82,287 equity shares of Rs II- each to 8,72,64,087 equity shares of Rs II- each during the period.

11 (Note 38 of Annual Accounts): The Company has granted options under the Companies Employees Stock Options Scheme and 17,06,590 equity shares of Rs.2/- each are reserved under employee stock option scheme as on March 31,2014 (Previous year 18,02,716) of this 2,13,750 options, 5,83,227 options, 6,11,386 options and 2,98,227 options will vest in the year 2014-15, 2015-16, 2016-17 and 2017-18 respectively.

12 (Note 39 of Annual Accounts): The Board of Directors of the Gati Limited has allotted 22,182 Zero Coupon Unsecured Foreign Currency Convertible Bonds (FCCBs) of US$ 1,000 each, thereby raising US$ 22.18 Mn. on December 12,201 I. The Bonds are convertible pursuant to terms and conditions thereof, any time from December 12,2012 up to the close of business on November 13,2016 by holders of the Bonds into fully paid equity shares of the company. Unless previously converted, redeemed or purchased and cancelled, the Bonds will be redeemed in US dollars at 132.8341 percent of principle amount on December 13,2016 giving a Yield to Maturity of 5.76 percent per annum calculated on semi-annual basis.

13 (Note 40 of Annual Accounts): In response to company''s application to Reserve Bank of India (RBI) seeking permission for part repurchase of FCCBs, RBI vide its letter dated September 27, 2013 accorded permission while stating that the Company was not an eligible borrower under the automatic route and the borrowing be treated as a Foreign Debt. The company was levied a compounding fee of Rs. 29.6 Mn in this respect. While suspending the compounding orders of RBI, the Hon''ble High Court of Andhra Pradesh had passed an interim order directing the Company to deposit Rs. 0.74 Mn with Reserve Bank of India, out of the compounding fee of Rs. 29.6 Mn, which the Company has since deposited. The matter being subjudice and on the basis of written legal advice, the Company has not recognized the conversion notice from one of the bondholders in respect of the FCCBs.

14. (Note 41 of Annual Accounts): (Rs. In Mn)

Particulars 31 st March 2014 30th June 2013

a) Contingent Liability not provided for in respect of

Bank Guarantees 90.33 96.20

Guarantees and Counter Guarantees outstanding 1,379.66 1,913.50

Estimated amount of contracts remaining to be executed on capital account 7.11 2.65 and not provided for

Earning per share

(i) Net profit after tax available for equity shareholders - for Basic and Diluted EPS 205.59 253.55

(ii) Weighted average no. of ordinary shares for Basic EPS (Nos.) 86.75 86.58

Add: Adjustments for foreign currency convertible bonds and stock options (Nos.) 30.07 30.17

Weighted average no. of ordinary shares for Diluted EPS (Nos.) 116.82 116.75

(iii) Nominal value of Ordinary Shares (Rs.) 2.00 2.00

(iv) Basic Earning per Ordinary Share (Rs.) 2.37 2.93

(v) Diluted Earning per Ordinary Share (Rs.) 1.76 2.17

15. (Note 42 of Annual Accounts):

Related Party Disclosures

Related parties with whom transactions have taken place during the period

i Directors/ Key Management Personnel:

Mr. Mahendra Agarwal (Founder & CEO) Mr Sanjeev Kumar Jain

ii Associates of the Company

1. Gati Intellect Systems Ltd.

2. TCI Finance Ltd.

3. Giri Roadlines & Commercial Trading Pvt. Ltd.

4. Jubilee Commercials & Trading Pvt. Ltd

5. Coast to Coast Shipping Ltd.

6. Gati Cargo Management Services Ltd.

7. TCI Hi-ways Pvt Ltd.

8. TCI Industries Ltd.

9. Mahendra Kumar Agarwal & Sons ( HUF)

10. ITAG Infrastructure Ltd.

11. ITAG Business Solutions Ltd.

12. Gati (Thailand) Ltd.

13. Mahendra Investment Advisors Pvt. Ltd.

14. Amrit Jal Ventures Pvt. Ltd.

15. Gati Academy

III Subsidiaries / Step Down Subsidiaries

1. Gati Asia Pacific Pte Ltd.

2. Gati Hong Kong Ltd.

3. Gati China Holdings Ltd.

4. Gati Cargo Express(Shanghai) Co.Ltd.

5. Gati Cargo Malaysia SDN BHD.

6. Gati Kausar India Ltd.(Formerlly known as Kausar India Limited)

7. Gati Import Export Trading Ltd.

8. Zen Cargo Movers Pvt. Ltd.

9. Gati-Kintetsu Express Pvt Ltd

10. Gati Ship Ltd.(Formerlly known as Gati Ship Private Limited)

11. Gati Logistics Parks Private Ltd.

12. Gati Projects Private Ltd.

16. (Note 44 of Annual Accounts):

The Financial Results cover a period of nine months ended March 31, 2014 and the company would close the accounts on 31 st March each year. The figures for the current period are therefore not comparable with those of the previous year. Figures of the previous year/period have been regrouped /reclassified wherever necessary.


Jun 30, 2013

(1) (Note 28 of Annual Accounts)

The Hon''ble Andhra Pradesh High Court, vide its order dated March I9, 20I3 approved the Scheme of Arrangement for amalgamation (The Scheme) between the erstwhile wholly owned subsdiaries namely I) Ocimum Commercial and Trading Private Limited 2) Newatia Commercial & Trading Private Limited 3) Trymbak Commercial and Trading Private Ltd 4) Sumeru Commercial and Trading Private Limited and Gati Express Distribution Limited (Transferor Companies) with Gati Limited (Transferee Company) with effect from March 3I, 20I3, the appointed date. In terms of the said scheme the undertakings of the Transferor Companies including:

i) All the assets and properties both movable and immovable, investments, rights, title and interests comprised in the respective undertakings of the Transferor companies stand transferred to and vested in the Transferee company at their respective fair values.

ii) All the assets and liabilities recorded in the books of the respective transferor companies stand transferred to and vested in the Transferee company at their respective fair values.

iii) Book values of net assets of Ocimum Commercial and Trading Private Limited, Newatia Commercial & Trading Private Limited, Trymbak Commercial and Trading Private Limited, Sumeru Commercial and Trading Private Limited have been treated as fair value. The Book value of Rs. 3.5 Mn. of investment in 3,50,000 equity shares in Gati-Kintetsu Express Private Limited in the books of Gati Express Distribution Limited has been valued at Rs. 5,5I0 Mn., being the fair value ,as per the valuation report of an independent valuer.

v) All the erstwhile transferor companies are wholly owned subsidiaries of Gati Limited and on amalgamation there is no issue of shares and the entire share capital of the erstwhile transferor companies held by the Transferee company including through its nominees and the corresponding investment represented in the transferee company stand cancelled. The interse amount of deposits, loans and other receivables/payables also stand cancelled.

vi) The amalgamation has been accounted for under the ''Purchase Method'' as per the Accounting Standard I4 (AS-I4)" Accounting for Amalgamation".

vii) The excess of value of assets over value of liabilities amounting to Rs. 5555.4 Mn. has been credited to a Capital Reserve to be called Special Reserve as per the Scheme.

2. (Note 29 of Annual Accounts)

i) The Scheme of Arrangement permits the Company to create a capital reserve to be called Special Reserve to which shall be credited excess of value of assets over value of liabilities in the books of the transferee Company amounting to Rs. 5555.4 Mn. which shall be utilized by the transferee Company to adjust therefrom any capital losses arising from transfer of assets and certain other losses, any balance remaining in the Special Reserve shall be available for adjustment against any future permanent diminution in the value of assets and exceptional items etc as specified in the Scheme and as the Board of directors may deem fit .

ii) In accordance with the above, the loss of Rs. 640 Mn. on sale of investment in 4 Mn. equity shares of subsidiary Gati Ship Limited (being 40% of the equity capital) required to be debited to the Statement of Profit and Loss has been adjusted with Special Reserve which is not in accordance with the Accounting Standard (AS) I3 ''Accounting for Investments''. Had the Scheme not prescribed the above accounting treatment the accounts would have reflected as follows:

Profit on sale of investments of Rs. 891.8 Mn. in the previous year was credited to the Statement of Profit and Loss and classified under the head "Other Income".

3. (Note 30 of Annual Accounts)

a) On transfer of Express Distribution and Supply Chain and Shipping businesses to separate subsidiaries in the year 2011- 2012, the primary operating business of the Company sit in the Balance Sheet of the Company as investments and became major source of income by way of dividend.

b) The Company has surplus land which it plans to dispose off in parcels over a period of two to three years as a continuous activity. Accordingly, the Company has been advised that the dividend income of Rs. 104 Mn. during the year from subsidiaries (previous year Rs. Nil), net profit of Rs. 67.6 Mn. on sale of land and buildings during the year (previous year Rs. 72.3 Mn.) and

c) Management fees of Rs. 33.2 Mn. during the year (previous year Rs. Nil) be considered as "Other Operating Income". The corresponding previous year''s figures which were classified as Other Income have also been reclassified accordingly. This has no impact on profit of the year.

4. (Note 31 of Annual Accounts)

The company has made investment in Share Capital of Rs. 352.25 Mn.and has other receivables of Rs. 4.06 Mn. due from the subsidiary Gati Kausar India Ltd.(Formerly known as Kausar India Ltd.) The net worth of the subsidiary has significantly eroded because of losses suffered from year to year. The business of Gati Kausar India Limited is the cold chain solutions which has a lot of potential. Gati Kausar India Limited has always been making cash profits and the losses are only on account of depreciation. The subsidiary will continue to have the required support from the holding company. The performance of the subsidiary is expected to improve in the near future. Under the circumstances no provision is considered necessary by the management at present for any dimunition in the value of investments and also in respect of possible losses that may arise on account of other receivables from the subsidiary.

5. (Note 32 of Annual Accounts)

The company has made investment in Share Capital of Rs. 3.62 Mn. and has other receivables of Rs. 13.55 Mn. due from the subsidiary Zen Cargo Movers Pvt. Ltd. The net worth of the subsidiary has fully eroded because of losses suffered from year to year. The business of Zen Cargo is clearing agency business and is very closely related to the freight forwarding business of the parent company. The same is in the process of stabilization. The subsidiary will continue to have the required support from the holding company. The performance of the subsidiary is expected to improve in the near future. Under the circumstances no provision is considered necessary by the management at present for any diminution in the value of investments and also in respect of possible losses that may arise from other receivables from the subsidiary.

6. (Note 33 of Annual Accounts)

The Opening balance of Rs. 100 Mn in the provision for contingencies account has been adjusted by Write off/reversals/Adjustments : (a)Interest income of earlier year Rs. 7.59 Mn (b) Advances/Deposits not recoverable Rs. 16.93 Mn

(c) Loan to a Subsidiary Rs. 11.40 Mn (d)Trade Receivables Rs. 35.32 Mn and (e)Unreconciled Inter-divisional balances Rs. 21.29 Mn aggregating to Rs. 92.53 Mn leaving a balance of Rs. 7.47 Mn.

7. (Note 34 of Annual Accounts)

Pursuant to the notification issued by the Ministry of Corporate Affairs dated December 29, 2011 on Accounting Standard 11, the company has opted to adjust the carrying cost of depreciable fixed assets/ to amortize the exchange differences on the Long term Foreign Currency Monetary Items over their tenure. Accordingly as on June 30, 2013 an amount Rs.151.71 Mn. has been carried forward in the "Foreign Exchange Monetary Item Translation Difference Account" (FCMITDA). Consequently the net profit is higher by Rs. 63.60 Mn. for the year ended June 30, 2013.

8. (Note 35 of Annual Accounts)

In the year 2009, the Company discontinued Freighter Aircraft operations as per the arrangement with National Aviation Company of India Ltd (NACIL)(the erstwhile Indian Airlines Ltd., and now Air India Limited,) due to continuous failure and defaults by NACIL. The matter was referred to arbitration of the Arbitral Tribunal appointed by the parties. The Company had filed its statement of Claim before the Arbitral Tribunal for the losses suffered against which NACIL has made counter claims. The hearing of the Arbitration has been concluded and the Award of the Arbitral Tribunal is awaited. Pending decision of the Arbitral Tribunal, a sum of Rs. 266 Mn. is included in loans and advances being the difference between the amount of Bank Guarantee invoked by NACIL and claims acknowledged by the Company. In the Company''s view there are fair chances of recovery of Rs. 266 Mn. as well as the legal expenses of Rs. I0.2 Mn. as per the legal advice received by the Company, endorsed by another eminent jurist, no liability is contemplated to arise in the matter and no provision is considered necessary in these accounts in this behalf.

9.(Note 36 of Annual Accounts)

Tax provision in these accounts has been made considering the working results for the year ended June 30, 20I3. The actual tax liability will be determined on the basis of tax accounting year ended March 3I, 20I3. (Assessment Year 20I3-I4).

10. (Note 37 of Annual Accounts)

The Company has granted options under the Companies Employees Stock Options Scheme and I8,02,7I6 Options are outstanding(Previous year I9,48,I4I) as at 30th June 20I3. Of this I0,84,2I6 Options will vest in 20I3-I4, 2,I5,550 options in 20I4-I5, 2,87,400 options in 20I5-I6 and 2,I5,550 options in 20I6-I7.

11. (Note 38 of Annual Accounts)

The Board of Directors of the Company has allotted 22,I82 Zero Coupon Unsecured Foreign Currency Convertible Bonds(FCCB) of US$I,000 each, thereby raising US$ 22,I82,000 on December I2, 20II. The bonds are convertible any time from December I2, 20I2 upto the close of business on November I3, 20I6 by holders of the Bonds into fully paid equity shares of the company with a par value of Rs. 2 each with full voting rights at an initial conversion price of Rs. 38.5I per share with USD/INR reference exchange rate that is fixed at Rs. 52.2285 per US$. Unless previously converted, redeemed or purchased and cancelled , the Bonds will be redeemed in US dollars at I32.834I percent of principle amount on December I3, 20I6 giving a Yield to Maturity of 5.76 percent per annum calculated on semi-annual basis.

13. (Note 40 of Annual Accounts)

Related Party Disclosures

Related parties with whom transactions have taken place during the year

i Directors / Key Management Personnel:

1. Mr. Mahendra Agarwal (Managing Director & CEO)

2. Mr.Sanjeev Kumar Jain (Director -Finance)

ii Relative of Key Management Personnel:

I. Mr. Anand Kumar Agarwal (Brother of Mr. Mahendra Agarwal)

14. ( Note 41 of Annual Accounts)

Segment Information Primary Business Segment

Express Distribution & Supply Chain :Covers integrated cargo services - Road, Rail and Air Transportation.

Coast-to-Coast (Shipping) : Covers Sea Transportation

Fuel Stations: Covers Fuel Stations dealing in petrol, diesel and lubricants etc.

15. (Note 43 of Annual Accounts)

The previous year''s figures have been regrouped/reclassified/restated wherever necessary. However the current year figures are not readily comparable with those of the previous year due to:

a) Implementation of Scheme of Arrangement with effect from March 3I, 20I3.

b) The previous year financials reflect the operations of EDSC and Shipping Division upto March 3I, 20I2, since those businesses were transferred to two separate subsidiaries with effect from that date.


Jun 30, 2012

Terms/rights attached to equity shares

The Company has only one class of equity shares of par value of Rs. 2 per share. Each holder of equity shares is entitled to one vote per share and ranks pari passu. The dividend proposed by the Board of Directors is subject to approval of the shareholders, except in case of interim dividend. In the event of liquidation, the equity share holders are eligible to receive the remaining assets of the Company, after distribution of all preferential amounts, in proportion of their share holding.

Shares reserved for issue under options and contracts/commitments

i) 19,48,141 equity shares of Rs.2/- each are reserved under employee stock option scheme as on 30th June 2012(Previous year 30,71,980). Of this 9,09,402 options, 7,84,539 options, 2,06,200 options and 48,000 options will vest in the year 2012-13,2013- 14,2014-15 and 2015-16 respectively.

ii) On December 12,2011, the Company issued 22,182 Foreign Currency Convertible Bonds of US$ 1,000 each for an amount of US$ 22.182 Mn. The Bonds are convertible at any time on and after December 31,2012 up to the close of business on November 13, 2016 by holders of the Bonds into fully paid equity shares with full voting rights with a par value of Rs 21- each at an initial conversion price of Rs 38.51 per share with a fixed rate of exchange on conversion of Rs 52.2285 to US$.

(i) On allotment of 577387 shares under Employee Stock Option Scheme and transferred from Stock Option Outstanding account.

(ii) Provision for Pro-rata Premium on redemption of Foreign Currency Convertible Bonds.

(iii) In respect of options granted under the Companies Employees Stock Options Scheme and in accordance with the guidelines issued by Securities and Exchange Board of India the accounting value of options(based on market value of share on the date of grant of options minus the option price) is accounted as deferred employees compensation which is amortised on a straight line basis over the vesting period. Consequently salaries, wages and bonus includes Rs. -4.98 Mn(previous year Rs. 15.96 Mn) being amortisation of deferred employee compensation after adjusting for reversal on account of options refunds/lapsed.

a) As per Business Transfer Agreements (Refer Note Nos. 26 & 27)

b) A part of Land & Buldings were revalued on 31 st December, 1997,29th June, 1999, and 31 st March, 2000 and the resultant increases in the value of assets by Rs.4.6 Mn Rs. 14.1 Mn and Rs. 14.84 Mn respectively and aggregating to Rs.33.56 Mn was transferred to Revaluation Reserve.

c) Depreciation forthe year includes Rs. 0.095 Mn in respect of above revaluations.

d) Deduction to Assets includes Rs. 10.71 Mn (previous year Rs.4.31 Mn) on account of exchange rate difference on restatement of foreign currency loans.

e) The increase/decrease in the rupee liability arising out of the restatement of foreign currency convertible bonds, has been adjusted to the carrying cost of respective fixed assets to be depreciated over their remaining depreciable life. The depreciation forthe current year includes Rs. 0.37 Mn (previous year - Rs.0.42 Mn) arising on account of this adjustment.

(1) With a view to restructure its business and operations

a) The company has entered into Business Transfer Agreement(BTA) with its wholly owned subsidiary Redsun Supply Chain Solutions Limited(Since renamed as Gati-Kintetsu Express Private Limited) for transfer of substantial part of its Express Distribution and Supply Chain business division on a going concern basis without payment of any monetary consideration effective at the close of business hours on 31 st March 2012.

c) The excess amount of liabilities over amount of assets of Rs. 1250.59 Mn has been accounted as surplus in these accounts.

d) No values have been assigned to any specific asset or liability comprised in the Business Division

(3) a) The company has also entered into Business Transfer Agreement(BTA) with its wholly owned subsidiary Gati Ship Private Limited for transfer of its shipping business division as a going concern on slump sale basis effective at the close of business hours on 31 st March 2012 for a consideration of Rs. 1800 Mn.

b) In discharge of the consideration amount, Gati Ship Private Ltd has allotted to the company One Crore Equity Share of Rs. 10 each fully paid at a premium of Rs. 170 per share aggregating to Rs. 1800 Mn pursuant to the BTA

d) No values have been assigned to any specific asset or liability comprised in the Business Division 28) The Company has made investment in Share Capital and has also given loans & advances to two subsidiairies Kausar India Ltd. and Zen Cargo Movers Pvt. Ltd., including receivables from the subsidiaries, aggregating to Rs.346.6 Mn & Rs. 14.4 Mn respectively. The net worth of these two subsidiaries has fully eroded because of losses suffered from year to year. The business in which Kausar India Limited is the cold chain solutions. This business has a lot of potential. Kausar India Limited has always being making cash profits and the losses are only on account of depreciation. The business of Zen Cargo is clearing agency very closely related to the freight forwarding business of the parent company. The same is in the process of stabilization. Both the subsidiaries will continue to have the required support from holding company. The performance of this subsidiaries is expected to improve in the near future. Under the circumstances no provision is considered necessary by the management at present for any diminution in the value of investments and also in respect of loss that may arise from other receivables from the two subsidiaries.

a) During an earlier year the Company discontinued Freighter Aircraft operations as per the arrangement with National Aviation Company of India Ltd (NACIL), (the erstwhile Indian Airlines Ltd.,) due to continuous failure and defaults by NACIL. The matter now stands referred to the arbitration of the Arbitral Tribunal appointed by the parties. Pending decision of the Arbitral Tribunal a sum of Rs.265.98 Mn is included in loans and advances being the difference between the amount of Bank Guarantee invoked by NACIL and claims acknowledged by the Company. In the Company's view there are fair chances of recovery of Rs.265.98 Mn. The Company has filed its statement of Claim before the Arbitral Tribunal for the losses suffered against which NACIL has made counter claims. As per the legal advice received by the company endorsed by another eminent jurist, no liability is contemplated to arise in the matter and no provision is considered necessary in these accounts in this behalf.

c) Pursuant to the notification issued by the ministry of Corporate Affairs dated 29th December 2011 on Accounting Standard 11, the company has opted to adjust the carrying cost of depreciable fixed assets/ to amortize the exchange differences on the Long term Foreign Currency Monetary Items over their tenure. Accordingly as on June 30, 2012, Rs.88.11 Mn has been carried forward in the " Foreign Exchange Monetary Translation Difference Account". Consequently the net profit is higher by Rs.88.11 Mn for year ended 30th June, 2012.

d) Due to inadequacy of profits, the remuneration paid to the Managing Director and erstwhile Whole-time Director is in excess of the prescribed limits under the Companies Act, 1956 by Rs. 22.47 Mn which requires approval of the Shareholders and the Central Government.

e) Tax provision in these accounts has been made considering the working results for the year ended 30th June, 2012. The actual tax liability will be determined on the basis of tax accounting year ended 31 st March, 2012. (Assessment Year 2012-13).

f) Out of the 1,02,32,400 convertible warrants allotted to the promoter on 13th February, 2010, 8,50,000 warrants were converted into shares on 31 st March 2011.93,82,400 warrants lapsed on 12th August, 2011 and amount received on allotment of warrants of Rs. 16,40,58,800 was forfeited and transferred to Capital Reserve Account.

g) The Company has granted options under the Companies Employees Stock Options Scheme and 19,48,141 Options are outstanding(Previous year 30,71,980) as at 30th June 2012. Of this 9,09,402 Options will vest in 2012-13, 7,84,539 Options in 2013-14, 2,06,200 options in 2014-15 and 48,000 options in 2015-16.

h) The Board of Directors of the Company has allotted 22,182 Zero Coupon Unsecured Foreign Currency Convertible Bonds(FCCB) of US$ 1,000 each, thereby raising US$ 22.182 Mn on December 12,2011. The bonds are convertible anytime from December 12,2012 upto the close of business on November 13,2016 by holders of the Bonds into fully paid equity shares of the company with a par value of Rs.2 each with full voting rights at an initial conversion price of Rs. 38.51 per share with USD/INR reference exchange rate that is fixed at Rs. 52.2285 per US$. Unless previously converted, redeemed or purchased and canceled, the Bonds will be redeemed in US dollars at 132.8341 percent of principle amount on December 13, 2016 giving a Yield to Maturity of 5.76 percent per annum calculated on semi-annual basis. The FCCBs earlier issued which were listed on the Singapore Stock Exchange have been fully redeemed along with the redemption premium on 13th December 2011.

i) The Company has taken a ship on finance lease during the financial year 2008-09 and accordingly as per AS-l9, the asset has been capitalized with corresponding Liability.

The ships along with the other assets and liabilities have been transferred to its wholy own subsidiary Gati Ship Private Limited(refer note 27(c))

30th June 2012 30th june 20l1

j) Contingent Liability not provided for in respect of

Bank Guarantees 151.35 190.86

Guarantees and Counter Guarantees outstanding 471.35

Estimated amount of contracts remaining to be executed on capital account 25.73 36.00 and not provided for

k) Earning per share

(i) Net profit aftertax available for equity shareholders - for Basic and Diluted EPS (Rs. In Mn) 719.96 143.01

(ii) Weighted average no. of ordinary shares for Basic EPS (Nos. in Mn) 86.39 85.37

Add: Adjustments for foreign currency convertible bonds and stock options (Nos. in Mn) 30.23 18.12

Weighted average no. of ordinary shares for Diluted EPS (Nos. in Mn) 116.62 103.49

(iii) Nominal value of Ordinary Shares (Rs.) 2.00 2.00

(iv) Basic Earning per Ordinary Share (Rs.) 8.33 1.68

(v) Diluted Earning per Ordinary Share (Rs.) 6.17 1.38

I) Related Party Disclosures

Related parties with whom transactions have taken place during the year

i Directors / Key Management Personnel:

Mr. Mahendra Agarwal (Managing Director & CEO)

Mr. Lagad Himmat Singh Daulat Rao (Whole-Time Director)

ii Relative of Key Management Personnel:

Mr. Anand Kumar Agarwal (Brother of Mr. Mahendra Agarwal)

iii Associates

1. Gati Intellect Systems Ltd.

2. TCI Finance Ltd.

3. Giri Roadlines & Commercial Trading Pvt. Ltd.

4. Jubilee Commercials & Trading Pvt. Ltd.

5. Gati Shipping Ltd.

6. Gati Cargo Management Services Ltd.

7. TCI Hi-ways Pvt. Ltd.

8. TCI Industries Ltd.

9. Mahendra Kumar Agarwal & Sons (HUF)

10. ITAG Infrastructure Ltd.

11. ITAG Business Solutions Ltd.

12. Gati (Thailand) Ltd.

iv Subsidiaries I Step Down Subsidiaries

1. Gati Holdings Ltd.

2. Gati Asia Pacific Pte Ltd.

3. Gati Hong Kong Ltd.

4. Gati China Holdings Ltd.

5. Gati Middle East FZE Ltd.

6. Gati Cargo Express(Shanghai) Co.Ltd.

7. Gati Japan Ltd.

8. Gati Cargo Malaysia SDN BHD.

9. Newatia Commercial & Trading Pvt. Ltd.

10. Trymbak Commercial & Trading Pvt. Ltd.

11. Ocimum Commercial & Trading Pvt. Ltd.

12. Sumeru Commercial & Trading Pvt. Ltd.

13. Kausar India Ltd.

14. Gati Import Export Trading Ltd.

15. Zen Cargo Movers Pvt. Ltd.

16. Gati Kintetsu Express Pvt Ltd (Formerley known as REDSUN Supply Chain Solutions Ltd.)

17. Gati Ship Private Ltd.

18. Gati Logistics Parks Private Ltd.

19. Gati Projects Private Ltd.

20. Gati Express and Distribution Private Ltd.

o) The figures of the Current Year are not readily comparable with those of the previous year due to -

i) The current year financials reflect the operations of EDSC and Shipping Division upto to 31 st Mar 2012 only, since those business were transferred to two separate wholly owned subsidiaries with effect from that date.

ii) The previous year's figures have been reclassified/regrouped to confirm to Schedule Vl(as amended) of the Companies Act, 1956.


Jun 30, 2010

Profit and Loss Account

(Rs. in Lakhs) June 30, 2010 June 30, 2009

1. Estimated amount of contracts remaining to be executed on capital account and not provided for 498.49 688.55

2. Contingent Liability not provided for in respect of Bank Guarantees 1,806.74 602.85

Guarantees and Counter Guarantees outstanding 1,590.24 1,863.64

3. During the previous year the Company discontinued Freighter Aircraft operations as per the arrangement with National Aviation Company of India Ltd (NACIL), (the erstwhile India Airlines Ltd.,) due to continuous failure and defaults by NACIL. The matter now stands referred to the arbitration of the Arbitral Tribunal appointed by the parties. Pending decision of the Arbitral Tribunal a sum of Rs.2659 lakhs is included in loans and advances being the difference between the amount of Bank Guarantee invoked by NACIL and claims acknowledged by the Company. In the Company’s view there are fair chances of recovery of Rs.2659 lakhs. The Company has filed its statement of Claim before the Arbitral Tribunal for the losses suffered against which NACIL has made counter claims. As per the legal advice received by the company no liability is contemplated to arise in the matter and no provision is considered necessary in these accounts in this behalf.

4. In terms of amendments notified on March 31, 2009 to Accounting Standard 11 (AS 11), the exchange gain of Rs.40 lakhs on restatement of foreign currency borrowings relating to acquisition of depreciable assets has been credited to the account of such assets. In other cases Rs.150.50 lakhs has been credited and Rs.58.84 lakhs has been amortised out of the Foreign Currency Monetary Item Translation Difference Account. As a result net profit after tax is lower by Rs. 207.90 lakhs and fixed assets are lower by Rs.36.22 lakhs.

5. Tax provision in these accounts has been made considering the working results for the year ended June 30, 2010. The actual tax liability will be determined on the basis of tax accounting year ended 31st March, 2010. (Assessment Year 2010-11).

6. (a) The appointment of and remuneration of Rs.65.86 lakhs paid to the Whole-Time Director for the period from December 1, 2009 to June 30, 2010 is subject to the approval of the shareholders and the Central Government.

(b) Due to inadequacy of profit, the remuneration paid to Managing Director for the year is in excess of the limit prescribed under the Companies Act, 1956 by Rs.61.93 lakhs which is subject to the approval of the shareholders and the Central Government.

7. During the year, 48,72,000 convertible warrants of Rs. 2/- each at Rs. 81/- per warrant and 53,60,400 convertible warrants of Rs. 2/- each at Rs. 58/- per warrant were allotted to Mr. Mahendra Agarwal, one of the promoters of the Company on preferential basis and 25% of the consideration was received as per the terms. These warrants would be converted into equity shares within eighteen months from the date of allotment.

8. The company has granted options under the Companies Employees Stock Options Scheme and 28,07,980 Options are outstanding (Previous year 17,83,930) as at June 30, 2010. Of this 8,42,394 options will vest in 2011-12, 11,23,192 options in 2012-13, and 8,42,394 options in 2013-14.

9. During the year 2006-07 the Company issued Foreign Currency Convertible Bonds (FCCB) of a face value of US $ 1000 each aggregating to US $ 20 million. As per the terms of the issue, the holders have an option to convert the FCCB into Ordinary Shares at an conversion rate of Rs. 125 per Ordinary Share at a fixed exchange rate conversion of Rs.44.67 = US $ 1, from December 20, 2006 to November 5, 2011. The conversion price will be reset periodically to the average closing price of the shares on the reset date, and it has been presently reset at Rs.90.00 per share. FCCB of US $ 5 million was converted into shares in the year 2007-08. Unless previously converted, the Company will redeem these bond at 147.88 per cent of the principal amount on December 6, 2011.

10. The Company has taken a ship on finance lease during the financial year 2008-09 and accordingly as per AS-19, the asset has been capitalized with corresponding Liability.

The future lease payment obligation and their present value as at June 30, 2010

11. In respect of Micro, Small and Medium Enterprises, the company has sent letters to all suppliers for the status of each supplier, but no confirmation has been received from any supplier, hence the disclosure regarding the unpaid amount and interest if any payable could not be given.

12. In the opinion of the Board of Directors, the current assets, loans and advances have a value on realisation in the ordinary course of business atleast equal to the amount at which they are stated.

13. Related Party Disclosures

Related parties with whom transactions have taken place during the yea

i. Directors / Key Management Personnel:

Mr. Mahendra Agarwal (Managing Director & CEO) Mr. Himmat Singh Lagad (Whole-time Director)

ii. Relative of Key Management Personnel:

Mr. Anand Kumar Agarwal (Brother of Mr. Mahendra Agarwal)

iii. Associates

1. Gati Intellect Systems Ltd.

2. TCI Finance Ltd.

3. Giri Roadlines & Commercial Trading Pvt. Ltd.

4. Jubilee Commercials & Trading Pvt. Ltd.

5. Gati Infrastructure Ltd.

6. Gati Shipping Ltd.

7. Gati Cargo Management Services Ltd.

8. TCI Hi-ways Pvt. Ltd.

9. TCI Industries Ltd.

10. Mahendra Kumar Agarwal & Sons ( HUF)

11. ITAG Infrastructure Ltd.

12. ITAG Business Solutions Ltd.

13. Gati (Thailand) Ltd.

iv Subsidiaries / Step Down Subsidiaries

1. Gati Holdings Ltd

2. Gati Asia Pacific Pte Ltd

3. Gati Hong Kong Ltd

4. Gati China Holdings Ltd

5. Gati Middle East FZE Ltd

6. Gati Cargo Express(Shanghai) Co.Ltd

7. Gati Japan Ltd.

8. Newatia Commercial & Trading Pvt. Ltd

9. Trymbak Commercial & Trading Pvt. Ltd

10. Ocimum Commercial & Trading Pvt. Ltd

11. Sumeru Commercial & Trading Pvt. Ltd

12. Kausar India Ltd.

13. Gati Import Export Trading Ltd.

14. Zen Cargo Movers Pvt. Ltd

15. REDSUN Supply Chain Solutions Ltd (Formerly Known as Gati Skyways Ltd.)

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