inter state oil carrier ltd Management discussions

OVERVIEW AND DEVELOPMENTS

The logiscs industry in India, considered to be the lifeline of the country, holds unprecedented importance as it connects various markets, suppliers and customers spread across the country, and has now been rmly embedded as an integral part of the naonal GDP value chain. The Indian logiscs sector provides livelihood to more than 22 million people. The logiscs industry is highly fragmented and consists of mulple acv e players which include large scale domesc players, leading global players and emerging start-ups specializing in e-commerce deliveries.

The logiscs industry is currently undergoing a transformav e change. Road Transport is considered to be one of the most cost e ecv e and preferred mode of transport, both for freight and passengers. Thus, it is vital for economic development and social integraon of the country. Road Transport has emerged as the dominant segment in Indias transportaon sector. The performance of companies in the transportaon industry is highly sensiv e to uctuaons in c ompany earnings and the price of transportaon ser vices. Main factors a ecng company earnings include fuel costs, labour costs, demand for services, geopolic al events and government regulaon. Many of these factors are interconnected. Oil prices are a key factor for transportaon, as the commoditys price generally has an influence on transportaon expenses. Gas and fuel prices that rise will increase costs for a trucking company, eang into their profit and potenally reducing their stock price. Numerous inia v es are undertaken by the government in the development of favourable policies and regulaons is creang a posiv e market outlook.

As regards the Union Budget of 2023, expectaons center around implementaon of plans outlined as part of the Naonal Logiscs Policy (NLP) that PM Modi launched in September 2022. Aimed at enhancing economic growth, increasing employment and improving the compev eness of domesc products in local markets and abroad, the NLP will establish a single-window e-logiscs market and promote the seamless movement of goods across the country. This was a natural next step following the Ga Shak Naonal Master Plan that seeks to urgently improve first and last-mile connecvity , which connues to be a roadblock for e-commerce players, MSMEs across the board. With the unorganized sector amounng to over 90% of the logiscs industry, there is a need for less-fragmented communicaon between various stakeholders. A technology driven framework can bridge the gap between manufacturers, government bodies, customs, shippers, service providers by enabling information exchange in a secure, con denal and real me or near real me manner, as outlined by the Uni ed Logiscs Interface Pla orm (ULIP).

The implementaon of ULIP will prove to be a game changer in mes to come, by improving logiscs visibility mul fold, cung down expensive delays and transports costs and enhancing enterprise efficiency.

All in all, the logiscs industry has a tremendous growth set for 2023 and in the coming years. With AI, Big Data, IoT and other advance soluons available to help create excellent strategies to provide great soluons to customers, many businesses are turning to invest more in logiscs. With an evoluon of mulple trends in the market, companies need to keep up with tech advancements to navigate through the challenges and adapt to the changing mes. Another challenge faced by the sector is rising diesel price and related in aonary scenario. Rising fuel prices have become a cric al part of everyday logiscs and it has adversely impacted the prospects of the Indian Logiscs Sector.

GLOBAL ECONOMY

Global real GDP growth at 2.8% for 2023, marking a slowdown from 3.4% growth in 2022. Despite rapid monetary gh tening, in aon is proving persistent in many key economies, parcularly on the back of strength in job markets amid severe labour shortages. Therefore, monetary policy is likely to remain restricv e throughout most of 2023, despite financial stability concerns.

Global real GDP growth should pick up steam in 2024 to 2.5 percent and be more evenly distributed among regions. Tailwinds to growth in 2024 will largely come from fading shocks related to the pandemic, elevated in aon and monetary policy gh tening. However, growth rates in 2024 and beyond are likely to be below the pre-pandemic trend, given ongoing supply-side weakness (e.g., ageing demographics worldwide and slow producvity growth). In aon, while lower than experienced currently, may remain rela vely elevated for several reasons, including expected persistence in labour shortages, deglobalizaon and the global energy transion. Average global in aon is projected at 5.2 per cent in 2023, down from a two-decade high of 7.5 per cent in 2022.

INDIAN ECONOMY

According to the Internaonal Mone tary Fund, Indian economy is projected to deliver robust growth of 5.9% for 2023, highest amongst the emerging economies, driven by strong domesc demand and healthy consumpon growth supported by an improvement in labour market condions, increasing consumer con dence, an expected recovery in rural demand and higher purchasing power with moderang of in aon.

Risks to the outlook remain with weakness in the global economy impacng exports, volality in food and crude oil prices, slowdown in private consumpon and aggressive monetary gh tening by global central banks to moderate in aon.

In the Union Budget for financial year 2023-24, the government announced a 33% increase in capex allocaon to INR 10 trillion, which is expected to boost private investments. The Budget has also targeted a lower fiscal de cit in financial year 2023-24 at 5.9% and the government has commi ed to bring it down to below 4.5% by financial year 2025-26. In India, the focus of government spending has shi ed toward infrastructure investment, labour regulaons are being simpli ed, underperforming state-owned assets are being privased and the logiscs sector is expected to be modernized and integrated.

INDIAN TRANSPORT INDUSTRY: OUTLOOK AND OPPORTUNITIES

The Indian economy is the h largest in the world and we have our sights set on becoming a $5 trillion economy by 2025. One of the big drivers of this growth is expected to come with the expansion of the logiscs industry in India which employs 22 million people and acts as the backbone for mulple industries.

Indias economy connues to be one of the fastest-growing economies in the world with an esma ted growth of 7.5% in financial year 2022-23. Pung the spotlight on express logiscs speci cally, new trends are consistently developing that aid the sector in becoming more streamlined, efficient and customer-friendly. Technology connues to be a major pivot, driving the sector forward towards becoming more future-ready, in the case of another unprecedented event. From first mile to last mile, the logiscs industry is adopng technology across the supply chain. A future outlook for the industry seems to be a space where faster results can be expected without compromising on quality.

India is one of the countries with the largest populaon and an expansive geographical coverage which contributes to many of the factors that influence logiscs in the country. The pandemic has seen a shi with countless challenges unique to each region. The logiscs indus try is seeing its fair share of ups and downs but trends suggest be er growth for this sector in the coming year.

Logiscs players have increasingly begun to adopt advanced technologies such as Block chain, Data Analycs, Ar cial Intelligence and Machine Learning to enhance operaonal efficiency and opmiz e cost and me. These technologies have played a vital role in reviving the sector post lockdown(s) and it is expected that embracing digiz aon will be more than just a passing trend.

Another important facet of the industry that is being highlighted now more than ever is Sustainable Logiscs. The race against climate change is urging humanity to instantly adapt to a more sustainable lifestyle. Logiscs contributes to a significant amount of carbon emissions, year on year. With an aim to reduce carbon emissions and increase efficiency, numerous logiscs providers are now opng for environmentally friendly alternav es such as e-Vehicles, etc.

INTER STATE OIL CARRIER LIMITED

Your Company is a prominent player in Tanker (Bulk liquid and gas movement) transport. It covers various zones like East-North East, West-North-West, West-East-West, East-South-East, South-West-South. It has sufficient number of eet to cater to its customers. It has its camp o ces at Haldia, Chennai, Hazira, Mumbai, Kandla, Vadodara.

Your Directors will leave no stone unturned to ensure that the effect of contracon in demand for movement of tankers on hired basis is minimum. Your Company has full faith in the efficiency and e cacy of sta , at all levels. Moreover, your Company sll enjoys the con dence of many Companies across India.

FINANCIAL PERFORMANCE REVIEW

It has been explained in the boards report.

OPPORTUNITIES AND THREATS

Grant of infrastructure status to logiscs, the introducon of the E-Way Bill and GST implementaon are set to streamline the logiscs sector in India. Seng up of a logiscs division under the Department of Commerce, technology upgrades and development of dedicated freight corridors and logiscs parks are also major moves to upgrade the logiscs landscape.

The vehicle scrappage policy is a government-inia ted program to replace old vehicles from Indian roads. According to the new policy, commercial goods vehicles greater than 15 years will have to be mandatorily scrapped if they do not pass the tness and emission tests from April 01, 2023.

Your Company has good number of eets to cater to the demand of Industries across India. It has added new eets also. Your Directors are hopeful that your Company will be able to direct customers of other Transport Companies into its fold. The eventual situaon of higher demand for vehicles would work favourably and coupled with the inevitable freight rate hike caused by such policy implementaon would lead to a higher margins for the Company.

The main threat to transport sector is oil prices. For now, it has been going up. If this trend connues, the bo om line of your Company may be adversely affected. The Companys operaons could also be affected owing to development of newer policies by the different State Governments of the country. The Companys business operaons are totally dependent on the road network in India. There are various factors that affect the road network such as polic al unrest, bad weather condions, natural calamies, regional disturbances or even third party negligence. Even though the Company undertakes various measures to avoid or mig ate such factors to the extent possible, some of these have the potenal of

causing extensive impact on operaons and assets.

SEGMENT - WISE PERFORMANCE

The Segment wise performance for the year ended 31 March, 2023 is here in given below :

The Companys operaons predominantly consist of Transportaon and Invesng in Shares & Securies:

	2022-23	2021-22
Particulars	Amount	Amount
	(Rs. Lakhs)	(Rs. Lakhs)
1 Segment Revenue
(Net Sale / Income of each segment)
i) Transportaon Acvies	5,390.86	4,556.12
ii) Invesng in Shar es & Securies Acvies	3.52	217.63
Total	5,394.38	4,773.75
Less: Inter Segment Revenue	-	-
Net Sales / Income from Opera_ons	5,394.38	4,773.75
2 Segment Results
(Pro t and Loss before Tax & Interest from each segment)
i) Transportaon Acvies	204.38	338.74
ii) Invesng in Shar es & Securies Acvies	(21.63)	216.26
Total	182.75	555.00
Less: I. Unallocable Finance Costs	40.54	30.34
II. Other unallocable expenditure net off unallocable income	214.80	194.55
Pro t / (Loss) before Tax	(72.59)	330.11
3 Segment Assets
i) Transportaon Acvies	3,444.54	3,077.12
ii) Invesng in Shar es & Securies Acvies	266.93	390.53
iii) Unallocable Assets	441.26	373.49
Total Segment Assets	4,152.73	3,841.14
4 Segment Liabili_es
i) Transportaon Acvies	1,927.74	1,610.70
ii) Invesng in Shar es & Securies Acvies	0.25	0.25
iii) Unallocable Liabilies	493.77	456.27
Total Segment Liabili_es	2,421.76	2,067.22
5 Capital Employed (i.e. Segment Assets less Segment Liabili_es)
i) Transportaon Acvies	1,516.80	1,466.42
ii) Invesng in Shar es & Securies Acvies	266.68	390.28
iii) Other Unallocable Assets net of Liabilies	(52.51)	(82.78)
Total Capital Employed	1,730.97	1,773.92

FUTURE OUTLOOK OF YOUR COMPANY

Your Directors are of the view that due to unpredictable Indian Economy, Various policy changes and supply chain disrupon, it is di cult t o state the future outlook of your Company. Nevertheless, your Directors are con dent that your Company will fare much be er than other transport Companies.

INTERNAL CONTROL SYSTEM

Your Company always strives to strengthen Internal Control Systems and processes for smooth and efficient conduct of business and complies with applicable relevant laws and regula ons. A comprehensive delega on of power exists for smooth decision making. Elaborate guidelines for preparaon of accounts are followed for uniform compliance. Further, all the key funconal areas are governed by respecv e operating manuals.

The internal control is supplemented by an extensive internal audit, periodical review by the management and documented policies, guidelines and procedures. The internal control is designed to ensure that the financial and other records are reliable for preparing financial statements and other data and for maintaining accountability of assets.

HUMAN RESOURCES AND INDUSTRIAL RELATIONS

Your Company connues to place significant importance on its Human Resources and enjoys cordial relaons at all levels. Our constant endeavour is to invest in people and people processes to improve human capital for the organizaon and service delivery to our stakeholders.

Ar acng , developing and retaining the right talent will be a key strategic imperav e and the organizaon connues its undivided a enon towards that. Your Company recognizes the fact that Human Capital is one of the vital constuen ts of a successful organizaon. Your Company appreciates performance of the employees for the year and ancipa tes much more for the years to come. Your Company believes in employee empowerment across the enr e organizaon in order to achieve organizaonal e ecv eness. Your Company has sufficient pool of talents in various opera onal elds. The Human resource environment has been very smooth throughout the year. Your company has laid emphasis on improving the skills of its human resources towards achieving be er performance and improving quality.

The Company takes special care about the safety, which is core value of the company and all necessary

acons are taken in the company to keep safety as priority.

RISK AND CONCERN

Risk factor is associated to all business acvies of all c ompanies, though in varying degrees and forms. Risk evaluation and its management is ongoing process within your company. The risk of your Company is in the nature of s compeon in the market. Change in technology also plays a major role.

CHALLENGES

Every business carried out by any Company are full of challenges and risk and the success of any business always depend upon the ability of the Company how it faces the challenges and survive in the highly compev e market. Your Company is developing various systems and strategies to face the challenges in the compev e market. The challenges are not from the compet ors but also from the domesc and global economic scenario. Your Company is taking all precauons to o set the associated risks.

KEY FINANCIAL RATIOS

As spula ted in the Regulaon 34(3) of SEBI (LODR) Regulaons, 2015, the Company reports key financial

raos as follows:

a) Details of significant changes (i.e. change of 25% or more as compared to the immediately previous

financial year) in key financial raos or sector specific raos, along with detailed explanaons there of:

Sl. No.	Ra_os	Financial Year 2022-2023	Financial Year 2021-2022	Variance (in %)	Reason for Variance
1.	Current Rao	0.97	1.20	-19.17%	- Due to increase in borrowings during the year. Due to decrease in earning for debt service during the year. Due to net loss during the year. -
2.	Debt-Equity Rao	1.22	0.91	34.07%
3.	Debt Service Coverage Rao	0.86	1.39	-38.13%
4.	Return on Equity Rao	-0.02	0.17	-111.76%
5.	Inventory Turnover Rao	N.A.	N.A.	N.A.
6.	Trade Receivables Turnover Rao	5.83	5.51	5.81%	- Due to decrease in average trade payables during the year. Due to decrease in working capital during the year. Due to net loss during the year. Due to decrease in earnings before interest and taxes during the year. Due to decrease in income generated from invested funds during the year.
7.	Trade Payables Turnover Rao	15.67	9.54	64.26%
8.	Net Capital Turnover Rao	-105.51	18.82	-660.63%
9.	Net Pro t Rao	-0.01	0.06	-116.67%
10.	Return on Capital Employed	0.02	0.13	-84.62%
11.	Return on Investment	0.01	0.44	-97.73%

b) Details of any change in Return on Net Worth as compared to the immediately previous

financial year along with a detailed explanaon ther eof;

Sl. No.	Ra_os	Financial Year	Financial Year	Variance (in %)	Reasons for variance
		2022-2023	2022-2023
1.	Return on Net Worth (%)	-2.48	15.40	-116.10%	There has been a decrease in Return on Net Worth as compared to previous year due to loss during the year.

CAUTIONARY STATEMENT

Statements in the Management Discussion and Analysis Report describing Projecons, Esma tes, Expectaons, Future Outlook etc. In connecon with the business may be forward looking statements within the meaning of applicable securies laws and regulaons. Actual results may differ materially from those expressed or implied. However, the actual results could materially differ from those expressed or implied in the statements made by the Management. Various factors which are outside the purview of the Management Control can cause these deviaons. These factors include economic developments in the country, changes in governmental policies and fiscal laws, sudden and unexpected rise in input costs, change in the demand supply pa ern in the industry, etc.

For and on behalf of the Board of Directors

	Sanjay Jain	Nand Kumar Bha_er
Place: Kolkata	Managing Director	Director
Dated: The 11 Day of August, 2023	(DIN:00167765)	(DIN:00013918)