ABC India Ltd Management Discussions.

Industry structure and development

The business of transportation is in the hands of operators both in organized as well as in unorganized sector. A large portion of the transportation business is undertaken conventionally by operators in unorganized sector. Our Company being an operator in organized sector has to compete with operators in unorganized sector. In the process of the transportation business we also offer logistics and specialized project transportation services. The project transportation services involve logistics of Over Dimensional/Over Weight Consignments where also several new operators have started offering the same services, thereby increasing competition.

Opportunities and Threats

Performance, growth and development of transport and logistics service business is directly linked with and related to performance, growth and development of industry in our country. The specialized project logistics business is linked with setting up of new projects requiring Over Dimensional Plant & Machinery. Road transportation & Logistics solutions are one of the most important prerequisites for development of trade and industry and setting up of new industrial projects. The project transportation also suffers from ambiguous government regulations. In cycles of economic growth and development of Indian Industry, our Company finds opportunities, whereas in cycles of economic slowdowns in Indian industry our Company faces challenges and threats of fierce competition from operators in unorganized sector.

Segment-wise or product-wise performance

The Company has three primary business segments namely, Freight & Services, Petrol Pump & Construction. Out of the total earnings for these three segments amounting to Rs. 11,665 Lakhs, the Freight & Services Segments earning was Rs. 5,069 Lakhs, Petrol Pump Segments share was Rs. 5,957 Lakhs and the Construction Segments share was Rs. 639 Lakhs.


The Company has presence all over India and especially in North Eastern States. The Company has proven capabilities and competency to offer domestic road transportation, complex logistics solutions for Over Dimensional Consignments by multi modal routes and international freight forwarding services to its customers. The Company is also providing innovative logistics solutions to its customers with value addition in its services. With these advantages, we have good prospects of demand for Companys services.

With the introduction of GST during the year under review, the revenue was in stress and with the stabilization of the taxation procedure and wider acceptability, we are hopeful to recover the pace in business volume.

Besides, to improve the profitability, the Company has reduced its work force by almost 15% and other cost reduction measures are underway to sustain in the business.

During the year under review, the Company has received an Order in February, 2018 from BHEL to the tune of Rs. 141.93 Crores for Multimodal Transportation of Export Cargo from India to the MSTPP Rampal project in Bangladesh. This will help the Company to improve its revenue and profitability in the coming years.

Accordingly, the performance of the Company in current year as well as coming years shall continue to be highly dependent upon revival of infrastructure sector, power sector, industrial project and procurement of orders.

Risks and concerns

Our Company, as in case of any other body corporate, is exposed to specific risks that are particular to its business and the environment within which it operates. These include credit risks, market risks and operational risks. We have established policies and procedures to manage these risks. Such policies and procedures are continuously bench marked with best practices in Indian Road Transport Sector.

Internal control system and their adequacy

The Company has a well-defined organization structure, authority levels and internal policies and procedures for conducting business transactions. The Company has an internal audit system, and the audit plans. The Audit Committee periodically reviews internal audit reports and adequacy of internal controls.

Discussion on financial performance with respect to operational performance

The Companys total earnings including other income for the year amounting to Rs. 11,701 Lakhs as compared with previous years total earnings of Rs. 12,986 Lakhs. For the year the profit before exceptional items, finance cost, depreciation & amortization expenses and taxation is Rs. 398 Lakhs. Finance cost for the year amounted to Rs. 393 Lakhs, Depreciation & Amortisation expenses amounted to Rs. 150 Lakhs. The Profit after taxation for the year is Rs. 89 Lakhs.

Material developments in Human Resources/Industrial Relations front, including number of people employed

The key resource for the Company is its employees, which is giving the Company a competitive edge in the business environment. The Company has been able to create a favourable work environment that encourages innovation and meritocracy.

For this purpose, we have a practice of rigorous job rotation, training in new age skills and multi-functional exposure and responsibilities.

The Company had 162 permanent employees at the end of the year. As in the past, the industrial relations continued to remain cordial at all the locations of the Company.