amiable logistics india ltd share price Management discussions

a. Industry structure and developments

The logistics industry is a comprehensive service industry that includes a series of activities such as transportation of goods by air, land and sea, warehousing, freight forwarding, custom clearance, information and others. It involves the movement of products from the origin to the production system, and then to their final consumption point to meet the needs of customers or enterprises. It is a basic, strategic and leading industry that supports the development of the national economy.

The quality of logistics development will directly affect the quality of services, and the service industry is the largest source of GDP growth, which will directly affect the high-quality development of the economy.

In order to meet the needs of different industries, logistics enterprises need to increase their efforts in technological innovation and service upgrading, adapt to the requirements of different industrial structures, and promote the high-quality development of the logistics industry.

It can be said that the rapid development of the logistics industry has greatly promoted the economic development. On the other hand, with the expansion of the logistics scale, it has brought a series of problems such as energy consumption, environmental pollution, urban traffic congestion, etc.

b. Opportunities and Threats

Opportunities:

Extended Warehouse Management e-commerce operators Advancements in technology favourable tax environment for SMEs Last mile delivery Strong cash flow Highly Skilled Labour

Threats:

Increasing transportation costs short supply of heavy goods vehicle drivers Inconsistencies in tracking Limited visibility of shipments Delivery delays

c. Segment-wise or product-wise performance

During the year under review, the Company operates into only one segment i.e. Logistics. However, the Company is generating income from different activities of Logistics. The detailed revenue and % from the logistics activities are given below:

Sr. No. Segment/ product	Revenue in the year 2022-23	% of total revenue
1. Agency and Forwarding	762.95	25.90
2. Freight	943.18	32.01
3. Transportation	417.68	14.18
4. Warehousing	822.44	27.91

d. Outlook

India has become the prime destination for logistics service providers all over the world. The demand for logistics services in India has been largely driven by the remarkable growth of the economy. This industry plays an important role in the business and economic system that deals with activities like warehousing, freight transportation, material handling, marketing, forecasting, and customer service. The Company is aware about the growing concerns about the sustainability and is consequently adopting several digital solutions launched by the Government such as ICEGATE and E-Logs. The Company also endeavours to inculcate the technique of “green logistics” to minimize the burden on our environment. This is a process of shifting to an eco-friendly means of running a business along with improving its sales.

e. Risks and concerns

Logistics firms are the backbone of every industry in a country. Logistics play a critical role in promoting trade and ensuring smooth operations. However, along with the several opportunities in the industry, many companies face specific risks in the industry. Following risks and concerns can be termed as some stapled risks involved in the logistics industry:

Increased cost of transportation:

While the Russia-Ukraine conflict has triggered the recent volatility in fuel prices, transportation costs have increased over the last few years. A key source of concern for logistics businesses worldwide is the rise in fuel prices, as they account for most of the increase in transportation costs. Increased fuel prices impose an additional surcharge on customers, effectively increasing the total shipping cost or freight charge for products and affecting revenue and earnings when fuel prices fall. Failure to cut costs results in an increase in expenses and, ultimately, losses for the business.

Empty miles

Empty miles, also known as non-revenue miles, have plagued the logistics industry for years. They lead to unnecessary cost increases, adverse environmental impacts, and negatively affect the efficiency of both carriers and shippers.

Shortage of drivers

Driver shortages continue to be a major problem for logistics companies across the globe. The Company is aware that dealing with drivers and transporters are critical necessities that should be addressed with proper supply and demand management. The management is also making the efforts to attract new drivers by offering amenities that address the drivers interests, requirements, and aspirations. Company also endeavours to develop a more positive relationship by demonstrating the importance and necessity of drivers for the growth of the Company.

Lack of skilled manpower

Shortage of competent labour and specialized experts is the main risk of the industry. With the advancement of modern technology, there is an increased demand for technically trained manpower. However, most labourers are underqualified, overworked, and lack the necessary skill sets to ensure the process is efficient.

Government and environmental regulations

Logistics companies should adhere to stringent laws set by federal, state, and local governments. Transportation legislation, norms, and security measures differ by region, and educating all company staff about these restrictions can be a significant burden. Further, the growth of transportation and logistics infrastructure requires a significant amount of space and as a result, carbon emission increases and the environment suffers.

f. Internal control systems and their adequacy

The Company has focused on internal control systems in true sense. The Company monitors the status of internal control in four areas, viz. reliability of financial reporting, legal compliance, operating effectiveness and efficiency, and protection of assets. In the event an issue is found, the management implements corrective measures to ensure the relevant department performs appropriate and effective internal control operations. The Company also keeps a check on the internal environment, information and communication and internal supervision of the activities of several departments of the Company.

g. Discussion on financial performance with respect to operational performance

Equity Shares

During the year under review and consequent to the Initial Public Offer, the Companys Authorized Share Capital is Rs. 1,85,00,000/- divided into 18,50,000 Equity Shares of Rs. 10/- each. The issued, subscribed and paid-up share capital of the Company is Rs. 1,74,82,000/- divided into 17,48,200 Equity Shares of Rs. 10/- each.

Total Revenue

During the year under review, the Company has recorded total revenue of Rs. 3019.06 Lakhs against Rs. 1725.92 Lakhs in the previous year which is 42% more in the current year when compared. The Profit for the year was Rs. 158.55 Lakhs and profit after tax was Rs. 108.22 Lakhs.

Revenue from Operations

Revenue from operations for the financial year 2022-23 was at Rs. 2946.25 Lakhs as against Rs. 1703.74 Lakhs in the previous year. Since previous year the Company has increased the revenue upto 42.17% and net profit upto 56.10%. Your directors are hopeful that the Company may be able to show better performance in coming years.

Reserves and Surplus

The Reserves and Surplus of the Company for the Financial Year 2022-23 stood at Rs. 5,14,27,627/- as against Rs. 53,29,439/- for the Financial Year 2021-22.

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

While the pandemic is starting to weaken and the global markets are finally beginning to stabilize, the demands in the logistics industry are still intense, especially when it comes to hiring skilled workers. The management is making all possible efforts to develop hiring practices that drive results, which in turn, will enable the Company to remain competitive in todays growing market.

A continuous effort is being made by the management to make the Company a great place of work by providing a platform to employees where they feel empowered and engaged. At Amiable, we always strive for continuous improvement and believe in our strong foundation which gets reflected in our values and systems.

During the year under review, the Company had 30 employees on its payroll. This count of employees depends upon the projects in hand and excludes the manpower from housekeeping, security services, contractual services and truck drivers.

i. Details of significant changes (i.e. change of 25% or more as compared to the immediately previous financial year) in key financial ratios, along with detailed explanations therefor, including:

Sr. No. Ratios	2022-23	2021-22
1. Debtors Turnover	16.90	9.39
2. Interest Coverage Ratio	402.87	554.62
3. Current Ratio	1.19	1.74
4. Debt Equity Ratio	0.76	1.12
5. Operating Profit Margin (%)	9.07%	5.21%
6. Net Profit Margin (%)	3.67%	2.79%
7. Return on Net Worth (%)	15.70%	27.27%

j. Details of any change in Return on Net Worth as compared to the immediately previous financial year along with a detailed explanation thereof The Company has raised funds during the year under review and the same has affected Companys Reserves and Surplus.