Blue Dart Express Ltd Management Discussions.

"Indias competitiveness, infrastructure development and initiatives of the government have created an ecosystem that is driving the growth of the logistics sector in our country. Post witnessing the second wave of the COVID - 19 pandemic, we are cautiously optimistic about what the future holds for the economy. Blue Dart, will extend its role as the ‘Trade Facilitator to the nation and will support all its customers logistics needs. With our market-leading technology and automation, we intend to continue our longstanding relationship with customers as their ‘Provider of Choice. We are committed to staying one step ahead of the curve and continuously outperforming, by investing in the Brand, People, Technology, Digitization and Automation to chart a new trajectory as we build our brand for the future."

Balfour Manuel, Managing Director,

Blue Dart Express Limited

GLOBAL ECONOMIC OVERVIEW

The financial year 2020-21 began with the declaration of the COVID - 19 virus taking shape as a global pandemic. The spread of the new strain of COVID-19 impacted the world as nations began closing their borders as well as initiating the lockdown. As a result of the pandemic, the global economy in April 2020 was projected to contract sharply by 3% during the year, much worse than during the 2008-09 financial crisis1. While the pandemic remained at large, the second half of 2020 gave impetus to economic growth as containment efforts succeeded and the lockdown was gradually lifted. By October 2020, global growth was projected at -4.4% in 2020. Following the contraction in 2020 and recovery in 2021, global growth for 2021 was projected at 5.2% with the level of Global GDP expected to be a modest 0.6% above that of 20192.

2021 began with hope as several companies making vaccines against COVID-19 gained approval to begin worldwide distribution. Although this has raised hopes of a turnaround in the pandemic later this year, renewed waves and new variants of the virus pose as concerns for this outlook. Amidst exceptional uncertainty, the global economy is projected to grow by 5.5% in 2021 and 4.2% in 20 223. Global economic output is projected to grow by 4% in 2021 assuming widespread roll-out of the COVID-19 vaccine throughout the year, as per the World Banks Global Economic Prospects (GEP) report. After an estimated 3.6% contraction in 2020, the U.S. GDP is expected to grow at 3.5% in 2021 and the Euro area at 3.6%. Emerging markets and developing economies (EMDEs) are expected to grow at an average of 4.6% in the financial year 2021-224.

The strength of recovery is projected to vary significantly across countries, depending on access to medical interventions, the effectiveness of policy support, exposure to cross-country spillovers, and structural characteristics entering the crisis. Policy actions should ensure effective support until the recovery is firmly underway. Strong multilateral cooperation is required to bring the pandemic under control everywhere3.

INDIAN ECONOMIC OVERVIEW

The Indian economy had begun to regain momentum with clear signs of an uptick in consumption and investment towards the end of Q3: 2019-20. This came to a halt with the rise of COVID-19, leading to the government enforcing a nation-wide lockdown in late March 2020. With industries across verticals having to adapt to new methods of working in the new normal, the Indian economy contracted by a record 24.4% in the April-June quarter of FY2020- 21. Indias real GDP fell to 26.9 lakh crore in constant terms, 23.9% lower than a year ago whereas its nominal GDP fell to 38.08 lakh crore, 22.6% lower than the same period a year ago5.

The Government of India announced the first unlock in June, 2020 thereby giving impetus to revive the Indian economy. The Indian economy contracted by 7.4% in the July-September 2020 quarter from the year earlier, a substantial improvement from the 24.4% decline in the quarter ended June 2020. The Purchasing Managers Index (PMI) rose to 56.8, the highest in eight-and-a-half years in September and Goods and Services Tax (GST) collections rose to a post-pandemic high of 95,480 crores6. Along with this, effective Government support provided during the quarter, in the form of a five-part economic stimulus package totalling 20 lakh crore helped deal with the fallout of COVID-197.

Pent-up demand, festive spending and a jump in government expenditure helped bring back growth in the Indian economy after two consecutive quarters of contraction. The economy grew 0.5% in the third quarter of FY 2020-21. This return to growth marked Indias exit from a technical recession8.

As Indias mobility and pandemic trends aligned and improved concomitantly, indicators like e-way bills, rail freight, GST collections, digital payment & power consumption not only reached pre-pandemic levels but also surpassed previous year levels. The reinstated inter and intra state movement, record-high monthly GST collections in January and February 2021 rising to 1.13 lakh crore and the PMI rising to a record high of 57.5 during the first two months of 2021, have marked the unlocking of industrial and commercial activity. A sharp rise in commercial paper issuances, easing yields, and sturdy credit growth to MSMEs signify revamped credit flows for enterprises to survive and grow9.

Economic indicators point to an improvement in the Indian economic scenario going forward. Expansion in Indias manufacturing activity, as tracked by the seasonally adjusted IHS Markit India Manufacturing Purchasing Managers Index (PMI) is at 57.5 in February10.

This coupled with the pragmatic Union Budget 2021-22 ("Government Budget") announced in February 2021 indicates a steady recovery for India. The proposed Government Budget rests on six pillars — health & well-being, physical & financial capital and infrastructure, inclusive development for aspirational India, reinvigorating human capital, innovation and R&D, as well as Minimum Government, Maximum Governance.

The Government budget also increased the foreign direct investment (FDI) limit in the insurance sector from the existing 49% to 74%11. Foreign Direct Investment (FDI) remains a significant engine of economic growth and a key source of Indias non-debt financing. Total FDI inflows stood at a record high of US$ 46.82 billion between April 2020 and October 2020, an 11.3% increase over the first seven months of 2019-20, supporting Indias position as a favoured global investor destination. The Indian stock market showed a positive outlook among investors, with FPI inflows hitting a record high of US$ 9.7 billion in November 2020 and US$ 8.6 billion in December 202012.

The Government budget coupled with a slew of Government Initiatives such as Make in India, Digital India as well as other policies were launched to increase employment and help revive the Indian economy. The Organization for Economic Co-operation and Development (OECD) has raised the projection for Indias economic growth rate by 4.7 percentage points at 12.6% for 202122. That would enable India to retain its earlier tag as the fastest- growing large economy in the world13.

 8 Q3 GDP: Indian Economy Returns To Growth In October-December Quarter

 9 https://pib.gov.in/PressReleasePage.aspx?PRID=1693232

 10 Indias Manufacturing PMI at 57.5 in Feb 2021, against 57.7 in Jan

 11 Budget 2021: Mega boost! Govt to increase FDI from 49% to 74% in insurance

 12 Indian Economic Development & Growth Report

 13 OECD raises Indias economic growth forecast to 12.6% for 2021-22

GLOBAL LOGISTICS INDUSTRY

The supply chain interruptions due to the COVID-19 outbreak had a direct impact on the global logistics industry. The sector had to rise to the ultimate test of durability, as it was faced with issues such as labour shortage, fragmented supply lines, weak infrastructure, and ambiguity concerning the rules and regulations for the mobility of goods14.

While the pandemic interrupted the supply chain, the eCommerce market witnessed high growth with consumers and businesses ordering everything, from groceries to consumer durables, online. This led to a surge in demand for last-mile delivery services which ultimately resulted in growing volumes for express logistics providers, many of whom also witnessed higher revenue. Data shows, both domestic and international express are expected to see continued growth over the next four years, expanding at a CAGR of 7.9% and 6.8% respectively15.

Contrary to that, the pandemic has impacted the forwarding market as well. The reduction in both air and sea capacity early in 2020 significantly disrupted global supply chains. As the demand from consumers and manufacturers returned at a faster pace than air and sea capacity, rates shot up over the second half of the year. Pre-pandemic, air freight had its global volumes down by 12.6%, while rates were 79% higher. The near-global suspension of passenger air travel early in the pandemic effectively removed belly freight capacity from the market, eliminating around half of all the air-freight capacity. In November 2020, IATA data shows available Cargo Tonne Kilometers were still 21.3% below 2019 levels.

In sea freight, rate volatility has been no less extreme. Data shows the cost of transporting a Twenty foot Equivalent Unit (TEU) from China to the West Coast of the United States of America, in the week of January 22nd, 2021 was $4,261. This shows an increase of 103% when compared to the cost to transport the same TEU during the same week in 2020 which got priced at $2,102. While carrier capacity has returned to the market more steadily than in air, a shortage of container availability and port capacity is creating acute problems in supply chains. This is likely to keep rates high through the first half of 2021 at least. New market forecasts predict a CAGR expansion for air and sea freight at 5.4% and 5.0% respectively, over the next four years.

The global logistics industry was worth USD 4,967 billion in the year 202015. Data predicts recovery from the COVID-19 pandemic will be healthy with the industry expanding at a CAGR of 4.7% by 202416 and attaining a CAGR of 6.5% by 202817.

 14 Emergence of COVID-19: Impact on Logistics Industry

 15 Global Logistics Market Outlook

 16 Total Logistics 2021

 17 Logistics Market Size, Market Share, Application Analysis, Regional Outlook, Growth Trends, Key Players, Competitive Strategies and Forecasts, 2020 To 2028

LOGISTICS INDUSTRY IN INDIA

The logistics industry in India continues to remain highly fragmented with a large number of unorganized players. While there is a need for the highly fragmented Indian logistics market to get more organised, there is also a need to reduce logistics cost to 7% from about 14% now and to bridge the current competitiveness gap of $180 billion. The Confederation of India Industry (CII) recommends that a 20-25% reduction in indirect costs is essential to bring down the logistics cost in India to be on par with the USA and Europe, at 7%.

Indias supply chain and logistics sector are one of the largest globally, with the logistics industry valued at $215 billion, growing at a CAGR of 10.5%. The logistics modal mix should be enhanced with roads constituting 25-30%, railways comprising 50-55%, and waterways accounting for 20-25% from the current modal mix which includes roads constituting 60%, railways constituting 31% and waterways constituting 9%18. The cold chain storage infrastructure should also be expanded. However, despite its size and criticality to economic growth, Indias supply chain faces several barriers to growth, notably an unbalanced logistics modal mix, high indirect costs, fragmented infrastructure and networks as well as limited technology adoption19.

In 2020, the pandemic-induced supply chain interruptions gave a significant blow to the industry. Rampant uncertainty, multiple roadblocks, coupled with revolutionary revival processes have upheaved the industry into a rocky start for the FY 2020-21.

Soon after the COVID-19 outbreak was declared a pandemic in March, 2020, the Prime Minister of India announced a nationwide lockdown; the complete shutdown of the movement of goods and people created challenges. This was further intensified with the partial opening of the lockdown which saw the movement of the migrant labour force from cities, creating a void in the labour market. Social distancing, safety, and hygiene checks that werent prevalent before became imperative for daily operations. The pandemic took a considerable toll on the last-mile efficiency, with the entire industry racing to re-calibrate operations20.

The pandemic saw an immense shift in the way businesses restructured operations and steered themselves through the multifaceted challenges. Today, by partnering with third-party logistics providers who offer end-to-end services such as same day/next day deliveries, etc., small and medium enterprises are establishing a fortified online presence for themselves. Sellers are now digitizing their businesses to accelerate the revival process and ensure their business does not become redundant. The

 18 https://www.livemint.com/politics/news/national-logistics-policy-to-bring-down-cost- and-streamline-rules-11580668680723.html

 19 https://www.thestatesman.com/business/india-needs-lower-logistics-cost-7-8-gdp- report-1502942310.html

 20 The logistics industry in 2020 and the outlook for 2021 logistics industry is instrumental in supporting these businesses, especially during a time where their existence was threatened to become obsolete. The industry ensured that the global and national flow of goods, particularly essential items, is left unhindered despite the lack of sufficient transport and other disruptions in the supply chain.

With the application of technology and digitization remaining at a nascent stage in India, only a handful of logistics players with a market advantage in technology were able to use the crisis as an opportunity. While many companies understood the requirement for resilience and automation, a number of them are still trying to bridge the gap.

The solution to a majority of the hurdles faced, lies in embracing the aforementioned trends to the industrys advantage. Technology is the backbone of not just the logistics industry, but of almost every industry across the world. Modern supply chains will include lean operators who can ramp up and achieve high service levels at a short notice. A big advantage for India is the resources the country possesses as well as the talent of skilled manpower. This makes it a great landscape to find a balance between Artificial Intelligence and Augmented Intelligence.

Logistics players have increasingly begun to adopt advanced technologies such as blockchain, data analytics, artificial intelligence, and machine learning to enhance operational efficiency and optimize cost and time. These technologies have played a vital role in reviving the sector post lockdown(s) and it is expected that embracing digitalization will be more than just a passing trend18.

A future outlook for the industry seems to be a space where faster results can be expected without compromising on quality. Technological leaps such as real-time ordering, end-to-end inventory visibility, autonomous warehouses and hubs, drone delivery and a significant use of robotics are what we can expect in the foreseeable future. The idea is to use manpower for more complex and rewarding tasks thereby increasing the efficiency and effectiveness of the entire ManTech combination. An indigenous network modelling system needs to be developed and implemented to dynamically respond to changes in network schedules and recommend fast and reliable network routes linking shipment origins with destinations.

The role of the logistics sector has never been more crucial than in the year 2021. The logistics industry has been preparing to transfer millions of doses of the Vaccine against COVID-19 across the country since the end of 2020. Unlike many developed countries that are struggling with laying down policies and plans to distribute the COVID-19 vaccine, India has the benefit of already having a vaccine distribution mechanism in place that has been running for years21. Going forward, the growth of the logistics industry

 21 Covid-19 vaccine distribution to give cold chain logistics sector a boost will be centred around the adoption of technology; be it tactical or operational decision making, routing, fleet optimization, data analysis, or strategic planning; technology will be all-pervasive.

In FY2021-22, we can expect an impetus given to the logistics industry owing to the mass vaccine and immunization programme against COVID - 19. Over and above this, Government policies such as Make in India, Vocal for Local, Digitized India as well as the Government Budget would benefit the logistics sector substantially.

GOVERNMENT POLICY

In order to facilitate the need to reduce logistics cost as well as in light of the interruptions that the year 2020 has caused the logistics industry, the Government has proposed several policies to help boost the industrys growth.

The implementation of GST continues to remain a boon to the logistics industry. The integration of the multilayer goods and service tax, turned the Indian tax system into a unified one and eased the way of conducting business. The process reduced the overall transportation tax and helped in enhancing various logistics decisions. This helped the industry reach its potential in terms of matching high-quality service levels and growth. Over and above this, it helped logistics players reduce the transit time which continues to play an integral role in reducing logistics costs22.

Furthermore, the National Logistics Policy, the National Air Cargo Policy, the National eCommerce policy as well as the dedicated freight corridors continue to gain traction in creating a framework to achieve holistic growth of the integrated logistics industry. Moreover, the industry is eagerly waiting to see the consequences of the Government Budget. The proposed solutions include a succinct focus on improving road and railway infrastructure. Investments in National Highway corridors and economic corridors will aid in the speedy movement of goods and improve turnaround time which, in the long term will bring down logistics costs significantly.

The National Highway work planned in Tamil Nadu, Kerala, West Bengal, Assam will further assist in the final goal of last-mile delivery and the industry is eager to see its results on the business. In the long term, all the expenditures could be assisted with the proposed introduction of the Development Finance Institution (DFI) which will speed up the infrastructure development in India.

COVID-19 PANDEMIC

The virus spared little time in becoming a pandemic that catapulted across the world in a matter of days. Indias advantage lies in its geographical positioning. As the pandemic spread from the Far East to the Great West, India remained, almost untouched in the period between January and March. However, as numbers grew across

 22 How GST (Goods and Services Tax) Has Affected Logistics in India the world, India succumbed to the COVID-19 variant as well. The Government stepped in and soon the Honorable Prime Minister announced a nationwide total lockdown to cease the spread of the virus and protect the Indian population.

Between March and May 2020 all life came to a standstill with multiple restrictions imposed on the movement of goods and people alike. With only the essential supply chain operational along with a complete shutdown of inter and intrastate travel, the supply chain was interrupted with very few logistics players operating as essential service providers during this time. Blue Dart Express Limited ("Blue Dart" / "Company") remains one of the most notable mentions on the list of logistics providers who supported India and its citizens in their time of need. During the lockdown, there was not a single day during which we pulled down our shutters and switched off our lights.

The Unlock phases of the lockdown began to slowly take shape and by June, the economy showed signs of recovery across many industry verticals. As the world familiarized itself with the new normal, e-commerce and digitalization propelled to levels never seen before; India too saw a positive shift in the adoption of these trends.

Therefore, by the time the festive season ushered in towards the end of 2020, shopping online extended from buying groceries online to buying everything from consumer durables to consumer electronics online. The festive season also provided a large number of industry verticals with a breather as organizations recovered to showcase pre-pandemic growth levels.

The year 2021, began with hope as multiple pharmaceutical majors rushed to gain approvals to manufacture the vaccine against COVID-19. Pharmaceutical majors, Logistics players as well as the Government continue to do due diligence in ensuring the vaccine is disseminated to every city, town and village, leaving no stone unturned in the drive to rid the entire country of COVID-19.

PERFORMANCE REVIEW

As the year began, many organizations across industry verticals struggled to keep afloat. Blue Dart accepted, adapted and improvised itself to the situation at hand to be a reliable, resilient and responsive organization for Blue Dart team members as well as Customers. Over the last 37 years, Blue Dart has played a vital role in shaping the express logistics industry in India. Everything that the organization has worked on since its inception was put to test in 2020; whether it be its market-leading technology, dedicated and motivated teams as well as the ability to support the nation as its Trade Facilitator. While the period under review has been challenging due to a very volatile market, Blue Dart has managed to ensure stability for all its stakeholders during the financial year year 2020-21.

FY2020-21 began with Blue Dart executing its Business Continuity and Contingency Plan (BCCP) to ensure essential supply and business continuity amidst a pandemic. Every Blue Dart team member played their role as an essential service provider to perfection, displaying the organizations core values of Passion, Can Do, Right 1st Time and As One at every single juncture. As the nationwide lockdown continued, Blue Dart frontliners were on the field every day. Blue Dart pilots operated the six Boeing 757200 freighters through the lockdown - across the nation as well as across borders - ensuring essential and non-essential supply chain continuity.

Blue Dart continued to offer unwavering support and was honoured to be a part of the Indian Governments Lifeline Udan initiative to ensure uninterrupted supply chain continuity of medical equipment ventilators & PPE, testing kits, reagents, enzymes, respirators, surgical masks and gloves among other vital supplies. The organization worked closely with the Government of India and several other institutions, to ensure door pick-up and door deliveries across major Indian and International cities. Blue Dart operated close to 1,108 flight cycles, uplifting thousands of tonnes nationally and internationally, carrying urgent medical supplies and COVID-19 related relief material from Guangzhou, Shanghai, Hong Kong, Dhaka, Yangon and Hanoi during the pandemic.

Blue Dart with its dedicated freighters in the air supplemented by network route connections on the ground, continues to support the nation with its capability to offer an unrivalled service across the expansive and diverse Indian geography. During the year, Blue Dart carried over 1,853.16 lakhs domestic shipments and over 7.52 lakhs international shipments both weighing more than 718,548 tonnes.

Even amidst a highly challenging and volatile environment, Blue Dart outperformed significantly, recording the highest ever sales in a single quarter in Blue Dart history during the quarter ending in December 31 st, 2020 and the highest in October 2020.

For the year ended March 31st, 2021, Blue Dart on a standalone basis reported income from operations of Rs 3,27,970 Lakhs (previous year - Rs 3,16,639 Lakhs) and posted net profit after tax, on a standalone basis of Rs 9,631 Lakhs (previous year net loss of Rs 3,829 Lakhs).

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 are as under :

Particulars March 31, 2021 March 31, 2020
Interest Coverage 5.131 (0.47)
Current Ratio 1.422 1.11
Adjusted Debt Equity Ratio 0.1513 0.07
Particulars March 31, 2021 March 31, 2020
Operating profit margin 11%1 4.3%
Net profit margin 2.9%1 (1.2%)

Notes:

1. Profit for the year of Rs 13,105 Lakhs as against a Loss of Rs 4,720 Lakhs in the previous year (2019-2020), owing to:

- A one-time exceptional hit of Rs 6,411 Lakhs for rightsizing/ restructuring

- Implementation of IND AS 116 effective from April 1st, 2019 having an adverse impact of Rs 6,662 Lakhs

- Business disruptions caused due to the COVID-19 pandemic situation impacted the bottom line by Rs 5,420 Lakhs

Whereas during 2020-21, the Company had rewarded its employees a one-time ex-gratia amount of Rs 3,417 Lakhs for outstanding efforts during the COVID-19 crisis

2. Higher profits of the current year contributed to an increase in the margins, ratios and cash flow as compared to the previous year. Further, 2019-20 had the redemption of Non-Convertible Debenture Series III amounting to Rs 7,118 Lakhs.

3. The Company had additional borrowing of Rs 100 Crores in 2020-21.

COMPANY OVERVIEW

Blue Darts key differentiators continue to be its customer centricity which offers customers flexibility and security with product and service offerings such as late pick-up/early delivery, reliability, security, tracking visibility across the delivery chain. This is facilitated using APIs and SMS pre-alerts that support the customer through the first, middle and last-mile delivery.

During this year, the company invested aggressively in its products and services to continue to provide for its customers even during a very challenging period. The company also invested in its people and its market-leading technology to position itself as a Provider of Choice, an Employer of Choice as well as an Investment of Choice to all its stakeholders.

Blue Dart is South Asias Most Innovative and Awarded Logistics Service Provider since its inception in 1983. Over the last 37 years, the organization has centred the business around providing individualized customer solutions to ensure exceptional service quality.

Blue Darts award-winning services are supported by its six Boeing 757-200 freighter aircraft offering a payload of over 500 tonnes per night, a flotilla of 11,122 vehicles as well as 2113 facilities and hubs across 35,000+locations. A stellar advantage to the Blue Dart brand remains its efficient team, who work in perfect harmony to deliver 30 shipments every second of every day. Blue Dart has been a part of the Deutsche Post DHL (DPDHL) Group since 2005. In 2019, Blue Dart became a part of the newly restructured DHL eCommerce Solutions division. This division is geared towards providing high- quality solutions, particularly to customers in the rapidly growing e-commerce industry. Leveraging the Group footprint, Blue Dart intends to continue being a customer favourite and living up to the Groups motto of Excellence. Simply Delivered.

Our goal is to build a platform to provide the best national network, with a strong focus on the expected delivery date and time, providing critical solutions that can ride on the most cost-efficient network for last-mile deliveries. The focus in creating the platform is to generate profitable growth across all sectors and customer segments. Our USPs are exceptional service quality, individualized delivery solutions; our reach that extends into the Indian heartland and our unmatched speed that ensures our shipments reach on time, every time.

Blue Darts key offerings are the air and ground express segment as well as air freight, speed trucking and charters through its synergies with the Deutsche Post DHL business units - DHL Express, DHL Global Forwarding, DHL Supply Chain and DHL eCommerce LLP. Our global network through DHL Express spans over 220 countries and territories, making Blue Dart the only express logistics company to offer an unmatched delivery capability encompassing the entire spectrum of distribution services.

Blue Dart offers a wide range of innovative and simplified solutions across industry verticals coupled with a dedicated air and ground network, high standard technology infrastructure, value pricing, customer satisfaction, excellent service quality and operations delivery par excellence. Since 1983, Blue Dart has maintained its technology leadership and continues to invest extensively in its technology infrastructure to create differentiated delivery capabilities, products and solutions for customers. Our key differentiators continue to be late pick-up/early delivery, a securitised network, 24x7 visibility allowing for tracking across the complete delivery chain. APIs integrated with customer requirements and other technology, mobility solutions such as dynamic re-routing, visibility of courier movement as well as providing access to monitor net-stops from the service centre to enhance courier and route productivity. Blue Dart continues to innovate and create for our customers to ensure user-friendly and efficient technological solutions. This includes our Contact Less Delivery Service as well as our My Blue Dart mobile application, both launched during FY2020-21.

Under the Group motto of "Connecting People, Improving Lives", Blue Dart focuses its corporate responsibility on three key pillars namely GoTeach (Championing education), GoGreen (Protecting the environment) and GoHelp (Disaster management response), successfully impacting communities and the environment.

Blue Dart is aligned to the Groups Mission 2050: Zero Emissions. The aim is to reduce the logistics-related emissions to zero by improving carbon efficiency by 50% over 2007 levels, operate 70% of first and last mile services with clean pick-up and delivery solutions, have 50% of our sales to incorporate Green Solutions and 80% of our employees to be certified GoGreen Specialists and together with our partners, plant one million trees globally each year, of which Blue Dart will plant over 10% in India every year.

As part of DPDHL, Blue Darts New Sustainability Roadmap calls for Clean Operations for Climate Protection, a Great Company to Work for all as well as building a Highly Trusted Company. The Company has launched many initiatives to ensure it is doing its bit to aid the world in its battle against climate change and global warming. The company aims to make all their owned or leased facilities operate at Net Zero Carbon by 2025, drive increased efficiency and use cleaner fuels within their fleet of six Boeing 757200 freighters, support customers with sustainable and optimized packaging solutions, as well as design greener products & services through their comprehensive solutions.

PRODUCTS

Blue Dart is the market leading premium express logistics player in India. The award-winning product and service offerings provided to the customer helps build trust and loyalty with the organization. We are the only express carrier in the country today which offers an entire range of services that extends from a document to a charter-load of shipments. Our services are relentlessly monitored to deliver a net service level of 99.96%.

The company offers services in the air express segment, the ground express segment as well as multi-modal express solutions in the day-definite and time-definite delivery schedules.

Blue Dart is the only express logistics operator with its own fleet of scheduled Boeing 757-200 freighter services offering a larger capacity than any other domestic airline in the country. Our focus through our air express solution is to carry shipments as our primary business, rather than as a by-product of a passenger airline. A dedicated aviation system to support Blue Darts services is selfsustaining, with its own bonded warehouses, ground handling and maintenance capability.

The key market-defining domestic express offerings include Time Definite Solutions (Domestic Priority 1030, Domestic Priority 1200, Dart Apex 1200), Day Definite Solutions (Domestic Priority, Dart Apex, Dart Surfaceline) as well as the Temperature Controlled Logistics (TCL) solutions.

Domestic Priority:

Domestic Priority services are specially designed to offer time- critical businesses a competitive edge with the fastest delivery services.

• Domestic Priority 1030: A guaranteed door-to-door time-definite delivery of shipments by air, the next possible business day by 10:30 hours, targeted at time-critical business-to-business needs.

• Domestic Priority 1200: A guaranteed door-to-door time-definite delivery of shipments by air, the next possible business day by 12:00 hours, targeted at time-critical business-to-business needs.

• Critical Express: A door-to-door, day-definite express service for delivering critical shipments such as passports, tenders, original papers/certificates, property documents, etc across India, under 32kgs per package securely and safely.

Dart Apex:

Dart Apex is a door-to-door day-definite delivery service for domestic shipments weighing 10kgs and above. It is the fastest, most efficient delivery solution for commercial shipments that are time-bound and are required to undergo regulatory clearances or require special handling. Dart Apex offers an economical Airport- to-Door and Door-to-Airport service from the major airports of Chennai, Bangalore, Mumbai, Delhi, Kolkata, Hyderabad and Ahmedabad to all the Dart Apex locations serviced and vice versa.

• Dart Apex 1200: A guaranteed door-to-door time-definite delivery of commercial shipments by air, that require regulatory clearances and specialized handling, on the next possible business day by 12:00hrs, targeted at time-critical business-to- business needs.

Dart Surfaceline:

Dart Surfaceline is an economical, door-to-door, ground distribution service to over 35,000 locations in India for shipments weighing 10 kgs and above. It offers a cost-effective logistics option for less time-sensitive shipments.

Blue Dart also offers a host of value-added services:

- COD (Cash on Delivery)

The invoice value of the shipment booked by a customer will be collected from the consignee in the form of cash at the time of the delivery. The cash collected from the consignee will be returned to the customer to complete the transaction.

- DOD (Demand Draft on Delivery)

The invoice value of the shipment booked by the customer will be collected from the consignee in the form of a demand draft at the time of the delivery. The demand draft collected from the consignee will be returned to the customer to complete the transaction.

- FOD (Freight on Delivery)

The freight of the shipment will be collected from the consignee at the time of delivery.

- FOV (Freight on Value) - Insurance Arrangement

Blue Dart Express (BDE) can facilitate arrangements to insure shipments through an insurance company. In the instance of shipment damage or loss while in BDE custody, BDE would assist the customer in the claims process and ensure the claim is settled in the minimum possible time after the shipper/ consignee handover required documents to the insurance company.

Dart Plus:

Dart Plus is an economical speed trucking solution. It is ideal to move time-sensitive shipments with transit time superior to the traditional Dart Surfaceline service. Day-definite delivery service is backed by speed, security and handling.

Temperature Controlled Logistics:

Temperature Controlled Logistics solutions are backed by extensive and reliable express distribution, dry ice supplies including free top-up replenishments, real-time shipment status information, regulatory clearance, validation services and project management. The packaging is constructed from recyclable, environmentally friendly and cost-effective material.

The innovative Temperature Controlled Solution ensures safe and compliant transport in frozen, chilled and ambient conditions. Using appropriate cooling mediums, the packaging performance delivers temperature for the range - 20C, 2 - 8C and 15 - 25C for varying distribution times.

Packaging Solutions:

- Express Pallet (Air and Ground)

The Blue Dart Express Pallet is a convenient, flexible yet economical way to send oversized goods domestically. It is a special wood-free palletized packaging, which can be built to accommodate shipments for freight as heavy as 50kg, 75kg or even over 100kg.

- Smart Box (Air and Ground)

Smart Box - Air Express and Smart Box - Ground Express are convenient, economic, packaging units priced to include a door-to-door delivery service within India. The units come in 2 sizes, 10kgs and 25 kgs, and are designed to accommodate a variety of products.

Aviation Solutions:

- Airport - to - Airport:

The airport-to-airport service is an air freight service available on the flights operated by Blue Dart Aviation between the airports of Kolkata, Delhi, Mumbai, Bangalore, Chennai, Hyderabad and Ahmedabad. The advantages of an airport- to-airport service are no Cooling-Period, Late Night Cut-off & Early Morning Deliveries and a larger capacity than any other domestic airline

- Interline:

This facility enables the distribution of imports within the country and has provided exports access to and from the gateways of international airlines. This provides international airlines with a cost-effective option to restrict their on-line stations within India, and enhance their marketing possibilities at off-line locations by utilizing the distribution capabilities of Blue Dart Aviation.

- Charters:

Charters are operated on an ad hoc basis. Normally, charters have been used where timely delivery of sensitive equipment or large loads are required.

Technological Solutions:

Initiatives such as On-The-Move (OTM) handheld devices, Retail Point of Sale (POS), Reverse Logistics (Open and Close), offering over 16 Digital Wallets on Courier Handhelds, Call Bridge facility to create a personalised customer experience have all been appreciated as industry-leading solutions and benchmarks. Blue Dart has also pioneered the Contact Less Delivery (CLD) service during the pandemic to ensure a healthy and safe delivery process to provide a customer experience without the fear of contagion.

Global Solutions:

The Companys global presence is enabled through the DHL Document Express (DOX), DHL Worldwide Package Express (WPX) and a wide range of packaging solutions. DHL Import Express is a unique single window importing service that takes care of all importing needs by offering door-to-door convenience services. X-Border International Services is another unique and strong service offering. Duties & Taxes Paid (DTP), Express Pallet,

Shipper Interest Insurance (SII) and Express Easy-Student are some of the other offerings.

CAPABILITY BUILDING

Temperature Controlled Logistics Solution Ramp Up

The world heaved a sigh of relief when a few vaccine candidates received emergency use approval and the dissemination of the vaccine began. However, while manufacturing the vaccine solved a large part of the problem, transporting the vaccine in a temperature controlled manner posed a potential challenge for Governments across the world.

To remain one step ahead of the curve and support the government in the distribution of the vaccine Blue Dart ramped up its Temperature Controlled Logistics Services ahead of time.

Blue Dart already has the operational experience and specialized infrastructure required for handling bio-medical shipments. This feat is supported by our fleet of six Boeing 757 freighters, 11,122+ ground vehicles, servicing 35,000+ locations and a strong Blue Dart team.

We have eight Pharma Grade Conditioning Rooms at strategic locations like Mumbai, Chennai, Hyderabad, Ahmedabad, Pune, Kolkata, Delhi and Bangalore. These rooms are in close proximity to our Blue Dart Aviation Station which reduces turnaround time and aids in the speedy delivery. Work-related process flows have been designed and rehearsed across all locations where we have our Conditioning Rooms. The conditioning rooms are being constructed of PUF. The room is expandable and is being designed by refrigeration/cold room experts.

We understand the criticality of the shipment and have a specialized life science team who are experts in solutions required in this vertical of the business. We have already done our background work in terms of the capacity requirements - materials for packaging, availability of Data Loggers, Insulated Shippers, Walk- in Cold Room, Coolant, network reach, manpower preparedness, and technology investment to handle requirements in this direction. Each TCL Expert and Support Staff has been trained to handle all temperature ranges.

Additionally, a task force has been created with the DPDHL Group to leverage each others strengths in terms of network, vehicles and internal assets. We have access to a global shipping network at scale, a local freezer and storage capacity as well as an in-depth understanding of in-country logistics.

Blue Dart Aviation -

Blue Dart Aviation Ltd. (BDA) was incorporated in May 1994 as a 100% subsidiary of Blue Dart Express Limited. The company launched the first domestic freighter operations in India with a fleet of two Boeing 737-200 freighters in 1996 and consistently updated its fleet to serve the increasing customer demand. Currently, Blue Dart Aviation operates a total of six Boeing 757-200 freighters.

In FY2020-21, Blue Dart Aviation purchased two of the six Boeing 757-200 freighters. The aircraft continue to operate across our scheduled network of seven airports (Kolkata, Delhi, Mumbai, Bangalore, Chennai, Ahmedabad, & Hyderabad) and serve domestic and international charter operations.

CUSTOMER CENTRICITY

Customer centricity has always been the bedrock of our foundation at Blue Dart and our services during the pandemic have been a testament to this fact. Customer experience is what sets Blue Dart apart in a very competitive environment. Ensuring a smooth and hassle-free experience for the customer has been a priority, always. Blue Dart designs each product and service offering keeping the customer at the centre of our business.

The pandemic significantly affected our customers. Whether it be business continuity or caring for loved ones in another country, the challenges our customers faced were varied. To help ease the discomfort of the pandemic, Blue Dart curated a number of solutions to ensure that our customers werent feeling the pinch in their pocket while shipping with us. We offered a 25% discount for MSME and Retail shippers with our Fight COVID-19 Price as well as shipped medicines to NRIs living away from family.

During the festive season, we launched the Rakhi Express, Diwali Express and Merry Express offers through which our customers celebrated the festivities with their loved ones even while adhering to social distancing norms.

We wanted our customers to feel safe while shipping with us across the world even amidst a pandemic. Therefore, we introduced the Contact Less Delivery Service to deliver shipments and also shifted our billing and collections to a completely digital platform.

To provide customers with a superior experience, we use technology enabled mobility solutions for administering specialized pickups of product returns, which also include quality control checks, product image verification and close coordination for timely pickups. Our goal is to ensure that all Blue Dart stakeholders remain safe. To accelerate this seamless experience, we also launched our My Blue Dart mobile application that helps customers track their package, find out the most cost-effective prices to send their shipments across horizons as well as access important contact information etc. in a user-friendly and on-the-go manner.

We have been receiving customer appreciation through the pandemic and experienced several instances where customers went out of their way to email us or post their appreciation on our social media platforms. Our teams knew the crucial role we played during the pandemic and ensured that the customer always came first.

As a national network operator and part of the DPDHL Group, we work with standardized processes and continue to optimize our offerings which enables us to deliver quality services to our customers. We, therefore, keep ourselves updated on our customers evolving requirements through our Key Account Management Programme and the First Choice Programme. The Net Promoter Approach also identifies improvement areas highlighted by customers. Our managers ensure they interact with our customers individually to translate customer challenges into continuous improvements areas. These programmes are tailored to ensure that the voice of the customer is heard and their feedback is acted upon to deliver delight consistently in a process-driven manner.

Despite challenging geographical features and a difficult infrastructure landscape, we were able to consistently improve delivery reliability in the country. We consistently work to maintain our value-driven quality and achieve outstanding customer satisfaction ratings. It is in this manner, we are fulfilling our aspiration of being the quality leader in India.

Blue Darts USP is our quick delivery and fast turnaround time, all while ensuring our consignees shipment is in perfect condition. We know and understand that the shipment matters to our customer, and therefore, it matters to us. Therefore, we launched our TVC Ad Campaign highlighting the phrase, We Move So Your World Can Move and If Its Important, #BlueDartIT. Life comes to a stop, be it in an operation theatre or in an office when something critical to ensure continuity hasnt arrived. Hence, the objective was to have clear and straightforward messaging, without ambiguity: If its important, Blue Dart it, to bring forward our communication and offerings in a subtle yet power-packed manner. The Ad campaign was rolled out in 2020 with a multimedia approach across traditional and digital mediums to highlight Blue Dart as the preferred courier brand for all our consumers logistics needs, especially critical shipments, e-commerce & Temperature Controlled Logistics.

As we continue to serve diverse industries such as E-commerce, Automotive, Banking, Financial Services, Electronics etc. and build loyalty, the successful customer loyalty programme Blue Points Amazing Returns will be further strengthened to enable, nurture, grow, build and sustain strong revenue streams and profit pools.

DIGITALISATION AS A KEY LEVER

The Blue Dart team drives its market leadership through its cutting- edge technology. The learnings from the ongoing crisis vary across industries, but a singular collective agreement in the importance of technology and digitalization can be established. Technology has become the backbone of not just the logistics industry, but of almost every industry across the world. The ability to work from home was simply the start of what is now a technological revolution. As Blue Dart is an essential service provider, we focused on digitalization and prioritized processes to drive productivity and efficiencies across various functions in the organization. The intent is to ensure a smooth flow within the organizational functions to avoid roadblocks in the processes.

At Blue Dart, the technology based infrastructure is the backbone of the organization acting as the glue holding different departments together and helping them optimize their output at all times. Our initiatives and our focus remain on minimizing risk for our customers and colleagues as much as possible while ensuring business continuity.

We see systematic digitalization throughout the company as a key lever in driving the business forward. We are investing in initiatives designed to enhance both the customer experience as well as make the most of the ManTech combination, thereby improving operational excellence.

The future holds an underlying theme of a Technology Led Transformation which would revolve around creating business models and having systems in place to ensure that the organization will survive in a no contact society.

The most notable innovations at Blue Dart in FY2020-21 aligned with the need of the hour; a Contact Less Delivery system and a mobile app. Given the transferable nature of Coronavirus, Blue Dart wanted to ensure that our customers could continue shipping with us without the fear of contagion. Therefore, we pioneered the Contact Less Delivery service that enables business continuity, eliminating any touchpoint that encouraged contact of any kind. We made this possible by activating 16 digital wallets, Net Banking, Credit & Debit cards, UPI, BHIM etc. to ensure that our customers did not feel vulnerable doing business with us. The shift to providing digital solutions, helped us support the nation in acclimating to Digitized India. Our collections, which were 35%-40% digital prepandemic, took a sharp turn to become 100% digital during the pandemic and in the recovery period.

Blue Dart recorded many firsts during FY2020-21. One of the significant achievements during this period was the launch of our mobile application My Blue Dart. The app aims to fulfil all of our customers logistics requirements, whilst providing individualized on-the-go solutions. Our user-friendly, secure and reliable mobile application will now allow customers to track their shipment, locate the nearest Blue Dart store or find out the best pricing anywhere and at any time. The app offers all the features necessary to have a smooth logistics experience such as -

• TrackDart - Enables the customer to track their shipment anywhere, anytime.

• Location Finder - Benefits the customer by helping them find the nearest Blue Dart store across the country.

• Transit Time & Price Finder - Provides the customer with a user-friendly method to find out the best rate while sending/ receiving a shipment.

• Schedule a Pickup - A specialized post-login feature for our registered credit customers.

• Contact Us - To help customers connect with our reliable, responsive and resilient customer service team who will assist them with their queries.

Apart from this, our key technology based solutions continue to help enhance customer experience ensuring that Blue Dart remains the best and sets the pace across all touchpoints. Some of these are -

• Continued focus on enabling digitized data capture of delivery and pickup of shipments covering 98.40% of delivery and 37.55% of pickup as during March 2021.

• Application programing interface (API) based solutions for our customers have been enhanced for exchanging manifest at detailed levels to ensure an automated and seamless supply chain, from pre-pick up to post-delivery; inclusive of collections.

• Blue Darts website has been revamped to engage with customers for additional touchpoints like exception handling with alternate instructions, dashboards for greater visibility on performance and visibility to billing information.

• Technology-enabled mobility solutions for administering specialized pickups of product returns, which also include quality control checks, product image verification and close coordination for timely pickups.

• Customised solutions built for some of our top customers to manage Tamperproof Packaging, checking and secure delivery to the specific recipient with OTP confirmation. Such initiatives prevent errors and bring great value to our service quality.

• An indigenous network modelling system has been developed and implemented which has enabled Blue Dart to dynamically respond to changes in network schedules and recommend fast and reliable network routes linking shipment origins with destinations.

• Big data setup has helped in getting advanced analytics on various segments of Blue Darts operational process, customer insights, and trends on volume/revenue from different geographies.

• Product performance dashboard delivers daily insights on volume and revenue for analysis and action.

• eNSG app for operations has introduced a green approach in the field. With the implementation of the application, the printing of NSG copies has stopped, saving printing and dispatch costs whilst reducing our carbon emission. The information on the eNSG App is updated to display real-time information, therefore, updates if any, can be flashed early.

• A personalized tracking tool for recipient shipments has been enabled on a unique URL link, which allows tracking, plotting delivery landmarks, visual display of the courier on map and provision to give NPA feedback on the service.

• Control Tower built for proactive monitoring of shipment movement within the network. Teams that operate using this solution can control nationwide activity which involves First Mile, Network connection and Last mile delivery.

• Video conferencing and recording in administrative offices have been upgraded with interactive High Definition display, wireless presentation streaming from any device to promote virtual meetings and seamless day-to-day functioning.

• Hardware Infrastructure of ERP systems upgraded at data centre and Discovery Resource site to cater to our capacity for the next three years.

• Active network link configured for our branches, resulting in optimum usage of network bandwidth.

• Upgrade and redundancy built for secure access to employees outside of the office network, into Blue Darts internal digital resources using Two Factor Authentication.

OPPORTUNITIES AND FUTURE OUTLOOK

Opportunities

The value of the express logistics industry has never been more apparent. The year 2020 highlighted the key USPs of the industry as organizations across industry verticals used express service to ship to consignees while individual customers used the service to source essential and non-essential items. The express industry has been a key enabler in facilitating trade and commerce, especially during the pandemic given the time-sensitive nature of most goods. The express industry can cater to the demand for reliability and efficiency this is what makes it extremely opportunistic.

Air express continues to remain the preferred option for those looking for reliability, speed and security. Air express has often been the sole mode of transportation for relief material during any emergency response situation. The visibility of this vital role has been enhanced because of the extensive grounding of passenger airlines during the COVID-19 pandemic. The pandemic unified elements of the aviation industry to respond to an unprecedented crisis, with the transportation of relief material on freighters and even seats. The proven reliability of air express certainly bodes well for the future of our business. Air Express proved to be a true lifeline during these critical times. This augured well for our business model.

Ground express too, offers huge opportunities due to increasing consumption and affluence spreading into Tier II and Tier III towns which are emerging as important factors for a growing economy. They are currently in a rapid growth mode and provide a wider catchment for manufacturers presenting interesting opportunities.

Most importantly, the year 2021, involves using express logistics to disseminate the vaccine through every city, town and village in India. Blue Darts location reach remains far superior as we cater to over 35,000 locations across the country. We leverage the power of our air express, ground express, our technology and people to support the nation fight COVID-19.

Future Outlook

While the Indian economy did a lot better than expected, the growth in Indias real GDP during 2020-21 is estimated at -8 per cent as compared to the growth rate of 4.0 per cent in 2019-2023.

Rating agency Moodys has revised its FY2021-22 GDP growth projections for India to 12% from the earlier 9% forecast citing a stronger than expected December quarter. Most professional forecasters including the Organization for Economic Co-operation and Development (OECD) have projected double-digit growth for India in FY22. Moodys Analytics expect private consumption and non-residential investment to pick up in the next few quarters and strengthen domestic demand revival in 202124.

The future outlook for the express logistics industry specifically, is positive owing to several government initiatives that are actively being executed. These include the National Logistics Policy, the National Air Cargo Policy, the National E-Commerce policy as well as the dedicated freight roads. In an attempt to propel the growth of the logistics sector even further, the Government has also actively invested in Logistics Parks and included several initiatives in the Government Budget.

The COVID-19 outbreak damaged Indias most indebted businesses as almost 14% of Indias imports come from China, making it the nations biggest import partner. India is heavily dependent on Chinese imports such as Electronics and Pharmaceuticals. India also procures almost 70% of its active ingredients for medicines from China. India has found its way around this potential problem by giving impetus to the Make in India and Vocal for Local initiatives. The Aatmanirbhar Bharat initiative, eliminates the need for dependency on external parties and helps India become more self-sufficient.

 23 Indian economy to contract by 8% in 2020-21, show govt estimates

 24 Moodys upgrades Indias GDP growth to 12% in 2021

The future outlook shines the spotlight on digitalization and technology as well as an eCommerce boom, both features of the new normal. Blue Dart is ready to adapt to and embrace both, to further support our customers growing needs.

RISKS AND CONCERNS

Air Express

Despite Air Express facilitating the essential supply chain during the initial few months of the pandemic as well as helping ensure business continuity, the air express segment is still hurting. High fixed costs remain unchanged, the depreciation of the rupee impacts our lease & maintenance cost and the commodity mix has changed. While certain segments like eCommerce and pharma have grown, we are yet to witness other industries get back to their pre-pandemic levels, especially the BFSI sector, an important component of our business. The ATF cost is now back to pre- COVID levels and is the biggest hit. ATF is a well-worn subject that is continuously brought up because it is a core cost component. For an express logistics airline, it accounts for close to 40% of Direct Operating Cost. Unlike passenger airlines where excess belly capacity is used for incremental revenues, space on freighters is the mainstay of our revenue.

In sectors such as Automotive, Engineering, Electronics and Electricals, Pharmaceuticals, Medical Equipment etc., major customers of Blue Darts air package service (Apex) are shifting heavier shipments to ground express as cost pressures across industries push them to focus on cheaper modes of express transport.

With more belly space being made available in passenger aircraft in the coming years, more capacity will be added to the air express market further putting pressure on yields and profitability. Faster and agile speed trucking with growing competition also chips at the air express business.

Furthermore, the cost of operating at major airports has significantly increased after their privatization. The problem of insufficient aircraft parking bays, truck docking stations, limited space for express terminals and clearance processes, have lead to a delay impacting operating costs.

Ground Express

During the pandemic, the biggest challenges Ground Express faced included restrictions imposed on travel and the shortage of manpower. However, with the gradual unlock phases and the migration of labour back from villages to cities, pre-pandemic levels have been achieved, especially during the festive season sales.

A boost in the growth prospects of ground express is present with improving infrastructure and other regulatory measures.

Ground express offers a big cost incentive given that customers from industries such as Life Science, Healthcare, Computer, IT, Automotive can ship with express providers without having to pay the air express premium. The opportunity for ground express lies in the connectivity it offers the Indian heartland. This helps ground express be an economical favourite for both SME and MSME customers as well as sectors such as eCommerce with a customer base that spans the entirety of the Indian terrain.

With many initiatives such as Dedicated Freight Corridors, Logistics Parks, as well as a National Logistics Policy being executed, the Government, is taking an active interest in propelling the growth of Ground Express. This helps reduce logistics delays which in turn will decrease logistics costs.

The ground express market benefitted from the implementation of GST. Improving the quality of roads and the removal of check posts has led to a faster turnaround time. This has positively impacted players in this space. The Companys ground express business also witnessed the momentum.

COMPETITION

The pandemic signalled the need for innovation and creativity for organizations to remain resilient. A by-product of this was increased competition in the express logistics field, especially with express logistics receiving essential service status and being allowed to operate during the total lockdown phase.

Passenger airlines, previously carrying cargo only in the belly space, have entered the logistics space by offering express logistics services. More importantly, passenger airlines and their air cargo arms have also played a crucial role in disseminating the first round of vaccines against COVID-19, thereby posing a direct threat to Blue Darts air express business.

Heavily funded third party logistics players have been working with competitive pricing which has impacted Blue Darts revenues with pressure on margins. eCommerce players continued to increase the share of their captive arms thus reducing the addressable market further for traditional companies like Blue Dart.

The air and surface express competitive landscape has become volatile with new challengers entering the market and filling demand gaps thus cluttering the segments leading to a lot of disruption. New models in premium road transportation have emerged with the backing of investors making the surface express market environment dynamic and competitive. The local competition in Tier II and Tier III cities has also been aggressive.

ECONOMIC FACTORS

The Express Industry is affected by economic factors like macroeconomic growth, inflation, crude oil prices, and foreign exchange rate fluctuations. The growth of the industry is largely based on the general economic situation in the country and an upswing in economic activity would lead to an increase in domestic and international trade, creating incremental demand for the express industry.

In FY 2020-21, due to the pent up demand of the earlier months cascading to the later half of the year, the country witnessed a V-shaped recovery graph with macroeconomic indicators first indicating a contraction that was hard to come up from. However, as the unlock phases of the pandemic began and with multiple industries such as e-commerce, consumer electronics, consumer durables moving to the path of recovery early on, the express logistics industry has benefitted.

While international crude oil prices are low currently, central and state taxes make the cost of fuel astoundingly high. India follows a dynamic system for altering fuel rates, oil marketing companies are mostly responsible for the recent hikes and the government has no control over it. Indias import dependency continues to remain an issue with 85% of its fuel needs taken care of through imports. This causes fuel to come under a significantly larger tax bracket.

Blue Dart is an express logistics company and our market differentiators lie in our fleet of six Boeing 757-200 freighters and our ground network of over 11,122 vehicles on the field. Price hikes in fuel automatically indicate an effect on Aviation Turbine Fluid (ATF) and diesel, a big part of our business. We, therefore, follow a fixed Fuel Surcharge Calculation method in Domestic and Regional services that is computed based on the Brent index, as updated on the site www.livecharts.co.uk.The Average index would be rounded off to the nearest dollar ($) to determine the applicable Fuel Surcharge. The current surcharge, effective 01 February 2021, is 50.00% on Domestic and Regional Services.

Blue Dart prides itself on being ahead of the curve and hence we adjust our prices annually with the General Price Increase (GPI). The adjustment takes into account inflation, currency dynamics, fuel cost fluctuations and other rising regulatory and mandatory costs, such as expenses related to compliance for the workforce with enhanced security regulations across a large number of locations it services.

We want to ensure that our customer is never at the short end of the stick and receives the premium service quality that Blue Dart remains synonymous with, always.

CYBER RISK

Logistics, like most facets of operating a business, involves transferring sensitive information electronically. This is beneficial to any supply chain as it simplifies and speeds up communication. However, it also makes sensitive information susceptible to cybercrime.

Supply chains are part of a complex global system where data and information are shared through cyberspace. The interconnectedness of the logistics industry is an attractive target for cyber-attacks. The more links in a supply chain, the more vulnerable it becomes, which augments the importance of secure handling and storage of data.

The effects of cyber-attacks on the supply chain can be detrimental to all parties involved. With Companies focusing on digitization, cyber risk is here to stay.

INTERNAL CONTROLS AND ITS ADEQUACY

Across industries, internal process control and systems play a critical role in the health of a company. An effective system of internal controls forms a keystone necessary for building, maintaining and improving shareholders value and helps to enhance the overall quality of the business and enterprise. Blue Dart remains committed to ensuring an effective internal control environment that assures the efficiency of operations and the security of assets. Blue Dart has a sound internal control system to ensure that all assets are protected against loss from any unauthorised use. All transactions are recorded and reported correctly. The companys internal control system is further supplemented by internal audits carried out by the internal audit team along with co-sourced audit firm. The Company has recently appointed M/s. Grant Thornton as the Companys co-sourced Internal Audit firm effective from April 1st, 2021. Well-established and robust internal audit processes, both at the business and corporate levels, continuously monitor the adequacy and effectiveness of the internal control environment across the company and the status of compliance with operating systems, internal policies and regulatory requirements.

Blue Dart has maintained adequate and effective internal financial controls based on internal control over financial reporting criteria established by the company. This takes into account the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls over Financial Reporting issued by the Institute of Chartered Accountants of India (ICAI). These responsibilities include maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to the companys policies, safeguarding its assets, prevention and detection of frauds and errors, accuracy and comprehensiveness of the accounting records, and the timely preparation of reliable financial information, as required under the Act.

The Audit Committee of the Board works closely with both the Internal Auditors and Statutory Auditors ensuring that all their queries are addressed. The company also conducts Risk Assessment Workshops annually to define and identify what the companys most significant risks are and how those risks can be mitigated. The members of the Leadership team actively participate and deliberate in the risk workshops.

SUSTAINABILITY

Blue Dart, with its legacy of over three decades of conscientious corporate citizenship, focuses on positive growth and development in the social, environmental and economic aspects of peoples lives since its inception. The company believes that while continuing to generate wealth for its shareholders, it is not only important to create value for them, but also to share it equitably with them. Our Board of Directors, our Management and all of our employees subscribe to the philosophy of compassionate care.

Sustainability (or Corporate Responsibility) has been an integral part of our company as well as our parent company - Deutsche Post DHLs (DPDHL) strategy emphasizing the brands commitment to being responsible and working with communities across the globe. Logistics plays a central role in the global economy and therefore the industry can play a crucial part in the way business is done while having a significant impact on the environment. Owing to this we, alongside the DPDHL Group, have embarked on a journey to achieve Zero Emissions by 2050 and be the industry benchmark for responsible business practices. As part of DPDHL Group, we are committed to contributing to our Groups mission of 50% carbon efficiency by the year 2025.

At Blue Dart, to further strengthen our Sustainability programmes, we integrated our initiatives under DPDHLs credo of "Connecting People, Improving Lives". Blue Dart (along with the DPDHL Group) focuses its corporate responsibility under the three pillars of GoGreen to protect the environment, GoHelp through disaster management initiatives and GoTeach by championing educational programmes. We work closely with our project partners, stakeholders, beneficiaries and local communities to facilitate social, economic and environmental progress through effective management of human and natural capital. Our programmes are supported and complemented by regional community initiatives, which demonstrate the voluntary commitment, special abilities and enthusiasm of employees from across the Blue Dart family.

We conduct our business in accordance with the applicable laws, ethical principles, ecological standards, and international guidelines. Through ongoing dialogue with our stakeholders, we ensure that their expectations with regards to social and environmental issues are accounted for appropriately and that our business is aligned systematically with those interests.

We utilize our expertise to make our logistics greener and more sustainable while continuing to find ways to eradicate waste and retain more value in our products. Our initiatives to increase CO2 efficiency and our environmentally friendly product range enable us to uphold our responsibility for the environment whilst strengthening our own market position. Blue Dart, along with DPDHL Group offers Indias first end-to-end GoGreen Carbon Neutral Service (CNS) across international and domestic markets. In the year under review, Blue Dart continued to offer the specialized Carbon Neutral Service, wherein customers were provided with an environmentally responsible shipping option to neutralize the carbon emissions produced by the transportation of their shipments. DPDHL Group had set a target of 30% carbon efficiency improvement over the base of 2008 by 2020 for all its Group companies. Blue Dart led the challenge by achieving an efficiency improvement of 31% in 2019-20.

Additionally, Blue Dart launched the Blue Greens programme which focuses on green initiatives for the company. Blue Dart partnered with Grow-Trees.com and planted 4,52,000 trees to date which will offset 9 million kg of its carbon footprint per year on maturity.

Under GoTeach, Blue Dart focussed on further strengthening its programmes Blue Edge and Blue Teach, designed to provide equal educational opportunities for the underprivileged and marginalized communities. ‘Blue Edge: Empowering Lives is aimed at elevating and transforming the lives of young adults from difficult environments, who have not been able to complete their education. Blue Teach aims to reach out to beneficiaries, touching their lives right from their childhood. The programme is built to elevate the lives of children from different strata of society, making them independent and sustainable in their adulthood.

Under GoHelp, Blue Dart has designed two programmes - Blue Homes and Blue Help. Blue Homes provides shelter to orphans and children affected with critical illness in association with SOS Childrens Villages of India and St. Jude India ChildCare Centres. In association with HelpAge India, UHRC, Vision Foundation of India and KEM hospital, Blue Help aims to impact the lives of disadvantaged senior citizens and provide health care for the underprivileged.

HUMAN RESOURCES

FY 2020-21 was a challenging year for the company. Maintaining business continuity in the changing business landscape with motivated employees became a Human Resources priority. Even in a volatile environment, Blue Dart continues to remain one of Indias best places to work with an exceptionally talented workforce.

The company aligns itself with the DPDHL Groups Strategy 2025 - Delivering Excellence in a Digital World. In line with the strategy, focusing on employee safety and development, we initiated and executed several strategies virtually.

EMPLOYEE MORALE, MOTIVATION & ENGAGEMENT

To keep our internal systems and processes consistently updated, we upgraded our Employee Satisfaction Survey (ESS) to the DPDHL Groups Employee Opinion Survey (EOS) which was executed virtually from start to finish. The year 2020-21 saw employee participation of 93% in the annual Employee Opinion Survey (EOS). Pride in working for Blue Dart remains at an alltime high with a favourable score of 98%. The favorable score of employee engagement stands at 97% in 2020-21, which just goes to show that Blue Dart has delivered, once again, on its People First philosophy. In Leadership, the score stands at 96% favourable.

Employee activities like festival celebrations, health-related talks, virtual activities among others helped in increasing employee bonding and engagement. The key talent retention in 2020-21 was 95.6%.

PERFORMANCE MANAGEMENT

The performance management system in Blue Dart is handled through the online HRIS platform, PRIDE. During the current year, the Global HR system, called Cross-Divisonal Human Resources Information System (CHRIS) was rolled out for critical HR activities in a phased manner.

2020 onwards, the performance management process has been upgraded to accommodate the six DPDHL Leadership attributes instead of the earlier eight competencies. This is applicable for roles including managers and above. The six attributes are under the Head, Heart and Guts leadership elements (Being results-oriented, Leveraging strengths, Providing purpose, Having & creating trust, Focusing on clear priorities, Being positive about challenges, uncertainty and change). The performance management upgrade will be standardized across levels at Blue Dart, in 2021.

As part of the Blue Dart Way, our People-First Philosophy guides us to, Drive a meritocratic and development-oriented people management culture within the organization. We firmly believe in appreciating individual efforts and contributions while also recognizing employees by rewarding them for their exceptional performances. This helps us encourage growth and development. To aid our employees in living up to their potential and leading with attributes that will make them Great People Managers in the future, various training programmes have been incorporated to strengthen the development culture.

EMPLOYEE DEVELOPMENT & SUPPORT

Our goals are best achieved when motivated and well-trained employees provide quality service that always fulfils our customers expectations. Our Certified programmes are tailored for seamless and easy implementation. Common values of Passion, Can Do, Right 1st Time & As One and a clear focus on quality; are the foundational tools necessary for all Blue Darters to deliver customer-centricity par excellence. We have begun introducing the Certified Programmes and will roll-out the programmes in a phased manner across the country. In 2020-21, the company, on average, invested in 4460 man-days to provide employees with the relevant training and development programmes to help propel both, organisational as well as individual learning and growth.

• Certified eCommerce Specialist (CeS): This programme is aimed at strengthening the Blue Dart Way and communicating the same to each team member via the Certified eCommerce Specialist training programme. We have done the initial preparatory work and embarked on the CeS training journey to cover all our colleagues from FY 2020-21 onwards. This is a DPDHL Group led programme, providing the foundational information and knowledge about DHL and Blue Darts eCommerce businesses. Facilitation skills and CES foundation lite (Virtual TTF training sessions) have begun from mid-March 2021 and will continue till mid-2021. The roll-out of the CES foundation for all the Blue Dart Express employees will start by the end of May21 as soon as we complete TTF sessions.

• Leadership attributes aligning with the Performance Management System: Leadership attributes (LA) have become an integral part of performance management and appraisals from 2020. In 2020, all employees falling in the bracket of L10 and above had their appraisals conducted based on six leadership attributes. Employees have been made aware of the change through LA awareness roadshows, mail communications and virtual sessions. All employees will be assessed on leadership attributes from the year 2021 onwards.

• Blue Connect (Internal M&E learning platform): At the very beginning of 2020, we launched and updated our internal learning management system to an application called Blue Connect. Blue Connect is a uniform platform that acts as a one-stop solution to all the learning and communications related requirements. This helps us in showcasing training modules, conducting feedback/surveys and uploading e-learning interactive content. The platform not only helped in providing ease of access to data but also increased the traction towards L&D initiatives.

• Gamification for frontline assessment: We introduced the gamification platform for the first time at Blue Dart for functional & behavioral assessment and development of frontline employees. They were assessed on their operational knowledge and leadership attributes. We have rolled out many training sessions to address the developmental needs that came up as a result of this intervention.

• Safety SOP trainings: During the pandemic, we made it a point to strictly monitor and adhere to the safety guidelines in the operations that we conducted. We did not halt our operations during the pandemic, working round-the-clock to fulfil our role as the Trade Facilitator of the nation. Following the safety norms, we conducted the safety guidelines training programme extensively for all employees both, virtually and face to face wherever possible. We ensured the attendance and training details were reported to management.

• Employee Assistance Programme (EAP): We launched the Employee Assistance Programme (EAP) for employees. This programme aims at helping employees address personal and mental health matters in a safe space with help from professional experts and counsellors. The initiative is especially helpful for employees who have tested COVID-19 positive and who are in a different mental headspace during this time. .

• Executive development review (EDR): The new process of EDR has been shaped to fall in line with the DPDHL process which aims at continuous development, growth and succession planning. The EDR process is conducted for Business Critical Positions for validating their performance, potential and identification of strengths and developmental needs. We have covered key employees under this exercise. This process results in the formulation of the Individual Development Plan (IDP) for training needs and developmental inputs.

As part of this exercise, 29 managers were mentored to be better people managers through an external training platform, Great Manager Institute (GMI), under Great Place to Work Institute. This was done in order to provide our own Great People Managers with the tools to sharpen their skills further.

• Compliance training: Compliance strengthens a business license to operate and is the foundation of an entrepreneurial business practice that encourages compliance-driven behaviour. 1600 employees have undergone the Compliance training in 2020-21.

• Building leadership pipeline: We have incorporated the Management Trainee (MT) programme at Blue Dart since 2012. This enables us to take in fresh talent from management institutions and build a leadership pipeline. In 2020-21, we on - boarded 32 new management trainees across functions such as Operations, Sales, Marketing, Finance.

EMPLOYEE REWARD & RECOGNITION

In order to motivate employees and recognize their outstanding work, 1459 Blue Darters were awarded the on-the-spot Bravo Award by individual managers for excellent work and 6 received the prestigious Super Darter award for achievements beyond the call of duty. In 2020-21, 40 Employee of the Year awardees along with 30 nominees from across the country were felicitated by the Managing Director, 871 Blue Darters joined the True Blue Club on completion of 5 years of service.

OTHER PROGRAMMES Upstairs

A GoTeach initiative by Blue Dart that promotes equal education opportunity and offers a Scholarship programme for the children of Blue Darters. Through the Upstairs programme, Blue Dart supports selected children with a scholarship for three years.

Subsidized Tuition Education Plan (STEP)

This developmental policy enables employees to acquire higher qualification skills to enhance career prospects/ personal development/ improve effectiveness on the current assignment. This is a developmental initiative by Blue Dart.

Blue Darts Reimbursement of Accident Claims & Expenses (BRACE)

This is a wellness initiative that aims at providing timely relief including reimbursement of medical expenses.

Death Benevolent Fund (DBF)

This is an employee welfare initiative at Blue Dart where the immediate family of a deceased Blue Dart employee receives monetary help from employees, as payroll giving.

Appreciation Week

During the Appreciation Week celebration, employees express their gratitude by exchanging Thank You mailers with each other. In 2020-21, the celebration was done virtually with many online activities. The theme was based on the 4 values of the DPDHL Group: Passion, Can Do, Right 1st Time and As One. A Thank You pop-up card was also sent to the employees at their homes for acknowledging their contribution to the Company, in the midst of the pandemic.

Diversity Interventions

During the Diversity Week celebration, virtual activities were conducted to uphold the culture of diversity at Blue Dart.

Some of the major interventions that we have undertaken for enhancing diversity within Blue Dart are as below:

- Each One Refer One: An Employee Referral policy communication has been sent out, focusing on rewarding referrals of women candidates for open positions at Blue Dart

- We also launched the all women service centre at Kharghar, Navi Mumbai branch of the West 1 region on International Womens Day . We have 16 female employees, ranging from the manager to security.This is the first of many more to come in the future. We conducted the Prevention of Sexual Harassment (POSH) training across functions for all the employees to apprise them about a safe work environment. This will be followed by a follow-up refresher course too. A short survey with some women employees, who were selected at random, was done to gain an insight into their knowledge on POSH and safety. This survey received tremendous positive feedback.

- We also published interviews of female employees on the Career page of our Blue Dart website to emphasize the importance of diversity and the role it plays within the Blue Dart culture. This is primarily aimed at prospective female talent looking to work at Blue Dart.

- We conducted the first-ever virtual womens day session for all our women employees across India. We invited Tulsi Mirchandaney, Managing Director, Blue Dart Aviation to address participants. We had also invited a lady Police Inspector to address the participants as well.

- For every open position, during the recruitment stage, we emphasize looking for female candidates first. We have also included hiring female candidates as an HR MBO that is monitored regularly.

- We have constituted a cross-functional team of regional diversity champions across India, including female and male colleagues, who drive diversity initiatives with HR support.

- We have also been working on enhancing the washroom facilities for women at all Blue Dart facilities. This is to give women a better working environment at Blue Dart.

CAUTIONARY STATEMENT

The statement forming part of this Report may contain certain forward-looking remarks with the meaning of applicable Securities Law and Regulations. Many factors could cause the actual results, performances, or achievements of the company to be materially different from any future results, performances, or achievements. Significant factors that could make a difference to the Companys operations include domestic and international economic conditions, changes in government regulations, tax regime and other statutes.