Committed Cargo Care Ltd Management Discussions

1. Logistic Industry Outlook

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, customs clearance 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.

The Logistics Industry is undergoing a rapid digital transformation, aiming to simplify procedures, reduce expenses, and enhance effectiveness through digitalization. The digital revolution has enabled stakeholders to make data-informed decisions.

The more successful companies throughout the logistics sector are gravitating towards artificial intelligence (AI), block chain and other technological solutions to help solve present challenges being faced by logistics sector. Digital tools will add value at each stage of the logistics journey. McKinneys Travel, Logistics, and Infrastructure Practice estimated that advanced technology could not only reduce logistics costs by as much as 25% but also help logistics companies offer better service and free internal capacity for other purposes.

The logistics Industry in India is shifting to align with the evolving business landscape. Improved Infrastructure, increased emphasis on digitalization and heightened focus on sustainable logistics are driving this shift as the country sets its eyes on unleashing the potential of becoming a US$ 26 trillion economies by FY 48 (with US$ 6 trillion by FY 30)

The Logistics sector in India was valued at US $ 250 billion in 2021, with the market predicted to increase to an astounding US$ 380 billion by 2025, at a healthy 10-12% year-on-year growth rate. Moreover, the Government is planning to reduce the Logistic and Supply Chain Cost in India from 14% to 10% of the GDP as per Industry standards.

Another key trend in logistics sector is that ocean freight rates are going up and are expected to remain high for the substantial part of the current year because of Red Sea crisis as the increase in nautical miles travelled need to be factored in. This has resulted in sharp turn in supply chain pricing.

Likewise, Air Freight prices have also gone up because of increased demand. Global Air Cargo market is on a pathway to double-digit growth in volumes in the current financial year. Disruption in Ocean container services has also been a factor for increase in Air Freight rates.

The Indian logistics sector is facing a number of challenges, including:

- High logistic costs: Indias logistic costs are higher than the global average, which makes it difficult for Indian businesses to compete in the global market.

- Inefficient Infrastructure: Indias infrastructure is not as developed as the infrastructure in developed countries. This can lead to delays and disruptions in the logistic process.

- Lack of skilled manpower: There is a shortage of skilled manpower in the Indian logistics sector. This can make it difficult for logistics providers to meet the growing demand for their services.

Despite these challenges, the Indian logistics sector is poised for growth. The government is taking steps to address the challenges facing the sector, such as by investing in infrastructure and developing skills training programs. The growth of e-commerce and manufacturing is also expected to boost the sector in the coming years.

Here are some of the key trends that are impacting the Indian logistics sector:

- Digitization: The logistics sector is being rapidly digitized, with the use of technology to improve efficiency and visibility. This includes the use of GPS tracking, block chain, and artificial intelligence.

- Sustainability: There is a growing focus on sustainability in the logistics sector, with companies looking to reduce their environmental impact. This includes the use of renewable energy, energy-efficient vehicles, and green packaging.

- Regionalization: The Indian Logistic sector is becoming more regionalized with companies focusing on services serving specific regions or industries. This is due to the vast size of India and the different needs of different regions.

- Globalization: The Indian logistic sector is becoming more globalized, with companies looking to expand their operations to other countries. This is due to the growing demand for Indian goods and services around the world.

These trends are expected to continue to impact the Indian logistics sector in the coming years, driving growth and innovation in the sector.

2. Brief introduction of companys business model and operations

At Committed Cargo, we define excellence through the highest level of Logistics Services. Having started the journey in 1998, we completed 25 years of unparalleled services. During this span of 25 glorious years, we have served a robust clientele by delivering logistics services of global standards. Our commitment to innovation within the Logistics realm continuous as we introduce and implement innovative concepts while customizing solutions for our clients unique needs. Our dedicated professionals are ceaselessly innovating and enhancing operational efficiencies.

With ISO 9001: 2015 Certification, Committed Cargo specializes in the seamless handling of Import and Export Cargo, earning a distinguished reputation for delivering dependable and comprehensive cargo movement solutions globally. Its guiding principle ‘Customer Pride has been instrumental in establishing a lasting presence in the dynamic cargo industry.

The Operational Team at Committed Cargo consists of 187 in-house, well-trained, and dynamic employees. These individuals collectively possess several years of experience in international freight forwarding and a proactive history will reputable shipping lines and air lines. This operational process empowers Committed Cargo to adopt a ‘Total Freight Management approach enabling the provision of end-to-end logistics services.

Comprehensive list of services being rendered by Committed Cargo include Custom Brokerage, Air Freight, Sea Freight, Express Freight, and 4 PL and Supply Chain Management. In addition, our company provides special services handling Dangerous goods, Human Remains relocations, Diplomatic relocations, Exhibition Cargo, Critical Logistics, and many more.

3. Financial performance review

- During the year 2023-24, Committed Cargo celebrated 25 glorious years of service and performance.

- During the year, our Company successfully completed its initial Public Offer (IPO) of Equity Shares of face value Rs. 10/- each at a premium of Rs. 67/-. The IPO of Rs. 24.94 Crs. was oversubscribed by 86 times.

- Our Company recorded total revenue of Rs. 142.59 Crs. against Rs. 122.03 Crs. in the previous years which is 16.7% more in the current year as compared to the last year. The Profit for the year has been Rs. 5.70 crores and Profit after tax (PAT) has been Rs. 4.12 crores.

- Committed Cargo has declared its maiden dividend of 5% on the equity shares.

- The Company continues to be largely Debt Free Company with Shareholders Net worth being Rs. 57.80 Crs. and Debt of Rs. 0.11 Crs only.

4. Key financial ratios

Ratios	2023-24	2022-23
1. Current Ratio	6.37	3.88
2. Debt Equity Ratio	0.002	0.02
3. Interest Service Coverage Ratio	112.12	75.06
4. Debtors Turnover ratio	5.81	5.43
5. Operating Profit Margin (%)	14.26	14.41
6. Net Profit Margin (%)	2.87	4.35
7. Return of Net Worth	7.11	18.48

Return on Net Worth, during the year under review has gone down because of the following reasons: -

a) During the year, Company completed its maiden IPO at a price of Rs. 77/- per equity share, comprising of Rs. 10/- of Face value and Rs. 67/- of Premium. With the result, the Net Worth of the Company has gone up substantially to Rs. 57.91 Crs. (Comprising Premium and Net Profit for the year) as on 31st March 2024 as against Rs. 28.85 Crs. as on 31^st March 2023. b) During the year, the Net Profit Margin has gone down due to Expenditure incurred for opening and stabilizing the new Branches, IPO expenses (Part) written off and higher depreciation.

5. Internal control system

With a view to manage the business operations efficiently. Internal Control System have been put in place and are reviewed periodically by Companys Team and also by Internal Auditors. In Managements opinion, the systems being followed are adequate, keeping in view the nature and size of Companys operations.

6. Human Resources

Committed Cargo employs, as on date, 187 people in different categories. The Company practises people-friendly working environment and gives sufficient opportunities to its people to grow within the organization. This has resulted in very high retention % of people since its inception.

7. Outlook and future strategies

During the year under Review, Committed Cargo aspired to become a National Player. Towards this objective, Company started new Branches at Mumbai, Pune, Goa, Ahmedabad, Hyderabad, Bangalore and Chennai. These branches have been equipped with infrastructure and experienced manpower. With the initial stability period of 9 to 12 months, these branches are expected to contribute significantly to Companys top line and profitability.

Further, the company has initiated steps towards technological integration and digitization. The company has tied up with an IT company to set up a subsidiary Company for taking up technology initiatives relating to Logistics Industry. In due course, Company aspires to make its operations fully digitally abled.

Committed Cargo, like in past, aims to be a customer-centric and technology-abled logistics company. The company will continue to strive for excellence in all its activities and will pursue value-based policies to satisfy the aspirations of its customers, vendors, employers, shareholders and society at large.

Please refer to a separate presentation on OUR STRATEGY to grow in future on the earlier page.