Lancer Containers Lines Ltd Management Discussions.

Industry and Business Overview Logistic industry in India

The presence of a robust logistics-related infrastructure and an effective logistics management system facilitates seamless movement of goods from the point of origin to that of consumption, and aids an economys movement to prosperity. The progress of logistics sector holds an immense value for Indian economy as well; as such advancement would increase exports, generate employment and give the country a significant place in the global supply chain. As per the Economic Survey 2017-18, the Indian logistics sector provides livelihood to 22 million-plus people and improving the sector would facilitate a 10% decrease in indirect logistics cost, leading to a growth of 5-8% in exports. Further, the Survey estimates that the worth of Indian logistics market would be around US$ 215 billion in next two years compared to about US$ 160 billion currently. The boom in next couple of years is expected largely due to the implementation of Goods and Service Tax (GST). To alter the countrys logistics landscape, GOI has taken a number of decisions. The GST regime is certain to expedite faster conversion of informal logistics setups to formal ones and speed up freight movement at interstate borders due to dismantling of check posts. There is a target to reduce the logistics cost in India from the present 14% of GDP to less than 10% of it, by 2022. A national committee headed by Cabinet Secretary is in place to develop the Pan-India roadmap for trade facilitation. A new Logistics Division in the Department of Commerce has been established to coordinate integrated development of the sector by way of policy changes, improvement in existing procedures, identification of bottlenecks and gaps, and introduction of technology-based interventions. A concerted effort in collaboration with central line ministries and state governments is on to simplify the regulatory processes in domestic and export-import logistics. The Ministry of Commerce and Industry (MoCI) is developing an integrated logistics portal which would serve as a transactional e-marketplace by connecting buyers, logistics service providers and the relevant government agencies such as customs, port community systems, port terminals, shipping lines, railways, etc. Once functional, it would reduce delays and facilitate a transparent, informative and convenient trading system. Recently the Ministry also launched a new Logistics Ease Across Different States Index to rank states for the support they provide to improve logistics infrastructure within their respective jurisdictions. The logistics sector now finds a place in the Harmonized Master List of Infrastructure Subsector. This inclusion is set to benefit the logistics industry as it will now have an access to cheaper and long term credit. Such a move will also lead to simplification of the approval process for the construction of multimodal logistics parks. Lastly, it will encourage market accountability through regulation and will attract investments from debt and pension funds into recognized projects.


Governments initiative in logistic sector

In November 2017 the Department of Economic Affairs (DEA), issued a notification widening the category of infrastructure sub-sectors to "transport and logistics" from the earlier sub-head of "transport". In addition to the above the various initiatives currently underway under the Sagarmala project in the form of Port Modernization, developing new ports, improving capacity at existing ports, enhancing port connectivity through highways, railways, Inland waterways and logistics hubs, Port-led industrialization are all expected to improve the efficiency of the sector.

Impact of Budget 2018 on Logistics industry.

The governments recent announcement conferring infrastructure status to the logistics sector has not only pushed up the industrys morale, but also the investments flowing into this sector. The governments recent budgetary announcements serve to provide higher confidence in, and greater impetus to the logistics industrys growth trajectory. The government will develop an online Logistics marketplace which will serve as a single platform for all the various stakeholders such as buyers, logistics service providers, Customs, DGFT, Railways, Ports, Airports, etc. This initiative will make product prices more competitive in the domestic and international markets by bringing down the overall logistics costs, as well as increasing the speed and ease of goods movement.

Business Overview

Lancer Container Lines is engaged in providing logistic services such as NVOCC, Freight Forwarding, Container Trading and Leasing and Container yard. We are also diversifying our services by introducing Lose cargo consolidation (LCL) and Break bulk operations. This will give us more verticals to service our valued clients and improve market hold. We provide these services and product on worldwide basis and aim to emerge as a global logistic service provider. We focused on covering the maximum possible locations by expanding our network of our own offices and agents. Our own offices give us a mileage in terms of having better control over business and helps us venturing new business opportunities at individual locations. We get associated with agents by entering into agency agreements with fix terms to have limited cost and better revenue for our NVOCC and container handling operations at India, Indian Subcontinent, Gulf, Upper Gulf, South East Asia and Far East so that we have worldwide coverage in cost effective manner. We have also focused on enhancing our fleet of containers should they be available at competitive price points to support demand of our clients.

Further, marketing plays a crucial role in our business and our Company has an efficient team of marketing professionals which forms part of our core strength. Our goal is to build relationships through our flexibility to meet the customer ‘s changing needs. We believe in giving our customers ?Total logistics solutions without limits. We constantly make an effort to add more value to our products and services, thereby providing ultimate customer satisfaction. It is our aim to meet the critical success factors of our customers by delivering end to end solutions in logistics to our customers. Towards this end we have been investing in a state of the art Enterprise wide software system focused and specialized to the logistics industry, investing in additional space to take care of the new verticals and enhanced capacity, adding new products and new verticals, attracting and retaining senior level talent from the industry, developing the agency and own office network.

Internal Control Systems and their Adequacy:

The Company maintains a system of internal controls designed to provide a high degree of assurance regarding the effectiveness and efficiency of operations, the adequacy of safeguards for assets, the reliability of financial controls and compliance with applicable laws and regulations. The company is well structured and the policy guidelines are well documented with pre-defined authority. The Company has also implemented suitable controls to ensure that all resources are utilized optimally, financial transactions are reported with accuracy and there is strict adherence to applicable laws and regulations. In addition, the board of directors and the Audit Committee periodically review the findings and ensure corrective measures are taken.

Financial Performance and Analysis:

Particulars Year ended 31.03.2018 Year ended 31.03.2017
Sales and other income 110.7 79.34
PBT 9.26 2.05
Net profit for the year 6.85 1.68

** For detailed explanation, please refer Directors Report.

Cautionary statement:

This report contains forward-looking statements based on certain assumptions and expectations of future events. Actual performance, results or achievements may differ from those expressed or implied in any such forward looking statements. The company undertakes no obligations to publicly revise any forward looking statement to reflect future/likely events or circumstances.

Place: Mumbai By order of the Board of Directors
Date: 23rd August, 2018 Abdul Khalik Chataiwala
Managing Director
DIN Number - 01942246