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The Management of Shree Vasu Logistics Limited (SVLL) Presenting "Management Discussion and Analysis Report" covering the operational and financial performance of the company for the year 2022-2023.

OVERVIEW

Shree Vasu Logistics Limited is a publicly held logistics company that offers customized and end-to-end logistics solutions and services.The company operates in several states in India, including Chhattisgarh, Orissa, West Bengal, Assam, and parts of Madhya Pradesh. Its core business lines revolve around providing ird-Party Logistics (3PL) solutions.

The company specializes in providing comprehensive services such as transportation and distribution, warehousing and value-added services. ese services are designed to meet the specific needs of its clients, offering integrated logistics, warehousing, and transportation solutions.

Shree Vasu Logistics Limited has strategically located warehouses and an extensive pan-India network. is allows the company to efficiently handle the storage, transportation, and distribution of goods across various regions. By leveraging its network and infrastructure, the company aims to provide reliable and efficient logistics services to its customers.

Currently, we have over 60 clients to whom we are providing our services from more than 10 cities within our PAN-India network.

Migration to the Main Board of National Stock Exchange of India Limited (NSE)

The Company has recently migrated from SME-EMERGE platform to the Main Board of National Stock Exchange of India Limited (NSE) w.e.f. 21st April, 2023. is signifies a significant step in the growth and development of the company. By moving to the Main Board, the company aims to enhance its corporate governance practices and provide greater transparency in its business activities. is transition demonstrates the companys commitment to adhering to higher regulatory standards and aligning itself with established market norms.

The Main Board of the NSE is generally considered a more prestigious and regulated market segment, attracting a larger investor base, including institutional investors. As a result, the company can potentially gain access to a wider pool of capital, which can be utilized for expansion plans, research and development, and other strategic initiatives.

Moreover, being listed on the Main Board can also improve the companys visibility and credibility in the market. It signals to investors, stakeholders, and the general public that the company has achieved a certain level of maturity and stability. is can contribute to building investor confidence and attracting more interest from potential investors.

Moving to the Main Board also subjects the company to more stringent reporting and disclosure requirements. is can further enhance transparency in the companys operations, financial performance, and decision-making processes.The company will need to comply with the regulations and guidelines set by the NSE, including regular financial reporting, board meetings, and disclosure of material events or information.

Expansion of Business:

In addition to the core business line, Shree Vasu Logistics has recently ventured into retail business by setting up Exclusive Brand Outlets (EBOs) for the renowned brand "Jockey" (Page Industries Limited).

Setting up EBOs for Jockey allows Shree Vasu Logistics to establish a direct connection with consumers and offer a dedicated retail space for Jockey products. is move enables the company to create a distinct shopping experience for customers and potentially increase brand loyalty.

Establishing Exclusive Brand Outlets (EBOs) for Jockey is a strategic move that can bring several advantages. Here are some key benefits of this expansion:

_ Diversification of revenue streams: By entering the retail sector, Shree Vasu Logistics can diversify its revenue streams beyond its core logistics operations. is diversification helps the company reduce dependence on a single business line and mitigate risks associated with fluctuations in the logistics industry.

_ Synergy with existing operations: Since Shree Vasu Logistics already has expertise in logistics and supply chain management, expanding into retail with Jockey EBOs allows the company to leverage its existing capabilities.The company can utilize its logistics infrastructure to efficiently manage the supply chain and ensure timely delivery of Jockey products to its retail outlets.

_ Brand association and recognition: Partnering with Page Industries Limited and offering Jockey products through EBOs helps Shree Vasu Logistics establish a strong brand association. Jockey is a renowned brand with a loyal customer base, and this association can enhance Shree Vasu Logistics reputation and credibility in the retail industry.

_ Increased customer reach and engagement: Setting up EBOs allows Shree Vasu Logistics to directly engage with customers. is direct interaction enables the company to understand customer preferences, gather feedback, and build long-term relationships. It also provides an opportunity to upsell and cross-sell related products, thereby increasing the average transaction value and customer loyalty.

_ Potential for business expansion: Successful operation of Jockey EBOs can open doors to future expansion opportunities. Shree Vasu Logistics can explore collaborations with other renowned brands or consider establishing additional retail outlets in different locations. is expansion can contribute to the companys overall growth and market presence.

INDUSTRY OVERVIEW AND TRENDS

Industry Overview:

Logistics is widely known as the process of coordinating and moving resources, such as equipment, food, liquids, inventory, materials, and people, from one location to the storage of the desired destination. It is the management of the flow of goods from one point of origin to the point of consumption, to meet the requirement of customers. Logistics management focuses on the efficiency and effective management of daily activities concerning the production of the companys finished goods and services. is type of management forms a part of the supply chain management; and plans, implements, & controls the efficient, effective forward, reverse flow, and storage of goods. Logistics mainly comprises various services such as ird-Party Logistics (3PL), Fourth-Party Logistics (4PL), inbound logistics, outbound logistics, reverse logistics, green logistics, construction logistics, digital logistics, military logistics, and others logistics services.

Overview of Indias Logistics Sector:

Indias logistics sector plays a crucial role in the countrys economic development by facilitating the efficient movement of goods and services across the vast geographical expanse of the nation.The sector encompasses various activities such as transportation, warehousing, inventory management, packaging, and freight forwarding. Heres an overview of Indias logistics sector:

_ Size and Growth:The logistics sector in India has witnessed significant growth over the years, driven by factors like increasing consumption, rising international trade, expanding e-commerce industry, and government initiatives such as "Make in India" and "Digital India."The sector contributes around 14% to Indias GDP and is estimated to reach a market size of $215 billion by 2022.

_ Infrastructure: Indias logistics infrastructure consists of roadways, railways, airways, and waterways. However, the sector faces infrastructure challenges like inadequate road and rail networks, congested ports, and limited cold chain facilities. E_orts are being made to improve infrastructure through initiatives like the Bharatmala Project (roadways), Sagarmala Project (port development), and Dedicated Freight Corridors (railways).

_ Road Transportation: Roadways dominate Indias logistics sector, accounting for over 60% of freight movement.The road network, although extensive, su_ers from issues such as poor road conditions, traffic congestion, and last-mile connectivity challenges.The government has taken steps to address these issues by promoting the construction of highways, expressways, and improving connectivity through initiatives like the National Highways Authority of India (NHAI).

_ Rail Transportation: Railways play a significant role in long-distance freight movement, particularly for bulk commodities.The Dedicated Freight Corridor (DFC) project is underway to create exclusive rail corridors for freight, which will enhance capacity, reduce transit time, and improve efficiency. is project aims to transform rail logistics in the country.

_ Air Transportation: Air cargo is essential for time-sensitive and high-value goods. India has seen a steady growth in air cargo volumes, with major airports developing dedicated cargo terminals. Air cargo infrastructure is being expanded to handle the increasing demand, and efforts are being made to improve customs clearance processes to enhance efficiency.

_ Water Transportation: India has an extensive coastline and a network of inland waterways. Water transportation, particularly for bulk goods, has the potential to provide cost-e_ective and eco-friendly logistics solutions.The government has been developing National Waterways and promoting multimodal transport to harness the potential of water transportation.

_ Warehousing and Storage:The warehousing sector in India has been evolving rapidly due to the growth of e-commerce, organized retail, and the implementation of the Goods and Services Tax (GST). Modern warehousing facilities, including automated and temperature-controlled warehouses, are in demand to meet the requirements of different industries.

_ Technology and Digitization: Technology is playing a crucial role in transforming the logistics sector in India. Digitization, adoption of advanced analytics, Internet of ings (IoT), and blockchain are being used to enhance supply chain visibility, improve operational efficiency, and streamline processes. E-commerce platforms have also contributed to the digitization of logistics operations.

_ Challenges:The logistics sector in India faces several challenges, including complex regulatory procedures, fragmented nature of the industry, high logistics costs, lack of skilled manpower, and ine_cient intermodal connectivity. However, the government is taking initiatives to address these challenges through policy reforms, infrastructure development, and ease of doing business measures.

Overall, while the logistics sector in India has witnessed significant growth and transformation, there are still opportunities for further development and improvement. With ongoing infrastructure projects, policy reforms, and technology-driven solutions, India aims to enhance its logistics capabilities and create a more efficient and competitive logistics ecosystem.

Salient trends in the Indian logistics industry

The logistics industry in India is benefitting from technological advancements, policy initiatives, and infrastructure capex in 2023. Logistics is integral to economic growth and any improvements in the countrys logistics ecosystem has business positive outcomes – ranging from operational efficiency to expanding supplier networks to boosting last-mile-reach to meet market demand. Further, applied tech innovation and data-driven insights can allow companies to optimize their supply chains, allocate resources more effectively, and deliver exceptional customer experiences.

Indias logistics industry has achieved remarkable progress, highlighted by countries rise of six spots in the world banks logistic performance India (LPI) is improvement is credited to various factor, such as technolgy innovation, data-driven decision making, and policy initiatives aimed at facilitating world class infrastructure.

Earlier in the year, the government increased the Union Budget allocation for capital investment by 33 percent, amounting to INR 10 trillion, for 2023-24. is development has been warmly welcomed by the logistics industry as it is expected to bolster Indias position in the global supply chain by prioritizing infrastructure development.The National Logistics Policy (NLP) and the PM Gati Shakti initiative are important overarching policy steps taken in this direction by the central government to deliver results by 2024-25.

Currently, Indias freight movement is heavily dependent on road transportation, accounting for 66 percent of cargo in ton-kilometers. Rail transportation follows closely behind, with a share of 31 percent, while shipping and air transportation contribute three percent and one percent, respectively. However, freight transportation is unevenly distributed across different modes.

Key trends steering Indias logistics performance in 2023

Technological innovation

The integration of advanced solutions is revolutionizing logistics operations, enhancing efficiency, and unlocking new opportunities. Key technologies shaping the future of logistics include:

_ Artificial intelligence (AI) and machine learning: AI-powered algorithms and machine learning models enable predictive analytics, demand forecasting, route optimization, and real-time decision-making. ese tools empower businesses to optimize their supply chains, improve resource allocation, and deliver enhanced customer experiences.

_ Internet of things (IoT): With the proliferation of IoT devices, logistics companies gain greater visibility and control over their assets and inventory. IoT sensors and connectivity facilitate real-time tracking, remote monitoring, and predictive maintenance, enabling proactive and efficient logistics operations.

_ Robotics and automation: Automation technologies, such as robotic process automation (RPA) and autonomous vehicles, are reshaping warehouse operations and last-mile delivery. Robotics streamlines repetitive tasks, reduces errors, enhances speed, and improves safety, leading to cost savings and increased productivity.

Data-driven decision making for operational superiority

In times where data reigns supreme, logistics companies must harness the power of data to drive informed decision-making. By adopting robust data analytics capabilities, businesses can gain actionable insights and optimize various aspects of their operations. We discuss some ways how:

_ Predictive analytics: Leveraging historical and real-time data, predictive analytics enables businesses to anticipate demand fluctuations, optimize inventory levels, and enhance supply chain resilience. Accurate forecasting minimizes stockouts, reduces inventory holding costs, and improves overall operational efficiency.

_ Supply chain visibility: Comprehensive data integration and visibility across the supply chain enable end-to-end traceability, proactive issue identification, and prompt problem resolution. Real-time data sharing fosters collaboration, enhances communication, and builds trust among supply chain partners.

OUTLOOK

The Company has recently expanded its Logistics Business by expanding its reach across various states in India such as West Bengal, Maharashtra, Telangana, Gujrat, Delhi, Karnataka, Tamil Nadu, Assam. It is a strategic move that allows your company to tap into new markets and take advantage of the growing opportunities in those regions. By expanding our reach, we can cater to a larger customer base and potentially increase our market share.

is expansion has evidently resulted in a significant increase in the companys turnover. With a wider presence, we can generate more revenue by serving a larger number of customers and meeting their logistics needs efficiently. is growth is a positive sign for your companys financial performance and overall business development.

Furthermore, venturing into the retail business by setting up Exclusive Brand Outlets for Jockey, which is a renowned brand owned by Page Industries Limited, is another strategic move. By partnering with a well-established and recognized brand, your company can leverage Jockeys reputation and customer base to drive sales and expand its retail presence. is diversification into retail allows your company to explore new revenue streams and capitalize on the demand for Jockey products.

Overall, these expansions and ventures demonstrate your companys proactive approach to growth and seizing opportunities in different sectors. It positions your company to benefit from the potential of new markets and capitalize on the strengths of established brands like Jockey.

FINANCIAL PERFORMANCE

The summarized financial performance of the Company as compared to last year is shown as under:

(Amount in Lakhs)
Particulars March 31, 2022 March 31, 2023 % Change
Net Sales/Income from Business operations 8,481.77 10,050.90 18.50
Other Income 31.90 133.01 316.95
Total income 8,513.67 10,183.91 19.62
Profit before Tax 253.56 313.36 23.58
Net Profit/ 217.29 204.73 5.78
(Loss) after Tax

The Company has only one segment of business operations i.e. Logistics. erefore, segment wise reporting is not applicable.

The significant changes in the financial ratios of the Company which are more than 25% as compared to the previous year are summarized below:

Sr. No. Particulars of Key Financial Ratio 2021-2022 2022-2023 % Change
1 Net Capital Turnover Ratio -34.67 -17.50 -49.53
2 Return on Capital Emploured 0.12 0.16 32.31

1. Net Capital Turnover Ratio ratio has increased due to increase in total sales.

2. Return on Capital employed has improved in current year on account of better earnings.

OPPORTUNITIES

In the current scenario, building more warehouses to cater to the demands of e-commerce, consumer, and retail sectors is a strategic move, especially considering the industry-specific requirements. With the strategic location of our warehouses and the high occupancy rate, it seems like we have successfully attracted various e-commerce companies to avail your services. is is a positive sign for our business.

Expanding our transportation network by opening branches across Central India and implementing reverse logistics will not only improve our overall service offerings but also provide us with an opportunity for backward integration.

The COVID-19 pandemic has indeed emphasized the importance of localized approaches in supply chain management. By focusing on local storage and distribution, you can enable expedited and hassle-free deliveries to the local market. is localized approach aligns well with the current trends in the e-commerce industry, as businesses increasingly seek to optimize their last-mile delivery operations.

By conceptualizing and implementing a plan that caters to these industry trends, you position your business for more opportunities in the near future and the long run. Its crucial to continue monitoring the evolving needs of the market and adapting your strategies accordingly to stay competitive in the dynamic logistics sector.

Our services will improve agility, credential stability, transparency, and speed, adding to the overall development in Indias logistics space.

RISKS, THREATS AND CONCERNS

Our business is significantly influenced by the performance of the automotive industry and also by demand and supply ratio in market. We operate in a highly competitive industry, with many different and unorganized players. Many segments within the logistics industry are highly commoditized and have low barriers to entry, leading to a market with a very high degree of fragmentation. In the recent past, start-ups and international logistics companies have entered the Indian market. Competition from these segments is likely to increase. Digital marketplace platforms and data analysis provided by these start-ups to serve customers directly by removing middlemen from logistics operations are able to reduce the total costs of transportation and improve reliability and operational efficiencies. We will need to stay ahead of our competition through consistent investments in modern technology and focus on service quality and value-added services.

The Company is committed to recognizing and managing the risks it is exposed to, both internal and external, and has put in place mechanisms to handle the same proactively and efficiently.The Company also recognizes that these risks could adversely affect its ability to create value for all stakeholders, and has taken steps to mitigate the same.

INTERNAL CONTROL SYSTEM AND ADEQUACY

The Company has a well-established and comprehensive internal control system. Documents, policies and authorization guidelines comply with the level of responsibility and standard operating procedures specific to the respective businesses. Observation made in internal audit reports on business processes, systems, procedures and internal control and implementation status of recommended remedial measures by Internal Auditors are regularly presented to and reviewed by the Audit Committee of the Board.

The system of internal control is being improved to ensure that all assets are safe and protected against loss from unauthorized use or disposition, and that all transactions are authorized, recorded and reported correctly.The Company regularly conducts internal check, using external and internal resources to monitor the effectiveness of internal controlling the organization. It strictly adheres to corporate policy with respect to financial reporting and budgeting functions.The Audit Committee of the Board of Directors deals with significant control issues and instructs further areas to be covered.

HUMAN RESOURCE DEVELOPMENT

Your Company focuses on creating an enriched environment for its employees, where it lays the opportunities for growth.There is complete focus on providing employees with a platform where they can continuously upgrade themselves and also stay up to date with the recent happenings in the industry.There are various Learning and Development programs that are carried on throughout the year, where employees can up-skill themselves.There are other engagement programs through which the organization supports physical and mental well-being of all its employees ese initiatives help enhance the skills and experiences of employees, ultimately enabling the Company to achieve its business objectives.

By promoting these standards, your company creates an inclusive and supportive environment for all sections of society. Ensuring equal opportunities at all levels, providing safe and healthy workplaces, and protecting human health and the environment are important commitments that contribute to a positive work culture and sustainable practices. Your Company believes that the employees are the most valuable assets and key drivers of business success and sustained growth.The total number of employees employed by the Company as on March 31, 2022 were 590.

Moreover, by offering opportunities for employees to improve their skills and capabilities, your company demonstrates a dedication to personal and professional growth. is commitment to employee development can lead to increased job satisfaction, motivation, and productivity among your workforce. Additionally, maintaining cordial industrial relations with various clients, vendors, financial lenders, and employees is crucial for a harmonious and productive work environment. Positive relationships with these stakeholders can foster collaboration, trust, and mutual success.

Overall, your companys focus on creating a congenial atmosphere, respecting human rights, providing equal opportunities, prioritizing safety and health, promoting employee development, and maintaining strong industrial relations reflects a commitment to ethical and responsible business practices.

Your Company is an equal opportunity employer and does not discriminate on the grounds of race, religion, nationality, ethnic origin, color, gender, age, citizenship, sexual orientation, marital status or any disability not affecting the functional requirements of the position held

CAUTIONARY STATEMENT

Statements in this "Management Discussion and Analysis" describing the Companys objectives, projections, estimates, expectations, plans or predictions or industry conditions or events are "forward-looking statements" within the meaning of applicable securities laws and regulations. Actual results, performance or achievements could differ materially from those expressed or implied. Several factors could make a significant difference to the Companys operations. ese include economic conditions affecting demand and supply, government regulations and taxation, natural calamities and so on over which Company does not have any direct control.

SD/- SD/-
ATUL GARG PREETI GARG
Managing Director Non-Executive Director
DIN: 01349747 DIN 07048745
Place: Raipur
Date: August 14, 2023