MANAGEMENT DISCUSSION & ANALYSIS

Industry structure and development

The business of transportation is in the hands of operators both in organized as well as in unorganized sector. A large portion of the transportation business is undertaken conventionally by operators in unorganized sector. Our Company being an operator in organized sector has to compete with operators in unorganized sector. In the process of the transportation business we also offer logistics and specialized project transportation services. The project transportation services involves logistics of Over Dimensional/Over Weight Consignments where also several new operators have started offering the same services, thereby increasing competition. To overcome the situation, the Company has diversified its business activities and has started a new segment viz. Contruction Division during the year under review.

Opportunities and Threats

Performance, growth and development of transport and logistics service business is directly linked with and related to performance, growth and development of industry in our country. The specialized project logistics business is linked with setting up of new projects requiring Over Dimensional Plant & Machinery. Road transportation & Logistics solutions are one of the most important brrequisites for development of trade and industry and setting up of new industrial projects. The project transportation also suffers from ambiguous government regulations. In cycles of economic growth and development of Indian Industry, our Company finds opportunities, whereas in cycles of economic slowdowns in Indian industry our Company faces challenges and threats of fierce competition from operators in unorganized sector.

Segment-wise or product-wise performance

The Company has three primary business segments namely, Freight & Services, Petrol Pump & Construction. Out of the total earnings for these three segments amounting to Rs. 15,252 Lakhs, the Freight & Services Segment's earning was Rs. 8,770 Lakhs, Petrol Pump Segment's share was Rs. 5,452 Lakhs and the Construction Segment's share was Rs. 1,030 Lakhs.

Outlook

The Company has brsence all over India and especially in North Eastern States. The Company has proven capabilities and competency to offer domestic road transportation, complex logistics solutions for Over Dimensional Consignments by multi modal routes and international freight forwarding services to its customers. The Company is also providing innovative logistics solutions to its customers with value addition in its services. With these advantages, we have good prospects of demand for Company's services.

Risks and concerns

Our Company, as in case of any other body corporate, is exposed to specific risks that are particular to its business and the environment within which it operates. These include credit risks, market risks and operational risks. We have established policies and procedures to manage these risks. Such policies and procedures are continuously bench marked with best practices in Indian Road Transport Sector.

Internal control system and their adequacy

The Company has a well-defined organization structure, authority levels and internal policies and procedures for conducting business transactions. The Company has an internal audit system, and theaudit plans. The audit Committee periodically reviews internal audit reports and adequacy of internal controls.

Discussion on financial performance with respect to operational performance

The Company's total earnings including other income for the year amounting to Rs. 15,360 Lakhs as compared with brvious year's total earnings of Rs. 16,483 Lakhs. For the year the profit before exceptional items, finance cost, debrciation & amortization expenses and taxation is Rs. 12 Lakhs. Finance cost for the year amounted to Rs. 772 Lakhs, Debrciation & Amortisation expenses amounted to Rs. 644 Lakhs and Provision for Taxation for the year amounted to Rs. (128) Lakhs. Accordingly, the profit after taxation for the year is Rs. 13 Lakhs.

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

The key resource for the Company is its employees, which is giving the Company a competitive edge in the business environment. The Company has been able to create a favourable work environment that encourages innovation and meritocracy.

For this purpose, we have a practice of rigorous job rotation, training in new age skills and multifunctional exposure and responsibilities.

The Company had 267 permanent employees at the end of the year. As in the past, the industrial relations continued to remain cordial at all the locations of the Company.