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Snowman Logistics

BSE: 538635|NSE: SNOWMAN|ISIN: INE734N01019|SECTOR: Transport & Logistics
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Mar 15
Chairman's Speech (Snowman Logistics) Year : Mar '16

Dear Shareholders,

At Snowman, we believe that this strategic direction was validated by the financials. Your Company reported CAGR revenue growth of 31 per cent in the five years ending 2015-16 and a profit after tax growth of 27 per cent during the period. This growth was 2x the sector growth average, validating our strategic priority.

Following this aggressive business investment over the last five years, the time has come to consolidate our capacity addition and enhance value from our existing assets and facilities. We believe that such an approach will enhance our asset utilisation, revenues from existing assets and return on employed capital. At the same time Snowman will continue to invest in building capacity further with a goal of growing by 15-20% every year.

In this financial year, there have been some changes in the business model of Snowman after the management changes which took place during the year. Under the new leadership team, the Company is now focused on its core business of temperature controlled warehousing for frozen and chilled products and has decided to cater to the distribution business only related to our warehousing business. With these changes and a reduced fleet size, which is fully owned instead of leased, the transportation margins have improved with better control and higher capacity utilisation.

Snowman Logistics was a first-mover in India''s warehousing business, offering specialised temperature-controlled warehouses. The company''s infrastructure comprised compartmentalised temperature-controlled and power-backed warehouses proximate to key consuming markets coupled with mechanised product handling. Gradually, the Company widened the moat, graduating one-off business transactions into long-term relationships marked by quality considerations over price. In addition to this, your Company selected to invest in transport services as an ancillary support to the overall warehousing business which increased the share of specialised customers in the portfolio, which enhanced returns on pallet investments.

Note of thanks

I wish to thank all our stakeholders

- shareholders, investors, bankers, customers, vendors and employees - who have demonstrated faith in our business model and in the Company''s vision. I assure that the outlook appears promising and we expect to report sustained market outperformance going ahead.

Regards,

Prem Kishan Dass Gupta

Chairman

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