VRL Logistics Limited has completed one year since its successful
listing. The year gone by presented many challenges and we had to work
hard to overcome these. I take great delight on the company crossing
Rs.100 crores in net profits, a first in its history.
The overall economy remained sluggish during the year. Reality at the
ground level is that the business volume across sectors struggles to
sustain preceding levels. Our company has had a long history of
sustained growth even during similar tough times in the past. We
managed to post a nominal growth in the overall business volume but
remain satisfied that we have not compromised on the quality of our
business for the sake of growth.
The erosion in margin was predominantly on account of a significant
increase in employee costs. We divided our business operations into
metro, mid sized cities and smaller towns and have affixed a minimum
salary scale for each of these to ensure a decent pay package for our
staff, especially the lower level cadre and the same has resulted in
salary correction. This is a one-time measure and I do not envisage
something similar in the near medium term.
On the capex front, we would continue to add to our fleet. Such fleet
addition should not be linked to the immediate performance but would be
undertaken with a long term perspective. Addition of vehicles would
reduce dependence on outside vehicles, ensure vehicle availability
during festive seasons and peak periods, lead to better service levels
as also would be necessary to remain compliant with environmental
regulatory requirements in certain pockets of the country. I am
confident that we would complete the pending utilization of IPO
proceeds earmarked for fleet addition in the coming year.
On the business front we will continue to remain focused on existing
verticals and aim to increase freight tonnage in the goods
transportation division as also improve occupancy levels in the bus
operation segment. The company''s top management continues to engage
extensively with the senior and middle level management of the company
across India to guide and mentor these individuals as also set a tone
for inclusive decision making and the same has extensively benefited
the company in the past. Regaining the erstwhile business growth would
be the focal point in all such interactions.
GST would soon be a reality and after overcoming the hiccups associated
with the initial implementation this law will provide a big boost to
organized players in our industry. VRL today is GST ready and eagerly
awaits the stabilization of the new GST regime. I am confident that the
share of Less than Truck Load (LTL) business would go up post
implementation. I hope however that this law is implemented in right
earnest and would actually bring in the benefits being anticipated by
my fellow transport brethren. I sincerely hope that the government
would also play equal emphasis in speeding up the passage and
implementation of the impending Road Safety and Transport Bill.
Coupled with GST this would bring in a seamless movement of goods
vehicles across the country, reducing transit times and bring in more
economy to the end users. The other developmental schemes and
initiatives being announced by the present government are also expected
to fuel growth in the days to come.
At the Board level, the directors remain aware of their obligations to
the business operations more specifically in respect of setting up
internal controls and ensuring that these continue to operate in a
satisfactory manner. The Board is committed to maintain the highest
standards of Corporate Governance and integrity. The Board also opines
that more executive representation is warranted at the Board level and
there could be some changes on this front in the near future.
Lastly, I wholeheartedly complement all the employees of VRL for their
individual contribution at all levels. I also thank all the
stakeholders - Bankers, Investors, Customers, Suppliers, Government
authorities, Regulators and the management team including the
Co-Directors on the Board for their continued association with VRL. I
look forward to regaining our growth in the days to come.
DR. VIJAY SANKESHWAR
CHAIRMAN ACY- MANAGING DIRECTOR