Velox Shipping and Logistics Ltd Management Discussions

1. Macro-Economic Environment:

The global economy in 2024 2025 has shown notable resilience despite facing a volatile mix of geopolitical tensions, protectionist trade policies, and macroeconomic headwinds. According to recent reports by the United Nations Conference on Trade and Development (UNCTAD) and the International Monetary Fund (IMF), growth continues at a moderate pace. However, structural disruptions from tariffs and regional conflicts to shifting supply chains are reshaping the landscape of global trade and production.

Despite the backdrop of prolonged conflicts in Eastern Europe and ongoing tensions in the Middle

East, the global economy has avoided a sharp downturn. The IMFs April, 2025 projections forecast global GDP growth at 2.8% for the year, signaling a steady, though below-trend, recovery. This resilience is largely attributed to strong domestic demand in advanced economies, stabilizing inflation, and gradual improvements in business investment and labor markets. Advanced economies have shown resilience, but elevated interest rates, fiscal tightening and sluggish productivity growth continue to weigh on economic momentum. Encouragingly, global inflation is expected to decline to 4.3% in 2025 and further to 3.6% in 2026, with advanced economies likely to reach their inflation targets sooner than developing economies, creating a more balanced risk environment. Inflationary pressures are easing globally, with the IMF expecting inflation to decline to 4.3% in 2025 and further to 3.6% in 2026. Advanced economies are on track to reach their inflation targets more quickly than developing countries, creating a more balanced but still uneven risk environment. However, the persistence of elevated interest rates and fiscal tightening continues to weigh on overall economic momentum, particularly in mature markets where productivity growth remains sluggish.

While global trade remained stable throughout 2024, it faces mounting pressures in 2025. The UN projects world trade growth at 2.7% this year, a modest rebound. However, this recovery is tempered by growing geo-economic fragmentation, renewed tariff uncertainty, and rising protectionism. Notably, the reimposition of tariffs by the United States has caused distortions in global supply chains, increasing costs for manufacturers and complicating cross-border planning.

Falling freight indices have further revealed weaknesses in industrial activity, especially in sectors heavily reliant on global supply chains. As trade becomes more fragmented and costlier, companies are increasingly forced to reconsider their logistics strategies and sourcing models. Amid rising risks, structural changes are also taking place across the global economy. Businesses are responding to tariff volatility and geopolitical instability by realigning trade routes and decentralizing operations. This realignment is not merely geographic but also technological: artificial intelligence and digital logistics are playing a greater role in helping firms optimize their supply chains for both cost efficiency and resilience.

2. Overview of the Indian Economy:

India remained one of the fastest-growing major economies in 2024 25, driven by infrastructure investment, a strong services sector, and policy reforms. However, domestic consumption weakened due to high interest rates and inflation. While private consumption remained sluggish, the governments recent personal income tax reductions, expected to cost the treasury approximately

Rs.1 lakh crores, aim to revive household spending and boost economic momentum. Inflation, at 4.2% (IMF), remains a concern, though easing food and fuel prices along with supply chain improvements may offer relief. Sluggish rural demand and cautious urban consumption could still weigh on growth. Fiscal consolidation, rising exports and continued investment in industrial production will be crucial in sustaining economic momentum.

From a supply chain perspective, India is benefitting from global trade realignments, as companies diversify their supply chains to reduce dependence on a few regions. Government initiatives like multimodal logistics parks, AI-driven optimization, and warehouse automation are boosting efficiency and positioning India as a logistics hub. However, rising freight costs, volatile energy prices, and protectionist trade policies pose significant risks.

The Union Budget 2025-26 allocates Rs.11.21 lakh crores for capital expenditure, a modest 0.9% rise from the previous year, reflecting a balanced approach between infrastructure and consumption. Tax cuts aim to boost spending, while logistics investments continue under PM Gati Shakti, with Rs.11.17 lakh crores for 434 key projects. A record Rs.2.5 lakh crores were spent in FY 2024-25 to build 5,614 km of highways, improving freight movement and supply chain efficiency.

The Indian government has implemented strategic monetary and fiscal measures to boost growth and consumption. The RBI cut the repo rate to 6% in April 2025 its second consecutive reduction to lower borrowing costs amid easing inflation. Concurrently, the Union Budget introduced major income tax cuts, expected to raise middle-class disposable income and potentially boost consumption by Rs.5 lakh crores (2.7% of GDP).

Lastly, these developments not only improve logistics operations but also create new growth avenues for organised logistics players.

3. Outlook:

The Indian logistics market is rapidly growing, driven by infrastructure expansion, policy reforms, and technology. Growth is supported by booming e-commerce, increased manufacturing, and initiatives like PM Gati Shakti and the National Logistics Policy. Rising demand for premium warehouses and investments from institutional-backed developers, signifies a pronounced trend towards a more mature market.

The Indian logistics industry is diverse, including startups, SMEs, domestic and global players. Road transport dominates with over 60% share, while rail, air, and coastal shipping are growing due to policy incentives. Government initiatives like multimodal logistics parks, dedicated freight corridors, and digital platforms are enhancing efficiency and reducing transit times. Technology is playing an increasingly transformative role, with AI-driven logistics optimisation, automated warehousing and predictive analytics streamlining supply chain operations End-to-end visibility, Internet of Things (IoT)-enabled tracking and digital freight matching are becoming industry standards, improving operational efficiency.

Despite progress, logistics costs remain high at 13-14% of GDP versus a global 8-10%, due to multimodal integration challenges, high fuel costs, and infrastructure bottlenecks. The implementations like the Unified Logistics Interface Platform, compliance easing, and the Rs.11.17 lakh crore PM Gati Shakti initiative aim to boost efficiency by developing logistics hubs, expressways, and freight corridors. Contract logistics is becoming increasingly important.

The B2B express segment is expanding at a robust 15% CAGR, with the market size expected to reach Rs.24,000 crores by 2026. This growth is driven by the demand for direct-to-consumer models, omnichannel fulfilment and faster delivery services. The segment is more organised compared to contract logistics, with the top players holding nearly 70% of the market share.

Indias logistics sector is undergoing a major transformation, powered by policy reforms, infrastructure investments, and rapid digitalization. Initiatives like Gati Shakti, the National Logistics Policy (NLP), and a focus on green logistics are driving the industry toward a more integrated, cost-effective, and sustainable system. As the sector evolves, it is shifting from traditional transport and warehousing to advanced, technology-driven integrated logistics, positioning India as a global logistics hub.

4. Key Government Initiatives:

Indias logistics sector faces high costs, accounting approximately 14% of GDP substantially higher than the 8-10% seen in developed countries. This is due to inefficiencies such as slower transport, theft, damages, and an over-reliance on road transport, which makes up over 60% of freight movement. To address these challenges, the Government of India has launched initiatives such as the National Logistics Policy and PM Gati Shakti Master Plan aimed at improving infrastructure and promoting multimodal transport. Additionally, technology-driven projects like ULIP and ONDC seek to increase efficiency and transparency. Together, these efforts aim to reduce logistics costs, enhance speed, and help India achieve its goal of becoming a US $ 5 trillion economy.

National Logistics Policy

Launched in September 2022, Indias National Logistics Policy (NLP) aims to reduce logistics costs from around 14% to 8% of GDP by 2030. By March 2025, significant progress has been made, including the rollout of Multi-Modal Logistics Parks (MMLPs), adoption of the Unified Logistics

Interface Platform (ULIP), and use of AI for route planning. These efforts support Indias ambition to rank among the top 25 countries in the World Banks Logistics Performance Index by 2030.

Open Network for Digital Commerce (ONDC)

ONDC is an initiative designed to promote open networks for all aspects of exchange of goods and services over digital or electronic networks. It enables small sellers to compete with major platforms and has attracted partners like Uber, exploring transit ticket bookings via ONDC. New initiatives like Nirmit Bharat and the DigiHaat buyer app further boost access for artisans, farmers and small businesses.

Multi-Modal Logistics Parks (MMLP)

The MMLP represents a holistic approach to integrating different modes of freight transportation, including highways, railroads, and inland waterways. The Government plans to develop 35 MMLPs with an investment of approximately Rs.46,000 crores, aiming to handle around 700 million metric tonnes of cargo upon completion. By 2024-25, six MMLPs have been awarded, with seven more planned for the next fiscal year. In March 2025, NHLML and the Inland Waterways Authority of India signed an MoU to develop a state-of-the-art MMLP in Varanasi, aiming to strengthen the regions logistics infrastructure.

Sagarmala Programme

The Sagarmala Programme is a major Government of India initiative aimed at port-led development and reducing logistics costs. As of March 2025, it has identified 839 projects worth Rs.5.79 lakh crore, with 272 projects worth Rs.1.41 lakh crore completed. The programme has significantly boosted coastal shipping by 118% and inland waterway cargo by 700%, easing road and rail congestion. Under Sagarmala 2.0, Rs.40,000 crore is being invested to unlock Rs.12 lakh crore in maritime opportunities.

Production-Linked Incentive Scheme

The PLI scheme, launched with an outlay of Rs.1.97 lakh crores, aims to boost domestic manufacturing and exports across 4 key sectors. By December 2024, it attracted Rs.1.46 lakh crores in investments, enabled Rs.12.5 lakh crores in production and sales and drove exports worth Rs.4 lakh crores. The scheme has also generated around 9.5 lakh jobs, highlighting its impact on Indias manufacturing and trade landscape.

5. Industry Structure and Developments:

Velox Shipping and Logistics Limited was originally incorporated as Nirbhoy Exports Limited on February 21, 1983 under the Companies Act, 1956 vide certificate of incorporation issued by the Registrar of Companies, Mumbai. Subsequently, the name of the Company was changed to Khatau Exim Limited and has obtained a fresh certificate of incorporation dated January 23, 1985. Further, pursuant to the Shareholders resolution passed through Postal Ballot, the name of the Company was changed to ‘Velox Industries Limited and had obtained a fresh certificate of incorporation dated May 15, 2012 as issued by the Registrar of Companies, Mumbai.

During the year, the Company changed its name from Velox Industries Limited to ‘Velox Shipping and Logistics Limited. The Company is now engaged in the business of carrying on all or any of the trades and business of freight contractors, carriers, shippers, shipping agent, agents of operators of shipping lines consolidation and multi model transport operations. Earlier the Company was engaged in food industry.

6. Opportunities and Challenges: Opportunities

Opportunity to expand cross-border logistics

Cross-border trade from India is growing, driven by strong economic growth and the adoption of the China+1 strategy, making India a preferred manufacturing hub. The PLI scheme further boosts domestic manufacturing, increasing demand for freight forwarding services. Through our subsidiary Lords, we are well-positioned to leverage end-to- end freight forwarding capabilities. Additionally, our expansion into air chartering strengthens our global network and supports critical trade lanes, positioning us to thrive amid geopolitical tensions and market volatility.

Opportunity to expand air cargo freight

With around 150 operational airports spread across India, a remarkable opportunity beckons us in the air cargo freight sector to ensure faster movement of goods to far-off destinations. This extensive network of airports enhances accessibility and connectivity, facilitating swift transportation of goods across vast distances.

Challenges

Impact of geopolitical conflicts on supply chain

The Economic Survey 2024 highlights that escalating geopolitical tensions could lead to supply chain disruptions, increased commodity prices and inflationary pressures. Such conflicts may necessitate rerouting and cause delays, impacting global trade dynamics.

Pricing and inflationary pressure from clients

Rising input costs, driven by higher commodity and crude oil prices, have intensified customer focus on cost rationalisation, leading to greater pricing pressure in contract logistics and last-mile delivery. This mandates focusing on value addition and driving cost-reduction initiatives across the organisation.

7. Segment wise Performance:

Presently, the Company operates in only one segment i.e. logistics sector.

8. Financial Performance and Analysis:

The Financial statements of the Company have been prepared in accordance with Indian Accounting Standard (Ind AS) notified under the Companies (Indian Accounting Standards) Rules 2015 as amended from time to time by the Ministry of Corporate Affairs (MCA), the provisions of Companies Act, 2013, and guidelines issued by the Securities and Exchange Board of India (SEBI). Financial statements of the Company are prepared under the historical cost convention except for the certain financial assets and liabilities measured at fair value as mentioned in applicable accounting policies.

9. Risk & Concerns:

We operate in a highly fragmented yet rapidly evolving market, one poised for transformational change that impacts millions, including socioeconomically disadvantaged communities. This dynamic landscape reinforces our commitment to strengthening our risk governance framework, ensuring business sustainability while driving inclusive growth. This continuously drives us to strengthen our risk governance framework for business sustainability. Our Board of Directors plays a pivotal role in shaping, developing, and reviewing our risk management framework. This comprehensive approach includes policies, processes, and mechanisms to proactively identify, manage and mitigate risks while uncovering new growth opportunities. By defining our risk appetite, prioritising mitigation strategies, and implementing structured processes, the Board ensures resilience and agility. Our robust organisational framework enables businesses to anticipate, assess, and report risks effectively, fostering a proactive and future- ready enterprise.

Key risks faced by our business	Description	Management Approach
Cost Escalation Risk	Rising input costs, driven by inflationary pressures, may affect business margins	1. We focus on scaling up volumes to achieve economies of scale and foster resource sharing among subsidiaries to attain synergistic gains.
		2. We boast a robust management team who remains committed to diligently pursue direct cost-saving projects to optimise operational expenses.
Competition Risk	New-age start-ups, with advanced technological solutions may act as disruptors for the Company	1. We continue to integrate advanced technological solutions to ensure we stay at the forefront of innovation in logistics.
		2. We chart our M&A strategy to build tech- based partnerships with new-age companies.
		3. We maintain the right degree of penetration and volumes within our target markets.
Customer Concentration Risk	Concentration of our business with a few particular accounts or within a particular sector may impact our performance if unforeseen	1. We are constantly diversifying our portfolio of services with value-additions, enabling us to target a wider base of customers.
	challenges affect those clients or the sector.	2. We initiate continuous interaction and engagement with our customers to gather timely insight into their business requirements and gauge their strategic thinking in terms of their business continuity plans
Compliance Risk	Our operations across multimodal transport and third-party logistics come under various domestic and	1. We inculcate a strong culture of compliance through a comprehensive process framework.
	international legal frameworks. Any instance of non-compliance to local, national or international laws threatens our operations as well as our reputation.	2. We educate our team regularly to make them aware of their responsibilities towards ensuring compliance with all the applicable laws and regulations.
Internal Risk	Our business is human capital intensive. Situations adversely affecting the health and wellbeing of our people stand to impact our operations. It is equally important that our workforce demonstrates the appropriate skill level in order to drive efficient output.	We uphold continuous investments in skill upgradation programmes for our people, especially with a view to empower them within a technology-first environment. We boast the industrys best safety practices and standardised protocols to reduce the margin of error.
Financial Risk	Efficient working capital management is critical to the smooth functioning of supply chains of the Company.	We ensure readiness of banking lines through a robust monitoring of cash flows and strong, trust-based partnerships with our clients and our vendor/ partners
Strategy Risk	Our ability to predict emerging risks and opportunities are critical to our success in driving our business profitably and identifying the right partnerships as well as customer segments.	We are harnessing a detailed and comprehensive business continuity plan as part of our risk management framework, in line with our organisational goals and priorities.

10. Internal Control Systems and Their Adequacy:

The management of the Company is committed to ensure effective internal control systems, commensurate with the size and the complexity of the business. The adequate and effective internal controls, established by us, seek to achieve Companys compliance and reporting objectives. The Companys internal control environment provides assurance on efficient conduct of operations, security of Assets, prevention and detection of frauds/errors, accuracy and completeness of accounting records, timely preparation of authentic financial information and compliance with applicable laws and regulation. The controls are deployed through various policies and procedures, which are periodically revisited to ensure that they remain updated with the changes in the business environment. Moreover, these polices and processes are regularly evaluated by internal and statutory auditors, with suggestions to further strengthen them and enhance their efficacy shared with respective process owners, following which requisite changes are made. The Audit Committee reviews the adequacy and effectiveness of our internal control environment and monitors the implementation of audit recommendations.

11. Developments in Human Resources:

During the year, the Company welcomed

Mr. Moti Punamchand Dabhi has been appointed as a Non-Executive Independent Director.

Mr. Moti Dabhi is a law graduate and has specialized in legal studies and jurisprudence. He has experience in Litigation and Dispute Resolution, Consumer Protection Law, Corporate and Commercial Law, Regulatory Compliance and Risk Management, etc. He has been a panelist for various legal counsel and representation to the Company and Active volunteer with Green Catalyst.

The Company encourages the employees to upgrade their knowledge and skills. The training sessions on various working parameters are conducted in routine apart from allowing employees for outside specialized training, wherever required.

Cautionary Statement:

The above Management Discussion and Analysis contains certain forward-looking statements within the meaning of applicable security laws and regulations. These pertain to the Companys future business prospects and business profitability, which are subject to a number of risks and uncertainties and the actual results could materially differ from those in such forward-looking statements. The risks and uncertainties relating to these statements include, but are not limited to, risks and uncertainties, regarding a fluctuation in earnings, our ability to manage growth, competition, economic growth in India, ability to attract and retain highly skilled professionals, time and cost over runs on contracts, government policies and actions with respect to investments, fiscal deficits, regulation etc. In accordance with the Code of Corporate Governance approved by the Securities and Exchange Board of India, shareholders and readers are cautioned that in the case of data and information external to the Company, no representation is made on its accuracy or comprehensiveness though the same are based on sources thought to be reliable. The Company does not undertake to make any announcement in case any of these forward-looking statements become materially incorrect in future or update any forward-looking statements made from time to time on behalf of the Company.

Annual Declaration under Regulation 34(3) read with Part D of Schedule II of SEBI (Listing obligation and Disclosure Requirements) Regulation, 2015

DECLARATION

As required under Regulation 34(3) read with Part D of Schedule II of SEBI (Listing obligation and

Disclosure Requirements) Regulation, 2015, We hereby declare that all the Board members and senior executives of the Company have complies with Code of Ethics of the Company the year ended March 31, 2025

FOR VELOX SHIPPING AND LOGISTICS LIMITED
(Formerly Velox Industries Limited)
Sd/-	Sd/-
DEBASHIS MUKHERJEE	SUSHIL SINDHKAR
MANAGING DIRECTOR	DIRECTOR
DIN: 00537728	DIN: 10191346
Date: 05th September 2025
Place: Mumbai