M/s SJ EXIM TECH ServicesNew Delhi

Integrated Service Center offering

A Program/Project for Rural Connectivity & Business Integration Plan-Courier/Health/IT Services

Background• There is a huge potential for an integrated service offering focused only for

Rural areas;

• The huge population of the Rural India account for over 70% of the totalPopulation of India;

• Consumerism have seen a sharp increase in the last 3 FY in Rural belt;

• There has been a sharp increase in the population of youngsters agedbetween 18 to 40 years using Mobile internet and smart phones in RuralIndia;

• There are virtually no company or player in Rural India offering anintegrated logistics for courier service;

• There are just 2 to 3 companies across India who are offering such a servicee.g Drishtee is present in pockets like Western UP, certain parts in Bihar andWest Bengal; Professional courier is present in certain pockets ofMaharashtra & Delhi/NCR zone; FedEx has a rural delivery programshowever not focused on backend integration and is too much limited inscope and area;

Basic Info:• Total No of Blocks in Bihar: 535 (Averaging 40-50 villages per block)

• Total No of Blocks in Jharkhand: 260 (Average 60-75 villages per block)

• Total No of Blocks in WB: 338 (Average 80-90 villages per block)

• Average % of Household using Mobile Phones in Bihar: 51.6%

• Average % of Household using Mobile Phones in Jharkhand: 44.1%

• Average % of Household using Mobile phones in WB: 42.9%

• Road, Rail & Other accessibilities are of very good levels in all the abovementioned states

• Total No of People using Mobile Internet via smartphones in Rural India is87 Million (Dec’2015 Data as per IAMAI report on Mobile Internet)

• Total No of People using Mobile Internet via smartphones in Urban India is219 million (Dec’2015 Data as per IAMAI report on Mobile Internet)

Scope:• To offer full fledged Courier Service dedicated to Rural belts only;

• To set up warehouses and Delivery Hubs/Centers and clusters acrossgeography;

• To set up a robust IT infrastructure-App based system, WMS, GPS &Fleet management systems, BAAN, Integrated Logistics managementand contracts management system, Payment systems, RFIDtaggings/Barcoded model for order bookings;

• To set up a robust delivery mechanism for courier services & e-commerce clients;

• To integrate Health Service offerings at all centers atVillage/Panchayat/Block/Tehsil/District/State levels- MOVAS/KneeCare etc;

• To utilize the centers to offer integrated Internet café services for nonMobile phone users and IT training systems for the local population

Potential:• Targeted revenue in 1st three FY: INR 20 Crores;

• Potential revenue in 1st three FY: INR 30-50 Crores;

• To display & utilize the efficiency of MOVAS/Knee Care at minimum44 clusters/Distribution hubs/Centers in the 1st 6 months itself. Thisshall give Marutaka a different level of penetration in the market inrural belts with even just 2 to 3 machines at each centers. This willfurther generate business model & response from these markets;

• To utilize these centers to offer Internet facilities for the localpopulation. This may further give a boost to the digital India program& it may even open avenues for funding from VC funds andCentral/State govt under the PMKVY (Pradham Mantri Kaushal VikashYojana), NSDC and other programs of the government;

• Other revenue streams like Center based promotion programs mayfetch additional revenues by Advertisements etc;

Steps Ahead:• Preliminary Data Collection Survey Program- ALREADY DONE & COMPLETED

• MILKRUN to collect practical data for Cost analysis;

• Comparative analysis of Costs (both CAPEX & operational), Risks,Infrastructure, Customer segments, Demand-Region wise to finalize thePhysical location of the centers;

• Simultaneously meet and talk to possible investors on the business model &come to a mutually beneficial business agreement;

• List down possible investors & VC for Start ups funding;

• FMEA analysis of various risks involved- Locational, Cost, RoI, Political, law &order, Social, structural, IT systems audit etc;

• To plan a Pilot launch program in a specific region/area;

• To plan and place a risk mitigation systems;

• To talk to various stakeholders like the Insurance providers, Fleet owners,IT/Non IT supplies vendor; listing of possible vendors, Legal attorneys,Administrative officers from various State & central govt agencies andprofessionals from Courier and Logistics companies;

Possible Risks:• Business Model being flawed;

• Risk analysis system being flawed;

• Fail to assess Qualitative & Quantitative risks in the entire business model;

• Failure to Incorporate the available data/information in the system or obtained during trial runs;

• Political Risks;

• Law & order problems;

• Social Risk- Consumer behavior to test various payment methods;

• Electricity supplies and other essential supplies;

• Lack of proper campaigns to create awareness amongst possible consumers and clients;

• Large Geographic spread outs for delivery system;

• Lack of good quality vendors for Fleet supplies, IT & Non-IT supplies;

• Higher rate of attrition amongst delivery boys and staffing issues;

• Cost escalations due to unscrupulous elements demanding ransom or booty;

• Too much reverse logistics costs because of refusal to accept ecommerce orders - from consumerends;

• Quality check issues arising from client ends and consumer ends- with regards to the product orservices being offered;

Key Objectives:• To create a network of delivery system across rural areas and

connecting them to the mainstream business centers;

• To create a robust delivery platform for rural areas to facilitatecourier services, propagating health/wellness for all, IT serviceoffering in terms of Café’s and IT skilling services;

• To create a niche mechanism to integrate the portfolio of servicesunder one roof by using latest technology and methods;

• To cater to larger possible geographical areas and to create analternate for the postal services;

• To create huge direct and Indirect employment possibilities byinvolving local population and further boosting the local economy;

• To utilize various govt and private platforms to usher into a bestbusiness solution for clients and consumers alike;

Key Investments:A. CAPEX COST:

• IT Infrastructure (INR 65 Lakhs) - Website, CRM, ERP, SAP, App Based System, WMS & Inventory Management software,Community Wifi Platform, BSNL Infra set up, Computers, Laptops, Servers, Backend Integration for CS Platform;

• Warehousing Set up costs for 4 Distribution hubs across Bihar: INR 60 Lakhs/Hub includes Security Systems, Fire ControlSystems, Electricals & Plumbing Systems, Special equipment’s like Forklifts, Cranes, Cargo Sorting Systems, RFID/BarcodingEquipment’s, GPS coding systems. It does not include the cost of Civil structure as it will be leased;

• Delivery Vans 10 Nos to start with- INR 50 Lakhs;

• 10-15 Delivery Bikes to start with- INR 9 Lakhs;

• 15 Movas Machine on a leased basis @ INR 15000/month/machine= INR 225000/month. If purchased then each machine costsINR 3.5 Lakhs/Machine i.e INR 52,50,000

• 15 Knee Care on a leased basis @ INR 12000/month/machine= INR 180000/month. If purchase then each machine costs INR100000/Machine i.e INR 15,00,000

• Total CAPEX Cost shall be INR 4,32,50,000

B. OPERATIONAL COST:

• Salary & Wages;

• Fuel & Vehicle maintenance;

• IT & Non IT supplies;

• Vendor Payments;

• Miscellaneous/Other Payments-Rents/Leasing costs;

Key Revenue Targets from Sources:• Through Courier Pick ups & Deliveries- approx. 10%;

• Through E-commerce pick ups & deliveries- approx. 30%;

• Through Internet café earnings- approx. 8-10% (Retail customers);

• Through Membership Programs for Café & Health Services- approx.30-32%;

• Through the Sale of Time Slot’s on the community wifi broadcastplatform- approx. 20%;

• Additional revenue sources will be through promotional campaigns atcenters/Ad sponsorship earnings & product promotion schemes;

Key Processes:• To create a network of digital platform to usher the best solution for

clients/customers- Complete Process Automation;

• Creating a network of Village level Franchisee points and connectingeach center through the digital Platform;

• Creating a strong team of Delivery personnel for Last Mile and FirstMile;

• Mapping the entire geography for MILKRUN purposes & GPS basednavigation system for tracking purposes;

• To ensure that every process is mapped and accountability fixed atevery stage of activity;

• To ensure that the manpower hired is trained enough to understandthe system and ensure the best customer support services;

• Develop a strong customer support team with the best serviceexperience using the best technology (In-house) not out outsourced;

Contact Us:• Name: Mr. Ravi Shekhar Jha

• Email ID: intelconsul@gmail.com

• Mobile No: +91-9999005379

• Blog: www.sjeximservices.wordpress.com

• Web: www.facebook.com/sjeximservices

• Twitter: @jhasravi

• Alternate Email: jha.sravi@gmail.com & jha.sravi@hotmail.com

• Address: Kishangarh, Vasant Kunj, New Delhi- 110 070, India