MANAGEMENT DISCUSSION AND ANALYSIS REPORT Forming part of the Board Report A) Industry Structure and Development The Glass-lining Industry is engaged in manufacturing of specialized Glass lined equipments used for reactions of corrosive chemicals by the Pharmaceuticals, Agro-based and other Chemical Industries. The core element of the Glass line Industry lies in the technology for manufacturing of glass frit and its applications. The emergence of SWISS GLASCOAT EQUIPMENTS LIMITED is a consequence of the exploitation of the Indian consumers by the Multinational Companies for Glass-lined Equipments. Swiss Glascoat Equipments Ltd. is engaged in the manufacture and sale of glass lined equipments and spares in India and abroad. The objective of the Company is to ensure a corrosion-free techno sphere under the sun. In a very short span of time, your Company, embarked upon the technological drive to synthesize the best of engineering practices and technological advancements to come up with superior quality solutions in glass-lined products and services, has emerged as a front-runner of domestic glass lining fraternity by catering to industries as diverse from dyes to pigments; from pharmaceutical to food processing; from chemicals to pesticides; from intermediates to resins or any other conceivable corrosion-prone areas in chemical processing industry. By consolidating quality performance, engineering design, service and much more, Swiss Glascoat Equipments Limited has established itself as an One-Point-Solution-Provider for glass-lined products of any type, size, output plus a complete range of accessories. Today, thanks to the support of its customers, GLASCOAT is ahead of the curve in terms of technology, processes and people. B ) Opportunities & Threats Your Company always tries to find the opportunities in the Glass-lining Industry through its strength, technology edge and management expertise. These opportunities are linked directly to the growing demand from the customers. Almost all the Indian glass-lined equipment end users have used and are satisfied with the Company's products. Now, the Company has intensified marketing efforts and service network to strengthen its global brsence and it has received tremendous positive response. The threats for your Company are mostly associated with rising inflation and unavailability of adequate skilled manpower, continuous increase in electricity/fuel cost, cost of wages and salaries and cost of credit. Your Company is optimistic to tide over the problems and fulfill the profit expectations of the members. C) Outlooks, Risks & Concerns India's economy gained momentum in FY 2015 and is expected to have grown at the fastest pace in five years. Robust urban consumption and public investment have supported growth despite an unfavorable external environment. Recent data point to a soft start to FY 2016: both the manufacturing and services PMIs moderated in April. India continues to remain a bright spot in the otherwise bleak global economic forecast of the International Monetary Fund (IMF). India's growth will continue to be driven by private consumption, which has benefited from lower energy prices and higher real incomes, IMF said, adding that "With the revival of sentiment and pickup in industrial activity, a recovery of private investment is expected to further strengthen growth." India will be the fastest growing major economy in 2016-17 growing at 7.5%, ahead of China, at a time when global growth is facing increasing downside risks, as per the World Economic outlook released by the IMF. India expects to grow in a wide range of 7-7.75% in 201 6-17 as against a projected 7.6% growth in 2015-16. IMF, however, flagged the slowing trade growth as one of the risk factors to growth. The Indian pharmaceuticals market is the third largest in terms of volume and thirteenth largest in terms of value, as per a report by Equity Master. Branded generics dominate the pharmaceuticals market, constituting nearly 70 to 80 per cent of the market. India enjoys an important position in the global pharmaceuticals sector. The country also has a large pool of scientists and engineers who have the potential to steer the industry ahead to an even higher level. The pharmaceutical industry is expected to register muted export revenue growth and stable domestic revenue increase in 2016-17, a report said. The overall pharmaceutical exports are expected to grow at about 5 per cent, while domestic pharma market is likely to grow at 8-10 per cent in the next fiscal. India Ratings has revised the pharmaceutical sector outlook for 2016-17 to 'Stable' from 'Positive', expecting moderation in the sector's growth momentum next fiscal. Overall, looking at the positive growth of the Indian economy and the Indian Pharmaceutical industry, your Company has and does expect good number of order bookings, local and foreign, in hand in coming year ahead. Doubling of the Clean Environment Cess on coking coal per tonne is expected to hit steel and cement companies hard and weigh heavily on consumers, particularly when the Government is focusing on sprucing up infrastructure and pushing investors to 'Make in India'. However, the growth in the Indian steel sector has been driven by domestic availability of raw materials such as iron ore and cost-effective labour. Hence, at this point of time, we expect prices would either would remain stagnant or go up marginally provided the gap between the demand supply has lessened. Further, due to cost management, operational efficiency and aggressive marketing policy, the Company continues to maintain its positive stance. Your Company believes in firm and steady growth and is continuously heading towards that direction. D ) Internal Control Systems and their adequacy The Company's Management has adequate internal control procedures over financial reporting. To further strengthen the internal control systems, an external agency has also been appointed as the internal auditor of the Company, apart from appointment of the statutory auditors. The CEO and CFO Certification provided in this Annual Report discusses the adequacy of our internal control systems and procedures. E) Financial performance vis-d-vis Operational performance As derived from the financial statements viz Balance sheet/ Profit & Loss account/ Cash flow statements for FY 2015-16, your Company believes in constant efforts to perform well on operational front along with making its financial condition strong. Your Company believes in utilizing internal funds instead of depending heavily on external borrowings in case of any requirement of the same. The management of your Company also believes in steady growth and utilize the financial resources accordingly. Operating profit before working capital for FY 2015-16 is INR 118643768 and for FY 2014-15 was INR 110203114. Cash generated from operations for FY 2015-16 is INR 112129737 and for FY 2014-15 was INR 73763861. F) Material Developments on Human Resources/ industrial relations, including number of people employed We have been having excellent co-operation and support from the entire hierarchy of personnel, resulting in an improvement in productivity and overall growth of the Company even in rough economic conditions during the fiscal year 2015-16. Our staff and workers are the most important assets. Glascoat family comprises of shareholders, management, staff, workers, suppliers, agents, customers and other stakeholders who are directly or indirectly associated with it. The personnel of your Company are efficient and committed to provide best of them for growth of the Company. During recruitment for any vacant position, your Company banks on talent and experience of its personnel and provides them opportunity to go for bigger role in the organisation. The Company believes in focusing on development of its existing staff and workers; and provides constant training to them so as to make them ready to uplift themselves for better positions in the Company itself. The training is provided internally and even training programmes are organized by inviting external faculty. Our continuous training programmes have emphasis not only on increasing production of the Company but also on imbibing qualities of commitment and integrity in the attitude of the personnel. By the Order of the Board of Swiss Glascoat Equipments Limited Mr. Kanubhai Patel Chairperson Mr. Sudarshan Amin Managing Director Date : 21.06.2016 Place : Vitthal Udyognagar |