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FUSION FITTINGS (INDIA) LIMITED
ANNUAL REPORT 2011-2012
MANAGEMENT DISCUSSION AND ANALYSIS
1) Industry Structure and Development:
After two successive years of fairly robust growth of 8.4 per cent, GDP is
estimated to decelerate sharply to 6.9 per cent during 2011-12, with a
marked slowdown in agriculture, mining and quarrying, manufacturing and
construction sectors. Global uncertainties and domestic cyclical and
structural factors resulted in growth slowing down considerably to the
estimated level of 6.9 per cent during 2011-12. All three major sectors of
the economy - agriculture, industry and services - slowed down. Despite the
sluggish global and Indian economic development the engineering industry is
on high growth path.
Engineering industry forms the backbone of any economy as it is intensely
linked with many other core sectors. It is true the case with the Indian
engineering sector also. In the engineering field India has achieved a
markable landmark. Design engineering is vital for application of
engineering knowledge in industry or for the advancement of well being of
mankind. Without design engineering the advancement of engineering
knowledge can not be put in use for satisfying human needs. Engineering
industry is the largest segment of the Indian industry. Engineering goods
account for 30.5 per cent of the share in index of industrial production
(IIP), 29.9 per cent of share in total investment and 62.8 per cent of
share in foreign collaborations. The sector is also the largest foreign
exchange earner for the country. Going by the data compiled by the
Engineering Export Promotion Council (EEPC), the apex body of engineering
exporters, engineering exports increased by 17 per cent to US$ 58.2 billion
during 2011-12, as against US$ 49.7 billion in the previous fiscal. The
Ministry of Commerce has formulated a strategy paper targeting engineering
exports at US$ 125 billion by 2013-14.
2) Opportunities and Threats:
The Indian economy has a long way to go, so that it can pose true challenge
to the developed countries. For supporting sustainable and high growth of
Indian economy the infrastructure development will remain core concern for
the government of India and it will be main thrust of the policymaker of
the Country too. Large investment in infrastructure sector, which is
expected, will boost the demand of Design engineering about which the
Company is optimistic. However, increase in inflation sluggish global and
Indian economic growth associated with the increase in cost especially the
cost of technical personnel required to carry on design engineering
activities and competitive market may act as major threats which may have
adverse bearing on industry.
3) Outlook:
In order to achieve high GDP growth rate, large amount of investments are
expected to be made in diverse sectors of Indian economy. The prospect of
the Company to a large extent is dependent on the macro economic
determinants of the Indian industry. The Company caters to the design
engineering needs of engineering and project execution companies. The work
of the Company is dependent on the orders received from these companies. It
is expected that the Government of India will take some bold steps to
stimulate the rate of economic development of the country. It is expected
that in the years to come the company will be able to fetch more work from
the companies using the design engineering services of the Company
consequently the Company.
4) Segment wise or Product wise performance:
Fusion Fittings (I) Limited is a technology led Company, specialized in
process design engineering for various process plants and is primarily
engaged in design engineering for electricity tower, electricity lines and
related works. The Company largely deals with two groups of services one
for erection of electricity towers and another for laying of electricity
lines. The development of the Company primarily hinges on the growth plan
of its user industries.
The global industrial sluggish performance since last three years affected
adversely the Indian industrial performance and engineering industry.
Consequently, the demand of the services offered by the Company has reduced
materially. The total income of the Company in the Financial Year ended
March 31, 2012 is Rs. 278.12 lac and Profit after tax is Rs. 237.39 lac as
against total income of Rs. 401.60 lac and Profit after tax of Rs. 330.66
lac in the previous year ended March 31, 2011.
5) Risks and Concerns:
Design engineering is the main business activity of the company which
constituted major part of operating income of the Company during the year
under review and it is expected that this trend will continue in the years
to come. Your Company expects recovery of industrial growth of the country
which will provide momentum to the demand of the engineering design
services offered by the Company. The Company caters to the design
engineering needs of engineering and project execution companies. The work
of the Company is dependent on the orders received from these companies.
The Company offers quality services of industrial design for structures and
equipment for user industries in the power, steel, cement and other
sectors. The performance of the Company is exposed to the uncertainties
prevailing in these user industries. Further, the clientele of the Company
is limited therefore the profitability of the Company is exposed to risk to
some extent. In addition the micro and macro determinants of economy pose
risk to the business of the Company.
6) Internal control systems and their adequacy:
The Company has effective internal control systems and all the monetary
transactions are carried on strictly in accordance with the internal
control procedure. The management of the Company had taken proper and
sufficient care for the maintenance of adequate accounting records in
accordance with sound accounting principles and standards for safeguarding
the interest and assets of the Company and for preventing and detecting
frauds and other irregularities.
7) Human Resource Development:
Your Company considers human resources as its most critical asset and is
putting in place various practices to ensure healthy work environment.
Industrial relations continued to be cordial and harmonious throughout the
year.
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FUSION FITTINGS (INDIA) LIMITED
ANNUAL REPORT 2010-2011
MANAGEMENT DISCUSSION AND ANALYSIS
1. Industry Structure, Development & Outlook:
The Indian economy continued to outperform most emerging markets during
2010-11 retaining its position as the second fastest growing economy,
after china, amongst the G-20 countries. GDP growth of India in 2010-11
was 8.5 per cent which was majorly driven by the inherent strength of
domestic demand in the country, stimulus packages offered by the
Government and the monetary policies of the Reserve Bank of India. However,
the high degree of integration with the global economy, recent global
macroeconomic developments pose some risks to domestic growth.
According to World Economic Outlook April 2011 published by the
International Monetary Fund, world real GDP growth is forecast to be about
4% percent in 2011 and 2012, down modestly from 5 percent in 2010. Real
GDP in advanced economies and emerging and developing economies is
expected to expand by about 2% percent and 6% percent, respectively in the
year 2011.
According to India Brand Equity Foundation (IBEF), India is emerging as an
eminent design and engineering destination with numerous firms
establishing their centers besides offshoring design tasks to India.
According to a study conducted by National Association of Software and
Service companies (NASScOM) and Booz & company (a strategy and technology
consulting firm), India has the potential to capture US$ 40-45 billion in
engineering R&D services by 2020.
2. Opportunities and Threats:
Design engineering is the main business activity of the company which
constitutes major part of operating income of the company during the year
under review and it is expect that this trend will continue in the years
to come. Your company expects sustainable industrial growth in the country
across several sectors. However, the increase in cost especially the cost
of technical personnel required to carry on design engineering activities
and competitive market may act as major threats which may have adverse
bearing on performance of the company. Further, the clientele of the
company is limited therefore the profitability of the company is exposed
to greater degree of risk.
3. Segment wise or Product wise performance:
Fusion Fittings (I) Limited is a technology led company, specialized in
process design engineering for various process plants and is primarily
engaged in design engineering for electricity tower erection, electricity
lines laying and related works and to some extent trading in securities .
The company largely deals with two groups of services one for erection of
electricity tower and another for laying of electricity lines. The
development of the company primarily hinges on the growth plan of its user
industries.
During the period under report, the company has shown remarkable
performance in comparison to the previous year. The total income in the
Financial Year ended March 31, 2011 is Rs. 401.60 lac and Profit after tax
is Rs. 330.66 lac as against total income of Rs. 181.99 lac and Profit
after tax of Rs. 83.74 lac in the previous year ended March 31, 2010.
4. Risks and Concern:
The company caters the design engineering needs of engineering and project
execution companies. The work of the company is dependent on the order
received from these companies. The company offers quality services of
industrial design for structures and equipments for user industries in the
power, steel, cement and other sectors. The performance of the company is
exposed to the uncertainties prevailed in these user industries. Further,
the micro and macro determinants of economy pose risk to the business of
the company.
5. Internal control systems and their adequacy:
The company has effective internal control systems and all the monetary
transactions are carried on strictly in accordance with the internal
control procedure. The management of the company had taken proper and
sufficient care for the maintenance of adequate accounting records in
accordance with sound accounting principles and standards for safeguarding
the interest and assets of the company and for preventing and detecting
frauds and other irregularities.
6. Human Resource Development:
Your company considers human resources as its most critical asset and is
putting in place various practices to ensure healthy work environment.
Industrial relations continued to be cordial and harmonious throughout the
year. During the financial year 2010-11 the company had employed twelve
employees.
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FUSION FITTINGS (INDIA) LIMITED
ANNUAL REPORT 2009-2010
MANAGEMENT DISCUSSION AND ANALYSIS
OPERATIONS:
The Company did not undertake any manufacturing activity during the year.
Income inter-alia includes revenue earned from design engineering services
rendered by the Company during the year.
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