Fluidomat Ltd Management Discussions.

A. Economic Scenario and Outlook:

The FY 2019-20 was a challenging business year. The business environment during the year was competitive in the first half year and the year ended with COVID-19 pandemic resulted in lockdowns.

As a result of Pandemic the Global and Indian Economy are in uncertainty phase. The financial year 2020-21 will have adverse effect on economy and any quantitative prediction on financial and economic scenario will not lead to any useful conclusion. However, various economic package and reliefs are being announced by GOI, RBI, and other government bodies to spur growth and to build a "ATMNIRBHAR BHARAT " The mission to be achieved by meeting global demands by usage of local manufacturing, local market and local supply chains.

The government slashed the corporate tax rate to 22% from 25% to promote investment; it announced a new tax rate of 15% for new domestic manufacturing companies, providing a boost to the Make-in-India initiative.

The Company continues activity of R&D and innovation. Routine activities of product and process improvement continues. A new series of scoop control couplings has been introduced which have major application in high speed pumps and fans. A new test facility is being setup to for high speed testing of couplings.

Due to restrictions on travelling in pandemic situation physical inspection of their product is not possible by the buyers. Fluidomat therefore implemented ON-LINE inspection and successfully carried out several inspections by various agencies including NTPC, Thyssen Krupp etc.

As at present Fluidomat has pending order to suffice for next one year production.

The Atmnirbhar Bharat mission and continued implementation of infrastructure projects the Company expects to get regular business.

Fluidomat serves to a wide spectrum of industries including power plants, Steel Metal Cement, Coal and Ore Mining and Fertilizer & Chemical industries and Port trust with advantage of business opportunity with growth of any of these sectors. At the same time with wide population of their couplings the spares business will be generated.

Your Company with accreditation of ISO:9001-2015, ISO:14001-2015 & OHSAS:18001-2007 and with indigenous technology is in strong position to earn business from these industrial sectors in domestic and international front.

All the labour and staff of Fluidomat are local residents of Dewas, Indore and Ujjain. Therefore we did not face problem of non-availability of labour.

B. Industry structure and developments:

Your Company deals only in the one segment i.e. manufacturing and sale of the hi-tech products "Fluid Couplings" which are mainly used in various sector of industries including Thermal Power Plants, Steel, Metal, Cement, Paper, Chemical, Fertilizers, Coal and Ore-mining and Port handling facilities, etc. New projects in these sectors have important contribution towards growth and profitability of the Company.

C. Quality Management System:

The company continued to be certified under ISO:9001:2015 by British Standard Institution –BSI Management system for the Companys quality system. The Quality Management System in the Company is well defined and is well in place.

D. Internal Control System:

The Company has adequate internal control systems and procedures in place for effective and smooth conduct of business and to meet exigencies of operation and growth.The transactions are recorded and reported in conformity with generally accepted accounting practices. The internal control systems and procedures ensure reliability of financial reporting, compliance with the

Companys policies and practices, governmental regulations and statutes. Internal Audit is conducted by independent firm of auditors. Internal Auditors regularly check the adequacy of the system, their observations are reviewed by the management and remedial measures, as necessary, are taken. Internal Auditors report directly to the Chairman of the Audit Committee to maintain its objectivity and independence.

E. Opportunities and Threats:

Since your company is catering the needs of almost all sectors of Industries, therefore it has a good businesscushion against recession in one or other sector as the other sector may improve concurrently.

The Indian Government focus on infrastructure growth will offer more opportunities to capital goods sector.

The COVID-19 pandemic has disrupted demand and supply chains across industries, negatively impacting the business of companies and driving the global economy towards a recession. Governments in several countries have imposed stringent lockdown in a bid to contain the spread of the disease.

The Banking system in the domestic market is facing an unprecedented situation of uncertainty and economic challenge due to non- performing assets (NPAs). Though the Government and the central Bank are seized of the gravity of the situation and are moving ahead with initiative to contain and resolve the problem, global macro-economic factors, beyond the control of the domestic economy can disrupt the equilibrium. In such a scenario the entire capital goods sector itself will face difficulties due to lack of new projects and liquidity crisis.

Apart from the normal risk demand-supply conditions, raw material prices, competitor strategies, changes in government regulations, tax regimes, economic developments within the country and globally no major risks are foreseen.

F. Human Resources:

We are committed to providing our employees with a workenvironment that is based on fairness, openness and mutual respect. Our on-ground work force and our employees together are the key to successes of our Company.

The Company emphasizes on the highest level of professional ethics, personal decorum, adherence to deadliness, compliance to standards and customer service.

The Company continues with its dedicated efforts to identify talent and has been recognized for its exemplary people-related parties in the Industry.

G. Health, Safety and environment measures:

Company is committed to meet the highest international standards of health, safety and environmental performance. It continues to accord highest priority to conducting safe operations while being responsible towards the environment and ecology. The Company focused on safe operations in line with its commitments to improve its health, safety and environment performance. As a part of our drive to standardize our health, safety & environment management, company has certified under occupational health & safety management system (OHSAS 18001: 2007) for the manufacture of Fluid Couplings and Flexible Couplings and environment management system (ISO 14001: 2015) by BSI.

Internal and external safety audits and inspections were carried out regularly. Emergency management plans have been developed to deal with any emergency within the factory premises.

H. Segment Reporting & Finance performance of the Product:

Company has only one segment i.e. manufacturing of fluid couplings and the financial performance of the product is being incorporated in the Directors Report section.

I. Cautionary statement:

Statement made in the management discussion and analysis report as regards the expectations or predictions are forward looking statements within the meaning of applicable laws and Regulations. Actual performance may deviate from the explicit or implicit expectations.

J. Details of Significant Changes in Key Financial Ratios

Key Ratio 2019-20 2018-19 Variation in % Comments for Variation in ratio above 25%
Debtors Turnover Ratio 3.20 2.60 23% -
Inventory Turnover Ratio 3.32 4.19 20.69% -
Interest Coverage Ratio 0.00 0.00 0.00 -
Current Ratio 2.77 3.18 12.89% -
Debt Equity Ratio 0.00 0.00 0.00 -
Operating Profit Margin (%) 16.80% 12.38% 35.70% Recovery & less provision of bad debts and increase of other income.
Net Profit Margin (%) 11.73% 8.87% 32.24% Recovery & less provision of bad debts and increase of other income.
Return on networth (Any Change) 9.12% 7.35% 24.08% Recovery & less provision of bad debts and increase of other income.

K. Compliance with Indian Accounting Standards

In the preparation of the financial statements, the Company has followed the Indian Accounting Standards as notified. The significant accounting policies which are consistently applied have been set out in the Notes to the Financial Statements.


Companys Industrial relations continued to be healthy, cordial and harmonious during the period under review.


Your Directors state that during the year under review: a. The Company has not issued shares (including sweat equity shares) to employees of the Company under any scheme. b. Neither the Managing Director nor the Whole-time Directors receive any remuneration or commission from its subsidiary. c. The Company has complied with the applicable Secretarial Standards under the Companies Act, 2013.


Your directors place on record their appreciation of the continued support extended during the year by the companys customers, business associates, suppliers,bankers, investorsand Government authorities. They also place on record their appreciation of the dedication and contributions made by all the employees for their commitment, hard work and support.

Your directors would also like to thank all their shareholders for their continued faith in the company and expect the same in future.

For and on behalf of the Board
Place: Indore Ashok Jain
Date 28thAugust, 2020 Chairman & Managing Director
DIN 00007813