Schablona India Ltd Merged Management Discussions

Operating results for the period, have been discussed in the Directors Report. A further overview of Companys business by t he management with a discussion on the Companys areas of strength and weakness, the opportunities that are available and the threats and concerns that are being experienced are given below.

Industry Structure & Development

Since last few years, growth in Construction Industry is muted. As a result, demand for Decorated Tiles is sluggish. Although the digitally printed basic tiles with improved technology is continuously affecting the third fired Decorated Tiles business; however, the very existence of third fired Decorated Tiles cannot be questioned because of its unique product positioning and range of products in terms of look, finish and application of precious metals etc. We remain hopeful of growth in the years to come where demand for decorated tiles business would resurrect.

Decal manufacturing industry is passing through changing scenario. In recent few years wherein small manufacturers of Decals have backward integrated their capacity by installing superior plants and Tableware manufacturer have set up their own Captive Plant, resulting into increase in competitive intensity.

Risk Factors and its Mitigations

• Competition with Digitally Printing Tiles: Designer Tiles being a Fashion Product is facing a huge competition from the Digital Printing on Basic Tiles. Precision in manufacturing attributes in terms of look, finish and application of precious metals give an edge to decorated tiles over the digitally printed basic tiles.

• Rising Cost of Inputs, Energy & Transportation: All the three factors have a major bearing on the profitability; Company is taking effective steps towards improvements in Efficiency, Cost cutting and price adjustments wherever possible.

Internal Control Systems

Regular audit of systems & accounts of the Company is carried out by the Internal Auditor and it is ensured that Internal Control Systems are adequate and reliable and there is proper compliance of all regulations & obligations.

Human Resources & Industrial Relations

The Company continues to have cordial relations with its staff & workers. Industrial relations during the year continued to be cordial.