Shivalik Bimetal Controls Ltd Management Discussions.


Global Review

According to International Monetary Fund (‘IMF), global growth is projected to decline from 3.6 percent in 2018 to 3.3 percent in 2019, before returning to 3.6 percent in 2020. Growth for 2018 was revised down by 0.1 percentage point relative to the October 2018 World Economic Outlook (WEO), reflecting weakness in the second half of the year, and the forecasts for 2019 and 2020 are now marked down by 0.4 percentage point and 0.1 percentage point, respectively. The current forecast envisages that global growth will level off in the first half of 2019 and firm up after that.

After strong growth in 2017 and early 2018, global economic activity slowed notably in the second half of last year, reflecting a confluence of factors affecting major economies. The economic environment for all major markets – in China, the U.S.A. and Europe – worsened significantly around the middle of the year. Chinas growth declined following a combination of needed regulatory tightening to rein in shadow banking and an increase in trade tensions with the United States. The euro area economy lost more momentum than expected as consumer and business confidence weakened and automobiles car production in Germany was disrupted by the introduction of new emission standards; investment dropped in Italy as sovereign spreads widened; and external demand, especially from emerging Asia, softened. Elsewhere, natural disasters hurt activity in Japan. Trade tensions increasingly took a toll on business confidence and, so, financial market sentiment aggravated, with financial conditions tightening for vulnerable emerging markets in the spring of 2018 and then in advanced economies later in the year, weighing on global demand.

Indian Economy

The Indian economy started the fiscal year 2018–19 with a healthy 8.2 percent growth in the first quarter on the back of domestic elasticity. Growth eased to 7.3 percent in the subsequent quarter due to rising global volatility, largely from financial volatility, normalized monetary policy in advanced economies, externalities from trade disputes, and investment rerouting. Further, the Indian rupee suffered because of the crude price shock, and conditions aggravated as recovery in some advanced economies caused faster investment outflows.

Real GDP growth of India is 6.8% in FY 2018-19 as compared to 7.7% in FY 2017-18. Further, due to subdued consumer demand, the countrys economic growth rate slowed down to 5.8 percent during the fourth quarter of FY 2018-19. According to the Central Statistics Office (CSO), on a year-on-year (YoY) basis, the GDP growth of 5.8 per cent in the fourth quarter ended March19 was way lower than the 8.1 per cent expansion witnessed during the same quarter of the previous year. In 2017, India had emerged as the sixth largest economy whereas with $2.7 trillion GDP in 2018, India has become the seventh largest economy, slipped one place down largely due to the currency fluctuation and growth slowdown. The Reserve Bank of India shifted its focus from inflationary concerns to sustaining the growth momentum. Despite softer growth, the Indian economy remains one of the fastest growing after China and possibly the least affected by global turmoil. In fact, the effects of the aforementioned external shocks were contained in part by Indias strong macroeconomic fundamentals and policy changes (including amendments to the policy/code related to insolvency and bankruptcy, bank recapitalization, and foreign direct investment).


The Companys growth is primarily interlinked with the Electrical, Electronics and Automotive Industries. The Growth of the electronic products industry has driven the expansion of the electronic component industry as well. The electronic components segment is expected to see bright days in near future and exports are expected to grow as the government has increased the export incentives for this industry. Also, the recent rise in the custom duties on energy meters, electronic products etc. will push up the demand for the components used in these products and thereby will increase the domestic production. The emerging high growth areas for domestic manufacturing are automotive components, electric vehicles and smart meters.


"Shivalik" is engaged in the business of manufacturing & sales of Thermostatic Bimetal / Trimetal strips, Components, Spring Rolled Stainless Steels, EB welded products with multigauge, Cold Bonded Bimetal Strips and Parts etc. "The Company" has specialized in joining of materials through various methods such as Diffusion Bonding/ Cladding, Electron Beam Welding, Solder Reflow and Resistance Welding etc., and offers precision manufactured components specific to the application requirements and a single vendor to many prestigious OEMs since 1986 and have successfully met the most stringent of demands set by multiple large global organizations. The application of "Shivalik"s Products are mainly in Switchgears, Circuit Breakers and various other Electrical and Electronic Devices. The Companys products are exported to over 40 countries around the world.

Our vision for our business is "To earn our clients trust and maximize the value of their business by providing solutions using our knowledge and technology." We seek to emphasize on our core values of being passionate about our clients success, treating each person with respect, being global and responsible, and maintaining unyielding integrity in everything we do.


Standalone financial performance is as under:

Equity Share Capital: The Equity Share Capital of the Company as on 31st March, 2019 stood at र 768.06 Lakhs.

There was no fresh issue of capital during the year.

Turnover: The Companys sales and other income has increased from र 16,201.64 Lakhs to र 19,877.81 Lakhs, an increase of 22.69% over the previous year.

Net Profit: Net profit available for appropriation for the year 2018-19 stood at र 2,305.14 Lakhs as compared to र 1,599.04 Lakhs in the previous year.

Earnings Per Share (EPS): The Companys Earnings Per Share during the current year is र 6.00 as compared to र 4.16 in the previous year.

Net Worth:

Particular FY 2018-19 FY 2017-18 CHANGE CHANGE %
Net Worth 10,554.12 8,526.76 2,027.36 24

Net Worth has increased by 24 % from र 8526.76 Lakhs in FY 2017-18 to र 10554.12 Lakhs in FY 2018-19. The book value per share has increased to र 27.48 in FY 2018-19 from र 22.20 in FY 2017-18.


The future outlook is optimistic, despite of the slow-down in the first quarter of FY 2019-20.

The outlook for SHIVALIKs business (in long term) is positive based on the following developments in regulatory framework in India:

Electric Vehicle Market/Fame India Phase-II Programme: In March 2019, the Indian government announced the second phase of FAME – II, which envisages setting up of about 2700 charging stations across the country. The government has announced an outlay of र10,000 crore for FAME 2 to boost the number of electric vehicles in India. र1,000 crore has been earmarked for setting up charging stations for electric vehicles in India. The government will offer the incentives for electric buses, three-wheelers and four-wheelers to be used for commercial purposes. FAME 2 will offer incentives to manufacturers, who invest in developing electric vehicles and its components, including lithium-ion batteries and electric motors.

Considering the government reforms and changing policies will create conducive business environment, the Company is quite hopeful with the opportunities available and constantly working towards developing the integral components for Smart Meters and Electric Vehicles (Both two wheelers and four wheelers) Projects in a phased manner. We are expecting the aforementioned activities to enhance our revenues/profit in the future.

Opportunities & Threats


• Increase in urbanization, rising net disposable income, rise in nuclear families is positively impacting the demand.

• Improvement in Electrification through government initiatives such as ‘Saubhagya Scheme and ‘Deendayal Upadhyaya Gram Jyoti Yojana (DDUGJY) are driving demand for electrical products in semi-urban and rural territories.

• Rise in affordable housing projects of the Govt. such as "Housing for All" and the "Pradhan Mantri Awas Yojana" offers potential to generate demand for electrical products.

• Governments plan to convert traditional meters into smart meters and Replacement and retrofitting programmes.


• Competition

• Change of technology

• Any unfavorable change in Govt. Policies may affect export competitiveness

• Market volatility

Risks & Concerns

Risk Management Policy has been adopted by the Board to review and mitigate risks relevant to environmental, operational and business risks to safeguard its interest. It ensures sustainable growth by implementing a proactive approach in reporting, evaluating and controlling/resolving risks associated with the business of the company. In order to achieve this, the policy establishes a structured and disciplined approach to Risk Management, including the development of the risk areas, so as to guide decisions on risk related issues.

The Company has internal audit systems which assesses the effectiveness of internal controls, risk identification and mitigation processes prevailing in the company. Audit Committee of the Board of Directors also reviews the internal audit reports and takes appropriate actions w.r.t. deviations, if any.

The various heads of operations have regular interactions and communications to keep themselves abreast with the developments in the market, products, competition and other relevant areas.

Internal Control System and their Adequacy

SHIVALIK has an adequate system of internal controls in place which has been designed to provide a reasonable assurance with regard to maintenance of proper accounting controls, monitoring of operations, protecting assets from unauthorized use or losses, compliance with regulations and for ensuring reliability of financial reporting. Company has documented procedures covering all financial and operating functions.

Company has robust internal audit programme, where the Internal Auditors, an independent firm of chartered accountants, conduct a risk-based audit with a view to not only test adherence to laid down policies and procedures but also to suggest improvements in processes and systems. Internal audit observations and recommendations are reported to the Audit Committee, which monitors the implementation of such recommendations.

Occupational Health & Safety

SHIVALIK gives great importance to all the matters related to Health, Safety and Environment and ensures compliances of all statutory regulations. Training of employees on emergency response, firefighting, rescue and first aid are some of the regular features at manufacturing sites.

Occupational Health & Safety is an area concerned with protecting the safety, health and welfare of employees engaged in the company. The goals of occupational safety and health programs include to foster a safe and healthy work environment. Occupational Health & Safety has been recognized as an integral and key part of the Companys Business Process. The management believes that people working with the organization are of key resource for the success of the Organization. The sincere efforts put in by the employees have translated in to Quality improvements, Productivity improvements and Cost reduction etc. Management firmly believes in developing and nurturing its human resources and improving their talents which subsequently help in the growth of the Company. Proper care is taken for safety, health and welfare of the employees. The Company ensured employee safety through investments in pollution mitigating equipment, the selection of safe processes, adequate safety training and provision of safety equipment. Our aim is to remove unsafe situations and practices by any/all pre-emptive steps required. For the safe return of the employees to their homes all precautions are taken to avoid accidents.

Human Resource and Industrial Relations

The organization maintains harmonious relations at all levels within the Company and employees are well motivated round the year to meet the goals set for them. Your Directors wish to place on record the deep sense of appreciation for the contributions made by the employees.

Your Company is continuously striving to create appropriate environment, opportunities and systems to facilitate identification, development, and utilization of their full potential and inculcating a sense of belongingness.

Your Companys industrial relations continued to be harmonious during the year under review.

Cautionary Statement

Statements in the "Management Discussion and Analysis" describing the Companys objectives, projections, estimates and expectations or predictions may be forward looking statement within the meaning of applicable securities laws and regulations. Actual results could differ substantially and materially from those expressed or implied. Important factors that could make a difference to the Companys operations include economic conditions effecting demand/supply and price conditions in the domestic and overseas markets in which the company operates, currency (forex) fluctuations, changes in government regulations, tax laws and other statutes and other incidental factors.