Skipper Ltd Management Discussions.

Global growth strengthened to 3.8% in 2017, with much of this incremental growth coming from more than half of the worlds economies.

Global Economic Review

The global upswing in economic activity is strengthening. Global growth, which in 2016 was the weakest since the global financial crisis at 2.4%, strengthened to 3.8% in 2017 and is projected to rise to 3.9% in 2018, as per the International Monetary Fund (IMF).

With much of this incremental growth coming from more than half of the worlds economies, this globally inclusive cyclical recovery is a result of a secular rebound in investment, manufacturing activity, and trade. In particular, the recovery in global investment growth was supported by historically low financing costs, rising profits, and improved business sentiments.

These factors had a universal impact, enhancing advanced economies, emerging markets, and developing economies.

India will continue to be the fastest growing large economy in the world. While the growth in China and other parts of emerging Asia remains strong, the still-difficult conditions faced by several commodity exporters in Latin America, the Commonwealth of Independent States and the sub-Saharan Africa show some signs of improvement. In advanced economies, the notable 2017 pick-up in growth is broadly based, with stronger activity in the United States, Canada, the Euro area, and Japan.

While speaking at a session on the global economic outlook at the World Economic Forum (WEF), IMF Chief Christine Lagarde stated that the global economy is in a sweet spot with all major economies doing well, expecting around 120 countries set to see strong growth in 2018. This positive outlook is supported by the sustained strong performance anticipated out of advanced economies, including USA, EU and Japan.

Additionally, US protectionism trade policy which imposed punitive duties on Chinese products has caused some disruption. This impact on Chinese exports could ripple through the supply chains that stretch across the region, depriving other economies of growth opportunities and jobs. The US-China trade war also gives Chinas close competition - India a window of opportunity to swiftly and seize the prospects. China has an increasingly widening trade gap with India. It is easier to export our surplus agriculture products to China than manufacturing products. As Indias impact has been minimal with this trade-off, it gives the country an opportunity to increase its trade exposure with the USA.

Global Economic Growth

Year World Advanced Economies Emerging and Developing Economies USA Euro Region China India (Fiscal Year)
2017 3.8 2.3 4.8 2.3 2.3 6.9 6.7
2018P 3.9 2.5 4.9 2.9 2.4 6.6 7.4
2019P 3.9 2.2 5.1 2.7 2.0 6.4 7.8

(Source: IMF, January 2018)

Indian Economy Overview

The Indian economy continues to be the flag-bearer for economic expansion in the global landscape. Affirmed by a rapid increase in economic activity across lower income groups, in addition to the underlying population growth, India is on track to becoming the worlds fifth largest economy by 2018, according to Centre for Economics and Business Research (CEBR, London). By 2020, the World Bank anticipates the Indian economy to overtake Germany, becoming the fourth largest behind the United States, China and Japan.

Indias overall economic growth resumed to 6.7% in FY2018. Indias economy grew at its fastest in seven quarters in Q4 FY2018, bolstered by strong performance in construction and manufacturing, showing a persistent revival trend. Indias growth is Economy is back on track and is set for a strong recovery after the period of disruptions sparked by demonetisation and GST implementation. With this performance, India retained its ranking as the worlds fastest-growing major economy, outpacing China by nearly a percentage point.

Indias economy temporarily decelerated in the first half of FY2018, as the rest of the world accelerated. This interim deceleration was primarily caused by the demonetisation measures implemented and the introduction of the Goods and Services Tax (GST). In the second half, the scenario improved meaningfully, and India jumped 30 spots on the World Banks Ease of Doing Business rankings. In addition, actions to liberalise the foreign direct investment (FDI) regime helped increase flows by 20%.

The Government has progressed well on its agenda for important economic reforms, which should support strong and sustainable growth going forward. In particular, the implementation of the GST, which has been in the making for over a decade, should help raise Indias medium-term growth, as it is likely to enhance the efficiency of production and movement of goods and services across Indian states. Furthermore, the long-festering "Twin Balance Sheet" problem was decisively addressed by sending the major stressed companies for resolution under the new Indian Bankruptcy Code, and implementing a major recapitalisation package to strengthen the public sector banks. As a result of these measures, along with the abating effects of earlier policy actions, the economy is set to progress on a sound fiscal foundation.

The IIP indices for manufacturing and industry rose at 4.4% rate over the year and have been significantly buoyant. The major rise in construction and manufacturing GVA in Q4 FY2018 has taken the growth potential of Indian economy to a new height. Indian steel industry can now look forward to a stable flow of orders from both manufacturing and construction segments. The gross fixed capital formation as a percentage of GDP has moved up to 29.1% in Q4 to lift the average share to 28.5%. It has reflected in maximum order flow to steel fabricators in the last quarter of the fiscal. Steel fabricators are now finding a sweet spot which would bring back stability in the demand pattern for steel.

Furthermore, in the Union Budget, FY2019, the government has laid strong impetus on Infrastructure Sector. It announced allocations for its ambitious projects Bharatmala (road-led) and Sagarmala (port-led). Bharatmala will aim at providing roadway connectivity and develop over 35,000 km in phase one at an estimated cost of about Rs 5.35 lakh crore. Higher allocation have also been announced in the Railways and Defence sector. The railways sector received a record Rs 1.48 trillion in Union Budget for capacity creation, including track doubling, gauge conversion and third and fourth line works and redevelopment of 600 railway stations.

Indias overall outlook remains positive, driven by several factors. Strong private consumption and services are expected to continue to support economic activity. Private investments are expected to revive as the corporate sector adjusts to the GST, which over the medium term is expected to boost economic activity and fiscal sustainability. Meanwhile, the steady global trade recovery is expected to encourage exports. In line with the positive economic development, the IMF has projected Indias growth at 7.4% for the next financial year FY2019.

World Banks Ease of Doing Business: Indias improved ranking in the List

2016 #131
2017 #130
2018 #100

Power Sector Overview

Power is one of the most critical components of infrastructure, crucial for the economic growth and welfare of a nation. The Indian power sector is undergoing a significant change that has redefined the industrys outlook. Sustained economic growth continues to drive the demand for electricity in India. The Indian governments focus on attaining ‘Power for all has accelerated capacity addition in the country. The demand for electricity in the country has increased rapidly and is expected to rise further in the years to come. In order to meet this increasing demand, massive additions to the installed generating capacity is required. The installed capacity as of 31st March, 2018 was 3,44,002 MW, which constituted 64.8% thermal power, 13.2% Hydro, 2% nuclear and 20.1% Renewable Energy Sources (Source: CEA). The electricity generation target of conventional sources for FY2018 has been fixed at 1,229.40 Billion Units (BU), a growth of around 5.97% over actual conventional generation of 1160.14 BU for the previous year.

Electrification of remote villages remains a priority on the agenda of the government. While significant progress has been made, there is a long way forward for the country. Indias per capita electricity consumption is lowest among the BRICS nations. It is also about 1/3rd the worlds average per capita electricity consumption and is just 10% of that of Australia, 7.5% of USA and 6.6% of Canada. The per capita consumption in UK also is more than five times that of India.

India per capita electricity consumption has been continuously increasing over the years. From 734 kWh in 2008-09, the per capita consumption has reached 1,122 kWh in 2016-17, an increase of 53% in nine years. The per capita consumption has been increasing at an average of 6% every year. The expansion in industrial activity, growing population and increasing penetration and per capita usage will drive demand for electricity.

Power Transmission Sector

Economic growth, fast paced urbanisation, and a rise in per capita consumption, coupled with electricity access to all, are some of the factors which contribute to the increase in the total demand for electricity in India. The Electricity sector in India is growing at rapid pace. During FY2018, the peak demand was reported at 164 GW while the installed capacity stood at 344 GW.

The growth of the power sector is subject to the development of a robust and a non-collapsible transmission network. While the Indian Power sector has seen a remarkable accretion in generation capacities, investments in T&D networks have lagged behind, causing network congestion and inefficiencies. Indias Power Transmission networks constitute the vital arteries of the entire power value chain. The requirement for large scale transmission is further accentuated by the scattered locations of load centres, often situated far away from generating stations located in resource-rich areas. Initial estimates from the 19th Electric Power Survey (EPS) for the annual peak load and load generation balance analysis indicate that massive transmission corridors need to be built in Northern and Southern regions for transferring power from other regions. Going forward, subdued investments in thermal generation capacities is expected, while capex in T&D networks is likely to gain pace as utilities upgrade and ramp-up the T&D infrastructure.

With the massive generation in capex witnessed over the past decade, Indias transmission capex is now catching up. An extensive network of transmission lines is being developed over the years for evacuating power produced by different electricity generating stations and distributing the same to the consumers. Depending upon the quantum of power and the distance involved, lines of appropriate voltages are laid. These have been installed by all the SEBs, and by Generation, Transmission & Distribution utilities including those in the Central Sector.

Over 23,119 circuit kilometres (ckm) of transmission lines have been commissioned during FY2018. Consequently, 86,193 MVA of transformation capacity of substations has been added during FY2018. The capacity of transmission system of 220 kV and above voltage levels, as on May, 2018, stood at 3,93,076 ckm of transmission lines and 8,34,878 MVA of transformation capacity of Substations. The total transmission capacity of the inter-regional links stood at 86,450 MW as on March, 2018. The annual target of 22,647 ckm of transmission lines has been fixed for FY2019.

Taking the total transmission requirements into consideration, it is estimated that 100,000 ckm of transmission lines and 200,000 MVA of transformation capacity of the substations at 220kV and above voltage levels is expected to be added during 13th Plan period.

Based on the capacity addition required for the inter-state (ISTS) and intra-state transmission systems, a capex of Rs 2.6 trillion is estimated over the 13th Plan. Out of the Rs 2.6 trillion transmission capex envisaged during the 13th Plan, PGCIL is expected to contribute Rs 1,00,000 crore and balance Rs 1,60,000 crore is estimated to be contributed by SEBs/Discoms and private players. This reflects a clear shift of capex from PGCIL to SEBs, indicating increased opportunities from states.

Additionally, regional power supply imbalance has resulted into PGCIL and SEBs to invest in inter regional corridor. As per draft NEP total of 1,05,580 ckm of transmission is planned from FY17-22, of which 69% of lines are in in 400kV and 765kV. This will further benefit bigger organised players such as Skipper Limited to garner larger share of incremental orders.

According to CRISIL Report on transmission towers, its market size is expected to grow at 8-10% CAGR over 2017-19, fuelled by the demand from PGCIL and state transmission corporations to augment the transmission capacity, augmenting the power generation capacity. Moreover, the development of green transmission corridors for the expected solar and wind energy projects would propel incremental demand in the transmission tower space over next few years.

There is a global opportunity for transmission towers as well. According to World Energy Outlook (WEO) 2015, a total of US$ 8.4 trillion investments is expected to flow in the global T&D investments between 2015 and 2040, averaging US$320 billion per year.

UDAY Scheme

Launched in 2015, Ujwal DISCOM Assurance Yojana (UDAY) is aimed at reviving electricity distribution companies, improving demand and, in the process, resolving the woes in the sector. It is a financial turnaround and revival package for electricity distribution companies of India (discoms) initiated by the government. Under this, 75% of the Discoms debt is to be transferred to the respective state governments, while the rest would be converted into state government guaranteed bonds.

The UDAY scheme has helped debt-laden discoms reduce annual losses by 70% to around Rs 17,350 crore in last two years, according to the Deutsche Bank Market Research report. The scheme for restructuring power distribution companies has also helped them cut aggregate technical and commercial losses by 5%. It also said that the gap between ACS (actual cost of supply of power) and ARR (Cost & Tariff rate) has reduced to Rs 0.24/kWh or by 57% over two years. As per the study, top 5 states which saw maximum reduction in A&TC losses in FY2018 over the previous year were Manipur, Jammu & Kashmir, Assam, Rajasthan and Bihar, while bottom 5 performers were Mizoram, Madhya Pradesh, Punjab, Tripura and Uttarakhand.

Electricity demand revival is partly showing up in elevated exchange tariffs as well as better health of state utilities and ‘Saubhagya household electrification led growth.

Integrated Power

Development Scheme (IPDS)

Integrated Power Development Scheme (IPDS) is aimed at strengthening the power sub-transmission and distribution network in urban areas through reliable 24x7 power supply in the urban area. Till March 30th, 2018, projects worth Rs 29,058 crore has been sanctioned by the Monitoring Committee. State utilities have awarded the works worth Rs 23,448 crore. The IT and technical intervention envisaged in the scheme will not only ensure 24x7 power supply in urban area but will also help in improvement in billing and collection efficiency which will ultimately result in reduction in Aggregate Technical and Commercial (AT&C) losses.

Growth in Solar Energy

Growing awareness and interest in solar within developing countries as well as dominant countries are estimated to show even a better result in 2018. India has already claimed the mantle of third top solar market by overtaking japan. The country is poised to overtake solar growth in EU by 2022. With an ambitious target of achieving 175 GW by 2022, India has been putting in massive efforts towards cleaner energy, resulting in a sharp drop in the prices of solar and wind energy. Of the targeted 175GW of clean energy capacity, 100GW is to come from solar projects. Out of this, 60GW will be ground mounted, while balance will be roof top. Excited by rampant bids in renewable sector, the central government is now confident of achieving renewable power capacity of 225GW by March 2022, breaking the earlier set target of 175GW of renewable energy. The government has also fixed up plans to tender 30GW of annual solar energy projects. To reach that milestone, India is focusing on developing more than 50 solar parks, which will significantly add to the Indian solar capacity.

Green Corridor

India plans to add massive capacity of renewable energy over the coming decade. Hence, it is imperative to create a dedicated independent transmission corridor to evacuate the resultant additional power. The Green Energy Corridor project would be a dedicated, stable network to transmit large volumes of power from rich renewable energy power states, to higher energy demand states by creating intra-state and interstate transmission infrastructure.

Green Energy Corridor will connect the renewables from its source locations to the rest of the country. As part of this, the government also envisages connecting 34 solar parks with around 20GW capacity.

Of this, 13 solar parks with 9GW will be connected to the interstate grid while 21 solar parks with 11GW will be connected to the intra state grid. As per estimates given by NITI Aayog, the cost of strengthening the inter-region and intra-region transmission lines to achieve the integration of renewables with the national grid will be over Rs 1.2 tn.

Technology Advancement

The quest for clean and renewable power is increasing globally. Introduction of High Voltage Direct Current (HVDC) transmission has revolutionised the existing power system in India. The biggest advantage being ease of long distance and bulk power transmission, it has facilitated the transmission of electricity from power rich states to power deficit states. High capacity transmission corridors comprising 765 kV AC and 800 kV 6000 MW HVDC system along with 400 kV AC and 500 kV/600 kV 2500 MW/6000 MW have been planned to facilitate transfer of power from remotely located generation complexes to bulk load centres, thereby strengthening the national grid. During the 13th Five Year Plan period, it is estimated that a total of around 15,000 MW of HVDC systems will be required for grid expansion.

Intra State Projects Moving Tariff Based

In order to encourage private participation in the development of electricity infrastructure and to move towards tariff based competitive regime, the Ministry of Power has mandated that procurement of transmission services in new projects to be done on the basis of a tariff based competitive regime.

Saubhagya Scheme

Saubhagya was flagged off in September 2017 with the objective of electrifying all left-out Indian households. The original completion date of March 2019 has been advanced to December 2018. The scheme covers both urban and rural households. Under it, free electricity connections are provided to below poverty line (BPL) households, while other households have to pay 500 for the connection. Saubhagya has already reached out to 59 lakh households and is expected to be rolled out in the remaining 3.2 crore households. if implemented successfully, Saubhagya can improve education, fuel economic activity and create more job opportunities across villages.

Power generating and distributing companies, currently saddled with excess capacity, are expected to benefit through an increase in the demand for power. Power distribution companies who are in financial distress may be able to recover some of their costs through the new household connections and added demand.

Cross Border

Transmission Network

In view of the various power projects being developed in Nepal, India and the Himalayan nation have agreed to lay down new cross-border transmission lines. The opening of cross border network will gradually build significant opportunities for T&D companies in India.

Indian Pipe Industry

The Indian pipe industry is estimated at 5mn MTPA, of which the Polymer Pipes segment is estimated to be over 35%. The Indian Polymer Pipe industry with a capacity of 2mn MTPA is valued at over Rs 250 bn. The Polymer Pipes segment has grown at a CAGR of 10-12% during the past 5-6 years; and is expected to grow at 12-15% per annum over the next 5 years, largely driven by demand from irrigation and housing sectors. According to industry estimates, polymer piping capacity would go up to 2.7mn MTPA at FY2019E. On the global front, the PVC pipes market has grown at a CAGR of around 5% during 2010 -2017 with production volumes reaching 21.6 mn tonnes in 2017.

Among the several variants of polymer pipes available in the market, the demand for PVC and CPVC is on the rise due to their affordability, high quality and better durability. The PVC plastic imparts them the ability to withstand extreme movements without experiencing any damage. They are continuously replacing conventional metal pipes and currently account for nearly 60% of the total plastic pipes produced worldwide.

PVC pipes are used in a wide range of applications such as water supply, irrigation, tube well and land drainage schemes. Their high resistance to chemicals and a high tensile strength to withstand high fluid pressure makes them suitable for water supply schemes. Agriculture forms a major share of the PVC pipes and fittings revenues, followed by the building & construction sector.

As compared to the other building product segments, the Polymer Pipes industry remains largely organised. As per industry estimates, the organised industry enjoys 60% market share in the PVC pipes, while the CPVC segment - which is purely household - has 80% organised market share. As the CPVC segment poses a significant technological barrier for the unorganised players, it provides

Key Growth Enablers

Demand from Irrigation

Given the over dependence on rainfall as a source of water for Indian agriculture, the central government has renewed its focus on irrigation. The Budget, FY2019 for the water resources ministry witnessed 15% higher allocation compared to the revised estimates for the previous year, amounting to a total of Rs 1,200 crore. This amount has been earmarked for efficient extraction of groundwater, especially in some selected backward districts, and for command area development of irrigation projects. Furthermore, under the flagship programme of Prime Minister Krishi Sinchai Yojna - Har Khet Ko Pani, an allocation of Rs 2,600 crore has been announced. This is targeted towards the 96 irrigation deprived districts where less than 30% of land holdings get assured irrigation presently.

Additionally, in the Union Budget, FY2019, the Governments announcement of assured remuneration to farmers through minimum support price is a key positive for the sector. This higher income will improve the investment sentiment and encourage farmers to invest in irrigation to increase production and productivity.

The central government has also announced various measures such as crop insurance, disaster relief schemes and interest subvention to support farmer level incomes, which would also translate into spending on irrigation projects at the ground level.

Government Focus on Housing and Smart Cities

India is home to more than 1.31 billion people, or an estimated 264.9 mn households, compared with 207.2 mn households in 2004. Rising population and changing income demographics have contributed to a sharp rise in the number of households, especially in urban areas.

Any increase in the population directly impacts demand for housing units and, in turn, the requirement for floor space area. The number of households is likely to rise with the change in the age mix, growing number of nuclear families, increasing urbanisation and penetration of financing. Moreover, in the current scenario, population in the younger age brackets is very high. The trend is estimated to translate into a remarkable increase in working population, leading to greater demand for housing.

Of all the policy initiatives, the Housing for All (Pradhan Mantri Awas Yojana) and the Smart Cities Mission are two major flagship policies that have affected the demand and supply trends of residential real estate, and have a huge impact on addressing the issues of informal housing. The Housing for All mission envisions a multitude of strategies such as tax rebates, monetary support, relaxed development regulations, discounted interest rates, to provide Housing for All by 2022. The Union Budget, FY2019 has increased the allocation to PMAY to Rs 6,505 crore, up from Rs 6,042 crore in the previous year.

The Smart cities programme received a 54% jump in the budget for FY2019 over the previous year, and emerged as the governments flagship scheme in the area of urban renewal. In the programme to develop 100 smart cities, 99 have been selected till now and a allocation of Rs 6,169 crore has been announced for FY2019.

In addition to residential demand, the real estate industry would also be supported by the commercial sector (office space, shopping centres) and the hospitality sector. Increasing proportion of jobs in the services sector, an increasing pool of highly-skilled employees, rising disposable incomes, and aspirations to break out from routine lifestyles have been driving demand for commercial space.

GST favours Organised Players

With the implementation of GST, the organised sector is witnessing faster growth than the overall industry and is gradually capturing market share from the unorganised industry. The introduction of GST has widened the tax net, making it very difficult for manufacturing companies to escape paying taxes. This would benefit the companies that operate in sectors with large number of unorganised players. As a result, the price competitiveness of the unorganised entities is likely to deteriorate, resulting in narrowing of the price differentials. The implementation of GST has brought down the price difference between organised and unorganised players, as the tax compliance costs is higher for the latter. This is likely to lead to accelerated top-line growth of organised players, while also increasing their overall market share. This is particularly true for organised players in the polymer industry.

Affordable Housing given Infrastructure Status

The 2017 Budget introduced infrastructure status for affordable housing. This is expected to bring the cost of financing down and open up additional avenues for developers to raise funds. Easy and dedicated access to institutional financing, higher limit on external commercial borrowings will attract more investments and assure sustained growth of affordable housing in India, making it the core driving segment for real estate. This in turn is expected to lead to demand for construction and building materials, including waterworks.

Long-Term Irrigation Funds (LTIFs)

The Government had also set up a Long-Term Irrigation Funds (LTIF) in NABARD for irrigation works with a corpus of funds amounting Rs 40,000 crore. Out of this, an amount of Rs 14,398 crore has been released for projects as on 31st December, 2017. Spread across 18 states, the 99 projects are to be completed in phases by December 2019, bringing 7.9 mn hectares of land under assured irrigation.

Scheme to construct 1 crore houses in 3 years

The Government has introduced a scheme to construct one crore houses in next three years with the objective of ‘Housing for All by 2022. This is in line with the objective of ‘Housing for All by 2022 as envisioned by the government. This will further fuel the demand for water related solutions in and around these dwellings.

NHBs Refinancing Scheme to aid Low-Income Borrowers

National Housing Bank (NHB) announced plans to offer a special refinance scheme to mortgage lenders for loans to low-income groups in a move that is likely to create a long-term market for fixed-rate housing loans and boost affordable housing. Lenders, including housing finance companies, are expected to use the funds from NHB to offer loans to low-income borrowers at concessional fixed interest rates and insulate them from the volatility of rates.

Under the refinance scheme, borrowers with an annual income of up to Rs 2 lakh can get a 15-year loan from banks or housing finance companies at concessional fixed interest rates. This scheme will facilitate purchases of houses costing around Rs 10 lakh. This will further proliferate the affordable housing market and thus construction materials.

Open Defecation Free Villages To Get Piped Water Supply

On the Clean India front, the 2017 Budget introduced a programme in which open defecation free villages will be given priority for piped water supply facility. The aim of the government will also be to provide safe drinking water to 28,000 arsenic and fluoride affected habitations. This spells for fresh demand for water infrastructure related products, such as pipes and storage tanks.

Swachh Bharat Mission

The central government launched the Clean India campaign (Swachh Bharat Abhiyaan) in 2014. Under Swatch Bharat Mission (rural), the government has prioritised pipe water supply for open defecation free villages and safe sanitation. According to the 2011 census, more than 0.11 billion rural households do not have access to a toilet. Lack of sanitation and drinking water facilities creates a huge opportunity for PVC pipe manufacturers. The Government in the Union Budget of FY2019 has allocated Rs 2,500 crore has for building toilets, up from Rs 2,300 crore in the previous budget.

AMRUT Scheme

The purpose of Atal Mission for Rejuvenation and Urban Transformation (AMRUT) is to provide basic services (such as water supply, sewerage and urban transport) to households and build amenities in cities, and to improve the quality of life for all, especially the poor and the disadvantaged. The AMRUT scheme was allocated Rs 6,000 crore in the Budget for FY2019, a jump of 20% over Rs 5,000 crore in the current fiscal.

Replacement Demand

In existing real estate units, the market is fast moving away from cement-based, cast iron and galvanised iron (GI) pipes towards plastic-based PVC/CPVC pipes, as there is growing awareness about the advantages of the latter over the former ones. PVC/CPVC pipes are economic and last 2x longer than GI pipes. PVC/CPVC pipes are also increasingly being preferred by industries given their relative durability and strength versus conventional iron or lead pipes.

Other New Businesses

Solar Structure

The Indian solar market is one of the fastest growing in the world. The opportunity for solar mounting structures is likely to be over USD 3-3.5 billion over the next 5-7 years. India is expected to add 80GW of solar capacities over the next 6-7 years and for every mega watt of solar PV capacity, an approximate of 40 tonne of structural steel is required. This will create a total market opportunity of 3.25 mn tonne of mounting structures.

Railway Electrification

Indian Railways has prepared an action plan to electrify 38,000 km route in next four years at a total capital outlay of over Rs 35,000 crore. The pace of electrification has been increased to achieve 100% electrification of broad gauge (BG) rail routes. Currently, only 42% of total track network is electrified and the rest is operating on fossil fuel. The national transporter has set a target to electrify 6,000 km route in FY2019. In FY2020, 7,000 km route will be electrified, while in FY2021 and FY2022, the target is of 10,500 km route each. To speed up the project, the Indian Railways plans to bid out large tenders which opens up a massive opportunity of aligning business interests in Steel structure and EPC space.

Also, several projects worth in excess of Rs 40,000 crore are lined up to connect capital cities of five north eastern states and areas bordering China, Myanmar and Bangladesh with the rest of the country.

As a leading player in the eastern regions of India, Skipper Limited is advantageously placed logistically to target and convert a significant portion of these large upcoming opportunities.

Skipper is gearing up to sharpen its focus on Railway electrification and intends to increasingly start bidding for such projects in strategic alliance with local private players initially. The Company is in the process of adding more manpower and building capacities to handle all future railways related projects.

Micro Irrigation System

The global micro irrigation system market is one of the fastest growing segments of the global agricultural industry. The current domestic industry size is estimated at over Rs 5,000 crore. Further, with the Prime Ministers flagship scheme Pradhan Mantri Krishi Sinchai Yojna (PMKSY) which aims of extending irrigation cover (‘Har Khet ko Pani) and improving water use efficiency (‘Per Drop More Crop), the sector is expected to witness robust growth.

Penetration of micro irrigation is still very low in India. The average penetration of 5.5% is much lower than that of China, Israel and the US. With still half of the cultivable land in India still being rain fed, there is immense potential for micro irrigation in India. In order to tap into this large opportunity that is complimentary to Skippers existing business, the Company has established a Joint Venture with one of the technologically leading players of drip irrigation solutions from Israel.

About the Company

Skipper Limited established in 1981, is one of the leading companies in the Power Transmission & Distribution and the PVC pipes segment. With over 35 years of domain knowledge it is largest transmission tower manufacturing company in India and 10th largest globally. Skipper serves as a ‘one-stop solution providing clients advanced value-added solutions that are optimally designed and meticulously executed.

Skipper differentiates its offerings with high quality but cost-effective solution for infrastructure providers and telecom operators. Its international footprint spans across continents including Latin America, Europe, and Africa and is spread across 25 countries with presence across sub-segments such as Transmission Towers, Distribution Poles, Monopoles, Railways, Solar Structures and EPC.

Skipper Limited is a national powerhouse in the Polymer pipe business. Under the brand name of ‘Skipper, the company manufactures premium quality polymer pipes and fittings which serve both the agricultural as well as plumbing sectors. Skipper is also a trusted partner for executing critical Infrastructure EPC projects.

Its integrated manufacturing units, focused management and committed production and quality teams makes Skipper the preferred choice for all customers across sectors.

Business Verticals

1. Engineering Product Business

Skipper is Indias largest manufacturer of transmission towers and distribution poles, and is among the top 10 largest tower producers in the world. The Company has a strong market share in the domestic market of transmission towers. With 265,000 MTPA of manufacturing capacities, Skipper has the benefit of scale and experience to implement large T&D orders.

Over the years, the Company has, at various intervals augmented capacities from 100,000 MTPA in FY2013 to 265,000 MTPA in FY2018. Despite regular capacity addition in the past, Skipper has been able to consistently operate at over 85% capacity utilisation for the last many years.

The Company has its own captive galvanising plants. It is the only domestic company having eight galvanising plants – including one of Indias largest galvanising plant of 14 metre long with capacity of 8,000 tonne per month. In addition, the Companys angle and plate CNC lines ensure the highest product quality and timely supplies, which strengthen customer trust and ensure repeat business. Over 75% of Skippers manufacturing is carried out using automated CNC lines, imported from reputed global suppliers.

As a fully integrated manufacturing enterprise, the Company ensures high quality control, timely dispatch, superior customer service and swifter time-to-market entry. From a fiscal perspective, this integration has reduced Skippers exposure to commodity price fluctuations, leading to cost optimisation, higher margins and better business sustainability.

Furthermore, Skippers tower manufacturing plants are located in the Eastern part (Kolkata and Guwahati) of India, which is near its raw material source helps in reducing logistics cost. The Company because of its tower plant locations and backward integration enjoys stronger returns and margins.

Core Competence

• Differentiated: Emerged as Indias only company (of its size) focusing on transmission tower manufacturing, rather than EPC.

• Leading: Ranks among the world leading transmission tower manufacturer and largest in India

• Cost Efficient: One of the lowest cost producers of transmission tower in the world

• Offering Diversified Products: Presence across business sub segments including towers, tubular poles, monopoles, telecom towers, solar and railway structures and EPC.

• Pioneer: First company in India to manufacture and supply 800 KV transmission towers to PGCIL

• Value Chain: Complete control over the value chain from angles to tower production to fasteners to EPC with a high degree of performance

Key Highlight, FY2018

The Engineering Division recorded revenue of Rs 17,782 mn, as compared to Rs 13,887 mn in the previous year, constituting 86% of the Companys total overall revenue in FY2018. The Companys order book as on 31st March stood at Rs 26,270 mn and is well diversified between domestic, PGCIL, SEBs and private players and international orders. The order book to sales stood at 1.5x as on 31st March, 2018 and the Company expects growth to remain strong and gain further pace with increased participation opportunities.

The continued government thrust towards expanding electricity access to all rural households, and last mile connectivity under the flagship scheme such as Saubhagya, IPDS and DUGJY will spur good investment and opportunity in the sector.

During the year, the Company made strong advancements to diversify its business and enrich the product portfolio. In doing so, the Company successfully reduced its over dependence on any particular sector.

The Indian telecom tower industry has witnessed many key changes in the past few years as the focus has shifted from growth to operational prudence. Fuelled by the exploding data usage and the rollout of next generation 4G/VoLTE networks, the Indian telecom tower industry will see good revival in demand for new infrastructure roll out. Tower companies will look beyond traditional business models and capitalise on opportunities in areas such as IBS, WiFi Hotspots and Fiberisation. To establish ubiquitous connectivity, the Government is implementing forward looking and enabling policies that will play a pivotal role in faster roll-out of telecom infrastructure. Various Government programs such as Digital India, Smart Cities & BharatNet project will be the enablers for telecom infrastructure in the coming years. In view of this seismic trend, Skipper is strategically prepared to participate in the upsurge in potential business from the telecom tower segment.

As a part of its mission to contribute to the growth of clean energy, the Company has forayed into the manufacturing of solar structures. The production will be executed from the existing Uluberia plant. The products that are planned to be manufactured from the unit are Ground based Module Mounting structures, Roof Top Mounting structures, Module Mounting Accessories and Seasonal Tilt Structures. Latest automated machineries have been already installed at the facility and experienced quality manpower has been appointed.

The Company as an ongoing endeavour to enrich and diversify its product mix entered Railway electrification segment. The sector is on the governments priority and it plans to achieve complete railway electrification by 2021. Indian Railways has prepared a Rs 38,000 crore plan to electrify its entire network in the next four years, a move that will help save Rs 10,500 crore a year in fuel bill. The cost works out to be slightly more than Rs 1 crore per kilometre over parts of the 66,000-km network yet to be electrified. Also, several projects worth in excess of Rs 40,000 crores are lined up to connect capital cities of five north eastern states and areas bordering China, Myanmar and Bangladesh with the rest of the country. Being an East India player, the Company is logistically well placed to target these large upcoming opportunities.

The Company is gearing up to sharpen its focus on Railway electrification and intends to increasingly start bidding for projects in strategic alliance with local private players initially. It is also adding more manpower and building capacities to handle all future railway-related projects. Looking ahead, the Company is favourably placed to bag significant orders in the future.

There are immense opportunities emerging from the North-East India for power sector as well. For industrial development and to improve the mismatch of power generation and transmission in North-East India, the government has allocated around Rs 100 billion for development or up gradation of the transmission system. Being a key regional player in North-East India, Skipper expects a significant share from this, which will improve its future order inflow and execution.

The Companys newly built Guwahati plant having a capacity of 30,000 MT per annum for engineering products received approval from Power Grid Corporation of India Limited for supply of galvanised tower structures and parts. This has enabled the Company to actively support the various transmission projects being undertaken by Power Grid Corporation of India Limited in the North-East region under the NERPSIP scheme alongside large upcoming BOO projects in the region.

Additionally, The rising monopole demand augurs well for the Companys future growth. The Company enhanced its focus on the monopole business to address its growing demand. Monopoles are now becoming a popular choice for installing T&D structures and telecom towers, as they not only reduce the space requirement but also comply with the local aesthetic and zoning requirements. Going forward, the demand for monopoles is likely to expand at a faster pace, given the increasing urbanisation and scarcity of land.

For the overseas market, Skipper has successfully cleared the Canadian Welding Bureau (CWB) audit and received its certification during the year. This enables Skipper to supply power transmission towers and poles to the North American market. CWB certification is a mandatory requirement to supply structure steel to many in the US and Canada. Skipper is expected to benefit from Canadas sufficient untapped supplies of electricity, primarily large hydro, to meet its future needs. Operators in Canada are undertaking significant capital investments to repair their transmission networks, expand existing lines and build new infrastructure in frontier areas to provide reliable electricity.

Skipper has been certified by The Laboratory of testing Equipment and Materials (LAPEM) which is a Federal Electricity Commission (CFE) organization. With this certification Skipper now gets an entry into the highly potential Mexican Power Transmission market. Mexico is another key focus region for the Company. Mexico needs immense capacity for its transmission network to match up with the rapid expansion of the countrys generation fleet.

2. Polymer Product Business

Skippers polymer segment comprises a variety of products from agriculture use to fitting and pipes. Its product portfolio includes UPVC Lead-Free Plumbing Pipes, CPVC by Durastream hot and cold Pipes and Fittings, SWR Magik Flow Pipes and Fittings, Agricultural Pipes and Fittings, Overhead Tanks and Borewell, and Irrigation Pipes and Fittings. Currently, the agriculture sector accounts for 70% of the Companys total polymer revenue and remaining is contributed by plumbing sector.

Skipper grew its polymer capacity by 4x over the last five years from 10,000 MTPA to 51,000 MTPA to expand its national foot print and strengthen its growth trajectory in the organised PVC pipe market. The Company plans to take the total capacity to 100,000 TPA by FY2020, to address Indias need for superior quality of PVC pipes and products.

The Company is gradually emerging as a pan-India player by expanding rapidly across the country. For these capacity additions, the Company has adopted an asset-light approach to generate better returns on investments for the Company. Under this, the Company has opted to lease land, against owning it. The approach is expected to reduce costs significantly, by maintaining the debt level and through prudent capital allocation. this strategy is expected.

Skipper is largely focused on the retail segment, which accounts for 90% of its polymer sales. The Company has more than 5,000+ touch points as on 31st March, 2018 to cater the demands of its retail customers and make Skipper a household brand. Even on the procurement side, Skipper has now become a large-scale manufacturer enjoying remarkable economies of scale in sourcing of PVC resins, both locally as well as through imports.

To diversify product portfolio and for establishing plumbing piping market, Skipper has partnered with Sekisui of Japan and Wavin Group of the Netherlands for CPVC and plumbing solutions.

This helps Skipper position its products effectively with established players and improves the overall PVC operating margin.

Core Competence

• Leading: Largest PVC pipes manufacturer in West Bengal; one of the largest capacities in eastern India

• Capacity Creation: Cumulative production capacity of 51,000 TPA created within only five years of business launch

• Partnerships: Technological tie-up with two of the worlds most renowned companies Sekisui of Japan for CPVC compound and Wavin Group of The Netherlands for advanced plumbing solutions.

• Distribution Network: Large- scale and widespread network of over 5,000+touch points

• Economies of Scale: Enjoys economies of scale in procurement of PVC resin locally as well as through imports

Key Highlight, FY2018

The Polymer Division recorded a revenue of Rs 2,100 mn, as compared to Rs 1,953 mn in the previous year. The polymer segment contributed 10% to Skippers total revenue in FY2018.

The polymer pipe industrys growth in FY2018 was impacted as GST related disruptions persisted and majority of dealers refrained to replenish stocks. The Company expects growth to accelerate going forward as GST implementation builds optimism for organised sector. This growth momentum will be backed by ramping up of its manufacturing capacities leading to higher utilisation levels coupled with lower working capital requirements; exploring newer markets; strengthening of dealer network and policy push by the government.

The growth will also be augmented by the Companys foray in drip irrigation business. The Companys board has given in-principal approval to form a JV with Metzerplas which is one of the largest and most specialised manufacturers of drip irrigation solutions from Israel. The drip irrigation business holds immense potential in India and is one of the focus sectors of the government.

The Company engaged Vector Consulting Group during the year to help build a robust sales organisation by enabling processes to rapidly increase the reach and availability of its products across the country. Looking forward, the Company plans to maintain its focus on the high margin Plumbing business with gradual growth in the agriculture business.

3. Infrastructure Business

Skipper Limited is a fully integrated global infrastructure Engineering, Procurement and Construction (EPC) major. It offers integrated solutions across tower design, tower testing, manufacturing, and onsite construction.

It has built a dedicated team for EPC line construction, with capabilities to execute turnkey transmission projects up to 800 kV HVDC for various utilities. The Company is also a pioneer of trench-less technology service in India, offering Horizontal Directional Drilling (HDD). This facilitates faster installation of underground utilities, thereby eliminating the need for surface excavation. The Company has executed trench-less horizontal drilling for the installation of telecom cable networks, HT/ LT power cable networks, water and sewerage pipelines, and oil & gas pipelines, among others.

Key Highlight, FY2018

The Infrastructure Division recorded a revenue of Rs 855 mn, as compared to Rs 805 mn in the previous year, constituting 5% of the companys total overall revenue in FY2018.

Under this business, the Company is more focused on transmission lines compared to other EPC projects. The Company carefully selects project for participation under the infrastructure sector to ensure that the margins are maintained. Skippers backward integrated tower business model helps in execution of the transmission line projects, without major deviations.

During the year, the Company executed the following EPC transmission line projects:

180 km of 400kV (Quad Moose) - Bhadla (Jaisalmer) to Bikaner Transmission Line

45 km of 400kV (Twin Moose) - Rapp (7 & 8) – Kota (Part A) Transmission Line

145 Km Of 400Kv (Twin Moose) - Allahabad - Kanpur Transmission Line

132 kV SC Neebkarori – Kayamganj:

220 kV DC Neebkarori – Bhogaon – Mainpuri:

132 kV DC Sirsaganj - Ubati :

132 kV DC Azamgarh-II(220) – Lalganj:

132 Kv Dc Azamgarh(220) – Bindwal Jairajpur:

132 kV SC Sangipur(220) – Lalganj:

Human Resources

In an ever changing business dynamics, the Company is constantly developing effective and innovative HR practices to remain competitive. Skipper conducted a research and revisited its HR practices, and identified five essential focus areas to enhance productivity and employee motivation.

Areas of Focus:

Goal Setting with Dynamic HR Policies and Guidelines

Integration of Performance Management System with performance driven organisational culture

Dynamic Compensation & Benefit strategy to keep pace at par with industry.

Employee Talent Pool Development – Training & Development

HR System & Process Integration with New Automation & Technology implementation Skippers management is extremely focused on people development along with organisational growth journey. With this positive business Skipper HR team started their new initiatives and HR Change management practices.

Goal Setting:

Skipper conducted a top management workshop with experiential learning mix, for setting the organisational development objective. Fifty top management professionals participated from all the SBU of Skipper to share their perspectives and align their goals to the mission and vision of the organisation.

Performance Management System:

The Company believes that employees performance is driven by their skills, attitude and their ability to innovate and drive change. In response, Skipper has implemented a new and agile approach towards performance management through 9 Grid Performance Management System. This model emphasises on the following:

Innovative appraisal system implemented with performance and potential rating

Increment process linked with newly defined job band and salary range grid

Identified individual KRA/ KPI as per business unit and people linked with organisational and departmental goal.

Individual evaluation based on defined KRA/ KPI and allotted target

Compensation and Benefit:

Skipper redesigned Compensation and Benefit structure at par with present industry practises to attract the best talent pool from the industry and to stay competitive in the market. The Company defined job band and salary slab as per the present pay structure in the industry. It also implemented short-term (quarterly) incentive schemes.

Rewards and Recognition

Reward and Recognition enables to publicly showcase and appreciate the employees who demonstrate the behaviour and performance that the organisation wants to cultivate. The Companys initiative to ensure a sound reward and recognition system includes:

• 8 Leadership competencies (Mid Senior to Senior) and 4 Behavioural Competency (Junior to Middle Level) assessment model designed and implemented for Flagship R&R.

• Nominated employees will be finalized by the management

• The winners name will be published in "Skipper Now", a quarterly newsletter and will be circulated over mail to every individual working in the company.

Talent Pool Development

Training and talent nurturing is a continuous process at Skipper, where innovation is a must and a new process of training always creates a different impact on the employees. Talent development linked with talent management grid for a specific outcome is a globally accepted model. The inputs in this realm are:

• Well-defined KSA development areas and plans for all grid.

• Updating training calendar as per defined plan.

• Initiating leadership development training, which includes coaching, mentoring and sharing effective feedback

• A well-organised training for revenue earners, which will include: motivation and development of negotiation skills and effective communication skills.

HR System & Process Integration:

As a continuous process of development and modernisation, the existing HR automation system is being replaced by highly automated integrated new generation software with customised solutions, which includes the entire ‘Employee Life cycle with user friendly technology tool.

Skipper is always innovating to strengthen interpersonal relationship among team members and also to create an environment for employees where learning is an integral part of their career development which is aligned with organisational goal.

HR Technology:

• HR Payroll to Entire Employee Life Cycle : HRIS - Cloud Partner with " Adrenalin"

Sales Force Automation Hand Held Tool : "Sales Mpower" - ACE-DNS

Performance Management & Talent Management Integrated Tool: "Uddan" – in-house development

Employee Policy & Benefit interactive Tool: Skipper-DNA

Information technology

Technology plays a key role in enabling transformation at Skipper Limited. Information technology gives it a competitive edge and plays an important role in the Companys forward-looking business strategy. Systematic expansion and gradual renewal of the IT architecture ensures efficiency of business processes and helps meeting market and customer requirements. Technology benefits of IT are leveraged to maximise the productivity and improve customer service.

Adoption of advanced technology and Industry best practices makes Skipper Limited more competitive in the global market. Technology advancements are opening up unprecedented opportunities to create value and meet the expectations of a wider group of stakeholders.

When opting for technology as a growth engine, it is essential to select the right technology and use it in the right way. The Company has remained proactive to find newer ways of doing business and stay ahead of the curve. Technology has been acknowledged as the backbone of business innovation and transformation.

The key accomplishment for the year was migrating mission- critical ERP SAP from on-premise to data centre cloud. This modern cutting-edge IT Infrastructure for faster business growth benefitted the company in terms of flexible capacity, availability and disaster protected SAP landscape in data centre cloud.

The following key results were achieved from the migration:

Faster and better performance

Operational efficiency from reduced Data foot prints

Mobilisation of business with mobile applications

Embedded analytics to perform real time analytics on the live transactional data

Model for smarter business innovations

Financial Review

S. no Profit & Loss Summary 12M 12M Change %
FY 18 FY 17 YOY
1 Net Revenue (Excl Excise Duty) 20,737.20 16,646.0 24.6%
2 EBITDA (Without Forex) 2,749.30 2,195.7 25.2%
% of Net Revenue 13.3% 13.2%
3 Depreciation 459.1 315.70
4 Interest Expenses 784.5 670.8
5 Other Income 21.9 31.6
6 PBT (Without Forex) (2-3-4+5) 1,527.7 1,240.9 23.1%
% of Net Revenue 7.4% 7.5%
7 Forex Gain / Loss* 276.2 526.4
8 Profit Before Tax (Reported PBT) (6+7) 1,803.9 1,767.2
9 Tax 626.3 525.0
10 Profit After Tax (Reported PAT) (8-9) 1,177.6 1,242.2
% of Net Revenue 5.7% 7.5%
* Derivative Instruments Gain / (Loss) 92.1 397.9
Gain / (Loss) on Exchange Fluctuation 184.1 128.5
Total Forex Gain / (Loss) 276.2 526.4

The company has successfully completed its migration to Ind-AS and are required to report Ind-AS compliant profit and loss numbers for both the current and the corresponding last year. Thus the previous years numbers were reinstated and adjusted in accordance to Ind-AS provisions, though most of the adjustments made no material impact, the requirement of forex derivative gain to be reported on mark-to-market basis has resulted in increased profitability numbers of previous year. The income from forex including gain on derivatives instruments and gain on exchange fluctuation during FY2017 was Rs 526.4 mn and in FY2018 is Rs 276.2 mn.


The Companys prudent interest to contribute in nation building is driving it to capitalise on emerging opportunities in sectors that are of governments prime interest. In this direction, the Companys recent foray in the segments of solar energy, railway electrification and drip irrigation have promising potential, and will help in strengthening its revenue base.

Furthermore, Skipper will continue to benefit from governments power T&D spends. The Companys low-cost integrated operation will enable it to earn better margins and bid competitively. While the impact of GST impact and demonetisation are expected to fade out, the outlook for Polymer segment seems promising, especially with a shift from the unorganised to organised sector. In addition to this, a multifold expansion in the PVC business on a pan-India level will provide scalable growth opportunities.

Internal Controls

The Company has sufficient and commensurate internal control systems to match the size and the sector it falls under. The Company has well-defined and clearly laid-out policies, processes and systems. These are strictly and regularly monitored by the top management and any digression or discrepancy is immediately flagged off and corrected. All requisite regulations, rules and laws of the land are strictly followed. The Company has a sound system for financial reporting and well-defined management reporting systems. These are supported by Management Information System (MIS) that regularly checks, monitors and controls all operational expenditure against budgeted allocations. The Company also has a regular internal audit process that is monitored and reviewed by the Audit Committee, which ensures that any deviations from set benchmarks are immediately reported and corrected. The Company regularly keeps upgrading its systems and processes to ensure these are up-to-date and the latest.

Risk Management

The Company is having a risk management policy for identification and assessment of risks which is monitored by the risk management committee of the Company. The Committee closely monitors the process and suggests suitable measures to mitigate the risks. The risks may be caused due to the internal factor which may be tackled by the prompt action from the management. However, risks imposed by the external factors are not in the control of the Company and the same are identified as per the directive given by risk management policy of the Company. Necessary precautionary measures are taken by the Company to negate the impact of probable risk.

Business Risk

The business risk is in general the risk imposed by the competition from the competitors. The Company has achieved such a milestone that the risk of competition is very rare. However, the Company does not ignore the possibility of competition from other players. The company operates in a very dynamic way and all decisions by the management are taken considering all the possibilities.

Perception Risk

The Company is engaged in products which are used in transmission and distribution business as well as plumbing related products. However, the products for T&D business are made of Steel due to which sometimes the Company is construed as belonging to Iron & Steel business. Sometimes the Company is considered as plumbing products related company. And sometimes, the Company is also construed as a full-time EPC player. However, the identity of the Company should be taken as a whole rather than a part of the business.

Financial Risk

Increase in operation cost as well as raw material cost poses financial risk to the Company. The impact of this risk is to some extent minimised with the escalation clause in majority of domestic orders. However, the Company applies various strategies such as purchase in bulk as well as import of raw materials to minimise the impact of financial risk.

Interest Rate Risk

The Company is financed by various bankers and it is required to pay interest on various credit facilities used by it. The change in rate of interest may be both favourable as well as unfavourable to the Company. The Company has availed credit facilities from various bankers and as a result the Company is in a better position to make negotiation with the bankers and take the benefit of competitive rate of interest.

Liquidity Risk

The liquidity risk may come in the way of smooth operation of the company due to one or the other reasons. Whenever there is blockage of funds in the hands of customers, the liquidity crunch is likely to happen. Although wholehearted support from the bankers strengthen the hands of the Company to face the liquidity risk, the company leaves no stone unturned to avoid the possibility of liquidity risk. Although management expects this kind of co-operation from the bankers, but things may go otherwise too for which the Management is very much concerned.

Market Risk

The Company is supplier in both domestic and international market. The market risk may origin either way be it global impact or government policy or due to competition from other players in the market. Due to backward integration, the Company is in a position to provide the products of better quality at competitive prices, which to a great extent minimises the market risk due to Competition. In addition, various promotional schemes initiated by the Company result in increase of market share for the products of the Company. The Company in present scenario has established such a place in the market that the possibility of market risk is remote.

Exchange Fluctuation Risk

The risk of Foreign exchange fluctuation can impact the Company as it is engaged in procuring various materials and machines from the overseas as well as the Company exports its products to foreign countries. This is a matter of great concern for the Company. The Company has taken efforts to negate the impact of this risk by following the hedging of forex exposure.

Cautionary Statement

This document contains statements about expected future events, financial and operating results of Skipper Limited, which are forward-looking. By their nature, forward-looking statements require the Company to make assumptions and are subject to inherent risks and uncertainties. There is significant risk that the assumptions, predictions and other forward-looking statements will not prove to be accurate. Readers are cautioned not to place undue reliance on forward-looking statements as a number of factors could cause assumptions, actual future results and events to differ materially from those expressed in the forward-looking statements. Accordingly, this document is subject to the disclaimer and qualified in its entirely by the assumptions, qualifications and risk factors referred to in the managements discussion and analysis of Skipper Limiteds Annual Report, FY2018. The Company is financed by various bankers and it is required to pay interest on various credit facilities used by it. The change in rate of interest may be both favourable as well as unfavourable to the Company. The Company has availed credit facilities from various bankers and as a result the Company is in a better position to make negotiation with the bankers and take the benefit of competitive rate of interest.