Swan Energy Ltd Management Discussions.

(i) Industry Structure and developments:

Your Company is a diversified player with the presence in Textile, Real Estate, Energy and Mining Sectors.

Energy:

As elaborated in detail in the Directors Report, LNG Terminal / FSRU Project has achieved various milestones and the work is underway in full speed in order to achieve the revised completion target of the March, 2022.

Textile:

During the financial year 2019-20, though revenue from operations has marginally decreased, but EBITA has increased by almost 31%, due to variety of factors, mainly being optimum utilization of all available resources.

The textile sector, as a whole, at both global and domestic level, is facing fierce competition and regulatory changes. Your Company is endeavoring and exploring various strategies to optimize the production capacity and its bottom line at its process house at Ahmedabad. The modernization of the plant is under way and production capacity is expected to increase by 20% over the next fiscal year.

Real Estate:

Real estate business of the company, being run through two subsidiary companies, is steady and stable. Two properties under Cardinal Energy and infrastructure Private Limited (CEiPL) are yielding decent lease rentals. One residential project is under construction through joint development agreement (JDA) at Bengaluru. On completion, this project is likely to fetch good returns. However, the company is exploring options to develop the properties owned by Pegasus ventures Pvt Ltd (PVPL).

Mining:

Through a new subsidiary, M/s Swan Desilting Private Limited, your company is exploring to enter in the business of desilting and mining.

Oil and Gas:

Through a new subsidiary M/s Swan Global Pte Limited, established at Singapore, your company will be exploring new ventures in the fields of oil & gas.

(ii) Opportunities, Threats, Risks and Concerns:

Opportunities in all the three sectors are enormous. in energy sector, construction of LNG Port terminal of 5 MMTPA is at advanced stage. Once commissioned, it is likely to outperform all other sectors. The project has tremendous growth potential with provision for doubling its capacity to 10 MMTPA.

Real estate sector, as usual, has tremendous scope and opportunities. The loan on two properties are being repaid through lease rentals and over a period of time, both the properties will become debt free. Other properties of the company, once developed, will yield decent returns. Your company is evaluating all available options, including monetization of the same.

Textile sector is facing tough times. However, the brand ‘SWAN is still popular in the market and is expected to increase the revenues of the company in times to come.

However, each of the three sectors of the company has inherent threats, risks and concerns, peculiar and applicable to each sector, like, regulatory changes & its uncertainty, rising competition & inflation, international factors, demand supply fluctuations, input cost fluctuations etc.

Your company is well placed to face all of these threats, risks and concerns.

(iii) Segment wise product wise performance:

During the year, 88.63% of the revenue from operations is from Textile sector and remaining 11.37% of the revenue is from construction and allied sector.

(iv) Outlook:

The outlook of the management has always been positive in all the three sectors. The country is attracting huge inflow of money due to diversifiedfactors. The sheer size of population has virtually forced all major players across the world to be present here. Your company expects to reap the fruits in all its three sectors over a period of time.

(v) Internal Control systems and their adequacy:

The internal control systems of your company are adequate and appropriate. it is being reviewed periodically to ensure that the CompanyRs.s interest and that of the stakeholders is protected. The process of introducing new inbuilt internal checks and controls is continuous depending upon the requirement of the same.

The Audit Committee of the Board reviews the adequacy and effectiveness of the internal controls and checks and suggests desired improvements from time to time.

(vi) Financial and Operational performance: (Rs. in lakhs)

particulars For the year ended 31st March, 2020 For the year ended 31st March, 2019
Sales 30684.03 85972.73
Other income 375.05 1444.94
Profit before Depreciation and Tax 923.62 4089.92
Depreciation 537.48 534.98
Taxes 27.06 3320.91
Profit/ (Loss) after depreciation and taxes 413.20 234.03

(vii) Material developments in human Resources/ Industry relations front, including number of people employed: The Company continues to give utmost importance to Human Resources Development and keeps relations normal. As on 31st March, 2020, there are 117 employees, including 3 whole time directors. industrial relations continue to be harmonious and normal.

(viii) precautionary Statement:

This report contains forward looking statements that address expectations and projections about the future, based on certain assumptions of future events. CompanyRs.s actual results, performance or achievements may, thus, differ materially from those projected in any such forward looking statements.