vertical industries ltd share price Management discussions

OVERVIEW

India has witnessed a major economic reform in terms of tax regime with introduction of Goods & Service Tax (GST) from 1st July, 2017. This tax regime, being at the nascent stage, is expected to result in improvement in logistics and faster movements of goods on one side and indirect tax reforms on the other side. The revitalization of global economy continued during the financial year 2017-18 and the global economy ended with a lower benchmark owing to fears of trade war between developed economics. In spite of global tremors, the financial year concluded on a better footing having the positive impact on the industry in varied ways.

The investors confidence in this volatile environment was reflected by being bullish and taking an advantage of the correction phase of capital markets during the year under review. And thus, the business growth has experienced good flow. Infrastructure, high end architectures coupled with real estate development is a must for maintaining such sustained growth and hence is on the highest priority of the Government making it to be the focal point for our economy. Increasing per Capita income resulting due to all round economic high per capita spending affects the sale and off take of our products and we foresee a prosperous future ahead. The Industry strike witnessed during the year for reduction of GST Tax rates had a positive end with demand and purchases being rebounded.

INDUSTRIAL STRUCTURE AND DEVELOPMENT

Real Estate sector and consumer spending have demonstrated exuberance and are witnessing a complete turnaround with signs of revival in industrial activity and rapid growth in global economic performance.

Real estate in India also indicates signs of firming during this time with the return of liquidity in the real estate sector and firm prices in the recent months, cash flows of realty players improved resulting in renewed construction of stalled projects and a few new launches as well. We can quite confidently assert that we will witness an exciting new era of development. We are fully prepared, equipped and updated to take advantage of the buoyant real estate demand which will generate a huge demand for the Companys multiple products.

Emerging out of the volatile economic situations with only minor bruises, the industry is poised to enter a growth phase and is on the threshold of a major transformation. In terms of demand, Marble and Granite Industry is comfortably placed and should see heightened demands in the days to come.

OPPORTUNITY & THREATS

Granite is facing stiff competition from its substitute products with are machine made. Engineered quartz, porcelain ceramics are gaining market share from natural stones like granite and marble. Engineered stone is getting popular in our major markets especially USA. While granite volumes are stable and other substitute products are taking all the incremental growth.

Granite is hard, durable and resistant to damage from heat, stains, and scratches. It is primarily used in home building and remodeling, especially for residential countertops. As per the National Association of Home Builders Remodeling Market Index (RMI), granite countertops are the most popular single home remodeling feature, by a wide margin. Good looks and low maintenance, plus a trend towards larger kitchens and more bathrooms in residential construction, have made natural stone one of the top 10 most popular materials in home design. Furthermore, where selection of natural stone for a project was once limited to what was locally available; todays stone marketplace is basically worldwide.

SEGMENT WISE OR PRODUCT WISE PERFORMANCE:

The operations of the Company are negligible. The management is keen and open to grab any good business opportunity.

OUTLOOK:

The Company is hopeful for a turnaround. The Board of the Company is optimistic and is open to any kind of strategic and financial tie-up including restructuring.

RISK AND CONCERNS

The Company has the mechanism to combat the risks of exposure to Business, Assets and Financial Risks in the form of competition, accidents, natural calamities, obsolescence, and fluctuations in foreign currency etc.

INTERNAL CONTROL SYSTEM AND THEIR ADEQUACY

The Company has in place proper and adequate internal control systems commensurate with the nature of its business, size and complexity of its operations. Internal control systems comprising of policies and procedures designed to ensure reliability of financial reporting, timely feedback on achievement of operational and strategic goals, compliance with policies, procedure, applicable laws and regulations, and that all assets and resources acquired are used economically.

FINANCIAL PERFORMANCE WITH RESPECT TO OPERATIONAL PERFORMANCE:

(Rupees in Lakhs)

PARTICULARS	2017-18	2016-17
Total Income	5.39	6.55
Total Expenditure	7.64	6.50
Profit before Tax	(2.25)	0.05
Profit after Tax	(2.25)	0.05
Earnings per Equity share - Basic & Diluted	(0.03)	0.00

MATERIAL DEVELOPMENTS IN HUMAN RESOURCES:

Your Company considers its Human Resources as the key to achieve its objectives. Your Company appreciates the spirit of its dedicated employees. There is no material development in the human resources employed in the FY 2017-18.

	BY THE ORDER OF THE BOARD
	For Vertical Industries Limited
	Sd/-
	P.Janadhan Reddy
	Chairman & Managing Director
Place: Hyderabad	DIN:01804697
Date: 13.08.2018