BCPL International Ltd Management Discussions.

Industry, Structure and Development

According to International Monetary Fund (IMF), the global economy growth further slow down in 2019. With favourable market sentiment and accommodative financial conditions, global growth is expected to grow in 2020. IMF has estimated Indias economic growth at 7% in FY19 and expected to grow at 7.3% in FY20 on hopes of further boost to investment and increased private consumption. The Indian economy, despite rebound in global economy witnessed slowdown in the first half due to inter alia the effect of Non- Performing Assets (NPA) overhang in Banks. Last year some of the major over-leveraged companies in the infrastructure, power generation and steel sector were referred to National Company Law Tribunal (NCLT) under Insolvency and Bankruptcy Code (IBC). Overall the sectors that company operates in remained depressed, adversely impacting the business of the Company. Resolution under IBC and effective monitoring of credit quality by Banks is expected to provide stable and favourable markets from FY20 onwards. Meanwhile, the Company is reorienting its business structure and pursuing new business avenues of trade in commodities etc., which will improve the performance of the Company.

Opportunity

Significant opportunities of growth exists over the next few years in key sectors such as Steel, Ports, Mining and Power for equipment and life cycle services. Encouraging public, private partnership in execution of projects. Liberalizing FDI norm and encouraging capital market. Rationalization of taxation both direct and indirect.

The Government of India has ushered in various reforms in agriculture, manufacturing and services sectors to help the economy realize its full potential and has rolled out several initiatives, such as the National Mineral Policy and National Electronic Policy, to fast-track development. Stability in the political environment and the Governments pro-reform approach continued to strengthen the confidence of entrepreneurs and investors. The Government Make in India initiative has also encouraged domestic entrepreneurs to match global best practices and also attracted FDI. The Make in India initiative is expected to help the country emerge as a hub for global manufacturing bellwethers.

Threat

Emergence of Global players delivering extended range of products endowed with latest technology. Litigation erupted for various terms of tender documents. Rising cost of input coupled with scarcity in supply. Volatility in prices of crude oil in international market. Volatility in foreign exchange currency. Weak rupee against USD.

Outlook

Demand revival, resolution of stressed assets referred to National Company Law Tribunal (NCLT) leading and consolidation is expected to boost capacity utilization. New capacities ramp-up are expected in FY20 to meet the demand growth. With the general election overhang now behind us and a stable government elected at the centre, any uncertainty around policy continuity or visibility has subsided. Continued economic reforms, along with efforts to reduce public debt, is a prerequisite for the countrys growth.

Economic activity is projected to pick up pace in 2020, especially in emerging markets and developing economics. India is also leading producer of sponge iron with host of coal based units, located in the mineral-rich states of the country. Sponge Iron is reduced directly in solid state using Coal gas, natural gas or Coal reluctant and is also known as Directly Reduced Iron (DRI). Basically, Sponge Iron is a substitute for steel scrap and therefore the price of Sponge Iron varies from time to time in view of the availability of the steel scrap in the country

Others

For Risk and Concern, Inter Control System and their Adequacy, Financial Performance with respect to operation performance, please refer to Board Report.

Overview of the Company

The Companys overall performance have not been good during the Financial Year 2018-19. The financial results have been disclosed in the Financial Statements annexed herewith.

Cautionary Statement

Statements in Management Discussion and Analysis describing the Companys objectives, expectations or predictions may be forward-looking within the meaning of applicable securities, law, and regulations. Actual results may differ materially from those expressed in the statement. Important factors that could influence the Companys operations include stiff competition leading to price-cuts, high volatility in prices of major inputs such as steel, cement, building materials, petroleum products, change in government regulations, tax laws, economic developments within the country and other factors such as litigation and industrial relations.