Bellary Steels & Alloys Ltd liquidated Management Discussions

BELLARY STEELS AND ALLOYS LIMITED ANNUAL REPORT 2008-2009 MANAGEMENT DISCUSSION AND ANALYSIS Management discussion and analysis of the financial condition and results and operations of the Company for the period under review as required under Clause 49 of the listing agreement (i) FINANCIAL AND OPERATIONAL PERFORMANCE: The Companys financial operation has been already impacted due to non availability of working capital. There is 20.83% negative growth in the turnover compared to the previous year. The Company has to provide interest on the term loans and working capital loans on accrual basis as per the Accounting Standard. The net loss has been arrived after charging interest on term loans and working capital loans. (ii) OUTLOOK: Economic and Financial health of the country is strong in spite of global recession, which encourages infrastructure development. Special stress has been laid by the union Government on rural and semi rural infrastructure development. Steel is the major component required to support all infrastructure developments. The Company has taken up suitable steps to improve the production within the limited resources available and expects to reach higher turnover and profitability. The Company is also anticipating allotments of captive mines from Government of Karnataka to meet Iron ore requirements to Sponge Iron unit. (iii) OPPORTUNITIES, THREATS AND RISKS: There is continuous demand for Steel and steel products to meet the industrial growth in and around Bellary as well as in Karnataka. Main threats are from the unorganised small sponge iron units as also volatility in commodity prices - raw materials prices - Iron ore and coal. (iv) INTERNAL CONTROL SYSTEMS AND RISK MANAGEMENT: Your company engaged the services of an independent agency to carry out internal audit of the company. The Audit Committee of the Board approves the Audit plan as per the Listing Agreement in consultation wifh the Internal Auditors, the Statutory Auditors and the operative management. The findings of the Internal Auditors are placed before the Audit Committee for review. The process not only seeks to ensure the reliability of control systems and compliance with laws and regulations but also covers resources; utilization and system efficacy. Risk Management is an integral part of the business process. With the help of experts, the Company mapped the risks at the business processes and enterprise levels and evolved a risk management framework. HUMAN RESOURCE: Your company attaches considerable importance to Human Resource Development (HRD) and harmonious industrial relations. The management is continuously working on the development of human capital, vital in an ever changing business environment towards achieving the goals and realizing the Vision of the Company. Number of Employees on the rolls of the Company as on 31.03.2009 is 224.