Benara Bearings & Pistons Ltd Management Discussions.



a) Industry Structure and Development

The automotive segment in India consists of Passenger Cars, Utility Vehicles, Commercial Vehicles, Two Wheelers and Three Wheelers.

Performance of Automotive components Industry during 2017-18 the automotive components industry has registered a CAGR of 14 per cent and has scaled three times to US$ 43.5 billion in 2016-17 while exports have grown at a CAGR of 14 percent to US$ 10.9 billion. The growth of global OEM sourcing from India & the increased indigenization of global OEMs is turning the country into a preferable designing and manufacturing base. The Indian auto-components industry is expected to register a turnover of US$ 100 billion by 2020 backed by strong exports ranging between US$ 80- US$ 100 billion by 2026. The auto-components industry accounts for almost seven per cent of Indias Gross Domestic Product (GDP) and employs as many as 19 million people. India is expected to become the 4th largest automobiles producer globally by 2020 after China, US & Japan. The auto components industry is also expected to become the 3rd largest in the world by 2025. In 2016, India overtook Japan to become the 2nd largest producer of stainless steel in the world. Also, it is one of the lowest cost stainless steel producers in the world.

(b) Opportunities and Threats


Indian automotive industry is emerging as one of the important markets and almost all the brands of car & commercial vehicle players in the world have opened their plants in the country, which will increase companys opportunities in export markets.

Government initiatives towards bringing more environmentally friendly regulations in vehicles will bring more opportunities for fleet filling.


At present the industry faces the following threats:

a. Increasing cost of manufacturing beyond the control of companies.

b. Increasing bargaining power of consumer, wanting continuous price reduction.

c. Volatility in fuel price.

d. Growth rate of industries is governed by Government policies.

e. Continuously increasing imports of bearings from low cost countries.

c) Outlook

Key economic indicators are encouraging and with the forecast of above normal monsoon, the outlook is positive.

d) Environment & Sustainability

Towards fulfilling our responsibility for the environment, the company continuously works for reducing the impacts on environment. Various initiatives like revisiting the manufacturing process for minimizing the waste generation, minimizing the consumption of natural resources, coolant recovery from grinding dust, reduction of energy consumption by using energy efficient lightings, Implementation of reusable packaging systems are under taken for environmental protection.

As an integral part of Environmental Management System ISO 9001:2015, the Company measures and monitors the key environmental parameters like water consumption, effluent discharge, gas emission, electric consumption etc. and improves every year in these parameters.

The management extended the environmental responsibility throughout entire supply chain, moving one step ahead towards the Companys one of the environmental objectives, minimizing the consumption of natural resources, during the year 2017- 18 joint efforts with the suppliers. The Company minimized the use of input material through suppliers process optimization.

The Company designs and manufactures the bearings with higher load rating within the existing boundary dimensions which gives longer service life or allows customer to use down sized bearings for same application.

(e) Internal control systems and their adequacy

The Company has strong internal controls which enable it to comply with the policies, procedures, standard guidelines and laws to help protect its assets against financial losses. The Audit Committee comprising of Independent Directors regularly reviewing the financial and risk management policies, monitors control procedures, review key audit findings and recommend measures to improvise risk mitigation plan concerning the business of the Company. The scope of work for the Internal Auditors is designed in the manner that they review the processes and transactions on periodic basis, discuss their findings with the operating management and make recommendations which are submitted to the Audit Committee. The Senior Management Team carries out monthly reviews to assess the internal control environment and their adequacy concerning the business and environment and make recommendations. We believe that these internal control systems provide among other things, a reasonable assurance that transactions are executed with management authorization and that they are recorded in all material respects to permit preparation of financial statements in conformity with established accounting principles.

f) Financial performance with respect to operations

The total Revenue (consolidated) for the year was Rs.145.42 crores as compared to Rs.122.37 crores for previous year. Profit before exceptional item and tax (consolidated) was Rs. 7.42 crores for the year 2017-18 as compared to Rs. 5.63 crores in previous year. There is improvement at operating levels on account of increase in sales.

(g) Human Resources and Industrial Relations

The Company has started regular training with scientific way as a whole from the last year. It was decided that every employee should give at least eight hours training during financial year. The Company started with skill gap analysis to make the training more job oriented and to achieve business goals. Based on skill gap, common training subject was devised. The company has planned five days every year training per month. Each employee will be pre assessed by production in charge and thereafter the training will commence.

Last year overall 2420man hours have been spent for Operational Excellence foundation, Quality management, labour laws, building positive attitude, soft skill, flow management and so on.

For and on behalf of the Board

Panna Lal Jain


DIN : 00204869


1. This certificate is issued in accordance with the terms of our engagement letter dated August 21, 2016.

2. We, Agarwal jain & Gupta, Chartered Accountants, the Statutory Auditors of Benara Bearing & Pistons Limited ("the Company"), have examined the compliance of conditions of Corporate Governance by the Company, for the year ended on 31 March 2018, as stipulated in regulations 17 to 27 and clauses (b) to (i) of regulation 46(2) and para C and D of Schedule V of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (the Listing Regulations). Managements Responsibility

3. The compliance of conditions of Corporate Governance is the responsibility of the Management. This responsibility includes the design, implementation and maintenance of internal control and procedures to ensure the compliance with the conditions of the Corporate Governance stipulated in Listing Regulations. Auditors Responsibility

4. Our responsibility is limited to examining the procedures and implementation thereof, adopted by the Company for ensuring compliance with the conditions of the Corporate Governance. It is neither an audit nor an expression of opinion on the financial statements of the Company.

5. We have examined the books of account and other relevant records and documents maintained by the Company for the purposes of providing reasonable assurance on the compliance with Corporate Governance requirements by the Company.

6. We have carried out an examination of the relevant records of the Company in accordance with the Guidance Note on Certification of Corporate Governance issued by the Institute of the Chartered Accountants of India (the ICAI), the Standards on Auditing specified under Section 143(10) of the Companies Act 2013, in so far as applicable for the purpose of this certificate and as per the Guidance Note on Reports or Certificates for Special Purposes issued by the ICAI which requires that we comply with the ethical requirements of the Code of Ethics issued by the ICAI.

7. We have complied with the relevant applicable requirements of the Standard on Quality Control (SQC) 1, Quality Control for Firms that Perform Audits and Reviews of Historical Financial Information, and Other Assurance and Related Services Engagements. Responsibilities


8. Based on our examination of the relevant records and according to the information and explanations provided to us and the representations provided by the Management, we certify that the Company has complied with the conditions of Corporate Governance as stipulated in regulations 17 to 27 and clauses (b) to (i) of regulation 46(2) and para C and D of Schedule V of the Listing Regulations during the year ended March 31, 2018.

9. We state that such compliance is neither an assurance as to the future viability of the Company nor the efficiency or effectiveness with which the Management has conducted the affairs of the Company.

For Agarwal Jain & Gupta

Chartered Accountants

FRN: 013538C

CA Nitesh Agrawal


M. No : 406155