Bhagwati Autocast Ltd Management Discussions.

(Pursuant to Regulation 34(2) of the SEBI (LODR) Regulation, 2015)

COMPANY PROFILE

BhagwatiAutocast Limited (BAL) is manufacturing Cast Iron (CI) & Spheroidal Graphite Iron (SGI) Castings having plant located at near Bavla, Ahmedabad. The Company is ISO 9001: 2015 certified (BUREAU VERITAS).

OVERALL REVIEW

The Companys production increased by 21.04% during the year 15932 (MT) as compared to the previous year production of 13163 (MT). In terms of total Revenue generated during the year is highlighted as follows:

(Rs. in Crores)
2018-19 2017-18
Sale of CI Castings 119.23 90.73
Sale of SGI Castings 0.24 0.61
Sale of Patterns 0.49 0.74
Net Revenue from Sales 119.96 92.08
Other Operating Revenue - 0.27
Other Income 0.04 0.20
Total Income 120.00 92.55

While detailed financial position and performance are available in the Balance Sheet, Statement ofProfit &Loss, along with related notes forming part of the financial statements for the year 2018-19.

INDUSTRY STRUCTURE AND DEVELOPMENTS

As the Companys product range can be categorized in implements to various tractor, compressor industry manufacturers. It would be appropriate to takea look at the trends that are prevailing in relevant automobile sectors.

Our Company is dealing with big tractors OEM and tractor industry is witnessing growth for the last 3 years. This resulted in increase in tractor production at our customers end and our demand for castings.

OUTLOOK, OPPORTUNITIES AND DEVELOPMENTS

After remaining in de-growth for almost back two years, the domestic tractor industry bouncedback to growth track and registered a handsome growth of 20%. The automobile industryalso performed well and is sustaining its momentum. It is expected that the tractor and automobileindustries will perform good in the near term. Factors like government continuous thrust on strengtheningrural sector, infrastructure development, make in India, skill India, and launch of new models by vehiclemanufactures, changing buying pattern, replacement demand etc. along with another good monsoonforecast and overall improvement in economic fundamentals will be the positive drivers for tractor andautomobile industries in the medium to long term. The optimistic outlook of tractor and automobileindustries will give boost to the demand for auto components as well and as a component supplier, theprospects of Companys business also looks good.

Under "Make in India" initiative of Indian government, India is poised to become manufacturing hub.The Automobile sector is one of the prominent sectors to contribute to the manufacturing industry in India.

THREATS, RISKS & CONCERNS

As your Company supplies components to tractor OE manufacturers, the Companywould be directly affected by the factors impacting tractor industry. Thesewould include issues like quantum of rains spread, Government policy on procurement, enforcement ofsafety / emission regulations, availability of credit, change in interest rates, commodity price trends,increasing intensity of competition etc.

INTERNAL CONTROL SYSTEM AND ADEQUACY

The Company has established procedures in place for internal control. The policies and procedureshave been laid down with an objective to provide reasonable assurance that assets of the Company aresafeguarded from risks of unauthorized use / disposition and the transactions are recorded and reportedwith proprietary, accuracy and speed. These aspects are regularly reviewed during internal audit andstatutory audit. The Company has also laid down adequate internal financial controls. Internal Audit Reports are reviewed by the Audit Committee of the Board from time to time. During the year,such controls were tested and no material weakness in their operating effectiveness was observed.

HUMAN RESOURCES

The Company has a highly committed, loyal and dedicated team. Many initiatives have been taken to support business through organizational efficiency, process change support and various employee engagement programmes which has helped the Organization achieve higher productivity levels. A significant effort has also been undertaken to develop leadership as well as technical/ functional capabilities in order to meet future talent requirement. The Company promotes an atmospherewhich encourages learning and informal communication within the organization.Industrial relations were cordial throughout the year under review.

CAUTIONARY STATEMENT

Statement in the Management Discussion and Analysis Report describing companys objectivesand expectations may constitute "forward looking statements" based on certain assumptions and expectations of future events. The Company cannot guarantee that these assumptions and expectations are accurate or will be realized by the Company. Actual results might differ materially from those either expressed orimplied.

By Order of the Board of Director
For, BHAGWATI AUTOCAST LIMITED
Place : Ahmedabad Dr. Pravin N. Bhagwati
Date : 29/05/ 2019 Chairman & Managing Director
DIN : 00096799