BHILAI ENGINEERING CORPORATION LIMITED
ANNUAL REPORT 2010-2011
MANAGEMENT DISCUSSION AND ANALYSIS
a). In Your company has four business divisions, namely Engineering and
Project Divisions, Fertilizer dustry Structure and Developments:- Division,
Constructions Division & Foods Division. The principal product includes
steel castings, fabricated steel structures, heavy equipments, single super
phosphates (SSP), sulphuric acid, processed agro foods etc. Engineering
Division also undertakes projects on Turnkey basis.
b). Outlook on Opportunities, Threats, Risk & Concerns:- Due to the boom in
steel sector all the steel plants of SAIL and of private sector are
expanding their capacities by installing new machineries. Our Engineering
Division has already bagged no. of orders from different steel plants.
Apart from this, the company also received substantial order from RINL
Vishakhapatnam. The Plants of Fertilizer Divisions are of very advanced
technology, established brand name of companys products, effective
distribution net work and increase in irrigation facilities will support
favourably to the company to grow its market size.
c). Segment wise or product wise performance: During the year under review
your Company achieved Sales and other income of Rs.79859.91 Lacs and
segment wise details of which are as under:-
Division Amount in lac
Engineering Rs. 62804.44
Fertilizers Rs. 14942.69
Constructions Rs. 1,566.12
Foods Rs. 546.66
Total Rs. 79859.91
The future outlook of your company largely depends on the prevalent
conditions in various sectors e.g. Steel, Cement, Mining Railways and
Agriculture etc. With the steel sector having turned around the demand for
products of Engineering division has gone up.
As in other industries, there are challenges of technological up-gradation,
risks on account of poor demand & increase in raw material prices, poor
monsoon etc. The subsidy policy of Govt. plays a very vital role.
Unbalanced favouring to complex fertilizers affects the viability of
companys products. However the single super phosphate has now covered
under NBS (Nutriant based subsidy) with effect from 01/05/2010 which will
increase the business value.
d).Internal Control systems and their adequacy:- Your Company has already
installed adequate internal control systems. The audit committee
periodically reviews such systems with the help of internal and statutory
auditors and reports to the Board on its adequacy.
e).Discussion on financial performance with respect to operational
performance The relevant details are given in the Directors Report.
f).Human Resources and Industrial Relations:
Industrial relations during the year under review have been cordial and
peaceful. The company has been continuously making concerted efforts aimed
at development of Human Resources to equip them to meet the growing
organizational needs and challenges.
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