Bhilai Engineering Corporation Ltd Management Discussions.

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.