Bombay Oxygen Investments Ltd Management Discussions

(i) Industry Structure and developments :

The substantial excess capacity of industrial gases continues to exist during the year. Due to lower demand most of the large tonnage plants are underutilized. This has led to immense pressure on margins and future development plan of the Company.

(ii) Opportunities, Threats, Risks and Concerns :

Due to inadequate growth in the gas consuming industries, the demand of gases is adversely affected. The cost of production and logistics costs have been continually increasing with no corresponding increase in the sale price thus affecting our profitability.

(iii) Segment-wise product-wise performance :

The Company is primarily engaged in the manufacturing and sale of industrial gases, viz, Oxygen, Nitrogen, Argon only. Dissolved Acetylene is outsourced by the Company.

(iv) Outlook :

The manufacturing sector of the national economy is although slowly picking up but the demand of gases still continue to be sluggish. It is therefore difficult to forecast the demand of gases. We are continuing to explore markets such as pharmaceuticals, refineries, glass, food process, chemical etc. we are also trying to increase our presence in health care through supply of liquid and gaseous medical oxygen.

(v) Internal Control Systems and their adequacy :

The Senior Management periodically reviews factors and issues that influence the Companys business and takes appropriate decisions to ensure that the Companys interest and that of the stakeholders is protected. The Company has an inbuilt system of internal checks and controls. The Audit Committee of the Board of Directors reviews the Internal Controls and matters connected there-with.

(vi) Financial and Operational performance :

	For the year ended 31st March, 2016	For the year ended 31st March, 2015
	(Rs. in 000)	( Rs. in 000)
Sales	1,75,529	1,72,929
Other Income	94,008	2,61,291
Profit before depreciation and tax	24,800	1,39,868
Depreciation	29,596	25,782
Taxes	(8,609)	37,126
Profit after depreciation and taxes	3,813	76,960

(vii) Material developments in Human Resources/Industry relations front, including number of people employed : The Company continues to give utmost importance to Human Resources Development and keeps relations normal.

(viii) Cautionary Statement :

Companys projections and estimates will vary from actual results, which depend on a variety of factors over which the Company does not have any control.