gmmco ltd Management discussions

GMMCO LIMITED ANNUAL REPORT 2007-2008 MANAGEMENT DISCUSSION AND ANALYSIS BUSINESS ACTIVITIES: MAIN DIVISION: Business Activities: Main Division recorded yet another successful financial year in 2007-08 despite constraints and issues in certain segments of the business. The overall business sales registered a growth of 37%, and was at Rs. 921.61 Crores. Growth in Sales of Prime Products (Machine, DG sets and Engines) was 70% and growth in Sales of Parts was 4%. Rental Earnings registered a growth of 47% and was at Rs. 28.98 Crores. Profit before tax at Rs. 105.71 crores registered a 11% growth. Considering continuous growth in Infrastructure sector the future outlook of the company is satisfactory. The Company during the year, has bagged the single largest order from M/s. South Eastern Coalfields Limited (SECL) for 22 nos. of CAT 793 Dumpers along with 12 years Maintenance And Repair Contract (MARC). The Company also made significant inroads in private mining sector with break through orders from Overburden Contractors for 100T Dumpers who were hitherto using on-off highway trucks. The performance of the Partnership firm carrying on Dealership of Motor Cars has further improved. Profit from the firm during the year was Rs.6.18 lacs as against a loss of Rs. 3.14 lacs incurred in previous year, however stiff competetion continuous in the segment. CHEMICAL DIVISION: During the year under review, production of Caustic Soda was 33,027 M.T. (previous year 31,858 M.T). The company continued to operate its Chemical Plant by Grid Power during the whole year. Due to this the cost of power and fuel was substantially lower compared to that of previous year. The Chemical Division earned a net profit of Rs.186.22 lacs during the financial year under review as against loss in the previous year.