MANAGEMENT DISCUSSION AND ANALYSIS Bemco Hydraulics Limited ('BEMCO' or 'the Company), is known for more than five decades as capital Goods Manufacturer, particularly in Hydraulic Presses and its allied hydraulic equipments. Since inception, Bemco is serving the Nation by providing the quality products to various Government Sectors such as Defence, Indian Railways, Nuclear project, Space Centers etc. apart from many private sectors in India and overseas customers. Since, we are brss manufacturers basically and our expertise lies in the field of hydraulics and the most critical machines required for process of manufacture. With the experience in the field, we are improving the design, incorporating new features / updated technologies, from time to time, with the intention to supply the sophisticated brsses to our customers' and also to meet the need of updated trend in the Indian and Overseas Market. In the course, to fetch the Market need , earlier we had tied up with M/sTowler Brothers of UK - for manufacture of high brssure pumps, M/s. Vogel of Germany - for C frame brsses and M/s. Cesare Galdabini of Italy - for servo brsses. OVERVIEW, STRUCTURE & DEVELOPMENT Bemco has a proven track record of customization of hydraulic systems to many critical applications. During past few years your company has spent on the Development of light weight hydraulics re-railing equipment. This equipment is primarily designed to re-rail all types of de-railed rail vehicles. However it is also used for various applications like lifting and shifting of heavy structures, girders, machineries etc. With all critical inputs imported from the reputed overseas manufactures, Bemco's Re-railing equipment is comparable with any global brands. It is proud to mention here that Your Company is the sole supplier for re-railing Equipment to Indian railways and 3rt of its kind in the Globe. With the good response due to quality of product the overseas customers' have also shown their interest to have such a developed updated Re-Railing Equipment and we met with their requirement too. Economy Since past few years, not only the Indian Economy but overall Global Economy experiencing the many hurdles, while stepping forward on its way towards growth. In spite of a big hit to Indian Economy during the year 2013-14, the management is seeing the rising sun in the forthcoming years as there is major political changes are being taken place and new positive . Performance Highlights The estimated Gross revenue, during year under report has been hit by not only by Indian recessionary trend but also by downward trend in Global Economy. The company's status in this respect is as under: • The net Revenue Income during year under review has been increased by 19.81%, as against decrease by 16.87% during brvious year(FY2013-14) • Gross profit during the year under review is Rs. 608.90 Lakhs as against the Gross loss of Rs. 177.34 Lakhs during the brvious year ended on 31st March 2014. • The Profit Before Tax during the year under review is Rs. 148.83 Lakhs as against the Loss Before Tax loss of Rs. 690.89 Lakhs during the brvious year ended on 31st March 2014. • The Loss After Tax during the year under review is Rs. 88.87 Lakhs as against the Loss After Tax loss of Rs. 474.65 Lakhs during the brvious year ended on 31st March 2014. • The Loss occurred for the year 2014-15 contains the Impact of Writing off of Deferred Tax Assets to the tune of Rs. 238.86 Lakhs: Your company is in continual process of changing over of product-mix by using the advanced technology & adding some critical components in the product list of the company. At brsent your Company has already executed the orders worth Rs. 450.37 Lakhs till date and the orders worth Rs. 1774.72 Lakhs are in hand to execute in the current year. In addition to this, orders worth Rs. 1774/- Lakhs are in pipelines. Further healthy enquiries are being received regularly, and the management feels that most of them will be converted into firm orders. However, company is setting the sales target, for2015-16, of Rs. 3846.66/- Lakhs on conservative basis. Company is studying the possibilities of adding the line of Mechanical Presses in its product mix which may help to grow its sales turnover. To sum up, the outlook for the next year looks bright. Internal Controls and their adequacy BEMCO has a adequate system of internal control to ensure that the resources of the Company are used efficiently and effectively, all assets are safeguarded and protected against loss from unauthorized use or disposition and the transactions are authorized, recorded and reported correctly, financial and other data are reliable for brparing financial information and other data and for maintaining accountability of assets. The internal control is supplemented by extensive programme of internal audits, periodical review by management, documented policies, guidelines and procedures. Human Resources During 2013-14, the focus from an organization development perspective was to implement strong processes and controls to continuously improve efficiencies and improve organization capabilities. The process of realigning the organization along functional lines in various areas of business like business acquisition, business execution and technology adoption continued through 2013-14. On the operations side of business, management changes were undertaken to create more focus and greater accountability. For and on behalf of the Board of Directors M. M. MOHTA Chairman DIN-00068884 ANIRUDH MOHTA Managing Director DIN-00065302 2 Mohanam, 10th Cross, Bhagya Nagar Belgaum, 590006,Karnataka Place : Belgaum Dated : 7thAugust2015 |