BEMCO HYDRAULICS LTD.

BELGAUM

EXECUTIVE SUMMARY

The Bemco Hydraulics Limited was established in the year 1957. This company
is well known throughout India. It is pioneer in the field of Hydraulics Presses. Since it's
inception it has a well planned adequately equipped manufacturing set up where every
infrastructure is available to design, develop and produce a mega range of Hydraulics
Presses and Equipments. It has a wide volume of standard as well as non-standard press
manufacturing facilities.

Bemco is collaboration with Vogel of Germany and Towler Brothers of U.K. who
was the first manufacturer of Hydraulic presses of its unique kind.

The project is done based on the information provided by* the company's well
project guide, company manuals etc. A great amount of care has been taken to furnish
accurate data in the report. If there are any mistakes in the facts, the student apologies for
the same.

The report initiates with brief introduction of the company. It covers many aspects
of the Bemco Hydraulics Limited like Company profile, Product profile, Objectives,
History, Organization structure and departmental study etc.

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INDUSTRY PROFILE

The Indian hydraulic industry started in the early sixties primarily with an
objective of import substitution of some of the hydraulic products being used by the
industry in various applications. Since most of the Indian industries are being set up
based upon the variety of technological sources, the range of their specification is very
wide. Due to this range of product in the hydraulic industry is also quite wide resulting in
a very small batch for every product.

It is therefore, difficult to specify minimum economically viable capacity for the

industry. While there has been a continued overall growth in the oil hydraulic products to
meet specific individual applications, volume growth in individual products has been
very low. With low volume and high development cost concerning tooling, casting and
forging, the industry has not been able to adopt modern production methods. Current
production is largely dictated by production of large volumes, quality requirements and
cost.

Since the industry has to manufacture a large variety of products with low
volumes, the industry is not able to use the modern high production lines. Most of the
manufacturers with exception to some are currently using general purpose machines with
special tooling and some special purpose machines for specialized metal-cutting
operations.

Although the industry has shown a reasonable growth over the years, but it is still
far away from volumes, which would lead to adopting modern production methods, also
the limited demand is being shared by over 20 firms resulting in uneconomical volumes
for most of them. It is unlikely that the situation would change drastically in the coming
decade due to variety of factors mentioned above.

Almost all the major manufacturers of hydraulic equipment have collaboration with
foreign companies. Only two companies viz. Polyhydron and Oscar Equipment are
manufacturing products based on indigenous developments. There has been very little

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attempt to developing indigenous technology for these products, although barring few
items, all other equipment have been indigenized.

Applications Of Hydraulic Components And System

Broadly, the hydraulic products from application angle have been classified
under:
• Industrial
• Mobile
• Marine
• Aerospace

The above major segments can be further subdivided in the specific categories as:
• Plastic processing machinery
• Steel making and primarily metal extraction industry
• Machine tool industry
• Others: Cover in general, furnace equipment, rubber machinery, textile
machinery, general mechanical industry, etc.
• Mobile hydraulics
• Agricultural tractors
• Earth moving equipment
• Material handling equipment
• Others: Cover general areas such as rail equipment, road building and
construction and machinery, drilling rigs, commercial vehicles, industrial
tractors, etc.
• Marine application: These cover oceanic vehicles, fishing boats and naval
equipment.
• Aerospace applications: These include equipment and systems e.g. transmission,
rudder control, which is used in airplanes, rockets and space ships
• .

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IMPORTS AND EXPORTS

The major raw material equipment for the hydraulic industry area CDC tubes,
casting, forging, alloy steel, nonferrous metals such as aluminum, copper, brass, some of
the mentioned materials are imported and other are available indigenously. Also, the
hydraulic industry is dependent on imported components for their production. The major
components import requirement of the industry is in respect of oil seals, spring vane
blanks, bearings, etc. Rotating block axial piston pumps/motors, special bearings etc.
The requirement for each type is so small that it has not been possible to develop and
good quality from indigenous sources. The total requirement of imported raw materials
and components for current level of production are estimated to be:
• Imported raw materials: Rs. 4000 lacs
• Imported components: Rs. 3200 lacs

The bulk of the exports of the oil hydraulic products are taken as indirect exports,
namely, as components of larger plant and machinery being exported. By large direct
exports by individual companies are minimal. It is also to be recognized that to be able to
export these products, it is necessary to have a high technical marketing and after sales
service set up in the countries, in which exports to have be made
INTERNATIONAL SCENARIO

In connection with oil hydraulic technology, it is widely acknowledged that it is

undergoing changes mostly determined by the user sector that have undergone
revolutionary changes in the in their product designs in the recent years. According to
present indications some of the changes in technology in respect of design, materials and
manufacturing will be as under:
• Increased power/weight ratio
• Increase system pressures
• Extensive use of manifold system avoiding extensive piping and relative leakage
problems
• Reduced noise levels

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• Increased use of proportional valve technology interfacing with electronics and

microprocessor systems.
• Improved sealing technology suitable for varying operating conditions.
• Increased use of load sensing and saving technologies.

BEMCO HYDRAULIC LMT.BELGAUM

SLOGAN
"Quality movement is life improvement"

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COMPANY PROFILE

Name of the Company : BEMCO Hydraulics Ltd

Registered Office : Kahanpur Road, Udyambag,Belgaum.
System Effective Data : 1957
Origin of the Company : Since 1939
Size & Nature : Medium scale & Public Ltd
Total Area : 30000 sq. mtrs
Total Area Build up : 10000 sq. mtrs.
Phone No. : 0831 2441980, 2440173, 2440270
Fax No. : 91-831-2441263
E-mail : [email protected]
Website : www.bemcohydraulic.net
Constitution : Public Ltd
Date of Incorporation : Originally incorporated on 14/03/1957 as Private Ltd
& subsequently incorporated on 18/03/1972
Registration : Registered with DGTD on 15/03/1973
Bankers : Bank of Maharashtra
Main Branch, Kirloskar Road,Belgaum.
: State Bank of India
Commercial Branch, Belgaum.
Product Mix : Custom built hydraulic presses,
Hydraulic cylinders,
Pumping units,
Valves pumps,
Products and sub assemblies

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BRANCHES :

1. NEW DELHI : 907, Padma Towers I,

Rajendra Palace,
New Delhi-110008
2. KOLKATA : Dakshini Para Road,
P.O. Thakurpukar,
Kolkata-700063
3. CHENNAI : Flat-3, Education J.D. Towers,
Nungambakkam High Road,
Chennai- 600034
4. Head Office : Khanapur Road,
Udyambag,
Belgaum
Auditor : M/s A. C. Bhuteria & Company (C.A.)
2, India Exchange Place
Kolkata- 700001
Compliance Officer : R. B. Patil, Finance Manager

Since 1957 Bemco Hydraulic limited, have been in the hydraulics field pioneering
various development in respect of Machine Tools. The company started manufacturing
presses initially with the collaboration of “M/S VOGEL & COMPANY” GERMANY,
and subsequently developed innumerable types of standard range of hydraulic presses
and special purpose Hydro-Pneumatic Machine.

To give more effectiveness to the products, BEMCO entered into collaboration

with “M/S TOWLER HYDRAULICS LTD” ENGLAND, for item, which were earlier
being imported into India have been successfully developed and commissioned for
reputed government and private sector industries in India. BEMCO has already recently

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developed “SERVO STROKE CONTROLLED STRAIGHTENING PRESS” with

worldwide leader in SERVO Technology.

BEMCO has an exclusive research and development department, working

continuously on improving the efficiency and increasing the productivity of their
machines, as well as diversity in the product range.

BEMCO Hydraulic Ltd is situated at Belgaum in the state of Karnataka, which is

easily accessible to the commercial nerve centre of India i.e. Mumbai by land and air.

The excellence of workmanship and quality has been hallmarks of recognition of

the industrial map of India, wherever machine tools have been installed. They have the
capacity to develop highly stylish items for particular requirements of our customer have
also enhanced company’s prestige.

The company has also exported with repeat orders to the various countries in
Southeast Asia, African and middle eastern countries.

The Shop-Floor of BEMCO Hydraulics Ltd, is equipped with sophisticated and

precision machines including “160 mm Spindle Dia Horizontal,” etc, and minute checks
and carried out right from the component stage up to the time of dispatch.

BEMCO has branches in almost all the major cities of India and to follow up the
dispatches, BEMCO has got an excellent after-sale services, which takes care of any
minor jobs that should be necessary afterwards.

Since its inception, BEMCO has been playing a crucial role in the development of
India’s core industries by providing sophisticated hydraulic Presses and Equipment for
innumerable applications. Collaboration and Technical know-how from the world leader
like “PINNETTE EMIDICAU INDUSTRIES,” France have been enabled BEMCO to
produce machines of international standards.At present the company is under finalizing
the Technology license agreement with “DUNKES INDUSTRIES,” Germany for the
technology required “WHEEL FITTING PRESSES.”

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HISTORY AND DEVELOPMENT OF THE COMPANY

BEMCO is the first company in India to produce hydraulic presses. BEMCO

originally an engineering craftsman’s shop in the late thirties has risen to be premier
producer of hydraulic presses and equipments. BEMCO Hydraulic Company started
manufacturing presses initially collaboration with M/S “VOGEL & COMPANY”
GERMANY, in the year, 1957 and subsequently developed innumerable types of
standard and nonstandard range of hydraulic presses and special purpose hydraulic
pneumatic machine.

VISION MISSION AND QUALITY POLICY

VISION

The vision of BEMCO is to be highly visible company known for its highest
technology driven products, superior training and exceptional services in the engineering
field. The company’s products are being marked worldwide and they are looked at as
leader in custom made machines. BEMCO will maket the world class prestigious
products through their distribution network manned by well trained and experienced
personnel in the country and world at large.

MISSION

➢ Continuous technological improvement.

➢ Rapid growth of business.
➢ To provide innovative products.
➢ To be able as a global supplier of hydraulic products.
➢ To develop technology of machineries of various components of the company.

Mohta says – we believe that our first responsibility is to satisfy our customers
who use our products. Our position in the industry will enable us to expand and offer
economic solutions to today’s industry’s requirements.

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QUALITY STATEMENT

Slogan of BEMCO – “Quality Improvement is Life Improvement.”

We at “BEMCO Hydraulics Limited” designers and manufacturers of hydraulic

presses and equipment are committed to enhance customer satisfaction by consistently
providing quality products and services to our customers through adherence to establish
quality management system and a commitment towards continuous improvement in all
functions of our organization.

We shall constantly acquire, adopt, innovate and refine our technological strength
in line with globally acceptable standards to maintain credibility, dependability and
leadership on our field.

ENVIRONMENTAL POLICY

BEMCO is committed to company with all the environmental restrictions laid

down by the local authorities. The company strives to minimize pollution during
production. The company is aware and converted with the impact of pollution on the
quality of air, water and the impact on noise and has taken preventive measures to reduce
the contamination and pollution in the environment. The company tries to achieve this
by regularly conducting environmental monitoring tests on the quality of air, water and
noise levels and to prepare test reports regularly and submit them to the environmental
authorities. The company increased the height of the chimneys to reduce air pollution.
Gardening is being done in the interest of the factory to improve quality of the air.

LABOUR POLICY
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BEMCO is committed to provide the best working condition to labours. They

provide safety to manpower and equipment and other aspects within the scope of work.
They develop safety consciousness among workers through proper orientation, induction
and training programs. They provide team spirit in them and provide leadership qualities
to curb out hidden talent among workforce and compensate them by providing fair wages
and incentives

OBJECTIVES OF BEMCO
➢ To develop and produce hydraulic cylinders of high quality in compliance with
the requirements of our customers to provide them with efficient solution and
satisfy their needs.
➢ To maintain customer satisfaction.
➢ To seek continuous improvement in the quality management process.
➢ Monitoring and improving the product performance.
➢ To offer the necessary resources to the customers.
➢ To utilize the resources in a better manner rather than wasting the same.
➢ To provide the necessary qualification to the collaborators.
➢ To make continuous efforts to improve quality by continuous training.
➢ To contribute high productivity through team work.
➢ To offer flawless service to the customers.
➢ To provide wide range of presses for various applications in metal working,
rubber, electronic, plastic and electrical industries.

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HUMAN RESOURCE INFORMATION

MANPOWER DETAILS

Managers 12

Engineers 40

Supervisors 20

Workers 106

Clerical Staff & Other Staff Members 42

Total Manpower 220

GROWTH RATE OF THE COMPANY

YEAR GROWTH RATE

2001-2002 687.98

2002-2003 567.83

2003-2004 889.78

2004-2005 1336.02

2005-06 1325.59

2006-07 2070.28

2007-08 2200.28

2008-09 2414.72

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Chart Showing the Growth rate of the Company

ORGANIZATION PROCESS
SHIFT TIMING

1ST 7:30 am to 4:00 pm

2nd 4:00 am to 12:00 pm

General 8:30 am to 5:00 pm

UNIQUE STYLE OF WORKING

Focus on Research and Development with in-house facilities :
The company is a Technology-driven company and focus on the development and
manufacturing of Hydraulic Equipments for the Automobile, Railways, Aviation and
Defense sectors. A continued on Research and Development will enable the company to
further develop new products, processes and innovative products and applications
possibly help the company enter new lines of possible.

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Technical Collaboration with PINETTE EMIDACAU INDUSTRIES:

BEMCO has entered into a technical collaboration with PENETTE EMIDACAU

INDUTRIES of FRANCE for manufacture of SMC moulding machines of high ranges.
This would help the company in adding new customers and industries in its portfolio.

Strong Management and Technical Team :

The company has a very strong management and technical team who have
developed products and executed projects. The company is managed by a team of
experienced and professional managers, exclusively focused on different aspects of the
Automobile industry including Research and Development, Manufacturing, Marketing
and Quality Control and Finance. The management has substantial experience in this
industry and its ancillary activities.

Quality Control:

The company follows through quality standards and products. The finished
products are not only inspected internally by the company's technical personnel but also
by the technical teams of its customers before the products leave the factory premises.

BEMCO OFFERS:

❖ Selection of machinery
❖ Design & Development
❖ Installation & Commissioning
❖ Supply of component and spares
❖ Prompt after sales services

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MARKETING INFORMATION:

1) CUSTOMERS:
AUTOMOBILE:
■ Tata Locomotive company Ltd
■ Bajaj Ltd
■ Daewoo Motors
■ Escort Ltd
■ Ashok Leyland Ltd
■ Hindustan Motor Ltd
■ Kinetic Engineers Ltd
■ Kirloskar system Ltd
HEAVY ENGINEERING AND ELECTRICAL:
■ Hindustan Aeronautics Ltd
■ L & T Ltd
■ Bharat Forge Ltd
INDIAN RAILWAYS:
■ All Zonal Work Shops
■ ART
■ HRD

2) COMPETITORS OF BEMCO:
 Siddhartha industries
 Hydro pack(lndia) Pvt. Ltd
 S. P. M Control
 Plus-one Hydraulics
NATIONAL LEVEL COMPETITTORS
• H.M.T. - Hydrabad
• Electrometic - Mumbai
• Isget -Delhi

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3) SUPPLIERS OF THE BEMCO:

RAW MATERIALS COMPANY'S
M.S. Plate Geeta Vanijya
Pipes Mahaveer Hydraulics pvt. Ltd. Mumbai
Round Bar Mitco Vires pvt. Ltd. Bangalore
Other Casting Prime Industry, Kolhapur
EN-19 Plate, EN-24 Round Bar Rukmini Forgings Pvt, ltd. Bangalore
M.S Pipes Shah Trading Company, Mumbai
C.I. Casting M.S.M. Hydro pneumatic Engineers
C.I. Casting Omkar Metal Industries
C.I. Casting Sudha Metals
M.S. Plate D. Khandelwala
Round Bar Steel Corporation

QUALITY CONTROL INFORMATION:

BEMCO quality control centre have been most carefully planned be equipped
with the most modern quality testing Instrument and Equipment. Quality starts from
vendors and Continues through the various stages of manufacturing right up to the final
testing and Painting of Product.
Stringent inspection of material and component at every stage of production is way of life
at BEMCO. Extensive and specialized quality control facilities backed by skilled and
experienced personnel ensure that only the best products reach our customers.

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D. BENEFITS AND FACILITIES TO EMPLOYEES INFORMATION:

■ Canteen Facilities
■ Medical Facilities
■ Retirement Facilities
■ Tour programmes once in a year
BREAK THROUGHS FOR FUTURE:
■ BEMCO SAND MOULDING MACHINE, a process which gives incredible
increase in production, reduced rejection, low man power and excellence finish.
■ Design and development indigenously by BEMCO.
■ High speed presses with cartridge valves, logic systems...presses for the new age.
■ To offer flawless service to customer.

PRODUCT PROFILE

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Hydraulic Re-Railing Equipments

BEMCO has designed and developed re-railing equipments for Indian Railways
and for other western countries.

Detailed descriptions of various products manufactured by BEMCO hydraulics are

as follows
1) Open throat-Gap frame type Vertical and horizontal Presses
2) Open throat Servo Stroke Controlled Straightening Presses
3) Column / Pillar / "H" Frame type Hydraulics Presses
4) CNC / PLC / conventional Powder Compacting Presses
5) CNC / PLC / Conventional Hydraulic Mounding Presses
6) Briquetting - Ferrous / Non - ferrous
7) Bailing
8) Die Spotting & Try-out Presses
9) Special Purpose Machines
10) Horizontal Forcing Presses
11) Light weight Hydraulic Re-railing Equipment
12) Presses for LPG Cylinder manufacturing plant
13) Cylinder & Power Pack
14) Machine Tools
15) Electromechanical lifting jacks
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16) Oil Expeller and Refinery

17) Telescopic Cylinders
18) Hand Pumps
BEMCO PRODUCTS ARE EXPORTED TO:
 Saudi Arabia Ethiopia
 Iraq Nepal
 Philippines Malaysia
 Russia Israel
 Srilanka Singapor

A) PROFILE OF THE BOARD OF DIRECTOR'S

Name Designation
Shri. M.M. Mohta Chairman & Managing Director
Shri.Aniruda Mohta Joint Managing Director
Smt. Urmiladevi Mohta Director
Shri. R.M. Shah Director
Shri. Dilip Chandak Director

B) DETAILS OF SHARE HOLDNG;

S. No.of share
Category % Shareholding
No held
1. Promoters/persons acting in concert 10,84,800 74.98
Financial Institution, Banks Mutual
2. 93 0.01
Funds
3 NRIs, Foreign Nationals, OCBs and FHs 500 0.03

4. Private Corporate Bodies 21,032 1.45

5. Indian Public 3,40,275 23.53

Total 14,46,700 100.00

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D) CAPACITY AND PRODUCTION FOR THE YEAR END 31 MARCH 2009:

Particulars Units Installed capacity Production

Hydraulic Presses Nos. 1000(1000) 79(88)
Axial Piston pumps Nos. 300(300) 89(88)
Hydraulic Equipment’s Nos. 800(800) 529(501)
Hydraulic Jacks Nos. 100(100) NIL (Nil)

SALES ANALYSIS
YEARS SALES (Lacks.)
2005-06 1336.02674
2006-07 1325.58544
2007-08 2070.15340
2008-09 2215.28044
2009-10 2414.71964

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BEMCO WORKING CAPITAL REQUIREMENT

PARTICULARS 2005 2006 2007 2008 2009

CURRENT ASSETS

Inventories 5,83,69,425 8,99,94,661 9,93,06,575 13,17,42,137 1,23,221,007

Sundry Debtors 3,41,37,970 2,89,58,207 5,85,97,160 6,22,30,657 5,07,13,758

Cash & Bank Balance 41,03,713 42,85,202 97,27,904 1,49,82,633 1,69,17,678

Loan & Advances 47,41,583 75,99,490 1,21,56,229 99,50,526 1,45,13,798

TOTA 10,13,52,691 13,08,37,560 17,97,87,868 21,89,05,953 20,53,66,241
CURRENT
ASSETS (A)

CURRENT LIABILITIES

Liabilities 5,48,63,690 66740781 14,31,43,302 14,30,00,161 12,02,85,500

Provision 4361261 85,60,793 99,31,880 84,64,189 55,83,967

TOTAL CURRENT 5,92,24,951 7,53,01,574 15,30,75,182 15,14,64,350 12,58,69,467

LIABILITIES(B)

NET WORKING 4,21,27,40 5,55,35,986 2,67,12,686 6,74,41,603 7,94,96,774

CAPITAL (A -B)
INCREASE OR 1,34,08,246 - 2,88,23,300 4,07,28,917 1,20,55,171
DECREASE IN

WORKING CAPITAL

TABLE -1
YEARS 2005 2006 2007 2008 2009
NetWorking Capital 4,21,27,740 5,55,35,986 2,67,12,686 6,74,41,603 7,94,96,774

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PORTER FIVE FORCES ANALYSIS OF BEMCO HYDRAULICS LTD.

A graphical representation of Porter's Five Forces

Porter's five forces analysis is a framework for the industry analysis and business
strategy development developed by Michael E. Porter of Harvard Business School in
1979. It uses concepts developed in Industrial Organization (IO) economics to derive five
forces which determine the competitive intensity and therefore attractiveness of a market.
Attractiveness in this context refers to the overall industry profitability. An "unattractive"
industry is one where the combination of forces acts to drive down overall profitability. A
very unattractive industry would be one approaching "pure competition".

Porter referred to these forces as the micro environment, to contrast it with the
more general term macro environment. They consist of those forces close to a company
that affect its ability to serve its customers and make a profit. A change in any of the
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forces normally requires a company to re-assess the marketplace. The overall industry
attractiveness does not imply that every firm in the industry will return the same
profitability. Firms are able to apply their core competences, business model or network
to achieve a profit above the industry average. A clear example of this is the airline
industry. As an industry, profitability is low and yet individual companies, by applying
unique business models have been able to make a return in excess of the industry average

The Five Forces

➢ The threat of substitute products

➢ The threat of the entry of new competitors
➢ The intensity of competitive rivalry
➢ The bargaining power of customers
➢ The bargaining power of suppliers

The Five Forces

The threat of substitute products

The existence of close substitute products increases the propensity of customers to

switch From BEMCO HYDRAULICS LIMITED other alternatives in response to price
increases (high elasticity of demand)

There is no close substitute product for BEMCO’s HYDRAULIC PRODUCTS,

products manufacturing by BEMCO are mostly customized products according to
customer’s requirement therefore no threat of substitute products.

The threat of the entry of new competitors:

Profitable markets that yield high returns will draw firms. This results in many
new entrants, which will effectively decrease profitability. Unless the entry of new firms
can be blocked by incumbents, the profit rate will fall towards a competitive level.

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The ELECTOMETIC-MUMBAY and ISGET-DELHI, these are the major

competitor of the Bemco in national level and SIDDHARTH INDUSTRIES is one of the
local level competitor. If they increase their product price BEMCO also increase our
product price, if they decrease their product price BEMCO also decrease our product
price in the market. So it will directly affect to our business process.

The intensity of competitive rivalry

For most industries this is the major determinant of the competitiveness of the
industry. Sometimes rivals compete aggressively and sometimes rivals compete in non-
price dimensions such as innovation, marketing, etc.

But BEMCO has an advantage of its brand name as a market leader, it is known
for its standard quality product and services and huge production capacity.

Bemco’s R&D department is also very strong, it has recently invented a new
product called Re-Railing Machine first in india and third in the world.

The Shop-Floor of BEMCO Hydraulics Ltd, is equipped with sophisticated and

precision machines including “160 mm Spindle Dia Horizontal,” etc, and minute checks
and carried out right from the component stage up to the time of dispatch.

BEMCO has branches in almost all the major cities of India and to follow up the
dispatches, BEMCO has got an excellent after-sale services, which takes care of any
minor jobs that should be necessary afterwards.
The bargaining power of customers

Following are the Customers of the BEMCO hydraulics limited. The

BEMCO provide good service to their customer on time at the sufficient price to
maintain the good relationship with their customer.

Also described as the market of outputs The ability of customers to put the firm
under pressure and it also affects the customer's sensitivity to price changes.

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• Buyer concentration to firm concentration ratio

• Degree of dependency upon existing channels of distribution

• Bargaining leverage, particularly in industries with high fixed costs

• Buyer volume

• Buyer switching costs relative to firm switching costs

• Buyer information availability

• Ability to backward integrate

• Buyer price sensitivity

Bargaining power of suppliers

Described as market of inputs. Suppliers of raw materials, components,
labor, and services (such as expertise) to the firm can be a source of power over
the firm. Suppliers may refuse to work with the firm, or e.g. charge excessively
high prices for unique resources.

The purchase department at BEMCO will request the supplier to register

with the company. BEMCO purchase required materials by calling tenders from
only registered suppliers. The purchase negotiations committee will take care of
this task.

Selection from alternatives

The BEMCO calls for applications on the open tender basis in that they
select three least bidding suppliers they are called for negotiation with previously
supplied suppliers. After negotiations, which are selected for supplying goods,
they will get the order for one year.

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DEPARTMENTAL FUNCTIONS

BEMCO Hydraulics Limited is a big organization and producing a wide range of

products. It has a several departments to take care of the smooth functioning of its day-to-
day activities of different kinds. The different departments of BEMCO are as follows :

a) Production Department
b) Personnel Department
c) Finance Department
d) Marketing Department
e) Engineering Department
f) Purchase Department
g) Planning Department
h) Stores Department
i) Dispatching and Packing Department

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PRODUCTION DEPARTMENT

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Production Planning Control (PPC):

This department plays a major role in Planning, Coordinating and Controlling of

the production related activities. They undertake the estimation of the materials and
equipments that will be required in producing a particular product and also scheduling of
production process. They also estimate the time required to produce each of the products
of particular machine.
The PPC department receives the drawing designs of the product from the
Engineering Design Department. After making analysis on such drawing of the product,
they decide on the particular kind and quality of materials required to undertake the
production. And based on the list of materials required, they place the order to the
purchase department to produce the material.
The design is also sent to the Assembly, Dispatch and the Fabrication department
to assess the requirement. The PPC department assist Production department in its overall
aspects regarding the production of the product procurement of raw materials to
assembling and till the product is dispatched.
Cutting Department:
The amount of raw material cutting required of the production will be cutted here
and sent for the production. Cutting section has 3 types of the iron bars and plates, like
big, medium, small size cutting according to the size and weight of iron required to
produce the components.
Hydraulic Equipment System-Machine Shop Section :
In this section of Machine shop various kind of Hydraulic Equipments are
produced required for the Hydraulic Presses, Pumps, Machine, some standardized
equipments are also produced which are supplied to the Defense sector, Hindustan
Aeronautics Limited, Indian Army, etc; the products supplemented for the Helicopters,
Tankers etc This section has 13 machines of Milling, Boring, Grinding, Lathe Machine,
CNC Lathe Machines, Jig boring etc.

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Hydraulic Presses, Pumps Machine Shop:

In this machine shop various components and parts required for building
Hydraulic Presses, Pumps, Power Packs, Cylinders are produced and machined through
the sequential process, there are different sections for machining and producing different
parts and components. There are 30 machines in this machine shop for Milling, Drilling,
Boaring, Taping, Chilling, Howning, Lathe, Grinding, CNC Machines etc.
Fabrication:
In this section of production department the mainframe body of the Presses is
build by wielding the different parts.
Assembling :
Once the framework of the machine and components are ready, then the
components and the parts are assembled in the frame body.
Electrical:
The Electrical Engineers install the electrical equipment and inbuilt the electronic
components such as Microchips, Transistors, Circuits, Devices. And inbuilt the particular
program in machine to perform the specific operation.

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PERSONNEL DEPARTMENT

ORGANISATION CHART OF PERSONNEL DEPARTMENT

Chairman and MD

Joint MD

Personnel and Factory Manager

Assistant Manager

Clerical Staff

Security

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FUNCTIONS OF PERSONNEL DEPARTMENT

After assessment of Manpower requirements sent by the departmental heads the

final list of employees required by each department will be submitted to the President or
Vice-president for their approval. On their approval the list will be sent to respective
departmental heads, which will be sanctioned strength.
Requirements of employees by way of replacement against retirement should be
sent at least 6 months in advance of the retirement.
Requirement for replacements against resignations, termination should be sent to
personnel department within a week of a resignation or termination of service.
Requirement of additional employees should be fully justified by the departmental
heads before advising the personnel to recruit.
Recruitment:
It is the process of attracting individuals on timely bases on sufficient numbers
and with appropriate qualification to work in the organization.
Recruitment to all categories of employees in the company is based purely on
Qualifications, Merit and Experience.
• Sources of Recruitment:
Recruitment are normally been made through application blanks received from
the candidates through : Advertisement
• Employment Agencies
• Industrial Training Institutions
• Engineering Colleges
• Polytechnics
Performance Appraisal:
Appraisal forms are sent to concerned departmental authorities periodically in
respect of employees whose performance is to be assessed.
The performance of the employee is rated on trait wise point system. On the basis
of rated points shown in the appraisal, the company will decide granting of Confirmation,
Increments, Promotions etc. This will be duly intimated to the concerned individual
through his head of department.

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On the basis of assessment made in the appraisal forms, developmental need of

the employees will be studied and the recommendation made to the company for drafting
the concerned employee to undergo suitable training and developmental programs.
All appraisal forms received by the departmental heads should be returned to the
personnel department as early as possible but not later than 15 days, with all particulars
duly filled.
Human Resource Maintenance :
• Welfare Facilities :
a) Non-Statutory Welfare Facilities :
• Canteen:
The company has well furnished and adequately staffed Canteen, which supplies
Snacks, Tea and Coffee at very normal rates i.e. 40 paise.
• Sport Activities :
Sports Activities are conducted for every year to all the employees. And the
winning teams or individuals are awarded with cash prizes and trophies.
• Tour Facilities :
Tours are conducted for the employees to the different tourism places across India
every year.
• Medical Facilities :
Various Medical facilities are given to the employees. There is a Medical Officer
who takes care of the health of employees. Medical facilities are also given for the family
members of the employees.
• Welfare Fund :
Each employee contributes Two rupees per month and the employers contributes
Four rupees towards Welfare fund.

b) Statutory Welfare Facilities :

• ESI - Employees State Insurance Policy :
Under this policy the employee's accidents, death and other uncertainties are
covered. In case of accidents occurred in the plant, 4.75% of compensation is covered by
the Employer And the rest is covered under ESI policy.

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• Safety Procedures :
The company believes in the policy of "Safety First" in all industrial activities.
The employees are provided with various safety equipments like:
Hand Gloves Safety Belts Goggles, etc.
The employees are advised to scrupulously follow all safety instructions and
safety working methods. Whenever unsafe working conditions are notified, employees
should immediately bring it to the notice of the supervisor or management.
First-aid kits with necessary medicines are provided in each department and
sufficient numbers of supervisory and managerial personnel are trained in rendering
First-aid treatment.

Human Resource Relationship :

General observation of human relation and industrial relation :
There exists a harmonious relation between the people within the organization.
The Human Resource Manager personally takes care of the workmen's problems and
dealing with other things. Every departmental staffs are very co-operative and friendly in
their nature. The company also has maintained a good relationship with other local
neighboring industries like- Ashok Iron Works, Polyhedrons etc.
Separation :
❖ Exit Policy:
Employees are required to enter and exit the factory in an orderly manner, at the
commencement and the close of their shifts. While going out in order to facilitate the
security men to conduct the check, employees are required to pass through the exit gate
only one by one. While doing so employees shall keep open their Tiffin carriers, Lunch
boxes, Brief cases etc. for the security staff to check.

❖ Exit Interviews :
It is an interview taken for the employees who are leaving the organization.
BEMCO Conducts such interviews for the employees who are leaving the organization
for any reason. The main purpose of conducting this interview is to know the reason for
their recruitment like whether they have any problems with their co-workers or

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supervisors or they are not happy with the policy of the organization or they want to go
for some higher jobs.

❖ Compensation :
The compensation is covered under Two acts. They are : Employees State
Insurance Policy Act (ESI) Employees Compensation Act (ECA)

If any accident occurs within the plant by which the worker gets injured and if the
amount comes under Rs. 7500, then it is covered under ESI or if above, then it is covered
under ECA. On such leave given to recovery with the injury, the management gives 50%
of the wages to the employees. And in case, if the employee loses his limbs in the
accident, then the management provides him with an artificial limbs. In case of death the
family of the employee is given 2-3 lakhs, which may covered under the LIC policy or
under ESI Act and also the management gives Rs. 2500 for the funeral and apart from
this Rs. 1000 is contributed by each of the staff members and given to the insolvent
employee or employee's family.

FINANCE DEPARTMENT
This department is concerned with the maintenance of account of the company.
The department is controlled by Mr. R. B. Patil, Finance Manger of BEMCO. Finance
department helps in the development of the company the main work of Finance
department is not only to provide the monetary supply but also to cut the expenses
through cost cutting as this department controls the expenses, it plays the role of the
auditor.

Organizational Chart of Finance Department:

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The functions of Finance Department :

Main Functions:
The Main Functions of Finance department are as follows :
• Arranging of Funds
• Proper allocation of Funds
• Compiling with all statutory responsibilities such as Sales Tax, Income Tax etc.
• Administration responsibility such as monthly P&L A/c, Cash flow and Fund
flow statement, Operating performance report, Final A/c's etc.
• Maintaining and controlling the expenditure.
• Preparation of Cash Budget.

MARKETING DEPARTMENT
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Organizational Chart of Marketing Department

Quality System Policy for Marketing and Servicing : Scope :

Receiving of enquiry, preparation and submission, reviewing the order from the
customer, handling the amendments to the contracts. The procedure also covers the
execution and after sales services.

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Responsibilities:
• Deputy General Manager shall review the specifications received from the
customer's for completeness and technical feasibility.
• GM/Deputy Manager shall nominate a Sales Engineer for each enquiry.
• Price to be quoted shall be indicated in the cost estimation sheet by GM/Deputy
Manager in consultation with Joint Managing Director.
• The Sales Manager based on the cost estimation sheet shall prepare proposal.
• Proposal contains the complete details of product provided, i.e. the specification of
the product, commercial aspects, delivery schedules and details of any other
contractual requirement if found necessary.
• Follow up with customer for the order, shall be done by Sales Engineers or General
Manager or Deputy General Manager, concerned branch office.
• On the receipt of an order or letter of indent or verbal order, Senior General
Manager, Deputy General Manager of Sales and Services shall review the
requirements with respect to :

 Adequacy of the requirements in terms of information and specification.

 Capability of the organization to meet the customer's requirements.

Distribution Channel:
As the products are directly sold to the customers, there doesn't exists any specific
distribution channel such as the middle men's like whole-sellers, retailers etc. There are
some representatives of the company who directly deals and negotiated with customer
and arrive at a particular resolution and decide on the mode of transport.
The Main Functions of Marketing Department:
• Interacting with defense customers for defense development items.
• Approval of technical aspects and cost estimation.
• Timely submission of tenders.
• Issue of order acceptance.
• Preparation of cost estimation.
• Responsible for preparation of proposals.

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ENGINEERING DEPARTMENT

Organizational Chart of Engineering Department:

The Main Functions of Engineering Department:

• Prepare drawing for a proposal
• Prepare manufacturing drawing.
• Technical specification of machine.
• Detail designing of presses.
• Detail designing of major assemblies such as General Assembly Layout, Sub-
Assemblies, Hydraulic Circuit Diagrams, Detailed Circuit Diagram, Sequence of
Processes.
• Preparation of blueprint and a soft copy of detailed design of presses is to give to
the customer.
• Preparation of bill of material.

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PURCHASE DEPARTMENT

After the blueprint is prepared and approved by the customer, then a copy of that
is sent to Purchase Department.

Organizational Chart of Purchase Department:

Functions of Purchase Department:

• Here the standard items are quoted for enquiry, which is the lowest quotations it
goes for supply.
• Here procurement of materials takes place.
• Negotiation for purchase of materials takes place.
• For materials default this department will be responsible.

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PLANNING DEPARTMENT

Organizational Chart of Planning Department:

The Main Functions of Planning Department:

• Specification list is prepared i.e. raw materials required for manufacturing a
product.
• Date of scheduling the product to Engineering customer is finalized and sent to
Engineering department which acts as base for designing a product.
• This department actually feeds the assembly i.e. the assembly of parts at workshop.
• If any order is received in between, then order will be subcontracte

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STORE DEPARTMENT

Organizational Chart of Store Department:

The Main functions of Store Department:

This department looks after the packing respects and the assembly of the finished
products.
Keeping record of finished goods in respective bins.
As when customer requirement comes dispatching the products.
Store Department can even reject the material when the goods are
not accordance.
Issues are of Three types are :
○ Inward:- materials comes from outside for pricing within its office hours.
○ Outward:- rejection dispatch and issues.
• Stock:- left out materials is stored.

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DISPATCHING AND PACKING

Organizational Chart of Dispatching & Packing Department:

The Main Functions of this Department:

• Materials are been packed as per instructions. If there are huge machines then they
are dismantled and packed in pieces.
This department takes care of Central Excise Duty to be paid if goods are
transported outside Karnataka and Karnataka state duty to be paid if goods are
transported within Karnataka

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SWOT ANALYSIS

Strength

➢ It has achieved international standard.

➢ Economies of scale.

➢ State of the art technology.

➢ High qualified trained workers.

➢ Efficient input sourcing.

➢ Efficient inventory management.

➢ Strong research and development support.

➢ It has satisfied the customer.

weakness

➢ by change in technology.

➢ Transportation difficulties.

➢ Depending on the customers wants.

Opportunities

➢ Larger number of customers.

➢ Diversification.

Threat

➢ High market competition.

➢ Political instability.

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RATIO ANALYSIS
MEANING:
Ratio is the numerical relationship between two members. It may be expressed in
quotients, rate or in percentage. The ratio analysis of working capital helps the
management in checking upon the efficiency with which working capital is been used in
the business.
Ratio analysis is widely used tool of financial analysis. It is defined as the
systematic use of ratios to interpret financial statement so that the strengths and
weaknesses of a firm, as well as its historical performance and current financial
conditions can be determined.
Ratio makes related information comparable. A single figure by itself has no
meaning. But when expressed in the terms of the related figure, it yields sufficient
inferences. Thus, ratios are relative figures reflecting the relationship between related
variables. They are used as tools of financial analysis, which involves their comparison as
single ratios which like absolute figures are not use.

IMPORTANCE OF RATIO ANALYSIS:

The following are the main point of importance of ratio analysis:
1. Useful in Financial position analysis.
2. Useful in simplifying accounting figure.
3. Useful financial in assessing the operational figure.
4. Useful in assessing purpose.
5. Useful in forecasting purpose.
6. Useful in comparison of performance.

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CLASSIFICATION OF RATIOS:
1) Financial Ratio
2) Profitability Ratio
3) Turnover Ratio
4) Leverage Ratio
5) Coverage Ratio

THEORY AND DATA REPRESENTATION

FINANCIAL RATIOS:
Financial Ratio can be divided into two broad categories:

(A) Liquidity Ratios

(B) Stability Ratios

(A) LIQUIDITY RATIOS:

Liquidity ratios are used to measure the firm's ability to meet short term
obligations. They compare short term obligation to short term (current) resource available
to meet these obligations. From these ratios, obtained into the present cash solvency of
the firm and the firms ability to remain solvent in the event of adversity. The important
Liquidity ratios are:

CURRENT RATIOS OR CAPITAL RATIO:

This is most widely used ratio. It is the ratio of current assets to current liabilities.
It shows firms ability to current liabilities with its current assets.
Generally 2:1 is considered ideal for concern 1 .e. current assets should be twice of the
current liabilities. If current assets are two times of the current liabilities, there will be no
adverse effect on business when the payment of current liabilities is made. If the ratio is
less than 2, difficulty may be experienced in the payment of current liabilities and the day
to day operations of the business may suffer. It is experienced as follows.

Current Ratio = Total Current Assets/ Total Current Liabilities

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Year 2009 = 205.366.241/ 125,869,467

= 1.63:1

Interpretation: - As Conventional rule, current ratio of 2:1 is satisfactorily. The current

ratio 2009 is less than 2:1 so the current ratio is not that strong but it is more than 1.17, it
is considered as good.
LIQUID OR ACID TEST OR QUICK RATIO:

This is the ratio of liquid assets to liquid liabilities. It shows a firms ability to meet
current liabilities with its most liquid (quick) assets. Liquid assets are those assets which
are readily converted into cash and which includes bills receivable, sundry debtors and
short term investments. Inventories and prepaid expenses are not included because the
emphasis is on the ready availability of cash in cash of liquid assets.
Liquid liabilities include all items except bank overdraft. Generally 1:1 ratio is
considered ideal ratio for a concern because it is wise to keep the liquid assets at least
equal to liquid liabilities at all times. It is calculated as follows:

Liquid ratio = Liquid Assets/ Current (or liquid) liabilities

Year 2009 = 82.145,234 / 125,869,467
= 0.65:1

Interpretation: the actual quick ratio has to be compared with the standard quick ratio of
1:1. If the actual quick ratio is equal to or more than the standard ratio of 1:1, the
conclusion can be that the concern is liquid and so that it can pay off its short term
liabilities out of its quickly realizable assets without any difficulty. But, BEMCO’s quick
ratio not up to the mark of standard quick ratio of 1:1. So, it is not possible to BEMCO to
meet the short term obligation.

ABSOLUTE LIQUIDITY OR SUPER QUICK RATIO :

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It considers only the absolute liquidity available with the firm. Here only cash +
bank balance + marketable securities are taken into account consideration. The desirable
norm for this ratio is 1 : 2 i.e. Re. 1 worth of absolute liquid assets are sufficient for Re. 2
worth of current liabilities. Absolute liquidity ratio is calculated as follows

Absolute Liquidity = Cash in hand + Bank Balance + Short term marketable securities
Current Liability
Year 2009 = 1.69,17.678 /12,58,69,467

= 0.13
Interpretation: This ratio indicates the availability of cash on every one rupee of current
liabilities. The the company is said to be having a sufficient amount of cash to pay
liabilities. The amount is highest in 2009 i.e.Rs.1,69,17,678.

FIXED ASSET RATIO:

These ratios explain whether the firm has raised adequate long term funds to meet
its fixed assets requirement and is calculated as under. If the ratio is less than 1, it is good
for the concern.
Fixed Asset Ratio = Fixed Assets/ Capital Employed

Capital Employed: (shareholder's fund + Long term liabilities)

Year 2009 = 5.76.52.68/ 13,71,39,314.88

= 0.42:1

Interpretation:-The fixed assets turnover ratio is calculated to know the companies ratio
of investment of company in fixed assets. The ratio of capital employed in the fixed
assets is 0.42 to 1. Nearly it is 50% of the company

RATIO OF CURRENT ASSETS TO TOTAL ASSET RATIO :

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= Current Assets / Total Assets

Year 2009 = 8.21.45.234 / 20,53,66,241
= 0.40
Interpretation: - The current asset ratio to total asset it shows the current asset blocked
in total assets. The total block of current assets in total assets is 0.40.

DEBT EQUITY RATIO

This ratio is calculated to measure the relative proportion of outsiders funds

invested in the company. This ratio is determined to ascertain the soundness of long term
financial policies of that company and is also known as external - internal equity ratio.
Generally debt equity ratio 2:1 and 2:3 is acceptable. It is calculated as follows
Debt Equity Ratio = Long Term Funds/ Share Holder's Funds
Year 2009 =7.92.46.130/ 5,78,93,185S
= 1.37
Interpretation: -The Debt equity ratio is higher in the year 2009 i.e. 1.37.

PROFITABILITY RATIOS:
Profitability is the overall measure of the companies with regard to efficient and
effective utilization of resource at their command. These ratios are calculated to enlighten
the end results of the business activities which are role criterion of the overall efficiency
of a business concern. The following are the important profitability ratios.

OPERATING PROFIT RATIO:

The operating profit ratio establishes the relationship between operating profit and
sales and is calculated as follows

=PBIT/ Net Sales

Year 2009 = 1,70,00,021 / 22,50,48,379* 100

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= 0.08 or 7.55%
Interpretation: - The Operating profit ratio in recent years it will be decreasing.
NET PROFIT RATIO:

The Net Profit Ratio establishes the relationship between the net profit (After Tax)
of the firm and net sales and may be calculated as follows
Net Profit Ratio = Net Profit after Tax/ Net Sales * 100

Year 2009 =33,22.462/ 22,50,48,379 * 100

= 0.014 or 1.48%

Interpretation:-The NP ratio measures the efficiency of the management in generating

additional revenue over and above the total cost of operations. This ratio also shows the
net contribution made by every 1 rupee of sales to the owner funds.
RETURN ON CAPITAL EMPLOYED RATIO:

Return on capital employed ratio is an indicator of the earning capacity of the

capital employed in the business. This is considered to be most important ratio because
it reflects the overall efficiency with which capital employed. This ratio is calculated as
follows

Return on capital Employed = PBIT/Capital Employed*100

---------------------------------------------------------
Year 2009 = 1.70.00.021/ 1,37,139,315 * 100
= 12.40%
Interpretation: - The ratio indicates that how much profit that the company has earned
on its investment. The analysis of the year it is 12.40%
RETURN ON SHAREHOLDERS FUND:

Return on Shareholders Fund shows the extent to which profitability objective is

being achieved. Higher the ratio, the better it is

Return on Equity = Profit after Interest and Tax/ Shareholder's Fund* 100
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Year 2009 = 33.22,462/ 5,78,93,185 * 100

= 5.74%

Interpretation: -The Return on equity is 5.74%. In recent years it is decreasing

EARNING PER SHARE :

This help in determining the market price of equity share of the company and in
estimating the company's capacity to pay dividend to its equity shareholders. It is
calculated as follows
Earning per share =Net Profit after Tax/ Number of Equity Shares
Year 2009 = 33.22.462/14,46,700
= 2.30
Interpretation: - It reflects the shareholders return on their amount invested in the
company, the returns on share value is satisfactory in recent years .
RETURN ON TOTAL ASSETS:

This ratio is calculated to measure the profit after tax against the amount invested
in total assets to assets are being utilized properly or not, it is calculated as under
Return on Total Assets = Ntet Profit after Tax / Total Assets* 100

Year 2009 = 33,22,462/26,30,70,782 * 100

= 1.26%
Interpretation: - This ratio is very important from shareholders’ point of view in
assessing whether their investment in the firm generates a reasonable return or not. It
should be higher than the return on investment otherwise it would imply that company’s
funds have not been employed profitably.
TURNOVER RATIO
These are ratio very important for a concern to judge how well facilitate the
disposal of a concern are being used or to measure the effectiveness with which a concern
uses its resources at its disposal. In short these will indicate the position of assets usage.
These ratios are usually calculated on the basis of sales. The following are the important
turnover ratio usually calculated by the concern.
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SALE TO CAPITAL EMPLOYED:

This ratio shows the efficiency of capital employed in the business by computing
how many times capitals employed is turned over in a stated period. The ratio is
ascertained as follows
Sale to Capital Employed = Sales/Capital Employed

Year 2009 = 2.25.048.379 / 13,71,39,315

= 1.64

Interpretation: - The higher the ratio, the greater are the profits. A low capital turnover
ratio should be taken to mean that sufficient sales are not being made and profit is lower.

FIXED ASSETS TURNOVER RATIO:

This ratio measures the efficiency of the assets used. The efficient use of asset will
generate sales per rupee invested in all the assets of a concern. The inefficient use of asset
s will result in low sales volume coupled with higher overhead charge and under
utilization of the capacity. It is calculated as under

Fixed Asset Turnover Ratio = Sales/ Fixed Assets

Year 2009 = 2.25.048.379/5,76,52,681
= 3.90
Interpretation: High turnover, capital employed, working capital and fixed assets
is a good sign and implies efficient utilization of resources. Utilization of capital
employed or, for that matter, any of its components is revealed by the turnover ratios.
Higher turnover reflects efficient utilization resulting in higher liquidity and profitability
in the business

LEARNING EXPERIENCE GAINED DURING IN-

PLANT TRAINING
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The in-plant training has created a sense of practical exposure and

enlightened my mind as to what actually an organization is and how theoretical
concepts are practiced in BEMCO HYDRAULIC’S LTD.

Importance of different management functions such as planning,

organizing, staffing, directing and controlling was known, which guide the
organization in facing competition. I have come to how different work and things
are got done through others and with others in a decentralized structure. I now
know how a work flow model helps in organizing the work, by determining
authority and responsibility for staff. In-plant training also helped me in knowing
the importance of group effort when compared to individual effort in an
organization. Also, importance of human relations was realized which helps in
getting the things done through and with others. I also came to know how
different employees/workers’ have different skills, talents, abilities, attitudes etc
and how they are coordinated and utilized in an optimum manner in achieving
organization goals. Also, I understood the importance of leadership traits, which
guide in achieving personal as well as organization goals. I have also come to
know how dynamic an individual should be in a cooperative sector, which will
guide me in my career planning and development. I also came to know how
information technology and various systems have reduced the activity and
documentation time.

I also came to know how marketing department bridges the gap

between organization and customers by various promotion tools as well as regular
feedback from customers. Also, I have recognized the importance of time
management, which helps an organization in meeting delivery dates of customers.
I have come to how quality control and assurance guides an organization in
providing quality product to customer, thereby improving loyalty from customer
side.

BAPUJI ACADEMY OF MANAGEMENT & RESEARCH, DAVANGERE 54

 BEMCO HYDRAULICS LTD. BELGAUM

Important things observed and learnt in SIS:

➢ I learned how to save time in production department and in which situation

to take correct decision.
➢ How to work as a team.
➢ How to utilize mechanics better.
➢ Self discipline.
➢ Time management.
➢ Good work culture.
➢ Self confidence.
➢ Group communication in the organization.
➢ How to implement plant to work so fast.
➢ How to identify waste and reuse for production.

BEMCO HYDRAULICS LIMITED (Balance Sheet)

ITEMS 2005-2006 2006-2007 2007-2008 2008-09 2009-10
SOURCES OF FUNDS
Shareholders Funds

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 BEMCO HYDRAULICS LTD. BELGAUM

Share Capital 9806700 11806700 11806700 19806700 19806700

Reserve & Surplus 29594803 27157996 29884689 35958539 38086485

Shared Application Money 0000 0000 12200000 0000 0000

Total(1) 39401503 38964696 53891389 55765239 57893185
Loan Funds
Secured Loans 25990715 36618665 33989057 58347939 57163020
Unsecured Loans 15997483 14947724 10713337 17262355 22083110
Total{2) 41988198 51566379 44702394 75610294 79246130
Deferred Tax Liability 0000 0000 440000 152000 62000
TOTAL(1+2) 8,13,89,701 9,05,31,075 99,03,37,883 13,15,27,534 13,72,01,315
APPLICATION OF FUNDS
Fixed assets (3)
Gross block assets 79676949 82892540 125451882 126732888 129350627
Less: Depreciation 46178864 49338310 53182646 62698817 71697946
Net Block Assets 33498085 33554230 72269236 64034071 57652681
Investment (4) 51860 51860 51860 51860 51860
Deferred Tax (5) 1261000 1389000 0000 0000 0000

Current Assets, Loan Advance

Inventories 58369425 89994661 99306575 131742137 123221007
Sundry Debtors 34137970 28958207 58597160 62230657 5071375827
Cash & Bank Balance 4103713 4285202 9727904 14982633 1691767799
Loan & Advances 4741583 7599490 12156229 9950526 1451379775
Total (A) 101352691 130837560 179787868 218905954 205366241

Less : Current Liabilities provision

Liabilities 54863690 66740781 143143302 143000161 120285500
Provision 4361261 8560793 9931880 8464189 5583967
Total (B) 59224951 75301574 153075182 151464350 125869467

Net Current Assets (6) [A-B] 4,21,27,740 5,55,35,986 2,67,12,687 6,74,41,603 7,94,96,774
Profit & Loss (7) 4451016 0000 0000 0000 0000
TOTAL (1+2+3+6+7) 8,13,89,701 9,05,31,075 9,90,33,783 13,15,27,535 13,72,01,315

BAPUJI ACADEMY OF MANAGEMENT & RESEARCH, DAVANGERE 56

 BEMCO HYDRAULICS LTD. BELGAUM

PROFIT AND LOSS ACCOUNT

Items 2005-06 2006-07 2007-08 2008-09 2009-10
A. INCOME
Sales 13360267 13255854 20701534 22152804 24147196
4 4 0 4 4
Less: Excise Duty 16243415 16656569 18075930 25852646 16423586
Net Sales 11735925 11590197 18893941 19567539 22504837
9 5 0 8 9
Other income 4589275 4600426 5506004 9824027 9259677
Increase / (decrease) in WIP & F/G 8772367 20454420 10158968 22295690 (6927405)
Total Income 13072090 14095682 20460438 22779511 22738651
1 1 2 6
B. EXPENDITURE
Material consumed 71477831 74130056 11854515 12776628 12056137
6 1 8
Employee Emoluments & Benefits 22241416 25676822 28680662 34123499 33350058
Manufacturing & other Expenses 27407659 26958298 38815786 42023793 47445311
Interest 5078375 5514396 6869006 7753750 10852043
Depreciation 889099 729741 3062053 10404352 9023883
Taxes
Total Expenditure 12709438 13300931 19597266 22207167 22123267
0 5 3 5 2
Profit Before Taxation 3626521 7947506 8631719 5723441 6147978
Provision for Taxation
Current Tax 413000 (2704000) (106300) (2776000) (2709500)
Deferred Tax 1023000 128000 (1829000) 288000 96000
Fringe Benefit Tax (602000) (550000) (631600) (729500)
Income tax earlier years 28522 5243 0000 0000 523484
Profit after Tax 2161999 4774749 5189719 2603841 3322462
Surplus/Deficit Brought forward 6613015 (4451015) 323733 3332709 3504682
Total 4451016 323733 5513452 5936550 6827144
Less: Adj. For Employee benefits as per 0000 0000 0000 753236 0000
transitional provision
Total 4451016 323733 5513452 5183314 6827144
Appropriation:
Transfer to General Reserve 0000 0000 500000 1000000 1000000
Proposed Dividend on Pref. Shares 0000 0000 1455819 580052 580052

Tax on proposed Dividend 0000 0000 224924 98580 98580

Balance carried forward 4451016 323733 332709 3504682 5148512
Basic/Diluted Earning per share 3.34 6.55 6.99 1.54 1.83

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 BEMCO HYDRAULICS LTD. BELGAUM

SUMMERY OF FINDINGS

1. BEMCO hydraulics limited is the first ever company to make hydraulic Presses.

2. Company has invented re-railing machine first time in india and third in the
World.

3. Company is importing some amount of row material from foreign countries

which is costing more.

4. The company is also having good credit facility from its supplier that reduces its
working capital requirement.

5. This company is having a practice of receiving 20% of the advance from its
customers with order which also reduces its working capital requirement.

6. The various current assets turnover ratio and net working capital ratio having
positive association with the return on investment ratio of the company.

7. Current assets to sales ratio having negative association with the return on
investment, which indicates proportion decline in current assets to sales, will
cause to increase in profitability of the company in less proportion.

8. The company is providing an excellent pre-sales and after sales services to the
customers.

9. The overall liquidity position of the company is good.

10. The BEMCO has a good image in the market for its better service and quality
products.

11. The company is has experienced staff which reduce the default in the work.

12. The company’s main policy is very good i.e.

“quality movement is life improvement”

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 BEMCO HYDRAULICS LTD. BELGAUM

SUGGESTIONS

1. Company can introduce very highly qualified and productive management.

2. Try to procure row material domestically rather than procuring from rest of the world if it
is available, from which the row material cost is reduced.

3. Company can borrow Bank finance to meet working capital requirement.

4. The BEMCO must reduce the debtors holding period, from which the investment in
debtors can be reduced.

5. Bemco should concentrate on marketing and promotional activity in the market to

increase its business operation.

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 BEMCO HYDRAULICS LTD. BELGAUM

CONCLUSION

BEMCO hydraulics company is public limited company. It is in the

field of hydraulic presses and equipments, since from 1957, and having good
sales record. It indicates the management’s effectiveness and efficiency.

The world is very competitive and BEMCO HYDRAULICS

LIMITED the manufacturing industry can face the competition if they
maintain the quality standard and services, keeping in view he changing
scenario of business. The customer opinion about BEMCO is good.

To conclude we can say that BEMCO HYDRAULICS LIMITED has

been in the hydraulic field pioneering various developments in respect of
Machine tools. They are developing the company by maintaining the quality
and they are coming with new models.

BAPUJI ACADEMY OF MANAGEMENT & RESEARCH, DAVANGERE 60

 BEMCO HYDRAULICS LTD. BELGAUM

BIBLIOGRAPHY

INTERNET

WWW.bemcohydraulics.net.

WWW.Bemcoworld.com.

BOOKS

• Marketing management- 13TH EDITION, Author-Philip kotler

• Companies past record.

• BEMCO’S Annual report.

BAPUJI ACADEMY OF MANAGEMENT & RESEARCH, DAVANGERE 61