We wish to place before you the performance of your Company in the year gone by andshare thoughts on Company's growth journey in the future.
As the Indian commercial vehicle industry recovered your Company has seen increaseddemand for its products. Major CV OEMs - where company enjoys an authorized applicationvendor status - have been placing higher schedules. The company however has not been ableto take full advantage of increased demand due to working capital challenges.
Our wagon manufacturing business which caters to Indian Railways has also not been ableto take off due to competitive price pressures and liquidity constraints.
Further there has been some growth in demand for fabricated steel structures frompower plant EPC contractors and we have been able to meet this partially with availablefinance and resources.
During the year the Company recorded gross sales (gross of excise duty) of Rs. 14887Lakhs which is 2.31% lower compared to the previous financial year. Loss before tax andexceptional items stood at Rs. 4719 Lakhs compared to loss before tax of Rs. 6036 Lakhs inthe previous financial year. The loss after exceptional items and tax for the year stoodat Rs. 10476 Lakhs against the previous year's loss of Rs. 10255 Lakhs. The loss for theyear includes an exceptional item representing provision for impairment in the value ofthe fixed assets of Rs. 5367 Lakhs (previous year Rs. 6300 Lakhs).This is a non-cashprovision and has been done in accordance with the Accounting Standard AS-28. Further asignificant portion of the loss is attributable to finance cost.
The Company has continued to incur cash loss during the year and have been facing cashflow challenges throughout the year. The working capital constraints are affecting theability of the Company to fulfill the customer orders and at times customers have beencurtailing schedules on the Company.
There has been a significant erosion of net worth. A reference may be please made tothe Director's Report.
Overall macro-economic performance of the Indian Economy and infrastructure growthwitnessed in year 2015-16 is expected to continue in the near future and the Company isworking on measures to take advantage of these opportunities for future growth.
The expected improvements in the market sentiment and infrastructure growth are likelyto drive growth in volumes in the coming years.
In the Commercial Vehicle - Fully Built Vehicle industry (FBV) the Company is planningto consolidate its position by regaining market shares and becoming a leading player amongauthorized FBV manufacturers.
The Company's wagon manufacturing capability continues to be unutilized as the currentlevel of prices do not support viable business propositions. We are looking at otheropportunities to tackle this challenge.
The Company's Heavy Fabrication business (manufacture of steel structures for powerplants) is also expected to grow in view of expected increased spending on powergeneration projects.
The Company continues to maintain its thrust on improving its share of business fromits customers and on exploring new products / applications / variants of current productsfor growth.
In view of challenges faced we have been rationalizing operations lowering costs andoptimizing production across our various plants.
The Company will continue its efforts to improve cost structure improve workingcapital management and strengthen its balance sheet.
The company is also exploring options to augment funds for working capital.
On the background of extremely challenging conditions over the past couple of years wehave indeed strengthened our resolve to grow the company from its current levels. Thecompany continues to enjoy support from its major customers viz. Tata Motors VECommercial Vehicles (VECV) and Man trucks in FBV segment and engineering giants likeL&T Power and BHEL in heavy engineering.
We would like to convey our appreciation to the entire CEBBCO team for theirdetermination and efforts in this journey of the Company.
We are confident that your Company will continue to better its performance in thecoming years. We would like to express our gratitude for your confidence in us. We wouldalso acknowledge the unfailing support of our extended family of customers dealerssuppliers financial institutions and partners which has been a major source ofinspiration to your Company.
|Thank you || |
|Yours sincerely || |
|On behalf of Board ||of Directors |
|P.Y. Gurav ||Prabhakar Dalal |
|Director ||Director |
|DIN: 02004317 ||DIN: 00544948 |