Chairmans Letter to Shareholders
My Fellow Shareholders
I am delighted to have the privilege of apprising you about Genus again. The aim is torecognize our accomplishments during the financial year 2015-16 and to share with you ouroutlook and plans for the future. I am grati ed with the continued growth of market sharein the arena of 'smart metering' and 'power infrastructure'. I am more excited about thepace and scale of execution that our Company is undertaking to ful l our unwavering aimOfficreating long-term shareholder value.
In a state of ux in the economies across the world we maintained capability todemonstrate a strong performance on the strength of our in-house innovation andengineering capabilities with constant cost discipline. We closed the financial year2015-16 on strong note with revenue and Profit almost in line with our estimates. I amhappy to inform that Genus achieved its highest ever operating Profit (EBIDTA) ofRs.138.41 crore during the year. Post adjustment of power backup solutions business(discontinued with effect from April 01 2015) our sales increased by 6% to Rs.869.24crore and the bottom line (PAT) increased by 53% to Rs.78.45 crore. We creditably reducedour gross debts by 35% to Rs.233 crore from Rs.360 crore reported in the previous year.The Company has a vision to make it a debts free company in coming years and it will bedone by internal accruals and by liquidating its investments and loans. Our net worthreached to Rs.656.60 crore with a book value of Rs.26 per share. In line with ourcommitment to deliver an incremental reward corresponding to performance of the Companythe Board has recommended a higher dividend of Re.0.25 (i.e. 25% of the face value of Re.1per share) per equity share as against Re.0.20 (i.e. 20%) per equity share in the previousyear.
While the challenges of Indian economy's and power sector's continued we remainedstimulated by our founding principles work hard and deliver excellence with simplicity.Genus continued to widen its wings in the area of providing smart metering solutions topower T&D sector with unique range of end-to-end smart metering solutions. Genus'ssmart metering solutions are continuing to achieve the improbable results in tackling theissue of power utilities/discoms and in improving their competency & Profitability.Genus's closed-loop smart metering solutions are also playing a key role in smart gridinfrastructures and giving boost to the ef ciency of the entire power value chain. Genusplays a vital role when it comes to balancing the need for innovative metering solutionwith low-pricing.
With recent initiatives like UDAY Scheme Integrated Power Development Scheme DeenDayal Upadhyaya Gram Jyoti Yojana Make in India Digital India Smart Cities Housing forAll Solar Net Metering and higher budgetary allocations the present government hascreated many positive waves for the industry. With the decades of experience in providingcustomized and top notched solutions for power transmission and distribution sector suchas smart metering solutions smart metering communications including control &automation software smart prepayment meters and net metering solutions Genus is uniquelypositioned to cater to needs of the power sector and to become one of the largest beneciaries of the government's ongoing reform initiatives.
While India continues to be our stronghold market we believe that our next level ofgrowth will come from developing international markets. We understand that UK and Africanmarkets are offering huge opportunities to deploy latest and most innovative energymetering technologies such as Smart Meters Prepayment Meters and Net Metering Solutionsto create a smart energy infrastructure. Our focused international thrust is based onconstant rising demand and building aspiration for smart metering solution in identi edinternational markets. We are strategically ready to capture the opportunities through ourrepresentative Offices in fastest growing regions in the world. Towards this Genus hasalready opened an Office in Singapore to assess and grab business opportunities in thatregion. Looking forward with the aggressive plans to increase our access to the domesticand international market as well I am fully optimistic of the rapid growth of the Companyin the upcoming years.
We are working very hard to transform our 'engineering construction and contract (ECC)- power project business' into a truly frontrunner rather than a supportive business. Wehave already taken signi cant steps to reinforce the capabilities of this business and tomeet the aspirations of power T&D sector for turnkey solutions. With increasing trustof government on revival of power T&D sector rural electri cation and smart gridspace we see signi cant headroom for growth in this area of business.
Our success is highly driven by deep insights into our customer's needs. Our decade ofexperience in-house research and development (R&D) centre and state-of-the-artmanufacturing facilities with complete forward-backward integration have been backing ourability to beforehand understand anticipate and embrace changes affecting the clients. Italways keeps us in winning position and helps in gaining unfailing trust of our clients.We have always been a strong believer of achievement of sustainable growth throughconstant R&D. We spent more than 14 percent of our Profit on R&D during the yearunder review. Our constant focus on R&D always provides us a competitive advantage inall areas of business and makes us the preferred choice of power utilities/discoms.
Genus has always been very active in discharging its responsibilities towards thesociety specially the local community in the areas where it is located. During the yearunder review Genus supported various educational programmes conducted in far reachingareas of the tribal belts of Rajasthan. With a view to provide basic computer knowledge torural women to make them self-con dent & self-reliant the Company also promoted thecomputer training programmes in the tribal belts of Rajasthan. Toward healthcare theCompany organized various medical camps and awareness programs in remote villages ofRajasthan. The Company also supported a naturopathy center in Moradabad which isestablished to deliver holistic services for healthy life to every class of people atsubsidized rates.
I personally believe that our accomplishments would have never been possible withoutthe never-compromised honesty & integrity and long-term association of our managementteam. While I am very thankful to our senior management team I am even more grateful toour executive team for the successful execution of our plans and for the fair &friendly culture that has embedded in Genus. I honestly consider our personnel at alllevels as our good fortune.
I want to conclude this letter with special thanks to our amazing group of long-termshareholders who not only supported us but also encouraged us for our long term approachto business mission. I promise them for the next phase of superlative growth in the comingyears.
Ishwar Chand Agarwal
Jaipur July 29 2016