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HMT Ltd.

BSE: 500191 Sector: Auto
NSE: HMT ISIN Code: INE262A01018
BSE LIVE 13:57 | 17 Aug 32.95 0.35
(1.07%)
OPEN

31.55

HIGH

33.50

LOW

31.00

NSE 10:57 | 17 Aug 33.00 0.05
(0.15%)
OPEN

33.00

HIGH

33.00

LOW

32.00

OPEN 31.55
PREVIOUS CLOSE 32.60
VOLUME 5722
52-Week high 49.00
52-Week low 31.00
P/E
Mkt Cap.(Rs cr) 3,967
Buy Price 32.60
Buy Qty 50.00
Sell Price 32.95
Sell Qty 80.00
OPEN 31.55
CLOSE 32.60
VOLUME 5722
52-Week high 49.00
52-Week low 31.00
P/E
Mkt Cap.(Rs cr) 3,967
Buy Price 32.60
Buy Qty 50.00
Sell Price 32.95
Sell Qty 80.00

HMT Ltd. (HMT) - Chairman Speech

Company chairman speech

HMT LIMITED ANNUAL REPORT 2008-2009 CHAIRMAN'S REPORT Ladies & Gentlemen, It gives me great pleasure to welcome you all, to the 56th Annual General Meeting of your Company. The Audited Accounts and the Report of the Directors for the year 2008-09 are already in your hands and I seek your permission to take them as read. THE ENVIRONMENT: During the year 2008-09, the Indian economy, the third largest in Asia, was hit hard due to the global recessionary trends affecting the industry all around. The global financial meltdown and consequent economic recession in developed economies have been a major factor in India's economic slowdown. Given the origin and dimension of the crisis in the advanced Countries, which some have called the 'worst' since the Great Depression, every developing Country has suffered in one way or the other. No country, including India, remained immune to the global economic shock. The economy which had grown at the rate of 9% plus consistently during the previous three fiscals decelerated to 6.1% during 2008-09. The GDP at factor cost reduced to a growth rate of 6.7% against 9% in 2007-08, while the per capita income showed a 14.4% rise. The overall Index of Industrial Production (IIP) for the year points towards a sharp slowdown with growth being placed at 2.6% during the financial year 2008-09 while the IIP for the manufacturing sector was a mere 2.3% as compared to 9% in the previous year. However, despite the slowdown in growth, investments remained relatively buoyant reflecting the resilience of the Indian Enterprise. It is estimated that India's economic growth in the current fiscal would be around 6.5 per cent. The economy continues to face wide ranging challenges - from improving its social and physical infrastructure to enhancing the productivity in agriculture and industry and addressing environmental concerns. Meeting these challenges will be critical for improving India's social and human development indicators and the quality of life. THE COMPANY'S PERFORMANCE IN 2008-2009: The inland Tractor industry remained stagnant during the year 2008-09. Your Company recorded a Turnover of Rs. 161 crore as compared to Rs. 171 crore in the previous year. The demand for tractors was affected due to stringent credit terms and restricted flow of finance to the farm sector from Banks owing to large levels of default. The Company took advance measures by synchronising the production activities with sales, in order to avoid stock pile up. The Company produced 3,651 tractors valued at Rs. 134.34 crore, registering a net loss of Rs. 70.79 crore during the year as against Rs. 44.67 crore in the previous year. One of the major factors that impacted production of tractors was interruption in supplies by suppliers seeking price increase due to impact of increase in price of inputs like steel, copper, pig iron etc. Further, Production was controlled in line with the stock level of finished tractors to avoid blockage of working capital. Sales of tractors was also affected by the tightening of norms for tractor loan by Banks due to rising NPA and this impinged on the off-take of tractors in the market. Specifically, the Banks revised upward, the criteria related to land-holding, interest rates, and limited number of loan cases per dealer. Consequently, there was a drastic cut in Tractor Retail Finance. Further, the slow agricultural growth was yet another factor which impacted the sales. During the year, your Company initiated a number of operational measures such as improvement in its products, rationalisation of product mix, operational methods, capital investments, new strategies for marketing and distribution and introduction of productivity improvement schemes. Furthermore, the Revival Plans prepared for the Company for approval by Government of India is in line with the Country's eleventh Five Year Plan and your Company is gearing up to meet the performance targets set for the current year 2009-10. STRATEGIC INITIATIVES IN THE TRACTOR BUSINESS: During the year under review, the following measures were initiated in the tractors business: * Appointment of dealers for tractors in un-represented areas / regions to improve the market share of HMT Tractors, implementation of revised credit policy for tractor dealers and focus on institutional orders for tractors as part of Marketing strategies * Introduction of new models of tractors and Rationalisation of Product mix; * Credit tie up with leading banks; * Continued thrust on Plant upgradation and modernisation; * Market / Industry bench marked incentive schemes to accelerate the sales & collections. The Company would continue to invest in upgrading / replacement of plant and machinery for modernisation of the tractor production facilities as well as for product upgrades with emphasis on products with better aesthetics, ergonomics and safety. INITIATIVES AT THE SUBSIDIARIES DURING THE YEAR: During the year 2008-2009, the various Subsidiaries of your Company, embarked upon several measures to address the issues of new product introduction, technology development and customer orientation. Various activities in respect of augmentation of manufacturing capability by investment in upgradation and modernization of plant and machinery have been undertaken along with rationalization of manpower and organizational restructuring. One of the key issues being addressed is in the area of modernisation of plant and equipment and technology acquisition in order to ensure improved technological capability to position the products in tune with the market demand. REVIVAL PLANS OF THE COMPANY AND SUBSIDIARIES: The revival plan proposals of HMT Machine Tools Limited approved by the Government are currently under implementation. The Company is progressively implementing the revival plan, by upgrading manufacturing facilities, imparting training to enhance manpower skills and has drawn future plans considering the likely changes taking place in the macro environment. The revival plan proposals formulated by the Company in respect of HMT Limited - the Holding Company, HMT Watches Limited and HMT Chinar Watches Limited along with the Draft Rehabilitation Scheme for HMT Bearings Limited are under the active consideration of the Government for approval. Concomitantly, the Company would pursue efforts for locating suitable joint venture partners for its Subsidiaries with the objective of harnessing higher levels of technology. THRUST AREAS FOR THE FUTURE: The outlook for the current year i.e. 2009-10 is promising and the Company has planned to achieve a higher turnover with a better market forecast for its products. In order to widen the product base and to gainfully utilize the existing facilities, the Company has embarked upon an ambitious plan to focus on rationalization of the product range together with manufacture of engines for genset applications by introduction of certain modifications in the existing engines. The Company also proposes to take up manufacture of Rotavators which is being developed to suit the Company's range of Tractors. The Company has already initiated a host of measures towards performance improvement by appointment of new Distributors and Dealers in select Territories, engine upgradation for compliance of new emission norms for all models of tractors, interaction and tie-ups with Banks for financing purchase of HMT Tractors, introduction of debt settlement schemes for the non-operative dealers, dynamic business strategies, focus on exports, focus on institutional orders etc., which are expected to yield positive results during the current financial year. It is also expected that the appointment of new Distributors & Dealers in select territories would bring in new business opportunities for the Company. ACKNOWLEDGEMENTS: Your Company salutes the vast body of stakeholders who have contributed their mite for building this great organisation. I take this opportunity to thank my colleagues on the Board for the guidance given by them. I would also like to thank the concerned Ministries of the Government of India, particularly the Department of Heavy Industry, under the Ministry of Heavy Industries and Public Enterprises, State Governments concerned, Joint Venture Partners, Suppliers, Banks and Financial Institutions for their valuable assistance and support. The valued customers of the Company both in India and abroad deserve special mention for their continued patronage. I also express my sincere appreciation to the employees at all levels for their best efforts in the operations of the Company and their continued co- operation and understanding for maintaining cordial relations during the year. Shri A. V. Kamat, Chairman & Managing Director