I am happy to present the Annual Report for the year 2014-15.
The year 2014-15 continued tobeanotherchallengingyear. The current economic situationdomestic and international is weak and these are not the times when we can continue withbusiness as usual. This environment is clearly reflected in the muted development of coresectors of Indian economy and especially in manufacturing sector. In such times thecountry needs a push from its central government to infuse investments and rekindlegrowth. Already the stock markets have displayed positive expectations.
Prime Minister's Make-in-India campaign is arrived to facilitate investments fosterinnovation and build best-in-class manufacturing infrastructure. The initiative alsobrings to light the challenges faced by Indian manufacturing sector especially since ithas been stagnant. It is well anticipated that several infrastructure projects which areunder hold at the moment will get government clearance. This will immensely help yourcompany. I believe the economic turn-around is under way but the recovery will be gradual.
With the above economic conditions your Company's business was also adverselyaffected. We have acknowledged the need to think differently in these trying times. Toaddress this we have tried to penetrate marketsandnewareasofgrowth.Wearere-structuringoureffortstomakesurethatweexploreallgrowthpossibilitiesinthis area. As a part of our measures toprofessionalise the management and to broad base the Board of directors we appointedVinayak N Bapat and Anand Hunnur as Managing Director and Director Salesrespectively. Recently we appointedAshok Misra and Janaki Kirloskar as Directors of yourcompany. The Company will be immensely benefited by their expertise in the respectivefields.
While in this difficult market we are adopting all possible measures to mitigate thelosses at a time when there are pressuresoncostintermsoflowerdemandslowerprojectexecution and clearances increase in interest burden lower turnover.Your Company istaking continuous steps to overcome these challenges by improving efficiencyproductivityand execution capability and enhancingskills of human resources by acontinuous process of learning & development but at the same time also see its impactin short term.
Recognising the need to strengthen operations of this company we decided to put stopon fresh investments in LDW.Asyouareawarelast SeptemberLDWhadapplied for insolvency.Going by the prudent and conservative accounting policies your company has made enoughprovisiontorecogniseimpairmentinvalueofitsinvestment in LDW. It was an extraordinarysituation needing extraordinarysolutionstoo.To address the situation which arose out ofthis we undertook financial and operational re-organisation of your company. I am happyto mention that with a crucial support of the banks we are already through with ourfinancial reorganisation. During the last year the promoters too had infused freshcapital in the company.Iacknowledgeyoursupportinapprovingallthe needed and relevantresolutions from time to time. We arecontinuing with our efforts to further strengthenbalance sheet and resource base of your company.
In these difficult times the Company has looked inwards and is trying to emerge evenstronger to even further strengthenitscompetitivepositioninginthenextfewyears. It isbeginning of a long path. It is a difficult task yet I am seeing changes and can expectbetter days ahead.
Few of the strategies that company is adopting for operational reorganisation are asbelow:
1. To improve market share for its products.
2. Realigning supply chain and procurement.
3. Product designs optimisation and reduction in material cost through severalinitiatives such as optimising procurement reverse engineering and value engineeringproduct and performance benchmarking.
4. Eliminate avoidable costs.
5. Use of capital sparingly & efficiently.
I express my sincere thanks to shareholder lenders bankers financial institutionsvendors customers and all other stake holders. I express my sincere thanks to theemployees of Company for their active involvement and support during the hard times.
Vijay R Kirloskar