The Indian consumer electronics industry has been growing at a double-digit growth ratesince past few years. Higher disposable income, Increased product awareness, affordablepricing, and shift In lifestyles have together been Instrumental In changing the amountand pattern of consumer spending; thereby, resulting In strong growth In the consumerelectronics industry. But still, the consumer electronics goods, like refrigerators,televisions and air conditioners, have low penetration In the country, leaving vast roomfor future growth.
According to research report by "Booming Consumer Electronics Market InIndia", the Indian consumer electronics Industry will grow at a CAGR of around 13%during 2011-2014. During this time period, we expect that LCD TV will capture majority ofthe television market share as It wiII replace Color televisions market to a large extent.
Moreover, we observed that the air-conditioner (AC) segment is one of the mostimportant product segments driving the overall growth of the Indian home appliances marketIntroduction of Innovative features and technology coupled with the expansion ofdistribution network Is helping the market to grow at a faster rate. Besides this, washingmachine and microwave oven Is becoming a high growth segment In the consumer electronicsmarket In India. Your Company as a future strategy is looking to expand In Southern partof India. Your Company has paid an advance for land which Is close to Chennai auto Selectronics hub as a part of the future growth strategy.
Further, many International brands are Increasing their presence En India's lucrativeconsumer electronics Industry by establishing their manufacturing base in India whichoffers an additional opportunity for your company to expand its operations hence we haveInvested In our pew manufacturing plants to boost the production capacity to meet theIndustry requirements as an OEM supplier. The year 2011 proved to be a bad year for allglobal markets and effects of global economic recession were also felt in lndia. Theimpact of economic stress has unfortunately carried over into the year 2012. The Indiancurrency took a severe beating and has devaluated quite substantially. I am confident thatinstability will end soon and the Indian economy will bounce back. During the year thecompany lost a major share of sales revenue on account of no new government tenderbusiness which had contributed around 50% of sales revenue of the company during theprevious two years. Also the sales revenues planned as part of Its expansion programmecould not be fully generated due to problems In ramp up of new lines which has nowstabilised and slowdown In sales of our major customers. The additional finance cost anddepreciation on account of huge capital investments coupled with foreign exchangefluctuation on account of currency fluctuation during the second half of the year resultedInto losses.
The Company is under process of Investigation by SEBI and SEBI has passed an ad interimex-parte Order WTM/PS/IVD-ID5/42/2011/DEC dated 28.12.2011 prohibiting the company toraise further capital from market, debarring the company and its director from dealing Insecurities market and asking the Company to call back the ICD and deposit the sametogether with the balance amount lying in the IPO account In an Escrow account. Thecompany has replied to the above referred ad interim ex-parte order vide its letter dated10th April 2012.
Keeping In mind our past experiences your company has already started diversifying Intoother fields like Automobile, Lighting and FMCG industry. These industries also holdimmense potential for increasing our plastic moulding and electronics business and theseIndustries are also growing at a very healthy rate. We have already started some businessfor these industries and our endeavour is to aggressively grow this business into a majorrevenue stream for your company.
As consumer electronics Industry will also grow at a sustainable rate, we are making anendeavour to be the leading OEM supplier to the world's best known brands In India byadding new customers and new products and add to the wealth for all the stakeholders.
Let me put on record my appreciation for all my colleagues, staff, customers, clients,vendors, suppliers, business partners, shareholders, stakeholders, civic and governmentagencies who have been with us since Inception of the business and have supported us allthese years
14th August 2012.