SHIMOGA FORGE LIMITED
Ladies and Gentlemen,
At the outset let me, wish you and your family members a VERY HAPPY AND
PROSPEROUS NEW YEAR.
On behalf of the Board of Directors and on my own behalf, I welcome you all
to this Fourth Annual General Meeting of your Company.
The Audited Accounts and Report of Directors for the period 1993-94 have
been with you for quite some time and with your permission I shall take them
Economic Scenario vis-a-vis Forging Industry
The present Indian Economic environment is replete with enormous
opportunities for healthy growth. Indian Industry, conscious of such
opportunities, is adapting to the requirements of liberalised business.
Foreign investment has started trickling in and it will not be long before
this trickle becomes a regular inflow. As the Indian economics picking up,
the Forging Industry is definitely emerging as one of the fastest growing
industries. With the fortunes rising in the domestic Engineering sector and
India becoming a sourcing point for Global giants, it is foreseen that, the
current manufacturing capacities shall prove to be grossly inadequate. The
overseas demand itself could exceed the current domestic market size.
Therefore, it is hightime for the Indian Industries to enhance their
capacities and to go Global.
The project for which your Company brought out its maiden public issue,
commenced in May 1994. There was a delay of six months in the commencement of
the project due to delay in shipment of Machinery, caused by natural
calamities. Inspite of this set back, your Company has made profit. A strong
foundation for a quantum leap has been laid. The unique strength of your
company is in focussing on niche markets of Small, Precision and Intricate
During the period under review, your Company has forged relationships with
many new customers and successfully developed many products. As a direct
result of this, the current order book position exceeds the turnover of the
period under review. In addition, orders exceeding 50%, of the installed
capacity are under negotiations. The overall performance of the company has
The estimated size of the world market for forgings is over US $ 5 Billion.
The price competition is forcing the automotive manufacturers to source the
forgings from the most economical source. Due to stringent environmental laws and expensive labour, manufacturing forgings in developed countries has
become both expensive and difficult. Global scouting teams from Mercedes
Benz, Cummins, Rockwell International, General Motors, Volvo, Ford, Volks
Wagon, Renault have evinced interest in India as a sourcing base. Your
company is, at present processing Export enquiries of trial nature, which are
expected to translate into regular offtake during the current year.
Your company has drawn concrete plans for expansion of installed capacity by
50%, which is proposed to be funded by internal accruals and institutional
borrowings. The land for the expansion project has already been acquired. In
addition to this, active negotiations are concurrently on, for acquiring one
more production unit, for which the funding pattern is being worked out.
I am, confident that your company will experience rapied growth in the years
to come, creating significant gains for the shareholders.
The success of a company, eventually hinges not only on dynamic leadership
but certainly on the hardwork and commitment of its employees. Your Company
has a highly motivated and committed team of employees. I thank each one of
them for their sincere service.
I thank our Customers for their continued patronage; our Vendors and
Suppliers for their valued contributions and the Company's Bankers for their
confidence and support. I convev my sincere thanks to, various departments of
Central and State Governments and all those, who have, directly or
indirectly, contributed to the growth of your company.
Above all, I convey my grateful thanks to all our share holders, for their
understanding and unstinted support.
Chairman and Managing Director