We wish to place before you the performance of your Company in the year gone by andshare thoughts on Company's growth journey in the future.
During the year the Company recorded gross sales (gross of excise duty) of Rs. 15115.5lakhs which is 1.53% higher compared to the previous financial year. Loss before tax andexceptional items stood at Rs. 3305 lakhs as compared to loss before tax of Rs. 4719lakhs in the previous financial year.
The Company continues to be severely constrained by shortage of working capital.
The schedules from the major commercial automotive OEM customers of the Company hadbeen improving starting from quarter 1 for the year under review. The Company had startedto increase the volumes at Jamshedpur plant beginning May 2016. However in September2016 the Company received a severe setback on account of action initiated by one of thebanks by stopping renewal of certain rotating working capital funding arrangement. Sincethen the Company has been struggling to make arrangements for working capital funds whichhas met no success. With support received from the OEM customers the Company has beenable to achieve some sales which are significantly lower as compared to potential demand.
Further there has been some drop in demand for fabricated steel structures from powerplant as erection of thermal plants are going slow. On the other hand there has beenincrease in demand of ESP due to strict norms of pollution. We foresee good orders withESP manufacturers. In year 2016-17 we were not able to take advantage of this requirementagain due to working capital challenges.
The Company has continued to incur cash loss during the year and have been facing cashflow challenges throughout the year
The Company is caught in a liquidity trap caused by the lower volumes higher level offixed cost and debt servicing.
The lenders have initiated Strategic Debt Restructuring (SDR) to explore possibility ofrevival of the operations. While the SDR is in process as of this date the Company ishopeful of positive outcome to resume the normal operations.
The overall macro-economic performance of the Indian Economy and infrastructure growthis expected to continue. While this will enable the Company to regain the volumesconsidering its potential much will depend on the outcome of SDR as explained above.
The company continues to enjoy support from its major customers viz. Tata Motors VECommercial Vehicles (VECV) and Man trucks in FBV segment and engineering giants likeL&T Power and BHEL in heavy engineering
We acknowledge the unfailing support of our extended family of customers dealerssuppliers financial institutions and partners and thank them for their hard work andcommitment in this critical phase of the company.
Finally we thank you for your continued trust confidence and support.
|Thank you || |
|Yours sincerely || |
|On behalf of Board of Directors |
|P.Y. Gurav ||M.V. Raja Rao |
|Director ||Director |
|DIN: 02004317 ||DIN: 00110363 |