Ladies & Gentleman. A very Good Morning to you all.
I welcome you all to the 24th Annual Meeting of the Shareholders of Crew B.O.S.Products Limited.
I will now proceed to share my thoughts on the Company and the macro environment.
Since the onset of the global meltdown, we have all been expecting a turnaround in theglobal economy & negative economic sentiment. It has become a continual wait. Thereare definitely some signs of the global economic recovery in certain quarters with the USeconomy showing signs of growth; as against that, the EU is yet to come back on track withthe GDP still in the negative zone. The Indian Economy continues to oscillate over policyissues. The investment climate is still a challenge with credit availability and cost ofcapital adversely impacting business.
It is time to also recognize the fact that the external climate will continue to beuncertain. So, it will be left to each organization to respond to these drifts and workout a business model that will help them to be agile and responsive to changes. I am awarethat the road we have travelled has been arduous & it has been tough for a couple ofyears. Having said that the decisions that we have made to wipe the slate clean withrespect to rectifying the issue that will allow all of us to freely comprehend the postionthe company finds itself in as of now. This will also allow us to set on a path ofrecovery and launch a transformation process where innovation and our ability to integratevarious disciplines will help us deliver results in the coming years.
Financial & Business review
Your Companys gross income for the year ended 31st March, 2013 stood at Rs.28819.14 Lakhs, as against Rs. 43903.56 lakhs for the previous year. The net income fromoperations was Rs. 26794.99 lakhs during FY13, as against Rs. 43204.05 lakhs for theprevious year.
However, an increase in the total expenditure (with increased interest costs, financecharges, higher depreciation and staff and other costs going up) affected net profitsduring the year under review. Your company is confident of increasing its business duringthe current fiscal and steps taken in the form of consolidations plans encompassing thehigh adherence to world class quality standards shall contribute in realizing itsaspirations. The present year has had its share of misfortune in the international tradeand your company suffered heavily due to non realization of debts from exports /domestictrades due to the economic downturn in the Global economy.
It was also unfortunate that the company got caught unawares with a situation relatingto our Chief Financial Officer. He had the organization wrongly believing into enteringinto certain trading activities that were seemingly lucrative. These turned out to beschemes that would benefit him personally and his associate companies and as result he hasfraudulently siphoned off scarce resource of the company. It was later found out oninvestigation that all his credentials as per his CV were wrongly declared. It was foundthat his CA certificate was forged as well as his work experiences and remunerations werewrongly stated. We have launched an investigation as well as reported him to the competentlaw enforcement authorities. At the same time we have immediately suspended and dealienated him from any affairs of the company or its subsidiaries. Inspite of thesedrastic setbacks we are confident that the company will be able to recover and realize itstrue potential and corrective actions will pave the path to its recovery
The fact that a number of our businesses were not doing well due to the currenteconomic scenario internationally, it was time to take stock of the situation and focus onreducing expenses that were being carried to support these non profitable businesses.Closure of these businesses will allow us to be able to consolidate our balance businessactivities over a narrower geographical area ensuring better control over the efficienciesand therefore reduction of costs. It is clear that the increase of expenditure to support"optimistically" our various expansions have hurt the organization in a hugeway. It was 1important to stop this slide and focus on our core areas of manufacturing therefore enabling us to get on the path of recovery, albeit slowly. I am confidentthat these decisions will enable us to move forward by first taking a few stepsbackward. The future of the leather business looks very good and once we have re organizedour operations to be leaner and efficient, we can only then capitalize on the opportunityIndia as a country and Crew BOS as a company has in the near future.
I would like to point out that in a few short years Crew BOS became the number oneleather goods exporter in India. I am confident that this process of consolidating andthen growing in a controlled manner will put us back on the road to success.
A WAY FORWARD
Our valued customers who are great brands in the US and Europe continue to support usand our long standing relationships will endure and allow us to ride this difficultperiod. Our engagement with our customers has always been exemplary and theserelationships are what will see us through these setbacks and put us back on a path ofexcellence that have allowed us to serve our customers to our best abilities. Crew BOSdesign room still continues to be the foremost design room in India and Asia for leathergoods. This excellence is now allowing us to go to better customer and improve our marginsin the future. Additionally the Govt. of India along with the leather Council is takingseveral steps to promote the industry. The problems of high prices of labour and rawmaterial in China are putting new opportunities in front us. A combination of the above, Iam sure, will allow us to perform well in the future and restore the confidence that allof you have always had in us.
A word of thanks
I also take this opportunity to thanks all the team members as well as our valuedclients who have supported us during this difficult phase. We have done very well as acompany since our inception. There is no reason why we will not be able to achieve thesame heights and more in the near future. I thank all of you valued shareholders, bankersfor your support. We will continue to work hard to bring the company back to excellenceand take it to its true destiny.
Last but not the least I would like to apologies - very sincerely - for the way thecompany has performed in the current year. It has been tough and all of you have enduredthe pain along with us. Some, more than others. The only assurance I can give you is thatmy team members, co directors and I have tried our best to ride this storm with a hugecommitment every day. We will continue to do the same in the future and I am sure we willhave enough reason to cheer. Many many thanks for your support.