4th Annual General Meeting
Message from the Executive Chairperson
I have great pleasure in extending you all a warm welcome to the41" Annual General Meeting of your company. I hope you are safe and secure duringthis global health crisis
We are pleased to present to you our Annual Report for FY 2019-20.Every Country and Organization is fighting on two fronts protectingthe lives andsafeguarding the livelihoods. This year has been challenging due to economic slowdown andin later part with health hazard due to COVID19. Even in this difficult situation we havestrived hard to overcome and deliver our best. I would like to assure the shareholdersthat your company has taken every step to ensure the safety of employees and the communityin this grim situation. We have applied all the recommended safety and precautionarymeasures at all units of your company.
The Annual Report for the year ended 31 March 2020 has been in yourhands for some time. With your permission i shall take them as read.
The year gone by was very difficult as the India's Auto Industry whichconsists of automobiles and auto components witnessed one of its challenging year withdeclining sales figures vis-a vis the previous year owing to weak domestic demand andfalling exports. Your company had taken various steps to face the situation includingcontrolling the operational costs and reduction in Fixed costs to bringdown company'sbreak-even point.
We have recorded total revenue of INR 203.69 Crores EBITDA INR 11.13Crores and recorded a loss of 6.92 Crores. This dip in numbers is the direct result of lowproduction among our key OEM clients which is again due to an extremely weak demandscenario in automobile industry and a cautious approach taken by manufacturers due tointroduction of BS VI and electric vehicles. Your company was able to achieve CashProfitability of INR 5.76 Crores inspite of Profit After Tax (PAT) being negative. Thereare no defaults in loan repayments even In this recessionary situation. Term LoanBorrowings in this financial has decreased by INR 4.87 Crores. By productivity improvementthe company was able to bring its Manpower cost down to INR 30.76 Crores as compared toINR 36.40 Crores in earlier year. Due to these measures the break-even point of thecompany during the year has come down to INR 226.30 Crores as compared to INR 266.56Crores In earlier year. Proper Sales recovery plan was undertaken during the yearresulting in reduction in trades receivables vis-a- vis previous year. Inventorywas reduced to INR 40 Crores from INR 48 Crores in earlier year with continued efforts toreduce it further. Some Key Financial Ratios like Debt ratio (0.45) Debt Equity ratio(0.25) Current Ratio (1.46) and Operation Cash Flow ratio (0.32) are indicating thefinancial stability of your company in this financial year.
The Company has always made efforts to increase value to itsshareholders and reward them for their continuous support and loyalty with these positivenotes your board has recommended a dividend of Rs. 01.00 (10%) on a face value of Rs. 10each out of its accumulated reserves. In the previous year a dividend of Rs. 4 per sharewas declared.
We expect an improved performance in FY 2020-21 but the pandemicscontinues to impact the business in the first half of the year and to a limited extent itis likely to affect the 2"'' half also. It is expected that the automobile industrydemand may remain subtle during second half of the FY 2020-21 and hence considering thisyear as a year of consolidation your Company has targeted to achieve sales performance asper previous year level but with profitability improvement. Further the Company islooking forward to positive change in productivity improvement.
Your company is striving hard to achieve growth in revenue andprofitability. Prime Focus will be on new customers and exploring new market areas and atsame time to reduce production cost and achieving maximum productivity. We have progressedwell in our diversification efforts mainly in the Defence sector and hope to beoperational in that soon.
We keep receiving suggestions from our valued shareholders which provedvery helpful in company's working. I thank our employees and all stakeholders customerssuppliers bankers financial Institutions and consultants and our Internal Auditors CostAuditors Secretarial Auditors and Statutory Auditors for their support through out theyear.
I thank you all for your time for this General Meeting. It is veryencouraging for us. Take care.
With best wishes
Rohini G. Kalyani Executive Chairperson