It is a pleasure to share our Annual Report for FY 2019-20
During the year we continued with our focus on growth. We concentrated on reaping thebenefits of our technological capabilities to strengthen portfolio and improve marketshare. We also maintained our focus on enhancing customer base and refining our productsand processes.
There is an inherent bias to knowledge and development in growth particularly inautomotive components industry. It is this "Knowledge" that helps usin different facets of our business. Today technology is not limited to justmanufacturing but extends well beyond this to quality control and customer care. It isall pervasive and impacts everything we do. Our technical know-how relationships in eachof our product segments enables us to offer the best technology to our discerningcustomers.
Our Enduring Endeavors
Our capabilities are helping us provide competitive end-to-end solutions increase therange of products with each customer to upsurge our wallet share. Cutting-edge processapproach makes us the preferred supplier to OEMs.
"During the year we have started our production operations at our JV unit atRajkot Gujrat. Also in the year under review we have acquired a land admeasuring 3837.50Sq mtrs in Pirangut Pune. All the necessary pre-construction approval has been receivedand we are about to begin the construction of new manufacturing plant. The plant isexpected to be operational by 2021-2022."
As we prepare ourselves for our next leg of growth we are taking strategic steps toachieve size and scale. We focus on continuous improvement in operational efficienciesreducing costs and ensuring that growth is profitable.
Today we are in the middle of the biggest crisis we have seen in our lifetime theCOVID-19 pandemic. So far it has created unprecedented socioeconomic disruption fear andthe tragic loss of human life. The collapse in economic activity this time is likely at alevel unseen in previous recessions. The exit path remains a vaccine and till then it islikely to be a bumpy ride with a continuous stop-start rhythm and strict health protocols.Having said that most of us have lived through economic crises before. Each time theagony has been different but each time we have adapted and bounced back. We are confidentthat like all previous crises the COVID-19 calamity will also pass and in time a freshwave of business energy will be unleashed. The next few months will be critical fororganizations as they build their resilience in order to persist resurrect theirbusinesses and master the new business environment.
"As companies focus on resilience to survive and thrive one trend that we seeaccelerating is the rapid adoption of technology. Businesses across the world wereundertaking large changes even before the outbreak but this crisis now provides anopportunity to hasten the transformation which will be imperative to the existence ofmany."
The year 2019-20 marked another downswing in the Indian economy with GDP growth rateslashing to 4.2% as compared to 6.1% a year earlier. The decline in GDP growth rate wasunderpinned by number of factors such as growing unemployment rate farmers indebtednessand rising cost of living affecting the overall demand. This slow pace was passed down tosupply side of the market when trade volumes and investment started to contract leadingto low manufacturing capacity utilization. In view of these pressures the Governmentannounced a slew of measures such as increasing the Minimum Support Price (MSP) forfarmers and reducing the Corporate GST and income tax rate cuts with the hope ofreviving the consumer sentiments to push business activities. Before we could see thepositive impact of these actions going into next fiscal year the Covid-19-inducedlockdown suspended economic activity. In response the Government and RBI announcedcombination of measures like fiscal stimulus reforms and monetary policy support tobring some relief.
In the year gone by domestic automobile industry faced a series of challenges such asliquidity crunch rising costs of inputs for vehicles and regulatory changes amongothers. All these factors caused a severe drop in the sales across all the vehicles'segments. The repercussion of this was felt across the domestic auto componentindustry orders.
The sales of passenger cars commercial vehicles and 2-wheelers stood at 2.78 million0.72 million and 17.42 million units respectively compared to 3.38 million 1.01 millionand 21.18 million units in FY 2018- 19. As a result the domestic auto component industrysuffered a revenue decline of 10% to 1.79 Lakhs Crores in H1 FY 2019-20 from the previousyear. Even the H2 FY 2019-20 which was expected to be smooth continued with the downsidetrend. Reason being subdued vehicle demand liquidity crunch lack of clarity onregulation and lastly COVID-19 outbreak in the 2nd half of March FY 2019-20.
To share with you an update on your Company's performance for 2019-20. The yearsaw a challenging business environment with lower GDP growth and slowdown in consumption.This resulted into a weakening consumer sentiment and lower demand for the segment inwhich we operate. The novel coronavirus has affected not just human health but severelyimpacted businesses and the society at large. Against this backdrop your Company'stotal revenue from operations stood at 47.54 Crores as compared to 57.88 Cr in theprevious financial year which is a decline of around 22%.
The next few months will be difficult but your company is strong with deeprelationships with customers and partners with a diversified business mix. It is wellpositioned to weather the storms ahead and take advantage of opportunities that come upduring the downturn to acquire new capabilities and gain market share. In the postpandemic world technology will play an even larger role in helping enterprises adapt tothe new normal and differentiate themselves. Your company is well poised to take the leadin partnering customers to recover and rebound on to their growth and transformationjourneys. In the coming years our priority areas comprise:
Continuous improvement in safety manufacturing processes and quality systems.
Operational excellence and focus on Industry 4.0
Enhanced engagement with existing and new customers
Growth in revenue and profitability
Focus on new product development
Employee engagement and talent management
Completion of capacity expansion and setting up proposed manufacturing facility.
Before we conclude we would like to take this opportunity to put forward that we as ateam stand together during this challenging phase of COVID-19. We look to fully cooperatewith the public authorities in these trying times with due-diligence and compliance.
Further we thank all our colleagues Board Members Management Regulatoryauthorities and the stakeholders for their continued support as we pursue these endeavorsgoing forward. We stand firm in our commitment to achieve sustainable growth and delivervalue to all our stakeholders.
We finally urge everyone to stay safe and healthy.
With warm regards
For and on Behalf of Board of Directors KRANTI INDUSTRIES LIMITED
|Sd/- ||Sd/- |
|SACHIN VORA ||SUMIT VORA |
|DIN: 02002468 ||DIN: 02002416 |
|CHAIRMAN & MANAGING DIRECTOR ||EXECUTIVE DIRECTOR |
|Date: August 17 2020 || |