The year under review has been extremely challenging and difficult for your Company.Sales revenue was down by 13.65% from Rs. 205 Cr. in the previous year to 177 Cr. in thecurrent year. This is mainly on account of extremely adverse conditions prevailing in thesectors your Company operates in such as automotive auto component wind energy andinfrastructure. This has adversely affected profits for the year resulting in an overallNet loss of Rs. 45.83 Cr.
The CNC Machine division struggled for orders due to virtually no fresh capitalexpenditure spending by both private sector companies as well as Government organizations/ PSUs. The wind energy sector had crashed for the past 2 years due to removal of certainincentives by the UPA Government. Although this was restored it has taken time for windturbine companies who are our customers to revive thereby affecting sales. Similarlyinfrastructure projects in power metro rail etc. where we supply equipment remained verysluggish during the year.
Besides reduction in revenue the Company had to make higher provisioning fordepreciation and amortization rising by nearly 24.15% from Rs. 32.75 Cr. to Rs. 40.66Cr. due to the new provisions in the Companies Act 2013. The Company also faced a highinterest burden that it is working on to bring down through real-estate sales andreduction of receivables and inventory.
The current year is expected to show improvement in terms of sales growth as there arenow signs of revival in the wind energy sector and increased Government buying for CNCMachines. Our Management team is working hard to increase production despite cash flowstringency and return to profitability.
Your Company is entering into long term supplier relationships with the Hyundai groupand the Alstom group for various Metro rail projects in India and overseas. This shouldstart adding significant sales revenue in the next few years. We have also startedexporting wind mill parts to Europe and expect to do about Rs. 20 Cr. of exports duringthe current year. I expect the current year to be one of consolidation and stabilizationfor your Company.
I would like to thank all the Company stake holders for their support during thischallenging period for the Company and offer my heartfelt condolences to our latePresident Mr. M. D. Adhikari's family on his sad demise in March this year.
Maitreya V. Doshi
Chairman & Managing Director
Date : 30th April 2015 Place : Mumbai