Dear Shareholders,
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 the
current year. This is mainly on account of extremely adverse conditions prevailing in the
sectors your Company operates in, such as automotive, auto component, wind energy and
infrastructure. This has adversely affected profits for the year resulting in an overall
Net loss of Rs. 45.83 Cr.
The CNC Machine division struggled for orders due to virtually no fresh capital
expenditure 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 certain
incentives by the UPA Government. Although this was restored, it has taken time for wind
turbine companies, who are our customers to revive, thereby affecting sales. Similarly
infrastructure projects in power, metro rail etc. where we supply equipment remained very
sluggish during the year.
Besides, reduction in revenue, the Company had to make higher provisioning for
depreciation and amortization, rising by nearly 24.15% from Rs. 32.75 Cr. to Rs. 40.66
Cr., due to the new provisions in the Companies Act 2013. The Company also faced a high
interest burden that it is working on to bring down through real-estate sales and
reduction of receivables and inventory.
The current year is expected to show improvement in terms of sales growth as there are
now signs of revival in the wind energy sector and increased Government buying for CNC
Machines. Our Management team is working hard to increase production despite cash flow
stringency and return to profitability.
Your Company is entering into long term supplier relationships with the Hyundai group
and the Alstom group for various Metro rail projects in India and overseas. This should
start adding significant sales revenue in the next few years. We have also started
exporting wind mill parts to Europe and expect to do about Rs. 20 Cr. of exports during
the current year. I expect the current year to be one of consolidation and stabilization
for your Company.
I would like to thank all the Company stake holders for their support during this
challenging period for the Company and offer my heartfelt condolences to our late
President, Mr. M. D. Adhikari's family on his sad demise in March this year.
With regards,
Maitreya V. Doshi
Chairman & Managing Director
Date : 30th April 2015 Place : Mumbai