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Chairman's Message
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Dear Fellow Shareholders,
It gives me immense pleasure to welcome you all to the 63rd Annual General Meeting of the Company.
The year 2009 – 10 was marked by recovery and revival of the global economy. The global economy witnessed significant improvement in the year after having plunged into the steepest economic contraction a few years earlier. The turnaround was quicker than expected due to immediate corrective fiscal steps taken by various Governments all over the world.
During the year, the Indian economy had around 7.4% GDP growth with the manufacturing sector showing growth of over 10%. The prospects for the current year are also positive. The monsoon almost all over has been good which should give fillip to the Agricultural sector, which in turn moves the consumer demand which has a cascading effect for the entire economy. The growth is expected to continue over a few years at least as the country continues to spend large amounts for infrastructure development.
As you would have seen from the Annual Report of the Company, during the year under review, your Company achieved a turnover of Rs. 8.41 billion, as against Rs. 8.67 billion in the earlier year and the operations have resulted in a profit of Rs. 375.93 million as against Rs. 302.12 million in the year before. As you are aware, the Company has a subsidiary – Kirsons B.V. in the Netherlands and that subsidiary has a subsidiary – Lloyd Dynamowerke in Germany. During the year ended 31st March, 2010, Lloyd Dynamowerke (LDW) had a turnover of Euro 50.83 million with a net profit after tax of Euro 1.91 million. The turnover of Kirloskar Electric on a consolidated basis as such was Rs. 11.83 billion with a net profit after tax of Rs. 509.61 million.
Your Company manufactures and deals in the major products of the Electrical Industry and is an important player in the Electrical Industry. The Electrical industry is expected to benefit considerably with the growth of infrastructure sector and the huge investments in power sector. The higher power generation would result in manifold rise in transmission equipment demand. This will propel the demand for our Transformers and allied products. We are progressively going in for higher capacity and higher kV class ratings in our Power Transformers. In order to meet the new market requirement for distribution transformers in the Country, the Company is setting up a new Distribution Transformer unit at Mysore with state of the art technology. In the 11th and 12th plan, there is a shift of power requirement towards 220 kV class. Hence the Company is setting up new facility to manufacture transformers upto 250 MVA, 220 kV class from the existing 100 MVA, 220 kV class. In the year under review, we have successfully manufactured 62.5 MVA, 220 kV Transformer for Aaress Steels, Hospet.
In the Electronics Division at Mysore, we manufactured 630 kW, 415 Volts, AC Drive for roughing stand for Steel Rolling Mill Application at Aashiaya Rolling Mill, Ahmedabad. Ours is the first company to have installed AC drive for such application in India on Slipring Induction motor. The Company has indigenously developed both in door and out door type 11 kV and 33 kV Class Vacuum Circuit Breakers which are fully type tested at CPRI, Bangalore. The Company is also working towards developing gas insulated switchgear.
The increasing investments in industrial sector, especially Ferrous, Steel and Fertilizers will see increase in demand for our Motor product lines.
The Company has supplied 50 MVA Short Circuiting facility to CPRI, Bangalore, for the first time in the Country. This has been successfully commissioned at CPRI. This is a national facility, used by customers in India and abroad for type testing of the products.
The Company has bagged an export order which is for about Rs. 6 crores for supply of motor generator set with controls with scada and automation for testing of large power transformers. This will be supplied for the first time from India.
The AC Motors group has developed new motors for the newer applications like Automatied parking systems that are being built to address the parking problems in metros and major cities.
We have expanded our product portfolios in other product areas and have expanded geographically by opening new offices in the areas with high business potential.
The unit at Gabbur Village, Hubli for manufacture of medium range motors and generators is having Statomat Automatic Winding machine which will increase the output fast.
To cater to the requirements of Generating Sets of higher capacity, the range of Generating Sets has been increased to 500 kVA from 160 kVA.
The Nuclear Power sector is on the rise in India with four new plants under construction. India has planned to increase the contribution of Nuclear power for electricity generation capacity. In 2010, India’s installed nuclear power generation capacity will increase to 6,000 MW as part of the plan to reach generation capacity of 20,000 MW by 2020. It is a matter of pride for me to say that we are working with Nuclear Power Corporation of India for development of special motors. We are the only company to be given this opportunity in India, apart from BHEL.
All above developments will have a positive impact on the operations of the Company.
As you all are aware, the global recession and meltdown had its impact more outside India – Europe was one of the hardest hit and it is yet to come out of recession fully. Our investments abroad in LDW will definitely yield good results, knowing the technological strength of that company. The economic developments in that part of the world will however make us wait for some more time and we are willing to wait for our investments to bear fruits through asset appreciation and operational earnings over the period of time.
We believe that inspired employees team is the key for achieving greater heights in excellence by any organization and for that reason the Company gives utmost importance to its Human Resources Development. For the purpose, the Company continues to take various HR initiatives for employee motivation, nurturing talent, enhancing skills and building new leaders. I am sure you will agree that this is equally important as is putting up of new facilities.
I am sure with all above developments, the outlook of the Company is bright. I assure you that we will pursue our goals with zeal and vigor so as to enlarge all stakeholders value.
I would now conclude by expressing my sincere gratitude to the shareholders for having stood by us all along. I would also like to take this opportunity to express my gratitude to the Banks, Financial Institutions, Customers and other stakeholders for their continued confidence and the employees for their support.
Thank You
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