Chairman's Message

Speech Delivered by Mr Vijay R Kirloskar, Chairman & Managing Director
Kirloskar Electric Company Limited at the 61th Annual General Meeting

Dear Fellow Shareholders,

Another year passes by and I am sure you are content with the performance of your company. The growth that the company has witnessed over the past five years has been sustained in a strong and steady way. After completing the restructuring activities in 2004, the company has grown to its highest ever turnover of Rs. 728 Crores with a profit after tax of Rs. 23.7 Crores in 2007-2008. These correspond to a growth rate of 23% in turnover and a 32% in profit. I am sure you will find these results satisfying but I continue to strive to achieve higher targets and assure you that the Company shall continuously work to improve itself.

The Indian economy continues its high-sustained growth rate of 9% despite the prevailing turmoil of the world’s financial markets and the increase in the commodity prices. The Indian economy is now poised to grow at a good rate although inflation may moderate the growth rates. However, the government’s concentration on infrastructure and in particular the power sector will help in the growth of your Company’s business. The Company’s order books stood at a record high of 132.55 Crores. To capitalize on the demand for our products, we have increased our marketing presence by adding new sales offices in the previous year. We continue to invest in new infrastructure and strengthen our human resources to meet this growing demand. We are focusing our energies in particular on our transformer and rotating machine business where we strive to make bigger and larger machines for our esteemed customers in India and abroad. Similarly, we continue our increase our presence in the Switchgear and Electronics area. Our new business of diesel generating sets under the brand name “BLISS” continues to grow well and we plan to expand the existing range of products.

In this year, your Company has decided to combine the assets and liabilities of the three firms namely, Kirloskar Electric Co. Ltd., Kaytee Switchgear Limited and Kirloskar Power Equipments Ltd. to form a single business entity. This merger will allow your Company to capitalize on the new synergies in terms of revenue enhancement and cost savings. By merging the three entities, your Company hopes to benefit from improved market reach and visibility as well as be able to achieve economies of scale. With the completion of this merger, your Company shall be in a position to deliver enhanced market power in the upcoming year.

My fellow shareholder, it is my ambition in the current year that the Company will cross the figure mark in turnover. We are hoping to sustain the profit margins by constantly working on cost saving methods through better design and increased efficiencies to combat the increases in commodity price in India. We continue to implement quality improvement programs to offset the higher raw material prices. We are also focusing on building upon the existing strength of my colleagues, officers and workmen to move this company to be a key player in the Indian market.

With the growth being witnessed all over the world, it is time for us to adopt a more global outlook about our business and measure ourselves on par with the leading companies of the world in order to further the business, your. Company shall continue to seek the best technologies and if necessary, invest appropriately in new or current business all over the world so that your company can be a world market player.

Finally, I would like to take this opportunity to express my gratitude to the Financial Institutions and Banks for the sustained support to be the Company. I would also like to thank all our valued customers, domestic and international, for their unstinted support. I sincerely appreciate the contribution and efforts of all our employees without which the Company would not have been able to overcome its difficult times. I would like to thank you , the shareholders of the confidence that you have placed with your Company’s management and Board of Directors, I request you to continue to extend your whole hearted support so that we can work together to accelerate the growth of the Company.