I am happy to present the Annual Report for the year 2014-15.
The year 2014-15 continued to be another challenging year. The current economic situation, domestic and international, is weak and
these are not the times when we can continue with business as usual. This environment is clearly reflected in the muted development of core sectors of Indian economy and especially in manufacturing sector. In such times, the country needs a push from its central government to infuse investments and rekindle growth. Already, the stock markets have displayed positive expectations.
Prime Minister's Make-in-India campaign is arrived to facilitate investments, foster innovation and build best-in-class manufacturing infrastructure. The initiative also brings to light the challenges faced by Indian manufacturing sector especially since it has been stagnant. It is well anticipated that several infrastructure projects which are under hold at the moment, will get government clearance. This will immensely help your company. I believe the economic turn-around is under way but the recovery will be gradual.
With the above economic conditions, your Company's business was also adversely affected. We have acknowledged the need to think differently in these trying times. To address this we have tried to penetrate markets and new areas of growth. We are re-structuring our efforts to make sure that we explore all growth possibilities in this area. As a part of our measures to professionalise the management and to broad base the Board of directors, we appointed Vinayak N Bapat and Anand Hunnur as Managing Director and Director - Sales respectively. Recently we appointed Ashok Misra and Janaki Kirloskar as Directors of your company. The Company will be immensely benefited by their expertise in the respective fields.
While in this difficult market, we are adopting all possible measures to mitigate the losses, at a time when there are pressures on cost in terms of lower demand, slower project execution and clearances, increase in interest burden, lower turnover. Your Company is taking continuous steps to overcome these challenges by improving efficiency,
productivity, and execution capability and enhancing skills of human resources by a continuous process of learning & development but at the same time also see its impact in short term.
Recognising the need to strengthen operations of this company, we decided to put stop on fresh investments in LDW. As you are aware, last September, LDW had applied for insolvency. Going by the prudent and conservative accounting policies, your company has made enough provision to recognise impairment in value of its investment in LDW. It was an extraordinary situation needing extraordinary solutions too. To address the situation which arose out of this, we undertook financial and operational re-organisation of your company. I am happy to mention that with a crucial support of the banks we are already through with our financial reorganisation. During the last year, the promoters too had infused fresh capital in the company. I acknowledge your support in approving all the needed and relevant resolutions from time to time. We are continuing with our efforts to further strengthen balance sheet and resource base of your company.
In these difficult times, the Company has looked inwards and is trying to emerge even stronger to even further strengthen its competitive positioning in the next few years. It is beginning of a long path. It is a difficult task, yet I am seeing changes and can expect better days ahead.
Few of the strategies that company is adopting for operational reorganisation are as below:
1. To improve market share for its products.
2. Realigning supply chain and procurement.
3. Product designs optimisation and reduction in
material cost through several initiatives such
as optimising procurement, reverse
engineering and value engineering, product
and performance benchmarking.
4. Eliminate avoidable costs.
5. Use of capital sparingly & efficiently.
I express my sincere thanks to shareholder, lenders, bankers, financial institutions, vendors, customers and all other stake holders. I express my sincere thanks to the employees of Company for their active involvement and support during the hard times.
Vijay R Kirloskar Executive Chairman