MESSAGE FROM THE CHAIRMAN
The last year has been a landmark period in the state of the Indian
economy. GDP growth rate crossed 9% there was a huge inflow of FDI and
several large overseas Cos. were acquired by Indian corporates. The
Indian has now acquired an appropriate position of respect,
appreciation and relevance in the global economy.
The political stability has also contributed by providing the right
environment for economic reforms. Investments in infrastructure,
agriculture, housing, etc. are getting a great fillip through budgetary
provisions and these investments are creating a spurt in demand across
sectors like automobile, cement, steel, tractor, etc.
The automobile sector has in particular displayed an excellent growth.
The demand is continuously increasing in cars and light commercial
vehicles, with the frequent introduction of newer models, with
ergonomic designs, higher efficiencies and comfort. Multinationals like
General Motors, Fiat, Renault, etc. are increasing their presence in
the market, thereby creating further upswing in the demand. Toyota and
Honda have also announced plans for introducing small cars in India.
The One Lakh car will soon be a reality, with the Tata Motors project
going on stream by mid 2008. Such introductions in the coming years
would add to the demand, not just from the urban populace, but also
from the rural area for four-wheelers. Consequently, many
multinationals, like Dana, Eaton, and Caterpillar are setting up hubs
in India for meeting the growing demand as well as for feeding
components to their overseas operations. All this provides a great
opportunity to the Company to further grow its business.
The previous year has been good for the Company. Steadily we have
consolidated our financial position as well as our systems and
processes, in order to bring in better efficiencies. The Company has
achieved a growth of over 20% (on an annualized basis) and maintained
its market leadership. The production from the new plant at Gandhidham
is well accepted by the customers and has added significantly in
improving the overall business, in spite of last year being the first
year of its operation. In the next two years Gandhidham Plant will
materially help in increasing the business of the company. Thus,
despite much higher interest, depreciation and manpower costs of the
new plant, the Company has been able to maintain a -healthy bottomline
and has continued paying dividend. With the higher utilization of the
capacities in Gandhidham in the current year, the results are expected
to only improve.
In view of the strong growth in automobile industry in India, the
Company has decided to diversify into precision machining of automobile
components. To finance this new machining project, the Company is
tapping the capital market with a Composite Issue of rights-cum-public
aggregating to Rs. 29.00 crores. This project has a strong synergy with
the existing operations of the Company, as the Company already has
strong relationships with automobile OEMs, as well as considerable
strength in precision machining capability. This project is suitable
for expanding Companys business with the long term view.
I take this opportunity to express my gratitude to all the
shareholders, business associates, bankers, financial institutions and
suppliers for their continued support and faith in the Company.