Greaves Cotton

The world has changed since we last met. After years of robust growth,
 the Global Economy witnessed a dramatic collapse. The decline started
 with problems in several large Wall Street firms; but it rapidly spread
 to other financial institutions affecting availability of credit to
 businesses across the world bringing to an end what was one of the
 longest continuous growth periods for the world economy. This along
 with the inflated prices of commodities brought about in the final year
 of the growth phase damaged businesses even in India. There really was
 little reason for the Indian Economy to suffer. Our fundamentals were
 sound and our financial institutions stable - thanks to the
 conservative approach adopted by the Government and the Reserve Bank of
 India - but our economy is today much more integrated into the global
 economy and we could not escape the impact of the downturn.
 
 Although the Indian economy grew in overall terms, there were specific
 sectors that were seriously affected. Indias automobile, capital
 goods, construction and realty sectors slowed down drastically in the
 second half of the year and Greaves could not escape the effects. The
 year, therefore, saw a fall in turnover and profits of the Company
 after two years of robust
 
 growth. Although the engines business managed to regain its topline,
 the construction equipment business declined dramatically.  At the end
 of the last calendar year, there were a few months of almost no demand
 due to the disappearance of credit and collapse of the real estate
 sector.
 
 Internally, timely action in our units to cut costs enabled us to
 weather the downturn. We have also rationalised our structure to align
 ourselves more with our markets in order to be able to service them
 better and to take advantage of the opportunities evolving in almost
 all of them. We have reorganised operations into five divisions -
 Agricultural Equipment, Automotive, Auxiliary Power, Construction
 Equipment and Industrial Engines Divisions.
 
 The rebound in a fair part of the economy has been quicker than
 forecast by pundits. The automotive industry is back on a healthy
 growth path; capital goods purchase frozen for some months is beginning
 to see life and even real estate seems to have bottomed out. Going
 forward, a stable government in place at the Centre is taking
 appropriate action which should get the economy back on track. Worthy
 of specific mention is that the Government of India has a stated
 priority to develop infrastructure. It is expected that this enhanced
 focus and associated spending will boost the prospects of the Companys
 Construction Equipment Division. We expect that a new growth cycle for
 both the Company and the country will begin by the second half of the
 current financial year.
 
 A strong vision, investments in research and development backed by
 focussed effort has led to the development of contemporary technology
 engines and a series of new innovations and products. This along with
 regular addition to capacity in previous years kept the Company on a
 growth path until 2007-08. These strengths along with your Companys
 strong financial health - being virtually debt free - will enable us
 to convert into reality any opportunity in our businesses that may come
 our way.
 
 The year 2009 has special significance for Greaves Cotton Limited. The
 Company was born at the height of the British Raj - in 1859 - and as
 such achieves a significant landmark in history - 150 years of
 successful operations.
 
 Your Company participated in the dawn of industrialisation of India and
 the renewal that Independence brought about. It has over the years,
 sustained itself with an entrepreneurial spirit and a resilience that
 the phoenix in the Companys logo connotes. We celebrate this
 significant milestone by rededicating ourselves to our mission - that
 of meeting and exceeding our stakeholder expectations in time to come.
 
 I strongly believe that the growth of a company is invariably
 determined not just by its strategy but on how it responds to the
 challenges. We are determined to convert all challenges into
 opportunities.
 
 I sincerely thank you for your continued support and look forward to
 receiving the same in the years ahead.
 
 Warm regards, 
 
 Yours Truly,
 
 Karan Thapar