The year 2013-14 continued to be another challenging year. The growth
of Indian economy has been going down gradually for the last 5
consecutive quarters at below 5% growth. Industrial growth has been
badly affected and is estimated to be a mere 0.7% in FY 2014 with
manufacturing sector actually shrinking by 0.2%.
This environment is clearly reflected in the developments of core
sectors of Indian economy and especially in the manufacturing sector.
In such times, the Country needs a push from its government to infuse
investments and rekindle growth. Now that elections are over, there is
much expectation from the new government. Already the stock markets
have displayed positive expectations. I believe the economic turnaround
is under way but the recovery will be gradual and the Country is still
a few years away from attaining the high growth trajectory.
With the above economic conditions, naturally your Company''s business
was also adversely affected. We have acknowledged the need to think
differently in these trying times. Our Transformer Division which
accounts for the largest part of our business has been the worst hit.
To address this we have tried to access different markets and new areas
of growth. We have made export breakthroughs in Thailand, Indonesia,
Korea, Turkey, UK and other middle Asian Countries. We have received
significant export orders for AC Motors from Steel plants and Cement
Industries. In Domestic front also we have got huge orders from Indian
Railways and repeat orders from satisfied customers including big
corporates. In the past, most of our business has been generated from
Motors, Transformers and PGG. We are re-structuring our methods to make
sure that we explore all possibilities of growth in these areas. The
sales force has been realigned to meet the expectation of the market.
While in this difficult market, we are adopting all possible measures
to mitigate the losses, at a time when there is pressure in terms of
lower demand, high cost of inventory, increase in interest burden,
lower turnover and increase in cost of employees. Your Company is
taking continuous steps to overcome these challenges by improving
efficiency, productivity, enhancing execution capability and skills of
human resources by continuous process of learning and development but
at the same time its impact can also be seen in short term.
These difficult times, the Company has looked inwards and is trying to
emerge even stronger to further strengthen its competitive positioning
in the next few years. It is the beginning of a long path. It is a
difficult task, yet I am seeing changes and can expect better days
The strategies that Company is adopting for healthy growth such as use
of capital sparingly & efficiently, realigning supply chain and
procurement, reduction in material cost through central procurement, to
improve operational efficiency and reduce waste, focus on export of
high revenue generating products and diversification on the customer
Several measures were initiated during last year to improve the
performance of Lloyd Dynamowerke GmbH & Co KG (LDW), the step down
subsidiary of your Company. LDW is operating in difficult economic
environment which was prevailing in Euro zone. LDW is not an exception
to this and it is passing through one of the most challenging times and
it is expected that it will show considerable progress in the coming
We believe in building relationships through trust and faith in a
manner which is totally transparent. We respect the rights and dignity
of the human being and believe in every individual''s limitless
ability to excel.
I express my sincere thanks to shareholders, lenders, bankers,
financial institutions, vendors, customers and all other stake holders.
I express my sincere thanks to the employees of the Company for their
active involvement and support during the hard times.
Vijay R Kirloskar