Kirloskar Electric Co Chairman's Speech > Engineering - Heavy > Chairman's Speech from Kirloskar Electric Co - BSE: 533193, NSE: KECL
Kirloskar Electric Co
BSE: 533193|NSE: KECL|ISIN: INE134B01017|SECTOR: Electric Equipment
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« Mar 12
Chairman's Speech (Kirloskar Electric Co) Year : Mar '13
Dear Shareholders,
 I am happy to present the Annual Report for the year 2012-13. I would
 also like to take this opportunity to welcome Mr.  I Alok Kumar Gupta,
 who is I appointed as joint Managing Director of your Company from 15th
 March, 2013. He has got more than 32 years of extensive techno,
 commercial experience in sales, marketing, business development,
 purchase, planning and CRM. I also thank Mr. Anuj Pattanaik the former
 Deputy Managing Director.
 The year 2012-13 continued to be a challenging year. Even after four
 years since the eruption of global financial crisis, the word economies
 and financial systems are in the mode of recovery yet.  This has
 ultimately been leaving its continued and far reaching impact on the
 growth rates of the major developing countries, reflecting both upon
 external vulnerabilities and domestic challenges. However, it is widely
 believed that the developed economies will gradually perform better in
 the coming months though the developing economies will witness sluggish
 economic performance or negative growth.
 Back in India, growth of power, project and infrastructure sector has
 come to standstill and the demand for the manufacturing goods has been
 shrinking. Overcapacity, depressed selling prices and uncertainty loom
 large today. The delayed implementation of projects coupled with
 extended deliveries of the finished goods are the new challenges being
 faced. Benefits of internationally weak commodity prices could not be
 reaped due to depreciating rupee. Tight monetary policy and high cost
 of funds are adding to the woes of industry. Your Company is mitigating
 this issue through the measures like optimization of capacities,
 realigning production facilities and by improving efficiency of
 It is important to note that despite various challenges, your company
 is able to achieve a steady performance through continuous improvements
 in processes, new product offering and driving operational efficiencies
 across all its functions, cutting costs, reducing overheads ,
 optimizing the labour cost.  The Management of your company is focusing
 its attention on improving productivity and achieving rationalization
 of production facilities. We expect to achieve substantial cost
 reduction through these measures. Considerable efforts are being put on
 achieving saving in material prices and related expenses. We have
 initiated various actions to improve customer satisfaction and to get
 closer to the customer. Integration of German Subsidiary and exploring
 related benefits has been being followed. For the electronic business,
 we are in process of entering into strategic partnership for the drive
 systems, so as to offer full motor plus drives package solutions. Your
 Company continue to add new customers in all sectors of business in
 substantial way.
 We have initiated several actions to improve performance of Lloyd
 Dynamowerke GmbH & Co., KG, Germany (LDW), the subsidiary of your
 Company in Germany Replacement of certain key managerial personnel and
 engagement with certain internationally well-known independent experts
 to work with the company are some crucial actions which are already
 implemented. We have charged off certain expenses in the year 2012-13
 and they are onetime costs. This has resulted in substantial loss in
 the year 2012-13. Nevertheless, we are pleased to mention that the
 existing order book of LDW is remarkably healthy and we have made
 necessary arrangements for continued enhanced support of the local
 banks and financial institutions.  Europe in general and Germany in
 particular has been showing signs of recovery. We firmly believe that
 LDW will be benefited by these initiatives and developments. The
 necessary steps are being taken to improve operational efficiency and
 business performance of LDW It is expected that LDW will report better
 performance in coming year.
 During the year Kirloskar (Malyasia) SDN.BHD, has recorded just above
 50% growth in its turnover. We hope that the current team would sustain
 its growth and would record still better results in the year 2013-14.
 During the year 2013-14 the external environment appears to be even
 more challenging and demanding. Unprecedented depreciation of rupee and
 higher cost of funds will put margins under pressure. Nevertheless, on
 the optimistic note, it is expected that the necessary fiscal and
 monetary measures would be taken by the Government to provide impetus
 to the economy.  We see good opportunities in certain segments like
 transmission & distribution, energy efficient machinery and demand in
 rural areas. We will continue with our efforts to explore new
 opportunities of achieving cost reduction and price competitiveness.
 I express my sincere thanks to all shareholder, lenders, banks,
 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 these hard times.
 Vijay R Kirloskar Chairman
Source : Dion Global Solutions Limited
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