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Kirloskar Electric Co
BSE: 533193|NSE: KECL|ISIN: INE134B01017|SECTOR: Electric Equipment
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« Mar 13
Chairman's Speech (Kirloskar Electric Co) Year : Mar '14
Dear Shareholders,
 
 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
 ahead.
 
 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
 base.
 
 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
 years.
 
 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
 
 Executive Chairman
Source : Dion Global Solutions Limited
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