It is indeed very gratifying to note and review the performance of the
Company in the last year ending March 06. The turnover of the Company
increased from Rs.13.46 Crore in 04/05 to Rs.22.24 Crore in 05/06.
During the same period the net Profit increased from Rs. 3.12 Crore to
Rs. 6.03 Crore. This heartening rate of growth reflects the convergence
of a variety of positive factors - the efforts and investments that
TAAL has made through trying times, the diversified technologies and
capabilites that it has developed and, of course, the economic
environment which is now vastly more conducive to the growth of the
aircraft industry than in prior years. More importantly, it reflects
the competitive strengths that the Company has been able to develop and
the foothold that it has managed to secure in a number of growth
sectors of the aviation industry. Given this positioning and given the
robust foundation that has been laid, we believe the Company has every
reason to look forward to a bright, exciting and rewarding future.
As most of you would be aware, TAAL is present in three principal
business segments, the maintenance, repair and overhaul (often referred
to in the industry as MRO). In each of these areas, within India, TAAL
enjoys certain competitive advantages be it in terms of infrastructure
or be it in terms of a set of unique capabilities resulting from a
first mover advantage. Going forward TAALs growth strategy hinges on
using these advantages to establish itself as a Centre of Excellence
or as a Leader in each of these sectors.
On the aerostructures front the principal growth drivers are the Offset
Policies proposed by the Ministry of Commerce and the Ministry of
Defence (whereby foreign suppliers of aircraft are required to offset
their supplies with purchases of aeronautical products from India) and
the manufacture of Aerostructures (aircraft parts and assemblies),
aircraft sales (currently including P68C and Cessna aircraft) and
aircraft increased impetus to outsource by domestic organizations such
as ISRO and HAL. As one of the first private sector entrants in this
sector, TAAL enjoys a substantial first mover advantage in terms of
capabilities, relationships with customers and industry knowledge. Over
the next six months your company intends to roll out an ambitious plan
to capitalize on these opportunities and advantages and establish
itself firmly as a global player in this arena.
The excitement and the growth in the MRO segment stems, as you would
expect, from the rapid and sustained growth in the airline industry.
TAALs key strengths in this area include its past experience and the
infrastructure that the Company owns. TAALs airfield at Hosur has
recently been upgraded to be able to accept an Airbus A 320 or Boeing
737 class of aircraft. Simultaneously, a hangar has been built that
can accommodate such aircraft. Recently the Company has entered into an
agreement with a leading courier company for the maintenance and
operation of their three BAE ATP aircraft. These aircraft have now
arrived in India and are ready to enter service. This year the Company
shall also launch an Approved Service Center for Cessna Citation
Business Jets. TAAL is currently in discussions with a number of
potential partners for setting up a full fledged MRO facility at its
airfield. We expect the outcome of such discussions to he known within
the next six months.
The interest in business aircraft continues to be strong and with the
economy on a stable footing we expect this trend to continue.
Increasingly, companies as well as individuals are beginning to place
value on their time and are therefore beginning to realize the benefits
of a private aircraft. As the sole Indian representative of the Cessna
A ircraft Company for their Citation range of Business Jets and the
Caravan aircraft, TAAL enjoys a very strong positioning in the market
and is therefore certain to benefit from the tailwinds in this sector.
To facilitate all of the above TAAL has embarked on an aggressive HRD
initiative. A number of executives have been recruited at middle to
senior levels and they now form part of a very motivated and diverse
team that will he responsible for driving the Company into the future.
In short, the future looks exciting and every effort is being made to
convert this excitement into real growth.
We look forward to the continued support of our customers, hanks,
financial institutions and shareholders in bringing these aspirations
Pune, June 30, 2006 Chairman