premium energy transmission ltd Management discussions

PREMIUM ENERGY TRANSMISSION LIMITED ANNUAL REPORT 2008-2009 MANAGEMENT DISCUSSION AND ANALYSIS OPERATIONS The Company has achieved a gross turnover of Rs. 297.66 Crores as against Rs. 314.24 Crores in the previous year. The Net Profit after tax for the year under review has declined by 20% to Rs. 24.07 Crores as against Rs.30.16 Crores in the previous year. The profits have declined mainly due to the increase in input cost of Raw Materials and higher Depreciation. In the previous years report, the company had highlighted the possibility of a significant increase in the cost of commodities and inputs and their likely adverse impact on margins of our products. The exports during the year were Rs. 12.16 Crores against Rs. 16.27 Crores in the previous year, a decline of 25%. This drop was mainly due to the global economic slowdown. The Company has made forays into new territories like South Africa and South America during the year under review. Business in all the product groups except Geared Motors has shown flat or declining trend as compared to the significant growth achieved in the earlier years. Decline in the current year was mainly due to the general economic slowdown of the Indian economy. The Geared Motors business, however, had s growth of 38% during this year and the product is well accepted by the market. The management is optimistic thai this growth trend will continue in the coming financial year also. The Company has made satisfactory progress in the production of Lift Machines as per UWML design and is in the process of developing modern light weight lift machines in technical collaboration with Sicor, S.p.a of italy. The Companys strategy of providing thrust to Research and Development activities has begun yielding positive results. Eight new products were developed during the year under review which brought in new business both domestically and by way of exports. Consequently it has been decided to further invest and upgrade the R&D infrastructure. FUTURE OUTLOOK With a stable government at the centre, the Indian economy is again expected to return to a growth rate of 9% with a thrust to the infrastructure segment. This will have a positive impact on the growth of your Company. Your Company is continuously focusing on development of new products to strengthen the range and consequently improve market share. The Directors are optimistic of improved performance for the current year, barring unforeseen circumstances. PROMOTER CROUP Your Company is a subsidiary of DBH International Private Limited and it continues holding 15,776,294 shares representing 61.20% of Equity Capital of the Company. DBH International Private Limited in a part of B M Thapar Group. The Members may note that B M Thapar Group, inter alia, comprises the following Companies: (1) English Indian Clays Limited (2) Greaves Cotton Limited (3) Pembril Industrial & Engineering Company Private Limited (4) DBH International Private Limited (5) Karun Carpets Private Limited (6) Greaves Leasing Finance Limited (7) Bharat Projects Private Limited (8) Dee Greaves Limited (9) KCT Chemicals & Electricals Limited (10) Standard Refinery & Distillery Bharat Starch Products Limited (12) Greaves Farymann Diesel GmbH (13) Greaves Cotton Netherlands (14) DBH Global Holdings Limited (15) Greaves Auto Limited (16) DBH Consulting Limited (17) DBH Investments. HUMAN RESOURCES Industrial relations at all the manufacturing Plants of the Company remained cordial. The Company organizes various training programmes for the employees regularly, with a view to give thrust to improved productivity and quality. As required by provisions of Section 217 (2A) of the Companies Act, 1956 read with Companies (Particulars of Employees) Rules, 1975 as amended, the names and other particulars of employees are set out in the annexure to the Directors Report.