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It is my pleasure to present to you, our performance for the fiscal year 2011–12, marking another year of steady progress for your Company. During the last fiscal, we have continually worked on expanding our capabilities and horizons, moving towards realizing our vision of becoming a leader in engineering and project implementation. We have also implemented necessary steps to address key issues and pave the way for continued growth.
While it was believed that the Indian economy has been able to decouple itself from the world economy, the reality is that the global events have impacted us reducing India's GDP growth to 6.9% (estimated) after expanding at more than 8% during the last two fiscal years. The sovereign debt crisis in Europe, slow recovery of the US economy, political instability in Middle East, ramification of natural disasters in Japan & Indonesia, rising crude prices and higher commodity prices have combined to present a rather challenging operating environment.
However the challenges cannot be attributed to global factors alone as, closer home, the hawkish stance adopted by RBI to counter persistent inflation and the surging fiscal imbalance have compressed availability of capital. Sentiment has also been affected by the slow pace of reforms, a multitude of corruption issues and delayed regulations which have impacted the domestic decision making cycle. However, the fact still remains that India is the second fastest growing economy in the world, and is expected to continue to deliver relatively attractive growth rates.
Despite operating in a challenging environment, our revenue growth for the year was quite robust. Having a presence in multiple verticals enables us to avoid the effects of cyclicality in any single vertical and allows for balanced growth. During FY 2012 our contracting business remained fairly robust with Process & Metallurgy carrying the bulk of revenue and order wins for the year.
The contribution from the Water business has been steady and there was progress on outstanding orders during the year. Towards the end of the year we also witnessed substantial turnover from our Power business comprising thermal power as well as solar power while biomass was subdued.
This year we have forayed into two new verticals of solar power and mines and mineral processing. We have already booked revenues from services in the solar power vertical. While we won order in the mines and mineral processing segment we begin executing on this order only in FY 2013.
Our order backlog has been fairly robust providing us healthy visibility. As of 31st March, 2012 we had an outstanding order backlog of Rs.2,924 crore on a standalone basis and Rs.3,803 crore on a consolidated basis. Given the strong order backlog and new order wins across verticals, we remain optimistic about our performance going forward.
Coming to the performance of our subsidiaries; it was a very challenging year for Leitner Shriram Manufacturing Limited in the wind turbine manufacturing business. Despite witnessing healthy topline growth there was pressure on profitability due to the sharp increase in price of a key raw material. This also led to some order cancellations during the year. However, these challenges have already shown signs of moderating and with the impending launch of wind turbines of larger capacity, we are confident that the performance in coming years will improve significantly.
The cooling tower business of Hamon Shriram Cottrell Pvt. Limited had a profitable year. Top line witnessed strong growth compared to last year; while profitability would have been even more impressive had it not been for Capex which had to be incurred on some projects. The demand for cooling towers is set to increase and prospects remain strong for this business given visibility from orders in the pipeline.
Our other subsidiaries / associates like Blackstone Group Technologies Pvt. Limited, Shriram SEPL Composites Pvt. Limited and Haldia Coke and Chemicals Pvt. Limited have progressed well during the year and delivered a performance on expected lines.
During the course of the year there were two significant developments. The first was obtaining approval from the Board to raise around Rs.150 crores of equity capital. The manner of fund raising and details are still being worked out but I can assure you that Shareholder interests will be adequately addressed. The funds raised will be primarily used for debt reduction and for the long–term business growth of the Company.
The other development is the conversion of part of the dues owed to the Company by Sree Jayajothi Cements Limited (SJCL) into equity. We have also assigned a part of the dues in favour of an SPV, Spark Environmental Technology Limited (SET). Together, the Company and SET have taken majority control in SJCL and will be undertaking necessary steps to improve the ongoing operations of SJCL while simultaneously identifying partners to co–invest in this equity. We believe that there is a considerable value in the asset and have undertaken steps which will eventually lead to recovery of outstanding dues.
The initiatives undertaken during the year will help stabilize operations and result in resumption of growth in both topline and profits and we remain confident in the Company's potential to create value for its stakeholders.
At this juncture, I wish to express my gratitude and appreciation towards our employees, customers, business associates, suppliers and bankers. I would like to thank our Shareholders for their unstinted support.