July 23, 2003
Ladies and Gentlemen,
It gives me a great pleasure to welcome you all to the 17th Annual General Meeting of Kale Consultants Limited this morning. The Director's report, Auditors report and audited accounts with notes thereon are with you for some time and request your kind permission to take them as read.
Continuing global recession, which had an adverse impact on the IT industry in general and Airlines industry in particular was prevalent throughout the last year. For our Airline customers the series of global events – slowdown in travel, war on Iraq and scare of SARS made the situation further challenging. Our customers are now increasingly looking for flexibility in solutions, shifting the fixed costs to variable costs and an integrated approach from their IT partners. Your company, having anticipated these trends, positioned itself through our offerings to align us closely with our customers and the needs of the changing landscape.
We have integrated our own state of the art products, enrichment of solutions through customization and well-conceived processing systems and infrastructure. This enables us to offer our clients cutting edge solutions in our vertical segments while creating entry barriers for the competition. We are now able to offer our clients licensed products if they so choose, customized development for their special needs if they so demand and total business process outsourcing if it suits them thus covering the entire portfolio of offerings. This flexibility in offerings has enabled us to get new clients while winning repeat business from existing customers. Our IPR led growth approach has ensured that we continue to provide significant “value” as compared to pure services play, thus enabling to differentiate ourselves with our clients.
Your company has managed to sustain the revenues while containing costs leading to improved profitability for the year concluded. The Company reported a net profit of Rs 31.42 Mn for the year ended 31st March 2003, showing an increase of 55.08% against a profit of Rs 20.26 Mn reported during the previous year. This was achieved while maintaining revenue base and reducing the cost structure. The total income for the year was Rs 507.01 Mn registering a marginal growth of 0.5% over Rs 504.50 Mn reported during the previous year.
The Airlines division reported sales of Rs. 348.19 million, a growth of 14% over the previous year. The Managed Process Solutions (MPS) business was the key contributor to this growth, showing an impressive growth with sales of Rs 151.32 million over Rs 66.14 million reported during the previous year.
The Company has expanded its service offering in the Managed Process Service (MPS) business from Revenue Accounting to Audit Services. At present, it offers end-to-end Revenue Accounting and Sales Audit services to the Airline industry. We plan to further expand the airline services portfolio to include Ticket Proration, Cargo Sales Audit and Interline Billing among others. We have seen significant client interest in these services and hope to seize new opportunities with these new offerings.
Branding its BPO business as Managed Process Services (MPS), we have built a niche in the outsourcing value chain. The branding highlights the value-added nature of our offerings; wherein the complete responsibility and ownership of outsourced business processes rests with Kale. Thus, the value to customers is latest technology, cost structure tied up with business conditions, significant cost savings and optimization of processes.
As part of our strategy to expand its outsourcing business to other industry verticals like Banking, Travel & Transport etc., we have set up a new center in Mumbai with state of the art infrastructure and facilities. This center has the ability to grow in a modular fashion as per the business needs.
Our Banking and Projects services divisions have chosen to work in specific niche segments and geographies to ensure focused growth. This is especially true considering the consolidation of software services market and increased role the domain expertise play. We continued to win new clients while ensuring repeat business from our existing clients through customer-focused teams. We are now consolidating our Banking and Projects Divisions into a single division known as BPD. This would enable us to provide adequate expertise and management to address Financial services and Banking vertical more effectively.
During the year, the Company was selected by the International Air Transport Association (IATA) Neutral Prorate AWG and recommended by the Revenue Accounting Panel as one of the two co-existing solution offerings to the industry for the Neutral Proration. This recognition is a very important achievement for the Company with significant implications for the future growth.
The road ahead continues to be of challenges and opportunities. Our efforts for global brand recognition, international industry acceptance and multilevel customer engagements have shown visible results. We are now a known international player widely respected for the work we do in our verticals. This has not been reflected into the top and bottom line growth as yet, but we are confident that it is a matter of time that it will. The Company aims to expand its presence in transportation and tourism sector while consolidating its position in the airlines segment. It will also continue to pursue opportunities in the Financial and Banking space, to leverage the expertise and domain knowledge, which we have acquired over the years. Developing customer focused niche competencies and leveraging our own products to offer processing services would ensure that the company would operate at top end of the value chain. This unique business model should give a competitive advantage to win new business for us.
I take this opportunity to appreciate our clients for trusting us to provide innovative solutions to them. I thank the stakeholders, business partners, Bankers, RBI, NASSCOM, and various government authorities for the constant encouragement and support throughout the year. I also like to thank the efforts of all the Kale Consultants colleagues for their total dedication and hard work. I am sure that with continued support and focused efforts we will build a future that all of us will be proud of.
Thank You,
Narendra H. Kale
Chairman,
Kale Consultants Limited |
