Ladies and Gentlemen,
It gives me a great pleasure to welcome you all to the 19th Annual General Meeting of Kale Consultants Limited. 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.
This year has been an interesting year for the US $400 Billion Airline industry. The airline traffic globally totaling to 1.8 Billion passengers grew at 8.7% last year which is a very welcome sign. The cargo traffic also grew compared to last year indicating the up tick in the economy.
However, the fuel prices continue to weigh heavily on the growth and profitability for the industry. The margins are under pressure as evident from the fact that the airlines in USA lost record money. Naturally Airlines are looking for efficiency improvements and they have been able to come up with 2-3% gains in each of the last two years and even more expected for 2005. The tourism industry globally represents about 5% of the GDP and in Asia it is expected to be much higher. The International passenger traffic to and from India is expected to expand significantly bringing it amongst the top growth markets in the world. All in all your company is in one of the most competitive and high growth markets and is in an excellent position to offer solutions to our travel partners.
For the year under consideration the company has recorded revenues of Rs. 505.99 million as compared to Rs. 481.37 million a growth of 5.1% over last year. However the growth in the Airline segment is over 28% over last year. Operating profit has grown to Rs. 36.72 million from Rs. 31.67 million during the previous year. Also the annuity type revenue from multiyear contracts has increased by 50%, ensuring the revenue certainty – an important consideration for planned growth.
The highlights for the year are quite impressive.
- The company added 10 new customers in this year significant ones being DELTA, GULF AIR and OMAN Air. Your company has successfully penetrated into large airlines in US, with 3 among the top 10 airlines globally as its customers. Both Delta and Continental Airlines and a large US airline use Kale’s product, APEXT for their proration needs.
- MPS (Managed Processing Services) revenue has grown at a CAGR of 69% over the last 4 years and now has 9 customers. Revenues from the long term, multi-year contracts of MPS contributed 47% of revenue in the year.
- CSPT, the enterprise wide modern technology solution launched globally.
- The company added 131 people during the year, taking the total strength to 634 people.
Our goals for the last year included significant increase in new clients while expanding our current client relationships to provide them with a competitive edge. I am happy to report the company has done well on both these counts as you can see from the facts above.
The good performance continued in the first quarter with the company winning new customers while rewarded with repeat orders from the existing customers. Today the company has an order book over Rs. 2.1 billion to be completed over next few years. This shows the significant value the customers attach to the relationship with your company.
Your company offers the entire suite of solutions for the Airline and travel industry. These include Revenue accounting, Revenue recovery and protection, Cargo Management and e-travel strategies. The offering covers the entire value chain from Managed processing services, hosted services, software licensing to consulting services. This enables to fully engage the client association by matching the needs and comfort of the client with the company offerings. These flexible solutions help the client to meet the challenging situation of meeting the growing expectations of their customers while significantly driving down the cost structure. The multi-year deals signed by the company are testimony to the growing customer confidence in us for delivering value to clients around the globe.
The outlook for the business is promising given the focus on cost reduction for travel and transportation clients. You company is positioned to address the opportunity with talented professionals, world-class infrastructure and flexible solutions. We at Kale, have achieved quite a few firsts- for the Country and the Industry- and I am sure that the pioneering spirit, wise investments and the recent wins would pave the way for significant growth in years to come.
I thank all of our stakeholders- Clients, Colleagues and Corporate stockholders- 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 this continued support we would see the results of all our hard work paying off in near future.
Narendra H. Kale
Kale Consultants Limited