Dear Fellow Shareholders
Iron and steel were the harbinger of industrial revolution in late 18th and early 19thcentury. Today this industry has proved to be the harbinger of globalisation. It is one ofthe very few industries that have assumed a global character with developments in oneregion affecting the industry almost everywhere else; and India is no exception.
The Steel Industry is one of the most important industries in India and is consideredas the backbone of any economy especially in developing countries whose materialintensity is likely to increase significantly in the future for infrastructuredevelopment and growth in manufacturing sector. Among these Indian economy is one that ispoised to grow significantly over the next decade with its per capita consumption nearlyat one-fourth of the global average. The Government of India aims to triple the steelcapacity to 300 million tonnes by 2025. In order to ensure that such capacity is viable toset up and value creating for the stakeholders it is important to ensure that the ease ofdoing business is enhanced.
However the global steel industry continues to witness challenging times though theperformance of the industry has been better in the financial year 2016-17 with improvedrealisations and more supply side response. According to World Steel Association globalsteel output will be tapering in the next year and the slowdown is expected to continuethrough 2035 as countries around the world start to rein in output while demandretreats.ln India the Steel Industry is passing through a challenging phase. Domesticconsumption is severely affected due to lack of activity in infrastructure as well as inthe manufacturing scope. The biggest challenge facing the domestic steel industry is tohave the per capita steel consumption in India at par with the average global company. Inthis challenging phase your Company had tried its best to maintain the level ofperformance.The financial year 2016-17 has been an average year for the Company. TheCompany faced many challenges in its operating sector due to falling prices of finishedproducts spurred by significant imports from countries like China Korea etc. like manyother players operating in the similar sector. In spite of significant fall in prices offinished goods as compared to last year the Company's revenue from operations decreasedby 8.67% % only. Moreover.net profit increased by 1.23%.
Since your Company is engaged in the production of Wire Rods and TMT bars which aremainly used in the construction and infrastructure as well as in the manufacturing unitstherefore the outlook for your Company is closely linked to that of the steelinfrastructure and real estate industry and the demand for TMT and wire rod in particularis influenced by the price & availability of raw materials. Looking into presentmarket situation the future of the Company looks good and forward looking.
CORPORATE SOCIAL RESPONSIBILITY
CSR activities continue to play a pivotal role with focus on inclusive sustainablegrowth. In the year 2016-17 the emphasis was on society's care and provision of welfaremeasures to the needy. A separate section is provided in Directors' Report regarding CSRactivities.
Your company's commitment to transparency in Corporate Governance is reflected in itsestablishing appropriate systems and procedures for every process. A separate Report onCorporate Governance along with Certificate on Compliances of Corporate Governance andSecretarial Audit forms part of the Annual Report.
India is increasingly becoming an important part of the international steel market anda key growth area for steel production based on various positive factors including itsstrong demand for steel arising from strong economic growth low per capita steelconsumption and abundant iron ore reserves. As India is one of the fast progressingnations around the world and we are expecting fast growth in the near future demand forsteel related products will always be there and will increase substantially keeping inmind the present pace in the Economy. We believe the Company will be able to flourish inthe competitive market along with an increase in demand for the products. Further ourmarketing team is also well poised to capture new opportunities created. The demand forlong products i.e.TMT Bars and Wire Rods in India is expected to remain robust in long rundue to escalation in demand created due to upcoming smart cities infrastructuredevelopment and also from other sectors consumer durables oil and gas industrialmachinery and real estate.
I would like to take this opportunity to place on record our gratitude to allstakeholders - shareholders customers vendors the various Governments and regulatoryagencies and our banks and financial institutions for their encouragement and support andto all employees for their contribution to the growth of the company throughout the year.I would also like to express my profound appreciation for the guidance and support fromall the members of the Board. In addition I would like to express my deep gratitude toall our stakeholders for the continued faith in Adhuniklndustries and I assure you that wewill strive to accelerate our growth in coming years.
With best wishes
Mahesh Kumar Agarwal Chairman
22nd May 2017