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Amforge Industries Ltd.

BSE: 513117 Sector: Engineering
NSE: AMFORGEIND ISIN Code: INE991A01020
BSE LIVE 15:40 | 08 Dec 4.50 0.20
(4.65%)
OPEN

4.50

HIGH

4.51

LOW

4.09

NSE LIVE 05:30 | 01 Jan Stock Is Not Traded.
OPEN 4.50
PREVIOUS CLOSE 4.30
VOLUME 8602
52-Week high 6.20
52-Week low 2.28
P/E
Mkt Cap.(Rs cr) 6.66
Buy Price 0.00
Buy Qty 0.00
Sell Price 4.49
Sell Qty 2499.00
OPEN 4.50
CLOSE 4.30
VOLUME 8602
52-Week high 6.20
52-Week low 2.28
P/E
Mkt Cap.(Rs cr) 6.66
Buy Price 0.00
Buy Qty 0.00
Sell Price 4.49
Sell Qty 2499.00

Amforge Industries Ltd. (AMFORGEIND) - Chairman Speech

Company chairman speech

AMFORGE INDUSTRIES LIMITED ANNUAL REPORT 2003-2004 CHAIRMAN'S REPORT THE CHAIRMAN'S INTIMATE TALK Dear Amforge Member, The Performance of the Financial Year 2003-04 and the promising future hereafter have encouraged me to re-establish my intimate talk with you. Hope this sharing of information will help you peruse your further reasoned investment decisions. We have had an encouraging start to the efficacious measures initiated by the Management for the long term revival and sustained growth of the Company. The revenues have gone up by 50%, yielding net profits purely from operations, to the tune of Rs.109.3 million. The silver lining to this performance is that this has been achieved despite discontinuance of the activities at Khopoli and the Wheels Division at Faridabad. The earning per share nearing its face value and is likely to exceed it in the coming year. To attain the above financials, the Company initiated a business restructuring plan basically to focus on our core strengths which have been developed over the last five decades with strong OE customer exposure that Amforge has in the forging industry. As the demand grew in India, Amforge, based on its strong bondage with its OE customers and with better utilization of its installed capacity, entered the higher target market in respect of value added products like Crankshafts, Stub-axles, and Connecting rods, etc. This resulted in securing a larger share of business from our major customers, thereby increasing our business share in the domestic market. At the Plant level, better productivity has been achieved with technology up-gradation, introduction of CAD-CAM systems, automisation of production equipment and lower rejection levels. CNC machining, after designing on CAD-CAM, was introduced for die making, thus, giving a thrust to saving on material inputs and better yields resulting in substantial saving at OE customers' level by involving minimum machining of the product at their end. Thus, giving an edge on product performance and pricing to our OE buyers. The export market has also been tapped and exports have started from the Chinchwad unit. As you are aware, exports have a long gestation period. Major supplies on volume basis are moving up on a month to month basis. Export efforts have also been on at Chakan and initial samples for certain components have already been accepted. We are now working on crystallizing the same through pricing and pilot batch route. We are very confident of achieving it. Both our Pune based units are QS9000 certified and work on TS 16949 is in progress with a time bound schedule. Apart from improving the performance of our major Pune units, the management also took action to increase the overall financial performance of the Company by shutting its other uneconomical operations. As you are aware, the Company has already closed its Khopoli and Faridabad operations. Action has also been initiated at Bhandup, where the high cost of production on account of heavy wage bill and Government taxes applicable within the metropolitan city of Mumbai, coupled with obsolete technology and equipment make operations totally unviable. Apart from following the legal path, the Management has also initiated discussions with the concerned parties to arrive at a peaceful and amicable settlement to resolve the matter, as expeditiously as possible. Training programs for technical and product engineering are regularly being conducted for our workers and supervisors with both in-house and outside expertise. This will bring about a substantial cultural change to ensure that our products are accepted in the global market. As you are aware, the current economic scenario in India and rest of the world with special reference to Automobile and its ancillary sectors has resulted in an unprecedented upsurge in the automobile as can be gauged from data below: Passengers Cars : +37% Commercial Vehicles : +35% 2-Wheelers : +12% 3-Wheelers : +22% Total production of all above exceeded 7.90 million nos. in 2003-04. Of this, exports was over 0.50 million registering a growth of +56%. The growth drivers were: 1. Good monsoon in 2003; 2. Reduction in excise duty to 24% from 32%; 3. Drop in lean interest rate; 4. Higher disposable incomes. With the liberalization of foreign investment in India coupled with free inflow of foreign technology and investments for car manufacture, the automobile industry cashed upon such opportunities and produced vehicles of International Standard to increase its export and its own development. This atmosphere led to many of the international manufacturers establishing their production base in India or made foreign technical and financial collaboration and investments with Indian partners. The forging industry has all along helped the buoyant automobile industry by acting as contract manufacturers for critical auto components. India is fast gaining acceptance as first choice for 'auto outsourcing' resulting in contracts to the tune of over 1 billion USD in 2003-04 since: 1. we are a high-skilled and low-cost source; 2. understanding of customers' requirements is clearly understood and fully met with. Not surprisingly, therefore, we are preferred to even China and Mexico- other low-cost sources. Since our export of auto components is only 0.3% of global demand, sustained growth at 35-40% per annum is certain and easy. The domestic and international demand for autos and its components will increase substantially in the coming years. Amforge has prepared itself to ride this high tide with a well formulated action plan involving: - capex programmes for increase in production capacity / removal of bottlenecks, quality control and improvement measures to control rejections; - Training for all its staff; - and other measures such as strategic partnership, alliances with prospective customers / forging units abroad. With the above, I request my shareholders to bear with me for a further short period so that we can reap the fruits of the above actions initiated by the Management. I thank my shareholders, business associates and employees for remaining with the Company during the trying time and extending their bit to the performance of Amforge. Yours Sincerely, Puneet Makar Chairman & Managing Director Mumbai, Dated : 31st August, 2004.

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