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Decolight Ceramics Ltd.

BSE: 532858 Sector: Consumer
NSE: DECOLIGHT ISIN Code: INE172I01012
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Decolight Ceramics Ltd. (DECOLIGHT) - Chairman Speech

Company chairman speech

DECOLIGHT CERAMICS LIMITED ANNUAL REPORT 2010-2011 CHAIRMAN'S REPORT On behalf of the Board of Directors of Decolight Ceramics Limited and on my personal behalf, I extend a warm Welcome to the Twelfth Annual General Meeting of the company. Industry Scenario VITRIFIED TILES The construction industry in India, which is having major linkages with building materials segments, has been growing at 15% to 20% year on year, mainly on the strength of increased manufacturing activities, industrial growth, and heightened investments, especially by the government in infrastructure and real estate. Vitrified tiles segment, being one of the building materials segment linked mainly to the construction landscape has been growing at 25% to 30% per annum, while the gap in growth rate between Vitrified tiles segment and construction industry can be attributed to new capactly addition every year in the wake of the paradigm shift and preferences towards Vitrified tiles in place of the old and conventional mosaic tiles, marbles and Kota Stones, etc. Being one of the constituents building materials for construction activities and one of the important sectors in the Ceramic Industry, Vitrified tile segment is expected to constitute the size of Rs. 4000 Cr out of the Rs. 12000 Cr Indian Ceramic Industry. The production capacity of Vitrified Tiles has been increased to 5,50,000 sq mtrs per day contributed by about 55 units which in the year 2009-10 stood at 3,20,000 sq mtrs per day and 40 units respectively. On global front, the consumption per head of ceramic tiles, which includes vitrified tiles, comes to 3 to 4 sq mtr in Europe, 1.8 sq mtr in China and 0.35 sq mtr in India. Globally the vitrified tiles segment has been growing at a rate of 18% per annum over the past three years, accounting for around 10 - 12% of the total tile production. While the demand for vitrified tiles is driven by the developments and growth in construction, realty, housing and infrastructure sectors, it is expected that expanding construction activities in the largely untapped rural areas are also expected to provide a huge thrust to the construction building materials market. Besides, in view of rising disposable income, rapidly growing middle class and increased urbanization, etc, it is expected that India's per capita consumption of ceramic tiles will have a healthy growth in the periods ahead. While India growth story continues in spite of inflationary pressures, indications are that the long term scenario for the ceramic industry in general and the vitrified tiles segment in particular will remain healthy. Business Performance For the year ended 31st March, 2011, the revenue from Tiles, Building Materials and Allied Activities remained at Rs. 14043.32 lakhs as against Rs. 8199.56 lakhs for year 2009-10. On green power generation front, during the year under review the revenues were Rs. 336.66 lakhs as against Rs.549.69 lakhs for the year ended 31st March, 2010. Overall for the year under review, the company reported a profit before tax of Rs. 101.27 lakhs as against the reported loss of Rs. 240.75 lakhs for the year ended 31st March, 2010. Though the company could manage volume growth in its Tiles, Building Materials & Allied Activities segments, the margins were affected because of rising input cost, intense competition in the vitrified tiles segment and pricing pressures. The manufacturing facilities of the company remained completely shut down for a period of about 50 days because of the natural calamity destructions that happened to the company on 17th of November, 2010. Even after regaining the manufacturing operations on 1st January, 2011, it took another fifteen days to bring on track the manufacturing operations in to a regular flow. Resultantly, the year 2010-11 was very tough and challenging for the company. While we continue to focus on improving all round efficiencies and lowering costs throughout the value chains, we are also preparing for the emerging challenges of rising input costs and inflationary pressures, etc. Future Plans With the objective of reducing the cost of production and at the same time not compromising with quality, the company already imported and installed new coal stove plant during 2010-11. However, because of inflationary pressures and consequent increases in input costs the company could not pass the cost savings benefit on to its esteemed customers. Those apart, continuing its cost optimization initiatives further, the company has imported new polishing line and printing machines to aid in increased productvity and further quality improvement. For the future, the company has in its agenda to double the capacity of its manufacturing facilities so as to ramp up the production capacity to manufacture 24,000 SMPD from the existing 12000 SMPD anticipating that the construction landscape which includes the constructions and real estate segments will continue to drive the growth of the ceramic industry. Also on the agenda is to introduce Nano Technology backed machinery for manufacturing of high Nano quality Vitrified Tiles so as to offer the company's products with manufacturing value addition. On marketing front, the company's drive to position its products in untapped and potential markets continues to get greater thrust and priority including futher improvement for better delivery systems. Corporate Governance Your Company is committed to the continued adoption and adherence to good Corporate Governance practices as the Company continues to believe that implementing good corporate governance practices add value and thus contribute to the overall performances. Green initiatives in Corporate Governance We welcome the Ministry of Corporate Affairs' 'Green initiative in Corporate Governance' by allowing paperless compliance to companies. Accordingly, the company will be taking necessary steps to implement the same. CSR Activities On Corporate Social Responsibility front, the company is making every possible efforts. In this context I am pleased to inform that the company has already made plantation of two hundred environment friendly plants in the manufacturing premises of the company. Also myself spearheaded in making the old ghuntu road spanning about three kilometers adjoining the company's premises anew among other entrepreneurs of the Morbi Ceramic hub, as the units in Morbi believe that unhindered approach roads facilitate the customers reach the market place at right time. Investor Relations The investors' relations were cordial during the year under review. There was no complaint from investors during the year under review for which credit goes to Bigshare Services Pvt. Ltd., the existing Registrar & Share Transfer Agent, who have recently launched Gen-Next Investor Module i'Boss the most advanced tool to interact with shareholders. Please log on to i'Boss (www.bigshareonline.com] and help them serve you better.' Conclusion Finally, I convey my sincere gratitude to all shareholders and stakeholders of the Company. I also wish to place on record the support of Board Members, Customers, Business Associations and Employees of the Company and the cooperation extended by the government and look forward the same in the future too. On behalf of the Board of Directors of the Company, my best wishes for the periods ahead! Girishbhai M Pethapara Chairman and Managing Director Place: Morbi Date : August 26, 2011

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