On behalf of the Board of Directors and the Company it is my pleasure to extend a warmwelcome to you all to the 56th Annual General Meeting of your Company.
The Fiscal 2016 -17 was a momentous year for the Country. Two major economic reformsnamely demonetization of high value currency notes and the finalization of the Goods andServices Tax (GST) were announced by the Government. As per the World Bank demonetizationwill increase the formalization of the Indian economy whilst GST being a complementaryreform will support the formalization.
The improvement in India's economic fundamentals has accelerated in the year with thecombined impact of strong government reforms Reserve Bank of India's inflation focussupported by benign global commodity prices.
At a time when major economies of world are undergoing slow growth and adoptingprotectionist policies the Indian economy is comfortably placed and is expected toaccelerate to 7.7 % during FY 2017-18.
Energetics and Explosives Businesses
In 2016-17 the consolidated turnover of ` 574 crores and the Profit of ` 32.91 croresof your Company and its wholly owned subsidiaries have been a highest since inception.This achievement was made possible inspite of stiff competition and decline in prices inthe PSU tenders. The considerable volume growth could not fully reflect in the revenuesdue to the major decline in the prices of the finished products.
The increase in revenue for the year was due to effective follow through by ourMarketing team and ably supported by the Production teams. For the Energetics Divisionproduction increased by 15% for the 100% subsidiary IDL Explosives Limited it increasedby 10% to 132686 MT. Besides executing orders from the mining PSUs the volume ofbusiness with private mining companies in India also increased.
Total Coal Production in F-17 was 672 Million Tonnes giving 3.21% growth over lastyears. The value of total Mineral Production (excluding Atomic and minor minerals) in F-17was ` 242538 Cr recording a growth of 3.8% over F-16. The mining sector is expected togrow steadily while the infrastructure sector will grow rapidly in view of theGovernment's focus. We expect the demand for Energetics and explosives to steadilyincrease over the next 3 5 years. This would stretch the Company's productioncapabilities. The two companies have already embarked on upgradation of processes andincrease in capacities to meet the growing demand.
Since 2000 the Company has been supplying to the defence and space sectorsspecialised devices for the Army Navy ISRO Bharat Dynamics Ltd. and DRDOestablishments. With the expertise and experience gained over the years in supply of highquality items meeting stringent specs the Company is planning to explore the growingpotential in defence manufacturing under the Make in India' initiative of theGovernment of India.
Last year I informed you that 14.54 lakhs sft in Blocks 3A and 3B with MLCP alongwithcentral landscaping and relevant construction was completed and are ready for fit outs.Block 2 of the SEZ area 10.06 lakh sq.ft. is nearing completion. It will be ready for fitout by March 2018. Although marketing efforts are in full swing and enquiries from majorinternational clients are being handled we are advised by the large real restate agenciesthat office take-up was currently concentrated in the other growth areas of Bengaluru suchas Outer Ring Road Suburban Business District Central Business District Whitefield andBannerghatta Road. These blocks are expected to reach saturation and demand in the NorthBengaluru area would pick up. Our development being located in the North Bengaluru blocktowards the new airport should receive good demand in 2017 18.
The Hyderabad development has received some impetus with the IT / ITeS segment demandhaving increased manifold with the multinational technology companies having signed uplarge spaces in the current year. We have accordingly revised our plans for approval.
You would have noticed our announcement in April 2017 that the Company through itswholly owned UK subsidiary holds 10% in Houghton International Inc. whose combination withQuaker Chemical Corporation is expected to be completed by December 2017. Quaker Chemicalwould then be a global leader in the space of process fluids chemical specialties andtechnical expertise to the global primary metals and metal working industries. Oncecombined your Company will have the benefit of 2% holding in the US listed company withsynergy benefits. This will be a major asset of your Company.
I take this opportunity to convey my gratitude to my colleagues on the Board for theircooperation and valuable contributions during the year. 2016 17 was an extremelychallenging year for the Company and I appreciate the management and employees for theirefforts on building up marketing strategies cost reduction / rationalisation and newproduct initiatives.
| ||Ajay P. Hinduja |
|June 28 2017 ||CHAIRMAN |