It gives me great pleasure to share with you an update on the overall performance ofyour Company in 2016-17. It was yet another dif cult year for the global economycharacterised by low growth and geopolitical uncertainties. In India rural demandcontinued to be sluggish in the early part of the year on the back of two consecutive poormonsoons. The overall market showed signs of recovery in the latter half of the year butfaced a temporary slowdown in November due to demonetisation.
During the year under review your Company has taken up major capex programme inpotential areas of growth. As part of this programme during the FY 2016-17 the Companyhas made additions of Rs 85.42 crores to its gross fixed assets as compared to previousyear Rs 26.95 crores. In addition to this the Company has capital work in progress of Rs96.93 crores (previous year Rs 97.22 crores).
Your Company split its stock from face value Rs 5/- per share to face value of Rs 1/-per share. With effect from 28 December 2016 in order to improve the oat and liquidityof the stock in the interest of both existing and potential investors.
In the tune of progressive Dividend Policy the Board of Directors declared and paid aninterim dividend of 40 percent ( Rs 2.00 per fully paid-up equity share of Rs 5/- each) inOctober 2016. The financial year 2016-17 concluded with recommending a final dividend of30 percent ( Rs 0.30 per fully paid-up equity share of Rs 1/- each) aggregating to 70percent i.e. amounting to Rs 328.42 lakhs subject to the approval of the shareholders atthe Annual General Meeting.
Despite significant pressure on margins due to higher raw material prices higherdepreciation and slower economic growth your Company has sustained its profitable growthstory.
A focus on shareholder returns is at the heart of the strategy. The Board believes thathigh-quality and sustainable long-term revenue and earnings growth combined with adisciplined approach to capital allocation and progressive dividend policy will drivesuperior returns for shareholders.
Your Company is also committed to its social responsibility agenda and contributemeaningfully to the communities that it operates in. Your Company continues to focus inthe areas of Education Health & Hygiene Rural development and Water management toenhance the livelihoods of people in its operating communities. These initiatives alongwith several others reaf rm our belief that addressing societal needs and business growthgo hand-in-hand.
Besides existing plants updation your Company has undertaken three more projects asbelow:
i. At Muzaffarnagar facility: In August 2016 the Company has started commercialproduction of Native Starch by using Corn as raw material with capacity to process 300tons of corn per day. The product is selling under the brand 'Rhino' and has been wellaccepted as a strengthening agent by the paper mills in and around 150 km of ourMuzaffarnagar facility. The Product has a huge location advantage as Western U.P. being ahub of Paper Mills alone consuming 6000 tons of starch every month.
ii. The Company has set up rice grinding unit to produce High Fructose Rice Syrup atMuzaffarnagar facility. In January 2017 Company commenced the commercial production ofHFRS.
iii. At Chhindwara facility: Potable Alcohol Plant is also expected to be completed bythe 2 quarter of FY 18.
It has been a year of further progress strategically operationally and financially. Inrapidly changing markets we continue to focus our energies on shorter decision timelinesrapid deployment and strong customer focus. We can only do this successfully withexcellent people and on behalf of the Board. I would like to thank all our employees andpartners for their very considerable efforts in the past year. I look forward with condence to your Company's response to further changing customer demands in the year ahead.
None of these achievements would have been possible without the passion and commitmentof our employees - our biggest asset.
Dr. C. K. Jain Chairman & Managing Director