Dear Fellow Shareholders
It gives me immense pleasure to present to you the 2015-16 annual report of theCompany. The fiscal year 2015-16 witnessed the country's economy getting stronger asimproved focus on fiscal targets and rolling out of favourable policies led to the economygrowing strongly by 7.6% during a time when most of the world's major and developingnations are struggling. The interest rates have fallen inflation is under 5% fiscaldeficit reduced to a low of 3.99% and foreign exchange reserves strengthened to anall-time high of USD 355.60 bn as on 31st March 2016. The various initiatives(Digital India' Make in India' and Start-up India' among others)undertaken by the government to simplify ease of doing business in India is likely tocontribute to the economic growth momentum and boost the manufacturing sector.
In the past despite big investments Indian economy was more about work-in-progressconsidering the fact that most of the infrastructure and industrial expansion projectswere stuck at some levels. This led to a vicious cycle creating troubles for all thesectors of the economy. However things have started to change as projects are gettingclearances road and rail expansion projects are on fast track agriculture sector isgetting the required importance and more importantly FDI policies have been eased out forvarious sectors which shall lead to foreign players entering the markets and sharing theirtechnical expertise. This positive move shall provide the much-needed kick to theindustrial concerns in India and contribute to the economic growth.
The past two years were a difficult one for the petrochemicals industry as weakeningoil prices led to buyers being reluctant to procure goods expecting a further decline inoil prices. This led to inventory pile-ups and pressure on margins. However after the oilprice falling to a relatively low level the scenario is expected to stabilise with nomajor shocks for the industry players. The stabilising crude prices would result in bettermargin realisations for the Company.
Moreover with the increased government focus on rural water management andinfrastructure projects along with the reviving construction and automobile sector thedemand for plasticisers paints and unsaturated polyester resins are expected to rise.Your Company being a proactive one anticipated this upcoming demand trend and embarkedon various capacity expansion and operational efficiency enhancement programme that arecompleted and have stabilised operations. With this your Company is well-poised to makemost of the opportunities and grow.
I am happy to state that with immense focus and years of planning we have managed tostrengthen the fundamentals of the Company. In spite of undertaking large-scale expansionproject and investing in environment protection and process improvement technologies wehave emerged to be a relatively low debt Company with a debt:equity of 0.32 as on March31 2016. This has resulted in improvement of our credit ratings by India Ratings &Research from IND BBB+' to IND A-' for long- term borrowings and INDA2+' to IND A1' for short-term borrowings. We are proud of the fact that not onlyare we the largest Phthalic Anhydride producer in India but we are also amongst the mostenvironment- friendly companies in India across all sectors. We have strengthened therecovery process at our plants thereby utilising 100% steam generated from processes forproducing power that meets the entire energy requirements of our plants and reduces oilconsumption. We have also installed effluent management system that utilises wastesgenerated from operations for developing value-added products having commercial value.
As a responsible Company we shall continue to focus on investing inenvironment-friendly processes and utilising a part of profits towards our communitydevelopment initiatives. In 2015-16 we spent a sum of ' 26.87 lacs (2% of our netprofits) towards education healthcare and community services.
I would like to thank all the shareholders who have been with us through good and badtimes. I would like to assure you that the Company is sweetly positioned in the industryto make the most of the upcoming opportunities to grow and enhance shareholders' value.Finally I would also like to thank all our employees whose efforts and expertise havecontributed to the growth of the Company and our customers bankers and vendors for theircontinued support to the Company.