On behalf ofthe Board ofDirectors.it is my pleasure to present the 50thAnnual Report ofKennametal India Limited.
It has marked another milestone to Kennametal India's history completing 50 years ofdedicated service in the Engineering Industry. Your continued trust encouragement andsupport is what gives us energy enthusiasm confidence and motivation to strive forbetterment.
We observe that the world economy is going through an uncertain phase but we stillremain optimistic about the future. Europe is still trying to resolve its economicchallenges and now we are not getting good news from Asia Pacific as well. India needs aboost of confidence and investor-friendly moves from the Government to restore the countryto a faster growth trajectory.
In a world grappling with sluggish growth India is steadily accelerating the pace ofeconomic development thanks to the new Government's growth-oriented policies. In theApril-March period of FY 2014-15 the IIP grew by 2.8% compared to the contraction of0.1% during the same period of FY 2013-14. Cumulatively the IIP registered a growth of3.5 % during April to July 2015-16 over corresponding period of previous year. Positivesentiments attracted FDI inflows of US$ 35 billion into the economy a 26% escalation inFY 2014-15.
The recent forecasts for below normal monsoon coupled with the slow pick-up inindustrial activity and gloomy global market could lead to challenging demand conditionsin the domestic market. However over the long term your Company is confident of thegrowth prospects of the engineering industry both in the domestic and the internationalmarkets. With this confidence your Company has planned to increase capacities of certainproduction lines in your Company to meet future demand of domestic and internationalmarkets.
The steady growth in our economic environment has reflected in the overall performanceof your company which registered an annual turnover growth of 4.6% and profitabilitygrowth before extra-ordinary items and tax of 34% over previous year primarily driven byefficient sourcing of raw materials and cost management projects executed during theyear.Your Company received the land compensation amount of Rs 591 Lakhs including interestafter Tax deducted at source from the City Civil Court towards the acquisition ofthe partof land in Sy No. I I by the Karnataka Industrial Areas Development Board (KIADB) forBangalore Metro Rail Project.
The Government's "Make in India" initiative augurs well for the economy ingeneral and the manufacturing sector in particular. This initiative aims to increase thesector's contribution to the GDP by removing the bottlenecks that had so far restrictedgrowth. There is more focus on indigenous manufacturing of components or products whichhitherto were imported. Such a scenario will help the domestic engineering automotive andallied sectors to perform encouraginglygoing forward.
Since last year the Boards' Report contained in the Annual Report which is madeavailable to you continues to be far more comprehensive and gives an in depth anddetailed analysis of your Company's financial and operational performance.
During the year the Ministry of Corporate Affairs(MCA) and Securities Exchange Boardof India (SEBI) changed the governance landscape by notifying majority ofthe provisionsofthe Companies Act2013 and Rules thereunder and the SEBI Listing regulations. Some ofthe concepts like approval of related party transactions evaluation of the performance ofDirectors and the Board rotation of auditors Code for Independent Directors increasedresponsibility of the Nomination and Remuneration Committee and the Audit Committee inorder to ensure higher standards of transparency and accountability and seek to align thecorporate governance practices in India with global best practices.Your Company'scorporate governance standards have strengthened over the period of years and your Companywill continue to follow good practices to enhance stakeholders' value.
Your Company has focused on its Corporate Social Responsibility agenda and undertookvarious initiatives to touch and improve lives by contributing to communities that yourCompany operates in.Your company focuses its giving in order to achieve a greater impacton those causes most aligned with Kennametal's corporate strategy. Three primarycategories have been established for giving which includes the support of Secondary andPost-Secondary Educational opportunities with an emphasis on studies in the areas oftechnical engineering machine skill training and materials and environmental sciencesKennametal in the Community and Protecting Our Planet. In FY15 Your Company focused inthe areas of education Health and Water Management to create measurable and lasting valuefor neighboring communities.Your Company has adopted a project "Nisarga Gram"which is being executed by SparshaTrust for building a home for underprivileged childrenmore specifically girls.
Our employees are our biggest assets. On behalf of the Board of Directors and on yourbehalf I profusely thank the employees for their aspiration focus on customers hardwork commitment and teamwork. I also place on record our deep appreciation of thecustomers vendors partners shareholders and bankers for their continued support.
I thank the members of the Board for their continued guidance in making ourorganization successful in every sphere. As I complete a year of my tenure as thenon-executive Chairman of your Company I am grateful for the opportunity to guide yourCompany on its growth path. I wish the entire Kennametal team great success in theirpursuit of excellence and in their journey for the growth of the Company.
Prakash M.Telang Chairman