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M M Forgings Ltd.

BSE: 522241 Sector: Engineering
NSE: MMFL ISIN Code: INE227C01017
BSE LIVE 15:40 | 13 Dec 1021.90 22.90
(2.29%)
OPEN

1024.00

HIGH

1035.00

LOW

1005.00

NSE 15:31 | 13 Dec 1019.60 12.45
(1.24%)
OPEN

1017.10

HIGH

1037.00

LOW

1005.65

OPEN 1024.00
PREVIOUS CLOSE 999.00
VOLUME 1724
52-Week high 1035.00
52-Week low 412.05
P/E 25.23
Mkt Cap.(Rs cr) 1,233
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 1024.00
CLOSE 999.00
VOLUME 1724
52-Week high 1035.00
52-Week low 412.05
P/E 25.23
Mkt Cap.(Rs cr) 1,233
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

M M Forgings Ltd. (MMFL) - Chairman Speech

Company chairman speech

M M FORGINGS LIMITED ANNUAL REPORT 2009-2010 CHAIRMAN'S REPORT INTRODUCTION: Friends, Good Afternoon. The Board of Directors and I welcome you to this the 64th Annual General Meeting of your Company. The Directors' Report and the Audited Annual Accounts for the year ended 31 March 2010 have been with you for sometime now. With your permission, I shall take them as read. YOUR COMPANY'S PERFORMANCE - AN OVERVIEW : In my speech at the AGM last year, I had said and I quote, 'Once the Indian Economy and the global Economy recovers - in the segments relevant to M M Forgings - your Company will bounce back in terms of performance and return to the growth trajectory it has achieved in the past. The recovery is expected to begin in the first quarter of 2010-2011'. The first quarter results published on 27th July this year vindicates this statement. Sales increased by 71%. Exports accounted for 69% of total sales. Net Income was almost five times more than in the corresponding quarter of the previous year and half of what was earned in the full year 2009-10. You will be interested to know that sales of Rs.21 Crores in June 2010 is the highest for any month in the Company's history. Despite the relative under performance in 2009-10, the Dividend has been maintained at 15%. This is due to the confidence derived from the first quarter results, and the optimistic outlook for the future. The proposed Dividend is in line with the Company's objective of consistently rewarding all stakeholders - in particular, you our shareholders - in good times and bad. C. M M FORGINGS LIMITED - IN PURSUIT OF MANAGERIAL EXCELLENCE: Managerial Excellence is the bedrock for reliable performance and stable growth of in any company. Peter Drucker - one of the foremost 'Management Thinkers' the world has produced -has said that for any Company to succeed: 'Its Management practices should be both EFFECTIVE AND EFFICIENT Effectiveness is choosing the right thing to do Efficiency is then doing the chosen things right'. Judged from both these dimensions M M Forgings is indeed a well managed Company. It has effective strategies that are efficiently executed. Let me cite six examples to support this viewpoint. FIRST It is now recognized by the business community the world over that 'People not products deliver results'. It is also recognized that effective Human Resources Management can make 'Ordinary people deliver extraordinary results'. The fundamental prerequisite is for the organization to recruit good people - people who have both character and competence. Your Company is strongly focused on recruiting talented people at every level. Money spent on their training and development is viewed as an investment not as an expenditure. They are remunerated well and retention of the best receives the highest priority. The Company fully understands that human assets are the only assets that do not necessarily depreciate over time. SECOND Customer Relations Management is the cornerstone for stable long term growth in Sales and Profits. Customer satisfaction that ensures Customer Retention is therefore an important aspect of your Company's strategy. To retain customers, your Company is constantly striving to achieve global standards in terms of product quality, ontime delivery and after sales service. I am happy to report that your Company has not lost a single customer in both Domestic and Export Markets. On the contrary, the existing customer base acts as a strong 'Brand Ambassador' to attract new customers at premium prices. THIRD To achieve the lowest 'break even level' in the industry is a target that your company steadfastly aims for. The Company is therefore obsessed with continuous improvements in productivity and a perpetual effort to lower costs. From a business perspective 2009-10 was one of the most turbulent years in recent history. Demand for most products declined sharply causing a steep fall in sales, higher inventories and lower capacity utilization. Currencies were volatile. Input costs rose to unprecedented levels. Bank credit was more expensive and hard to come by. In this adverse environment, your Company increased its profit after tax over the previous year and has maintained its dividend. This demonstrates that reducing 'break even levels' is a prudent strategy at all times - particularly so in turbulent times. FOURTH In 1994, when the Company went Public, it had only one large customer in the Domestic Market and no Exports. The Board decided then that aggressive forays into Export Markets and widening the domestic customer base was the appropriate strategy for the Company to pursue. M M Forgings today is the largest Exporter of Steel Forgings from Southern India. In recognition, it has won 16 successive Export Awards. It has several large customers in the Domestic Market and is no longer dependent on any one of them. The strategy to build Exports and diversify the domestic customer base has been executed to perfection. FIFTH The systematic augmentation of manufacturing capacity -with a strong bias towards value addition - has been a vital part of the Company's growth strategy. Nearly 200 Crores of rupees have been invested, in the last decade, to increase capacity from 10,000 Tons to 38,000 Tons. The overall expansion in capacity has been in incremental steps causing no strain on financial or human resources. This strategy has helped the Company to rapidly respond to any surge in demand. The 71% increase in Sales in the first Quarter of this year is a case in point. SIXTH AND FINALLY: Historical experience has established that no company in India can plan stable growth based on power supply from State Electricity Boards. Investment in self generation is a fundamental prerequisite. Your Company has invested Rs.35 Crores in windfarms. These windfarms generate electricity at significantly lower prices than grid supplies. Your Company today can self generate its total requirement of power. It is this strategy executed extraordinarily well that has helped an energy intensive Company such as yours to sustain growth in an energy starved environment. D. FUTURE OUTLOOK: The Founder of your Company the Late S E Krishnan was a Visionary Entrepreneur and an outstanding Management Leader. It is he who promoted Effectiveness and Efficiency in Management Practices, and Ethics and Transparency in Corporate Governance at M M Forgings. This has helped the Company's growth trajectory in the past. I am proud that his two sons - Vidyashankar and Venkatramanan - are raising the bar in terms of developing competencies on both these dimensions. The Management today is highly effective and precisely efficient. The future outlook is bright because M M Forgings is managerially well poised, to respond favourably to a challenging environment. E. CONCLUSION: Let me conclude by thanking all our employees for their dedication and cooperation; our customers for their continued loyalty and patronage, our Bankers for their empathy and support, our vendors for their promptness and service and our Board for their guidance and encouragement. Above all, I thank you our shareholders for the TRUST and CONFIDENCE you have reposed in us. The Board assures you that we will do everything possible to justify the confidence and trust you have reposed in us - by delivering consistent results year after year and reinforcing the image of M M Forgings as a World Class Company. To achieve this, we need your continued support and God's blessings. Thank you. ANNUAL GENERAL MEETING 3:30 pm - 27th August 2010