INDO MATSUSHITA CARBON COMPANY LIMITED
ANNUAL REPORT 2003-2004
77, NUNGAMBAKKAM HIGH ROAD,
Speech delivered by Shri P. Obul Reddy, Chairman at the Twentysecond Annual
General Meeting of the Members of the Company held on 9th July, 2004.
Ladies and Gentleman
I take pleasure in welcoming each one of you to this Twentysecond Annual
General Meeting of your Company.
Company's performance in the year ended 31st March, 2004:
The Twentysecond Annual Report which contains the Report of the Board of
Directors and the Audited Statements of Account for the year ended 31st
March, 2004 had been with you for some time and, with your permission, I
shall take them as read. I am sure all of you also would have studied them.
However, I would like to refer to some of the highlights in brief for your
better understanding and positive reception.
The Indian Dry Battery Industry registered a negative growth during the
year under review, which had its direct effect on the volume of our
domestic sales. By quantity, we could achieve only 88% of last year.
However, Shareholders should be happy to note that your Company could
penetrate into the International Market with aggressive and personal
interaction with Customers and improve its market share by selling 720 Min.
Pcs. as against 596 Min. Pcs. in the last year, an increase of about 21%.
This higher export sales compensated to a greater extent drop in domestic
sale volume. The total sales for the year was 2290 Mn. Pcs., which
accounted for 96% as compared with last year.
Value wise, since the sale prices were under pressure both in domestic (due
to reduction in import duty) as well as International Market (due to severe
competition), it had come down. Added to that, while in the domestic market
we had to switch over to sale of one less priced grade of Carbon Rods in
one variety as preferred by the customers, in the International market, the
Indian Rupee steadily strengthened as against US Dollar by more than 5%.
All these resulted in lesser sale value (inclusive of excise duty) of
Rs.41.24 crores for the year as against Rs.47.62 crores in the last year, a
reduction of Rs.6.38 crores.
The pressure on sale price and consequent lower sale volume necessitated
the Company introducing various restructuring measures including
announcement of Voluntary Separation Scheme. The entire compensation of
Rs.1.23 crores paid under the above Scheme have been fully charged off to
the Personnel Expenses of the current year. However, the benefit of
manpower rationalization will result in reduced manpower cost in the
In regard to the profitability (before taxation), it amounted to Rs.9.61
crores as against Rs.11.25 crores of last year. Considering the reduction
in sale volume of more than Rupees Six crores and the writing off of the
Voluntary Separation Scheme Compensation in full, the Shareholders should
appreciate that, effectively, the percentage of profit has only improved.
This was possible due to substantial cost cutting and cost control
activities implemented by the Company on all areas of operation.
Considering the performance of the Company during the year under review,
the Board of Directors are pleased to recommend a Dividend of 60%, same as
in the last year, even in spite of reduction in profit, as an investor
friendly measure. This dividend, on your approval, will be paid without
deduction of tax and that too on 14th July, 2004 itself (i.e.) in the next
five days, instead of waiting for the statutory period of thirty days
permitted by the provisions of the Companies Act.
Interse Transfer of Shares between Collaborators:
During the year 12,48,000 Equity Shares representing 26% of the paid up
Capital held by Matsushita Battery Industrial Company Limited, Japan (MBI)
(Subsidiary Company) has been transferred to Matsushita Electric Industrial
Company Limited , Japan (MEI) (Parent Company) after observing guidelines
issued by the SEBI, and consequently MEI's shareholding has gone up from
12,00,000 Equity Shares - 25% to 24,48,000 equity shares representing 51%
of the paid up capital of the Company.
Outlook for the current year:
In the first three months of the current year, the Company had sold 647
Min. Pcs. as against 670 Min. Pcs. for the same period in the last year. By
value, the total sales, inclusive of excise duty amounted to Rs.11.50
crores as against Rs.12.38 crores for the same period in the last year.
Based on the future-trend in the Battery Industry, your Company expects to
register a reasonable growth in the current year especially in the domestic
market. In regard to International market, due to severe competition among
the players in the field, there had been a drop in Export sales. However,
by continued production of high quality standard product and timely supply
coupled with other all round efforts, your Company expects to increase its
sale volume and achieve reasonable profitability. The Company will also be
studying the Budget for the year 2004-2005 presented yesterday in depth and
take suitable and needed action.
The Company continues to be a zero debt Company for the last many years and
thus there are no interest costs. The Company continues to invest its
surplus funds judiciously in Banks in Fixed Deposits as per the risk free
policy adopted by the Company and the quantum of deposits are continuously
growing. The financial status of the Company continues to be good.
As per the provisions of Articles of Association of the Company, Mr. V.R.
Gupte and Mr. Yoshikazu Yokoe retire by rotation at this Annual General
Meeting. Being eligible, they offer themselves for re-appointment.
The Directors recommend passing of the resolutions pertaining to the
appointment of these two Directors placed before you.
I take this opportunity to thank, the Collaborators, M/s. Matsushita
Electric Industrial Co. Ltd., and M/s. Matsushita Battery Industrial
Company Ltd., Japan for their continuous support and guidance, our valued
Customers for their patronage, Suppliers for their quality supply and the
Bankers for their support. I also thank my colleagues on the Board for
their advice and assistance. I appreciate the employees' dedicated efforts
and their maintaining harmonious relationship.
Before I wind up, I, on my behalf as well as on behalf of my colleagues on
the Board, thank the Shareholders for their confidence and encouragement
and request your continuous support in future also.
Source: ANNUAL GENERAL MEETING P. OBUL REDDY
Dated : 9th July, 2004 CHAIRMAN