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Paramount Communications Ltd.

BSE: 530555 Sector: Engineering
NSE: PARACABLES ISIN Code: INE074B01023
BSE LIVE 15:56 | 24 Nov 10.23 0.48
(4.92%)
OPEN

10.00

HIGH

10.23

LOW

10.00

NSE 15:22 | 24 Nov 10.15 0.45
(4.64%)
OPEN

10.15

HIGH

10.15

LOW

10.10

OPEN 10.00
PREVIOUS CLOSE 9.75
VOLUME 122186
52-Week high 10.23
52-Week low 2.66
P/E
Mkt Cap.(Rs cr) 128
Buy Price 10.23
Buy Qty 68878.00
Sell Price 0.00
Sell Qty 0.00
OPEN 10.00
CLOSE 9.75
VOLUME 122186
52-Week high 10.23
52-Week low 2.66
P/E
Mkt Cap.(Rs cr) 128
Buy Price 10.23
Buy Qty 68878.00
Sell Price 0.00
Sell Qty 0.00

Paramount Communications Ltd. (PARACABLES) - Chairman Speech

Company chairman speech

PARAMOUNT COMMUNICATIONS LIMITED ANNUAL REPORT 2008-2009 CHAIRMAN'S REPORT LETTER FROM THE CHAIRMAN AND CEO: Dear Stakeholders, The years of Paramount's existence have created an organization culture of continual change and radical progression. It's a change that has been steered as much and as often by the transforming economic environment, as the evolving demands of our customers. The year 2008-09 was unique however, in the Company's odyssey. It was a year when both, the demands of our customers and the global economic environment, underwent a stark change - a change that almost threatened to derail our growth trajectory and would have done so, but for our inherent strengths and intrinsic ability to find opportunity in adversity. And that is precisely how we steered ourselves through the complexities of this difficult year- looking for new opportunities and making the most of them; leveraging our strong capabilities in the cables space to find new segments for growth and successfully foraying into them and driving our innovative skills to deliver exceptional value to all our stakeholders. In this year of unprecedented global economic turmoil, when our business model was tested as much as that of other companies within and outside India, it is indeed remarkable that not only did we firmly stand our ground, but in fact moved cautiously, but steadily ahead to expand our operational excellence into new segments of growth. Responding distinctively to the changing environment, we surged ahead to expand our portfolio into the building wires segment. FINANCIAL PERFORMANCE: What I feel is truly remarkable about this expansion, is that we surged ahead despite the overall negative financial situation gripping the Company during the year. Hit by the overall recessionary trends within and outside the country, with dwindled demand and plummeting input prices, the Company's top-line and particularly the bottom-line, suffered a severe blow. In the year under review, your Company's turnover stood at Rs. 4,923.88 Million, marking a marginal decline from the previous fiscal and reported a net loss of Rs. 293.61 Million as compared to a net profit of Rs. 327.70 Million during the previous year 2007-08. As mentioned earlier, the huge erosion in profitability was primarily due to inventory loss on account of steep fall in raw material prices coupled with intense volatility in currency rates. To give you a clearer perspective, our key raw materials, Copper and Aluminium, saw prices shooting up to new levels till about the third quarter of the financial year under review, only to come crashing down thereafter. As a result of these wide and frequent fluctuations in major input prices, the value of our inventories declined drastically and together with severe dollar appreciation, our profitability was affected adversely. TACKLING THE CHALLENGES: The challenges, quite obviously, were unprecedented. But as mentioned earlier, with our focused planning and far-sighted policies, we strategised a business model that could effectively address these challenges. Let me now take you through our strategy to tackle this difficult period. For your Company, like with the industry at large, it was indeed a difficult period. While this was not the first time your Company found itself in such a difficult situation (the glut in the JFTC market around 2002 had also severely affected your Company's growth), it was a more difficult and complex situation than ever before. Our approach and strategy towards tackling this challenge, however, was as focused and well thought-out as it had been around 2002, when we had moved towards the diversification of our business model in order to insulate it from the downturn in the JFTC market. This time too, our strategy to overcome the challenges of this difficult period centred around diversification and further de-risking of our business. And as in the past, we succeeded in capitalizing on the prevailing situation as another inflection point in our growth trajectory and in finding new solutions and new product portfolios. As a concerted move, we decided to focus our strategy around the domestic market, which was riding the recessionary storm better than the exports market and which, on the back of the government impetus of stimulating domestic demand, was unfolding huge opportunities for companies like ours, to leverage. MAKING THE MOST OF THE DOMESTIC OPPORTUNITY: With an enviably diversified and de-risked presence across all fast growing sectors, your Company embarked on strengthening it further through a prudent foray into the building wires segment in the domestic market. Backed with the technical expertise and support of AEI Cables Limited - probably the oldest cables manufacturer in the world - and powered with its in-house capabilities in manufacturing specialised cables, the Company intends to revolutionise the Indian market with a range of superior quality, unmatched building wires. The Company is confident that its differentiated offering in this segment will act as a natural hedge against dwindling profitability emanating from intense price wars in the power cable space and will also insulate it from sector cyclicality in the future. In addition, this prudent move will further enhance the Company's ability to leverage opportunities unfolding across sectors on account of its unique one-stop cabling solutions provider status. This foray is in fact, an endorsement of our philosophy to constantly look at the bigger picture and redefine our strategies to align them with the changing and future needs of all our customers. As we move forward to expand and develop this segment, we seek to capitalize on our cable manufacturing experience of over half a century in India and the expertise of our UK subsidiary AEI Cables Ltd., with its long and rich history dating back to 1837 and its leadership position in the building wires business in Europe. Let me take you through the uniqueness and technological superiority of our building wires product range: Offering a top-of-the-range, environment- friendly 'lead-free, zero-halogen, low-smoke' option that shall match international standards in safety and protection, they have been the first lead-free building wires range for construction needs in India. They are being manufactured at our ISO 9001 and ISO 14001 certified Khushkhera plant. With world-class longevity and safety features intrinsic to every cable and wire manufactured by your Company, I am confident that our building wires range, initially being launched in Delhi and the NCR, will soon emerge the market leader in this space, just as our power, railway and industrial cables have done before. This timely and path-breaking foray into the retail building wires segment has, in fact, placed us among the few companies which are catering to the growing needs in this niche segment. As we move ahead, with plans to extend our building wires to all the key North Indian markets within three months of launch, I am positive it will contribute significantly to your Company's revenues and profitability. Personally, I see the building wires business as among the important drivers of the top-line and bottom-line growth of the Company. We expect to capture over 5% of the building wires market in North India within a year of launch with an initial target of Rs. 800 Million of sales and for this, we are in the process of expanding our dealer and distributor network in the region in a big way. Though to some extent, this foray marks a shift of sorts in our focus from the industrial sector to the growing building wires segment, let me assure you that it is but an extension of our diversified and de-risked business model, which we have earlier utilized to establish a niche for the Company in specialized cables segments such as optical fibres and rural electrification. MAKING: The Company's growth strategy is not confined to the building wires segment, our thrust on the core infrastructure sectors of Power, Railways and Telecom continues, with our wide bouquet of product offerings catering to diverse demands across each of these segments and fulfilling complete cabling needs of these sectors. Our longstanding associations with industry stalwarts and prestigious government and private institutions, coupled with prestigious approvals and accreditations, powered with exhaustive capabilities in manufacturing specialty cables, equipped with multi-purpose swing manufacturing capacities and a leadership position in many segments, positions us favourably. With core infrastructure sectors witnessing significant growth and investment, the opportunity window for Paramount is huge indeed. POSITIVE OUTLOOK: Paramount's core strength lies in its innate ability to accept all adversities as challenges, to be tackled with the best of our capabilities, in order to emerge even stronger. These, I truly believe, are the essential qualities of a leader, which your Company definitely and decidedly is today. Today, I feel that with our timely move towards diversification and the realignment of our business model, we are strategically placed to make use of the opportunities that unravel as the economy prepares itself for a fresh phase of growth and development after a period of slowdown. That this fresh phase of growth and development has already started is evident from the revival in our established business segments - power, industrial expansion and railways. With government initiatives once again driving infrastructural growth, industrial expansion is back on track. Quite evidently, the fiscal and monetary measures undertaken by the Government and the Reserve Bank of India are showing positive results. This revival of industrial and economic growth is, in turn, opening new windows of opportunity for your Company which, as a quality manufacturer of cables catering to diverse needs of a wide clientele, is uniquely positioned and primed to deliver exceptional value to all its stakeholders in all the segments of its presence. In conclusion, I take this opportunity to thank all members of the organization, and each of its stakeholders, for the exemplary support extended by them in this extraordinary year. It was their unwavering faith in the Company's inherent strengths that enabled us to tackle the adversities of this difficult period to march confidently ahead towards a better future. Yours sincerely Sanjay Aggarwal, Chairman & CEO