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Roofit Industries Ltd.

BSE: 526089 Sector: Industrials
NSE: ROOFITIND ISIN Code: INE743A01017
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Roofit Industries Ltd. (ROOFITIND) - Chairman Speech

Company chairman speech

ROOFIT INDUSTRIES LIMITED CHAIRMAN'S ADDRESS, 19TH ANNUAL GENERAL MEETING, ROOFIT INDUSTRIES LIMITED Ladies and Gentlemen, It gives me great pleasure to welcome all of you to the 19th Annual General Meeting of your company. The Economic Scenario There is an economic crisis engulfing not just India but the entire globe, precipitated by the depressed consumer sentiment and pessimistic investor outlook, post the tragic and traumatic events in America. As it is, the Indian economy, following international footsteps, was heading towards a recession since the first quarter of the new financial year; the software sector which has been the winning horse for India in the export segment was suffering as its biggest customer, the United States experienced a definite economic slowdown. The terrorist attacks worsened the situation and it will be quite a while before the world recovers from the setback Industries such as Airlines, Tourism and the Financial sector were the worst hit and this consequently impacted on other industries like consumer goods since propensity to spend was probably at its lowest. Following the recessionary indications, downsizing has been the buzzword in the last tow quarters in almost all the industries and especially the infotech sector. Companies, which blindly created overheads in anticipation of growth, painfully realized that they had no choice but to shed some of them, to stay afloat. Everyone concerned has how realized that it will be some time before normalcy returns in the economic process of buying and selling. Already, the RBI recently fired its first set of "solution" steps, by reducing the lending rate by half a percentage point, hoping that this might lift the sagging spirits. However, the need of the hour is to stay positive, focused and patient. These qualities alone will enable the industry to tide over the crisis. After all, even in this climate of doom, there are a few industries such as pharmaceuticals and security devices, which have experienced a boom. The Industrial Scenario The construction industry in India experienced a satisfactory first half till June 2001, aided by government spending on infrastructure development and a definite upswing in the property sector. Indeed these two factors still exist, but generally their effect has been dampened by the overall recessionary trend observed in the country. The specific segment that your company operates in, namely roofing and dry mix plasters, experienced satisfactory growth in 2000-2001. The total potential for roofing products grew by more than 10%, mainly due to the increased spending on housing in the rural areas. Similarly, your company managed to successfully create a new industrial category of dry mix plasters in which it is now the only player. On the roofing side, the concern with regard to the use of asbestos increased further. Your company has been propagating the fact that the usage of asbestos in AC sheets and pipes is completely harmless and continues to do so. However, we respect the public sentiment and keeping in view the future interests of our shareholders, the management has successfully derisked the company. Your company now offers complete roofing solutions, be it metallic roofs or PVC roofs and this has certainly widened our customer base. Especially on the industrial roofing side, this has been a big shot in the arm for the Roofit sales team, since many industrial projects now specify the use of non-asbestos roofing sheets. However, AC sheets continue to rule in the rural and the semi-urban housing category and here your company is extremely well placed to cater to the demand. Roofit Industries Ltd. of course has successfully created a new category in the Indian construction industry - that of Dry Mix Plasters. The launch of dry mix plasters in an event comparable to the introduction of ready mix plasters is an event comparable to the introduction of ready mix concrete in the country in the early nineties. It signified a substantial leap for the country in the construction sector. Dry mix plasters contain sand, cement and additives, which are blended in standardized and accurate proportions at the factory level. They are very convenient to use, offer a high quality finish and are environment friendly. Though these plasters are a shade costlier than conventional plasters, the management us confident that consumers will be eventually convinced to use them, since they clearly provide a superior alternative. Now that your company has created this new category, there are reports of other companies in the industry who are eyeing the market. Your company's performance during the year 2000-2001 Even during these recessionary times, your company's performance has been brilliant. In the last four years, your company's turnover has grown by a compounded annual growth rate of 62%, which is one of the highest in the Indian industrial scenario. Your company registered a turnover of Rs. 456.16 crores in the year 2000-2001, as against Rs. 321.02 crores in the previous year. Similarly, the after tax increased to Rs. 41.64 in 2000-2001 as against Rs. 37.04 crores, in 1999-2000. What is even more satisfying is the fact that in the financial year gone by, your company further consolidated its position as a provider of construction solutions. Today, the various products manufactured and marketed by Roofit include RoofitMix dry mix plasters, ac pipes, GRP Water tanks, PVC sheets, AC sheets and wooden panels for doors and windows. A modern and fully automatic plant to manufacture dry mix plasters was commissioned in the last year at Kurkumbh, near Pune. This plant has given a huge boost to the selling efforts since the company is able to offer the full range of dry mix plasters divided into four categories; external plasters, internal plasters, tile plasters and special plasters. Also, the superior technology used in the plant has enabled the company to deliver a superior product at the market place. The sales team has made intense efforts over the past six months to get the dry mix plasters enlisted in various tenders, which are brought out by government agencies as well as large construction companies. These efforts have now started bearing fruit. Being the only manufacturer of dry mix plasters in the country, Roofit stands to gain tremendously when large tenders mentioning dry mix plasters get materialized. The sales pitch is made purely on the basis of the superior quality and the convenience that the product offers. You will be pleased to note that customer reaction has been encouragingly positive. The roofing division on the other hand has continuously made inroads into newer markets and customer segments in the last financial year. Your company is now the leader in the roofing industry in the segments that it operates in and on a national scale it stands third . The management is confident that within a span of the next two years, Roofit will become the highest selling brand in roofing sheets. The PVC sheets introduced by your company in the previous financial year have received a tremendous response from consumers as well as from distributors. They are an excellent pointer to the success of Roofit to introduce premium products at affordable rates, which end up offering really good value for money. The rural market continues to drive the growth of Roofit AC sheets since your company' brand has a very good top-of-the-mind recall in the rural areas. As our annual report for the year 2000-2001 demonstrates so very strongly, we are a people-oriented company. Our employees are continuously performing at their peak levels and this has been the main factor in our stunning financial performance. To quote from our annual report, our vision is "to become the Building and Construction Solutions group of choice in India- for customers, business associates and stakeholders". I want to assure all of you that we are progressing very steadily towards the complete fulfillment of this vision. Performing for the quarter July to September, 2001 The Sales for this quarter have gone up by 57% as compared to previous year quarter from Rs. 9036 lakhs to Rs. 14184 lakhs. However the net profit for the quarter has declined by 21% due to increase in material cost, selling expenses and interest. The company has taken concrete steps to curb the increased expenditure and to maintain the consistent bottom line growth over the years. Acknowledgement I would like to thank all shareholders for your support and confidence . I take this opportunity to thank all the customers, bankers and Financial Institutions for their continued cooperation and patronage. I a;so place on record sincere appreciation for excellent hard work and dedication of all employees of the company. Thanking you, Chairman