Financial year 2016-17 has been another good year of progress and growth for SanghviMovers Limited and I take this opportunity to share the performance of your Company andseveral initiatives undertaken during the year that have contributed to this performance.
During the financial year 2016-17 the global macroeconomic situation was impacted byvarious events which have in turn affected the business environment in India. The Indianeconomy is in a strong position compared to the continued tepid global economic growth andoutlook. Many sectors such as infrastructure power generation (especially renewableenergy) transmission and distribution refineries and petrochemicals are seeingincreased investments leading to infrastructure sector growth. While there are challengesin any business environment India's overall macro fundamentals are strong.
Keeping in view the market conditions your Company has performed exceedingly well anddelivered strong growth in the last financial year. The continued growth of Sanghvi MoversLimited is linked to the overall performance of the Indian economy and sustainable publicand private sector capital expenditure. Against this milieu the Company will continue tofocus on sustaining profitable growth maintain operational excellence and selectivelypursue large orders.
In the fiscal year 2016-17 turnover of your Company was at an all-time high at Rs.562.88 crores representing an increase of 6 percent over the previous year. Net profitbefore tax (excluding exceptional items) was Rs. 161.49 crores. Your Company was able togrow revenues and profitably despite the challenges prevailing in the global and the toughdomestic business environment. The Company generated significant cash accrualsstrengthened its Balance Sheet and financial position and continued to return value to itsshareholders.
Your Board has recommended a dividend of Rs. 4/per share of Rs. 2/fully paid-up (200percent) subject to your approval atthe Annual General Meeting.
Capex for FY 2016-17
The company has done Net Capital Expenditure of Rs. 151 Crores in the current financialyear and has purchased 5 Nos. New Terex Demag CC 3800-1 Cranes (Capacity650 MT) andDerrick Attachments. These cranes can erect windmills upto 3 MW and has height of 165meters these are next generation cranes for future wind mills & projects. In additionto this the Company has already bought Office premises in BKC Bombay. Hence the TotalCapex done for the FY 2016-17 is around Rs. 205 Crores.
The company has judicially used its cash flow partly towards funding its capex plan forFY 2017 and partly for reducing its bank loans. The company has repaid loans in excess ofRs. 265 Crores during the last financial year. As on 31st March 2017 TotalOutstanding Bank Borrowings including Cash Credit Buyers' Credit & Unsecured Loansis Rs. 545 Crores. The Debt: Equity Ratio is 0.63:1 which is quite comfortable consideringthe capital intensive nature of company's business model and the asset base which it hascreated over last 25 years.
Proposed Capex for FY 2017-18
The company proposes to import 7 Nos. Brand New Terex Demag CC 3800 Cranes (Capacity650 Tons) and 18 Nos. Brand New Grove GMK6300L Cranes (Capacity300 Tons). The Net Capex(after sale of cranes under Trade-in agreement) would be aroundRs. 275 Crores.
The projected amount of Debt: Equity Ratio as on 31 March 2018 after doing this capexwould be around 0.80:1.
Your Company has spent a sum of Rs. 121.37 Lakhs on CSR during the financial year2016-17. Your Company is also committed to its social responsibility agenda andcontributes meaningfully to the communities that it operates in. Your Company continues tofocus in the areas of Education Healthcare and Sustainable Livelihood.
Our commitment towards the communities where we operate also remained steadfast. One ofour key initiatives last year was to provide education to underprivileged children's thatwas run in partnership with Pune City Connect Development Foundation Teach for IndiaJagriti School for Blind Girls Helplife I teach movement Vanitashray and Sant GajananMaharaj Shikshan Sanstha. The Company also supported Maher Late Vaibhav PhalnikarMemorial Foundation Ashray KEM Micro Grid Village Project Navkshitij Lata MangeshkarMedical Foundation and Janseva Foundation. Work in these areas is expected to be enhancedfurther in theyears ahead.
The Indian economy is in a strong position and many core sectors saw increasedinvestments leading to positive growth. I believe human capital plays a vital role inachieving in the success of our company. I believe our existing talent pool will enableyour Company to continue to outperform peers.
I thank you all for your immense support and continued confidence in the Management ofour Company. I would like to convey my gratitude to all our stakeholders including ouresteemed banks vendors and customers for their consistent faith in us. We seek thecooperation of all stakeholders to make thejourney even more exciting and rewarding goingforward. I am optimistic that Sanghvi Movers Limited will continue to grow and succeed.
Chandrakant P. Sanghvi
Chairman & Managing Director