It gives me immense pleasure to welcome you all at the Thirty Sixth Annual GeneralMeeting of your Company. It's been another challenging year and I would like to thank andappreciate you whole heartedly for your continued trust encouragement and support whichmade your company sail through this difficult phase.
The Global Economy witnessed a marked slowdown in growth. Emerging economies werecharacterized by sharp fall in growth rates especially in China. Europe and Japancontinued to be in pressure through out the year and the United States showed tepid signsof improvement.
The Indian Economy witnessed the seeds of much needed sustainable economic stabilitybeing sown with a new Government enjoying clear majority coming to power at the centreafter a two decade long of coalition politics and the future to be seen with certaindegree of optimism. With better macroeconomic conditions coupled with improved sentimentspost the general elections helped India to be the better performing emerging marketseconomies.
However given the backdrop of market slow down consumer spending remained mutedduring the year and the operating environment continued to be a challenging one. Overallthe F.Y. 2014-15 remained a tumultuous one for the Metal Industry particularly in thebackground of;
Subdued manufacturing growth leading to overall depressed demand;
High input cost;
Frequent Changes in the prices at London Metal Exchange affecting the localprice charging system of primary producers in the country;
Regulatory uncertainties in captive mining operations.
Your company's performance has been viewed in the context of aforesaid economic andmarket conditions.
The performance of Aluminum Extrusion Industry is dependent upon the following keyfactors;
Good Domestic Market
Reasonable power tariff and other energy costs
Cost of Credit
Stable input cost.
The year got off to a jittery start with the first half of the year witnessing a mutedconsumer demand and production cuts given the backdrop of slow economic growth. Furtherhigh indirect input and finance cost made the operating environment a challenging one.
In the second half of the year your company faced a financial crunch in the ThirdQuarter which nearly doubled the working capital requirement of your company. Furtherlower margin and lower EBIDT impacted interest coverage thereby increasing finance cost.
The last quarter of the Financial Year saw business sentiments improving in the energysector (which constitutes almost 40% of the user segment in India) and automobile sectorwhich improved the demand and production margins. Thereby the Company witnessed an overallincrease in volume as compared to the previous Financial Year.
However considering the financial crunch high borrowings poor cash flows and suchother factors as mentioned above the profitability of the company got severely affected.
For the first time since the F.Y. 2003-04 your Company incurred a loss of ' 838.19Lakhs in the current Financial Year (2014-15) as compared to a profit of ' 41.09 lakhs forthe previous Financial Year (2013-14). EBIDT fell to ' 331.36 Lakhs as compared to '775.20 Lakhs in the previous financial year. However the Company recorded an increase inturnover of ' 8075.54 Lakhs in the current Financial Year (2014-15) from ' 7368.32 Lakhsin the previous Financial Year (2013-14).
Despite the sluggish performance of the Company for the year under review the futurelooks brighter for the Company going ahead with demand expected to pick from the 2ndQuarter of the F.Y 2015-16 on the back of improved business sentiments as well as higherinvestments across key industrial and infrastructure sector as the governments "Makein India" campaign will start yielding results. Further with the Government takingnecessary steps to control the regulatory uncertainties in captive mining operations thevolatility in indirect input cost seems to be easing up. Further the F.Y. 2015-16 will seemoderation in interest cover (operating profit / interest cost) which will help improveprofitability at net level.
Moving forward we will continue to leverage our established track record commitmentto quality and strong network of domestic customers to achieve greater value for ourshareholders. Our vision is to expand our business volume where margins are comparable.
Your Directors place on record their sincere appreciation to the active involvement anddedication of the officers employees and workers of the Company at all levels to show theresilience in the performance of the Company.
Your Directors would also like to place on record their sincere appreciation for thecontinued support and co-operation to the Company by the bankers primary metal suppliersand other business associates regulatory authorities customers vendors shareholdersand Stock Exchange.
|Place : Mumbai ||Sudarshan Chokhani |
|Date : 31st July 2015 ||Managing Director |