We made good progress during the year on our different business strengtheninginitiatives such as focusing on sourcing locally and enhancing our domestic manufacturingcapabilities to keep the Company aligned with the government's vision of an"Aatmanirbhar Bharat".
As I write this statement I find myself vindicated of the trust and confidence I hadput in my colleagues over the years but specially over the past year when we were put toyet another test of resilience as the raging pandemic continued to wreak havoc in people'slives and countries' economies. I was confident we would manage to stay on top of thecrisis and the confidence was fully vindicated as our colleagues across our facilitiescame together in the most inspiring ways to ensure that we continue to serve our customersand grow our business. The covid crisis sensitized us to the fragility of human life andhealth.
As companies collapsed economies crashed and lives perished I would not be toopompous to claim that 20 Microns was not walking on the edge. But we cognized this realityand re-invented our approaches in keeping with the limitations Covid has imposed on us sothat moderation if not excellence per se can help us stay relevant in the market.
Ensuring business continuity
We entered FY21 under severe uncertainty when progress came to a grinding halt due tothe pandemic and the nation-wide lockdown. This impacted us also wherein all our businessunits from corporate offices to manufacturing units to mining facilities remained closedfor nearly 21 days. Further social distancing norms and other covid protocols meant thatwe operated with limited workforce. Further strict movement restations meant there waslimited availability of transport across different mediums. This led to higher transittime along with rising transportation cost.
There is no denying the fact that while COVID-19 has challenged every individual andbusiness entity alike we overcame this challenge by sticking together and by beingproactive in our approach. Even before the pandemic had hit our nation we tried toanticipate the same by observing how it impacted China and took necessary measures to safeguard ourselves to the maximum extent. The top management took keen interest in ensuringthat we had the requisite raw material reserve also we meticulously planned on our clientdeliverables to ensure that we are not severely impacted by the pandemic or lockdown. Ourvendor management
Even before the pandemic had hit our nation we tried to anticipate the same byobserving how it impacted China and took necessary measures to safe guard ourselves to themaximum extent. and procurement team played a key role during this time as it ensured ourmanufacturing units had regular supply of other key raw materials. With majority of ourworkforce stationed near to our manufacturing and mining hubs it played well in our favorand we never faced any shortage of people. Keeping in mind the current situation westrategically choose our raw material suppliers and more focused on sourcing domesticallyto ensure that we are not severely impacted by the rising transportation cost and we don'tloose our competitiveness in the market.
FY21 has been a year of unprecedented challenges and uncertainties. The COVID-19pandemic disrupted the way of life businesses and the overall economic scenario not onlyin India but across the globe. The Indian GDP witnessed a contraction of ~ 24.4% in thefirst guarter of FY21. However post the second quarter of FY21 there has been a steadyrecovery with the economy returning to growth in the third and fourth quarter and a sharprebound in all end markets. For the complete FY21 the Indian economy contracted by -7.3%.Though renewed outbreaks are posing fresh challenges especially in India where the secondwave has been devastating the outlook for the global economy remains positive after ayear of negative performance. However the aggressive roll-out of vaccines and the renewedfocus of the government on vaccination provides hope in this global battle against thepandemic.
Further our business growth is directly dependent on some of the key sub sectors ofthe Indian economy such as paint and coating printing real estate agriculture andautomobile industry. The pandemic negatively impacted most of these industries which inturn reflected in our performance. But with the opening up of the economy post thelockdown most of these industries started getting back on the growth track. Theautomobile industry witnessed a catastrophic effect in FY21 as sales volumes were pushedback by multiple years. However it is noteworthy that by the end of the year theautomobiles industry made a strong comeback as wholesale as well as retail volumes startedgaining momentum owing to the pent-up demand festive and wedding season. Agricultureemerged as the only sector which is expected to have clock a positive growth in FY21.Gross Value Added (GVA) for agriculture and allied activities recorded a 3.4% growth atconstant prices in FY21 lower than previous year but the best growth among all othersectors battered in the Covid-19 pandemic. The Indian real estate industry witnessed acomplete white wash in the first two quarters of FY21 but the industry witnessed a flurryof activities in the post pandemic period. Stamp duty cuts announced by some stategovernments unmet demand and moderation in interest rates of housing loans provided therequired boost to the industry to get back on the growth track.
Going beyond numbers
As I mentioned earlier I would not be too boastful about our company's accomplishmentsin a year like this. At the same time I would not also glorify this crisis because we at20 Microns never ceased working towards our longterm mid-term and short-term goals andproduced competitive results. With the adjustments and enhancements that we made to ouroperating model; we were able to deliver a very commendable business growth during theyear. Through the extraordinary efforts of our entire team the Company has been able toshowcase robust and resilient performance to overcome seemingly unsurmountable vagariesand stay on the charted course.
During the year we made good progress on our key strategic initiatives and achievedanother year of strong business performance. Yes indeed the financial numbers may not bein sync but I believe thatthisyear andforthe nextfewone needs to look beyond thefinancial numbers. We made good progress during the year on our different businessstrengthening initiatives such as focusing on sourcing locally and enhancing our domesticmanufacturing capabilities to keep the Company aligned with the government's vision of anAatmanirbhar Bharat. As a result we delivered or exceeded most of our stakeholderobjectives. Also we continued to focus on the delivery of the strategy in particularthrough reviews of progress on key strategic priorities such as operational excellencegrowing our international businesses in focused markets growing the proportion of value-added products withing our existing portfolio and expanding our offering in India usingtechnology to innovate our offerings and focusing on value creation with clear actions toprotect margins generate cash and deliver on our targets.
We witnessed the export market getting cold in the initial months of the year andaccordingly we recalibrated our manufacturing capabilities with a focus to control thefactors which are under our control. Backed by an able team we focused on modifying ourproduct mix improve our storytelling and make our customer interface more compelling thatled to such strong growth in the last two quarters. We also emphasized on enhancing ourbranding and marketing initiatives during the year to expand our customer base in theexisting markets and in new geographies. In FY20 we introduced many new products in theconstruction and chemicals segment and also in the fertilizers segment. But in FY21 wefocused on enhancing their market presence in India and also in our international markets.We enhanced our farmer interaction during the year to enhance the offtake of our mineralbased organic fertilizer products. The other key initiatives that we undertook during theyear was a few automation initiatives such as partial automation of packaging at Bhujplant and increased storage facility of raw materials and finished products. Through wenot only intend to reduce our dependency on human labour but it also helps us to reducecost. We also undertook initiatives targeting the expansion of capacity at our Alwar
Backed by an able team we focused on modifying our product mix improve ourstorytelling and make our customer interface more compelling that led to such stronggrowth in the last two quarters. plant. These efforts should translate into increasing theshare of value-added products in our revenue basket.
Despite all these challenges we recorded another year of positive topline andbottom-line growth thanks to the strong recovery of housing automobile paint andagricultural industry in the last two quarters of FY21. Touching on our financialperformance in FY21 our revenue stood at RS.437.95 crore while PAT stood at RS.22.45crore. Total cash generated from operations in FY21 stood at RS.62.25 crore.
With better operational performance we were also able to strengthen our balance sheetby reducing debt by more than Rs.23 crore during the year and enhanced our debt equityratio to 0.44 compared 0.64 in the previous year. This validates our commitment towardsmaintaining a strong balance sheet and creating longterm value for our stakeholders.
As employees stood by our side boosting our confidence we too ensured to retainmajority of them to the best of our abilities. This not just means retaining the jobs butalso ensuring they do so without compromising on the loyalty and trust they have towardsus. It was the spirit of our people and their willingness to rise to any challenge thatwas thrown their way I believe was central to the commendable performance of the companyin this most unpredictable year. I would like to take this opportunity to thank each andevery member of the 20ML family to help the Company overcome such difficult times andfunction as one cohesive family.
A big thanks to the employees of 20ML also for helping us sail through the difficulttimes. On one hand the management ensured the safety of our entire workforce by strictlyfollowing the covid protocols for those who had come to office or manufacturing and miningunits. They also ensured a smooth transition of the employees in the work from homeenvironment while focusing on business continuity and communicating effectively withcustomers and addressing priority deliveries. During the year we haven't been able tocompensate our employees aptly. Keeping this in mind in the current financial year wehave already implemented a new incentive policy as a mark of our gratitude.
Our core minerals and specialty chemicals business continue to be and will remainintegral to 20 Microns Limited in the future but our emerging value-added segment offerssignificant opportunities to deliver future end market requirements in specificapplications in the niche segments but where there is an opportunity to solve a problemfor our customers and our markets. Moving forward our focus would be centered aroundcreating the market for our value-added products this will help us access new revenue andmargin streams and differentiate against our competitors.
Given the uncertainty faced by businesses across India and in the internationalmarkets going forward our primary focus would be to enhance our relevance to ourcustomers across different industry and work on those factors which are under our control.For this we would continue to innovate with our product offerings build on our R&Dcapabilities strengthen our technology quotient accelerate growth and prepare ourselvesto capitalize on the first green shoots of recovery. As we continue to work on thesestrategies our aim of crossing the 1000-crore revenue mark over the next five yearsstill remains intact.
FY21 was dominated by the impact of the global pandemic as we worked closely with ourcustomers suppliers and people to overcome the unprecedented challenges that arose.Nonetheless the
Moving forward our focus would be centered around creating the market for ourvalue-added products such as organic fertilizers and herbal solutions segment this willhelp us access new revenue and margin streams and differentiate against our competitors.way we have showcased resilience so far underscores the strong fundamentals of ourbusiness. We are making continual progress in fine-tuning our new ways of operatingwithin the new constraints of social distancing and protection of our people to driveimproving profitability. With the measures undertaken to strengthen our capabilities andaccelerate growth and the innovation and dedication of our people are likely to enable usto approach the year ahead with confidence and help set us sail for new horizons.
|Rajesh C. parikh |
|Chairman and Managing Director |