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Ambuja Electrocastings Ltd.

BSE: 513317 Sector: Metals & Mining
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Ambuja Electrocastings Ltd. (AMBUJELCST) - Chairman Speech

Company chairman speech

1994 AMBUJA ELECTROCASTINGS LIMITED THE CHAIRMAN'S SPEECH Dear Shareholders, It is my pleasure once again to meet you all. I welcome you to this 5th Annual General Meeting of your Company. To begin with, I feel elated to inform you that your Company had an excellent performance in 1993-94. Notice convening this Meeting, Annual Accounts and Directors Report along with other papers are already with you for soine timc. With your permissioll. I shall take Notice and Directors Report as read. DIVIDEND I am pleased lo inform you that the Board of Drrectnrs have recommended payment of Dividend @ 15% i.e.Rs.1.50 per share amounting to Rs. 72,62,250/- (Subject to deduction of tax). WORKING RESULTS During Ine year undcr review. the tumove.r has incre.lsed from Rs.1013.80 lakhs to Rs.1321.73 lakhs. an increase of 30% from thc previous year. Likewis'e, Profil after tax has gone up from Rs. 70.13 lakhs to Rs. 152.98 lakhs, an increase of 118% Major breakthrough was Ihe entry in Exporl market & the achievemcnt waS 606 lakhs, during the year under review RIGHTS ISSUE You are aware that the Company is coming out with Rights Issue of 96,83,000 Equity Shares of Rs. 10/- each at a premium of Rs. 8 per share aggregating Rs.17,42,94,000.00 in the ratio of 2:1.The lssue will open on 4th November, 1994 and the earliest closing will be on 3rd Decenber l994 Implementation of expansion and forward integration programme is going on as per Shedule and commercial production will commence from April 1995. TAKE OVER OF MINI STEEL PLANT IN PUNJAB I am pleased to inform you that your Cnmpally has takcn over a mini steel plant near Ludhiana in Punjab. having a capacity of 60000 MT p.a. and reroling mill of 30000 MT p.a. which is expepted to start production from December. 1994. In this plant, we shall be manufacturing stainless steel biilets and then we will roll it to flats in the rolling mills and sell .S.S Flats which have a very good market in Northern India. It will also sul- stantially incre.lse the tumover and profiLability of your Company. We will also be makiing low carbon Billets which are being sold at a premium price in Punjab. We have also purchased a CR Strip mill in which we will roll the SS HR Coils & the product SS CR Strips will be exported. By rolling low carbon billet, we will manufacture Skalp & the end prnducts will be CR strips and pipes. We will also make sprillg steel carbon steel & special value added alloy steel casting PROJECTIONS Year ended 1994-95 1995-96 1996-97 Turnover 30 Crores 75 Crores 90 crores (with three month working of Punjab Unit) Net Profit 4Crores 9.50 Crores 12 Crores E P S (in Rs.)* 2.75 6.55 8.26 On enhanced Equity, after issue, i e. 14.52 crores JOINT VENTURE IN NEPAL Your Company has floated a joint venture comaplly in Nepal named Ambuja Electrocastings (Nepal) Ltd., which is already running a mini steel plant. The Company has also purchased 1and for another mini steel plant and a rolling mill. The work is going on in full swilig and the productioa is e xpected to start by February, 1995. This will further boost the performance of your Company. NEW PROJECTS -SPONGE IRON Your Company has definite place to set up a 1.50 lacs TPA, Sponge Iron plant with lurgi technology (a substitute of steel scrap) as a part of its backward integration. The plant will also be generating, 12 MW power by histalling a Turbo Generator run by the waste heat gases gcnerated in' Rotary Kiln. Two furnace.of each of 10 tons capacity will be installed, in which the sponge iron will be used to make billets and the billets will be rolled into M.S Rods and spring steel, carbon steel, etc. making it a complete mini integrated Steel Plant from iron ore to high value added roll products this will also put up the Company in the list of Large Industrial Houses. OIITLOOK FOR CURRENT YEAR Sales for 6 months ended 30th September, 1994 is mnre than 12 Crores (including Export of 4 Crores) and Profit after tax is around Rs. 160 lakhs, which shows an increase of 42% and 60% espectively compared to the corresponding ffigures of the previous year. The company will be able to achieve Rs. 30 Crores sales target (including Punjab unit) out of which exports will be around Rs. 10 Crores. FUTRE PROSPECTS Future of the Steel Industry is very hright and it is expected that profitabilily will take a quantum jump in the year as the general steel scenario is coming out of woods, due to an increased demand in the Domestic as well as the Export market. ACKNOWLEDGEMENT I am grateful for the supporl and confidence you have always extended to your Company and I now look forward to your collli nued supporl alld encouragemellt to your Compally to scale ncw heights. Thanking You DP GUPTA CHAIRMAN