Annual Report 2000-2001
SCHENECTADY-BECK INDIA LTD.
Ladies & Gentlemen,
On behalf of the Board, I welcome you to the 45th Annual General Meeting of
the Company and thank you for your attendance here today. The 45th Annual
report for the year ended 31st March 2001 has been with you and I take it
as read. Your directors have asked me to chair this Meeting as Mr.Wallace
Graham is unable to attend.
The financial results are well covered in the annual report, and the
Directors' Report attached thereto has carried detailed statement on
current and future outlook of the Company. I would like to share with you
the business status of the Company and the specific steps being taken to
improve the turnover and market spectrum of the Company.
First let me outline the status of the electrical industry and the power
sector, and I quote from my address to you a year ago, "The electrical
industry has been in a state of recession for the past 3 years and this
situation continues. Electrical equipment manufacturers are facing lack of
demand and electrical equipment and white goods are heavily discounted in
the market place. This is attributed mainly to slack capital expenditures
in the manufacturing sector, over capacity in the electrical industry and
the poor financial situation of the state electricity boards which has
restricted new investments in the power sector. Substantial imports of
electrical products such as motors and compressors and consumer durable
such as air conditioners, refrigerators etc., have exacerbated the
situation". The situation I have described still prevails which reflects in
static sales volumes and compressed margins in the domestic sector of our
business. Our response to this is broadly as follows
In terms of new business opportunities, your Company is pursuing the
1. The Lote Parsuram plant of Schenectady India Ltd., is undergoing a major
modification at a cost of Rs.60 mio to manufacture Phenolic Resins for the
tyre industry. The technology for this has been provided by Schenectady
International, Inc., which is a market leader for these resins, and we have
high expectations from diversifying into these products in India.
2. The thrust in Construction Chemicals is gaining momentum in terms of
sales growth and your Company has further diversified into Putties and
Adhesives for household use to be sold through retail shops. In the next
few years, we will be taking active steps to build up the Beck Bond brand
through advertisement etc., in order to support our foray into Construction
3. Your Company is in the process of establishing alliances for export of
electrical insulation to the China market, which has large potential.
Your Company is in a phase of modernising and de-bottlenecking its
production plants in order to achieve cost reduction, productivity,
quality, consistency and improved environment and safety standards. Taking
advantage of the recession, we are able to achieve this at extremely
competitive quotations from machinery manufacturers and contractors.
E-Commerce initiatives started last year have started yielding results and
orders from distributors are now being received through the Internet,
cutting down processing time.
In today's business environment, there is a trend towards commoditisation
of brands, which we are acutely aware of, and therefore, our objective is
to prevent this in so far as our product range is concerned by improved
production processes and measures to enhance quality standards.
I am pleased to inform you that the Hon'ble High Court, Mumbai has passed
suitable orclers approving the Scheme of amalgamation of Schenectady India
Ltd with your Company. With this, the integration process of Schenectady
India into Schenectady Beck started in 1998 will be completed giving your
company an excellent site to launch the phenolic resin business.
The Company is in an active learning phase to understand this business and
has already undertaken market seeding activity. I am confident that your
company as well as the user industry both will reap the benefits of
manufacture of phenolic resins indigenously.
Consequent to the approval of the scheme of amalgamation by the High Court,
the shareholders of Schenectady India Ltd. would be entitled to shares of
your company. The Scheme provides for payment of pro-rata dividend in
respect of period after 1.1.2001. A suitable resolution enabling the
directors to discharge their responsibility in this regard is being
proposed in the course of this meeting for your approval. As is already
known to you, by acquiring the shares held by the Mahindra Group
Schenectady International has reposed confidence in the strength and growth
prospects of your company. After giving effect to the scheme of
amalgamation, the holding of Schenectady Group in your company will
increase to 82.71 per cent.
Your Company continues to pursue quality management and is geared up to
adopt the revised version of ISO 9001 which is ISO 2000. Long term plans
are being made to adopt Six Sigma- an advanced technique in total quality
management. Schenectady Group all over the world is practicing the approved
Environment Management Systems and is always diligent in compliance of its
obligations under pollution control laws. Your company continues to be
recognised and certified under ISO 14001 system and we believe that
complying with safety, health and environment management norms is going to
benefit the company in the long run. Your company has taken necessary steps
well ahead of the statutory deadline to implement the Corporate Governance
in line with the requirements of Listing Agreement. You will find a
detailed report on Corporate Governance attached to the Directors' report.
Coming to the current year, I do not see a revival of electrical industry.
While initiatives to diversify into construction chemical business and
phenolic resins are being taken, significant part of the turnover will
continue to come from electro- insulation business. The turnover during the
period April to August 2001 was Rs. 323.6 Mio against Rs 296.1 Mio for the
corresponding period in the previous year.
Your Company has made arrangements for dematerialisation of the shares and
many institutional and individual shareholders have availed of the facility
and I encourage all shareholders to demat their shares, for their own
Before I conclude, I would like to express my sincere thanks to my
colleagues on the Board. I also wish to place on record our appreciation
for the cooperation received from all our employees and all of you for your
continued interest in the affairs of the Company.
SCHENECTADY-BECK INDIA LTD.
'Arcadia,' 10th Floor,
195, Nariman Point,
Mumbai 400 021