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Grand Foundry Ltd.

BSE: 513343 Sector: Metals & Mining
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Grand Foundry Ltd. (GRANDFONRY) - Chairman Speech

Company chairman speech

1994 GRAND FOUNDRY LTD CHAIRMAN SPEECH TO THE MEMBERS STATEMENT OF THE CHAIRMAN AT THE ANNUAL GENERAL MEETING OF GRAND FOUNDRY LTD HELD ON ;26TH SEPTEMBER 1994 Ladies & Gentlemen, On behalf of my colleagues on the Board and on my behalf I welcome you to this Annual General Meeting of the Company, the third AGM since its public issue in February 1992. PERFORMAANCE OF THE COMPANY: Last year was not a very good year for the steel industry. The industry faced world-wide recession. In India, the export support mechanism was changed from IPRS to Advance Licensing Scheme, due to which the export turnover reduced in value terms. Despite such recessionary trends in the developed countries, your Company maintained the sales tonnage at 3569 tonnes as against the previous year's figure of 3578 tonnes. The Company has reported increase in profit after tax for the fifth consecutive year. A two-for-five bonus issue was made during the year and the Board has recommended a dividend of 12.5 per cent for the year on the increased capital after capitalization of Rs.2.90 crores out of the Share Premium Account. The dividend works out to 17.5 per cent on the pre-bonus capital. The Company is a major exporter to USA. According to the preliminary dumping findings of the Department of Commerce of the USA, the dumping rate levied for our Company of 2.67 per cent is the lowest among exporters from India, Spain, Brazil, Japan and Italy (except for one Italian company). This has put our Company in an advantageous position as regards exports to USA. The final dumping findings are not likely to be significantly different. If so, Grand Foundry is likely to emerge as the single largest exporter of bright bars from among these countries to the USA. Under these improved conditions, the current year appears very encouraging and the Company should perform well as can be seen from the performance of the first six months. The exports for the six months in the current year are 2955 tonnes valued at Rs.18.30 crores as compared to 1250 tonnes valued at Rs.7.72 crores in the corresponding period of the previous year, indicating an increase of 137 per cent. Further, the order book is very comfortable with pending orders of about 3000 MT to be executed before the year end. The Company is expected to do much better in the current year in regard to turnover and profitability. EXPORT AWARD: The Company has once aqain, for the fifth year in a row, bagged an export award from the Engineering Promotion Export Council of India. The awards that the Company has been receiving were from the Regional Council, but this year we have received the Certificate of Export Excellence at the all India level for achieving the highest export performance in 1992-93 among non- exporters in the panel "Steel Products, All Types" ECONOHIC OUTLOOK . The economic outlook seems promising going by what we read in the press. We have had seven successive years of good monsoons. The decession has ended in India and the western countries. Industrial production is picking up, and in fact there has been a strong industrial revival during April-July 1994. The inflation rate which touched 10.5 per cent on March 5 and remained in double digits for 23 succesesive week & had caused much concern. However, it came down to 9.90 on August 6 and has single digit since then. Foreign exchange reserves are at an all time high, and this too has caused anxiety due to problems caused by large reserves. These are being sought to be tackled among other things by further liberalisation of imports.- Criticism has been levelled at the Government for the 510 space at which liberalisation has been taking place. On the other hand, it has been pointed out that Margaret Thatcher's pace of liberalisation spread over a period of 8 to 10 years would be more suitable for our country and that a faster pace of liberalisation adopted by some countries has not proved so very happy for them. The Government at the Centre is far more stable now, and I would say that its policies are bearing fruit. The Commerce Ministry has announced an alternative scheme to the International Price Reimbursement Scheme under which deemed export status would be granted to supplies by domestic iron and. steel producers to exporters of engineering goods. This should give us the benefit of obtaining raw materials at prices close to international prices. SUBSIDIARY COHPANY: Grand Bright Bars Ltd., the 100% subsidiary of the Company, which is taking care of the domestic side of the business, achieved a turnover of Rs.8.64 crores during the first year of its operations, and is consolidating its position in the domestic market. The Company's project for Wire Rod and Bar Mill will become a prominent milestone in the history of the Company when launched. Your Directors are doing their best to see that the project is tied up at the earliest. Negotiations with multinational companies are in progress for equity participation as well as marketing and sourcing with buy-back arrangements upto 35 per cent. The project will enhance the competitiveness of the Company in India and abroad, and the sales turnover will increase manifold to Rs.300 crores in the next three to four years. I take this opportunity to thank the Managing Directors Shri Kiran Jangla and Shri Hiten Jangla, the executives and all our employees for the continued success of the Company. I thank our bankers , Bank of India and Allahabad Bank, for their support, the financial institutions for their assistance, the shareholders for their trust and confidence in the Company, the customers of the Company in the international and domestic markets, and my colleagues on the Board for their valuable guidance and counsel. Thank you. DHIRAJLAL B JANGLA CHAIRMAN