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Jhagadia Copper Ltd.

BSE: 504920 Sector: Metals & Mining
NSE: SWIL ISIN Code: INE666A01028
BSE 05:30 | 01 Jan Jhagadia Copper Ltd
NSE 05:30 | 01 Jan Jhagadia Copper Ltd

Jhagadia Copper Ltd. (SWIL) - Chairman Speech

Company chairman speech

1996 SWIL LIMITED CHAIRMAN'S REPORT It gives me great pleasure in welcoming you to the 33rd Annual General Meeting of your Company. The notice convening this meeting, the audited accounts for the year 1995-96 and the Directors' Report have been with you for sometime, and with your permission I will take them as read. The Economic Scenario The Indian economy at this juncture is passing through a crucial phase which the future generations may well look back upon as a veritable watershed in its history. On the one hand, the economy has performed very well in the year under review. The GDP grew at a healthy rate of 7% with the industrial sector growing at 12%. Foodgrains production was of the order of 192 million tonnes and public food stocks soared to 24.5 million tonnes in March 1996. Exports registered a satisfactory growth rate of 21.4 % in dollar terms and the rate of inflation fell to below 5 %. On the negative side, the coalition Government at the Centre has not yet shown a positive and firm direction and this does not augur well for healthy development of the industrial sector. The capital market is going through a phase of prolonged depression and a major source of liquidity for the corporate sector has almost dried up. The industrial sector is also affected by the high rate of interest charged by banks and financial institutions which raises the cost of funds and by rigid and obsolete labour laws that hinder mobility of the labour force in tune with changes in technology. Unless this is corrected, Indian industries cannot compete globally. These adverse developments are a source of serious concern and are bound to hinder industrial development of the country in the long run. It will also have an adverse impact on the creation of employment and wealth within the economy. The Government's policy of reducing import tariffs in even industries that have managed to survive in the present competitive environment is of highly questionable wisdom and may also have a retrogressive impact on industrial development. Financial Performance Your Company has continued to maintain accelerated growth and has posted impressive operational results in the year under review. The turnover has increased from Rs. 139.46 crores to Rs. 191.52 crores, an increase of 37%, while the gross profit increased from Rs. 11.04 crores to Rs. 12.53 crores, an increase of 13.5%. The net profit increased from Rs. 6.37 crores to Rs. 7.23 crores, an increase of 13.5%. According to available indicators, the performance of your Company will improve further during the current year. On the export front, your Company's untiring thrust on exports has resulted in export earnings increasing from Rs. 15.11 crores last year to Rs. 29.81 crores during the year under review - an increase of 97%. The Company is in the process of synchronizing all its activities on the export front and is looking forward to consolidating and accelerating the rising trend. Prompted by the need to bolster the Company's future growth programme and at the same time to consolidate a sense of participation with the shareholders in the Company's improved operational performance, your Directors have recommended maintaining the dividend of 30% on the paid-up equity share capital of the Company for the period ended March 31, 1996. Modernisation & Expansion Programme At Uttarpara, the Company proposes to acquire balancing plant and equipment for its Synthetic Division. Your Company proposes to install one HP 200 loom and necessary seaming machines which will increase production significantly to cater to the increasing market demand. Your Company has installed one more 20 Hi Mill at Nasik during the year under review. This will enable the Company to increase the production of thinner foil to a great extent during 1996-97. The EDM Wire manufactured by the Company has been well-received in Europe and America. We are increasing our production considerably to meet the export requirements. Your Company has also developed many new items for the paper industry and can stand in competition even with the most developed countries in the world. Diversification Considerable progress has been made on your Company's Copper Project at the Jhagadia Industrial Estate in Bharuch, Gujarat. Out of the aggregate term loan of Rs. 300 crores, the Company has already executed loan agreements with participating financial institutions and banks to the extent of Rs. 255 crores. To part finance this project, the Company has made an issue of 15% fully convertible debentures on Rights basis for cash at par aggregating to over Rs. 59 crores. The necessary letter of credit in favour of the foreign collaborator has already been opened. The plant will use state-of-the-art technology in copper smelting developed in collaboration with M/s. Boliden Contech of Sweden. The contracts for the supply of the bulk of imported equipment have already been made. Floating of tenders for indigenous equipment started in May 1996 and is expected to be completed by October 1996. The Global Perspective : International Business Division (IBD) The IBD of the Company has continued to maintain its steady growth during the third year of its operations. The turnover of the Division has increased from Rs. 14.42 crores last year to Rs. 24.46 rores in the current year registering a growth of 70%. This has been achieved by an increase in the range of activities as well as in the number of items traded globally. The network now extends to the countries of America, Europe, East Asia and Africa. Wholly owned Subsidiary SWIL International Pte. Ltd., your Company's wholly - owned subsidiary in Singapore, continues to earn profit in the second year of its operations. During the current year, its turnover increased from Sing. $ 91.86 million to Sing. $ 255.79 million, an increase by almost 178%. Vote of Thanks In conclusion, I offer a vote of thanks to all those who supported us in our efforts, the people at SWIL, our shareholders and members of the Board. I would also like to express my appreciation of the assistance your Company has received from the Central Government and the State Governments of West Bengal, Maharashtra and Gujarat as well as all the financial institutions and banks, who showed their involvement in our cause. S.N. KHAITAN Chairman Place : Calcutta, Dated : 26th September, 1996.