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.
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.
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
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.
Place : Calcutta,
Dated : 26th September, 1996.