Your company has completed 77 years in business leaving in its wake a glorious historyof corporate ethics and social responsibility.
Growth being a high priority for a Company KCP has well-conceived and detailed actionplans for Growth in Revenue Profitability Return on Capital Employed Shareholder ValueCapacity Utilization and Productivity.
In the complex setting of Goods and Service Tax (GST) implementation the tighterregulatory norms and the increasingly volatile global scenario the resilience of KCP liesin its optimism managerial and technical competence discipline and commitment.
Let me deliberate on the economic scenario and performance of the company in the yeargone by and the outlook for future.
The Economy of this great country is evolving rapidly and your company is adapting tomeet that changes. The economic progress in the first half was impacted by GST relatedissues but the second half demonstrated recovery with higher economic growth.
The international agencies have painted a brighter picture of the Indian economy goingahead. International Monetary Fund (IMF) has projected the growth of 7.4% for 2018-19 and7.8% for 2019-20 while the World Bank estimates the economy to grow by 7.3% in 2018 and7.5% in 2019 citing that the economy has recovered from the adverse impact ofdemonetization and GST related disruptions. This growth will be contingent upon favorablemonsoon pick up in investment and increased private sector spending supported bycontinued government spending.
The manufacturing sector grew by 4.5% in 2017-18 the highest since FY14 on account ofrestocking activities undertaken by the sector post the implementation of the GST.
Coming to your Company the performance of the KCP was quite encouraging with theimproved results not only on standalone basis but group as whole.
Though the prices of cement were not as remunerative in 2018 as they were in 2017 thevolumes helped us to improve the bottom line. The demand for cement was supported byirrigation schemes low cost housing and infrastructure projects. Energy and freight costswere under pressure on the back of rising coal and diesel prices during FY2018. But forthe substantial jump in coal prices in FY 2018 the KCP would have made substantialimprovements in net realizations driven by cost saving measures.
Going forward it is expected that there would be moderate growth in the demand andprices of cement.
We are gearing up with strategies for the off- take of the additional capacity comingon stream during FY 2019 at our Muktyala plant.
Competition for the orders for engineering goods continues to exert pressure on marginsin our Heavy Engineering. The engineering unit though languishing in losses itsubstantially reduced the losses of the previous year.
Coming to the Hospitality sector with reference to our Hotel at Hyderabad it isheartening to note that the Revenue per Available Room and Average Room Revenue have beenimproving in the country signaling growth in this sector. Our Hotel also showedsubstantial improvement in line with the trend. It is expected that the industry would dowell in Hyderabad in coming years.
The prices of sugar were southwards in FY 2018. With completion of expansion to 9000TCD the subsidiary in Vietnam could turn out larger volumes which helped in improved andhealthy bottom line. Though expansion of crushing capacity to 11000 TCD has beencompleted the completion of sugar refining facilities would be done in a year's time.
It has been a rewarding year where the Board and the executive team have been deeplyinvolved in all of this work. We are clear in our path and in our goals. I thank to myBoard colleagues.
I thank you all for your continued support. I wish to express my deepest gratitude toour Partners Bankers Customers Employees and Governments that we operate in for theirguidance advice and support. Their goodwill renews our belief in ourselves and ourpotential.