From the desk of Chairman
"Where there is a stepping stone there is a milestone".
As another year treaded by various phases passes by I feel extremelyelated to reconnect with you through our annual report. We have witnessed a paradigm shiftby pursuing excellence towards achieving our economic social and environmental goals.
In financial year 2019-20 the global economy witnessed unevencircumstances including global trade imbalances escalating political tensions betweenworld super powers and the mid Indian economy was also not left aloof.
Facing a weaker consumer sentiment slackening demand and liquiditycrunch the India economy stunted a GDP growth of 4.2% during the year. With sluggishmanufacturing activities Index of Industrial AProduction (IIP) growth also turnedunfavorable. In-midst of all during the last quarter of 2019-20 the domestic economyalongwith the economies across the world started witnessing testing times owing to theCOVID-19 pandemic. The Government and the Reserve Bank of India (RBI) responded withprompt fiscal and monetary measures to counter the outbreak of virus and protect theeconomy that had come to a near standstill state. The Government also announced fiscalsupport under the 'Aatma Nirbhar Bharat Abhiyan' on May 12 2020 with an intention toinject Rs. 20.9 trillion into the economy. In addition the clarion call given by theHonorable Prime Minister to go 'vocal for local' aims to promote competitiveness of localproduce vis-a-vis global brands. The resultant impact shall lead to a gradual recovery inthe medium term. At K I C Metaliks Limited we are all working hard to bring backnormalcy to our lives and ensure safety of our employees and communities.
In last decade our Company has seen many disruptions. However the oneconstant is that we have always emerged stronger after periods of turmoil."Believe" is embedded in the DNA of our Company. This explains the enduringtrust of all stakeholders. 2019-20 was one of the testing years in our history. Havingseen our fair share of downturns during the current year the performance made by theCompany had not really been encouraging and appealing. However we continued to do what wedo best make the change instead of waiting for it. Although our sales and correspondinglythe profits went down but we continued to create long-term value for our stakeholders.Across businesses our near-term focus is to conserve cash advance our consumer connectadopt the best technologies and enhance the value-added product play.
Impact of COVID-19
The COVID-19 pandemic has affected every aspect of business and life.The world may not be the same again with the lasting impact of pandemic. But testingtimes bring out the best in mankind. The real need of the hour is to remain resilient tothe continuously evolving situation while ensuring health safety and wellness of ouremployees and all stakeholders. As the world fights this situation collectively we at K IC Metaliks Limited are responding to this unprecedented disruption with our commitmentand unwavering focus to serve our customers in an efficient effective and sustainablemanner. We accorded health and safety as the top most priority of all our staff andworkers. Appropriate actions were taken at each step to ensure safety and security of ourteam in the best possible way including adoption of remote work. We resumed partialmanufacturing operations after approximately 40 days of temporary closure of the plant dueto the pandemic. We diligently followed the SOPs laid down by the Government to run theplant.
The Iron and Steel industry witnessed headwinds towards the end of theyear owing to COVID-19 induced supply chain disruptions falling global crude oil pricesand deferred projects. While there were multiple clusters of large outbreak in urbanareas rural India despite lacking in basic infrastructure and healthcare facilities wererelatively been less impacted. Clearly urban city planners now have a daunting task ofdecongesting large cities and take infrastructure development to the outskirts satellitetowns and semi urban centers. The industry too will have to shift its priorities and bemore rural-centric.
However given the strong Government impetus on infrastructure sectorand wide enduser application the industry displays positive outlook in the future. Thecentral government also launched 'Garib Kalyan Rozgar Abhiyaan' to expedite implementationof 25 public infrastructure works and those related to augmentation of livelihoodopportunities. These 25 works are related to rural housing for the poor plantationsprovision of drinking water through 'Jal Jeevan Mission' and construction of panchayatbhavans community toilets rural mandis rural roads cattle sheds and anganwadi bhavans.The scheme was launched to facilitate income under the hands of rural labourers followingloss of employment in urban centres due to the nationwide lockdown to combat the spread ofCOVID-19. The central plans to launch more job generating schemes and lay it focus onrural India which sounds well for the overall economic & infrastructure developmentthereby benefitting the iron & steel industry in the coming days.
Active and adaptive
Just like the strength of a tree is known by its firm roots anorganisation's strength lies in its foundation. Over the last decade we have emerged asthe leaders in Pig Iron production. We continued to invest aggressively into integrationand expansion of our manufacturing capacities. Our expansions and modernisation projectswhich were expected to be commissioned by March 2020 were deferred due to lockdown owingto COVID-19 pandemic. However these projects are expected to be commissioned by theSecond quarter of the financial year 2020-21. With an upbeat mood I am confident to statethat once the projects are in place it would reflect in a robust topline and bottomline ofour Company.
Risks and uncertainties form an inherent aspect of any business. Wehave a robust governance and risk management framework to alleviate the risk at the timeof its occurrence. It also helps in evaluating and analyzing various factors of volatilitypertaining to our business. This approach of understanding and evaluating the environmentis a core value at K I C Metaliks Ltd. It helps underpin our plans and strategies andempowers us to make better andwell-informed choices in terms of decisions.
In adversity lies opportunity and as we navigate through the crisis and'believe' on the core of our operation we are quite optimistic to see opportunitiesgenerating in the near term. I remain confident that we are well positioned withappropriate strategies and resources to continue delivering value to all the stakeholdersand contributing to the broader vision of growth. We will continue to emphasize onincreasing utilization levels and growing the market share of our business. The demandfrom infrastructure construction and real estate sectors is likely to be subdued in thefirst half of the FY21 due to the lockdown during the first quarter followed by themonsoons during the second quarter. But effective government stimulus and return ofconsumer confidence is likely to be the key driver for a gradual recovery over the secondhalf of the FY2021. Strengthened with financial prudence robust governance along withaspiring innovations we are well placed to address all challenges and materialiseopportunities. We are well-equipped with all the competencies to satisfy our customers andtogether will mutually help businesses revive and maintain our market share.
Believe on ownself
Believe you can and you are half way there. With a dedicated belief onour robust operations singular product focus and sustain every downturn as anopportunity I take this opportunity to acknowledge and thank our employees for theirdedication commitment and contributions which have enabled us to achieve the results. Ialso thank our customers vendors bankers Central and State Government and all otherstakeholders for their undeterred confidence trust and support. I thank all ourcolleagues for their guidance during the year.
As I conclude I would like to place on record appreciation for all theefforts taken by the COVID warriors for bravely fighting this pandemic. I urge everyone tostay safe take care and continue to follow all precautionary measures.
With warm regards
Radhye Shyam Jalan