Dear Fellow Shareholders
Kiri Industries Limited (KIL) today is one of the largest integrated dyestuffmanufacturers and exporters with a prominent and reputed organisation from India. KILcontinuously improving and consolidating its product portfolio by expanding and optimizingits manufacturing facilities to manufacture a diversified range of products whichincludes ranges of varieties of dyes and speciality dyes intermediates which are based onnaphthalene and aniline as it would expand its foothold focus on export markets andfurther penetrate new territories in coming two to three years.
The Financial Year 2018-19 witnessed both volume growth and better cost acknowledgementcompared to last year KIL's consolidated top line increased by 23% from INR 11367 Mn to13965 Mn and EBITDA expanded by 28% from INR 1825 Mn to INR 2337 Mn in FY19. DuringFY19 Earnings After Tax (before share of profit of associates) has increased by 24% ascompared to previous the financial year. Topline of standalone business has increased by18% from INR 9046 Mn to INR 10647 Mn in FY19 as compared to previous year and has earnedEBITDA of INR 1592 Mn. in the current fiscal which is 15% of total revenues of thecompany. The standalone Net Profit after tax of INR 1198 Mn in FY19 has increased by 17%as compared to previous year. Your company has recorded an upsurge of 28% in export ascompared to the previous year that means the company has exported more products and hastried to further improve its market share globally.
During FY19 Zero liquid discharge facility were became operational in the month ofAugust 2018 in addition the manufacturing facilities of disperse dyes (Phase-1) andpartial speciality dyes intermediates facilities were operationalized at regularintervals. The production capacities of these plants shall be fully utilized in FY20 toadd the intrinsic value of the business to KIL. Furthermore the company is expected tocomplete 12 months business cycle for certain speciality intermediates which shall enablethe company to enhance its core profitability. Significant investment in expansion ofprojects are envisaged in FY20 in dyes intermediates and basic chemicals which willstrengthen the product offerings of the company. The proposed capital expenditure shall befunded from internal accruals of the company. It is important to note that the expansionprojects that were undertaken in the past two years and the proposed capital expenditurefor FY20 shall enable the company to achieve healthy growth and better margins in theensuing years.
I am extremely happy and proud to inform you that after a very long legal battle ofalmost 4.5 years the company has won a landmark judgment as the Court of Appeal (SupremeCourt) Singapore pronounced judgment on 29th May 2019 upheld the earlier SingaporeInternational Commercial Court (SICC) decision and dismissed the appeal filed by Senda(wholly owned subsidiary of Longsheng Group). Hence the minority oppression findings andoriginal SICC judgment dated 3rd July 2018 has been maintained by the Court of Appeal(Supreme Court). According to the directions of the SICC presently KIL and Senda willsubmit the independent valuations to the SICC. The SICC has fixed the hearing from 14th to17th October 2019.
The development for your organisation will be fueled in the coming years as the marketsize of India's colorants industry was pegged at USD 6.5 Bn in FY16 and evaluated to postminimum 11% CAGR over FY16-25 driven by expansions in the textile industry. While IndianChemicals & Petrochemicals Industry is growing rapidly due to the positive reformsundertaken by the Government of India in recent years which has attracted foreigncompanies to invest in India. The specialty chemicals market has witnessed a growth of 14%in the last five years; the market size is expected to reach USD 70 Bn by 2020. Duringpast several years numerous Chinese plants have closed down because of the implementationof stringent environmental laws which has prompted the movement of supply from Indiaboosting exports from the country. The various steps of China's government onstrengthening environment and safety norms will result in continuation of the improvementsin prices which would allow margins of the industry to improve in the future years.Transformation of the industry that has taken place during past 5 to 7 years is expectedto help the industry players to maintain their profits and to continue to enjoy highergrowth prospects in foreseeable future. Also continuing higher pace of Capex drive inIndian specialty chemical industry is expected to continue its positive momentum. With theongoing progress and impetus for further growth KIL strives to improve and enhance itsproductivity through the constant addition of new products and the increasing focus onresearch and development. This would help the company to strengthen its position as theleading integrated specialty chemicals player.
With that I would like to conclude that your company will continue on its growth pathand thank all our stakeholders employees customers and business associates for theirconfidence and support in us. Together we will soar new heights!
Manish Kiri Managing Director