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Premier Explosives Ltd.

BSE: 526247 Sector: Industrials
NSE: PREMEXPLN ISIN Code: INE863B01011
BSE 00:00 | 03 Apr 63.35 2.50
(4.11%)
OPEN

61.35

HIGH

63.90

LOW

61.35

NSE 00:00 | 03 Apr 62.60 0.65
(1.05%)
OPEN

60.60

HIGH

63.90

LOW

59.40

OPEN 61.35
PREVIOUS CLOSE 60.85
VOLUME 416
52-Week high 260.20
52-Week low 56.50
P/E
Mkt Cap.(Rs cr) 68
Buy Price 60.00
Buy Qty 50.00
Sell Price 66.90
Sell Qty 51.00
OPEN 61.35
CLOSE 60.85
VOLUME 416
52-Week high 260.20
52-Week low 56.50
P/E
Mkt Cap.(Rs cr) 68
Buy Price 60.00
Buy Qty 50.00
Sell Price 66.90
Sell Qty 51.00

Premier Explosives Ltd. (PREMEXPLN) - Chairman Speech

Company chairman speech

Dear members

Welcome to the annual report of your company for the year 2018-19!

A few months ago elections were over and a more decisive government has been formed atthe centre. This augurs well for the country in general. One particular point I would liketo mention is while there has been part-time defence minister initially in the previousgovernment now there is a full time defence minister. I am hopeful of a proactiveapproach in defence indigenisation and other areas.

Financials

During FY19 your company earned a profit after tax of Rs. 1172.55 lakhs compared toRs. 873.41 lakhs during FY18 which resulted in higher EPS of Rs. 11.00 for the currentyear as against Rs. 8.42 for the previous year. This improvement in profit is despitedecline in operating revenue to Rs. 24093.35 lakhs in FY19 from Rs. 26590.85 lakhs inFY18 mainly contributed by lower consumption of raw materials and increase in the priceof certain commercial products. Decline in top line is affected by factors like long delayin receipt of defence orders especially for Chaff.

Key developments

As mentioned in last year annual report your company supplied Chaffs to Indian AirForce in FY18 and your company is the first I ndian company to have supplied theseproducts. Again now in June 2019 your company received a repeat order for Chaff for anamount of Rs. 100.08 crores including taxes. This is the largest single defence orderreceived by your company.

Your company recognised the business opportunity in countermeasures like Chaff andFlare and has been working to enhance its presence in that vertical including obtainingmanufacturing licenses from foreign OEM collaborating with defence laboratories productdevelopment agreement with defence forces etc.

In June 2019 we received repeat order for Chaff for an amount of Rs. 100.08 croresincluding taxes. This is the largest single defence order received by your company.

Obtaining quality approvals for indigenously developed defence products has been a longprocess much beyond our expectations and your company's Air Target Imitator is awaitingorders after getting approval from MSQAA.

Tenders for supply of Bi-modular charge systems (BMCS) and ammunition in which yourcompany participated are yet to be opened. Your company believes new government wouldexpedite the tender process.

On commercial explosives front it is heartening to note that India's production ofcoal during 2018-19 was 8.1% higher than in 2017-18. Expecting this growth to continueyour company is hopeful of improvement in its commercial explosives business.

New projects

Your company's' Greenfield project at Katepally near Hyderabad is in advanced stageof completion. This project will house facilities for manufacture of solid propellantsRDX HMX mines war heads and other defence products.

First phase started on 4th July 2019 with the inauguration of Ammonium PerchlorateProcessing Building by Deputy Chief Controller of Explosives Hyderabad Mr. S.M.Kulkarni.Inspection of other process and storage buildings of Propellant Plant also has beenconducted that day.

During the year your company obtained Transfer of Technology for manufacture of solidpropellant for Brahmos missile and the induction of technology is in progress.

A new government has been formed at Andhra Pradesh in June 2019 and your companyinitiated a fresh dialogue for allotment of land at Sriharikota for setting up solidpropellant plant.

Going forward

Stepping into FY20 we see encouraging signs of our indigenisation efforts which areexpected to deliver better results. I would like to share a few important points atcompany level and defence ecology level that would help our defence foray in FY20 andlater:

As the Katepally unit is now ready your company is preparing formanufacture of solid propellant for satellite launch vehicle of ISRO.

MRSAM missile crossed the ‘development' phase and entered‘induction' phase. Order flow for solid propellant for missiles started with initialorder for Rs. 14.99 crores.

Development of prototype propellant for an Israeli customer is in finalstage and getting ready for production schedule.

Your company is awaiting order from Indian Air Force for supply of AirTarget Imitator. Enquiries are received from other wings of defence also.

Astra Brahmos Pinaka and other missiles / rocket offer good potential andyour company is waiting for the fertile time.

Your company bagged a substantial value order from IAF for supply ofcountermeasures under OEM certification.

Your company developed coloured smoke markers and received initial ordersfrom Telangana Police. One export order also has been received from UK.

To meet the requirement of smoke generators signalling flares andIdentification of Friend and Foe IFF () flares your company has developed differentcolours compositions and supplied to Indian Navy and paramilitary forces.

Your company has signed a Memorandum of Agreement (MoA) with IAF fordevelopment of NATO origin countermeasures under "Make in India" category II.These would replace East European countermeasures and adapt to NATO CMDS (C ounter MeasureDispensing System) which have been developed by Bharat Dynamics Limited. On successfultrials and acceptance by IAF we foresee to be self reliant and fulfil countermeasuresrequirement of IAF.

Your company is awaiting the opening of tenders for BMCS and ammunition.

On commercial explosives front it is heartening to note that India's production ofcoal during 2018-19 was 8.1% higher than in 2017-18. Expecting this growth to continueyour company is hopeful of improvement in its commercial explosives business.

Modernization of the armed forces and indigenization of manufacturing have emerged asfocus areas including the ‘Make in India' program. This is an opportune time toembark upon a new phase of self-reliance in the defence manufacturing with technologicallyadvanced processes within India.

Ph.D. for your company's employees

I am proud to share with you that in March 2019 two of our employees have been awardedPh.D. by Gulbarga University for their theses related to high energy chemicals.

SME Award

I am happy to tell you that your company has received "SME- Empowering IndiaAwards 2019" in the "Defence & Aerospace (Mid- Corporate)" category. Iand my colleague Mr. T.V.Chowdary are privileged to have received the award from Hon'bleUnion Minister of Steel Chaudhary Birender Singh at a ceremony held in New Delhi on 5thMarch 2019.

This award scheme is intended "to recognize the contribution of such SMEs whothrough their achievements and growth have empowered the nation".

I take this opportunity to thank all my co-shareholders co-employees bankscustomers suppliers and other stakeholders who have been the partners in our longjourney.

Yours sincerely

Dr. A.N.Gupta

Chairman and Managing Director