ROOFIT INDUSTRIES LIMITED
CHAIRMAN'S ADDRESS, 19TH ANNUAL GENERAL MEETING, ROOFIT INDUSTRIES LIMITED
Ladies and Gentlemen,
It gives me great pleasure to welcome all of you to the 19th Annual General
Meeting of your company.
The Economic Scenario
There is an economic crisis engulfing not just India but the entire globe,
precipitated by the depressed consumer sentiment and pessimistic investor
outlook, post the tragic and traumatic events in America. As it is, the
Indian economy, following international footsteps, was heading towards a
recession since the first quarter of the new financial year; the software
sector which has been the winning horse for India in the export segment was
suffering as its biggest customer, the United States experienced a definite
economic slowdown. The terrorist attacks worsened the situation and it will
be quite a while before the world recovers from the setback Industries
such as Airlines, Tourism and the Financial sector were the worst hit and
this consequently impacted on other industries like consumer goods since
propensity to spend was probably at its lowest.
Following the recessionary indications, downsizing has been the buzzword in
the last tow quarters in almost all the industries and especially the
infotech sector. Companies, which blindly created overheads in anticipation
of growth, painfully realized that they had no choice but to shed some of
them, to stay afloat. Everyone concerned has how realized that it will be
some time before normalcy returns in the economic process of buying and
selling. Already, the RBI recently fired its first set of "solution" steps,
by reducing the lending rate by half a percentage point, hoping that this
might lift the sagging spirits.
However, the need of the hour is to stay positive, focused and patient.
These qualities alone will enable the industry to tide over the crisis.
After all, even in this climate of doom, there are a few industries such as
pharmaceuticals and security devices, which have experienced a boom.
The Industrial Scenario
The construction industry in India experienced a satisfactory first half
till June 2001, aided by government spending on infrastructure development
and a definite upswing in the property sector. Indeed these two factors
still exist, but generally their effect has been dampened by the overall
recessionary trend observed in the country.
The specific segment that your company operates in, namely roofing and dry
mix plasters, experienced satisfactory growth in 2000-2001. The total
potential for roofing products grew by more than 10%, mainly due to the
increased spending on housing in the rural areas. Similarly, your company
managed to successfully create a new industrial category of dry mix
plasters in which it is now the only player.
On the roofing side, the concern with regard to the use of asbestos
increased further. Your company has been propagating the fact that the
usage of asbestos in AC sheets and pipes is completely harmless and
continues to do so. However, we respect the public sentiment and keeping in
view the future interests of our shareholders, the management has
successfully derisked the company. Your company now offers complete roofing
solutions, be it metallic roofs or PVC roofs and this has certainly widened
our customer base. Especially on the industrial roofing side, this has been
a big shot in the arm for the Roofit sales team, since many industrial
projects now specify the use of non-asbestos roofing sheets. However, AC
sheets continue to rule in the rural and the semi-urban housing category
and here your company is extremely well placed to cater to the demand.
Roofit Industries Ltd. of course has successfully created a new category in
the Indian construction industry - that of Dry Mix Plasters. The launch of
dry mix plasters in an event comparable to the introduction of ready mix
plasters is an event comparable to the introduction of ready mix concrete
in the country in the early nineties. It signified a substantial leap for
the country in the construction sector. Dry mix plasters contain sand,
cement and additives, which are blended in standardized and accurate
proportions at the factory level. They are very convenient to use, offer a
high quality finish and are environment friendly. Though these plasters are
a shade costlier than conventional plasters, the management us confident
that consumers will be eventually convinced to use them, since they clearly
provide a superior alternative. Now that your company has created this new
category, there are reports of other companies in the industry who are
eyeing the market.
Your company's performance during the year 2000-2001
Even during these recessionary times, your company's performance has been
brilliant. In the last four years, your company's turnover has grown by a
compounded annual growth rate of 62%, which is one of the highest in the
Indian industrial scenario. Your company registered a turnover of Rs.
456.16 crores in the year 2000-2001, as against Rs. 321.02 crores in the
previous year. Similarly, the after tax increased to Rs. 41.64 in 2000-2001
as against Rs. 37.04 crores, in 1999-2000.
What is even more satisfying is the fact that in the financial year gone
by, your company further consolidated its position as a provider of
construction solutions. Today, the various products manufactured and
marketed by Roofit include RoofitMix dry mix plasters, ac pipes, GRP Water
tanks, PVC sheets, AC sheets and wooden panels for doors and windows.
A modern and fully automatic plant to manufacture dry mix plasters was
commissioned in the last year at Kurkumbh, near Pune. This plant has given
a huge boost to the selling efforts since the company is able to offer the
full range of dry mix plasters divided into four categories; external
plasters, internal plasters, tile plasters and special plasters. Also, the
superior technology used in the plant has enabled the company to deliver a
superior product at the market place. The sales team has made intense
efforts over the past six months to get the dry mix plasters enlisted in
various tenders, which are brought out by government agencies as well as
large construction companies. These efforts have now started bearing fruit.
Being the only manufacturer of dry mix plasters in the country, Roofit
stands to gain tremendously when large tenders mentioning dry mix plasters
get materialized. The sales pitch is made purely on the basis of the
superior quality and the convenience that the product offers. You will be
pleased to note that customer reaction has been encouragingly positive.
The roofing division on the other hand has continuously made inroads into
newer markets and customer segments in the last financial year. Your
company is now the leader in the roofing industry in the segments that it
operates in and on a national scale it stands third . The management is
confident that within a span of the next two years, Roofit will become the
highest selling brand in roofing sheets. The PVC sheets introduced by your
company in the previous financial year have received a tremendous response
from consumers as well as from distributors. They are an excellent pointer
to the success of Roofit to introduce premium products at affordable rates,
which end up offering really good value for money. The rural market
continues to drive the growth of Roofit AC sheets since your company' brand
has a very good top-of-the-mind recall in the rural areas.
As our annual report for the year 2000-2001 demonstrates so very strongly,
we are a people-oriented company. Our employees are continuously performing
at their peak levels and this has been the main factor in our stunning
financial performance. To quote from our annual report, our vision is "to
become the Building and Construction Solutions group of choice in India-
for customers, business associates and stakeholders". I want to assure all
of you that we are progressing very steadily towards the complete
fulfillment of this vision.
Performing for the quarter July to September, 2001
The Sales for this quarter have gone up by 57% as compared to previous year
quarter from Rs. 9036 lakhs to Rs. 14184 lakhs. However the net profit for
the quarter has declined by 21% due to increase in material cost, selling
expenses and interest. The company has taken concrete steps to curb the
increased expenditure and to maintain the consistent bottom line growth
over the years.
I would like to thank all shareholders for your support and confidence . I
take this opportunity to thank all the customers, bankers and Financial
Institutions for their continued cooperation and patronage. I a;so place on
record sincere appreciation for excellent hard work and dedication of all
employees of the company.