Its not just about gold
I am pleased to present our performance during the year under review. Our Companyreported a 25.76% growth in revenues and 11.27% increase in profit after tax.
At Shree Ganesh, we are capitalising on a structural shift in consumption trends. Thereare a larger number of people today who would rather buy gold jewellery than stock rawgold as the cost of conversion into jewellery is negligible as a proportion of the totalcost of ownership. Besides, the flexibility to wear the jewellery as opposed to keepingthe raw gold in the vault is a greater inducement for its onward conversion.
Over the last few years, the emergence of a new wave of jewellerydesigners-cum-manufacturers-cum-retailers created a case for compelling jewellerypurchase, extending what was once a conventional product worn only at special occasions tosomething that is contemporarily fashionable.
At Shree Ganesh, we are capitalising on this inflection point. These are some of thetrends that are becoming increasingly manifest:
An increasing number of buyers prefer to buy branded jewellery, following theindustry selecting to commission stores pan-India, invest in gold hallmarking, providebuyback and promote products through the media
There is a growing movement of jewellery purchase from gold-silver-platinum tobases that may not necessarily be as precious or expensive, circumventing the sharpincrease in the cost of these precious metals
There is a wider appetite for gold jewellery as part of everyday wear as opposedto the conventional application for high-end events
There is a bigger appetite today for machine-made lightweight jewelleryfollowing the emergence of a new generation of buyers/earners who prefer affordabilitywithout compromising aesthetics
At Shree Ganesh Jewellery House Limited, we expect to capitalise on this opportunitythrough the following initiatives:
Corporatisation: Over the last few years, we have transformed from an informallyentrepreneurial approach to one that reconciles entrepreneurship at one end withprofessional corporatisation at the other. The result is that we invested in systems,processes, controls and reporting. This represents the fundamental bedrock of our approachto capitalise on the industrys emerging opportunities.
Value chain: Over the last few years, we widened our industry presence starting withrefining from one end to manufacture to distribution to retail to branding, making itpossible for us to capture value at every intermediate point.
Aggressive investments: Over the last three years, we increased our handcraftedjewellery manufacturing capacity by 115.17%; we possess the largest handcrafted jewelleryfactory in Asia (100,000 sq.ft).
Alliances: We entered into a joint venture with an Italian company to manufacturelightweight gold jewellery, wherein the Italian company provides its tested technology andequipment while we provide the joint venture with infrastructure and brand. Thisasset-light approach is expected to generate 50 lac euros for the joint venture in a fullyears working and following successful implementation, could be scaled and extendedto other products.
New opportunities: The Company entered the business of renewable (solar) energygeneration through equity investments in a Kolkata-based power Company during 2011-12 withthe objective to capitalise on a scalable opportunity, leverage tariff and tax incentivesand enhance corporate value. The Company acquired 55% stake in a running solar powergenerating company with 30 MW assets already commissioned as of April 2012. The companyintends to generate Rs.60 crore in revenues during the current financial year, plans tocommission two additional solar power units of 25 MW and 50 MW each, intends to commission500 MW in three years through private equity participation and accruals without asignificant drain on the financials of Shree Ganesh.
Enhancing shareholder value
At Shree Ganesh, we recognise that we are in business to enhance value for ourshareholders. The one way in which we did so was through a 11.27% increase in our profitafter tax for 2011-12. To reward our shareholders fittingly for this improvement in ourperformance, we proposed a dividend of Rs.6 per share. Besides, we expect to enhance valuethrough a 15-20% revenue growth and an extension into different profitable jewellerysegments that enhances volume and value, resulting in better returns in the hands of allthose who have invested in our Company.