It gives me immense pleasure to present you with our Annual Report for 2020-21. I hopeyou all are well and keeping safe in these difficult times. The year gone by has genuinelybeen a challenging one more so for our Company.
We witnessed one of the most severe quarters in our recent history in 2020-21. Being aconsumer company we did not have the liberty to conduct our operations during the firstwave of Coronavirus which led to a loss of operations for almost 50 days during Q1FY21.After opening-up of the economy and several markets the Company delivered a strongcomeback in Q2 and this momentum accelerated further in Q3 and Q4 which happened to bethe best quarters Company has witnessed in terms of Revenue from Operations. On an annualbasis Revenue from Operations stood at M143.18 crores up 6% from the previous year.Unfortunately the challenges were more acute on the profitability front where a higherEuro led to higher procurement costs and created pressure on Gross profitability. To addto this demand-supply disruptions in global supply chains caused erratic price movementsfor many critical inputs in the paint's value chain. The Company has taken price hikes topass on these costs and Gross profitability margins would revert to mean in due course.
As you all must be aware due to reasons such as; delayed commissioning of our Sonipatmanufacturing facility a fire incident at the said facility in June 2020 and achallenging external environment for the year gone by; we haven't been able to capitalizeon our Unico range of mass-market wood coating products. Unico's product range was addedto grow Sirca's presence pan-India and provide new levers of growth for the Company. Afterthe repairs & restorations the manufacturing facility is currently available forproduction from June 2021 onwards. The Company will be looking to ramp up production andaggressively relaunch Unico in all the markets it is present in especially markets suchas Western and Southern India where there is an anticipation of good demand andacceptance for these products.
Unico will also provide the Company entry into many new markets dominated by NC andMelamine products which have little acceptance for the luxury PU product range. TheCompany would be looking at higher advertisement and promotional expenses in FY22 topromote these products aggressively.
STRENGTHENED PRODUCT PORTFOLIO
If we step back and compare our product portfolio to what it was three years ago wehave come a long way since. From being a luxury PU brand to having a wide range ofproducts and a self-sufficient product kitty is an achievement. At present we areoffering luxury to economic wood coatings a complete range of wall paints & wallputty to high-end decorative colour finishes and adhesives. The Company has introducedmany globally relevant and recognized brands in the process; for instance this year welaunched San Marco - an eighty-year-old Italian paints brand recognized for its Decorative& Solid Colour finishes products range. This a niche high-end luxury brand will add alot of value to our wall paints product portfolio. In collaboration with San Marco theCompany has also added an exclusive shade card.
Another addition this year is the launch of DuranteVivan adhesives brand. This is anextension of our existing relationship with the group that houses the Sirca brand.DuranteVivan offers a complete range of adhesives but the Company will be targeting itshot melt adhesive to begin with. This product is extensively used in the furnituremanufacturing industry where the Company has a firm footing. Leveraging its existingrelationships with 300+ clients the Company will look to create a market for itself inthis segment.
We have also strengthened our wall paints portfolio by launching more products in FY21.The current range of products includes Luxury Emulsions Premium Emulsions EmulsionsEconomic Emulsions Weatherproof Emulsions Wall Primers (Interior and Exterior) TexturedFinish and Oil Primer.
A self-sufficient product portfolio will play a critical role in the Company's next legof growth; it will help us tap new markets new customer segments strengthen distributionand leverage our strong brands across multiple products.
KEY FOCUS AREAS
The Company will continue to focus on superior physical infrastructure be itstrategically located manufacturing units that will help optimize logistics cost orbranches & depots that strengthen Sirca's presence pan-India. We would also be lookingat manufacturing units in Western or Southern India to enhance our productivity. Inaddition we remain focused on strengthening our tinting machines' network with new-agedual tinting machines that can cater to both wall paints and PU products.
Also there is a sharp focus on upgrading the IT ERP and Digital systems &initiatives at an organisational level. An early success on this front is our SircaParivar application focused on digitalizing the complete contractor loyalty program. Todate this application has more than 8000 registered contractors who are actively usingthe application to collect and redeem points from Sirca products. We would be looking atmore developments in this area. In addition the Company is focusing on strengthening itsteam; many hiring's have been made in the past two years including experienced industryprofessionals who will play a critical role in taking the Company to the next level. Apartfrom hiring a lot of efforts are also being made towards training our team. We believeour team is the face of our brand and we would continuously work on strengthening thesame.
The Company also has plans to pick up exports in FY22. There were no significantdevelopments on this front in the last year since travel restrictions imposed by COVIDdidn't allow any on-ground work. However a trial shipment has been exported and theresponse received for it is encouraging. In addition the Company will be looking atinitiating business with Unico's range of products in Nepal Sri Lanka and Bangladesh inFY22.
Effects of the second wave of Coronavirus will be visible in our early performance forthe year especially given how the second wave hit our key markets such as Northern Indiaand NCR. However demand recovery has been good from June onwards and production is alsostabilising at the Sonipat facility. Team Sirca is making full efforts to offset theimpact of the second wave. Going ahead the Company would be looking to deliver goodprofitable growth based on the strong foundation it has created for itself in the lastcouple of years. Our long-term vision remains to position Sirca as a national brand. Weare more than confident in the long-term prospects of the wood coatings market in Indiaand Sirca will be at the center of this mega-opportunity.
I want to take this opportunity to thank our investors for their unwavering support;our team whose commitment to their work continues to drive us ahead the loyalty of ourcustomers that motivates us to deliver more.
CHAIRMAN AND MANAGING DIRECTOR