I am honoured and delighted to present the 22nd Annual Result of your company.
The Indian economy is on a recovery path enabled by various initiatives of thegovernment supporting 'Make in India' in the manufacturing sector. I am satisfied with thesustained efforts undertaken for the progress of your company. However the financialperformance has been lower than our expectations because of sluggish growth in miningsector coupled with devaluation of currency globally against USD particularly in Nigeriaand Turkey.
However with our focus on cost rationalisation and optimum capacity utilisation thecompany has posted satisfactory performance during the year 2016-17.
Our Gross Sales increased from Rs.574.01 Crores in FY16 to Rs.711.28 Crores in FY17registering a growth of 8.72%. The PAT was recorded at Rs.85.44 Crores in FY17 compared toRs.63.66 Crores in FY16.
We continue to reward our shareholders who have reposed their trust in us. Our totaldividend payout for the FY17 is 29.37% Which is in line with our Dividend Policy.
Our operations in India Zambia Nigeria and Turkey continue to perform optimally inspite of mining slowdown and currency volatility. I am pleased to inform you that theconstruction of our fourth overseas manufacturing facility has been completed in SouthAfrica and the commercial production has also commenced. This would substantially increaseour overseas revenue in the coming years.
I am happy to inform that we now have orders worth Rs.40 Crores on hand from variouscustomers in Defence Sector and deliveries have already commenced.
You are aware that our country has emerged as one of the fastest growing major economyof the world. Major sectors of the economy have resurged in response to positive andindustry friendly reforms being placed on board by the Central government.
The budget for 2017-18 has given a massive outlay of Rs.3.96 Lakhs Crores forinfrastructure. An outlay of Rs.64500 Crores for roads and highways; 10% higher than theprevious year will indeed boost the road construction activity. Further the Governmenthas announced series of incentives in its attempt to provide 1.2 Crores affordable housesfor the Lower Income Group (LIG). All these factors would boost the demand for cementsteel and stone aggregate.
With the Govt. of India aiming to substantially increase the coal production by 2020and giving major impetus to the infrastructure and housing segment this is bound toresult in substantial increase in the demand of industrial explosives in the coming years.
One of the most significant reforms of the Government is the implementation of GST from1st July 2017 which would indeed be a game changer and will provide a level playingfield to manufacturers like us. This is expected to boost the demand for our products.
Our Country still depends largely on import of ammunition for the defence sector. TheGovernment has taken various initiatives through the Defence Procurement.
Policy 2016 with emphasis on 'Make in India' program inviting the private sectorparticipation to achieve self reliance in defence production for our armed forces. Therecently announced policy on 'Strategic Partnership' by the Defence Minister is the mostwelcome decision of the Government which would help the Indian manufacturers of arms andammunition to have long-term assured growth avenues.
Currently we are the sole manufacturer of HMX RDX TNT and their compounded productsin the private sector and also have a large Composite Propellant plant. Most of ourproducts have been tested and validated by various approved defence agencies.
We are also working on setting up a world- class project for manufacture of Bi-modularCharge Systems and fully integrated Rockets which in the long run would play a crucialrole in considerably reducing the Country's foreign exchange outgo and will help theCompany to increase the return on our Capital employed.
Safety Health & Environment
Health Safety and Environment is an integral and essential part of our business andkey to our existence. Our HSE management is modeled after OHSAS 18001 and ISO 14001standards. The policies are framed to prevent and mitigate harm to health and environment.We lay great emphasis on imparting hands-on training to our employees at all levels tocreate safety awareness.
Acting in accordance with the principles of responsible management we lay emphasis oncorporate governance as crucial to our business sustainability. Good corporate governanceis aimed at increasing the value of our business. At Solar we have a transparentreporting and internal communication system and a policy on corporate governance aimed atactive and meaningful engagement with our stakeholder community.
At Solar we have enhanced our scope of social engagement as we firmly believe that itsour moral duty to act for the benefit of society at large.
We should never forget the importance of society and environment in our lives. It isindeed high time that we all start thinking about people around us and work for thebetterment of society.
Buoyed by our technological excellence strategic product profiles and financialstrength we are confident to be ahead of the growth curve of the explosives industry; bycapitalising on opportunities in domestic and overseas markets. The extensive regulationsstrict license controls long gestation period and heavy capital investments marks theuniqueness of our industry and poses a challenging task for the new entrants.
We look ahead to expand our vision and emerge not only as a global leader in themanufacturing of industrial and military explosives but also as an innovative one- stopsolution provider with strong focus on Safety Quality and Reliability.
I thank the entire Solar team for their dedication hard work and commitment which haskept Solar on the trajectory of success in all fields.
I would like to place on record my sincere appreciation towards the Board of Directorsfor their guidance and my gratitude towards all our stakeholders for their continuingfaith in Solar.