My Dear Shareholder
I have pleasure in sharing with you yet another year of satisfying performance. Theenclosed Report of your Board of Directors and the financial statements give succinctlythe highlights of your Company's performance.
India's GDP grew at about 7% whereas the automotive industry grew only by 3.5%largely due to lackluster performance of the two wheeler industry. However your Companyas always in the past has outperformed the Industry growth and as you would note in theenclosed financial statement with improved margins. Commodity prices and interest ratesremained stable at lower levels and currency fluctuations have been generally modest.
Our Wholly Owned Subsidiaries have performed impressively last year. The consolidatedperformance of Suprajit Automotive Pvt Ltd and Suprajit Europe Limited showed good growthin business and improved margins outperforming their past records. The outlook for thesesubsidiaries is good due to an increased business from some of the existing marqueecustomers. This is a clear indication that the global customers have started to dependmore on our ability to deliver value for money for their requirements.
Phoenix Lamps Limited our recently acquired subsidiary has turned out to be a goodfit for your Company. With stabilization of operations restructuring of its subsidiariesand close focus on all regulatory and tax issues the worst appears to be behind for thissubsidiary. A Capex plan has been put in place which will improve the quality of productsand process capabilities. I am confident that Phoenix will perform satisfactorily in theyears ahead.
Your Company used a significant amount of the cash it had in the balance sheet andborrowed the balance to complete the acquisition of Phoenix Lamps Limited. To pursue thegrowth opportunities your Company raised ? 14997.37 lacs through a QualifiedInstitutional Placement. The issue received good response by marquee investors.
You are aware that the Boards of both the Companies i.e. Phoenix and Suprajit haveannounced the merger of Phoenix with Suprajit. I believe that this is a clear win win forall minority shareholders. A single entity will have economies of scale reduced costs ofmanagement better customer service strong footprint across the world costcompetitiveness reduced regulatory hurdles and many other multiple advantages. This willadd to our strength to march ahead with confidence. I seek your blessings for this merger.
Global uncertainty continues with tepid global growth. Added to this recent issues ofthreat perceptions European and Chinese economic concerns and Brexit will add to theproblems of the global economy. The delay in rolling out GST and other reform measureswill continue to add to the woes of business in the medium term on the domestic front.
The capacity expansion plan to increase the annual cable capacity from 150 mn to 225 mnwill be completed by September 2016. With commercial production at the new plants atCharal Industrial Estate Sanand Gujarat and Vallam Vadagal area Chennai the currentyear appears to have begun well. With the expectation of a good monsoon and continuedlower commodity and interest rates the outlook for the current year appears to besatisfactory.
We continue to focus on OEM business and have made significant inroads into theaftermarket business domestically along with increased OEM and aftermarket businesses inthe export market using our enhanced global footprint. This gives me the confidence thatSuprajit as a group will excel in our business and outperform with our focused deriskingof business in every vertical. With Phoenix's additional product line I am confident thatTeam Suprajit will continue to deliver a good and robust performance going forward.'Customer Focus' and Value For Money Supplier' our motto drives our Team to continue toperform well in our business.
Suprajit Foundation continues to carry out CSR activities of the group. The activitiesof Suprajit Foundation are elaborated elsewhere in this report.
The vision of Suprajit 2.0 is to pursue organic growth aggressively and to explorefocused inorganic growth opportunities with the desire to grow profitability and toperform better than our peers. Team Suprajit continues to work in this directionrelentlessly.
To this end I seek your continued support and good wishes
With warm personal regards
K. Ajith Kumar Rai
Chairman & Managing Director