It is my privilege to write to you and present the Annual Report forFinancial Year 2019-20.1 hope this letter findsyou safe and in good health.Tosaythatwe arein the midst of unprecedented times will perhaps bean understatement.
The onset of the COVID-19 pandemic in the final quarter of the yearhas ushered in a new reality for industries businesses and the entire human race.Thenovel strain of coronavirus ('COVID-19') has spread throughout the world and the WorldHealth Organisation declared the COVID-19 outbreak a Global pandemic in March 2020. As ondate there are no completely andeffective treatment or vaccines available development oftreatments or vaccines may still take a significant amount of time. The COVID-19 pandemicand associated governmental responses have adversely affected consumer sentimenteconomies and financial markets. As expected this immediately took a toll on consumerspending which led to a global economic down turn.Our learning from the currentsituationis that duringthese times nothing can betaken asgranted.
I am pleased to share with you that the leadership team of your companyresponded and adopted extremely well to the given circumstances. As I write this note Iam pleased to share that we have resumed production at all factories and due to strictSOP's set up and by the grace of god we have not had a single case of Covid-19 in ourworkforce of almost 700 people.
Also I am pleased to state that we have already achieved 90% of ouraverage monthly sales of previous FY 2019-20 within two months of resuming business postlockdown. Given the facts that we have achieved turnover of Approximately Rs. 9 Crores permonth consecutively in June and July and we are confident to achieve overall growth of 10to 15% in FY20-21 in spite of losing 50%sales in Quarter one of 2020-2021.
Indian and Global Economy
It is predicted that the coronavirus pandemic will plunge the worldinto a severe recession the deepest since World War II shredding per capita incomes andpushing millions into poverty as per the World Bank. The global economy is expected toshrink 5.2% in 2020 Declines in economic growth across region will be driven by severedisruptions to "domestic demand and supply tradeand finance"
In India the World bank forecasts that Gross Domestic Product (GDP)will shrink 3.2% in the fiscal year 2020-21 when the "impact of the pandemic willlargely hit". GDP or the value of all goods and services produced is the broadestmeasure of incomes generated in an economy. The International Monetary Fund has slashedits 2020-21 growth projection for India to 1.9% from 5.8% estimated in January. Howeverwe are confident that due to the diversity of our business and withthe support on policyfront from the Government we will continue to grow at 10-15% even with the tremendousheadwinds faced by the economy.
The Period under review
A notable achievement of the year 2019-20 is the company's success inthe export market. Your company achieved export turnover of Rs. 9.83 Crores as compare toRs. 4.17 Crores in 201819. We are delighted to inform you that we have achieved more than100% growth which was only possible due to intensive efforts fromour Marketing andproduction team. Your Company participated in the Rubber Fair in USA also exhibited inWorld's biggest tyre Technology show in Hannover in Germany. At both these events we wereinvited to present a technical paper on use of recycled rubber materials in manufacturingnew tyres. I am pleased to share that your company is being recognized globally for itsinnovative approach in the space of recycled rubber materials. Your Company's efforts haveresulted in successful execution of export contract for supply of products to ThailandTurkey and Sri Lanka & Australia. We expect to see continued growth in Company'sExport during theyear2020-21.
The Govt of India imposed restriction on Import of new tyres to boostsupport local tyre manufacturers hence promoting the Scheme of "ATMANIRBHARBHARAT". We are optimally placed to benefit from this as Tinna is already approved byall the leading tires company of India.
Your company isalsogot registered under the new guidelines as a MediumIndustry (MSME) introduced by the Government recently. This is likely to benefits us bygetting more flexibility from Banks. It should also result in preferential treatment inGovernment supply contracts.
Further Government of India is making a major infrastructure pushthrough building new Highways (through NHAI) and Rural Roads (under PMGSY). This is majordriver for Modified Bitumen business. The FM made a specific mention about buildingphysical and social infrastructure and pollution free India "with green mother earthand blue skies." In her budget speech. There has been substantial allocations madeespecially in Infrastructure which should help the Road Construction Industry whichshould augur well for us as we expect higher sales of our products to the Roadsector.
Tinna has been a part of the societal and economic changes the Countryhas witnessed. Your Company is the only company in India which is fully integrated insourcing of waste/ELT tyres processing & manufacturing value added products from therecovered Rubber and Steel. Also we are the only manufacturer in India possibly in theworld to make Micronised Rubber Powder as fine as 120 mesh in ambient conditions. Thisproduct is being widely accepted now as an excellent additive for making new tyres.
Value added Stakeholders
I am delighted to inform you that ouresteemed list ofcustomers includeleaders in tyre industry where there is two to three years
process due to strict quality standards to commence commercialsupplies. This creates a time based entry barrier for others. I am pleased to inform youthat almost all our customers are in midst of capacity expansion which will result inhigher sales for us over next 2-3 years. The auto components industry is also bound togrow as India consolidates its position as a manufacturing hub. This will result in higherdemand for steel abrasives.
As we look ahead over the next two years we anticipate a completetransformation stemming from COVID-19. Consumer behaviourwill change in numerous waysfrom demanding more integrated digital experiences to prioritising health and safetyfeatures across purchasing decisions. We are following these trends closely so that weadapt and ensure we are ready. Last year prior to Covid 19 we had already embarked onmigrating to a cloud based ERP. While we are still stabilizing its use this timelydecision helped us to work seamlessly from home during the lockdown. We will continue tofurther invest in technology that brings in efficiency in our work.
A greater scrutiny will be placed on building environmentalsustainability and climate resilience into the very core of business models. Your companyis well placed to meet the demand/opportunities that will arise from these important andfundamental shifts. We will continue to explore new and innovative applications for use ofrecycled rubber which will emerge due to this irreversible trend. Our focus for 20-21 willbe margin expansion by bringing in efficiency in costs and and sales growth.
I wish to highlight that Exports and branding will be a key focus ofManagement in the CurrentYearas well. This will be theyear to exploit benefits fromeconomics of scale and establish a formidable presence in the market for recycled rubberproducts in the non-road sector. Over the last couple ofyears we have made substantiveinvestments to mitigate risks associated with our business and have laid the foundationfor solid growth.
I am aware that it has not been an easyjourney and I would like tothank our employees management team customers suppliers and all other stakeholders fortheir hard work and commitment at this important time of the company'sjourney.
I would also like to thankyou foryour continued trust confidence andsupport as we turn this business around and deliver the results that we all look forwardto.
| ||CHAIRMAN |
|Place: New Delhi || |
|Date: 8thSeptember 2020 || |