UTTAM GALVA STEELS LIMITED
ANNUAL REPORT 2003-2004
CHAIRMAN'S STATEMENT AT THE 19TH ANNUAL GENERAL MEETING 31ST JULY, 2004
I, on behalf of my fellow colleagues on the Board and on my own behalf,
warmly welcome you all to this 19th Annual General Meeting. The Annual
Report for the Financial Year 2003-2004 is already with you for last few
weeks, which I am sure you have studied by now, and therefore please allow
me to take the same as read.
The year under review, could be truly called "The Revival Year for the
The industry growth in India has been driven both by Export Market and
The year was a true turn-around period for the Steel Industry. The real
signs of growth were when the industry attracted further expansions and
investments. Most of the players in the industry, carried out their long
awaited de-bottlenecking operation and expansion plans.
Your Company also took some advantage of this opportunity and the growth in
production of Cold-Rolled-Prime was almost 10% that saw production from
3,17,578 MT to 3,47,881 MT and increase in production of Galvanized
Products was almost 33% that saw production from 1,70,001 MT to 2,26,521 MT
in this year.
FUTURE SCENARIO :
The industry has learned a great deal from its past dark days. The
controlled expansions based on demand requirements, very sensible pricing
strategy and curtailed credit terms will greatly improve the overall health
of this industry. The demand cycle is also expected to last longer than
expected. All these factors together ensure that the future of Steel
Industry is bright and strong.
Your Company, being intermediary of steel value addition, could not take
full advantage of the situation. In spite of negative impact of paucity in
HR availability, your Company ensured smooth production during the year
without any shortage of raw material. It also ensured that its long term
customers are well serviced.
Company continues to undertake process of modernization and de-
bottlenecking. It is also adding facility of wider width Cold Rolling and
Colour Coating lines during the current year.
EXPORT SALES :
Your Company's export turnover at Rs. 7421.10 millions was 60% of the total
turnover during the year, with an increase of 41% over previous year. The
year also saw your Company exporting its products to 100 countries till
date. No mean achievement considering we started exports from the year 1996
with only one country.
In recognition of your Company's export efforts, Govt. of India, through
Engineering Export Promotion Council of India, awarded All India Trophy for
largest exporter for the year 2000-01. Your Company also received Regional
Golden Trophy for the largest exporter of CR & Galvanized products for the
Quality of your Company's products are extremely well appreciated by very
quality conscious markets of USA and European countries. As you are aware
our products quality was also well accepted in China, where they preferred
Uttam's products over other manufacturers.
DOMESTIC SALES :
More than 65% of your Company's prime CRCA steel are sold to OEM customers.
Your Company has well established itself with most of the major producer's
of auto, white goods and engineering industry. In order to have maximum
realization and serve our customers well, we focus mainly with major
producers in Western Region. 80% of our businesses are done with in 500 KMS
radius from your plant.
You will be glad to know your Company is the most preferred supplier with
major manufacturers like Mahindra & Mahindra, Bajaj Tempo, Piaggio, Bajaj
Auto in auto sector, Godrej & Boyce in white goods industry, Crompton
Greaves, Kirloskar Copeland, L&T for electrical industry and BHEL, Ranipet
and Tiruchi in general engineering category. By having annual volume
agreements with these customers more than 70% of CRCA productions are
booked with these customers. Most of these customers appreciate our product
quality and commitments in servicing to them even during the period of
shortage. The goodwill earned will definitely stand by us in times of need.
During the year under review, your Company has achieved a higher turnover
of Rs. 12205.49 millions over the previous year's turnover of Rs. 8533.27
millions i.e increase by 43.03%.
The Gross Profit of Rs. 1296.03 millions is higher by 23.15% compared to
the previous year's Gross Profit of Rs. 1052.36 millions and Profit After
Tax of Rs. 238.75 millions in comparison to Profit After Tax of Rs. 102.98
millions during previous year is more than double.
Your Company has accelerated the positive trend and recorded Gross Profit
of Rs. 503.40 millions and Profit After Tax of Rs. 213.00 millions for the
first quarter ended 30th June, 2004.
I am optimistic that this positive trend will continue during the rest of
the current financial year. EPS is worked out to Rs. 3.14 for the quarter
ended 30th June, 2004 in comparison to annualized EPS of Rs. 3.43 of the
ENVIORNMENTAL PROTECTION :
Your Company is quite concerned about disposal of waste acid and coolants
in the Plant. Hence, your Company has invested a large amounts towards acid
regeneration and coolant recycling plants. Your Company is also planning to
implement ISO- 14000, which is for environment standards
CORPORATE GOVERNANCE :
Your Company has been very active in implementation of Corporate Governance
practice, which is the need and requirement of the day. The Company has all
along believed in fair business and corporate practices. All mandatory and
non-mandatory steps, such as having competent independent Directors on the
Board, constitution and functioning of various committees of the Board,
transparency through disclosure of financial and non-financial information,
introduction and implementation of corporate culture, have been taken and
being constantly reviewed for further improvements.
Let me thank each one of you for the higher confidence and faith that you
continuously have reposed in Uttam Galva Steels Limited. I would also take
this opportunity to thank every member of the team for their loyalty, hard
work, team spirit and value addition. I also wish to put on record my
gratitude to the Central, State and Local Governments, Financial
Institutions, Banks and above all our valued customers for their support. I
look forward to all of you for continued participation in the growth of the
Chairman & Managing Director
31st July, 2004