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Welcome to the 40th Annual General Meeting of your Company. It is always a pleasure to share with you a review of our performance last year as well as outlook for the future.
Growth continued to remain sluggish in most economies of the world during 2012. In the Eurozone, the Greek debt repayment crisis in the middle of 2012 followed by the more recent similar crisis in Cyprus in March 2013, cast their dark shadows on the entire global economy. In the Asian growth hot–spots of China and India, GDP growth came down to lowest in the decade as a result of slackness in demand. India faces its own economic challenges with high levels of current account deficit, sustained inflationary pressure and tight monetary policies. The falling Indian rupee against major international currencies added to an already difficult business environment.
In light of such challenging circumstances, most industries continued to struggle. In the steel industry, while consumption in India continued to grow and demand for special
grade of steel rose, the prices underwent a sharp correction. The Indian sponge iron industry had to contend with multipronged blows from high costs, poor availability of raw materials and cheaper import of scrap. Both demand and margins suffered badly, with the sponge iron production declining by 20 percent in the last two year. In the ferro alloys space, consumption increased during the year but with over–supply, there was fierce competition in both domestic and export markets, leading to pressures on margins. The power sector continues to face a peculiar issue where there is a huge demand from consumers, but concessional prices are making buying and distribution of power un–remunerative.
Despite these tough operating conditions, your Company came up with another sterling performance during the year. On a standalone basis, we achieved a record turnover of ? 1,524 crores for the year compared to ? 1,197 crores in the previous year, an impressive growth of over
27 percent. On a consolidated basis, revenue from operations (gross) were ? 1,545 crores, up from ? 1,205 crores last year, an increase of over 28 percent.
In line with this fine top–line performance, the bottom–line improved significantly. Our consolidated EBIDTA increased to ? 338 crores from ? 215 crores in the previous year, up by over 57 percent, and our consolidated net profit went up from ? 88 crores in the previous year to ? 162 crores this year, a jump of 84 percent.
Your Directors have recommended a dividend of ? 3 per share for the year.
This excellent performance was achieved due to sustained and relentless focus on improving internal efficiencies with remarkable improvement in reducing consumption of materials, fuel and power. This helped the Company remain competitive in a challenging scenario and maintain its margins.
During theyear, the captive thermal power plant of 80 MW capacity installed by Sarda Metals & Alloys Ltd. (SMAL), subsidiary of your Company was successfully commissioned at Vishakhapatnam in March 2013. The project has reported profit in the very first month of its operation.
Your Company also achieved financial closure for its ? 550 crore de–bottlenecking, modernisation and expansion project for its manufacturing and mining facility. The project will be executed in the next two years.
The outlook for the Company remains positive as both global and Indian economies are entering a recovery phase. The Company is confident that
with its continued efforts of optimal utilisation of resources, sustained focus on cost savings and the zealous drive of all its employees will ensure another better performance in the near future.
Your Company, as a responsible corporate citizen, always ensures that it leads with initiatives in environment sustainability as well as corporate social responsibility. This year has been no different, and the Company continued to remain actively engaged in initiatives ranging from education, healthcare, improving livelihood and providing better amenities and facilities to communities and societies in and around its plants and facilities. On the environmental protection front, the Company has focussed on full utilisation of in–house waste by expanding the fly–ash brick plant capacity. Many other initiatives like rain–water harvesting, solar power generation and extensive tree plantation have been undertaken during the year.
In conclusion, I would like to assure you that your Company has always believed in a growth that is inclusive and multi–pronged, that is shared and inclusive. Growth becomes exponentially effective and meaningful only when it empowers a nation and enriches the lives of its people.
On behalf of the board, I thank you all for your trust and faith in the Company, and look forward to your continued support as we move ahead on our journey of
EMPOWERING GROWTH...ENRICHING LIVES. Yours faithfully,
Kamal Kishore Sarda Chairman and Managing Director