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Chemfab Alkalies

BSE: 506894|NSE: CHEMFALKAL|ISIN: INE479E01028|SECTOR: Chemicals
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Mar 15
Chairman's Speech (Chemfab Alkalies) Year : Mar '16

Dear Shareowners,

I have great pleasure in welcoming you all to the 33 /Annual General Meeting of your Company.

At the outset, the year under review has been one of the most challenging years for us and for the Chlor-Alkali Industry in general. The depressed market conditions and its eventual slowdown saw most of the producers in the Industry not operating their plants at the full capacity. The demand for Chlorine and Hydrochloric acid continued to be subdued and hardly showed any signs of revival. The problems were further compounded due to cheaper Caustic imports which put the product realization under pressure. As if this was not enough, Mother Nature also unleashed her fury by the unprecedented floods during the third quarter of the year resulting in disruption of operations to many of our key customer facilities, adversely impacting our operations.

| Company’s PERFORMANCE FOR THE YEAR

In spite of the above challenges, your Company has performed reasonably well during the year 12015-16 as can be seen from the Annual Report. Thouglr the profitability for the year has declined to Rs.8.66 Crores as against Rs.10.23 Crores for the previous financial year, this was mainly on account of higher accelerated depreciation on redundant equipment and Exchange fluctuations. The EBIDTA has however been maintained at Rs.26.19 Cr as against Rs.26.73 Crores for the previous financial year.

/As tire? famous motivator Dale Carnegie said,

When fate hands you a lemon, make lemonade.

And we sure did that! The focus this year was on Cost Savings and I am happy to inform that on two of the key inputs viz. Power and Salt, substantial cost savings were achieved. We managed to reduce our power consumption significantly consequent to the stabilization of the New BiTAC Electrolyses, and the tremendous efforts by the operating team in optimizing power consumption.

During the year, your Company a°so achieved the highest ever production of Salt or far, and hare the procurement of shah cost Salt from outs.de sources, was at a m minimum. Eventually this translated to lower salt cost for us.

Both these measures have resulted in significant savings during the year, due to which we were able to maintain the EBIDTA, despite the lower revenues and challenging market conditions.

| EXPANSION

The much awaited statutory clearance for the proposed expansion is still awaited from the National Green Tribunal and we expect to receive the same in due course now.

Plans are also under way to boost up the revenues and the profitability by venturing into newer areas, trading activities and commencement of production at the new Salt field.

PROCESS SAFETY MANAGEMENT

Yet another feather in our cap was the successful implementation of Process Safety Management system for all the fourteen Elements and we are the first plant in the Chlor-Alkali industry to adopt the same.

SUSTAINABILITY REPORT

I am very happy to inform that your Company has completed the Sustainability Report for the year 2014-15 and the same is also available on our website.

| DIVIDEND

Your Directors are pleased to recommend a dividend of 25% for this; year.

acknowledgement

I thank all our Shareholders for the confidence they have reposed in us, which is a testimony of your trust in these difficult time that went past us. On behalf of all your Board of Directors and on my behalf, I would like to express our sincere gratitude to all our Stakeholders, for their valuable support. We also thank all the CCAL mates for their diligent efforts, commitment in these difficult times and their valuable contribution to the progress of your Company. I express my gratitude to our Directors on th Board for their valuable guidance.

Your continued support motivates us to create superior value in future for all our stakeholders.

Thank you all for attending this meeting.

Place : Chennai

Date : 18.05.2016 Suresh Krishnamurthi Rao

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