In the year under review, not only our country but all over the world
is under economic depression. Even the core sectors of economy like
steel and cement faced a darkness resulting in their demands. In
2012-2013, the world''s crude steel production increased of roughly 0.7%
over the previous year. This has been the slowest rate of growth since
the crisis of 2008. The overhang of the economic crisis and significant
overcapacity in regions like Europe and China continues to stress
global capacity utilization and the demand supply balance. In our key
overseas markets of Europe and UK where the Company has significant
manufacturing presence, the economic downturn has significantly
affected steel demand, which is now almost 30% lower than the pre-2008
financial crisis level. The outlook for the euro zone area currently
continues to be depressed and we have had to revise our cash flow
expectation and valuations. The Directors have taken all possible
measures during the year otherwise the losses would have been higher.
A multiplicity of business, economic and political factors made the
year gone by among the most challenging in recent times. The global
economy is seeking to recover from uncertainties centered on the
European Union. Domestically, a deterioration in macroeconomic
indicators and a marked deceleration in the investment momentum
aggravated'' bearish sentiments in the capital markets. Steel and Coal
sectors have been hampered by resource constraints and other issues.
Investment decisions, as a result, have seen prolonged deferment.
The slowdown in production due to price rise of raw material from the
domestic market which was uncompensated by sales therefore the company
faces deficit. Steel prices witnessed an unprecedented rise on the back
of high demand from all sectors and high input material cost. However
with the effects of the global crisis showing across all sectors,
mainly construction, automotive and consumer durables, the real demand
for steel started drying up during the year 2012-2013. This also led to
sharp correction in the steel and raw material prices in the same
period. The plant and machinery operated very well during the year.
However, the plant faced, shortage of Iron otherwise the production
would have been much higher.. Despite shortage of iron ore, the company
maintained its level of sales as compared to previous year.
The State of Chhattisgarh is experiencing a continuous and resounding
growth phase. Huge emphasis is being laid upon growth of infrastructure
in the state and therefore being the leading TMT manufacturer, both in
terms of volume and quantity, we expect record-breaking demand for our
products in times to come.
Furthermore, the added capital will lead to better realization on
finished goods as well as purchase of quality raw material at
reasonable rates, thus increasing the bottom-line of the Company.
The company continues its march towards improvement of processes and
will definitely revert in the next year with good results.
I wish to place on record the support and co-operation extended by the
governments of India and Chhattisgarh, the Banks and financial
institutions, Board of Directors, the employees, suppliers, contractors
and consultants in our endeavors.