The year in review was marred by an ongoing strained global
environment. While the global economy has showed signs of recovery from
the challenging environment of the last three to four years, there is
still some way to go. The US economy has demonstrated enough positive
momentum for regulators to begin reduction in levels of fiscal
intervention; while the performance in Europe remains cautious, with
need for further consolidation. Japan embarked on its own expansionary
monetary policy to consolidate the initial positive results, while
economies like China and Russia witnessed noticeably lower growth.
China seems to be shifting its attention more towards domestic
consumption than exports.
At home, aggressive steps taken by the Finance Ministry to address the
twin problems of growing trade deficit and weak rupee, as well as some
innovative and forward-looking policies by RBI helped India defend its
currency from the impact of global events. All of this serves to remind
us that not only has the global economy become increasingly integrated,
but heightened volatility in the operating environment is expected to
be a permanent feature.
Notwithstanding various domestic and global issues, we successfully
managed these challenges, thanks to our strong customer-centric
approach. We went beyond conventional supplier - customer engagements,
creating deeper and meaningful associations with consumers, thereby
allowing us to gain greater insights into their requirements.
Winning strategies. Sustained growth.
Winning strategies involve setting goals and implementing them through
concerted action, while mobilising the required resources. Such
strategies precipitate the achievement of goals through the means
chosen to achieve them.
FY 2013-14 has been an exciting year for your Company. Your Company
has sustained the growth momentum of the last couple of years, and made
progress on important initiatives which will pave the way for continued
growth in the years ahead. Your Company has implemented several winning
strategies. These strategies include an ability to capture new markets,
launch of new products on time, focus on R&D for process improvement
and enhancement, and leveraging expertise to build the right chemistry.
As a result of these strategic initiatives, revenues have doubled from
Rs.546 crores in FY 2009-10 to Rs.1,270 crores in FY 2013-14.
Three years ago, in a similar communication to you, I had shared my
optimism that your Company was on course to exceed revenues of Rs.1,000
crores by FY 2013-14. As you are all aware, we successfully surpassed
this milestone in FY 2012-13 itself. It gives me immense pleasure to
state that the growth momentum has continued to be robust. It is
greatly satisfying to share with you that the revenues for FY 2013-14
have touched Rs.1,270 crores, with Profit After Tax of Rs.38 crores.
Such performance would have been impossible without the trust and faith
reposed by all the stakeholders. The Board of Directors is happy to
share the success with each one of you and thus recommends a Dividend
of Rs.10 per Equity Share of a face value of Rs.10 each.
The growth and improved margins have been underpinned by initiatives
for operational excellence that your Company has undertaken during the
year. The Rupee was highly volatile and weakened against the US Dollar.
In spite of this, your Company was able to contain the impact on the
input costs and at the same time secure higher realisation on output
values. This was possible on account of your Company''s endeavour to
increase volumes through constant debottlenecking of capacities, become
market savvier, and thereby increase market share.
Over the past two years, your Company has successfully implemented the
Brownfield expansion plan and Phase I of the Greenfield project to
address the growing demand for its products and explore emerging
opportunities for growth.
Strategy must have continuity. It can''t be constantly reinvented.
- Michael Porter
Strengthening strategic focus
Your Company has commenced the process of realignment of its present
business segments into three Strategic Business Units (SBUs) based on
customer profile and end-use of products. These SBUs include Bulk
Commodities & Chemicals, Fine & Specialty Chemicals and Fluorescent
Whitening Agent. Realignment will lead to shifting of certain Organic
Intermediaries into Fine & Specialty Chemicals segment and Bulk &
Commodity Chemicals segment. End-use products like DASDA will continue
to remain in the Fine & Specialty Chemicals division. However, it will
ultimately become a part of Fluorescent Whitening Agent segment in the
Each of the SBUs will require specific skill-set to optimise
performance in line with new segments, business strategies, R&D focus,
investment focus and logistics costs. The SBUs will require customised
planning, marketing and strategic approach, which will be executed by
the SBU Heads who will drive growth and profitability.
Each of the designated and empowered SBU Heads brings with him/her vast
years of experience and knowledge about the business and industry, as
well as demonstrated track record of their passion to excel and
innovate in the face of challenges. All of this gives me immense
confidence that, together, we will steer the SBUs and the Company to
achieve new benchmarks of excellence and prosperity in a socially
On this positive note of assurance, I want to emphatically state that
we are working closely together and are determined and well-poised to
aggressively seize opportunities to further enhance the performance of
your Company. We have, during this year, achieved a significant
benchmark in our growth, but with our sustained performance, we are
sure of achieving many more such milestones in the future.
Your Company remains sensitised to its Shareholders'' concerns. One of
the concerns pertain to lower liquid nature of the Shares at the Stock
Exchanges. To ensure higher circulation of Equity Shares in the market
and enable investors to derive higher returns on their investment, your
Company''s Board has recommended a sub- division of Equity Shares from a
face value of Rs.10 per Share into five Shares of Rs.2 each, subject
to approval of the shareholders.
The last time, shareholders were rewarded by issuing Bonus Shares in
the year 1986. Your Company has been delivering healthy performance
year-on-year over the last decade. The sustained performance testifies
the stakeholders'' valued trust in your Company. To show appreciation
for this trust, your Company''s Board of Directors deem that it is an
appropriate time for declaring Bonus Shares. The Board has recommended
an issue of Bonus Shares in the ratio of 1:1 i.e. one fully paid-up
Bonus Share of Rs.2 each for every one Share of a face value of Rs.2,
subject to approval of the shareholders.
Good corporate governance has been one of the contributing factors in
our growth. In keeping with the Companies Act, 2013, we have raised our
Corporate Governance benchmarks. We have consistently viewed good
corporate governance not as a regulatory requirement but as an
essential contributor of our performance.
I take this opportunity to express my sincere gratitude to all our
stakeholders on behalf of the Board of Directors. I would like to thank
our shareholders for their continued support. I personally thank my
fellow employees for their unwavering support and valued contribution.
Together, we have much to look forward to as we strive to make your
Company stronger, so as to scale greater heights as we move into FY
D. C. Mehta
Vice Chairman & Managing Director