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Greetings from Ambuja!
“A Great Visionary, an Inspiring Leader, an Astute Industrialist and an Exceptional Human Being”
An organization’s journey is often marked by certain momentous events that define or redefine the course of its trajectory. Leading industrialist, enthusiast and our Founder Promotor and Chairman & Managing Director, Shri Vijaykumar Gupta, left for heavenly abode on 23rd May, 2018. Amongst his many qualities was the ability to wear multiple hats and perform each role with equal vigour, unwavering enthusiasm and admirable perfection. With his visionary guidance, pioneered all such historic and strategic changes to enable the evolution of Ambuja into a reputed company in India. He was our guiding light and we pay our heartfelt tribute. We will always remember him as an inspiring genius with a strong ability to think ahead of time and further commit ourselves to his ideals in our journey ahead.
Looking back at Ambuja, the one characteristic that has defined the global economy over the last decade is “uncertainty” - uncertainty that has brought its share of challenges and opportunities. The financial year 2017-18 had its share of uncertainty which affected revenue growth of the Company. The globe witnessed regular jibe at each other from countries like US, North Korea, Russia, Syria, China etc. These had unpredictable volatile movement in global economy on both way upside as well as downside in short span. The year end was also an onset year of trade war between US-China, US-EU, which also gave negative sentiments in globe trade. The respective countries imposed anti dumping duty on many products, which has short term negative impact.
The new financial year began with reduced impact of demonetisation as people started to be in line with Government movement to switch over to digital payments and receipts. The first half had also impact on growth due to GST implementation. It was a transitory phase for economy trying to grapple with new equations after GST implementation resulting into rebound in off takes significantly from October 2017 onwards. It performed with positive outlook from second half. The INR also was the least volatile at around 2.21% in 2017-18 compared to large movements in previous 5 years. This also helped to perform Indian economy without a significant exchange loss. The INR although started depreciating from March 2018 largely due to higher outflow on increasing crude prices.
The Government also increased import duty on edible oil in a phased manner to balance the domestic oil seed price in India. The Government also did balancing act by increasing the MEIS benefit by 2% on exports of various products largely produced from inputs from agri segment. This has balanced the low agri inputs price which was below MSP in the beginning of the season to a comfortable level at or above MSP to ensure sufficient return to farming community.
Further rather than discussing our financial numbers and sharing my thoughts on our strategic growth plan and Company’s performance in during financial year, I will take the opportunity to discuss some of our satisfying achievements which hold the promise of us being able to sustain profitable growth across the foreseeable future.
Aiming for a new growth trajectory will require new capabilities. Chalisgaon Project in the State of Maharashtra is a step in that direction. It gives us immense pleasure to share with you that the Company has commenced the commercial operations at its 1000 MT per day green field Maize processing plant at Chalisgaon.
Commencement of commercial production at the unit is one more step in the direction of establishing PAN India presence of the Company in the promising maize processing sector through which the Company will achieve highest market share in the sector. This facility gives us scale, agility & flexibility to compete better in Global market and also help to fulfill the Vision i.e. “to become largest corn wet milling Company in India by 2019”.
I am glad to share with you that Soya Processing devision of the Company is having 2nd highest crushing capacity in India. Moreover, Gujarat Ambuja’s Tree Brand is a well-established brand based on international standard which is well known for its best quality yarn in International market.
True to the philosophy - “Today, change is ‘the new normal’ and the pace of change in future will be even faster than it is today. Being ready for tomorrow means having vision and capabilities to compete in the world of tomorrow.”
Your Company has continually adapted itself and that is why it stands where it is today. To further ensure its sustainability, it seeks to redefine its business models fundamentally to become a globally effective & integrated organization.
Year at a glance - Company Performance:
Despite of various macro and micro uncertainties and challenging business environment including lingering effect of the uncertainty around GST saw a hurdle and disruptions in the initial period, the Company came back strongly and delivered volume growth as well as achieved robust profitable growth to finish the financial year on a high.
In F.Y. 2017-18, your Company posted strong performance, with Operational Revenue of Rs.3376.63 crores, EBITDA Rs.326.39 crores and Cash Profit after tax Rs.256.17 crores. Your Company continues to be the most profitable Company in the Maize based manufacturing industry during its last ten year performance, with a net profit of Rs.179.88 crores.
In keeping with our consistent track record and tradition of directing surplus cash and consistently rewarding the shareholders, the Board has recommended a final dividend @ 45% i.e. Rs.0.90/- per equity shares of Rs.2/each, subject to the approval of Members at this Annual General Meeting.
Further, Company’s continued focus on cost reduction and productivity enhancement initiatives supported by market buoyancy has resulted into considerable gains in profitability and also we have enhanced our product offerings and reached out to specific profitable segments successfully.
Giving back to the Society:
In these exciting yet demanding times, Company does not forget its commitment to live by one of its core values - ‘Care for Society’. With Concern for Society and Environment being a deep rooted core value of the Company; we are making concerted efforts for creating awareness in the fields of Community Healthcare, Sanitation & Hygiene and providing support for Education & Knowledge Enhancement.
Our Social Responsibility and Sustainability efforts continue to benefit a large base of stakeholders, because we undertake these with the same beliefs and conviction as we do our commercial activities. Our CSR initiatives are not an afterthought but an integral element of corporate strategy. Company has taken multiple initiatives in different States of India to have a positive impact on the everyday lives of its stakeholders.
Overall, your Company remains confident and continues to see several opportunities in the agro based product and manufacturing activities and also expecting good monsoon during this current year. Thus your Company is confident of growth from each of its segments on the back of improving market conditions. Therefore the management has put in plans to enhance operating efficiencies, which will allow your Company to scale new heights in performance.
I would like to take this opportunity to acknowledge and thank our bankers and vendors for their trust and support. I am deeply thankful to the continued support of our esteemed consumers, business associates, suppliers and legal authorities for their loyalty and trust in all our activities. Most importantly, also my sincere appreciation to all the shareholders for the trust reposed by them in the Management of the Company and also for continued support in our journey to create long-term value.
Dear Shareholders, Stakeholders and Friends of Ambuja, we are today living in a New India that has opened its doors for new and bold ideas and for daring and adventure to build a strong, prosperous and harmonious nation. Today, as we celebrate the 27th AGM of our Company, it will serve us well to recall our Founder’s many words of wisdom, the guiding principles of his life, the spirit and values, he upheld and nurtured in us. Each single day, our Founder urged us to set our eyes not on the far horizon, but far beyond the horizon. That has been the secret of Ambuja’s splendid achievements so far. But our beloved Founder Promotor and Chairman & Managing Director also taught us to be humble and to never forget that the nation expects a lot more from us in the future. Therefore, today I assure the Stakeholders that Ambuja will do everything, and more, to meet the nation’s expectations.
With Best wishes,