The Indian economy continued to register impressive GDP growth,
although the rate of growth declined marginally over the previous year,
reflecting inflationary trends driven by the increase in the cost of
energy and raw material. The level of industrial activity has also
begun to decline as a result of fiscal constraints imposed on money
supply and the raising of interest rate along with sub prime crises.
Despite of these adverse factors, your companys performance has been
satisfactory. I am pleased to report that your company continues to
perform on sustained basis and it has enabled to demonstrate its robust
business model with strong, satisfactory results for the year
2007-2008. The company aims to tap the Chinese market of drum closure
and scaffolding. Company is setting up a new plant in Anhui, China for
manufacturing of steel scaffolding systems in the first phase and then
drums closures in the second phase. A new wholly owned subsidiary
company has been set up for this called Anhui Reliable Steel Technology
Co in Anhui province near Nanjing. We have already acquired 35000 sq
meters land and construction of factory building is under progress.
Production is schedule to start in the first quarter of 2009-10.
Amalgamation of Danube Fashions Limited, with the company rests pending
with Honble High Court, Mumbai. On application of the company,
Registrar of Companies, Mumbai has granted two months extension to hold
Annul General Meeting for year ended 2008.
I am pleased to inform you that almost all our projects as envisaged in
our IPO prospectus are well within the time schedule as well as within
the budgeted costs. The second Yarn Mill consisting of 25,000 spindles
has already been commissioned in August 2007. The Mill is equipped
with most modern equipment from worlds leading suppliers like
Trutzschler, Toyota, Murata, etc. The production of yarn increased from
6307.75 M.T. to 8579.70 M.T. during the year 2007-2008.
The new Yarn Mill is likely to add about Rs. 70 crores annually to the
top line of the company! Since the mill is located in the existing
premises, we expect a substantial saving of overheads through greater
efficiency and cost reduction.
Due to severe volatility in steel prices, tube and scaffolding division
passed through some testing times. I am pleased to inform you that we
are able to procure reasonable stocks of steel in order to tide over
sudden spurts in steel prices. The project for increasing the capacity
of scaffolding has also been implemented. This has resulted in
substantial increase in conversion of steel tubes into value added high
precision scaffoldings. The forging plant for manufacture of in house
forged components has been commissioned. These projects will improve
the bottom line of scaffolding division substantially. Your company has
made a breakthrough in the US and Latin American markets and has
started supplying to the biggest scaffolding contractor in the world.
This will give us a strong foothold in these markets.
Your company continues to be the pre- eminent global player in drum
closure and continue to stand as the 2nd largest manufacturer in the
world. Upgradation and expansion of drum closure division has almost
15 MW power plant is ready but due to some civil disturbance, the
commissioning is delayed. We are in the process to resolve the problem
with the local authorities and other concern people, to start the
operations of plant. Once it is done, it will not only save substantial
cost but also the income from the power division will be tax-free. We
expect to add about Rs. 10 crores to the bottom line of your company
after commissioning of power plant.
Friends, we consider you as our partners. We would very much appreciate
your views and guidance on our projects and possible growth
opportunities. I am sure, as a team, we can create grow and prosper
together. Before I conclude I would like to convey my heartiest
greetings and very best wishes for Diwali and prosperous New Year