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Prabhav Industries L Chairman Speech
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You can view the entire text of Chairman's speech of Prabhav Industries Ltd.
Chairman's Speech
Mar 2011
Dear Fellow Shareowners,
The world is witnessing an interesting phase of transformation, towards
an unprecedented realignment and we are moving towards a multi-polar
world; a new socio-economic dispensation in which the emerging
economies have a far greater role to play in shaping the future than
ever before. India is the poster boy of this new era, attracting global
attention and scrutiny. Twenty years ago, the Government of India
initiated the intrepid step towards economic liberalization, which
eventually transformed India, and that process is still continuing. The
economy has averaged 8% GDP growth in the last decade and per capita
income has shot up from $300 to $1700 in two decades, accelerating
domestic consumption and savings.
The inference is that even with modest foreign capital inflows, India
can now afford an investment rate of 36- 38% of GDP, which can sustain
8- 9% GDP growth in the foreseeable future. Besides, unprecedented
economic development has enhanced Government spending on socio-economic
infrastructure.
There has been another visible advantage: Indian businesses, have
successfully aligned their operations and mindset to global benchmarks,
and have become multinationals in their own right. Something that was
rare two decades ago. Even your company is no exception to this fact.
Although India, China and Latin America witnessed considerable economic
activity in 2010-11 the US and Euro zone economies registered sluggish
recovery. These economies are now fraught with uncertainties and
looming recessionary trends. Inflation represents the new global
economic challenge, leading to a spiraling rise in prices of
commodities, mineral resources and energy. The global steel industry
has been impacted by the unprecedented increase in the price of iron
ore and coking coal. Steel demand in advanced nations has been largely
stagnant, while Asia enjoyed robust demands with China continuing its
march at the top of the league.
India''s steel industry has played a major role in driving the country''s
economic development. Over the decades, India''s ''steels cape'' has also
evolved, characterized by global acquisitions, adoption of advanced
technologies and modernization strategies for cost rationalization and
energy efficiency, and finally backward integration into global raw
material sources. The result is that India today is the world''s fifth
largest steel producer and is poised to emerge as the second largest by
2015.
Although modest performance of India''s construction and infrastructure
sector in 2010, coupled with high input costs, has impacted the
domestic steel sector, the long-term outlook remains robust. Firm
international steel prices and strong domestic demand will drive
domestic steel prices considerably. Besides, the government''s
estimated infrastructure spending is expected to drive the steel
demand. The share of the government''s infrastructure spending as a
percentage of GDP is expected to touch 9% by the end of the 11th Five
Year Plan.
WE- AT PRABHAV
The Decade gone by will be recorded in golden letters in the history of
your Company. It was in this decade that your Company achieved triumph
in creating an order book with such higher revenues generated from the
manufacturing and Trading of Steel products.
The decade holds special significance for our successful foray into the
primary steel segment. As a Company with no prior exposure to steel
making, there were a few who took us seriously when we ventured on to
this path. Defying many myths, we meticulously planned and rigorously
executed our dream vision in a record time of less than five years. A
brief highlight of our success story is detailed as under:
Performance Review
The year 2010- 11 was a year of diverse opportunities with the economy
across the globe showing signs of resurgence and revival, though with
some occasional hiccups, after the unprecedented financial meltdown.
Against such a meltdown we delivered robust financial performance.
Your Company achieved a record net profit before tax of Rs. 38,56,092.
This sterling performance has been the upshot of improved global
economic recovery, the ability of your Company to manage its resources
optimally, product innovation, technology and delivery. Further,
Strengthening prices, increased volumes and a strong focus on the
operational efficiency have contributed to a substantial growth of the
top line to Rs. 84,11,40,587 as compared to Rs. 2,95,35,648 in the
preceding year, thus registering an impressive growth of about 28
times. Further the Earnings per share of your Company''s Shares have
doubled as compared to the preceding year, thus resulting in the
overall accumulation of the Shareholders wealth.
Also our existing businesses achieved superlative performances and our
production facilities helped us to consolidate our market position.
Ushering in a new Chapter
The preceding year saw some significant changes in your Company. Your
management achieved significant success in yielding substantial
revenues from the Manufacturing and Trading operations of MS Ingots.
Despite volatile raw material prices we were able to close the year
with a healthy order book of Rs 85 crore thus maintaining our identity
of being one of the fastest growing steel companies in the World.
Future Outlook
Your Company functions in two business segments namely, Manufacturing
of Steel Products
i.e. M.S. Ingot from M.S. Scrap and Trading in upstream as well as
downstream metal products.
The existing business segments enable your company to hedge as well as
capitalize on volatility in the raw material prices. The trading
division has facilitated us to maintain our profitability in this
strenuous phase of uncertainty and anxiety.
In the course of balancing the existing business activity your company
has acquired deep insight of commodities and capital markets and thus
the Board of Directors considers it desirable to bank on its expertise
and commence the Investment Business along with the main objects of the
Company.
Growth Drivers
India''s growth prospects over long- term appear most promising amongst
major economies of the World. What India has delivered in the last
decade is just an indication of what it is going to unfold over coming
decades. And that puts your Company''s prospects in the right
perspective- at the right place, at the right time, with the right
offerings. Once we complete all our ongoing and proposed expansions in
primary and secondary steel segments, we shall certainly witness
multiplier growth in our revenues, profitability and subsequently the
valuation.
The Road ahead
India''s economy grew at 8.6% in the previous year, next only to China
and this is certainly a remarkable achievement as it comes in the
backdrop of a challenging period of global recession where few
companies were even on the brink of bankruptcy and had to seek huge
bailouts. With the world economy recuperating from recession, the
Indian economy has successfully re- positioned itself on a faster
growth trajectory. Further the Government''s initiatives in taming
inflation have brought positive results for the country and your
Company
The year 2010- 11 has been a robust year for us with a substantial rise
in the Top line and Bottom-line. What is even more encouraging is the
sector outlook which is looking stronger. Further with the demand
accelerating in the Middle East and Asian Markets for steel and steel
products there is tremendous unexplored potentials. Parham is very
well positioned to bank on these emerging opportunities. With all such
initiatives we are confident of retaining our leadership positions in
the market to ensure profitable growth.
It, Human Resource initiative and People''s Excellence
Your Company firmly believes that Business Excellence is not an
isolated enterprise. It is the outcome of integrity towards people and
community, transparency towards stakeholders and an enduring commitment
towards sustainable development. Further it also believes that it is
only the inspired employees who are the key to uplift the organization
to higher echelons of success. Thus we have been successful in
maintaining an unprecedented low turnover of people through proactive
Human resources initiatives.
The HR philosophy of your Company is to recruit fresh, young and
talented people and nurture them to become the future leaders and
entrepreneurs. Your Company encourages employees to come up with
innovative ideas and projects to exhibit their entrepreneurial skills.
Further your Company is an equal opportunity employer and encourages
more and more woman employees to join us and take leadership position.
Thus on behalf of my other fellow team members, I take this opportunity
of expressing my deep regards and gratitude to the employees and the
Stakeholders who have continued to repose trust in our abilities and
extended support to us.
Corporate Conscience
We acknowledge the roles and responsibilities of a corporate citizen.
Despite our business priorities, our social commitment remains
predominant. We are equally steadfast in our commitment to a cleaner
and greener environment, and as we go along we will enhance our green
quotient in terms of acquisition of more environment-friendly
technologies, encouraging green practices in our plants and host
communities globally and above all generate awareness about global
warming and climate change.
Values when actively pursued with deep conviction can generate
tremendous wellsprings of energy and focus. This is the true spirit and
mantra of success for any organization and am proud to say that your
Company has initiated efforts towards achievement of the same.
Our Gratitude
I would like to convey my sincere gratitude and appreciation to our
Shareholders, Debenture Holders, Customers, Business Partners, Vendors,
both international and domestic, Bankers, Financial Institutions and
all other stakeholders for their consistent support and trust.
A compulsive dreamer, I continue to scan the horizon with optimism and
conviction. The second fastest growing economy in the world will take
its rightful place as an economic superpower. This will create huge
opportunities for growth over the next decade. Thus I would like to
assure the shareholders that your Company will play an important role
in this India''s growth story and we will continue to invest in
projects, products and markets that would reinforce our position as one
of the lowest cost steel producers in the world
With Warm Regards,
Registered Office:
902, Galav Chambers,
opp. Sardar Patel Statue, Sd/-
Sayaji Gunj, Vadodara -390 005
Jayesh Thakkar
Place: Vadodara
Date: 1st September, 2011. Managing Director
The world is witnessing an interesting phase of transformation, towards
an unprecedented realignment and we are moving towards a multi-polar
world; a new socio-economic dispensation in which the emerging
economies have a far greater role to play in shaping the future than
ever before. India is the poster boy of this new era, attracting global
attention and scrutiny. Twenty years ago, the Government of India
initiated the intrepid step towards economic liberalization, which
eventually transformed India, and that process is still continuing. The
economy has averaged 8% GDP growth in the last decade and per capita
income has shot up from $300 to $1700 in two decades, accelerating
domestic consumption and savings.
The inference is that even with modest foreign capital inflows, India
can now afford an investment rate of 36- 38% of GDP, which can sustain
8- 9% GDP growth in the foreseeable future. Besides, unprecedented
economic development has enhanced Government spending on socio-economic
infrastructure.
There has been another visible advantage: Indian businesses, have
successfully aligned their operations and mindset to global benchmarks,
and have become multinationals in their own right. Something that was
rare two decades ago. Even your company is no exception to this fact.
Although India, China and Latin America witnessed considerable economic
activity in 2010-11 the US and Euro zone economies registered sluggish
recovery. These economies are now fraught with uncertainties and
looming recessionary trends. Inflation represents the new global
economic challenge, leading to a spiraling rise in prices of
commodities, mineral resources and energy. The global steel industry
has been impacted by the unprecedented increase in the price of iron
ore and coking coal. Steel demand in advanced nations has been largely
stagnant, while Asia enjoyed robust demands with China continuing its
march at the top of the league.
India''s steel industry has played a major role in driving the country''s
economic development. Over the decades, India''s ''steels cape'' has also
evolved, characterized by global acquisitions, adoption of advanced
technologies and modernization strategies for cost rationalization and
energy efficiency, and finally backward integration into global raw
material sources. The result is that India today is the world''s fifth
largest steel producer and is poised to emerge as the second largest by
2015.
Although modest performance of India''s construction and infrastructure
sector in 2010, coupled with high input costs, has impacted the
domestic steel sector, the long-term outlook remains robust. Firm
international steel prices and strong domestic demand will drive
domestic steel prices considerably. Besides, the government''s
estimated infrastructure spending is expected to drive the steel
demand. The share of the government''s infrastructure spending as a
percentage of GDP is expected to touch 9% by the end of the 11th Five
Year Plan.
WE- AT PRABHAV
The Decade gone by will be recorded in golden letters in the history of
your Company. It was in this decade that your Company achieved triumph
in creating an order book with such higher revenues generated from the
manufacturing and Trading of Steel products.
The decade holds special significance for our successful foray into the
primary steel segment. As a Company with no prior exposure to steel
making, there were a few who took us seriously when we ventured on to
this path. Defying many myths, we meticulously planned and rigorously
executed our dream vision in a record time of less than five years. A
brief highlight of our success story is detailed as under:
Performance Review
The year 2010- 11 was a year of diverse opportunities with the economy
across the globe showing signs of resurgence and revival, though with
some occasional hiccups, after the unprecedented financial meltdown.
Against such a meltdown we delivered robust financial performance.
Your Company achieved a record net profit before tax of Rs. 38,56,092.
This sterling performance has been the upshot of improved global
economic recovery, the ability of your Company to manage its resources
optimally, product innovation, technology and delivery. Further,
Strengthening prices, increased volumes and a strong focus on the
operational efficiency have contributed to a substantial growth of the
top line to Rs. 84,11,40,587 as compared to Rs. 2,95,35,648 in the
preceding year, thus registering an impressive growth of about 28
times. Further the Earnings per share of your Company''s Shares have
doubled as compared to the preceding year, thus resulting in the
overall accumulation of the Shareholders wealth.
Also our existing businesses achieved superlative performances and our
production facilities helped us to consolidate our market position.
Ushering in a new Chapter
The preceding year saw some significant changes in your Company. Your
management achieved significant success in yielding substantial
revenues from the Manufacturing and Trading operations of MS Ingots.
Despite volatile raw material prices we were able to close the year
with a healthy order book of Rs 85 crore thus maintaining our identity
of being one of the fastest growing steel companies in the World.
Future Outlook
Your Company functions in two business segments namely, Manufacturing
of Steel Products
i.e. M.S. Ingot from M.S. Scrap and Trading in upstream as well as
downstream metal products.
The existing business segments enable your company to hedge as well as
capitalize on volatility in the raw material prices. The trading
division has facilitated us to maintain our profitability in this
strenuous phase of uncertainty and anxiety.
In the course of balancing the existing business activity your company
has acquired deep insight of commodities and capital markets and thus
the Board of Directors considers it desirable to bank on its expertise
and commence the Investment Business along with the main objects of the
Company.
Growth Drivers
India''s growth prospects over long- term appear most promising amongst
major economies of the World. What India has delivered in the last
decade is just an indication of what it is going to unfold over coming
decades. And that puts your Company''s prospects in the right
perspective- at the right place, at the right time, with the right
offerings. Once we complete all our ongoing and proposed expansions in
primary and secondary steel segments, we shall certainly witness
multiplier growth in our revenues, profitability and subsequently the
valuation.
The Road ahead
India''s economy grew at 8.6% in the previous year, next only to China
and this is certainly a remarkable achievement as it comes in the
backdrop of a challenging period of global recession where few
companies were even on the brink of bankruptcy and had to seek huge
bailouts. With the world economy recuperating from recession, the
Indian economy has successfully re- positioned itself on a faster
growth trajectory. Further the Government''s initiatives in taming
inflation have brought positive results for the country and your
Company
The year 2010- 11 has been a robust year for us with a substantial rise
in the Top line and Bottom-line. What is even more encouraging is the
sector outlook which is looking stronger. Further with the demand
accelerating in the Middle East and Asian Markets for steel and steel
products there is tremendous unexplored potentials. Parham is very
well positioned to bank on these emerging opportunities. With all such
initiatives we are confident of retaining our leadership positions in
the market to ensure profitable growth.
It, Human Resource initiative and People''s Excellence
Your Company firmly believes that Business Excellence is not an
isolated enterprise. It is the outcome of integrity towards people and
community, transparency towards stakeholders and an enduring commitment
towards sustainable development. Further it also believes that it is
only the inspired employees who are the key to uplift the organization
to higher echelons of success. Thus we have been successful in
maintaining an unprecedented low turnover of people through proactive
Human resources initiatives.
The HR philosophy of your Company is to recruit fresh, young and
talented people and nurture them to become the future leaders and
entrepreneurs. Your Company encourages employees to come up with
innovative ideas and projects to exhibit their entrepreneurial skills.
Further your Company is an equal opportunity employer and encourages
more and more woman employees to join us and take leadership position.
Thus on behalf of my other fellow team members, I take this opportunity
of expressing my deep regards and gratitude to the employees and the
Stakeholders who have continued to repose trust in our abilities and
extended support to us.
Corporate Conscience
We acknowledge the roles and responsibilities of a corporate citizen.
Despite our business priorities, our social commitment remains
predominant. We are equally steadfast in our commitment to a cleaner
and greener environment, and as we go along we will enhance our green
quotient in terms of acquisition of more environment-friendly
technologies, encouraging green practices in our plants and host
communities globally and above all generate awareness about global
warming and climate change.
Values when actively pursued with deep conviction can generate
tremendous wellsprings of energy and focus. This is the true spirit and
mantra of success for any organization and am proud to say that your
Company has initiated efforts towards achievement of the same.
Our Gratitude
I would like to convey my sincere gratitude and appreciation to our
Shareholders, Debenture Holders, Customers, Business Partners, Vendors,
both international and domestic, Bankers, Financial Institutions and
all other stakeholders for their consistent support and trust.
A compulsive dreamer, I continue to scan the horizon with optimism and
conviction. The second fastest growing economy in the world will take
its rightful place as an economic superpower. This will create huge
opportunities for growth over the next decade. Thus I would like to
assure the shareholders that your Company will play an important role
in this India''s growth story and we will continue to invest in
projects, products and markets that would reinforce our position as one
of the lowest cost steel producers in the world
With Warm Regards,
Registered Office:
902, Galav Chambers,
opp. Sardar Patel Statue, Sd/-
Sayaji Gunj, Vadodara -390 005
Jayesh Thakkar
Place: Vadodara
Date: 1st September, 2011. Managing Director
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Half Yearly Results
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Splits
Competitors
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