Download the Annual Report for 2010-11. - kiocl limited

Chairman's Statement (Contd.)in India is expected to touch 50 million tonnes by the end of 2012. Most of the plants are coming upin Karnataka and Orissa where low grade fines are available abundantly with good water supply andlogistics. But the cost of production in India is higher due to high energy costs, due to which IndianPellet manufactures are in a disadvantageous position. However removal of export duty on Pellets byconsidering it as a value added product has provided some relief to Pellet producers.Future Outlook:The outlook of year 2011 has been positive. Year 2010 saw a steady recovery of Steel demandwhich began in the second half of 2009 driven by stimulus packages globally, the resilience of emergingeconomies and an overall market recovery. In 2011, a further growth of 5.9% in world Steel demandis expected.The short range outlook published by World Steel predicts that the Steel use in the developedworld will still be at 14% below the 2007 level whereas in the emerging and developing economies,it will be 38% above. In 2012, the emerging and developing economies will account for 72% of worldSteel demand in contrast to 61% in 2007.Chinese economy is likely to maintain its growth at around 9%. China’s Ministry of Housingand Urban-Rural Development (MOHURD) has raised its construction target of affordable housingto 10 million units in 2011. However, series of measures have been initiated by Chinese Governmentto discourage high energy consuming Steel mills from operating. This may act as a dampener to thedemand for Iron Ore. Shifting from annual bench mark pricing mechanism to quarterly pricing systemhas already infused some amount of volatility to the market. Added to this, there is a move in themarket to introduce monthly pricing mechanism which is strongly resisted by Chinese Steel industry.In general, though the projections are positive, high degree of volatility makes it difficult to predictmarket direction.PHYSICO FINANCIAL PERFORMANCE OF THE COMPANY FOR THE YEAR 2010-11 :Financial year 2010-11 was a year of improved performance, recovery and consolidation for us.The global economic climate posed several challenges, but we made the best use of our resourcesand abilities for growth. At the beginning of the year, we had projected a revenue growth of 77%whereas in actual, we could post higher growth of 82% over the previous year. The total revenuestood at Rs. 1803.46 crore, a YoY growth of 81.67%. The profit after tax was Rs.76.27 crore, a YoYgrowth of 143.02%.DIVIDEND :We are pleased to announce a final dividend of Re. 0.25 per equity share including the InterimDividend already paid. The dividends are payable on the equity shares as on book closure dateand are subject to approval by the shareholders. Earlier in the year, we paid an interim dividend ofRe. 0.08 per share.Before we go ahead, I will touch upon some of the projects as envisaged in the 11th Five Year Plan(2007-2012) and the progress made.15