PENNAR PROFILES LIMITED
Chairman's Review
I welcome you to the Tenth Annual General Meeting of your Company.
The aluminium extrusion industry in India is presently going through a very
difficult period due to fall in demand. The growth expected in
infrastructure, communication, construction and automobile sectors in the
country has not materialised. The aluminium extrusion industry has also
suffered due to recession in the country. There has also been a significant
increase in the supply position as 25 new extrusion units have commenced
operation, four of them in Hyderabad itself. This has resulted in a steep
fall in prices and unit contributions. The performance of your Company was
affected due to this intense competition.
Your Company has developed a good export market base in Europe. The demand
for aluminium extrusions in this market is very huge. The Company has
doubled its export turnover during the second half of the year under review
compared to the previous year. The Company's efforts will be to put a
strong emphasis on increasing exports. Since your Company's sales are
export based, it would be possible to avail cheaper credit to reduce
financing cost. The product development exercise undertaken in the
industrial segment during the year has started yielding results. Your
Company would concentrate more in this segment during the coming years to
improve its performance. You are aware that this Company was a sick company
at the time of its takeover by the Pennar Group and was turned around
earlier. Considering that the Company has developed a good export market,
it would be possible to achieve a turnaround again.
During the period under review, KPMG Peat Marwick LLP, USA, has reviewed
the ISO 9002 Certification and reaccredited your Company.
I wish to conclude by expressing my sincere thanks to all my colleagues on
the Board for their cooperation and guidance.
I thank you for the support and encouragement to the Company.
Hyderabad Dr N Kondal Rao
March 22, 1999 Chairman