It gives me immense pleasure to welcome you all to the 35th Annual General Meeting of FCI OEN Connectors Limited. I am glad to inform that your company has completed first financial year under Amphenol Corporation which had acquired 100% share of FCI from Bain Capital and your company is now part of Amphenol ICC (AICC).
Spurred by the 'digital India revolution', Indian economy is expected to grow by more than 8% per annum until 2020. The Government of India has set up Electronic Hardware Technology Parks (EHTPs), Special Economic Zones (SEZs) and has brought about a favorable climate for foreign direct investment (FDI). It has also increased liberalization and relaxed tariffs to promote growth in all sectors and all these are positive steps to encourage the manufacturing units in India.
The Directors' Report and Accounts of your Company have been with you for some time and I seek your permission to take them as read.
Manufacturing enterprises are like growth engine of Indian economy. India's metal and electronics industry continues to be a critical force for growth, innovation and sustainable development, across multiple segments. Digitization of cable could lead to increased broadband penetration in the country and open up new avenues for your company. As we enter the year 2017-18, we anticipate even more opportunities for the products to meet the needs of the various segments using electronic communication devices.
Your company being a part of Amphenol Corporation, is going through an exciting phase due to revolutionary changes in technology, the introduction of innovative products and the challenges of global competition. This has made it necessary for the company to focus on continuous improvements in order to stay ahead of the pack. Technological improvements and competitively cost effectiveness are main drivers for demand of your company's products in India and abroad.
Domestic sales for the 12 months period ended March 31, 2017 was at Rs. 1390 million (Rs. 1,573 million in the 15 months previous year). Export sales for the year was at Rs. 2,398 million (Rs. 2,382 million). Export entitlements was at Rs.66 million as against Rs.69 million for the 15 months ended previous year. Net revenue was at Rs.4,225 million as against Rs.4,414 million for the previous year. Net profit before tax was better at Rs. 299 mn as against Rs.18 mn for the previous year. Earnings per share is Rs 32.49 as against (Rs. 10.55) in the previous year).
Performance for the year 2016-17 was satisfactory. We are glad to inform you that the volumes for Millipacs 10G picked up significantly during the year and we could also stabilize production of Standard Metral which was transferred from China in 2016. Cable assembly division had a good growth during the year adding new products and new customers. This has helped your company to improve the sales as well as profitability during the financial year 2016-17. Domestic sales also showed a growth, mainly from new business / customers even though mainly driven by cable assembly business.
Raw material cost started going up during the year driven by growth in automotive industry. This was partially offset by strengthening of Indian rupee against US$. Softening of Chinese market resulted in under utilization of capacity with all manufacturers which resulted in aggressive price reduction to gain available market.
Profit for the financial year under review was better at Rs.299 million as against Rs.18 million for the last year.
Sales for the first three months of the year 2017 was Rs.1,184 million against Rs. 851 million during the corresponding period of last year.
Sales continued to show an increasing trend, both in domestic and export market in the mobile networks (Power to Antenna and Fiber to Antenna and IT and Data Communication networking equipments.
Your company focuses on developing new products in fibre optics, which was well received in the domestic market as well as in the global market. With the excellent customer support and the global brand of Amphenol, your company expects to maintain growth in other segments like cable assembly and connectors in the domestic as well as export market.
Your company continues to enhance the leadership in the Industrial market not only with the BASICS product portfolio (board/wire-to-board connectors, terminal blocks and I/O connectors) but also with customized interconnect products to meet the demanding requirements. The emerging Digital Grid market has opened up opportunities in many areas including substation automation, smart metering, UPS & Inverters etc and your company leveraged out strong product portfolio to increase its footprint in these segments. Your company continues to be the preferred partner for many Industrial majors present in the country for all their interconnect needs. As a part of Amphenol Corporation now, your company is leveraging strong product portfolio of many Amphenol Industrial divisions worldwide, bringing proven innovative solutions to the Industrial customers across the country. The growing customer base and the increased penetration in consumer durables segment shall also provide enough scope for the growth to your company in the coming years.
Budgeted Sales for the year 2017-18 is estimated at Rs. 4,780 million. Cost reduction initiatives continue to be the focus area of the Company in order to be competitive in the market place.
The Board of Directors wishes to place on record their appreciation and gratitude for the contributions made by all employees. Harmonious employee relations continued in 2016-17 also.
On behalf of the Board, I wish to express my heartfelt thanks to AFCI and AICC Group for their increasing support to the Company. We also wish to thank our customers for their continued support.
I take this opportunity to also express my sincere thanks to the family of investors for their continued support and confidence.
26th September 2017
Richard Adam Norwitt