ANNUAL REPORT 1999-2000
GRINDWELL NORTON LIMITED
51st Annual General Meeting
Ladies & Gentlemen,
It gives me great pleasure to welcome you to the 51st Annual General
Meeting of your Company. At the outset, let me say that I am privileged
and, indeed, I am very honoured to have been elected to your Company's
Board and to have been given the opportunity to serve as its Chairman. I
will now speak briefly on your Company's performance and its prospects.
PERFORMANCE: APRIL - DECEMBER 2000
As stated in the Directors' Report, the financial period under review was a
difficult one for your Company with market conditions deteriorating as the
year progressed. In particular, demand for Bonded Abrasives (including Thin
Wheels) and Fused-cast Refractories was weak for the entire period under
review. On an annualized basis, aggregate sales were, more or less, at the
same level as last year, whereas net profit increased by 8%. Considering
the strong financial position of your Company and the improvement in its
profitability, the Board considered it appropriate to recommend a dividend
of Rs.3/- per equity share for the nine-month period that ended on B1st
December, 2000, as against Rs.3.50 per equity share declared for the year
that ended on 31st March, 2000.
The slowdown witnessed in the second half of 2000 by industry, in general,
and by many of your Company's important end- users, in particular, has
intensified in the current year. In some industries (e.g. passenger cars,
commercial vehicles, two- wheelers), volumes have shrunk. Consequently,
demand for many of your Company's products (primarily, Abrasives) has
weakened further and price levels have been under pressure. This is
reflected in the 1st Quarters' Results, which showed sales and profits
being lower than the preceding quarter and, more or less, similar to the
1st Quarter of 2000. At the end of five months, the trend remains the same.
With the global economy also slowing down, it is best to assume that
business conditions will remain subdued for the rest of the year. Under
these circumstances, your Company will continue to focus on increasing
productivity and on containing costs, on the one hand, while, aggressively
pursuing export opportunities, on the other. More specifically, your
Company has recently implemented a Voluntary Retirement Scheme at its
oldest plant at Mora. This has resulted in a 25% reduction in headcount at
that location. Further, as you know, the Fused-cast Refractories business
has been a cause of concern (and losses) for some time. In view of the
contraction of the market, the business is no longer viable and, therefore,
your Company has decided to close down the manufacturing operations.
Consequently, a Voluntary Retirement Scheme has also been implemented at
Bangalore. I am confident that the positive impact of these and other such
actions will be seen in your Company's results in the coming months. As to
the future, with a strong management team, with the best technology and
with underutilized capacities in all its major businesses, your Company is
well placed to gain significantly from a revival in industrial activity as
and when this occurs.
Before concluding, I, on behalf of the Board, place on record our
appreciation of your Company's employees, who, not only work hard, but do
so with enthusiasm and with a sense of ownership and pride. I would also
like to convey our gratitude to our Dealers and Suppliers for their loyalty
and their contribution to your Company's success. Finally, I would like to
thank you, our shareholders, for your encouragement and your support.
Grindwell Norton Ltd.
Army & Navy Building,
148, Mahatma Gandhi Road,
Mumbai 400 001.
13th June. 2001.