Dear Shareholders,
I present to you Samtel Color's performance for the first quarter of the financial year ended September 30, 2007 . Given below is an overview of the Company's financial performance in the quarter:
Financial Performance |
Q1 FY2007 |
Q1 FY2006 |
15M FY2007*
|
Revenues |
271.1 |
343.1 |
1380.9 |
PBIDT |
(3.4) |
32.9 |
66.0 |
PAT |
(27.5) |
(0.6) |
(66.0) |
Please note that the Board of Directors of your Company had decided to extend the Financial Year of the company by three months ending on 30 th . June 2007.
Market
The domestic market for Color Picture Tubes (CPT) has continued to show healthy growth during the quarter under review. In addition to the normal growth of the market, the Tamilnadu Government has released a fresh order for 3.4 million television sets to the industry. The television market is expected to grow at a healthy pace during the rest of the financial year.
A shortage of glass parts during the last quarter has resulted in hardening of colour picture tube prices in the international and domestic market.
Performance
During the last financial year, the financial performance of your Company was adversely affected due to cost overruns and delays in the stabilization of the new lines 4 and 5 set up by it.
As intimated in my last letter, the Corporate Debt Restructuring (CDR) Cell has approved the company's proposal for financial restructuring. The Scheme shall be given effect to in the books of account after the company receives the approval letters from the lenders.
With the implementation of the CDR proposal, your management expects to be able to utilize its production capacities more effectively and thereby take better advantage of the market. Besides this, steps initiated by the company for efficient utilization of financial resources will further bolster its liquidity position.
Outlook
The Indian economy is expected to continue on the growth path in the coming years. We expect the domestic TV market to also grow at about 10% per annum in the near future.
Your Company is the largest tube manufacturer in the country and offers its customers the widest product range. It is also the only manufacturer of 21” Full Flat and 29” tubes in the country and expects to benefit from the growing demand for these products in the coming years.
To enhance capacity utilization, the company has created flexibility to manufacture both large and mid size tubes on the new line it had set up to manufacture 29” CPTs. On its second new line, the company has created flexibility to manufacture both small and mid size CPTS to exploit the export markets more efficiently. Your Company has also taken steps to pass on the increase in cost of glass parts to the customers immediately.
Before concluding, I would like to wish all of you a Happy Diwali and a Prosperous New Year and as well as thank you for your continued support and encouragement.
Yours truly,
Satish K Kaura
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