Dear Stakeholders,

I am really excited to connect with you for the very first time since acquisition. This excitement is amplified by the fact that your Company had a great FY18. The year bygone was an inflection point for the global economy, as it grew by 3.7% in 2017 – its highest levels since 2011. This growth is forecasted to be augmented to 3.9% in 2018 and 2019. However, the caveat being that, it is expected to be lesser even and risks to this forecast are rising, as per the July edition of World Economic Outlook by IMF.

On the domestic front, the Indian GDP grew by 6.7% in 2017 and is expected to grow to 7.3% and 7.5% in 2018 and 2019, respectively, pleasantly surpassing the Chinese growth forecast. The Indian growth numbers are expected to be further accelerated by the reforms and developmental agenda of the Government of India. The expectations of a normal monsoon, strong recovery in demand, combined with rising income levels in rural India and rapid urbanization would add fuel to this growth.

The domestic steel industry has played a vital role in the economic development of India, contributing more than 2% of GDP and employing nearly 25 lakh people in the steel and allied industries. As per the Ministry of Steel Annual Report 2017-18, during April-December 2017-18 (provisional; source: JPC), the production of crude steel was at 75.642 million tonnes, a growth of 4.8% compared to same period of last year. India has proven to be a net exporter of total finished steel this year and the consumption stood at 64.867 million tonnes, a growth of 5.2% compared to last year. Coming to the niche segment - steel pipes and tubes, which is amongst the fastest growing industries across the globe. India is one of the leading ERW steel tubes

manufacturing hubs globally, with the domestic demand levels of ~10 MTPA. Going forward, an increased government impetus to boost infrastructural development and the ”Make in India” initiative, smart cities, airports, new routes and gas pipelines are all set to propel this growth in India.

Turning to your Company, it gives me immense pleasure to announce that we had undertaken a 360 degree SWOT analysis and the results reveal that Apollo TriCoat is ahead of any other Tube manufacturers in the country in 3 ways – our products, selling techniques and organizational values. These are the three steps which accelerate us ahead from our competition and establish us as the rising star in the industry. Let me delve into each of the three steps, starting with our products. We are coming up with a unique product, which is industry first initiative in the Indian markets. These Tubes will offer three coats – of paint, zinc and polyester, which would enhance the life of the products. Currently available products in the market offer only single coat – either paint or zinc. We foresee ourselves as not only suppliers of high quality, cutting-edge product suppliers, but as a solutions provider. This way, we would elevate and raise the bar, as the customers would derive a value-add, which no other competitor could supply. Moving to selling techniques, we have a clear focus on value selling, as opposed to volume selling. Rather than pushing our product in the market at competitive prices, we feel that enlightening the customers towards the benefits of the products, would create an inducement towards the product. We would be able to benefit from this hook and establish a niche premium position for your Company in the market. Our organizational values serve as the backbone in our day-today functioning and the urge for value creation for all stakeholders is woven into our DNA. These values act as guiding principles in all our decisions and actions. Your Company has a very keen focus on cost management and relentlessly undertakes numerous efforts, having institutionalized this area. Through deployment of various state-of-the-art technologies like Microsoft Navision and Manufacturing Excellence to name a few, which helps the leadership team to monitor every aspect of manufacturing and carve out new ways of raising productivity levels. Your Company has commenced the construction of new plant in April 2018 and our estimates suggest that this plant would be operational by October 2018. We have selected to install only the best-in-class machineries in order to boost long term efficiencies, which would provide your Company an edge over competition through lower maintenance and manufacturing downtimes. With these developments in progress, I am confident that your Company would be able to deliver unprecedented value growth in the times to come.

I would like to conclude with a vote of thanks to all our Board Members, who have shared their guidance and insights from time to time with the leadership team and steer the Company to newer heights. I am also grateful to all our stakeholders – Our customers, vendors, bankers, all our team members, community, the Government and above all – our most valued shareholders. Looking forward for your continued faith and support, towards taking Apollo TriCoat another three steps ahead and a stellar FY19...

Yours Sincerely,

Rahul Gupta
Managing Director

36, Kaushambi, Near Anand Vihar Terminal, Delhi (NCR) 201010, India