Aluworks Limited

Introduction

Fellow shareholders, distinguished guests, ladies and gentlemen, I am extremely honoured to welcome you to this Annual General Meeting.  It is also my privilege to present the financial statement for the year ended December 31, 2010 to you for the first time as the Chairman of the Board.

Although the year 2010 was yet another bad year, we could see the light at the end of the tunnel; we were able to cut down on our losses as compared to the previous year and saw the reactivation of Valco, our major raw material supplier.  The Rights Issue, although not very successful as we had envisaged, brought in some working capital which enabled us to cut down on our expenses, especially, interest on bank loans and exchange losses.

The Economic Environment
Analysts had hoped that the global recession would have ended during 2010 but the effects continue to persist even today and the world’s economy has not recovered to the level where there is again strong investment in infrastructure around the world.  As you know, we await the change to be able to sell finished coils into Europe, something which has been on hold since our coloured coating plant was commissioned early in 2009.

The Ghana Government continued its Better Ghana agenda in 2010. A GDP growth of 5.9% was achieved and inflation rate ended in single digit at 9.3%.

On the basis of Ghana having been re-classified a middle income economy and recognising the contribution of the oil and gas sector to the economy, Government has forecast growth in 2011 to be 12.3% (oil inclusive). In the 2011 budget Government intends to set the country’s economy on the path to accelerated growth with the theme of “stimulating growth for development and job creation”.

We remain upbeat about 2011 outlook and the opportunities available for us provided our main issues of supply, maintenance and sales are properly addressed. The underlying factors into the future are fortunately pointing in the right direction. Raw material supplies have improved and sales are following. This is allowing the company to improve its maintenance schedules. We forecast this year as an indicator of a strong recovery, something we as the Board, as Management, and I am sure, you, as shareholders, have been waiting for, for a long time.

Review of 2010

Financial Results
Due to the very low volume of production and sales achieved in 2010, the company made a loss of GH¢7.350 million. This loss was GH¢0.655 million better than the loss of GH¢8.005 million in 2009 although the volume in 2009 was much more. The loss was after charging interest on loans amounting to GH¢ 1.884 million and after charging GH¢1.400 million in exchange losses. It is worthy to note that this improvement is, to some extent, due to the decreases in exchange losses and interest on bank loans resulting from the injection of working capital from the Rights Issue.

Dividends
Following losses in the two previous years our income surplus account does not support a declaration of dividend for 2010 and the Directors are regrettably therefore unable to recommend the payment of a dividend.

Performance on the Ghana Stock Exchange
At the end of 2010, at GH¢0.11, the price of Aluworks stocks had seriously declined by 75% compared to the price of GH¢0.44 per share at the beginning of the year. It is instructive that as at 31st March the share price was GH¢0.22 per share. The Board remains confident that your share prices will rise as our performances improve in the years ahead.

Board of Directors
It is with regret that I have to announce that due to ill health the Chairman of the company Mr. William Ekroo Inkumsah resigned from the Board of Directors with effect from the 1st of January 2011, after nearly 24 years of service to the company as a member of the Board of Directors. Mr William Inkumsah joined the Board in July 1987 and was appointed the Chairman in May 1996. He has served the Board faithfully since then. He continues to be a strong shareholder in the company. I am sure all members of the company join me in thanking Mr. William Inkumsah for his invaluable service to this company and also do join me in wishing him the best of health into the future and enjoyment of his retirement from the Board.

In succession to Mr Inkumsah the Board has asked me to be the new Chairman; a position I have accepted. I agree with the Board that the company continues to need the experience that I shared with Mr Inkumsah to steer the company through these difficult times. I pledge to work very hard with my colleague Board members and with the management of the company to attain the objectives that we have set for the company.

I regret again to have to inform you that we have had two other resignations from the Board. Mr Benjamin Gogo resigned from the Board on 31st March 2011 for personal reasons which has to do with the weight of his responsibility schedules. We would like to thank Mr Ben Gogo for his incisive contributions to matters that were brought to the Board for discussion and for his invaluable service to the company, serving the Board for over 15 years.  We shall miss his wise counsel.

During 2010 Mr. Napoleon Kpoh was replaced by Social Security and National Insurance Trust (SSNIT), (one of our major shareholders) who he had been representing on the Board. Mr Napoleon Kpoh served on the Board for some 9 years and brought his immense labour experience to bear on the business of the Board whenever it was required. His invaluable service is appreciated by his colleagues and I am sure members of the company join me in thanking him ever so sincerely for the part he has played in keeping the company going in the face of the difficulties that it has had.
Since the end of the year we have had two new members join the Board and I would like to introduce them to members.

We welcome Mrs. Mariam Okwabi. She joins the Board as an additional representative of Cocoa Board who are now our majority shareholders. She comes well qualified. Mrs. Miriam Okwabi is a chartered Accountant and currently the Director of Finance of Ghana Cocoa Board (COCOBOD).

Miriam commenced her professional career with Ayew Agyemang Turkson and Company (AAT&Co), a Firm of Chartered Accountants where she gained extensive experience in Banking, Manufacturing, and service industries. During her five years stay with the firm, she undertook audit assignments in institutions like the VRA, SG-SSB (then SSB), Ghana Consolidated Diamond Limited and World Bank/Donor funded projects among others.

She joined Ghana Cocoa Board in 1989 and assumed the position of Principal Accounts Officer in 1990, Deputy Accounts Manager in 1991, Accounts Manager in 1996 and Senior Accounts Manager in 2006.

After serving satisfactorily as head of Finance Department in various Divisions of COCOBOD, she was transferred from the CSSVD Control Division of Ghana Cocoa Board to the Head Office in February 2008. She was subsequently appointed to the position of the Director of Finance in April 2010 due to her outstanding performance.
Miriam obtained an Executive Master of Business Administration (EMBA) from GIMPA in 2004. She has undertaken a number of courses in Finance, Administration, Banking, Entrepreneurship, etc. in Ghana and abroad.

She was admitted as a member of the Institute of Chartered accountants (Ghana) in 1991 and has a record of being a founding member of the Association of Women Accountants of Ghana.

She has served and continues to serve on a number of committees and Boards. She currently serves on the Board of West Africa Mills Company Ltd (WAMCO) - a cocoa processing company in Takoradi.

We welcome as well Mr. Victor Djangmah who is the new representative of SSNIT on the Board. He also comes well qualified. Mr Victor Djangmah is an engineer by Profession and currently is the Managing Director of Fanel Limited, a firm of Electrical Engineers and Contractors. He holds a B.Sc. in Electrical Engineering from the Kwame Nkrumah University of Science and Technology (KNUST). He worked with the Electricity Company of Ghana (ECG) after KNUST from 1973 to 1980 before entering into the Construction Industry. Mr. V. Djangmah is the representative of Social Security and National Insurance Trust on the Board of Aluworks Limited.

New persons will be chosen by the Board to replace Messrs. William Inkumsah and Ben Gogo in due course and they shall be presented to shareholders at the appropriate time. Meanwhile, distinguished shareholders, please join me in welcoming the new Directors to your Board.

In accordance with the regulations of the company and the Companies Code 1963 Act 179, Togbe Afede XIV, and Mr Anthony Fofie will be retiring by rotation and being eligible offer themselves for re-election.

Non-Executive Directors Fees
The Board has again decided that there should be no increase in Directors’ Fees in the year 2011 during the recovery period.  This is the fifth consecutive year in which the fees of the non-executive directors have not been raised.

Corporate Social Responsibility
No donations of significance were made by the company during the year. The company has continued to comply with all regulatory requirements including to the Ghana Stock Exchange, the Ghana Revenue Authority, the Tema Municipal Authorities, the Environmental protection Agency, The Fire Service, and with the provisions of the Factories, Offices and Shops Act, 1970, Act 328.

Projections for the future
The Board believes that Aluworks is turning the corner towards returning to profitability. The return of supplies by VALCO, leading to improvement in working capital utilisation, and the cost effectiveness measures in place will surely lead to a return to profitability from 2011. However the pre-occupation of the Board is to ensure that the future is secure. The medium term plan that we have approved is in use to invite investors to participate in our capital expenditure process designed to ensure improved reliability of production by Aluworks over the next five years. The Board is convinced the plan is robust and only looks forward to concluding arrangements for the needed finance to ensure a rewarding and sustainable future.

Conclusion
On behalf of the Board of Directors, I would like to sincerely thank shareholders for their forbearance, customers, suppliers, and other stakeholders for holding firm with us. In particular I have to thank the staff of the company for their steadfastness in the face of extreme difficulty and pray that their faith will be rewarded very soon. I believe all of us feel challenged and motivated to deliver sterling results in the coming year.

Thank you and May God Bless us All.