MESSAGE FROM THE MANAGING DIRECTOR
FY 2016 marked another important year in your Company's history as we evolved ourforward-thinking strategy to meet the challenges of the future.
Even though challenges persisted our inherent strengths and forward-looking approachenabled us to sustain growth amid tough conditions. Poor infrastructure and proceduraldelays continued to have an adverse effect on the macro external environment causingconsumer sentiment to remain low. This caused the Auto Industry to perform below pargrowing a mere 4 per cent during the past year. At Alicon however growth remainedlargely on track as we successfully harnessed our inherent strengths to seize newopportunities through a diversified and de-risked approach.
Our focussed strategy facilitated the translation of our past efforts into realachievements on the ground. The diversification initiatives we had launched in FY 2013 totap customers across multiple sectors started bearing results during the year underreview. Notwithstanding the low rate of growth in our core Automotive business segment wereported a 7 per cent growth in turnover which rose to ' 6825 Million during FY2016. Profit after Tax for the year stood at ' 219 Million as compared to '207 Million in FY 2015.
Our proactive approach enabled us to show flexibility in responding to the dynamicmarket situation throughout the year. Our Challenge the Now' initiatives once againremained at the forefront of our progressive agenda. Led by these initiatives wecontinued to scale up efficiencies across our products processes and systems to deliverhigher value to our stakeholders.
Another major contributor to our growth was our focus on innovation which we took tonew levels of excellence during the year. A long-standing relationship with our Japaneseand European associates and their knowledge base have equipped us with the ability toaddress the transforming needs of our customers. We took our innovative and collaborativethrust to the next level during FY 2016 through various key initiatives.
During the year we added 91 new and innovative products to our product pipeline toserve diverse customer needs across industries. Among our notable achievements were thedevelopment of a new Cylinder Head and the successful ramp-up for Renault KWID. Otherproduct innovations included Coolant Collector for Daimler (USA) Crank Cases for Polaris(USA) Oil Sump for Jaguar Land Rover (UK) and the expansion of our AMT base platesportfolio launched during FY 2015 to the Maruti and Tata Nano vehicles. The enhancementof these components in the coming years will be significant drivers for the Company'sgrowth.
To address the evolving demands of its customers the Company undertook several newmeasures during the year to further reduce the weight of Auto components.
This helped us augment our position as a complete solutions provider for our valuedcustomers who now look at us as their partners in progress.
In another significant innovation we successfully harnessed our R&D capabilitiesto modify engine parts to meet the new policy directives for diesel vehicles. Stringentgovernment regulations on diesel vehicles and the limitation on diesel and petrol vehiclelife to 10 and 15 years respectively are some of the policy changes underlying the growingawareness about the need for eco-friendly hybrid and electric vehicles. We expect thistrend to soon snowball into demand for better products at more affordable prices as Indianmanufacturers move towards electrification of their fleets.
As a forward-looking company we are focussed on the opportunities likely to arise inthis area in the coming years and shall be well equipped to seize such opportunities. Wehave already embarked on a journey to emerge as the preferred aluminium castings supplierfor hybrid/electric vehicles. Discussions have been initiated with leading manufacturerssuch as Samsung Bosch AAM and many more for the potential supply of aluminium partssuch as battery housing starter housing etc. for use in high-end vehicles made byamongst others Jaguar Land Rover and Daimler. We have also connected with domestic andglobal OEMs to involve our engineering teams in the process from the product design stagefor such vehicles.
Exports is another area which has emerged as a major contributor to our growth. Ourexports from India clocked a turnover of ~' 32 Crores contributing to 5 per cent of thetotal turnover during FY 2016. Our success in the exports market is also supported by theturnaround witnessed by our European subsidiary during the year. We see this trend gettingstrengthened going forward.
Our strong OEM base has kept our business largely insulated from the developmentsresulting from Brexit. As a result I expect further gains from this region in the comingquarters. The United States is another market where we are moving to expand our presence.Our focus on further building our green product portfolio will also help us meet thegrowing global needs for eco-friendly products. With this background I am confident thatwe will be able to double our export turnover in the next financial year.
Within India apart from the Automotive sector Infrastructure Defence PowerLocomotive Aerospace and Healthcare are other areas where I see a lot of developmentshappening in the coming years. With our diversified approach backed by favourablegovernment initiatives such as Make in India' Smart Cities' and Ease ofDoing Business' we shall continue to make the most of the new wave of opportunities.
The merger of the casting business of Atlas Castalloy Limited which we announced lastyear is continuing to support our efforts to build further on our strengths. The mergerhas already enabled us to augment our capacities and to secure access to skilled manpower.It has also led to significant cost benefits as expenses on manpower and other inputshave come down despite an increase in sales. Customers-sharing is another key benefit ofthe merger leading to significant volume growth. The synergies built as a result of themerger are supporting us in the development of new parts as well. I am confident thatthese synergies will add greater impetus to our growth engine and help us deliver highervalue to our stakeholders.
People shall continue to remain a critical enabler to our growing success. Our robustsystems and processes are designed to nurture a people-centric culture. We also remaincontinuously focussed on promoting our North Star' philosophy which helps align theindividual aspirations of our employees to the organisational goals. Our HR philosophy isrooted in a value-centric approach which we have built into our DNA.
We continue to nurture our value system and strengthen our DNA to encompass the entirebusiness value chain including our people systems and processes. As we work towardshigher growth we remain focussed on imbibing the Alicon DNA into every facet of ourbusiness. We believe that this is vital for managing the scale of growth we are targetingboth in the near and long term.
On this note I take this opportunity to thank my colleagues on the Board and themanagement team for their commitment and far-sighted vision. Most importantly I wish tothank all members of the Alicon family from across various locations for following theNorth Star policy with such dedication and putting in their best efforts towards aligningtheir dreams with those of the Company.
Before I conclude I would also like to thank our business associates bankersshareholders and all stakeholders for their constant support and cooperation.
From where I see it the future looks bright and exciting and I am confident that withour collective efforts and our ability to think ahead we shall be more than ready toembrace it.