The Financial Year 2016-17 has been a year of consolidation and bringing back theeconomy and businesses on growth track. India's GDP grew at 7.1% in FY17 witnessing amarginally lower growth as compared to 7.6% in FY16 due to demonetization of highercurrency in the month of November by Indian government. However India continues to be oneof the fastest growing economies overtaking China.
To strengthen the economy and augment the ease of doing business the variousinitiatives such as bankruptcy law and implementation of GST have been taken by theGovernment of India. The central government's major focus on the development ofinfrastructure and rural economy has also been an added advantage. This has led to atremendous growth in demand for construction equipments and tractors. Better monsoon in2016 has also added fuel due to which the tractors sales has increased by 18% as comparedto the previous year.
Sharing few highlights of the FY17 business the turnover of the company grewmarginally during FY17 mainly due to higher offtake from domestic OEMs but was partiallyoffset by the impact of demonetization on Automotive Components segment. The major revenuecontributor i.e. gears business grew by 8% in FY17. EBITDA in FY17 decreased by 6.8% dueto incremental VRS of ' 1.34 Crores and exchange gain of ' 1.61 Crores in FY16. Thecompany has incurred a net loss of ' 1.26 Crores for the year ended 31 March 2017vis-a-vis net profit of ' 0.24 Crores in the corresponding previous year.
This year efficiency improvement was our main focus area for improving the productionquality. Thus we have initiated many de-bottlenecking processes at all its plants whichhas released additional capacity.
To further strengthen our market position in this high margin Bevel Segment we arefurther strengthening our capabilities with addition of some state-of-the-art machinerysuch as C30 Dry Cutting Machine Viper 500 Grinding Machine and P40 Gear MeasuringMachine. These high-end machines will help us in manufacturing new-age products while alsoreducing the delivery time and variance. We have also relocated some
critical machinery from our Mumbra unit to Faridabad and Lonand units. This will helpthe Company in quality enhancement better turnaround reduce the manpower cost and servethe customers in a better way.
We have been able to increase the benchmark in terms of efficiency and quality in theplants due to the implementation of LEAN manufacturing approach. Various initiatives suchas total quality management safety audit Kaizen periodical machine health check upmachine risk assessment audit has increased efficiency and enhanced savings at plantlevel. The result can be seen through the increase in number of accident free days in theplant.
Our Customer base has been continuously increasing and we have been able to strengthenour market positions. Our thrust on developing next generation products having acompetitive edge to our customers. We have developed several products for our domestic andglobal clients which have received good acceptance with more orders coming in the nearfuture.
At Bharat Gears we also value the contribution of Human Capital in the growthtrajectory of the Company. We follow a structured approach for the career progression withan adequate blend of on-job training and mindfulness on work-life balance. This helps usto access attract train and retain best of talent across locations and functions.
We are committed to continue with our operational excellence journey in the comingfinancial year. We will take various initiatives at strategic and ground level to continuewith the same.
I would like to take this opportunity to thank to our shareholders partnersemployees customers and other stakeholders for their firm belief in the Company.
|Surinder P. Kanwar |
Chairman & Managing Director