Dear Fellow Shareowners
During FY 2015-16 the global economy witnessed a spillover of the heightenedvolatility and uncertainty from earlier years. In addition to concerns in various largeeconomies like China Japan and some European nations the trends in commodities andcurrencies have exerted pressure on both developed economies and emerging markets. As aresult global growth rates continue to be sluggish.
Amid the backdrop of unpredictability in the global macro-economic landscape Indiaremains well placed to deliver improving growth on the back of favourable structural andcyclical shifts in its economy. The Central Government in its second year has begun toimplement initiatives aimed at re-shaping growth trends for the country. The focus onfinancial inclusion improved infrastructure revival of the rural economy and impetus onlocal manufacturing are important thrust areas that will benefit consumption patterns inIndia.
Since the start of the century the Kitchen appliances segment has witnessed anexponential growth trend. In the last two years however the sector has witnessed slowingsales due to a variety of factors such as sluggish consumer sentiment volatile rawmaterial prices uneven rainfall and floods in high potential market along withmoderation in retail footfalls impacting growth.
Amidst such a scenario your Company continued to deliver stable operational andfinancial progress during the period under review with revenue increasing by 72% and netincome improving by 337%. This was driven by optimization of various aspects of ourbusiness model right from widening the product portfolio with expansion of productcategories to a steady operational performance from branded sales on the back of animproved distribution network to successfully executing the largest-ever volumes ofgovernment order sales in our history with emphasis on quality of our products.
Net branded sales performance (excluding component/spares) during the quarter wasprimarily impacted by macro-factors such as lukewarm festival sales impact of naturaldisasters and slower than expected recovery in consumption which led to a growth of 5.3%in the segment during the year. The revenues from sales against Government Orders were atRs.461crore (gross) in FY16 as the order received in January 2015 was combined for twofinancial years and major part of execution of the order took place in FY16.
The year gone by also saw your Company continuing to make progress on importantstrategic initiatives which are essential for sustainable growth for the organization inthe years to come. Improving focus towards expanding market reach extending product linesand increasing focus towards brand building and brand development activities were few ofthe initiatives undertaken by the Company during the year.
Given the prospects for an improved monsoon pent-up demand in the system and thefoundation laid by the government for enhanced growth we are confident that consumersentiment will improve and we will see better growth in the years to come. We havelaunched several operational excellence initiatives to further enhance our performance. Wehave leveraged our R&D capabilities to facilitate our deep value offering. Ourproducts enjoy a mass-premium appeal across multiple categories ranging from low economymodels to high-end technology models.
We are also investing for the longer term and accelerating the pace of our businessefficiency to capitalize on the uptick in consumer sentiment and demand. We do believethat the multiple initiatives taken this year will result in benefits that will besustained and far-reaching in nature.
As we look ahead to greater prosperity in the years ahead I would like to express myappreciation to all our employees for their contribution towards the performance ofButterfly Gandhimathi Appliances. I would also like to extend my gratitude towards ourCustomers stakeholders and suppliers for their loyalty and trust in us. And to all ofour shareholders I would like to express my sincere appreciation for their continuedencouragement and support.
Butterfly Gandhimathi Appliances Ltd