I have always believed that companies which successfully address and alleviate some ofthe most genuine pressures of a society and a nation with futuristic products andsolutions create enduring value. The era that we live in today is a testament of thisconviction.
By virtue of our engagement in the core sectors of the economy agricultureinfrastructure and construction and the railways our businesses make a uniquecontribution to the growth and development aspirations of the nation. In line with ourfocus on creating enduring value for the country we have converged our efforts oncreating an enterprise that is agile responsive dynamic and determined. Inessence future-ready.
The forecast of above-average and spatially-distributed monsoons in the current year isexpected to drive revival of farm incomes spur economic growth lower inflationarypressures and boost the overall rural demand across various consumption categories. Asoptimism sweeps across Indias vast agricultural landscape we are witnessing acertain perceptible degree of uniformity with the growing recognition of mechanisationamong the farmer community as the only way forward towards enhancing crop yields.
In no small measure is this revolution being fostered by educated and progressivefarmers who are aware of the cutting-edge global developments in agri-economics and arealso keen to leverage scientific best practices with a view to drive more crop per unit ofthe available land. They are increasingly looking at technology and mechanisation toenhance stability and derive risk-mitigated outcomes in a sector that is dependent on onecore anchor good monsoons. Besides with small agricultural land holdingsperipheral farmers also see technology as the emerging de-facto for crop transplantationand harvest especially in the face of risks emanating out of expensive labour or workershortages.
Relevantly so at Escorts we are bringing forth cutting-edge technology that enhancesagri-economics. Our world-class products help foster mechanisation across farmspositively impacting the lives at the grassroots. As a Company that is connected through avibrant social network with the agricultural ecosystem we nurture long-term relationshipswith our dealers and customers anchored on mutual trust sensitivity and respect.
At Escorts we also see the countrys infrastructure and construction industry atan attractive inflection point based on the Governments renewed focus on developingSmart Cities and other growth-stimulating infrastructure. This thrust can be amajor driver of economic transformation helping restore the growth momentum of ourconstruction equipment business that comprises a range of world-class efficiency-enhancingequipment.
The Indian Railways is poised to be a big investment driver with its own Five-Year Planthat envisages a massive capital outlay. This will inevitably throw up huge opportunitiesfor companies like ours that have demonstrated capabilities in cutting-edge andhighly-compliant ride-control products strong multi-year relationships and robust productdevelopment cycles.
To an attractively emerging macro-industry landscape we have brought ourcontinued signature focus on reinforcing the foundations of our organisation. Underliningour vision to achieve cost leadership we converged our various global-class engineeringprograms and practices under Project Shikhar that aspires to drive a three-pronged result reduce material costs build a lean and dynamic supplier base and moderateinventory in a bid to liberate working capital. Through our ongoing efforts during2015-16 we achieved robust cost economies that provide us with levers to further drawdown on our material and operational costs. We also sharpened our focus on productivitythat resulted in strategic manpower optimisation enabling us to right-size theorganisation. These initiatives are helping lower breakeven enabling momentum inprofitability accretion.
Your Company is also engaged with global experts and consultants to help us developprogressive systems and processes towards enhancing customer interaction with our brandsand capture value across the chain through lowering costs and boosting revenues.
With the Indian Governments focus on building human resource capacities andcapabilities reflected in its Skill India mission our Corporate Social Responsibilityinitiatives under the Escorts Skill Development Centre are actively contributing to skillsdevelopment and employment generation.
Our unwavering focus with the customer at the pivot robust intellectual poolextensive use of technology pan-India distribution channels and a comprehensive productsuite across divisions are some of the Companys key strengths that will enable us toremain at the forefront of growth.
Going into 2016-17 we will continue to strive to set higher benchmarks of performanceand strengthen our engagement with our stakeholders. We are future-ready to capitalise onthe opportunities emerging out of the India of tomorrow that will be very different fromthe India of today.
With my best wishes
Chairman and Managing Director