Welcome to the 95th Annual General Meeting of your Company. Ingersoll Randsustained another exceptional year of delivering value to its people its customers andthe country large sweeping changes in the world economy notwithstanding.
2016 was a tumultuous year with landmark economic and political developments.
Globally Brexit set the turbulent tone in the first half of 2016 followed by China'sslowdown low oil prices and overall weakening in the economies of Japan U.S. and Europe.Encouraging signs indicate a positive outlook for the next year with the world GDPestimated to grow from 3.1 % in 2016 to 3.4% in 2017. However a majorchallenge to the world economy is the emerging trend of protectionism leading toincreasing retreat from globalization of goods services and people. These developmentscan have a widespread impact on exports from a number of emerging markets includingIndia.
In this scenario with an added demonetization India has stayed economically strongrising 3 places to become the sixth largest manufacturing country in the world. The Indianeconomy is expected to grow at 7.5% in the fiscal year 2017-18 vs. 7.1% in the previousyear. Its consistent rock-solid domestic demand fuels not only about 60% of the GDP butalso keeps it insured against global volatility.
The capital goods sector continued its sharp decline with production at a dismal lowestsince 2008. The industrial sector too showed a moderate decline. Eight core industriescomprising coal crude oil steel cement natural gas electricity fertilizers andrefinery products registered a combined growth of 4.9% during April-November of FY17compared to 2.5% growth during the same period in FY16. Production volume categoriescomprising steel refinery products cement and electricity registered a significant risewhile production of natural gas and crude oil declined during April-November 2016.
Thermal energy production registered a growth of 6.9% while nuclear and hydro powergeneration marginally contracted during HI FY17.
With the Confederation of Indian Industry (CM) business confidence index (BCI) at anall-time high of 64.1 during the quarter of January-March 2017 there is a palpableoptimism about the future economic activities added with the hope that government reformswill open up various investment opportunities for companies going forward.
2016 demonstrated yet again the strength of our strategy; enduring growth throughsustainability in all its forms - business social and environmental.
We have continued to build a more sustainable and thriving enterprise and are leadingthe way to long term value creation and positive societal impact within our industriesand building a legacy for the next century and beyond.
We grew steadily despite weak global economic conditions. Our endeavour to createmarkets "In India; For India; By India" continued its robust momentum.
The financial statements forming part of this annual report are the Company's firstfinancial statements prepared in accordance with Companies (Indian Accounting Standards)Rules 2015 (Ind AS). For the year ending March 31 2017 we recorded revenues of Rs.677.2 cr. from continuing operations which was 1.7% higher compared to that of previousfinancial year. Our profits after tax for the year ending March 31 2017 stood at Rs.76.07 cr. which was 24% higher compared to profit after tax of previous financial year.
We continue to deliver excellence to our customers and stakeholders through investmentsin our manufacturing facilities building stronger partnerships and in brand awarenessactivities that will positively impact our business.
Our Naroda transformation project was successfully completed this year with thecompletion of Phase-3 work and the completion of the new office building. The transformedfacilities were inaugurated in the presence of our global leadership team with awalkthrough of the shop floor and reviews of OEDP (Operational Excellence DeploymentPlan) MDI (Managing Daily Improvements) boards critical 3P journey and the BBS (BehaviorBased Safety) board.
Continuing our focus on creating stronger partnerships successful Channel Meets wereorganized in Delhi and Mumbai for Direct and Distribution channels. The events were a stepfurther to enable all our stakeholders to grow and win market share together in aprofitable manner. The theme for the event this year was 'Customer Management' that wasdeveloped around ways to strengthen our foundation by working together to develop marketstrategies to 'Retain' 'Recapture' and 'Acquire' customers.
As a result of the successful Channel Meets a Global Competency Learning Program waslaunched as a sales training program in order to provide our distribution network withsolid know-how on compressed air technology and Ingersoll Rand products.
As a step further towards building brand awareness and acquiring new customers weparticipated in multiple trade shows industry events and seminars covering importantindustries including Pharmaceuticals Petrochemical Plastics Packaging Textile andPrinting across multiple regions of Uttar Pradesh Haryana Andhra Pradesh Tirupur Delhiand Mumbai. Key products including Evolution Sierra SH75 aeration blower. Oil- freeCentac range amongst others were showcased to thousands of visitors leading to successfulorder bookings lead generation and brand awareness.
A progressive diverse and inclusive culture for the employees is one of the company'scornerstones.
We provide a truly comfortable and encouraging working environment across allparameters so that our employees are happily and fruitfully engaged.
The 2016 employee engagement index score is up from last year with 100% participation.The strongest areas of engagement; ethics values sustainability and safety; reflect thecompany's internal growth and is a strong enabler to the company's superior performance.
We are invested in growing our business by growing our people first. Career Progressour new integrated career management and rewards system is helping to meet that needwith a suite of career management resources. By encouraging and enhancing competenciesskills and experiences. Career Progress sets the path for a meaningful productive andsustained career growth and paves the way for sustainable leadership.
Bearing testimony to our 'Winning Culture' Ingersoll Rand was named as the '2017 -Number 1 Dream Company to Work For' in the manufacturing sector and also ranked 15thacross all industries at the Dream Company Awards organized by Times Ascent and World HRDCongress from amongst 750 companies. The company also collected other top awards incategories of Organization with Innovative HR Practices Award for Talent
Management Excellence in Learning & Development Diversity Impact Award and Awardfor Best Corporate Social Responsibility Practices. At Ingersoll Rand we work together towin together!
Making a Difference
The company strives towards inspiring nurturing and connecting with individuals andcommunities in its area of operations. Ingersoll Rand has positively affected over117759 lives in India. Continuing our compliance with the Companies Act 2013 we haveinitiated several projects to further Education Healthcare & Sanitation
Livelihood and Sustainability.
Our fight against malnutrition progresses further with continued support of the AkshayaPatra Foundation to aid the mid-day meal scheme in Government schools for 8183 children inBangalore and Naroda. Continuing our association with Agastya International Foundation wehave strengthened our fleet of three Mobile Science Labs. Fun engaging and interactivethese have been catalytic in raising awareness among disadvantaged children. Focussed onthe girl child the Ingersoll Rand Science Centre at Government Girls Senior SecondarySchool Jacubpura
Gurgaon provides stimulating science education through experience and practicalmentoring. The Mission Education Centre in Kolkata aids the education and co-curricularactivities of 150 children in the age group of 3 to 18 years from difficult circumstanceseconomically weaker families and socially disadvantaged communities.
We strongly believe in skilling the educated youth from weaker sections and empoweringthem to earn a meaningful livelihood. We have partnered with National Skill DevelopmentFund a special fund setup under the Ministry of Skill Development & Entrepreneurshipto provide gainful employment to close to 250 youth with at least 30% focus on femaleparticipation.
Partnering with Sulabh Foundation we take head on the crucial step to furthercommunity development with the provision of accessible sanitation facility to commutersand beneficiaries in the area.
At the heart of our community development initiatives are committed aware and engagedemployees who volunteer to work for these causes wholeheartedly.
In 2016 our employees engaged in 15 volunteering activities with 1220 hours ofemployee time through CSR engagement and also helped the launch of 5 new pioneeringprojects.
The new financial year poses the challenge of sustaining growth in a politically andeconomically volatile world. However growth in a number of emerging economies is expectedto recover in 2017. The Indian economy is slated to grow at a healthy 7.5% in the fiscalyear 2017-18. This along with India's improved global performance in manufacturing makesfor a reassuring future.
Ingersoll Rand moves ahead with a focussed commitment on sustaining growth through itsdifferentiated product portfolio and culture in-depth domain expertise providing greatservice to customers and creating value for our shareholders. We are committed tosustaining our leadership globally and in India for delivering top-tier financialperformance and creating enduring value.
Chairman and Managing Director