I am pleased to see what we have accomplished at a time when our industry and economyhad been going through volatility and uncertainties. Its a great pleasure to connectwith you again this year with our Companys Annual Report that talks about newventures and milestones that our enterprise has achieved and its future growth prospects.Minda Corporation has laid a robust foundation for very bright prospects and globalizedfuture on the back of a good mix of businesses and technological foray optimal operationof scale leading market positions across product segments and strong customerrelationships.
For the automobile industry the financial year 2016-17 has been a mixed bag. While theglobal auto market remained largely muted India managed to project signs of steadyrecovery. The Make in India initiative has acted as a catalyst for the overalleconomy in India. It is being witnessed that the foreign companies are establishing theirmanufacturing facilities in India. Besides this the move is also expected to furtherimprove the purchasing power of an average Indian consumer and will have a ripple effecton the automotive sector. One of the latest developments in India is the implementation ofGoods and Services Tax. We believe GST should have a neutral to positive impact on theoverall auto and auto ancillary industry depending upon various end market segments. Theshift of the market from unorganized sector to organized sector would actually be positivefor most of the auto component manufacturers. Amidst the increasing concerns over therising pollution levels in the country the recent announcement for implementation of thestricter emission norms - Bharat Stage (BS) VI in 2020 would require a significantinvestment in technology upgradation.
In the financial year the demonetization move by the Government impacted the autoindustry especially in the months of November and December 2016. Demonetization causedpostponement and scrapping of purchases of automobiles which also led to increasedinventories. However towards the end of the financial year most of the segments haveshown growth which means the impact of demonetization drive is far behind. We stronglybelieve that the long term growth prospects of the sector remains intact primarily on theback of the positive impact of the Seventh Pay Commission emission norms (BS VI by 2020)and vehicle scrappage policy.
As far as Minda Corporation is concerned its encouraging to see how it hastransformed itself over decades from being a low-cost supplier to a key auto componentspartner for OEMs. Today we take pride in becoming one of the preferred suppliers of highvalue and critical automobile components to global OEMs.
The financial year 2016-17 has been quite an eventful journey for us. Our commitment togenerating sustainable organic growth by winning new business orders and retainingexisting business remains intact. I would like to highlight key initiatives of FY 2016-17.We commenced the Spark Minda Technical Centre (SMIT) in Pune. This Centre will serve asthe R&D backbone with contemporary infrastructure for automotive electronics andmechatronics. We have also set up a new green field plant at Mexico. This new plant willmanufacture interior components such as glove box I panel parts etc for the VolkswagenGroup. Our Group is also setting up the 3rd Die Casting Plant in Pune which is expected tobe operational in FY2017-18. We continue to expand our capabilities through both organicand inorganic growth. We acquired Panalfa Autoelektrik during this fiscal year. Furtherthe maiden JV in China would further help us in expanding our international footprint andcater the global OEM customers.
We are anticipating good growth in the coming quarters across businesses. We areconfident that our growth trajectory will help in securing new businesses and clients inthe coming years which will be in tandem with our technological innovation initiatives.
I am very pleased to announce that we have declared a total dividend of 25% for theyear. Creating shareholder value is one of the key priorities of our group. I firmlybelieve that our long-term strategy will strengthen our cash flow generation and supportour commitment to deliver a growing dividend.
I would also like to thank all our employees for their continued hardwork dedicationand support in helping us to achieve our shared goals. We regard our employees as the realforce behind our success story and we firmly believe in continuously striving towardsexcellence. We encourage our employees to inculcate and improve leadership qualities inthem for both individual and organizational growth.
I express my gratitude to all the stakeholders for their relentless contribution inbuilding the organization and making it a success. It is my great privilege to lead MindaCorporation from the front and I am confident that we have the right people productsservices and strategies to realize our bold vision and bright future.
Chairman & Group CEO