I have great pleasure in sharing with you the details of the continued winning momentumof your company at a time when the overall industry volume was static. Demonetization andimplementation of BS IV emission norms had their dampening effects in second half of FY2016-17. Our continuous thrust on developing new market by various productive measures hashelped the company to maintain its growth trend. The credit goes to vibrant employees formaintaining their enthusiasm which had taken proactive measures in developing newerproduct and markets areas and were responding admirably to the changes in the businessenvironment. We are grateful to our customers as well who have provided us additionalbusiness opportunities.
Global economy stagnated in 2016 with GDP growth of 3.1% as per the latest IMFestimates. Economic activity in advanced economies eased moderately compared to theprevious year with sluggish performance of the US being the major contributor. Meanwhileemerging economies performed relatively better.
The good thing is that the modest pick-up in global economic activity which began inthe second half of 2016 is gaining momentum this year. Overall growth in advancedeconomies is projected to come in at 2% in 2017. The developing world is expected to growat a healthy 4.5% in 2017 with the major support coming from recovery in Russia and Brazilcoupled with resilient India and to some extent China. Nonetheless rising protectionistpolicies oil price dynamics & geo-political tensions represent the downside risks togrowth outlook.
Against this backdrop India's Gross Value Added (GVA) growth which is expected toexpand by 6.7% in FY 2017 is set to increase to around 7.4% in FY 2018 (RBI estimates).However with faster pace of remonetisation and forecast of normal monsoon by the IndianMeteorological Department economic activity is going to further recover in the ongoingfiscal.
Apart from this land mark initiative of GST implementation w.e.f. 1.7.2017 shallboost overall economic situation throughout the industrial segment in a big way. Inparticular automotive segment is set to grow at a fast pace thanks to positive sentimentcarved out by the reduced taxation.
The Financial year 2016-17 was closed with a mixed note. Your over all income in the FY2016-17 was Rs.116.08 Crores as compared to Rs. 118.15 Crores in the previous year (net ofexcise duty). The Profit after Tax was Rs. 447.00 lacs as compared to Rs. 370.15 lacs inthe previous year thus improving our profitability by 22% as compared to previous year.
EMERGING OPPORTUNITIES :
As widely reported GST is perceived as the most wide-ranging tax reorganization andtargets to make India into "One Nation One Tax One Market". The structureproposed under the GST offers an ideal opportunity for organization to re-engineer theirexisting supply chain networks to reduce inefficiencies. With its comprehensive integratedservice portfolio RACL is distinctly positioned to be benefitted by the consequent supplychain realignment.
RACL has taken early lead by entering into Aerospace & Defence sector underGovernment of India "Make-in- India" initiative which shall definitely enrichthe performance of your company in the future.
Off-late there have been many initiatives emerging throughout the globe on E-mobilitysolution. RACL has been able to engrave its foot print at the initial stage itself. Yourcompany has already established business relations with a leading E-mobility solutionprovider within India and in active dialogue with many global customers being part ofsupplier for Gears for Electrical vehicle.
OUR BUSINESS OPERATIONS AND TECHNOLOGY STRATEGIES:
Looking ahead your company anticipates many developments in the economic and businessenvironment some of which are local phenomena and some triggered by global trends. IndianEconomy is on the threshold of the next phase of growth through government sponsored"Make-in-India" programmes and other investment- led strategies. Concurrentlythe business environment in India is expected to undergo a radical transformation with thebig push to build quality infrastructure in roads ports water ways airways andrailways nudging the logistics operations simpler and seamless. In the medium term wecan expect acceleration of fleet renewals road transport becoming more efficientregulation such as for fully built vehicles and norms in place to stop over loading allof which should augur well for the domestic commercial vehicle industry. Your company iswell equipped to capture the upsides owing to these developments.
BUILDING SUSTAINABLE COMMUNITIES
Your company has a structured framework for corporate governance. Independent directorsof the company are renowned professionals in their respective fields. With strong focus oncompliance in line with laws and regulations they have guided the management indecision-making for ensuring efficiency of operations.
All things considered I believe your company has delivered another year ofsatisfactory operational and financial performance despite the odds. The bar is now seteven higher. I am confident that with the growth strategies and plans in place and ablysupported by a determined and passionate team your company shall continue to excel in thecoming years.
I thank you all for the confidence you have continued to maintain in the company Iwould like to acknowledge the valuable support and contribution of our extended family ofcustomers dealers suppliers share holders Bankers and all of our business partners.
Chairman & Managing Director