Global economy recovery is continuing but at a slowing and increasingly fragile pace.The slow pace of recovery is coupled with global market volatility upliftment of growthmomentum in the advanced economies and continuing headwinds for emerging market economiesand lower-income countries. Therefore as per IMF global growth is projeted to remainstrong in 2016 at 3.2% while in advanced and emerging market and developed economies at1.9% and 4.1% respectively.
Notwithstanding this cloudier picture of economic fundamentals across the worldeconomies softening of oil prices lower capital outflows from China and decisions bymajor central banks have all contributed to improved sentiment. These developments pointsto the projection that growth in the world economies will still be slightly higher from3.1% in 2015 to 3.2% in 2016.
Improvement of Domestic Economic Performance:
The Indian economy has performed exceptionally well and grown at a rate of 7.9% in Q4of 2015-16 reflecting the efforts of the Government to boost the economy. Impressivegrowth in manufacturing sector at 9.3 percent and industry at 7.4 percent for the year2015-16 was registered mainly on account of initiatives of the Government such as"Make in India" program and improvement in ease of doing business environment tomake India a global manufacturing hub. Further India is on the path of becoming the hubfor hi-tech manufacturing as global giants have already set up and are in the process ofsetting up more plants in India.
Indias external position appears robust as the current account deficit hasdeclined and is at comfortable levels; foreign exchange reserves have risen and FDIinflows have grown with the raidcal reform measures in FDI regime that is easing of FDIrules in various sectors viz. Animal Husbandry Broadcasting Civil Aviation DefencePharmaceutical and Single Brand Retail Trading the economy is expected to become the mostopen economy in the world for FDI inflows. As a result of prudent fiscal policies and thegovernments commitment to fiscal consolidation India is in a comfortable fiscalposition as the government has been able to contain its fiscal deficit at 3.99% of GDP.
Going ahead Indias economic growth is expected to enter high growth trajectoryand will continue to be driven by domestic consumption. With the revival of sentiment andpickup in industrial activity a recovery of private investment is expected to furtherstrengthen growth in the coming times.
Company Performance and Strategy:
I am pleased to inform you that the financial year 2015-16 was an encouraging year foryour company and your over all income has risen to Rs.118.15 crores in 2015-16 as comparedto Rs.107.72 Crores in the previous year (net of excise duty). The PBT and PAT was Rs.5.69Crores and Rs. 3.70 Crores respectively as compared to Rs. 4.98 crores and Rs.3.59 Croresin the previous year.
Your company will continue to explore opportunities for growth in the years ahead.Though there will be challenges on many fronts but I am confident that we will besuccessful in our endeavour to scale up operations so as to achieve long term sustenanceand growth.
We have a strong technical expertise as manufacturer of transmission gears shafts andprecision components. We are proud to share with you that we have established ourselves inthe field of sub assemblies and have been exporting critical sub assemblies like torquelimiter balancer shaft assemblies & drive axle sub assemblies to Two wheelermanufacturer acorss the globe.
The advantage of being sub assmblies supplier shall contiue in the coming years asvalue added products line which shall ensure the growth of business at further higherlevel in the segment . Strategically your company is focusing on leveraging on our strongtechnical core strength & bringing in continual improvement in operational efficiencyquality and customer focused approach. RACL Geartech is fully geared up to tap burgeoningopportunities in newer field of electric mobility Aerospace defence sector requiringhigh quality product line up.
In our journey towards achiving excellence I take the opportunity to express mysincere gratitude to the memebrs of the Board and financial institutions which were agreat source of strength enhancement & support.
The growth and success of a company depends primiarily on its people. I thank therespective teams acorss the company for their diligence and dedication and look forward toa continued commitment and greater levels of achievement.
I thank you dear shareholders for your continued support and confidence in thecompany.
Gursharan Singh Chairman & Managing Director