I am pleased to be connecting with you in the matter of your Company's performance andprospect relating to yet another year.
The transport network is often called as the lifeline and arteries of modern society.Good transport network and logistics is crucial for sustained economic growth anddevelopment of any nation. Transport network is necessary for connecting villages withtowns markets industrial & educational hubs and in bringing together remote &developing regions closer to one another.
Recently in April 2017 NITI Aayog released a three-year action agenda setting outIndia's development strategy. Infrastructure is a key component of the action plan whichis for the period 2017-18 to 2019-20. For infrastructure the agenda focuses on targetsfor the next three years as well as the possible action to be taken by the Central and theState Governments to achieve these targets. The action plan has focused quite extensivelyon the maintenance aspects of the road sector. The allocation towards capital expenditurefor the construction and maintenance of roads is proposed to be increased from Rs. 310billion at present to about 860 billion by 2019-20. By 2020 the Central Government aimsto connect all unconnected villages with all-weather roads under the Pradhan Mantri GramSadak Yojana.
In the area of road safety the strengthening of rules governed by the Motor Vehicles(Amendment Bill) 2016 is welcomed. However the creation of road safety boards toeffectively set and enforced rule is important.
The plan is certainly a sound one as it is wide ranging in its scope and highlightssome of the important policy loopholes which requires urgent attention. For the country toreturn to its 8% Growth trajectory in the next 2-3 years speedy implementation of thisstep is not just a choice but a necessity especially if we are to close theinfrastructure deficit i.e. constraining economic growth.
As the world is waking up to the harsh realities of the climate change radicalpolicies are being formulated. The situation in India is no different. After thecommitment made at the Conference of Parties (COP) in Paris in 2015 India is takingstrong measures to cut emissions and reduce the carbon footprint of various sources. WithApril 1 2017 marking the mandatory adoption of the Bharat Stage(BS) IV emissionnorms throughout the country (many parts had these in place much earlier) the Governmentis already working towards the next milestone the transition from BS-IV to BS VI emission norm by 2020 skipping the BS-V level.
We are conscious of the role that Automobile Industry play in developing India'sinfrastructure and the important part that ACGL will have to play in this development. Weare optimistic about the Government of India's focus on greater digitization andformalisation of the economy and such other initiatives as mentioned earlier as these areenablers for strong and sustainable growth.
I am pleased to share with you the commendable work that the management has doneduring this volatile period in a structured manner by utilizing the resources optimally.This has been an exciting year for ACGL and we have delivered a strong financial andoperational performance. We continued to focus on cost optimization and productivityenhancement while also benefiting from the recovery in bus markets during 2016-17.Together these factors translated into strong Total Revenue of Rs.475 Crores reflectinga growth of 12% over the previous financial year. The PBT is Rs.32.41 Crores compared toRs.25.45 Crores in the preceding financial year. The Company has surpassed its own recordof highest number of buses manufactured in a year - 4960 no. in FY 2015-16 by registeringthe next record of 5925 no of buses manufactured in FY 2016-17. I am pleased to mentionthat your Board of Directors have also recommended the declaration of an all-time highdividend for FY 2016-17 for your consideration.
CSR is fundamentally an inspirational exercise and it is difficult to legislateaspirations. In April 2014 India became the only country to fix the quantum for CorporateSocial Responsibility by law. Indian companies need to go beyond traditional CSR and catchup with the emerging needs of the society. Considering this need of the hour your Companyhas been making organized and structured efforts targeting new social priorities such assanitation environment education women empowerment gender parity and skill enhancementat the grass roots level.
Today individuals and businesses need to embrace thought leadership-which is aboutcoming up with new ways of thinking and reinventing as a strategy for growth. Furthermorewe need to fortify our thinking by providing cutting edge offerings that will distinguishus from the competition while working on counter-intuitive perspective new valuegenerating processes and operational practices that accelerate the transition from idea toreality. The ability to make connections that others cannot see creates new worlds ofpossibility. As a much-needed strategy your Company needs to focus on the retailmarketing and I am eager to see the results of our efforts in this direction.
We are excited about the opportunities in FY 2017-18 and beyond. We concluded FY2016-17 on a strong note delivering on our strategic priorities and generating positivemomentum across the board. We continue to be guided by our mission strong ethicsprinciples of humility transparency respect and continuous learning and adaptability.The Board believes that ACGL is certainly on a growth path and is prepared to dischargeits performance in fulfilling the aspiration and expectations of its stakeholders.
There is visible growth across all sectors of the economy which bodes very well forthe Automobile sector and especially for ACGL's operating plan. We are encouraged byreforms including the Goods and Services Tax (GST) initiatives to develop infrastructureand focus on providing affordable housing. These are all transformative steps designed tostrengthen the country from within and unleash its full economic potential.
I am thankful to the board members for their continued sound guidance and contributionin making ACGL stronger and more efficient with each year that passes. During the year MrPFX Dlima and Mr Abhijit Gajendragadkar have separated from the services of the Board. Wetruly acknowledge their services and the contribution made in the growth of the Company. Iam happy to introduce you to our new Directors-Mr Yatin Kakodkar and Mr Abhay Bawale whohave wide and varied industry experience which would be an asset to the functioning of theBoard. I would like to congratulate our committed and hardworking people whose innovationand initiatives have contributed to the Company's growth and sustainability. We willcontinue to seek our shareholders' participation and support as we walk further on ourjourney to explore more fulfilling and enriching successes. I thank our principalshareholder on the Tata Group the Government of Goa our suppliers and commercialpartners for their continued support during the year.
I am confident about the future we are contemplating for ACGL.
June 29 2017