It is with a great deal of satisfaction and pride that we look back at the year goneby ending March 2017. We continued to do what we do best: deliver innovative Ride Controlsolutions to our customers and to drive the performance of your Company while ensuring afocus on sustainability.
In doing so we demonstrated resilience and strength to withstand not only marketpressures but also a difficult economic environment.
Our aspiration to be a world-class organization driven by innovation and integritycontinues to motivate us to build a sustainable business and to work closely with allstakeholders. This aspiration ignites our creativity energises our growth enables us todeliver to our customers and ultimately generates value for our shareholders.
The difficult global environment together with policy-induced slowdowns particularlydemonetisation proved to be a dampener for many businesses especially for those that aredriven by consumer spending and retail liquidity. The economic climate did not bring downGabriel India's determination; instead we made good progress towards
achieving our vision of being a leader in the market segments we serve by delivering acommendable performance. We absorbed the volatility in the market and delivered robustperformance.
The Indian economy grew by 7.1% in FY2017 while the production of vehicles by theIndian automobile sector grew by 5.4% for the same period. I am pleased to report that thesales of your Company grew by 6% from
' 14264.18 million in FY2016 to ' 15130.55 million in FY2017. This coupled with ouroperational excellence led to a 11.4% increase in EBITDA i.e. from ' 1293.07 million inFY2016 to ' 1440.15 million in FY2017. Profit Before Tax (PBT) increased from ' 954.93million in FY2016 to ' 1108.12 million in FY2017 an increase of 16%.
The growth in sales and profitability further boosted our confidence that the Companyis now even more Capable Scalable and Sustainable going into the future.
WE ARE CAPABLE
We have very good operational capability as evidenced by our performance track record.During the year we continued to fine-tune our manufacturing capabilities to not onlyimprove efficiency and productivity but to also meet the increasing quality demanded byour customers. The ANAND Group which includes your Company launched a major initiativeto renew and strengthen the "Quality Culture" across all operations andfunctions and is driving us on our Quality improvement journey.
We have the technical capability to meet the needs of our customers. We successfullylaunched new products in the Indian market including major customer launches in PassengerCar segment like S-Cross Vitara Brezza Ignis KUV1OO; in 2-Wheeler segment for ApriliaMojo Himalayan; and Linke Hofmann Busch (LHB) shock asbsorber for Indian Railways. Ourcapabilities are also reflected in the Technology Assistance Agreement (TAA) we signedwith Torre Parts and Components South Africa through which we will transfer our knowhowto develop and manufacture products for the South African market. This is in addition tothe technical services we already provide to Gabriel de-Colombia. Going forward we willfocus on new product development aligned with emerging technologies and stricterenvironmental norms with the objective of creating first-to-market products.
We have the capability to develop and manage enduring customer relationships.
We constantly strive to improve customer satisfaction and deepen our engagement withour customers. Our customers in turn demonstrate their appreciation through the awardsthey bestow on your Company. During the last year we were recognized by many customersincluding Toyota Kirloskar Suzuki Motorcycles Royal Enfield Honda Motorcycles &Scooters and UM Lohia Two Wheelers Pvt. Ltd. (UML). We will strive to remain the supplierof choice to our customers.
WE ARE SCALABLE
The reorganisation of your Company three years ago into profit centres also calledStrategic Business Units (SBUs) led to the strengthening of our presence across foursegments i.e. Passenger Cars
2 & 3-Wheelers Commercial Vehicles and Railways and Aftermarket and drove us tofocus on the needs and growth of these segments. This structure with each SBU led by aChief Operating Officer has proven to be stable and strong and can scale to meet marketdemands in each segment as required.
We have a strong presence with the major OEMs a strong Aftermarket network in Indiaand a wide reach for Exports into global markets. We entered into the Indian mopedssegment by leveraging our strong Aftermarket distribution network through theintroduction of products such as Wheel Rims and Tyres. We further expanded our presence inNorth America and Africa through Exports into new markets like Honduras Guatemala andKenya respectively. Going forward we will be able to scale our operations moreeffectively.
Your Company has a strong balance sheet. This combined with the successful trackrecord of managing major projects ensures scalability to invest in attractive growthopportunities.
WE ARE SUSTAINABLE
We have been focused on sustainability from all key perspectives - organizationenvironment communities and governance.
No organization is sustainable unless it provides a satisfactory place to work to allits employees. Your Company has a track record of investing in the development andwell-being of its people. This is reflected in its continuing to be one of India'sBest Companies to Work For' in 2017 as recognised by the Great Place to Work
India Institute a mark of great pride and one that maintains the recognition ofprevious years. We are conscious of the impact we have on our environment and communities.Whether it is increasing the energy efficiency of operations use of energy from renewablesources incorporation of environment friendly materials in operations or Corporate SocialResponsibility (CSR) projects in the communities where the operation facilities arelocated the focus has always been to ensure that the Company is a good corporate citizen.
As the Chairperson I can also attest that good governance through the variousCommittees of the Board supports the Company for long-term health and success.
TOWARDS A BRIGHTER FUTURE.
The Indian economy is expected to grow
in the range of 6.75%-7.5% in FY2018. A
major structural change is expected through the GST regulation. We expect robust growthin the domestic automotive industry as a result of the Central Government's impetus toincrease investment in road infrastructure and in the renewal of rural areas. TheGovernment's Make in India' programme encourages us to further strengthen ourexisting manufacturing footprint in India with the end objective of serving the globalmarket.
Overall the Indian auto components industry is projected to record a turnover of USD
200 billion by 2026 including exports of USD 70-80 billion as per the forecast byAutomobile Component Manufacturers Association (ACMA). We are working rigorously towardsplaying a pivotal role in this growth story. At Gabriel India we are committed to developand deliver innovative Ride Control solutions to our customers.
Our sustained performance not only reinforces our underlying strategy it also showsthe value of our people products and processes. I am grateful for the support extended byall our stakeholders particularly the shareholders in our journey.
I strongly believe that the Company is Capable Scalable and Sustainable and is wellpositioned to both face challenges and leverage opportunities. The wealth of experienceand key strategic guidance of the Board members has helped Gabriel India in itsperformance and governance. I also acknowledge the support of ANAND Group and itscorporate functions for their contribution towards Gabriel India. I am confident that thissupport will endure and that we will continue to work together in our endeavour to createvalue.
With my best wishes
Mrs. Anjali Singh
Chairperson Gabriel India Limited