It gives me great pleasure to reach out to all of you through this Annual Report.
FY17 was a crucial year for us wherein we spent bulk of our effort towards makingstructural changes in our sales force and designing systems and processes to ensure asustainable growth going forward.
Inspite of significant external factors such as demonetization and a general economicslowdown the company has been able to maintain its bottom line and has posted a modestsales growth.
New product development was the key driver for the company last year. We were able tocapitalize on our in-house design capability and launch market relevant products at theright price points. We are also looking to partner with global design firms to enhance ourdesign capabilities and launch cutting edgedesigns in the Indian market.
Our initiation of end-to-end distributor and retailer programs to improve engagementlevels is bearing fruit. The distribution engagement program has delivered incremental andsustainable benefits to Relaxo while ensuring a healthy relationship with our channelpartners. Our retailer based loyalty program has helped in establishing direct connectwith retailers and reward their efforts in promoting Relaxo brand.
We are continuously expanding our footprint in India and our retail stores haveincreased to 270 as on 31st March 2017. We put in a lot of efforts last year instrengthening the backend retail infrastructure by improving inventory control andbuilding a flexible supply chain.
I believe these efforts will go a long way in scaling up our retail business in thefuture.
We continue to take steps towards manufacturing excellence across our production units.We have been improving productivity and reducing manufacturing costs year-on-year withthe help of world class manufacturing concepts like Lean Manufacturing and MOST. Last yearwas no exception wherein we were able to manage our manufacturing expenses extremelywell while maintaining our high standards of quality and manpower engagement.
Trust in the brand is essential for its growth and we have been investing heavily toensure this objective is met. Last year we engaged Shahid Kapoor & Shruti Haasan asbrand ambassadors for Flite in addition to Salman Khan &Akshay Kumar who are alreadyendorsing Bahamas and Spa rx brands respectively. During the year we revamped the"Relaxo" logo and revamped the company's website in order to target the young andmodern consumer.
Under the goods and services tax (GST) regime footwears which are priced upto Rs 500per unitwill be taxed at 5% and footwears above Rs 500 per unit would be taxed at 18%. Atpresent India's footwear industry is quite fragmented with >60% belonging to theunorganised sector post GST will result in consolidation of small footwear players.However with GST implementation and increasing brand consciousness among Indianconsumers the share of organised players is going to increase. Hence Your Company isplaced at a favourable position to take advantage of the changing consumer trends in theIndian markets.
We believe modern trade and E-commerce will continue to be the growth engines of thefuture and we are well placed to capitalise it. Our online shopping portalwww.shopatrelaxo.com is faring much better and delivering higher conversions thanks toour dedicated focus.
We value our people too and have been strengthening their bond with us through longterm incentive plans like ESORs as well as providing them with periodic trainings.
At last I would like to thank all our stakeholders- customers business partnersBoard of Directors bankers and all our employees for believing in our Company's valuesand supporting us throughout our journey. I sincerely thank all of you and am pleased toshare the success that Relaxo has achieved during the last year.
With Best Regards Ramesh Kumar Dua