A RIVER CUTS THROUGH ROCK NOT BECAUSE OF ITS POWER BUT BECAUSE OF ITSperseverance:
It Is our pleasure to presentthe Annual Report of your company for the financial year2017- 18.
It has been a transformative yearforthe Indian economy with the introduction of Goods& Services Tax (GST) arguably the biggest tax reform since Independence. It hasremoved regional boundaries and created a single national market that benefits industryand of course the consumer.
Implementation of BS IV norms and GST disrupted the demand in the industry due toinitialadjustments made by business partners which also affected our performance in the
first quarter. Though business sentiment and sales picked up during remaining threequarters full benefits of GST will be realized gradually. I feel it will be beneficialfor the organized trade and industry and bring about a betterfiscal discipline.
The medium & heavy commercial vehicle (MHCV) segment has a direct correlation withthe economic growth. While the growth in FY 2017-18 was driven by urban growth currentyear growth is likely to be driven by strong rural demand. There has been a focusedapproach by our government on rural spend spurred further by good monsoons which aregood signs for the MHCV segment This growth momentum will continue for the next 3 to 4years and thereafter will get further impetus from the scrappage norms for old vehiclesand the implementation of BS VI norms post April 2020. Our Research and Development(R&D) centre is working in close coordination with OEM customers on development ofnew clutches with a strong focus on Noise Vibration Harmonics (NVH). The company's forayinto the farm equipment (tractors) segment during the year is a strategic step in ouroverall business plans and will beconsolidated in the comingyears.
While the Indian operations have continued to spearhead the performance company's allthree subsidiaries have reported improved performance on the back of better capacityutilization streamlining of operations and market demand. We are confident that theircontribution in the overall performance in the future wiUcontinue to grow.
Our four growth drivers for the coming years will be OEMs Farm Segment Aftermarket& Exports and Lava Cast - thus we have managed to de-risk our portfolio from acyclical CV industry and managed to diversify with a high growth area of precisionmachined castings aswell.
This year we have introduced a fresh philosophy and guiding principle for our company -Efficient Engineering. In these two words we outline efficiency controls qualityR&D environment focus and customer focus. Our organization is working to re-inventitself as a nimble and growth oriented organization while we attain newer heights. Ourentire team is now fully geared towards providing growth through new products and marketswhile enhancing profitability on the back of better efficiencies and cost controls.
We at Setco strongly believe in socioeconomic empowerment in the surroundingcommunities as a natural extension of the company's growth and profits. Through the SetcoFoundation we support extensive multi-disciplinary interventions in maternal- infanthealth child health & nutrition early childhood development special needs &disability support education adolescent outreach and women's empowerment
We believe that only well-equipped people and their collective capabilities can help usachieve sustainable growth. We continue to invest in developing our team to enhance theirskills and adapt best-in-industry practices and have introduced an industry leading careerdevelopment program STYLE (Setco Team's Young Leaders Excellence) Program.
Finally we would like to extend our gratitude to all our stakeholders includingcustomers suppliers lenders and employees and shareholders for their unstinted support.We are committed towards driving value for alL Led by values and a drive for excellencewe will also endeavour to achieve the milestone of makingyour company clock Rs. 1000 crorein revenues by 2020.
Chairman & Managing Director.