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 Dear Shareholders,
The Financial Year 2016-17 has been a year of
consolidation and bringing back the economy and
businesses on growth track. India's GDP grew at
7.1% in FY17, witnessing a marginally lower growth as
compared to 7.6% in FY16 due to demonetization of
higher currency in the month of November by Indian
government. However, India continues to be one of the
fastest growing economies overtaking China.
To strengthen the economy and augment the ease
of doing business, the various initiatives such as
bankruptcy law and implementation of GST have
been taken by the Government of India. The central
government's major focus on the development of
infrastructure and rural economy has also been an
added advantage. This has led to a tremendous
growth in demand for construction equipments and
tractors. Better monsoon in 2016 has also added fuel,
due to which the tractors sales has increased by 18%
as compared to the previous year.
Sharing few highlights of the FY17 business, the
turnover of the company grew marginally during FY17
mainly due to higher offtake from domestic OEMs but
was partially offset by the impact of demonetization
on Automotive Components segment. The major
revenue contributor i.e. gears business grew by 8%
in FY17. EBITDA in FY17 decreased by 6.8% due to
incremental VRS of Rs. 1.34 Crores and exchange gain
of Rs. 1.61 Crores in FY16. The company has incurred
a net loss of Rs. 1.26 Crores for the year ended 31
March 2017 vis-a-vis net profit of Rs. 0.24 Crores in the
corresponding previous year.
This year, efficiency improvement was our main focus
area for improving the production quality. Thus, we
have initiated many de-bottlenecking processes at
all its plants which has released additional capacity.
To further strengthen our market position in this high
margin Bevel Segment, we are further strengthening
our capabilities with addition of some state-of-the-art
machinery such as C30 Dry Cutting Machine, Viper 500
Grinding Machine and P40 Gear Measuring Machine.
These high-end machines will help us in manufacturing
new-age products while also reducing the delivery
time and variance. We have also relocated some
critical machinery from our Mumbra unit to Faridabad
and Lonand units. This will help the Company in quality
enhancement, better turnaround, reduce the manpower
cost and serve the customers in a better way.
We have been able to increase the benchmark in
terms of efficiency and quality in the plants due to the
implementation of LEAN manufacturing approach.
Various initiatives such as total quality management,
safety audit, Kaizen, periodical machine health check up,
machine risk assessment audit has increased efficiency
and enhanced savings at plant level. The result can be
seen through the increase in number of accident free
days in the plant.
Our Customer base has been continuously increasing
and we have been able to strengthen our market
positions. Our thrust on developing next generation
products having a competitive edge to our customers.
We have developed several products for our domestic
and global clients which have received good acceptance
with more orders coming in the near future.
At Bharat Gears, we also value the contribution
of Human Capital in the growth trajectory of the
Company. We follow a structured approach for the
career progression with an adequate blend of on-job
training and mindfulness on work-life balance. This
helps us to access, attract, train and retain best of
talent across locations and functions.
We are committed to continue with our operational
excellence journey in the coming financial year. We will
take various initiatives at strategic and ground level to
continue with the same.
I would like to take this opportunity to thank to our
shareholders, partners, employees, customers and
other stakeholders for their firm belief in the Company.
Surinder P. Kanwar
Chairman & Managing Director |
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