The year gone by presented many challenges and we had to work hard to overcome these. We however remained firm and consistent in our business approach. The economic situation was sluggish and there was no volume growth in the market.
We follow the best practices internally and that is the reason we could easily overcome the challenges that demonetization presented. We did not face any setbacks and could easily overcome the situation despite a majority of our revenues comprising of small billings which was possible only because of our compliant organizational culture. Demonetization however affected the passenger traffic in the latter half of the last year. There is a lot of hue and cry over GST. Its implementation is imminent and I foresee that immediately upon such implementation there could be a considerable confusion and chaos in the markets. I opine that businesses would need to wait for a while to actually see the perceived benefits of GST becoming a reality. A lot depends on the sincerity and approach of the concerned regulators in implementing and monitoring it. In the long run though the same would definitely benefit the organized businesses.
The year gone by saw a drop in the profitability of our Company. The same was mainly attributable to the fuel price increase and the unhealthy competition faced by us in the passenger bus business. Efforts are on internally to identify sustainable supply sources for bio-diesel. We have developed an adequate in house mechanism to pass the fuel price fluctuations which would henceforth be on a day to day basis. I also do not foresee the competition in the passenger bus division to sustain in the long run and we have initiated remedial measures to ensure that the performance of the said division does not deteriorate any further.
On the capex front, we would continue to add to our fleet and infrastructure with a long term perspective. We are geared up for the GST implementation and would await the stabilization of the GST regime to suitably direct our business growth strategy.
Lastly, I wish to place on record my sincere appreciation of all our employees at all levels for their wholehearted dedication and efforts. I also thank all the stakeholders - Investors, Customers, Suppliers, Bankers, Government authorities, Regulators and the management team including the Co-Directors on the Board for their continued association with VRL.
I look forward to a bright future ahead for the Company.
DR. VIJAY SANKESHWAR
CHAIRMAN & MANAGING DIRECTOR