The financial year 2011-12 was marked by challenges in both, the
domestic as well as the global economy. The challenges of high fiscal
deficit, sticky inflation and high fuel prices appear to have impacted
domestic growth. On the global front,Euro Zone sovereign debt default
concern and uncertainty overgrowth in USA loom large and resultantly
the macroeconomic scenario remains uncertain.
Notwithstanding the challenges, the Indian economy is expected to grow
by 6.9 per cent in financial year 2012-13 as per the World Bank. For
the longer term, however they have pegged growth at 7.2 per cent and
7.4 per cent in fiscal years 2013-14 and 2014-15, respectively in the
report titled ''Global Economic Prospects''.
The Automobile sector in India in 2012-13 is estimated to grow by 10-12
per cent as per industry body Society of Indian Automotive
Manufacturers (SIAM). The growth is likely to be fuelled by Passenger
Cars and the fast growing Multi Utility Vehicle (MUVs) segment on the
basis of supportive business environment, rising disposable incomes and
The Indian Auto Components Industry a sunrise industry, currently
valued at USD 30 billion is estimated to grow at USD 100 billion by
2020 and derives its growth impetus from the growing Automobile
Industry. This translates into a CAGR growth of over 15 per cent as per
Ikon Marketing Consultants. Further, Indian share in world auto
components is estimated to grow over 3 per cent by 2015-16 against a
meagre 0.4 per cent in 2003-04.
During the year, your Company continued to focus on innovation which we
believe will pave the way for long term growth despite near term pains.
Your Company, completed the amalgamation of business activities with
its subsidiaries Nirmiti Autocomponents Pvt. Ltd. and Western Pressings
Ltd. and are extremely confident of scaling your Company''s operational
performance. Visible signs of this have already been reflected in your
Company''s overall financial performance during the year.
On a consolidated basis your Company recorded Net Sales of Rs.7,483.5
million, a growth of 14 per cent while bottom-line increased by 45 per
cent toRs.397 million. The improved contribution to the topline came in
from new products added and also addition of new clients and increased
order booking from existing clients.
Our industry positioning of being the most preferred component maker
for International and Domestic OEMs has aided our efforts. Your Company
has been able to expand its client base and improve its order bookings
from existing clients in 2012 fiscal.
During the year, due to change in accounting policies the inventories
increased. However, the increase in finance costs have been in line
with increased business activities and an overall high interest rate
scenario in the economy.
Further, the Industrial Promotion Subsidy of Rs.204 million received
during the year as part of the Mega Project Status awarded to the
Chakan Plant by the Government of Maharashtra has improved your
Company''s bottomline performance. The Mega Project status was awarded
for providing minimum employment to 1,000 people and also undertaking
investments of approximately Rs.2,000 million towards regional
I am glad to inform you that the Board of Directors has recommended a
dividend of 40 per cent for FY 2012 as compared to 30 per cent in FY
Moving Ahead aided by Innovation
Your Company''s in-house designing team has introduced a number of new
products during the year. The Adjustable & Collapsible Pedal Assembly,
High Deck Load Body, Park Brake Assembly and Jack Assembly are a result
of our focus on driving growth through innovation,thus exemplifying the
value engineering expertise of our company.
While, most of these products have been tested and approved by leading
international and domestic OEMs - Volkswagen, Daimler India, Ashok
Leyland - Nissan, Asia Motor Works, Mahindra Navistar and Tata Motors,
your Company is now set to tap the incremental growth opportunities
arising from them.
Further, during the year,your Company earned recognition for its
in-house Designing & Engineering team from Volkswagen and General
Motors, global automakers to provide cost efficient pedal assemblies
and brake assemblies.
During the previous year your Company had proposed setting up a
manufacturing plant at Dharwad in Southern India, to cater to the
growing needs of Domestic and International OEMs and particularly for
the IRIS and ZIP models manufactured by Tata Motors. I am pleased to
inform you that not only is work at the said plant site well underway,
but also that your Company has started supplying components from a
rented shed in Uttarakhand plant given the rising demand from our
Tapping Opportunities through Innovation
While opportunities are abound in the long run, your Company would
continue to focus on product and service innovation and improvement.
The testimony to this is the overwhelming response received from OEMs
for the beta version of Meshwork Morpher Pro V Software developed
by your Company''s Associate company. This application helps to reduce
overall cost and time taken for product development and testing. Your
Company is therefore hopeful and optimistic of offering added value
products to its existing and prospective clients by offering this
product and thereby enhancing its revenue streams during FY 2013.
The recognition of your Company''s value engineering expertise by
International OEMs like General Motors, Volkswagen, Daimler, Ashok
Leyland - Nissan, Asia Motor Works, Tata Motors and Mahindra Navistar
continues to propel your Company''s growth, by enabling the development
of newer, high performance, value added and low cost products in your
Company''s portfolio. This will help us not only improve your Company''s
business performance but also strengthen your Company''s relationships
with the existing as well as prospective clients.
Your Company plans to continue investing in green field and brown field
expansion projects to service the growing demand of OEMs. Your Company
is therefore committed to a long-term and a balanced strategy of
profitable growth and strong returns. Further, with roll out of Tata
NANO from Sanand, Gujarat your Company is planning to set up its
manufacturing base in close proximity to OEMs and at an opportune time
may expand its operations.
Though I am optimistic of your Company''s performance over the longer
term, a cautious approach still needs to be maintained. Keeping in view
the ongoing global and domestic environment, possibility of facing an
unexpected challenge in the near future cannot be ruled out.
However, your Company''s untiring efforts of adhering to global quality
standards, enhancing production efficiency, upgrading to fast changing
requirements of OEMs, customization of products & solutions, and a
strong focus on product innovation and improvisation have yielded an
overall improvement in performance.
Vote of Thanks
I extend my deepest thanks to all those who have helped us achieve
continued success and who will remain the vital forces in shaping our
history—our employees, our customers, our suppliers, our business
partners, our bankers and our stockholders. I look forward to the
opportunities ahead of us as your Company continues to earn your trust,
your confidence and your pride. I am also grateful to our Management
Team for its relentless efforts to redefine our growth strategy and to
the Board of Directors for their continuing guidance. We look forward
to continued success and profitable growth.