When I wrote to you last year the world was in the middle of worst
global economic and financial crisis. Since then the global economic
scenario improved during the year 2009-10. The triad economies remained
stressed. The Chinese and Indian economies, led the world economic
recov- ery, grew by 11.9% and 7.2 % respectively.
The year gone by, exhibited significant stabiliza- tion in the global
economy and automobile sector as well, despite the global financial
crisis. Although the financial markets were volatile, mainly due to
uncertainty of the shape of the global recovery, the risks in the
global financial markets subsided for the most of the 2009-10. The new
structure and the related government-led financial packages, along with
market incentives helped the industry to survive this crisis.
In passenger vehicle including car segment, India witnessed growth of
25.57% by sale of 1,949,776 units in the year under review as compared
1,552,703 units last year in the domestic market. Similarly,
Commercial vehicles sales in the year gone by was 531,395 units, as
compared to 426,819 last year, registered a growth rate of 38.31% due
to faster execution of major infrastructure projects in the country.
The Two-wheeler industry, in India, has also achieved healthy sales of
10,511,415 units during the 2009-2010 as compared to 8,441,793 units in
2008-09 registering a growth of 24.51%. Low excise duties, low interest
rates and relatively higher disposable incomes pushed up the demand of
the two wheelers.
The export of commercial vehicles registered a moderate growth rate of
5.59% by sale of 45,007 units in the year under review as compare to
42,625 last year. However, two wheeler exports has exceptionally done
well and achieved the growth rate of 13.54% by sale of 1,140,184 units
in 2009-2010 as compared to 1,004,174 in 2008-09.
The export of cars this year was at 441,710 units as compared to
331,535 last year, registered a healthy growth of 33.23%.
Looking ahead, we see favorable prospects for the Indian economy. Our
strong domestic consump- tion and investment drivers will continue to
support healthy rates of growth. The stimulus package of the government
and the implementa- tion of the Sixth Pay Commission, which will
increase the purchasing power of public sector employee, should boost
the demand. We believe the economic recovery, some signs of which are
already visible, will gather momentum in the coming months and in the
due course see India returning to a high growth trajectory.
The Indian economy has been able to recover faster than its peers due
to the combined and timely efforts of the Government of India and
Reserve Bank of India. The Indian economy
successfully emerged out of the slow down and has posted a GDP growth
of 7.2% in 2009-10 with a future projection of 8.5% growth in 2010-11.
With a normal monsoon during the year, the Indian economy is expected
to return towards the higher growth path again with expected GDP growth
of 8.5% and moderate food inflation which has been a cause of worry
during the previ- ous year.
The policies of Government of India are encourag- ing manufacturing
sector as in India 15% of the GDP is contributed by Automobile Industry
whereas in China automobile industry contributes 42% of GDP. Hence
going forward, the govern- ment expects that by 2020 contribution of
Auto- mobile Industry to the India GDP should be up to 20%.
Various studies forecast a healthy future of the domestic automobile
sector. They depict substan- tial improvement in the automobile
products and markets in the coming years.
The financial year 2009-2010 has ended on a positive note. Your Company
surpassed the previ- ous year turnover and has achieved a net turnover
of Rs. 322.69 crores (Previous year 294.77 crores), recording an
increase of 9.47%. The Net Profit (After tax) of the Company has
increased from Rs. 7.69 cr. to Rs.17.85 crores, recording an increase
of 132.02 % as compared to the previous year.
The year under review saw increase in demand of the two wheelers and
exports also picked up especially in the last two months of the last
finan- cial year. The availability of the credit and improvement in the
world economy has resulted in rise in the demand of the automobiles
world- wide. During the year under review your Company has registered
marginal growth in the exports of its components, recording a total
export turnover of Rs. 48.89 crores as compared to Rs. 48.81 crores in
the previous year.
In keeping with our philosophy of sharing the gains with our
stakeholders, I am pleased to report that the Directors have made
recommen- dation for final dividend to 45% i.e. Rs. 4.50 per equity
share as compared to 15% paid last year i.e. Rs. 1.50 per equity
We at Hi-Tech Gears have demonstrated a passion to succeed and it is
now reflected in our position. This year your company has received two
prestig- ious awards namely Category-A TPM excellence award on
January 28, 2010 by the JIPM (Japan Institute of Plant Management) and
Shingo Silver medallion for the operational excellence. Shingo award
recognized the highest level of operational excellence in the field of
lean manufacturing. This award is one of the most prestigious
recognition in the Auto Industry worldwide.
We are in the process of expanding our capacities and plant-Ill is
under execution. It is expected that commercial production would start
by end of this year. This plant would cater to the new customers of the
company both domestic as well overseas also.
Before I conclude, I would like to thank all our business partners,
associates and employees for their continuing belief and faith in
Hi-Techs principles, philosophy and endeavors, and being a part of
Hi-Techs growth story. I would like to assure you all that the journey
will continue to be equally exciting and rewarding as we move ahead.
Chairman & Managing Director