AUTOLINE INDUSTRIES LIMITED
ANNUAL REPORT 2011-2012
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 favorable demographics.
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
to Rs.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
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 development.
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 2011.
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 customers.
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
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