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KINETIC ENGINEERING LIMITED
ANNUAL REPORT 2002-2003
CHAIRMAN'S REPORT
Dear Shareholder,
As the financial year 2002-03 draws to a close, I write to you with mixed
feelings. While the balance sheet has not yet reflected growth, we have
been taking steps and getting closer to fulfilling our goal of
transformation from a moped company to a motorcycle manufacturing one.
Several key initiatives that we undertook last year were carried out
successfully. These initiatives which include brand building in
motorcycles, strengthening of distribution network, cost reduction, work on
improving product portfolio, improving the company's policies and systems,
increasing exports, reducing debt etc., are aimed at paving the way for the
company to emerge stronger in the coming year. The underlying strategy is
to make a strong foray into motorcycles, while maintaining mopeds at the
current levels.
To quickly recap, last year we signed on legendary cricketer Kapil Dev to
be our brand ambassador for our motorcycle Kinetic Boss. Kapil's
association with the Boss was built right to the grassroots level by
organizing a series of his visits across the country from Aurangabad to
Gorakhpur. We also launched a special 250cc cruiser with breakthrough V-
twin technology Kinetic Aquila. The Aquila has been appreciated as the most
premium and overall superior motorcycle available in India. These two
initiatives, combined with a total motorcycle sales growth of 45.97% have
gone a long way into establishing Kinetic as a motorcycles manufacturer.
In addition, this year, we expanded our distribution network by 430
numbers, largely by adding sales points in the rural areas, an important
factor for motorcycle sales in the country. Cost reduction was achieved
through a series of cost cutting measures including vendor base
rationalization and renegotiation of our debt. We have also been working on
expanding our product portfolio and have three important products lined up
for the next year, exciting performance bike GF 170 (in two variants City
and Sport), an executive bike and also a mini-bike designed for load
carrying. We also achieved a significant growth in our export volumes
(129.36%) and opened new overseas markets. Special highlights include our
growing presence in US market, where we reached a milestone of over 25,000
units exported since we began. US being a very tough market in its
expectations of quality, this is a significant achievement. New markets of
Mexico, Sri Lanka, Bangladesh and African countries have also responded
very enthusiastically to us.
I believe that with this groundwork laid out, our company is now ready to
capture a significant market share in the motorcycles market. As we know,
India is the second largest two wheeler market in the world anti
motorcycles have emerged as a passion and a must-have in the country,
resulting in a growth of 25.350%. Last year, a total of 32.95 lakh
motorcycles were sold. I believe that this is a very good industry to be
present in today. And I am confident that next year, we will see ample
growth and success in this segment.
Thank you,
Arun Firodia,
Chairman
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