Triton Valves continues to strongly maintain its motto of Touching Lives. MovingIndia' with the realization that its products play a significant role in the lives andsafety of people. This motivates the Company to strive for perfection. Triton Valves playa critical role in tyre inflation and ensure that vehicles move smoothly safely and withcontrol. With the addition of products for the air-conditioning segment Triton is nowplaying a silent but critical role in people's homes providing high quality andleakage-free valves for air-conditioners.
FY 2017-18 was primarily focused on consolidation and diversification.
The Company has diversified into manufacturing valves for air-conditioners in both theindustrial and home segments thus growing in different domains and adding more productsand applications to its portfolio. The Company has also formally entered the aftermarketsegment for tyre valves and accessories and has significantly increased its presence atthe tyre shop level across the country. An e-commerce application was also launched toenable the aftermarket to access Triton's wide portfolio of OEM quality products. Tritonhas also enlarged its footprint in the global market during the year with an ever-growingpresence in the Middle-east and Southeast Asia.
GST Implementation and Macroeconomic Developments
A major milestone in the economic history of India was the implementation of GST fromJuly 1 2017. The Company successfully made the transition to GST having made all thenecessary preparations. The Company has benefited by GST on three counts-firstly taxcompliance has been simplified secondly supply chains have become more cost- efficientand competitive after removal of the cascading Central Sales Tax and lastly GST hascreated a level playing field for the industry with India becoming a single integratedmarket. The Government's move of raising import duties on tyres and imposition of AntiDumping Duties on Chinese tyres has helped reduce the import of tyres into the Indianmarket thereby boosting the domestic market. In light of these developments the prospectsfor the tyre industry appear to be positive for the next few years.
Your Company has performed well in terms of top line growth during the year. Net salesincreased by 9.3% to Rs. 226 crore in FY 2017-18. In spite of the best efforts of themanagement team however the Company's bottom line did not grow as expected on account ofthe steep increase in the cost of brass the major raw material consumed by the Company.The global prices of copper and zinc have been continuously rising since September 2017making it difficult to recover the increases from customers. In spite of this challengethe management team has done a commendable job to control expenses and ensure that theprofitability of the Company did not take a very significant hit.
Your Board of Directors having thoroughly reviewed the performance and having analyzedand assessed the future potential of the Company have recommended subject to the approvalof the shareholders a dividend of Rs. 15 per equity share of Rs. 10 (150%) to themembers the same as in the previous year. This stable dividend recommendation reflectsthe confidence of the Board in the future potential and capability of the Company toimprove and sustain a higher level of profitability.
Research and Development
The Company continues to invest in increasing capacities improving manufacturingtechnology and developing new products. During the year the Company incurred a capitalinvestment including capital advances of Rs. 11 crore and an R&D expense of Rs. 3.35crore. The R&D Center which is recognized by the Department of Science and Technologyhas performed well and has added significant value to the Company. During the yearseveral patent applications have been filed in line with the objective of creating astrong intellectual property base for the Company in future. The Company has alsopartnered with both industry and academia in not just developing new products but also increating roadmaps and putting in place processes for developing new products in step withtechnological changes which are sweeping across the industry.
Outlook for the year ahead
The Company is confident about the year ahead. Internally many initiatives takenduring the previous year will manifest their full year impact in the year ahead while theexternal environment in terms of market demand and economic factors are expected to befavorable.
The Company continues to strive to achieve greater heights delivering greater valuenot only to its customers and shareholders but to all its stakeholders - employeesvendors the environment and society at large. I thank all the employees for their hardwork dedication and unstinted support. Thank you dear stakeholders for your trust andfaith reposed in the Company over the years. I look forward to interact with you inanother positive and rewarding year ahead.