AFFLUENCE

The Indian economic sphere, touted to be among the top three economies of the world in a couple of decades, currently basks in the radiance of being the fastest growing major economy in the world at about 7 %, and perhaps the least affected by the ongoing global fiscal turmoil. But this adds more to the perplexity over the question as to why the auto industry is hurting so badly. The sector that employs 37 million people, contributes 7.5% to the country’s GDP and 49% to the manufacturing GDP, is staring at a multi-layered crisis.   In spite of being the fourth largest car manufacturer in the world, passenger vehicle sale in 2018-19, grew at a measly 2.7%, lowest in nearly 8 years. After a decade of high growth, the Indian Automobile Industry has slipped into the grip of a huge slowdown, experiencing the most prolonged decline in sales. The policy change on third party insurance covers by IRDAI, tightening of liquidity in the NBFC sector and the unprecedented floods in Kerala mounted the pressure on an already affected industry. Higher operational costs and inventory buildup coupled with poor sales added to the woes of the Automobile Dealerships across the country.   Hopes were pinned on the Union Budget of the New Government, to address this slowdown. Though it augurs well for the long-term growth, it lacked severely in a stimulus to revive immediate growth in the industry. However, the thrust imparted on the Electric Vehicle segment offers a ray of hope in opening up new business frontiers. Ambitious $5 trillion economy by 2024-25 announced in Budget 2019, along with the Economic Survey 2019 projecting a GDP growth rate of 7% for Indian economy, are definitely positive signs on the anvil.   Given India’s demographics and the rise in middle-class income, growth potential for the Indian automotive sector should remain strong in the long term. The passenger car density in India still stands at a mere 22 per 1000 population, which is far lower than even our neighbouring developing countries, where it is between 30 to 50 cars per thousand. But this growth would definitely be amidst the growing concerns of disruptions like tech-led shared mobility, EV makeover, change in business models, entry of more international players into the country and price hike led by stiffer emission norms and technological upgradations stipulated under the BS VI norms.   On a consolidated basis, our sales increased to Rs.39,055.58 million for the current year as against Rs. 36,777.81. million in the previous year, recording an increase of around 6.19 %. Our Profit Before Tax decreased to Rs.401.30 million for the current year as against Rs. 495.36 million in the previous year, recording a decline of around 18.99%.   On a standalone basis, our sales were at Rs.22,525.15 million for the current year as against Rs.22,608.69 million in the previous year, recording a minor decline of 0.37%. Our Profits Before Tax declined to Rs.189.58 million in the current year as against Rs. 279.94 million in the previous year, recording a decline of 32.28%.   Key highlights of financial performance of your Company on standalone and consolidated basis for the financial year 2018-19 are provided below:     1. Standalone Performance      (In INR millions, except earnings per share data)   Particulars For the financial year ended March 31, 2019   For the financial year ended March 31, 2018 Net Revenue from Operations 22,525.15 22,608.69 Other Income 128.80 60.95 Total Revenue 22,653.95 22,669.64 Total Expenses 22,464.37 22,389.70 Profit / (Loss) Before Tax 189.58 279.94 Tax Expense:    Current Tax    Income Tax for Previous Year    Deferred Tax 82.17 1.88 (17.23) 98.64 - 5.18 Profit / (Loss) after Tax 122.76 176.12 Earnings per equity share(in Rs)  Basic and Diluted                               10.00   14.74    

The company uses power saving lighting equipment’s for its office and workshop and saves power wherever there is scope for energy saving.

No technology absorption has taken place during the year under consideration

There was no foreign exchange inflow or outflow during the year.

In terms of clause (c) of sub-section (3) of Section 134 read with sub section (5) of Section 134 of the Companies Act, 2013, the Directors hereby state and confirm that—   (a) in the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures;   (b) the directors had selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the company at the end of the financial year and of the profit and loss of the company for that period;   (c) the directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities;   (d) the directors had prepared the annual accounts on a going concern basis; and   (e) The directors had laid down internal financial controls to be followed by the company and that such internal financial controls are adequate and were operating effectively.   (f) the directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.