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					ANG AUTO LTD.
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                                                     The year 2005-06 was a momentous one in the history of our Company and I am excited
                                                     as we ready to step into the next level of our growth.

                                                     My enthusiasm is derived from a key initiative, which we executed in 2005 and which
                                                     should catapult us into the top 10 auto ancillary companies in India by 2008.

                                                     Before I expound on the historic event, allow me to summarise our performance:

                                                      Topline registered a growth of 189 per cent

                                                      Profit grew by 830 per cent

                                                      Operating margin improved by 11 per cent

                                                      Return on invested capital was at 30 per cent



                From the desk of the
                Managing Director
                We have laid the foundation for
                growing the organisation from
                revenues of Rs. 57 cr currently to
                Rs. 500 cr by 2008-09
ANG AUTO LTD.
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         Initiative 2005                                        strengthened our quality commitment. The rapid          which is expected to continue over the medium term.        infrastructure and roads the demand for trailers will
         We consolidated two group companies into our           economic growth, an enhanced preference                 Companies who expand capacities while maintaining          increase substantially and this should translate into
         only listed entity ANG Exports and re-christened       towards surface transport and increasingly              their quality and cost competitiveness will emerge as      increased sales of trailer axles and suspensions. This,
         it to ANG Auto Ltd. I would like to remember this      stringent regulatory controls in line with the          the major beneficiaries.                                   we expect, will result in a silent shift towards the
         step as Initiative 2005. As much as it was             international benchmarks are providing a                                                                           increased use of trailers.
                                                                                                                        Our initiative
         necessary, keeping in line with the global trend,      significant opportunity for the quality conscious
                                                                                                                        We proactively increased capacity to emerge among          Our initiative
         it was important for the Company to unlock             Indian auto component sector. Our operational
                                                                                                                        the top auto component manufacturers and                   We have moved up the value chain from
         value for shareholders.                                scale, financial size and international
                                                                                                                        exporters for most of the products. We attained the        components to assemblies in the braking and axle
                                                                experience perfectly position us to capitalise on
         I would like you to look at the necessity of the                                                               ISO and TS-16949 certifications, and are moving to         segments. We expect to leverage this expertise in
                                                                this growing opportunity in the Indian market.
         consolidation from two angles: one from the                                                                    implement the TPM and the TQM standards across all         manufacturing trailers only for the Indian industry,
         perspective of business growth and the second          I take the opportunity to summarise the benefits        our plants over the coming years.                          which over the next few years will be among the
         from the perspective of unlocking value for our        of the consolidation through the diagram given                                                                     highest growing segments in the automobile industry.
         shareholders.                                          below.                                                  Domestic market                                            This initiative was the logical extension of the
                                                                                                                        Economic growth and an increased focus on creating         Company’s value chain as we already supply the
                                                                This is just the first step towards our goal. But the
         Global perspective                                                                                             a road network has increased the preference towards        undercarriage that constitutes about 30-35 per cent
                                                                road ahead consists of a mixed bag – of
         We are among the few companies                                                                                 road transport, providing a huge growth opportunity        of the trailer to various transporters and fleet owners.
                                                                challenges and opportunities.
         predominantly driven by international trends                                                                   for our Company due to the segment we are in.              As a proactive fast mover, we have taken two key
                                                                                                                                                                                   initiatives to ensure our success in this venture:
         and an export focus. Over the last few years,          The road ahead                                          Our initiative
         India has emerged as a preferred destination for       The Indian economy grew rapidly at 8.4 per              We have taken initiatives for growing our presence in
                                                                                                                                                                                     Entered into a Memorandum of Understanding with
         global automobile OEMs as well as Tier 1 and           cent during the fiscal under review, the second         the Indian market. As a first step in this direction, we
                                                                                                                                                                                     Fuwa Engineering, China, and are in the process of
         Tier II companies. The global players prefer to        highest in the decade. This trend is expected to        are looking for strategic tie-ups with Indian OEMs.
                                                                                                                                                                                     establishing a joint venture (JV) Company in India
         partner Indian corporates with stability, reflected    continue over the medium term, driven by
                                                                                                                                                                                     for the manufacture of trailers, trailer axles and
         in the strength of their financial statements. After   favourable government policies and a                    Safety first
                                                                                                                                                                                     other components at Uttaranchal at a total
         a decade of knowledge accumulation and                 consistently improved corporate performance,            Following an improvement in the road infrastructure,
                                                                                                                                                                                     investment of approximately Rs. 610 mn committed
         expertise development, we are seeking growth           presenting us with a mixed bag – of                     the emphasis on safety increased. The government is
                                                                                                                                                                                     over the next 12 months
         in India in addition to our traditional focus on       opportunities and challenges.                           in the process of making it mandatory for commercial
         exports, deriving volume and value-addition.                                                                   vehicles to be fitted with automatic slack adjusters for     Signed a strategic alliance with Ashok Leyland to
                                                                Outsourcing                                             improved braking efficiency.                                 supply and market our trailers. We will supply about
         Domestic perspective                                   Outsourcing to India has increased at a                                                                              6,000 trailers to Ashok Leyland from our Sitarganj unit
                                                                                                                        Our initiative
         Last year, we grew operational scale and               scorching pace over the last few years, a trend,                                                                     for a period of five years starting from November
                                                                                                                        We are producing automatic slack adjusters, a vital
                                                                                                                                                                                     2006 to be marketed under the Leyland-ANG brand
                                                                                                                        component in the braking assembly. This component
                                                                                                                        is to be fitted in all the commercial vehicles with
         Benefits of the consolidation                                                                                                                                             Outlook
                                                                                                                        effect from April 2007. We have commissioned a new
                                                                                                                                                                                   I am optimistic of our growth and expect the sum of
           ANG Exports (Pre-merger)                                      ANG Auto (Consolidated)                        plant with a capacity of 1,20,000 units per annum
                                                                                                                                                                                   these initiatives will grow the Company from Rs. 570
                                                                                                                        dedicated to exports. On having established our
                                                                                                                                                                                   mn in revenues into a Rs. 5 bn organisation, helping it
          Plants                   – 1                                Plants                   – 6                      reputation in the international market, we will launch
                                                                                                                                                                                   emerge among the top ten companies in the auto-
          Gross block              – Rs. 396.38 lacs                  Gross block              – Rs. 1,796.22 lacs      the product soon in India.
                                                                                                                                                                                   components sector in India.

          Revenue                  – Rs. 1,146.12 lacs                Revenue                  – Rs. 5,700.04 lacs      Regulatory norms
                                                                                                                        New norms are forcing change in the means of load
          EBIDTA                   – Rs. 89.15 lacs                   EBIDTA                   – Rs. 1,438.10 lacs
                                                                                                                        carrying. The regulatory norms are forcing trucks to
          PAT                      – Rs. 19.50 lacs                   PAT                      – Rs. 938.02 lacs        maintain their original carrying capacity and cutting

          Market capitalisation – Rs. 61.00 lacs                      Market capitalisation – Rs. 30,356 lacs           down on overloading. With the growth in                    Managing Director

				
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posted:9/16/2009
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