The financial statements have been prepared in compliance with accounting standards IND
AS. Our Management accepts full responsibility for the integrity of these financial
statements.
Demand for expanded mobility in India is driving rapid growth in domestic vehicle
production. According to recent research published by the Ministry of Heavy Industries,
India is on track to double the size of its automobile industry to Rs. 15 lakh crores by
the end of 2024.1 Furthermore, the Ministry estimates that Indias automobile
sector will contribute 7%-7.5% to Indias GDP, while expanding its manufacturing and
production of high-quality automotive electronics and vehicles for the global passenger
and commercial sectors.
The global automotive market continues to experience significant technological
advancements in vehicle electrification, connectivity, safety and autonomous driving, with
an increased focus on transforming transportation for both urban and rural mobility.
Demand for more efficient urban transportation, coupled with Indias transition to green
energy, is expected to propel Indias automotive market growth and economic development
prospects for the next decade. To this end, Indias government has significantly expanded
its strategic policy support for EVs and transportation safety at both the state and
central government levels. As Indias government continues its commitment to a
clean-energy-based future, these policies take aim at promoting Indias rapid transition
from Internal Combustion Engine (ICE) vehicles to EVs. According to a recent 2023 Global
Data study5, the global market for GDP growth continues to outperform
expectations, despite the myriad of global economic challenges. This study indicates that
global light-duty and passenger vehicle sales are improving in 2023, as supply chain
constraints continue to ease. Global vehicle production has increased nearly 6% between
2022 and 2023, due in part to the increase in demand for electric vehicles, as well as
pent-up demand for vehicles during the pandemic. These are encouraging signs in light of
the wide range of economic challenges that many of the global regions are facing.
According to an industry report titled "Electrifying Indian Mobility" issued by
Ernst & Young and The Indian Private Equity & Venture Capital Association (IVCA),
EV growth in India is expected to grow at a CAGR of 68% over the next 5 years. In addition
to the expanding electrification of the passenger vehicle market, the report indicates
that electric 3-wheelers and 2-wheelers for last mile transportation and delivery will
comprise the majority of this growth and demand. Furthermore, the report indicates that EV
charging infrastructure expansion will be necessary to accommodate the increasing demand
for charging the estimated 1.4 million electric vehicles on the road by 2027. The demand
for EV charging is expected to further contribute to Indias growth, as advancements in
technology and infrastructure development will lead to expanded opportunities for Indias
high-tech companies.
1 Source: Ministry of Heavy Industries Automotive Industry Outlook
(https://heavyindustries.gov.in/UserView/index?mid=1319) 2 Source:
Environmental and Social System Assessment (ESSA) The World Bank-MoRTH (India State
Program For Road Safety (P177668)) 3 Source: Grand View Research Automotive
Telematics Market Size 2023-2030 (GVR-4-68040-074-3) Source: 360 Research Reports
Telematics Control Unit (TCU) Market 2023-2030 (21804443) Source: GlobalData. Global
Automotive Outlook Navigating Chaos August 2023
In addition to Indias commitment to transitioning to green energy, urban and rural
road safety has become a major focal point of Indias state and central governments.
According to the Environmental and Social System Assessment (ESSA) analysis performed by
the Ministry of Road Transportation and Highways (MoRTH), and The World Bank Group,2
road crash fatalities in India are among the highest in the world, with a loss of life of
nearly 150,000 and injuries in excess of 450,000 people annually. According to the report,
more than half of the victims are pedestrians, cyclists and motorcyclists, which are
categorized as Vulnerable Road Users (VRUs). In an attempt to improve the safety of VRUs
on Indias roads, Indias government pledged its commitment to the Stockholm Declaration
on Road Safety, and began expanding its governance of road safety by establishing Indias
National Road Safety State Support Program (RSSSP). This program is envisioned to reduce
road fatalities by 30% by 2027. The need for passenger and commercial vehicle telematics
continues to accelerate to meet increasing demand for vehicle connected safety and
Over-The-Air updates. According to a recent 2023 market study, the global market for
automotive telematics was valued at USD 49.85 billion in 2022, and is projected to grow at
a CAGR of 16.6% from 2023 to 2030.3 This growth is attributed to a wide range
of government and private sector IoT initiatives, aimed at improving road safety for the
transport and fleet sector, as well as supporting commercial and personal line connected
vehicle insurance applications. Automotive OEMs have been expanding their use of vehicle
telematics for service solutions, and for enhancing the passenger vehicle ownership
experience through connected vehicle technology. Vehicle connectivity is generally managed
via what is commonly referred to as a Telematics Control Unit (TCU). Based on a recent
2023 market analysis report4, the global market for Telematics Control Units
(TCU) was estimated at US$ 3.1 billion in 2022, and is projected to reach US$ 6.9 billion
by 2028, growing at a CAGR of 14.3% during the forecast period 2023-2028. Currently, India
based commercial vehicle OEMs continue to accelerate their development and deployment of
telematics across their vehicle platforms. Indias commercial telematics market was
estimated to be US$1.32 billion in 2023, and is expected to grow at a CAGR of roughly 16%
during the forecasted period 2023-2028. This growth is being driven by increasing Indian
government regulatory demands, as well as the expanding insurance market for commercial
vehicles. In line with Indias "Make in India" initiates, our company has made
huge investment in its manufacturing unit for capacity expansion to meet the ever growing
demand.
Opportunities
Your company continues to focus its efforts on identifying opportunities to engage in
critical market opportunities that are driven by market and government driven initiatives
for vehicle electrification and safety critical infrastructure and applications. Our team
remains committed to proactive planning and investment in meeting the ever-increasing
demand for mobility and road user safety, to maximize your companys growth and
competitiveness both domestically and globally.
Electric Vehicles (EVs):
In the rapidly advancing Electric Vehicle (EV) market of India, your company continues
to identify significant opportunities to not only contribute to the countrys sustainable
transportation goals but also to achieve substantial growth. To engage effectively in this
market, we are adopting a multifaceted approach. Firstly, focusing on product innovation
and technological advancements is crucial. By investing in research and development of EV
technology, we hope to be able to cater to the specific needs of domestic and global OEMs,
with a focus on affordability, performance, and adaptability to diverse market demands.
Offering a range of EV electronic control unit (ECU)options, to support the needs of
two-wheelers to buses, can help capture a larger market share and cater to a wide
demographic in the mobility sector.
Secondly, establishing a robust charging infrastructure is vital for addressing a major
concern among potential EV buyers - range anxiety. Through the ongoing efforts of our
global development teams, your company is looking to build unique offering to enable home
charging stations in support of urban and semi-urban areas. This would not only enhance
the convenience of owning an EV but also alleviate concerns related to the limited
availability of charging points. By taking the initiative to create a comprehensive
charging ecosystem, we feel we can attract more consumers who are hesitant to switch to
EVs due to these concerns.
The Indian governments role in driving the growth in the EV market cannot be
understated. Government regulations, incentives, and policies play a pivotal role in
shaping the trajectory of the industry. Your company is looking to leverage supportive
policies such as subsidies on EV purchases, lower taxation on EV components, and
incentives for domestic manufacturing. Additionally, aligning with the governments push
for localized production through the "Make in India" initiative will not only
reduce costs but also enhance the companys competitive edge. Collaborating with the
government in campaigns to raise awareness about the environmental benefits of EVs and
encouraging public transportation authorities to adopt electrification technology can
further enhance your companys market penetration. Overall, by strategically aligning its
efforts with government initiatives and tailoring its approach to the unique needs of the
Indian market, your company can position itself as a frontrunner in the rapidly evolving
EV landscape.
Mobility Safety:
In the swiftly evolving landscape of automotive technology in India, has created a
unique opportunity to harness the power of telematics to enhance the safety of vulnerable
road users like pedestrians, bicyclists, and motorcyclists. Your company is focused on
seizing this opportunity by leveraging its unique position in the telematics market, to
develop sophisticated Vehicle-to-Everything (V2X) communication systems. By integrating
V2X technology into vehicles, the company can enable real-time exchange of information
between vehicles, infrastructure, and vulnerable road users. This can significantly
mitigate collision risks and enhance road safety, reduce congestion and improve mobility
for all commuters.
To effectively engage in this market and ensure the widespread adoption of V2X
technology, your company is working to strategically collaborate with both private and
public sector stakeholders. Partnering with automobile manufacturers to integrate V2X
solutions into new vehicles, as well as existing vehicles, can expedite the deployment of
this technology across the automotive landscape. Additionally, forming alliances with
municipal bodies and transportation authorities can facilitate the installation of
V2X-enabled infrastructure, such as smart traffic signals and pedestrian crosswalks. By
actively participating in government initiatives aimed at improving road safety and
reducing accidents, your company can align its efforts with broader regulatory frameworks,
thereby driving the acceptance and integration of V2X technology.
Government regulations and policies play a pivotal role in shaping the growth
trajectory of automotive technology companies. In India, the governments focus on road
safety presents a strategic opportunity for our team to align its goals with these
regulatory initiatives. By adhering to safety standards, certifications, and compliance
requirements set by the government, we can establish its credibility and trustworthiness
in the market. Moreover, by actively engaging with regulatory bodies to provide input on
the development of safety standards and policies related to V2X technology, we can
position the company as a thought leader and a key contributor to shaping the industrys
future. By demonstrating a commitment to improving road safety through V2X technology, we
will not only drive growth but also make a meaningful impact on the lives of vulnerable
road users throughout India.
Telematics:
In Indias dynamic automotive sector, your company strives to strategically engage
Indian Automotive Original Equipment Manufacturers (OEMs) to implement vehicle
connectivity and Telematics Control Unit (TCU) technology across a wide range of vehicles,
from 2-wheelers to heavy-duty vehicles. By showcasing the myriad benefits of vehicle
connectivity technology, the company can create a compelling case for its adoption.
Firstly, we emphasize the potential for improved vehicle safety. TCU technology enables
real-time data transmission, allowing vehicles to communicate with our clients
infrastructure, and central systems. This can enhance safety by providing alerts for
critical driving conditions, monitoring driver behaviour, and offering emergency
assistance in critical situations, ensuring the safety of the driver and others VRUs.
Moreover, highlighting the benefits of predictive maintenance through TCU technology
can be a game-changer. By continuously monitoring vehicle diagnostics, performance
metrics, and wear-and-tear patterns, our TCUs can facilitate proactive maintenance
scheduling. This not only reduces the likelihood of unexpected breakdowns but also
minimizes downtime, thereby increasing vehicle operational efficiency and reducing
maintenance costs. This predictive maintenance approach resonates across the spectrum of
vehicles, from 2-wheelers, passenger vehicles and heavy-duty trucks, offering long-term
cost savings and improved reliability.
Furthermore, our technology can underline the potential for enhanced vehicle
performance and optimization. TCUs can collect data on driving patterns, road conditions,
and fuel efficiency, allowing for the customization of vehicle settings and engine
performance to suit different terrains and usage scenarios. By fine-tuning these aspects,
TCUs can contribute to better fuel economy, reduced emissions, and optimized engine
performance. This not only aligns with many of Indias environmental goals but also
enhances the overall driving experience, a selling point that can attract both consumers
and fleet operators.
To achieve successful integration of vehicle connectivity technology, your company is
focused on establishing strong partnerships with a wide range of Indian OEMs.
Collaborating closely with OEMs during the product development and integration phases can
help tailor our vehicle connectivity solutions to the unique requirements of various
vehicle categories. Demonstrating the potential return on investment through reduced
maintenance costs, enhanced safety, and improved operational efficiency can be a
persuasive argument to OEMs. Furthermore, emphasizing the scalability of TCU technology
across different vehicle segments can showcase its adaptability and attractiveness to a
wide range of consumers.
By offering a comprehensive package that addresses safety, maintenance, and performance
enhancement, your company can position itself as a crucial partner for Indian OEMs seeking
to stay competitive and deliver value-added features to their customers. This
collaborative approach not only benefits your company through increased market share but
also contributes to elevating vehicle safety, reliability, and efficiency across Indias
diverse automotive landscape.
Threats, Risks and Concerns
A critical shortage of this important electronic components continues to be significant
drag on our companys growth. Moreover, the Indian automotive electronics industry is
becoming increasingly competitive. Having recognized this, we have embarked upon
innovative products and solutions to remain competitive at the same time combat the
semiconductor parts shortage. We keep abreast of global developments as well as emerging
technologies and develop innovative solutions of our own. The exchange rate between USD
and Rupee has impacted us significantly in recent years and may continue to affect us in
the future. The global economic and geo-political uncertainties may lead to economic
slowdown and may negatively affect our revenues and profitability. These risks are broadly
industry wide risks. Your company has taken steps to address these unforeseen events and
minimize the impact on the company.
Performance and Business Outlook
Your companys Engineering Division continues to create Intellectual Property by
developing various hardware and software solutions to address the automotive electronics
opportunities. Some of the products are going into production phase as well as new
products are being piloted at existing and potential new customers.
While we continue to serve our existing automotive OEMs and Tier-1s with embedded
software and testing services, we also place heavy emphasis on emerging technologies and
opportunities. Our continued relationship with Danlaw Inc. enables us to stay in the
forefront of the "connected vehicle" space.
Internal Control System and its Adequacy
Your Company has a policy of maintaining effective internal control system and focuses
on strict implementation of these policies and procedures to safeguard the assets and
interests of the Company.
Your Company has an Audit Committee comprising of two-thirds of Independent Directors
of the Company. The findings of internal audit are periodically placed before the Audit
Committee and the Board of Directors of the Company. The Audit Committee also reviews
periodically the performance of statutory and internal auditors, and adequacy of the
internal control systems. To ensure that the financial transactions comply with current
legislative requirements and accounting standards, your Company has developed a Financial
Accounting Procedure Manual (FAM). The FAM contains procedures, which cover the effective
and efficient financial administration of the Company.
Financial Performance
During the year under review the Paid Up Share Capital of the Company as on date is Rs.
4,87,06,670/ comprising of 48,70,667 Equity Share of Rs. 10/each. The net Revenue for
current year is Rs.16,790 Lakhs as compared to Rs.12,632 Lakhs in the last fiscal year,
thus achieving a growth of 32.91%. The net profit after tax is Rs.757 Lakhs as compared to
Profit of Rs.436 Lakhs in the previous FY, thus achieving a growth of 73.62%.
Material Development in Human Resources
We are employee centric and believe that our employees are the heart of the
organization. The managements responsibility is to care and support our employees. We
continue to provide them with opportunities for career enhancement and growth. We
continually strive to provide our employees with competitive compensation and benefit
packages.
We are committed to providing the necessary training opportunities to enable them to
adapt to the latest technological advancements. Additionally, we are taking steps to
ensure the resources we have are utilized optimally.
As on date the Company has a total strength of 108 Employees.
Cautionary Statement
Statements in the Management Discussion and Analysis describing the Companies
objectives, projections, estimated and expectations may be forward-looking statement.
Actual results may vary materially from those expressed or implied.
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