COMPANY PROFILE
SAL Automotive Limited (SAL) is a manufacturer of automotive components and
agricultural implements. We take pride in being the preferred supplier to leading
manufacturers of passenger vehicles, commercial vehicles, and tractors. Our diverse
product line encompasses a range of high-quality offerings, including seats, seat
mechanisms, and seat frames.
In addition to our automotive component production, we also specialize in manufacturing
top-notch agricultural implements. Our portfolio includes products such as Rotavators,
planters, Rotary Tillers, Box Scrapper, and tractor trolleys, which are designed to meet
the unique needs of the agricultural sector.
At SAL, we are committed to delivering excellence in both the automotive and
agricultural industries, ensuring our customers receive top-tier products and solutions.
FINANCIALS OVERVIEW
While details of financial position and performance are available in the Balance Sheet,
Statement of Profit & Loss, along with related notes, key aspects are highlighted in
the following paragraphs:
– Revenue
(Rs. in Crores)
| Particulars |
2022-23 |
2021-22 |
| Automotive Components: - |
138.35 |
104.12 |
| – Seats for Tractor & Commercial Vehicle |
75.43 |
64.24 |
| – Seat Mechanisms |
22.54 |
17.80 |
| – Seat Frames |
25.67 |
11.99 |
| – Others |
14.71 |
10.09 |
| Agriculture implements |
165.44 |
46.46 |
| – Rotavators |
165.43 |
45.91 |
| – Veg Planter & Others |
0.01 |
0.55 |
| Net Revenue from Operations |
303.79 |
150.58 |
| Other Income |
1.53 |
1.54 |
| Total Revenue |
305.32 |
152.12 |
– Equity & Reserves
The Companys net worth as on 31st March, 2023 stood at Rs. 34.95 crores (previous year
Rs 30.34 crore) comprising of an Equity component of Rs. 2.40 crore (previous year Rs 2.40
crore) and Reserves & Surplus of Rs. 32.55 crores (previous year Rs 27.94 crores).
Book value per share having facing value of Rs 10 each is Rs 146 share (previous year
Rs. 127 per share).
– Trade Receivables
Trade receivables as at 31st March, 2023 stood at Rs. 37.01 crores (previous year Rs.
34.81 crores) having debtors turnover ratio of 8.46 times (previous year 4.79 times).
– Trade Payables
Trade payables as at 31st March, 2023 stood at Rs. 50.23 crores (previous year Rs.
40.36 crores).
– Cost of Material Consumed
During FY 2022-23, the global economy experienced a post-pandemic scenario
characterized by a surge in global demand.
Despite the impact on raw material costs, SALs management diligently worked to
mitigate the effects and keep the expenses under control. Through their efforts, the
company was able to maintain a relatively stable raw material cost as a percentage of net
revenue from operations. This figure stood at 80.8%, compared to the previous years level
of 78.4%. The growth in sales volume of products with higher material costs played a vital
role in achieving this result.
SAL committed to adapting to market fluctuations while ensuring the production of
high-quality automotive components and agricultural implements. Our focus on efficient
cost management and sales growth positions us to navigate challenges successfully and
deliver value to our customers in the upcoming financial year.
– Other Overheads
Consisting of personnel cost, manufacturing expenses, administrative expenses and sales
& distribution expenses during the year were Rs. 47.95 crores (previous year Rs.
33.87crores).
– Depreciation & Amortization
Depreciation for the year stood at Rs. 3.08 crore against previous year figure of Rs.
2.13 crore which increased primarily due to additional Capex made during the year under
review.
– Results
Reflecting the above and after considering finance cost, Profit/(Loss) before Tax was
Rs. 6.20 crore (previous year (Rs. 2.99 crores). Total Comprehensive Income for the
current year was Rs. 4.61 crore (previous year (Rs. 2.37 crores)).
The financial statements of the Company have been prepared in accordance with Indian
Accounting Standards (Ind AS) notified under the Companies Act 2013 as per the Section 133
read with rule 3 of Companies (Indian Accounting Standards) Rules, 2015 as amended and
other relevant provisions of the Act.
The accounting policies have been consistently applied.
INTERNAL FINANCIAL CONTROL SYSTEMS & THEIR ADEQUACY
In FY 2022-23, SAL has implemented robust procedures to ensure effective internal
control. These policies and procedures have been put in place to provide reasonable
assurance that the companys assets are protected from the risks of unauthorized use or
disposition. Additionally, they aim to ensure that all transactions are accurately and
promptly recorded and reported.
To uphold the integrity of these controls, regular reviews are conducted during both
internal and statutory audits. These evaluations assess the effectiveness of the
established procedures and identify areas for improvement. Importantly, no material
weaknesses were observed in the operating effectiveness of the internal financial controls
tested during the year.
The Finance and Accounts function of SAL is well-equipped with a competent team of
experienced and qualified personnel. This ensures the smooth functioning of financial
operations and enhances the companys ability to meet its obligations effectively.
The Board of Directors and the Audit Committee play an active role in monitoring and
evaluating the operational and financial performance of the company. Through regular
intervals, these governing bodies conduct comprehensive reviews to assess the companys
progress and address any potential areas of concern.
SAL remains dedicated to maintaining strong internal control measures, supported by
qualified professionals and a diligent monitoring process. By adhering to these practices,
we strive to safeguard our assets, ensure accurate financial reporting, and drive overall
organizational excellence.
HUMAN RESOURCES
In FY 2022-23, SAL continued to thrive with a highly committed, loyal, and dedicated
team. Our company fosters an environment that promotes learning and encourages informal
communication within the organization, enabling employees to grow both personally and
professionally.
To objectively measure individual and organizational performance, SAL has implemented a
robust Performance Management System (PMS). This system not only evaluates individual
contributions but also aligns with the overall remuneration structure. By linking
performance with rewards, we motivate our employees to strive for excellence.
Recognizing the importance of continuous learning and development, SAL has established
a comprehensive training need identification system. This system identifies areas where
employees can enhance their skills and knowledge, ensuring that they remain competent and
up-to-date in their roles. This commitment to learning has made a significant contribution
to the success of our company.
Throughout the year under review, employee relations remained affable, fostering a
harmonious work environment. SAL has already signed a long-term settlement with the
workers union, ensuring stability and positive collaboration.
In addition, we diligently adhered to all required safety norms across our entire
company.
At SAL, we remain committed to nurturing our talented workforce, promoting a culture of
continuous learning, and prioritizing the health and safety of our employees. These
efforts contribute to our overall business success and reinforce our position as a
responsible and caring organization.
Regular employee strength as on 31st March, 2023 stood at 294 (31st March 2022 - [262])
INDUSTRY STRUCTURE AND DEVELOPMENTS
In FY 2022-23, SAL continues to excel in the manufacturing and supply of seats, seat
mechanisms, and agricultural implements to various manufacturers in the tractor, LCV, car,
and agricultural product sectors. The performance of our company is closely tied to the
performance of the automotive and agriculture industries. Over the past several years, the
automotive industry has shown a positive growth trend. However, in FY 2022-23, the Indian
auto industry witnessed a decline in production. A total of 2.59 crore vehicles, including
passenger, commercial, three-wheelers, and two-wheelers, were produced during this period,
compared to 2.30 crore vehicles in the previous financial year (2021-22), representing a
growth of 11.20%. A segment-wise analysis reveals a growth in production across various
segments during FY-22-23 (Source: SIAM website). Despite these challenges, SAL remains
committed to delivering high-quality products and solutions to our customers. We closely
monitor industry trends and adapt our strategies accordingly to navigate through market
fluctuations. Our experienced team and dedication to excellence position us to overcome
these obstacles and emerge stronger in the coming years.
OUTLOOK/OPPORTUNITIES
Both Automotive and Agri-Implement Industry looking forward for growths in upcoming
years. Your company being supplier to OEMs also expected to grow in positive trends in
upcoming years. Government policies and other economic factors also providing good
purchasing power to rural and semi urban areas of the country which may lead to positive
results for your company as well in upcoming years. The Automotive Mission 2026, a
collective vision of the Industry and Government of India, aims to set a new trajectory
for the evolution of the automotive industry ecosystem, taking into account its size,
global footprint, technological maturity, competitiveness, and capabilities.
Furthermore, several other factors are poised to act as catalysts for industry growth.
These include the governments continuous focus on strengthening the rural sector,
infrastructure development, initiatives like Make in India and Skill India, the launch of
new vehicle models by manufacturers, changing buying patterns, and replacement demand.
At SAL, we are closely monitoring these market dynamics and are prepared to adapt and
capitalize on the opportunities that arise. By aligning our strategies with industry
trends and leveraging our capabilities, we aim to navigate through these challenging times
and contribute to the growth and success of the industry.
NEW DEVELOPMENTS
In FY 2022-23, SAL continued to contribute to the manufacturing industry in India,
driven by the "Make in India" initiative of the Indian government. India is
rapidly emerging as a manufacturing hub, and the automobile sector plays a prominent role
in this transformation. Many international automobile giants have already established
their manufacturing facilities in India, while others are in the process of doing so. The
western and southern regions of India have become key hubs for the automobile sector,
attracting both manufacturers and suppliers. SAL is actively exploring opportunities to
set up new facilities near these manufacturing hubs, strengthening its focus on the auto
ancillary business.
Recognizing the immense growth potential, SAL has ventured into another business
segment, namely "Agriculture implements." This segment, primarily involving
contract manufacturing of Rotavators, has contributed 55% to the companys revenue. The
sustained demand from customers has led to substantial growth in this segment.
Furthermore, SAL is striving to expand its foot-print to include Indian Railway coach
components, such as seats and berths. Currently, the company is executing development
orders for Railways in the current year and actively pursuing opportunities to supply
different types of berths to all coach factories of Indian Railways.
By expanding into these strategic business segments and exploring new avenues for
growth, SAL Automotive Limited aims to leverage Indias manufacturing potential and
diversify its product offerings. These initiatives align with the companys vision of
expanding its presence and contributing to the overall development of the automotive and
manufacturing industries in India.
THREATS, RISKS & CONCERNS
In FY 2022-23, SAL, as a supplier of components to tractor and automobile original
equipment (OE) manufacturers, is directly influenced by the factors affecting these
industries. Several factors can impact both the tractor and automobile sectors, including
the quantum and distribution of rainfall, government policies on procurement, enforcement
of safety and emission regulations, availability of credit, changes in interest rates,
trends in commodity prices, and increasing competition.
In the short term, the automobile industry is experiencing a downturn due to various
factors affecting demand from both urban and rural areas of India. While these factors may
present challenges, SAL remains vigilant and adaptable to market dynamics. We closely
monitor industry trends and customer requirements, enabling us to respond swiftly and
effectively to changing demands.
As an organization, SAL is committed to maintaining strong relationships with our
customers and adapting our strategies to meet their evolving needs. By staying attuned to
the industry landscape and customer preferences, we position ourselves to navigate through
short-term fluctuations and remain resilient in the face of challenges.
The details of changes in the key financial ratios as compared to previous year are
stated below:
| Sr. No |
Particulars |
2022-23 |
2021-22 |
Change (%) |
Reason |
| 1 |
Debtor Turnover Ratio |
8.46 |
4.79 |
77% |
With better collections and improvement in credit management in line with increase in
revenue. |
| 2 |
Inventory Turnover Ratio |
12.50 |
10.01 |
25% |
Inventory norms are maintained in line with segmental revenue. |
| 3 |
Interest Coverage Ratio |
2.60 |
(0.24) |
1183% |
Healthier primarily due to increase in EBITDA. |
| 4 |
Current Ratio |
1.16 |
1.13 |
3% |
Improved with better management of Key Aspects. |
| 5 |
Debt Equity Ratio |
1.03 |
0.89 |
16% |
Increased primarily due to increase in borrowings in line with business operations. |
| 6 |
Operating Profit Margin (percentage) |
3.9 |
0.2 |
1850% |
Increased revenue helps to absorb fixed overheads resulting in increase in operating
margin. |
| 7. |
Net Profit / (Loss) / (percentage) |
1.5 |
(1.6) |
194% |
Increased revenue helps to absorb fixed overheads resulting in increase in operating
margin. |
| 8 |
Return on Net Worth (percemtage) |
14.1 |
(7.4%) |
291% |
Primarily due to increase in profits. |
ACCOUNTING TREATMENT
The financial statements of the Company are prepared under historical cost convention,
on accrual basis of accounting, and in accordance with the provisions of the Companies
Act, 2013 (the Act) and comply with the applicable Indian Accounting Standards.
CAUTIONARY STATEMENT
Statement in the Management Discussion and Analysis Report describing companys
objectives, projections, estimates and expectations may constitute "forward looking
statements" within the meaning of applicable laws and regulations. Actual results
might differ materially from those either expressed or implied.
|
For and on behalf of the Board |
|
Rajiv Sharma |
|
Chairman |
| Place: Ghaziabad |
DIN : 07418337 |
| Date: 10th August, 2023 |
|
+91-9892691696
