Vaksons Automobiles Ltd Management Discussions.
Our company is an authorised dealer of Light Commercial Vehicles (LCV), Multi-Utility Vehicles (MUV), Small Commercial Vehicles (SCV Vehicles) and spare parts for Force Motors Ltd. We currently operate three different showrooms of Force Motors Ltd., namely at Sonepat, Panipat and Gohana within the state of Haryana. We also operate an in -house service centre / workshop at Sonepat for the servicing and other after-sales needs of our clients. We have over a decade of experience in distributing all types of vehicles on behalf of Force Motors Ltd. including but not limited to Commercial Transporters ("Traveller"), MUV Vehicles ("Trax Cruiser", "Trax School Van", Trax Kargo- King"), Small Commercial Vehicles ("Trump-40" and Trump-15). Apart from the vehicle dealership business, we have also been involved in trading of vehicle spare parts and utilities of branded as well as generic products forming part of the auto value chain. We have further incorporated a subsidiary company in the name and style of Vaksons Metaplast Private Limited (CIN: U37100DL2015PTC278744) in order to undertake trading in auto parts, HDPE and LDPE polymer, aluminium scrap, and other metal and plastic items on a larger scale with good trading margins. We believe that our experience of selling and servicing vehicles would hold us in good stead with this diversification venture undertaken by the company and also provide for increased financial size.
We have over the years developed a philosophy for quality and have also obtained ISO Certification for our Quality Management Systems (ISO 9001:2008). We have also been awarded a "Certificate of Appreciation" in February 2015, by Force Motors Ltd. for "Best Dominance in the MUV Market Category".
During FY 2018-19, total sales marginally increased by Rs. 1,95,64,072/- Net Revenue from operations for the year under review was recorded at 166,410,354/- as against Rs. 14,68,46,282/- recorded in the year 2017-18.
We face competition from various local and nationwide dealers of commercial vehicles. Competition emerges from small as well as big players. The organized players in the industry compete with each other by providing high quality, consistent and time bou nd products and value added services. There are a number of competitors offering products similar to ours. We believe the principal elements of competition in our line of business are easy finance options, consistent & quality products prompt availability a nd strong relations with suppliers and vehicle manufacturers. We compete against our competitors by establishing ourselves as a trustworthy agency for our products in the State of Haryana which enables us to provide our clients with products and services at appropriate rates to meet their requirements.
Factors Affecting Our Result Of Operation
The following important factors could cause actual results to differ materially from the expectations include, among others:
Revenue Generation We earn majority of our revenue from sale of Vehicles which includes Light Commercial Vehicles (LCV), Multi- Utility Vehicles (MUV), Small Commercial Vehicles (SCV Vehicles) and spare parts. Regular income is the only source to create a healthy working of our Company. Our revenues are fixed to the extent of the price of each vehicle as determined respective manufacturers of vehicles and the same is affected by the cash discounts, seasonal offer discounts, etc. required to be given to customers from time to time. We rely on the marketing done by the vehicle manufacturer and suppliers and we market the products locally through pamphlets, mailers, etc. and also offer various EMI schemes.
Our Financial Expenses
There is a major impact of financial costs on the profitability of the Company. For the fiscal year 2018-19 our finance cost was Rs. 44,55,815 as compared to Rs. 68,51,680/- recorded last year. Our financial growth depends on how well we manage and service our debts. Our ability to successfully implement its strategy and its growth and expansion plans Our growth plans are considerable and would put significant demands on our management team and other resources. Any delay in implementation of our strategy and growth and expansion plans could impact our Companys roll out schedules and cause cost and time over runs.
Increasing competition in the industry
Our Company faces competition in the form of other manufacturers of LCVs, MUVs and SCVs and also other dealers of our suppliers, which may force us to reduce the prices, offer various discounts, etc. which may have an effect on our margins.
General economic and business conditions
As a Company with its complete operations in India, we are affected by general economic conditions in the country and in particular economic factors that affect textile industry in India. Indias gross domestic product, or GDP, has been and will continue to be of importance in determining our operating results and future growth.
Internal control systems and their adequacy
Our governance and compliance processes, which include the review of internal control over financial rep orting ensure that all the assets of the Company are safeguarded and protected against any loss and that all the transactions are properly authorized, recorded and reported. It also conducts regular internal audits to test compliance with the statutory requirements. Audits are led by professional audit managers and supported by experienced personnel drawn from across the organization. Audit results are used by management to create detailed action plans where the businesses have not yet achieved full compliance with the requirements. Key findings are reported to senior management and summary reports are considered by the Audit Committee of the Board. The nature of the industries in which the company operates means that many of its activities arehighly regulated by health, safety and environmental norms while maintaining operational integrity.
Discussion on financial performance with respect to operational performance
The Company recorded total revenue of Rs. 16,64,10,354/- during the year under review as against Rs. 14,68,46,282/- in the previous year. There was marginal increase in the revenue as compared to previous year. Management is making efforts to explore various business opportunities to flourish its growth.
Material developments in human resources / industrial relations front, including number of people employed
The Company firmly believes that motivated and empowered employees are the cornerstone of competitive advantage. The Companys employee value proposition is based on a strong focus on employee development, providing a satisfying work environment, performance appraisal and counseling and appropriate empowerment.
The Company continues to maintain and enjoy a cordial relationship with its employees, providing positive environment to improve efficiency with regular investments in upgrading the knowledge and skills of the employees
Growth Strategies Initiatives
Reduction of operational costs and achieving efficiency
As a part of our growth strategies we have to look for areas to reduce costs and achieve efficiencies in order to remain a cost competitive company. Our focus has been to reduce the operational costs to gain competitive edge.
To build-up a professional organization
We believe in transparency, commitment and coordination in our work, with our suppliers, customers, government authorities, banks, financial institutions etc. We have a blend of the experience and the sufficient staff for taking care of our day to d ay operations. We also consult with external agencies on a case to case basis on technical and financial aspects of our business. We wish to make it more sound and strong in times to come.
Focus on cordial relationship with our Suppliers, Customer and employees
We believe that developing and maintaining long term sustainable relationships with our suppliers, customers and employees will help us in achieving the organizational goals, increasing sales and entering into new markets.
The statements in the "Management Discussion and Analysis Report" section describes the Companys objectives, projections, estimates, expectations and predictions, which may be "forward looking statements" within the meaning of the applicable laws and regulations. The annual results can differ materially from those expressed or implied, depending upon the economic and climatic conditions, Government policies and other incidental factors.