1. BUSINESS OVERVIEW:
We are in business of designing and manufacturing of sheet metal
components and sub-assemblies requirements of automobile parts/equipment manufacturers.
Our range of product primarily covers sheet metal pressed components for clutches, brakes,
engine mountings, chassis, shaft drive, body trims, bearings etc. which are used in
passenger cars, commercial vehicles and tractors. Our products such as deep drawn
components and control panel components also find application in electrical equipments
industry.We have an in-house R&D set up for different processes involved in the
manufacturing of products, we have a high precision Tool Room at our Plants at Ambad MIDC,
Nashik where activities related to designing and development of various products are
undertaken.
We have three manufacturing units, all ideally located at Nashik,
Maharashtra on leasehold industrial plots of total size admeasuring to over 5000 sq.
meters. Our all three units comply with the IATF 16949:2016 standards. Apart from
manufacturing, we also provide job work services in respect of blanking and forming
process on metal components.
Our portfolio of products can be classified into following categories:
A. Components used in Automotive Power Train
i. Components for automotive clutches
ii. Components for automotive propeller shaft drive
iii. Components for automotive brake system
iv. Components for automotive engine mountings
B. Components used in Automotive Body
i. Components for automotive body trims
ii. High tonnage components
C. Components used in Automotive Chassis
D. Components for Bearings
E. Automotive welded assemblies
F. Deep Drawn Components
G. Components for electrical switchgear & heavy panels
2. OPPORTUNITIES & THREATS:
Strength:
In-house die making facilities and Machining Centre:
Our Company has its own in-house die making facilities and Machining
Centre which enables us to maintain high quality production standards and also helps us in
minimizing production time and bringing cost effectiveness. Our die making facility shop
is capable of manufacturing press tools for small to medium range of automotive pressed
parts. Our In-house Machining Centre consists of Hydraulic power press machines, Pneumatic
Power Press Machines, Mechanical Power Press Machines, SEW Machines and bearing cage
machines.
Wide product range and customized product offering:
We have developed the infrastructure to customize our product
offerings. This allows us to understand the customer requirement and offer the right
product to exactly suit their need. In addition to this, we offer a wide product range
i.e. wide range of Sheet Metal components including Precision Sheet Metal Fabrication,
Finishing and Assemblies offered in a wide size range to enable us to cater to maximum
requirement.
Vast Experience of Promoters:
Our Companys core strength lies in the extensive experience gained by
our Promoters in this industry. Our Promoters, Mr. Suresh Gunwant Fedge and Mr. Mukund
Narayan Kulkarni possess more than 20 years of experience in this field, which enables us
to deliver quality products to our Customers and help us to gain expertise in the
production.
Existing customer relationship:
We believe that we constantly try to address customer needs around a
variety of products. Our existing customer relationships help us to get repeat business
from our customers. This has helped us maintain a long term working relationship with our
customers and improve our customer retention strategy. We believe that our existing
relationship with our customers represents a competitive advantage in gaining new
customers and increasing our business.
OUR BUSINESS STRATEGY:
We intend to pursue the following principal strategies to leverage
our competitive strengths and grow our business:
Utilization of Existing Installed Capacity:
Presently, Our Company has installed capacity of 6530 MT p.a. for
manufacturing of automotive components. For the year ended 31st March 2022, our
total production was 5276.59 MT, which constitutes 80.80 % of the installed capacity.
Considering the future demand potential, we intend to utilize our existing installed
capacity to maximum level.
Improving operational efficiencies:
Our Company intends to improve operating efficiencies to achieve cost
reductions so to have a competitive edge over the peers. We believe that this can be done
through continuous process improvement, customer service and technology development.
Leveraging our Market skills and Relationships:
This is a continuous process in our organization and the skills that we
impart in our people give importance to customers. We aim to do this by leveraging our
marketing skills and relationships and further enhancing customer satisfaction. We plan to
increase our customers by meeting orders in hand on time, maintaining our customer
relationship and renewing our relationship with existing buyers.
Focus on consistently meeting quality standards:
Presently, Our Company is certified from IATF 16949:2016, further, we
intend to focus on adhering to the quality standards of the products. This is necessary so
as to make sure that we get repeat orders from our customers. This will also aid us in
enhancing our brand value.
Opportunity:
• Economic Growth of Domestic and International Market.
• Government policies to scrap the old vehicles.
• Our customers are keen on developing new supplies.
• Upcoming opportunities in export market.
• Government promotional scheme.
• Expanding aftermarket business with customers.
There are related expansions, growth prospectus and better
opportunities in the SM Autovision Private Limited, the Associate Company of the Company,
considering the same it will ultimately benefit our Company.
3. SEGMENT /PRODUCT WISE PERFORMANCE:
The Company operates only in the Automobile Component Segment, i.e.
development, manufacture and selling of automotive components mainly sheet metal
components, welded assemblies and modules for automobiles.
4. OUTLOOK:
The market has started showing improvements during the financial year
2021-22. The growth of Auto Industry which is largely dependent on infrastructure building
and financing options are expected to grow in line with the GDP growth estimated. All
sub-sectors within the automobile industry are rebounding from the pandemic. The industry
has shown resilience with both sales and values increasing. Innovation is continuing at a
strong pace, investment in new capacity, particularly for electric vehicles (EVs), is
soaring, and customer demand is increasing. Despite the pressures, the outlook for the
industry is positive.
5. RISK AND CONCERNS:
Supply Chain: In case of manufacturing companies and its projects
are typically time, cost and quality sensitive, leaving little room for delays. Thereby
manufacturers cant deliver on their promises because of a supply chain stall risk losing
out on thousands of crores in potential revenue and profit. For managing this type of risk
and continues supply of raw material, our Company has established commercial relations
with reputed suppliers.
Prices of Raw material: Due to volatile and unstable global markets
have widespread implications for manufacturing organisations and unexpected fluctuations
in raw material price levels, unforeseen obstacles are destabilising supply chains and
making it difficult for manufacturers to meet customer needs. Accordingly, change in the
price of raw materials raises the cost of production. Our company manages this risk by
entering in to the supply agreement with the suppliers.
Government Policy: Changes in the Government Policy could adversely
affect economic conditions in India generally and our business in particular.
Government Duties: Taxes and other levies imposed by the Government
of India or other State Governments, as well as other financial policies and regulations,
may have a material adverse effect on our business, financial condition and results of
operations.
Covid-19 Impact and Lockdown: If again Government imposes lockdown
to control spread of Covid-19 then it will have negative impact on the business of the
Company.
6. INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY:
The Company has in place adequate internal control systems covering all
its operations. Proper accounting records highlight the economy and efficiency of
operations, safeguarding of assets against unauthorized use or losses, and the reliability
of financial and operational information.
Some of the significant features of internal control system are:
• Financial and Commercial functions have been structured to
provide adequate support and control of the business.
• Risk Management policy has been adopted by the Company.
• The Company has an Internal Audit System conducted by the
Internal Auditor of the Company. Standard operating procedures and guidelines are reviewed
periodically to ensure adequate control.
7. OVERVIEW AND ANALYSIS OF FINANCIAL CONDITIONS:
During the year under review, your Company has achieved total revenue
from operations of Rs. 54,53,25,212/- as compared to Rs. 3,89,37,8996/- in the Previous
Year. After providing for taxes and other adjustments, Profit after tax is Rs. 3,63,86,469
as compared to a loss of Rs. 1,70,10,738/- during the Previous Year.
The Management believes that it has been objective and prudent in
making estimates and judgments relating to the Financial Statements and confirms that
these Financial Statements are a true and fair representation of the Companys Operations
for the period under review.
8. DEVELOPMENT ON HUMAN RESOURCE FRONT:
At SM Auto Stamping Limited, our human resources are critical to our
success and carrying forward our mission. With their sustained, determined and able work
efforts we were able to cruise smoothly through the hard time of the economic volatility
and rapidly changing market conditions. The requirement of the markets given the economic
scenario has made this even more challenging. Attracting new talent with the drive,
training and upgrading existing skill sets and getting all to move in a unified direction
will definitely be a task in the company. By creating a conducive environment for career
growth, Company is trying to achieve the maximum utilization of employees skills in the
most possible way.
There is need and the company is focused on retaining and bringing in
talent keeping in mind the ambitious plans despite the market and industry scenario. The
company also believes in recognizing and rewarding employees to boost their morale and
enable to achieve their maximum potential.
The Company has also indulged Life Catalyst India Private Limited, a
Company involved in training activities to conduct monthly sessions for the employees to
enhance their overall performance for their individual as well as organizational goals.
9. INDUSTRIAL RELATIONS:
In order to continue delivering quality products to our key customers,
our Company shall further strengthen its relationship with key vendor i.e.
sub-contractors. Our Company is also working on strategy to develop more and more vendors
who can deliver product and services in line with Companys philosophy and product
offerings, Industrial Relations throughout the year continued to remain very cordial and
satisfactory.
10. KEY FINANCIAL RATIOS:
| Sr. No Particulars of Ratio |
31.03.2022 |
31.03.2021 |
Explanation for change in Ratios |
|
(In %) |
(In %) |
|
| 1. Debtors Turnover |
7.84 |
6.00 |
Covid Pandemic caused low turnover and high trade receivables
in FY 2020-21. Post pandemic, the company has improved the ratio by increasing its sales
and offering discount for early payment. |
| 2. Inventory Turnover |
16.17 |
11.67 |
Company has achieved higher sales with a considerable
increase in stock, thereby increasing Inventory Turnover ratio. |
| 3. Interest Coverage Ratio |
6.25 |
0.77 |
Profit is achieved in FY 2021-22 as compared to loss position
in FY 202021. |
| 4. Current Ratio |
0.98 |
0.89 |
Increased inventory, decreased current maturities of long
term loan and comparative higher increase in current assets has resulted in improved
current ratio. |
| 5. Debt Equity Ratio |
0.34 |
0.45 |
Ratio has improved due to decrease in debt on account of
regular repayment and maintaining equity at constant level. |
| 6. Operating Profit Margin (%) |
17.06% |
12.44% |
Growth in sales and controlled manufacturing cost ratio has
contributed to increased gross margin. |
| 7. Net Profit Margin (%) |
6.67 |
(4.37) |
Improved gross margin, controlled administrative expenses,
reduced finance cost and overall efforts towards profit maximization has led to positive
bottom line. |
11. DETAILS PERTAINING TO NET-WORTH OF THE COMPANY:
| Particulars |
31.03.2022 (In Rs.) |
31.03.2021 (In Rs.) |
Explanation for change in Net- worth |
| Net-worth |
17,10,44,535 |
13,46,58,072 |
Net Worth has increased due to operational profit during the
year. |
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