1. FINANCIAL RESULTS
OF ASSOCIATION OF INDIAN FORGING INDUSTRY
The Managing Committee is pleased to present the 49th Annual Report together with the Audited Statement of Accounts for the year ended 31 st March 2014.
2. TRANSFER TO RESERVES
|Rs in lakh
|Revenue from operations
|Excess of income over expenditure
At the end of 2012-13, the accumulated surplus was Rs 596.58 lakh to which an amount of Rs 86.56 was added to give a surplus of Rs 683.14 lakh at the end of 2013-14. Out of this amount of Rs 683.14 lakh, an amount of Rs 419.12 lakh has been transferred to Building Fund.
3. PERFORMANCE HIGHLIGHTS OF THE YEAR
The total installed capacity of the forging industry continued to be around 37.7 lakh MT during 2013-14. Against this, the total production was estimated to be in the order of around 21.5 lakh MT. The overall capacity utilization during 2013-14 increased marginally to 57% from 55% during the earlier year resulting in a growth of about 2% of the Indian forging industry in 2013-14.
Taking into account the current growth in consumption of forgings and the projected growth of the consuming sectors, it is expected that the compound annual growth rate (CAGR) of the forging industry will be around 6% during the period 2013-17.
4. EVENTS AND ACTIVITIES OF AIFI
(i) During the year (April 2013-March 2014) the Managing Committee met four times; on 28 June 2013 in Pune, 30 August 2013 at Chakan, Pune, 19 November 2013 in Delhi and on 5 March 2014 in Chennai.
(ii) During the year (April 2013- March 2014) the meetings of the Western Region continued to be held every month. During the same period the Northern Region met thrice and the Southern Region once. In the Regional meetings review was taken of the industrial scenario particularly in the context of the forging industry. Presentations were also made by guest speakers on subjects related to the forging industry.
(iii) With the lead of the Technology & Training Sub-Committee of the Association, an MoU was signed on 17 October 2013 between the Association and the College of Engineering, Pune (COEP). Consequently, an elective paper on Forging Technology has been introduced in the Final Year of the 4-year B.Tech course of the COEP. Accordingly, 20 students of the Final Year B. Tech (Metallurgy) opted (January 2014) for Forging Technology as an optional paper.
(iv) A Memorandum of Understanding was signed on 16 January 2014 between the Association and the Arkey Technical Training & Research Institute, Pune in order to have training programmes on technical aspects for the personnel of the forging industry.
(v) An important milestone for the forging industry was the contract signed on 3 May 2013 by the Association with the BDB India Pvt Ltd, Pune to carry out a comprehensive survey of the Indian forging industry and of its end-users.
(vi) The 6th Asiaforge Representative Meeting was held in Tokyo, Japan during 24-26 July 2013. The Association was represented by its President, Mr Babu Rao, Mr Asheet Pasricha and Mr Vidyashankar.
(vii) The InterMold Thailand 2013 was held during 20-23 June 2013 in Bangkok. This was the 21st edition of Thailand's only show for mold and die manufacturing. A delegation of eight members visited the show.
(viii) A training workshop on Energy Efficiency, in collaboration with the Bureau of Energy Efficiency, was held in Chennai on 20-21 March 2014.
(ix) The AIFI was also very actively involved in a World Bank project, with support from the Global Environmental Facility (GEF), designed for the MSME sector to create awareness regarding energy efficiency measures and subsidize investments towards reaching the goal of improving efficiency in energy utilization.
5. MARKET TRENDS
It is well known that the demand for forgings essentially originates from the automotive sector which accounts for about 61% of the total forgings production. Within the automotive sector, it is the commercial vehicles segment that is predominant; this is followed by the passenger car segment. It is no exaggeration to say that the growth of the forging industry is automotive-led growth. It is therefore of paramount importance to the forging industry to closely follow the health of the automobile industry.
The year 2013-14 was one of the most challenging ones for the automobile industry; both vehicle and auto component sales saw a decline during the year. The industry recorded a decline of 2 per cent. The compound annual growth rate (CAGR) for the industry has been 14 per cent for the last six years. However, the auto component industry expects a growth of 4-6 per cent in the 2014-15 fiscal, if the vehicle sales continue to grow like they have in the last couple of months. Also, some positive initiatives taken by the government during the union budget for 2014-15 will help the industry record growth. ACMA has rightly acknowledged that there is a greater need for collaboration between the component manufacturers, OEMs, machine tool supplies and the raw material industry.
With increased urbanization and rising levels of disposable income, no doubt there will be greater demand for new mobility solutions. However, within the forging industry it is widely felt that with a view to reducing the dependency on the automotive sector, it is time to diversify into areas like defence, aerospace and railways.
6. GENERAL REVIEW OF THE ECONOMY
The growth rate of the Indian economy of over 9 per cent for three successive years between 2005-06 and 2007-08 was unprecedented. Although the global financial crisis of 2008-09 did not affect the Indian economy like it did many other world economies, it has been going through challenging times resulting in lower than 5 per cent growth of GDP at factor cost at constant prices for two consecutive years, i.e. 2012-13 and 2013-14. Persistent uncertainty in the global outlook and general slowdown in the global economy, compounded by domestic structural constraints and inflationary pressures, resulted in a protracted slowdown. India's growth declined from an average of 8.3 per cent per annum during 2004-05 to 2011-12 to an average of 4.6 per cent in 2012-13 and 2013-14. Average growth in the emerging markets and developing economies including China declined from 6.8 per cent to 4.9 per cent in this period (calendar-year basis).
The growth slowdown in the last two years was broad based, affecting in particular the industry sector. The last two years were particularly disappointing for the manufacturing sector, with growth averaging 0.2 per cent per annum. The decline in the manufacturing sector has been quite broad based, as per data from the index of industrial production (IIP). Inflation too declined during this period, but continued to be above the comfort zone, owing primarily to the elevated level of food inflation. The improvement in the external economic situation with the current account deficit declining to manageable levels after two years was the redeeming feature of 2013-14. The fiscal deficit of the Centre as a proportion of GDP also declined for the second year in a row. Reflecting the above and the expectations of a change for the better, financial markets have surged. Moderation in inflation would help ease the monetary policy stance and revive the confidence of investors. The IMF in April 2014 was of the opinion that India's economic slowdown appears have bottomed out; it predicted that India's GDP growth rates will gradually pick up over the next five years from 6.23 per cent in 2014 to about 7 percent in 2018. The global economy too is expected to recover moderately. Thus the Indian economy can look forward to better growth prospects in 2014-15 and beyond.
The real picture of the Indian economy during 2014-15 will emerge only after the current monsoon period is over and the extent to which the present government is actually able to translate its vision into action.
7. PARTICULARS UNDER SECTION 217 (1) (e)
There is nothing to be reported with respect to conservation of energy, technology absorption as required under the provisions of section 217 (1)(e) of the Companies Act 1956 and the rules framed there under. The information with respect to foreign exchange earnings and outgo is as under:
8. PARTICULARS OF EMPLOYEES
|Rs. in lakhs
During the year under report, no employee drew a remuneration, which is required to be disclosed under Section 217 (2A) of the Companies Act 1956 and the rules framed there under.
9. MANAGING COMMITTEE MEMBERS' RESPONSIBILITY STATEMENT
Pursuant to the requirement under Section 217(2AA) of the Companies Act, 1956, with respect to Directors Responsibility Statement, it is hereby confirmed that:
i. in the preparation of the annual accounts, the applicable accounting standards have been followed and that are no material departures;
ii. the selected accounting policies were applied consistently and judgements and estimates that are reasonable and prudent were made so as to give a true and fair view of the state of affairs of the Association at the end of the financial year viz., 31st March 2014 and of the surplus of the Association for that period;
iii. the Members of the Managing Committee have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the Association and for
iv. the Annual Accounts were prepared for the financial year ended 31st March 2014 on a going concern basis.
The Managing Committee has pleasure in recording its appreciation for the assistance, cooperation and support extended to the Association by Government authorities and banks.
The Association is grateful to all its employees for their exemplary cooperation during the year.
Finally, the Managing Committee sincerely thanks all the Members of the Association for their support and the confidence reposed in the Association.