Net profit for the financial year ended 31st March 2020 stood at Rs 261.3 crore
Skoda Auto Volkswagen India, the Indian subsidiary of German automotive manufacturing company Volkswagen Group, spent Rs 445.2 crore on advertising for the fiscal ended 31st March 2020 compared to Rs 343.5 crore in the previous fiscal, according to Registrar of Companies filing shared by market intelligence firm Tofler.
During the year under review, the Scheme of amalgamation of Skoda Auto India Private Limited (SAIPL) and Volkswagen Group Sales India Private Limited (VWGSIPL) with the company was approved by the Hon’ble National Company Law Tribunal, Mumbai, vide order dated 5th September 2019. Pursuant to the said order all the assets, liabilities, rights, and obligations of SAIPL and VWGSIPL got transferred to and vested in the company.
The name of the company was changed from Volkswagen India Private Limited to Skoda Auto Volkswagen India Private Limited and a fresh Certificate of Incorporation dated 20th September 2019, was issued by the Registrar of Companies, Pune in pursuance thereof.
The appointed date for accounting purposes was 1st April 2019 and the effective date of the merger was 5th October 2019. In view of the above merger, the financial statements reflect the figures on a consolidated basis of the merged entity effective from 1st April 2019, onwards.
SAIPL was in the business of manufacturing and marketing of passenger cars and had its plant in Aurangabad. VWGSIPL was in the business of marketing the cars manufactured by the company to various dealers across the country and also other brands in the Volkswagen Group.
The net profit for the financial year ended 31st March 2020 stood at Rs 261.3 crore compared to Rs 323.4 crore in the previous fiscal. The total comprehensive income during the year (net) has decreased to Rs 123.5 crore from Rs 390.9 crore, due to recognition of deferred tax assets to the extent of deferred tax liability and adverse exchange rate fluctuations.
The turnover of the merged entity for the financial year decreased from Rs 11,238.3 crore to Rs 9300.5 crore due to a reduction in sales volume in the domestic and export market owing to adverse market conditions in the auto sector and due to restructuring of the product portfolio. The introduction of new emission norms [BSVI] has also impacted the results.
Operating profit has increased to Rs. 507 crore as compared to Rs. 369.8 crore in the previous year due to an increase in other income on account of financial assistance from sister companies within the Volkswagen Group to maintain the desired operating margin as per transfer pricing. This has offset the negative impact of sales volume reduction of both the domestic and export markets and changes in employee cost and other expenses.
The company said that the "board is working strenuously to strengthen the financial position of the company and have embarked upon various initiatives to improve sales, control costs and improve efficiency in the plant".