- CORPORATE
REVIEW 
- OPERATIONAL
REVIEW - GOVERNANCE AND
SUSTAINABILITY - ANNUAL FINANCIAL
STATEMENTS- Independent auditor's report
- Company secretary's certificate
- Directors' report
- Balance sheets
- Income statements
- Statements of changes in equity
- Cash flow statements
- Notes to the annual financial
statements - Subsidiary and other information
- Annexure A - Segmental reporting
- Annexure B - Shareholders' diary 2007/8
- Notice of annual general meeting
- Corporate information
- Form of proxy
Operational Review
Ugo Frigerio
BA (Hons), M Phil
Divisional Managing Director
Feltex Automotive
Profile
The Feltex Automotive division is one of South Africa’s largest automotive component
manufacturers and has manufacturing facilities situated in Durban, Rosslyn,
Port Elizabeth, Ladysmith, Midrand and East London, in close proximity to the
Original Equipment Manufacturer (“OEM”) plants.
Period under review
Feltex Automotive achieved its 2006/7 budgets in spite of a number of challenges relating to raw material price increases, interest rate increases and submissions on new models to be launched during 2007. Revenue and operating profit increased satisfactorily on the previous 12 months.
Locally produced passenger and light commercial vehicle sales increased from 535 033 units to 542 831 units in 2006/7. A 4% reduction in sales in the first six months of the 2007 calendar year resulted in a lower-than-expected annual increase in locally produced vehicle sales. This was primarily impacted by interest rate hikes.
Feltex Fehrer, Feltex Automotive Trim and Rieter Feltex delivered excellent returns.
Feltex Automotive Leathers has been receiving significant attention and its performance has improved, but it is still not at the desired level of profitability and further initiatives have been put in place to improve performance.
The period was characterised by a number of events:
- The acquisition of Caravelle Automotive Holdings (Pty) Ltd, a producer of loose lay mats for the motor industry, which directly complements the interior carpet trim business.
- A joint venture was formed with an Australian company called Futuris Automotive Group Limited. Futuris Feltex (Pty) Ltd, situated in East London, will produce tufted carpeting and supply the Feltex Automotive Trim business unit for the new Mercedes C Class and requirements for the export market.
- A new greenfield production facility was commissioned in East London. The new site in the industrial development zone of East London will house the local operations of Feltex Fehrer (Pty) Ltd and Feltex Automotive Trim. The consolidation of the Port Elizabeth and East London plants was accompanied by retrenchments costing R1,6 million.
- A new leather processing technology was introduced at Feltex Automotive Leathers in Ladysmith, using a German technology partner. Orders from America have already been received and the new technology will assist this business unit to differentiate itself from its competitors and gain market share.
Prospects
With the launch of two new models, namely the Toyota Corolla and the Mercedes Benz C Class, the outlook for Feltex Automotive is favourable. Vehicle build for the period is expected to show strong growth, driven in particular by the Toyota Hilux/Fortuner and Corolla.
