(Including Management Discussion and Analysis Report)
The Directors have pleasure in presenting their Fifty Eighth Annual
Report, together with the Audited Accounts of the Company, for the year
ended 31st March 2014 as follows:
(Rs. in lakhs)
Sales (inclusive of excise duty) 132338 138589
Other income 788 473
Exceptional Income 696
EBIDTA 16810 20845
(before net Exceptional Income)
EBIDTA 17506 20845
(Including net Exceptional Income)
Profit/(Loss) before tax 15175 18520
Tax Provision 3996 5211
Net Profit/(Loss) after Tax 11179 13309
Transfer to General Reserve 1200 1500
Proposed Dividend (including tax) 2724 2322
Surplus carried to balance sheet 7255 9487
REVIEW OF PERFORMANCE :
Your Company is focussed on growth with a fair return on capital
employed. Your Company does not follow a standalone margin- led
strategy. Therefore the performance has to be understood in the light
of the philosophy followed by your Company.
- After a decade of high growth and a CAGR in excess of 25%, your
company for the first time witnessed a drop of 4.5% in topline largely
due to sudden shifts in government policy, economic slowdown across the
country, more trying economic climate in most of the southern markets
and deteriorating consumer sentiment across categories in the backdrop
of unprecedented inflation in articles of daily consumption. In sum and
substance a host of external factors impacted the growth path of your
company both in domestic market and export market. .
- More specific to your Company was the high base effect in the
previous year due to Induction Stove and its bundled products which
declined by 38% solely due to shift in Government Policy on domestic
cooking gas cylinder subsidies. In the rest of the category the growth
in domestic sale was around 8% which can be considered significant in
this economic climate. In fact your Company registered impressive
growths in mixer-grinders, gas stoves, Inner-lid pressure cookers and
in general in all value added products.
- Not deterred by general sentiment your company launched an all new
brand campaign using India''s leading celebrity couple as brand
ambassadors and introduced several new and advanced models of various
products. This has ensured that your Company''s brand salience is kept
more prominent and market share was either maintained or improved
across product categories and markets.
- The impact on topline also impacted EBIDTA (before exceptional items)
and Profit after tax which declined by 19.4% and 16% respectively.
- Your Company did get some boost to profits due to receipt of enhanced
compensation and interest aggregating to Rs.8.10 crores through a court
order relating to portions of industrial land of your Company acquired
by the Government about 10 years back. Your Company also incurred a sum
of Rs. 1.14 crores on a VRS scheme in the Hosur factory. The net
exceptional income was therefore Rs.6.96 crores
- The operating EBIDTA margin was 12.70% as compared to 15% in the
previous year, the drop largely being attributable to under-absorption
of some overheads owing to drop in sales.
- Earnings per Share stood at Rs. 96.78 (Previous Year Rs. 117.35).
- The ratio of Operating EBIDTA/ Operating Capital employed (excluding
CWIP) in the Kitchen Segment is 27.62%. This is on a substantially
increased asset base due to capitalization of the Gujarat facilities
which can be used to optimum potential only in the next few years.
- Your Board of Directors are of the view that the current year
performance is commendable in the light of several external factors
which are not under the control of the management and that the constant
efforts to derisk your Company from being dependent on a few products
and markets have made your Company withstand the onslaught of several
adverse external factors in one single year.
A detailed analysis is provided under the section ''Management''s
Discussion and Analysis'' forming part of this Director''s Report.
AWARDS AND RECOGNITIONS
Your Company continued to be recognized by various agencies for its
high quality performance in various parameters.
(1) Your Company''s brand Prestige continues to be recognized as the
Super Brand in the Kitchen Appliances Segment. The Company also won
the The Trusted Brand Award during the year.
(2) Your Company was honoured with the Dun & Bradstreet - Manappuram
Finance Limited Corporate Awards 2014 in the Consumer Durable/Domestic
Appliances Sector. Your Company is listed among the top 500 Companies
(3) In the area of Retail your Company has bagged :
(a) the award for the Best Franchiser in the Home category - for the
8th year in a row.
(b) the Award for Best Retailer in Home & Office Category - for the 4th
year in a row.
(4) The Thought Leadership Award for the best team was won by the
Company and your Chairman Mr. T.T. Jagannathan has been honoured with
the most coveted Award for Excellence in improving Performance through
(5) Some of your Company''s key executives have also been recognized by
reputed external Agencies:
(a) Mr. Chandru Kalro won the Marketing Thought Leader of the Year
(b) Mr. K.G. George was adjudged as one of the Top 50 Retail
Mr. T.T. Raghunathan and Dr. (Mrs) Latha Jagannathan retire by rotation
and are eligible for re-election. The information on these retiring
Directors is provided in the Notice calling the Annual General Meeting.
Mr. R. Srinivasan is an independent director and in terms of the
earlier reappointment holds office till the ensuing Annual General
Meeting. As he fulfills the qualifications required to hold the office
of independent director, he is proposed to be appointed as independent
director for a period of five years in accordance with the provisions
of Companies Act, 2013. The requisite particulars are provided in the
notice calling the Annual General Meeting.
The Fixed Deposits aggregated to Rs. 189.89 lakhs as on 31st March 2014.
There were 2 unclaimed deposits totalling Rs. 14.22 lakhs, which remained
unpaid as on that date.
Your directors recommend payment of a dividend of Rs. 20/- per share for
the year as compared to Rs.17.5 per share declared for the previous year.
This Directors Report and the Management Discussion and Analysis
included therein may contain certain statements, which are futuristic
in nature. Such statements represent the intentions of the Management
and the efforts being put in by them to realize certain goals. The
success in realizing these goals depends on various factors both
internal and external. Therefore, the investors are requested to make
their own independent judgments by taking into account all relevant
factors before taking any investment decision.
Report on Corporate Governance is separately presented as part of the
Annual Report. Management Discussion and Analysis is included in this
Directors'' Report in the preceding sections.
The particulars as required under Sec. 217 (2A) of the Companies Act,
1956 are given in the Annexure to this report.
M/s. S. Viswanathan, Chartered Accountants retire at the ensuing Annual
General Meeting and are eligible for reappointment as statutory
auditors of the Company.
In conformity with the directives of the Central Government, your Board
of Directors has appointed Sri. V. Kalyanaraman, Cost Accountant, No. 4
Second Street, North Gopalapuram, Chennai 600 086, as the Cost Auditor
under Section 233B of the Companies Act, 1956, for the audit of cost
accounts for Aluminium, Stainless Steel Pressure Cookers, Non-stick
Cookware for the year ended 31.3.2014.The cost audit report for the
year ended 31.3.2014 will be filed in accordance with the provisions of
the Companies Act.
Your Company''s shares are listed in the Bombay Stock Exchange and
National Stock Exchange and the listing fees for these two exchanges
have been paid.
FOREIGN EXCHANGE EARNINGS
The details of foreign exchange earnings and outflow are given in the
annexure to this Report.
CONSERVATION OF ENERGY AND RESEARCH AND DEVELOPMENT
The measures related to conservation of energy, etc., are covered in
the annexure to this Report pursuant to Section 217(1) (e) of the
Companies Act, 1956.
DIRECTORS'' RESPONSIBILITY STATEMENT
As required by Sec 217(2AA) of the Companies Act, 1956 your Directors
1. that in the preparation of the annual accounts, the applicable
accounting standards have been followed, along with proper explanation
relating to material departures;
2. that they have selected such accounting policies and applied them
consistently and made judgments and estimates that are reasonable and
prudent, so as to give a true and fair view of the state of affairs of
the Company at the end of the financial year and of the profit or loss
of the Company for that period;
3. that they 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 Company and
for preventing and detecting fraud and other irregularities; and
4. That they have prepared the annual accounts on a going concern
Your Directors deeply appreciate and acknowledge the significant and
continued co-operation given to your Company by the Bankers, Financial
Institutions and the employees of the Company.
For and on behalf of the Board
Registered Office :
Plot No. 38, SIPCOT Industrial Complex,
HOSUR - 635 126, Tamil Nadu.
Place : Bengaluru
Dated : 15th July, 2014