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TTK Prestige Directors Report, TTK Prestige Reports by Directors
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TTK Prestige
BSE: 517506|NSE: TTKPRESTIG|ISIN: INE690A01010|SECTOR: Domestic Appliances
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Directors Report Year End : Mar '15    « Mar 14
Dear Members,
 
 The Directors have pleasure in presenting their Fifty Ninth Annual
 Report, together with the Audited Accounts of the Company, for the year
 ended 31st March, 2015 as follows:
 
 FINANCIAL RESULTS                                         (Rs. in lakhs) 
                                               2014-15           2013-14
 
 Sales (inclusive of excise duty)               142142            132338
 
 Other income                                      510               788
 
 Exceptional Income                                244               696
 
 EBIDTA                                          15434             16810
 (before net Exceptional Income)
 
 EBIDTA                                          15678             17506
 (Including net Exceptional Income)
 
 Profit/(Loss) before tax                        13330             15175
 
 Tax Provision                                    4098              3996
 
 Net Profit/(Loss) after Tax                      9232             11179
 
 Transfer to General Reserve                      1000              1200
 
 Proposed Dividend (including tax)                3083              2724
 
 Surplus carried to balance sheet                 5149              7255
 
 Review of performance :
 
 a. Your Company''s current year performance has to be judged from the
 background of continuing sluggish economy coupled with weak consumer
 demand and most importantly from the point of view of investments being
 made even during this sluggish phase keeping in view the long-term
 health of your Company. The investments have been not only in the
 nature of capital assets creating capacity for the long-term but also
 revenue expenses in building brand, distribution and human capital for
 the future. Therefore these measures do have a transient impact on
 margins which can improve over a period of time once the investments
 start fuelling growth.
 
 b. Shareholders are also aware that your Company does not follow a
 standalone margin-led policy but is focussed on growth with a fair
 long-term return on capital employed.
 
 c. Your Company is back to growth path, albeit at a lower rate of 7.4%
 after a decline of around 4% in the previous financial year. This
 growth is in line with the overall economic growth notwithstanding
 specific factors affecting the growth in appliances segment in general.
 It is to be noted that the channel conflict on account of entry of on-
 line channels had some adverse impact on primary sales for the year
 especially the period between August 2014 and February 2015.
 
 d. While there has been recovery in business growth, the EBIDTA prior
 to exceptional items declined by about 8% from Rs. 168.10 crores to Rs.
 154.34 crores after providing for CSR contributions of about Rs. 3.38
 crores. The operating EBIDTA margin was around 11% as compared to 12.7%
 in the previous year. The background for this decline is stated in para
 ''a'' above. The capacity building initiatives coupled with soft
 investments in brand building, distribution, service network and human
 resources resulted in transient under absorption of overheads. There
 was also some lag in passing on input costs on account of pipeline
 inventory. The product mixes in certain appliance categories while
 contributing to volume growth resulted in a lower absolute value in top
 line and thus lower absolute margins.
 
 e. Net profits declined by about 17% from Rs. 111.79 crores to Rs. 92.32
 crores due to higher provision for depreciation on account of the
 changes brought about by Companies Act 2013 and also higher provision
 for taxation as the 100% benefits from Uttarakhand units are reduced to
 30% from 2014-15 onwards. As a result the Earnings per Share stood at Rs.
 79.30 (PY Rs. 96.78).
 
 f. Your Company became debt-free as at the end of 31st March, 2015 and
 is carrying significant net free cash.
 
 g. In spite of substantial additions to manufacturing asset base and
 lower capacity utilisation the ROCE was healthy at 24.20%.
 
 h. Your Board has recommended a higher dividend of Rs. 22/- per share (PY
 Rs. 20/- per share) a gross pay-out ratio (including dividend
 distribution tax) in excess of 30% of net profits.
 
 Your Board of Directors is of the view that the current year
 performance is commendable taking into account the general sluggish
 economy both domestic and global. The market share of the key product
 categories was maintained or improved across geographies which are
 key-factors to note.
 
 A detailed analysis is provided under the section ''Management''s
 Discussion and Analysis'' forming part of this Director''s Report.
 
 Aawards and recognitions
 
 Your Company continued to be recognized by various agencies for its
 high quality performance in various parameters. During the Financial
 Year 14-15, your Company bagged the following awards.
 
 1. D & B top 500 Companies Award May 2014-15
 
 2. Frost and Sullivan Award 2014-15
 
 3. World Brand Summit Award
 
 4. Readers Digest Most trusted brand
 
 5. ET Now Best Brand Award
 
 6. Asia''s Most promising brand in kitchen appliances segment
 
 7. 100 most valuable brands of the year
 
 8. Franchisee India Award - Home products
 
 9. Award for Retail Excellence in Home Products & office Equipment
 
 Your Company''s brand Prestige continues to be recognized as the Super
 Brand in the Kitchen Appliances Segment
 
 DIRECTORS
 
 Mr. Ajay I. Thakore, an Independent Director stepped down from the
 office as at the closing hours of 31st March, 2015.  Mr. Thakore was a
 Director on your Board for nearly 40 years giving valuable guidance
 from time to time. The Board placed on record its deep appreciation for
 the services rendered by Mr.  Thakore during his tenure on the Board.
 
 Mr. S. Ravichandran, Managing Director, retired from the services of
 the Company with effect from the closing hours of 31st March, 2015. He
 was with the Company first as Joint Managing Director from 5th
 February, 1997 and as Managing Director since 2001. He has contributed
 significantly to the turnaround and growth of the Company during his 18
 year association with your Company. The Board placed on record its
 deep appreciation for the unstinting efforts and contributions made by
 Mr. S. Ravichandran.
 
 Mr. Murali Neelakantan, a legal professional, with vast exposure to
 commercial and corporate laws both in India and abroad, has joined your
 Board as Independent Director effective from 25th March, 2015 having
 been appointed by the shareholders through postal ballot. Mr. Arun
 Thiagarajan, Mr. Dileep Krishnaswamy and Dr. (Mrs.) Vandana Walvekar
 have been reappointed as Independent Directors with effect from 25th
 March, 2015 by the shareholders through postal ballot. All these
 directors have been appointed for a period of 5 years and are not
 liable to retire by rotation.
 
 Pursuant to the request of Dr. (Mrs) Latha Jagannathan, a Promoter
 Non-executive Director your Board decided to accept her resignation
 with effect from the closing hours of 27th May, 2015. The Board placed
 on record its deep appreciation for the services rendered by Dr. (Mrs.)
 Latha Jagannathan during her tenure on the Board.
 
 As per the recommendation of Nomination and Remuneration Committee,
 your Board decided to co-opt Dr. T.T. Mukund in the casual vacancy
 caused by the resignation of Dr. (Mrs) Latha Jagannathan. The
 appointment of Dr. T.T. Mukund as Non-independent/Non-executive
 Director takes effect from 29th May, 2015.
 
 Dr. T.T. Mukund is the son of Mr. T.T. Jagannathan, Executive Chairman
 and belongs to the Promoter Group. He is 38 years of age and is
 presently Reader National Centre for Biological Services, Bengaluru. He
 graduated from Cornell University, USA and did Ph.D. (Physics) at
 Massachusetts Institute of Technology, Cambridge, MA.
 
 Mr. K. Shankaran retires by rotation and is eligible for
 re-appointment. The information on the retiring Director is provided in
 the Notice calling the Annual General Meeting.
 
 FIXED DEPOSIT
 
 Pursuant to the provisions of Section 74 of the Companies Act, 2013
 your Company has, during the year 2014-15 repaid all the deposits
 accepted from public. There are no deposits outstanding or remaining
 unpaid as at the end of 31st March, 2015.
 
 DIVIDEND
 
 Your directors recommend payment of a dividend of Rs. 22/- per share for
 the year as compared to Rs. 20/- per share declared for the previous
 year.
 
 FUTURISTIC STATEMENTS
 
 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.
 
 CORPORATE GOVERNANCE
 
 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.
 
 LISTING
 
 Your Company''s shares are listed in the BSE Limited and National Stock
 Exchange and the applicable listing fees have been paid.
 
 FURTHER DISCLOSURES UNDER THE COMPANIES ACT, 2013 AND THE RULES MADE
 THEREUNDER:
 
 (a) Extract of Annual Return:
 
 Extract of Annual Return (Form MGT-9) is enclosed as Annexure A
 
 (b) Number of meetings of the Board:
 
 The Board of Directors met 6 (six) times during the year 2014-15. The
 details of the Board Meetings and the attendance of the Directors are
 provided in the Report on Corporate Governance.
 
 (c) Corporate Social Responsibility (CSR) Committee:
 
 As per the provisions of Section 135 of the Companies Act, 2013 and the
 Rules made thereunder, your Company constituted the Corporate Social
 Responsibility Committee which comprises of Mr. T.T. Jagannathan as
 Chairman, Mr. R Srinivasan, Mr. K Shankaran and Dr. (Mrs) Latha
 Jagannathan as Members.
 
 The Corporate Social Responsibility (CSR) Policy enumerating the CSR
 activities to be undertaken by the Company, in accordance with Schedule
 VII to the Companies Act, 2013 was recommended to the Board and the
 Board adopted the same. The said policy was also made available on the
 website of the Company http://www.ttkprestige.com. The Annual Report
 under CSR Activities is annexed to this report as Annexure B.
 
 The details relating to the meetings convened, etc. are furnished in
 the Report on Corporate Governance.
 
 (d) Composition of Audit Committee:
 
 The Board has reconstituted the Audit Committee on 21st August, 2014,
 in accordance with the provisions of Section 177 of the Companies Act,
 2013 and the Rules made thereunder and Clause 49 of the Listing
 Agreement, which comprises of Mr. Dileep Krishnaswamy as Chairman, Mr.
 R Srinivasan and Mr. Arun Thiagarajan as Members.  Mr. K Shankaran -
 Director and Secretary is the Secretary of the Committee. More details
 on the Committee are given in the Report on Corporate Governance.
 
 (e) Related Party Transactions:
 
 During the year under review, no transaction of material nature has
 been entered into by the Company with its promoters, the directors or
 the management, their subsidiaries or relatives, etc., that may have a
 potential conflict with the interests of the Company.
 
 All related party transactions are placed before the Audit Committee as
 also the Board for approval. Prior omnibus approval of the Audit
 Committee is obtained on a yearly basis for the transactions which are
 of a unforeseen or repetitive nature. A Statement giving details of the
 transactions entered into with the related parties, pursuant to the
 omnibus approval so granted, is placed before the Audit Committee and
 the Board of Directors for their approval / ratification on a quarterly
 basis.
 
 The Register of Contracts containing transactions, in which directors
 are interested, is placed before the Audit Committee / Board regularly.
 
 The Board of Directors of the Company, on the recommendation of the
 Audit Committee, adopted a policy on Related Party Transactions, to
 regulate the transactions between the Company and its Related Parties,
 in compliance with the applicable provisions of the Companies Act, 2013
 and the Listing Agreement. The Policy as approved by the Board is
 uploaded on the Company''s website at http://www.ttkprestige.com.
 
 The details of the Related Party Transactions in Form AOC-2 are annexed
 as Annexure C to this Report.
 
 (f) Directors and Key Managerial Personnel:
 
 None of the Directors are disqualified from being appointed or holding
 office as Directors, as stipulated under Section 164 of the Companies
 Act, 2013.
 
 (i) Retirement / Cessation:
 
 - Mr. S Ravichandran retired from the position of Managing Director
 with effect from the closing hours of 31st March, 2015.
 
 - Mr. Ajay I Thakore retired from the office of Independent Director
 at the closing hours of 31st March, 2015.
 
 - Dr. (Mrs) Latha Jagannathan retired from the office of
 Non-Executive Director with effect from the closing hours of 27th May,
 2015.
 
 - Dr. T.T. Mukund was co-opted in the casual vacancy caused by the
 resignation of Dr. (Mrs.) Jagannathan with effect from 29th May, 2015.
 
 (ii) Appointment / Re-appointment of Directors:
 
 (a) Pursuant to the provisions of Section 149 and other applicable
 provisions, if any, of the Companies Act, 2013 and the Rules made
 thereunder and as per Clause 49 of the Listing agreement, the following
 Directors were appointed as Independent Directors of the Company:
 
 - Mr. R. Srinivasan was appointed as an Independent Director,
 effective 21st August, 2014, for a term of five years, not liable to
 retire by rotation at the 58th Annual General Meeting held on 21st
 August, 2014.
 
 - Dr. (Mrs.) Vandana Walvekar, Mr. Dileep Krishnaswamy and Mr. Arun
 Thiagarajan and Mr. Murali Neelakantan were appointed as Independent
 Directors, effective 25th March, 2015, for a term of five years, not
 liable to retire by rotation through the conduct of Postal Ballot
 including e-Voting.
 
 (b) Mr. K Shankaran, liable to retire by rotation at the ensuing Annual
 General Meeting, being eligible, offers himself for re-appointment. The
 Board recommends his re-appointment.
 
 (iii) statement on declaration by the Independent Directors of the
 Company:
 
 All the Independent Directors of the Company have given declarations
 under Section 149(7) of the Companies Act, 2013 that they meet the
 criteria of independence as laid down under Section 149(6) of the
 Companies Act, 2013 and Clause 49 of the Listing Agreement. The terms
 and conditions of appointment of the Independent Directors are posted
 on the website of the Company http://www.ttkprestige.com.
 
 (iv) Key managerial Personnel (KMP):
 
 The Board at its meeting held on 21st August, 2014, confirmed the
 following managerial personnel as Key Managerial Personnel (KMP):
 
 - Mr. S. Ravichandran, Managing Director as Chief Executive Officer
 (CEO) till 31st March, 2015
 
 - Mr. K Shankaran, Director & Wholetime Company Secretary as Company
 Secretary; and
 
 - Mr. V Sundaresan, Sr. Vice President - Finance as Chief Financial
 Officer (CFO).
 
 Mr. Chandru Kalro has been appointed as Managing Director/CEO with
 effect from 1st April, 2015 pursuant to approval of his appointment by
 shareholders through postal ballot carried out during March, 2015.
 
 (v) Performance Evaluation of the Board, its Committees and the
 directors:
 
 In compliance with the provisions of the Companies Act, 2013 and Clause
 49 of the Listing Agreement, the performance evaluation of the Board
 was carried out during the year under review. More details on the same
 are given in the Report on Corporate Governance.
 
 (vi) Remuneration Policy:
 
 Your Company follows a policy on remuneration of Directors and Senior
 Management. The policy is framed by the Nomination and Remuneration
 Committee and approved by the Board. More details on the same are given
 in the Report on Corporate Governance.
 
 (g) Auditors:
 
 (i) Auditors and their Report:
 
 In accordance with the provisions Section 139 and other applicable
 provisions, if any, of the Companies Act, 2013 and the Rules made
 thereunder, M/s S Viswanathan, Chartered Accountants, Chennai (Firm
 Registration No. 004770S) were appointed as Statutory Auditors, for a
 term of three years to hold office from the conclusion of 58th Annual
 General Meeting till the conclusion of 61st Annual General Meeting,
 subject to ratification by the members at every Annual General Meeting.
 
 Accordingly, a Resolution seeking members'' ratification for their
 appointment from the conclusion of this Annual General Meeting till the
 conclusion of the next Annual General Meeting of the Company is
 included under Item No. 4 of the Notice convening the Annual General
 Meeting.
 
 The Auditors'' Report to the Shareholders for the year under review does
 not contain any qualifications.
 
 (ii) Cost Auditor and Cost Audit Report:
 
 - Appointment for the year 2015-16:
 
 Pursuant to Section 148 of the Companies Act, 2013 read with The
 Companies (Cost Records and Audit) Amendment Rules, 2014, the Cost
 Records of the Company relating to Stainless Steel Pressure Cookers
 and Cookware are required to be audited.
 
 The Board of Directors, on the recommendation of the Audit Committee,
 appointed Mr. V. Kalyanaraman as Cost Auditor of the Company, for the
 financial year 2015-16 and fixed their remuneration.
 
 Mr. V. Kalyanaraman has confirmed that his appointment is within the
 limits of the Section 141 of the Companies Act, 2013 and has also
 certified that he is free from any disqualifications specified under
 the provisions of Section 141 of the Companies Act, 2013.
 
 The Audit Committee also received a Certificate from the Cost Auditor
 certifying the independence and arm''s length relationship with the
 Company.
 
 Pursuant to the provisions of Section 148 of the Companies Act, 2013
 and the Rules made thereunder, the approval of the Members is sought by
 means of an Ordinary Resolution for the remuneration payable to Mr. V.
 Kalyanaraman, Cost Auditor, under Item No.5 of the Notice convening the
 Annual General Meeting.
 
 The Cost Audit Report for the year ended 31st March, 2015 would be
 filed on or before the due date (i.e.) 27th September, 2015.
 
 - Cost Audit Report for the year 2013-14:
 
 The Cost Audit Report for the financial year ended 31st March, 2014 was
 filed on 4th April, 2015, vide SRN S37174786 on the Ministry of
 Corporate Affairs website.
 
 (iii) Secretarial Auditor and Secretarial Audit Report:
 
 The Board had appointed Mr. Parameshwar G Hegde, Company Secretary in
 Whole-time Practice, to carry out Secretarial Audit under the
 provisions of Section 204 of the Companies Act, 2013 for the financial
 year 2014-15. The Report of the Secretarial Auditor in Form MR-3 is
 annexed to this report as Annexure G. The report does not contain any
 qualification.
 
 (h) Transfer to Investor Education and Protection Fund:
 
 Your Company has transferred a sum of Rs. 4.12 lakhs during the financial
 year 2014-15 to the Investor Education and Protection Fund established
 by the Central Government, in compliance with Section 125 of the
 Companies Act, 2013.  The said amount represents the unclaimed
 dividends for the year ended 31st March, 2007, which were lying
 unclaimed with the Company for a period of seven years from their
 respective due dates of payment.
 
 (i) unclaimed shares
 
 In terms of Clause 5A of the Listing Agreement, the Company has opened
 a Suspense Account for holding the unclaimed share. The number of such
 share at the beginning of the year was 1,600 and the number of
 shareholders were 12.  No movement has taken place during the financial
 year 2014-15. The voting rights on the shares in the suspense account
 as on 31st March, 2015 shall remain frozen till the rightful owners of
 such shares claim the shares.
 
 (j) Conservation of Energy:
 
 The prescribed particulars under Rule 8(3) of The Companies (Accounts)
 Rules, 2014 relating to conservation of energy, technology absorption,
 foreign exchange earnings and outgo, are furnished in the Annexure D to
 this Report.
 
 (k) Particulars of employees:
 
 The information required under Section 197 of the Companies Act, 2013
 and the Rules made thereunder are annexed to this Report as Annexure E
 & Annexure F.
 
 (l) subsidiary Company:
 
 Your Company does not have any Subsidiary.
 
 (m) Loans, Guarantees and investments under section 186 of the
 Companies Act, 2013:
 
 During the year your Company had not given any loan, provided any
 guarantee OR made any investment under Section 186 of the Companies
 Act, 2013. Your Company holds 1440 equity shares of Rs. 10/- each in TTK
 Healthcare Limited. Your Company had in the past provided secured
 inter-corporate loan/deposit of Rs. 18.75 crores to Triveni Bialetti
 Industries P Ltd, an unrelated party with whom your Company has
 business transactions and this amount is still carried.
 
 (n) Significant and Material Orders passed by the Regulators or Courts:
 
 There are no significant and material orders passed by the Regulators /
 Courts which would impact the going concern status of the Company and
 its future operations.
 
 (o) Whistle Blower Policy:
 
 In accordance with the provisions of Section 177(9) of the Companies
 Act, 2013 and the Rules made thereunder and also Clause 49 of the
 Listing Agreement, your Company established a vigil mechanism termed as
 Whistle Blower Policy, for directors and employees to report concerns
 about unethical behaviour, actual or suspected fraud or violation of
 the Company''s Code of Conduct or Ethics Policy, which also provides for
 adequate safeguards against victimization of director(s) / employee(s)
 who avail of the mechanism and also provide for direct access to the
 Corporate Governance Officer / Chairman of the Audit Committee /
 Executive Chairman in exceptional cases.
 
 The Whistle Blower Policy is made available on the website of the
 Company http://www.ttkprestige.com.
 
 (p) Obligation of your Company under the Sexual Harassment of Women at
 Workplace (Prevention, Prohibition and Redressal) Act, 2013:
 
 In order to prevent sexual harassment of women at work place a new
 Act,The Sexual Harassment of Women at Workplace (Prevention,
 Prohibition and Redressal) Act, 2013 has been notified on 9th December,
 2013. Under the said Act, every Company is required to set up an
 Internal Complaints Committee to look into complaints relating to
 sexual harassment at work place of any women employee.
 
 Your Company has adopted a policy for prevention of Sexual Harassment
 of Women at Workplace and has constituted a Committee with a NGO as one
 of its Members, for implementation of the said Policy. During the year
 2014-15, there were no complaints.
 
 Directors'' responsibility statement
 
 As required by Sec.134(5) read with Sec.134(3)(c) of the Companies Act,
 2013 your Directors confirm
 
 a. that in the preparation of the annual accounts, the applicable
 accounting standards have been followed, along with proper explanation
 relating to material departures;
 
 b. 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;
 
 c. that they have taken proper and sufficient care for the maintenance
 of adequate accounting records, in accordance with the provisions of
 this Act for safeguarding the assets of the Company and for preventing
 and detecting fraud and other irregularities; and
 
 d. that they have prepared the annual accounts on a going concern
 basis; and
 
 e. they have laid down internal financial controls to be followed by
 the Company and that such internal financial controls are adequate and
 are operating effectively.
 
 f. they have devised proper systems to ensure compliance with the
 provisions of all applicable laws and that such systems are adequate
 and operating effectively.
 
 Acknowledgements
 
 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
 
                                  (T.T. JAGANNATHAN)
                                  Executive Chairman
 
 Registered Office :
 Plot No. 38,
 SIPCOT Industrial Complex,
 HOSUR - 635 126, Tamil Nadu.
 
 Place : Bengaluru
 Dated : 27th May, 2015
 
 
Source : Dion Global Solutions Limited
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