Dear Shareholders,
This has been a momentous year for V-Guard Industries, crossing a
turnover of Rs. 1,500 crore for the first time in our history. Despite a
tough operating environment, with consumer spends under pressure, the
Company has delivered a growth of 12% year on year in both top line and
bottom line while maintaining its margin profile at 8.4% for the full
financial year. The revenue contribution from non-South has increased
to 30% during the FY14.
The Company''s growth moderated in FY14 mainly on account of a weak
consumer sentiment and weather related issues. The advent of the
monsoon was earlier than usual in 2013 and lasted for longer period,
when compared to previous years, especially in Southern India. This had
a bearing on demand for some of our products like Pumps and Motors.
Growth of certain product category was lower than the previous years,
as many parts of the country were free from power cuts starting from
the second half of the year up to the general election period.
Despite these challenges, V-Guard has remained committed towards
building on its competitive strengths, expanding its network of channel
partners and retailers across the country and enhancing our brand
recall in the non-South markets through aggressive advertising spends
and sales promotions.
Your Company reinforced its presence in the kitchen appliance category
during the year by launching mixer grinder to the product category.
Both mixer grinder, and induction cook tops launched during FY13 has
been well accepted in the market. The category will be strengthened
further by adding more products to the folder.
During the year under review, your Company has doubled the capacity for
wires at the Kashipur plant in Uttarakhand from 3.3 million coils per
annum to 6.6 million coils per annum in two phases at a total cost of Rs.
16.30 crores. The Company has also fully commercialized its
state-of-art facility for manufacture of Solar Water Heater at
Perundurai and also constructed a central warehouse at Perundurai to
cater the requirements of the State of Tamil Nadu. The Management is
continuously exploring the possibility of automation in various
processes and steps are being implemented which will result in
efficiency improvement and cost reduction.
Your Company''s Research & Development Department has been approved by
Department of Scientific and Industrial Research (DSIR) and subsequent
to the approval, the state-of-art R & D Center has been set up by
consolidating the R & D activities of various products of the Company.
You are aware that, V-Guard since its inception is known for providing
quality and prompt after sales service. As part of strengthening
further the systems of after sale service, new service delivery model
is being institutionalized with the support of robust IT solution pan
India basis. With this new model of service delivery, the Company is
confident of delivering a differentiated customer service and develop
it as a competency, which will give competitive edge in the market and
will position V-Guard as a most reliable and trusted service provider
in the minds of our partners and customers.
Your Company believes that employees are the pillars of growth and
organizational success and has taken number of initiatives to increase
their engagement in the operations of the Company. Regular trainings
are provided to equip them to contribute to the future growth. Major
locations of the Company are connected through well-equipped video
conferencing facility. The focus is to make your Company a preferred
employer in all the geographies where the Company is present. With a
view to retain best talents of the Company and to create the feeling of
ownership in their minds, the Company has implemented ESOS 2013 during
the year under review and granted options to eligible employees.
The Board of Directors has recommended dividend of Rs. 4.50 per share for
FY14, up from Rs. 3.50 in the previous year. This amounts to a payout of
22% of profits. V-Guard is committed to creating shareholder value, and
the increased dividend reflects our continued focus to deliver on that
commitment. It also shows our confidence in successfully executing our
strategic plan and enabling a balance between judiciously investing in
the business and regular returns to our shareholders.
The existing Board of the Company has been re-constituted by inducting
two more Additional Directors - Mr. Ullas K Kamath and Mrs. Joshna
Mithun, with effect from 2nd May, 2014. Mr. Ullas K Kamath, who is on
the Board of Jyothy Laboratories Ltd., as Joint Managing Director, is a
Chartered Accountant and management expert, having immense experience
in Finance and Marketing. Mrs. Joshna Mithun, who is on the Board of
V-Star Creations Pvt. Ltd., as Executive Director, is a Management
professional with specialization in the areas of HR and Finance.
We believe our growth trajectory has bottomed out in FY14 and expect
accelerated growth going forward, given the strong outlook for the
summer season and low base last year. We will continue making
investments in advertising and marketing to enhance brand visibility in
order to facilitate further pan- India expansion. Actions are also
afoot to add more retailers under the distributors, thereby increasing
revenue contribution per distributor and providing significant scope
for expansion of returns on existing investments.
I would like to express my sincere thanks and gratitude to all
stakeholders including our esteemed shareholders, valued customers,
vendors, Banks, Central and various State Governments for the faith
reposed by them in the Company.
With Best Wishes
Sd/-
Kochouseph Chittilappilly
Chairman
