Message From The Chairman
It appears the world is standing still.
In last year's annual report, I had mentioned events ranging from the Arab Spring, theEuro crisis, the stubborn US economy and a slower Indian growth. I might as well be makingthe same observations now! Has nothing changed?
Ironically, even your company's performance has barely changed since last year.Revenues for instance, remained at around Rs.83 crores. This might appear somewhat unusualgiven the continuous growth your company has experienced these last several years. Whilemuch of this has been dealt with in the MD&A section of the report, let me summarizethe year's highlights and our outlook moving forward.
At first glance, it appears exports have dropped 1.5% to Rs. 59 crores from Rs.60 crores last year.
However, shipments in the US to our Grocery customers actually increased 20% vs. lastyear and Australian revenues also grew 16%. More importantly, consumer offtake in the USGrocery too was up. However, lower inventory norms in the US impacted our primary salesand hence our exports.
These revenue increases are quite impressive given the soft US economy and Tasty Bitecontinues to be not just the market leader in its segment but also the fastest growing.Additionally, the brand continued to make significant inroads into mainstream supermarketsand total points of distribution in the US increased.
Earnings (EBIDTA) were up 57% from Rs.5 crores to Rs.8 crores.
Gross margins were significantly better this year due to productivity gains in thefactory, smarter buying of raw materials and a weakened rupee. This was helped in no smallmeasure by our reorganization along profit centers viz. RTS, (Consumer Products) Sauces,FFP (Formed Frozen products) and the Farm. This has allowed us to focus more sharply oncustomers, quality and costs.
On the domestic front our business was up 13% at Rs. 19 crores.
The TFS business (Tasty Bite Food Service) represents a strategic opportunity for thecompany and you might recall that we are in the midst of a large capital expenditureprogram to set up a new sauces and frozen products line. While some expansion happenedlast year, the bulk of it will now be commissioned this year. This will be a major boostto our strategy to become a partner of choice to the leaders in the Indian Food Serviceindustry.
TBRC (Tasty Bite Research Center) received DSIR accreditation during the year.
You may recall, I had mentioned last year that we had inaugurated the new building thathoused the Tasty Bite Research Center. TBRC is designed to become a center for excellencein prepared foods R&D. As we had hoped, TBRC received its accreditation as a researchcenter by the Department of Scientific and Industrial Research (DSIR) of the Government ofIndia.
Apart from working on prepared shelf stable foods, TBRC has also added capabilities forresearch and development for intermediate and finished products for the Food Servicebusiness. This will give your company a major competitive advantage as we grow ourstrategic partnerships with leaders in the global food service industry.
PAT (Profit after tax) stayed at last year's level or marginally dropped to Rs.1.7 crores from Rs. 1.9 crores Some of the forex gains in exports however, were offset dueto revaluation of foreign currency borrowings and impact of forward contracts.
Lets take a quick look at the year ahead.
It does not appear that the global economy is set for a major revival anytime thisyear. The Greek crisis is still unfurling. Its impact on the rest of Europe remainsunclear. Syria is in flames even as Egypt is going through democratic birth pangs. The USis heading into its Presidential election and there seems little the Government in Indiaor the RBI can do to stimulate growth any faster.
It is not that your company is small enough not be affected by global headwinds. Butdespite these unsettling times, your company is probably well-poised to benefit from allthe seeding work that has happened in the last 2 years and is looking to grow its volumes,revenues and profits in all three of its key markets viz. North America, Australia andIndia.
It often sounds like a clich' when we say that our biggest asset is our people. But,dear shareholders, I am very proud to announce to you that yet again, your company, TastyBite Eatables Limited has been recognized by the Great Place to Work Institute and beenawarded "TOP 50 Best Companies to Work For" for the year 2012.