TTK PRESTIGE LIMITED
ANNUAL REPORT 2010-2011
I have great pleasure in welcoming you all to the 55th Annual General
Meeting of your company.
GENERAL ECONOMIC SCENARIO
Indian economy in the financial year 2010-11 represented a mixed outcome of
growth and high inflation. The real GDP grew by 8.5% in 2010-11 after
having clocked a growth of 8% in 2009-10. It is expected that the growth
rate will continue to be in excess of 8%.
The factors that cause concern are continuing inflationary trend in the
articles of daily consumption as well as manufactured products. The
interest rates are also hardening and the home loans and vehicle loans have
turned expensive. These will tend to have an impact on the private final
consumption expenditure (PFCE). If PFCE continues to grow at 8.3% as in
2010-11, GDP can grow at a faster rate in spite of the complex scenario.
If the advance tax collections the first quarter FY 2011-12 is any
indication then the economy is maintaining its growth and profitability.
The industry in which your company operates is growing at comparatively
higher growth rates and more players are attracted to this segment.
FINANCIAL YEAR 2010-11
The Annual Report for the year has already been circulated. In spite of the
Financial Year 2010-11 having witnessed high inflationary trends your
Company was able to significantly improve customer franchise and register
the highest ever growth rate of 50% over and above the 24% growth
registered during last year.
The salient features of the Company's performance for the year 2010-11 are
* Sales grew by over 50% from Rs. 517 crores to Rs.776 crores.
* All time high absolute value growth - around Rs.259 crores
* Profit before extra ordinary items increased by 69.31% from Rs.71 crores
to Rs.121 crores
* Profit after tax increased by 59.71% from Rs.52 crores to Rs.84 crores
* The operating EBIDTA margin was 16.24% as compared to 14.74% in the
* The Company continues to be debt free except for deposits of Rs.2.25
Crores. and carries free cash balance/liquid investment of around Rs.76
* Earnings per Share (before extra-ordinary/exceptional items) rose to
Rs.74.46 from Rs.42.98 - a growth of 73.24%
* The ratio of Operating EBIDTA/Capital employed (including free cash
balance) in the Kitchen Segment rose to 67.3% from 65.02%.
* As many as 49 SKUs across 13 categories were introduced during the year.
* All the new products introduced by the company have been well received.
CORPORATE AND BRAND SALIENCE
The continuous process of customer centric innovation and product offerings
coupled with innovative methods of reaching the consumer has earned several
awards and recognitions for your Company.
Your company received the coveted Business Standard 'Star SME award for
2009-10'. The award was given by the Honorable Prime Minister of India on
25th March 2011. This award evidences your Company's sustainable strategy
for growth and high standards of Corporate Governance.
You Company continues to enjoy the recognition of 'Super brand' in the
Kitchen Appliances segment and also been voted India's most Trusted Kitchen
Appliances Brand by a consumer survey conducted by the Economic Times.
Your Company received the 'Retailer of the year' award from Asia Retail
Congress for the year in recognition of your Company's successful
establishment and operation of Prestige Smart Kitchen Retail Network across
India, Franchise Award for the category of Home
Products/Furnishings/Appliances by Franchise World and Best Franchiser in
the Home Category by Franchise Plus.
Prestige today is the leading brand in various product categories namely
Pressure Cookers, Cookware, Value added Gas Stoves, Induction Cook Tops
Your company has just released brand new advertising campaign to reinforce
Taking into consideration the profits made and the need to preserve cash
for very large capital outlays to fuel future growth of your company, your
Board of Directors have recommended a dividend of Rs.12.50 per as against
Rs.10.00 per share declared in the previous year. This dividend will
account for a cash outflow of Rs.14.15 Crores by way of dividend and
Rs.2.30 Crores by way of dividend distribution tax thus aggregating to
FINANCIAL YEAR 2011-12: A PROMISING START
During the first quarter ending 30th June 2011, your Company registered a
growth of over 60% in sales as compared to the corresponding quarter of the
previous year i.e. from Rs.148 Crores to Rs.237 Crores.
The profit before tax for the same period increased by 60% from Rs.22.71
crores to Rs.36.32 crores.
Your Company will continue to offer improved new range of products during
the financial year in all product categories.
Salarpurias who are developing the Company's surplus land at
Dooravaninagar, Bangalore have informed that all sanctions have been
received and construction activities are commenced. The project will be
developed as a office/residential complex and is named as 'MAGNIFICIA'. The
project is expected to yield returns in the form of one time sale
consideration from parts of residential blocks allocated to the Company and
recurring rentals from office space allocated to the Company. These streams
of income can be expected during calendar year 2014.
As mentioned in the last year's speech and Directors' Report, your Company
has adopted A Prestige in every Indian kitchen' as its Vision, which
requires establishing large scale 'state of the art' manufacturing
facilities keeping the long-term in view.
Your Company is in the process of implementing a Rs.225 Crore expansion
plan covering various locations at Hosur, Coimbatore, Roorkee, Gujarat and
other parts of Western India.
The entire capital expenditure plan is expected to be completed during the
first half of the calendar year 2012.
Creation of new capacities for pressure cookers in Roorkee has largely been
completed and commercial production has just commenced. Commercial
production in the expanded facility for pressure cookers in the Coimbatore
factory is expected to commence in September 2011.
As regards Gujarat, the acquisition of the land has been completed and the
construction of the factory is slated to commence during the second quarter
of the current financial year.
The entire expansion plan is largely funded out of internal accruals. A sum
of Rs.100 crores has been spent till 30th June 2011. Your Company will
resort to transient borrowing during the current financial year to fund the
capital expenditure pending accrual of internal cash generations.
Over the last two years your company has developed a strong vision and a
long-term strategy to occupy the domestic kitchen domain and be seen as a
Leading Total Kitchen Solution provider.
The strong platform that your Company has laid has attracted interest from
global players for trade partnerships with your Company. If fructified this
will see the company get into significant new product offerings and also
open new market opportunities.
I acknowledge the support received from the shareholders, employees and
banks in putting the company into the track of sustainable growth.