(Including Management's Discussion & Analysis report)
Your Directors have pleasure in presenting their Sixty Second Annual Report togetherwith the Audited Financials of the Company for the year ended 31st March 2018as follows:
FINANCIAL RESULTS (STAND ALONE)
| ||2017-18 ||2016-17 |
|Sales (inclusive of Excise duty) ||1848.71 ||1683.06 |
|Other Income ||13.71 ||6.74 |
|Exceptional Income/(Expense) ||128.96 ||1.77 |
|EBIDTA (before Exceptional Income) ||248.54 ||201.65 |
|EBIDTA (Including Exceptional Income) ||377.50 ||203.42 |
|Profit/(Loss) before tax ||350.62 ||172.99 |
|Tax Provision ||93.75 ||29.99 |
|Net Profit/(Loss) after Tax ||256.87 ||143.00 |
|Other Comprehensive Income (Net of Tax) ||0.24 ||(0.43) |
|Total Comprehensive Income ||257.11 ||142.57 |
|Transfer to General Reserve ||26.00 ||15.00 |
|Surplus carried to Balance Sheet ||231.11 ||127.57 |
REVIEW OF PERFORMANCE:
a. The first quarter of the year saw a flat performance due to the announcement of GSTimplementation from 1.7.2017 as the trade channels reduced their stock levels. Post July2017 your Company witnessed a steady improvement in growth as compared to the previousFinancial Year. Except for a few markets which continued to reel under deficient monsoonall other markets registered a decent double-digit growth. Domestic sales witnessed 10.5%growth in absolute terms. However the absolute sales figures are not strictly comparablewith the previous year due to non-inclusion of central indirect taxes in the sales of thelast three quarters of current year. Overall domestic volume growth was impressive acrossproduct categories - Value Added Pressure Cookers Cookware Mixer Grinders Gas StovesInduction Cooktops and Rice-Cookers - growth ranging from 10% to 30%.
b. Your company was also able to tap the rural markets directly and the efforts put inover the last few years has started yielding results. Export performance continued to besubdued due to global market conditions.
c. Though the metal prices hardened during the year the favourable exchange rates formost part of the year had a positive impact on costs. There was marked improvement in theoperational efficiencies due to higher capacity utilization and general improvement inproductivity resulting in a higher EBIDTA margin of around 13.5%. While the top-linegrowth was around 10% EBIDTA before exceptional items grew by 23.2% from Rs.201.65 croresto Rs.248.54 crores.
d. Exceptional income of Rs. 128.96 crores is on account of monetization of thedevelopment rights relating to the Dooravani Nagar Property. Part
of these proceeds were utilized to 'buy back of shares' entailing an outflow Rs.70Crores.
e. The company's cash position improved significantly on account of operations as wellas on account of the proceeds from monetization of development rights.
f. As stated in the past years your company does not follow a stand-alone margin ledpolicy but is focussed on growth with a fair long-term return on capital employed. Inspite of substantial additions to manufacturing asset base in recent years the operatingROCE was a healthy 32.5% (Previous Year 28%).
g. The net profit after tax for the year was Rs.256.87 Crores. The standalone EPS wasRs.221.74. EPS before exceptional income was Rs.128.77 (PY Rs.94.47) a growth of 36.3%.
h. Your Company continued to be debt-free as at the end of 31st March 2018 and wascarrying significant net free cash.
i. As shareholders are aware your Company acquired through its UK subsidiary thebusiness of Horwood Homewares Limited effective from April 2016. On a consolidated basistaking into account the performance of UK Subsidiaries the Sales was Rs. 1981.64 Crores;Net profit after tax was Rs.263.49 Crores and EPS Rs.227.46.
j. Your Directors are pleased to recommend a dividend of Rs.30/- per share for the yearended 31st March 2018 (Previous year- Rs.27/- per share) which entails an out lay of Rs.34.65 Crores by way of Dividend and Rs.7.12 Crores by way of Dividend Distribution Tax.
To sum up your Board of Directors is of the view that the current year performance iscommendable. Your Company continues to maintain/improve its market share in value termsacross product categories.
A detailed analysis is provided under the section 'Management's Discussion andAnalysis' forming part of this Director's Report.
AWARDS AND RECOGNITIONS
Your Company continued to be recognized by various agencies for its high qualityperformance under various parameters. During the Financial Year 17-18 your Company baggedthe following awards/recognitions.
Red Dot Award for Hob-top
Icon Of The Year Award (Indian Brand Of The Year - Kitchen Appliances)
India's Most Trusted Company 2017
India's No. 1 Brands Award
CMO Asia - Consumer Durable Award
Globe Marketing Excellence Award in Kitchen Appliance Sector.
ABP News Brand Excellence Award in Kitchen Appliance Sector.
Brand Equity's 5th Most Trusted Brand in Consumer Durable Industry
MANAGEMENT'S DISCUSSION AND ANALYSIS
A. ECONOMY / INDUSTRY SCENARIO
The overall domestic economic scenario towards the later part of FY 17-18 has beenshowing signs of improvement as compared to the previous financial year. The first halfwas hit by transient impact of GST implementation. Barring parts of South India themonsoon was beneficial to the rural economy.
Specific initiatives of the Government such as providing gas connections to BPLfamilies direct cash benefit transfer etc. and the rural and infrastructure thrustenvisaged under the Union Budget for 2017-18 is driving up rural consumption.
Your Company predominantly operates in the Kitchen Appliances segment with a wide rangeof product categories. The product categories broadly consist of Pressure CookersCookware Gas Stoves and Domestic Kitchen Electrical Appliances. The market for PressureCookers is shared amongst organized national branded players regional players andunorganized players. Over the years the share of the unorganized players has beengradually coming down as there has been a shift in the consumer preference to reliablebranded products. The market for organized brands is estimated at about 60% of the totalmarket. The share of unorganized players is greater for cookware as compared to pressurecookers. For the rest of the product categories the market structure is fragmented andthe share and the role of regional brands and unorganized players continue to besignificant. In general there is a clutter of regional brands/unorganized players atentry level price points.
As the members are aware your Company is gradually entering categories adjacent toKitchen thus expanding the business to cover select home appliances and requisites keepingin view the 'mind share' of your Company's core customer the home maker and buildingaround the trust and goodwill your Company and its brands enjoy with its core customerbase. This extended segment consists of Cleaning Solutions Irons Lanterns Waterpurifiers etc. Each of the product-line within the Home portfolio has competition bothfrom organized and unorganized players. Your company's focus is to bring in upgradeddifferentiated products at several price points to get a sizable addition to the overallturnover of the Company to start with and establish a decent market share in the long run.
Continued perception of uncertainty in disposable income amongst core middle-class isgiving room for down-trading/bundling of products of entry level price points by someregional brands is distorting the market for entry level products. As a result valueadded products in general have been witnessing a better performance.
The kitchen appliance category is also witnessing entry of quite a few players -regional national as well as global who have brand strength mostly in non-kitchenappliance business.
Going forward proactive innovation and product differentiation coupled with innovativedistribution will be the key to stay ahead in the market place.
B. OPPORTUNITIES THREATS AND COMPANY'S RESPONSE
Shareholders are aware that the Company operates out of its core strengths of brandinnovation design manufacturing distribution sourcing and service capabilities andmore importantly 'Customer Engagement'.
a. Adoption of New Vision in the light of several opportunities in the Long-Term:
The core vision of the company has been 'A Prestige in every Indian Kitchen'; the coremission being 'Quality products at affordable prices'. As the members are aware that yourCompany is in the process of expanding its business base and is successfully able totravel beyond kitchen and tap categories adjacent to kitchen and relevant to home atlarge.
In order to broad base the vision your Company has adopted a new Vision after avigorous brain storming session aided by external consultants of repute as the currentvision is restricted to the Kitchen Domain. The New Vision is:
"To Delight Home makers with Innovation"
This vision is expansive as it does not limit the Company to one domain one brand orone country.
Your Company has not lost sight of its ambition of being in every Indian Kitchen/Homeas the same is incorporated in the vision for distribution:
"To make available Company's Products to Every Home".
Your Company will continue to be driven by the core mission of 'Quality Products ataffordable Prices'.
b. Opportunities within the Kitchen Domain:
Driven by the vision to reach every home with a product relevant to each of thecustomer segments duly supported by the strengths outlined earlier your Company
has been continuously broad basing its product offerings customer segments andgeographical coverage. Continuous interaction with the ultimate user of the product hasbeen helping your Company in identifying the pain points and offering solutions in theform of innovative products concepts and consumer offer of bundled products for aholistic use. This focus helps your Company to create opportunities even in the face ofdepressed consumer sentiment.
Given the fact that vast sections of Indian homes are to yet to equip their kitchenswith various products whether unbranded or branded-there is a significant opportunity inthe long-run for every product category of your Company in the kitchen domain. YourCompany's growth over the last decade has largely come from tapping urban markets andoffering innovative products at price points relevant to this consumer segment. Aided bythe State policy of providing LPG connections to rural households and electrification ofrural areas across India rural markets are expected to drive growth in the coming years.Your company has geared its innovation efforts to offer a slew of products to the ruralsegment with appropriate price points.
Your Company is slated to launch around 95 new SKUs in the kitchen domain in FY2018-19.
Your Company continues to see a significant opportunity to increase its share ofbusiness in the non-south markets.
c. Opportunities adjacent to Kitchen Domain:
Your Company's foray in to Cleaning Solutions and other Home Requisites is receivingcustomer acceptance. Your Company is currently placing select products in select marketsand has plans to expand the reach to other markets in the next couple of years. Forinstance the innovatively designed 'Tattva' range of Water Purifiers is well receivedwherever it has been launched. Your Company expects that these categories will contributeto the growth of the Company in the next 5 years. Your Company has slated to launch 35 newSKUs outside the Kitchen Domain.
d. Opportunities outside India:- Overseas Acquisition/Export Thrust
Shareholders are aware of the acquisition of the branded business of Horwood HomewaresLimited through the overseas subsidiary TTK British Holdings Limited. Your Company isexpected to leverage this acquisition for developing global business. Any furtheropportunity appropriate to the size of your company will be examined. Your Company haskept all its India based manufacturing facilities 'export ready' by meeting globalstandards in every respect - technology manufacturing processes green initiatives andgovernance. These are expected to drive white-label exports as well as exports to overseasbrands acquired by your Company.
Some white label exports have already begun. Your Company envisions to be a significantpart of "Make In India'' policy of the Government of India.
e. Channel Management and Service Network:
Over the last few years the method of reaching the ultimate consumer is undergoing achurn. Every channel - traditional dealers modern format stores exclusive retail networkor online stores - is rediscovering and reorienting itself to maximize footfalls. Thisprocess has thrown in opportunities as well as conflicts besides disruptions. Your Companyis fully seized of the situation and has put in place strategies to leverage every channelto reach the ultimate consumer. Your Company's proactive interaction with online playershas been highly productive and the share of online sale has increased significantly ascompared to the previous year.
Prestige Smart Kitchen now reformatted and rechristened as "PrestigeXclusive" network continues to provide a significant contribution to the totaldomestic sales. The current strength of the network is 544.
Your Company is continuing the process of strengthening the service network and callcentre operations so as to ensure timely service and build customer loyalty. It alsoprovides the platform to increase sale of original spares. Current strength of the servicenetwork is 254.
f. Introduction of "JUDGE" brand: Your
Company launched select product categories to address to tap the income segmentshitherto untapped by your Company. 'JUDGE' brand belongs to the wholly owned subsidiaryHorwood Homewares Limited and your Company will be utilizing the same to cater to newerconsumer segments within India as well as global markets. The initial launch was made inthe second half of the current financial year and the response has been encouraging.
g. New Brand Campaign:
Your Company has roped in Ms.Vidya Balan as Brand Ambassador from financial year2018-19 and exciting brand promotion activities are slated for the next few financialyears.
While there are vast opportunities in the Domestic Market threats can continue in
the form of unorganized sector and irrational discounting by regional brands. As theentry barriers are low any lag in innovation can impact growth.
C. ANALYSIS OF PERFORMANCE:
1. Kitchen & Home Appliances:
The products include Pressure Cookers Cookware Kitchen Electrical Appliances GasStoves and Home Appliances. The turnover of these product categories is given in thefollowing table:
| || |
| ||Domestic ||Export ||Total ||Domestic ||Export ||Total |
|Pressure Cookers(including Microwave Pressure Cookers) ||603.88 ||23.84 ||627.72 ||561.10 ||34.35 ||595.45 |
|Cookware ||291.29 ||8.98 ||300.27 ||274.43 ||5.91 ||280.34 |
|Kitchen Appliances ||557.34 ||0.86 ||558.20 ||491.69 ||0.89 ||492.58 |
|Gas Stoves ||268.02 ||1.02 ||269.04 ||229.88 ||0.89 ||230.77 |
|Home Appliances ||33.88 ||0.07 ||33.95 ||24.71 ||0.00 ||24.71 |
|Others ||58.92 ||0.61 ||59.53 ||58.15 ||1.06 ||59.21 |
|Total ||1813.33 ||35.38 ||1848.71 ||1639.96 ||43.10 ||1683.06 |
a. Domestic Sales grew by about 10.57% and the Export Sales dropped by 18%.
b. The Pressure Cooker and cookware category registered a growth of 5.5% and 7%respectively. The lower growth was due to depressed market conditions in parts of SouthIndia as well as subdued demand for nonpremium products.
c. Gas stoves recorded a healthy growth of around 16.55% while kitchen appliances grewby around 13.27%.
d. 'Cleaning Solutions'(included under Home Appliances) introduced in the previous yearperformed well and contributed Rs.22.65 Crores to the Sales as compared to Rs.13.00 Croresof previous year.
e. The EBIDTA margin before exceptional items for the year was 13.5% as compared to11.90% in the previous year. The improvement in EBIDTA Margin is attributable tofavourable Exchange rates improvement in operational efficiencies and treasury income.
f. The overall pay-roll cost ratio to Sales was around 7.7% as compared to 7.16% in theprevious year. The disproportionate increase is due to higher provision for employeeterminal benefits on account of some changes in actuarial parameters and revised leavepolicy.
g. Your Company continued to be debt free and carried a sizeable cash balance at theyear end.
h. Your Company has over the last three years substantially reduced its dependence onimports which has a positive impact on margins and cash-flows. Working capital efficiencyimproved as compared to the previous year.
i. During the year under report your Company introduced around 138 new SKUs coveringPressure Cookers Induction Cook Tops Mixer Grinders Rice Cookers Gas Stoves and othersmall electric/non-electric appliances and cleaning solutions. All these introductionsreceived good response.
j. PSK network was consolidated and rationalized where necessary. The number of outletsas at 31.3.2018 was 544. The network now covers 26 States and 315 towns. The spread of thenetwork is also evenly distributed between Metros Mini-Metros Tier 1 Tier 2 and Tier 3cities.
2. Properties & Investment:
The Company has dealt with the entire rights accruing under the Development Agreementrelating to the property at Dooravani Nagar Bangalore. The Gross revenue accrual was ofthe order of Rs.163.00 Crores and the Net income after accounting for expenses andbook-value of the assets was Rs.128.96 Crores
3. Overseas Subsidiary & Consolidated Results:
There was a slight drop in the sales from 17.7million to 16.5 million. EBIDTA was1.55 million (PY 2.3 million) The Brexit has somewhat impacted the businessenvironment. The subsidiary made some soft investments to capture the market which had animpact on the margins in the short-run. The consolidated financials are attached to thisAnnual Report separately.
The Government's thrust in improving the Rural Economy is continued in the Budget forthe FY18-19 also which is expected to increase the disposable income at the hands of therural population.
This coupled with the exponential growth of the E-commerce business is expected toincrease the penetration into hitherto untapped markets. The monsoon for this fiscal isalso expected to be normal. All these positive factors would help the company to recordbetter growth than the General Economic Growth.
E. RISKS AND CONCERNS
The various general economic risks and concerns which can impact your Company havealready been outlined in the preceding sections. The concerns largely center on externalfactors. The specific concern of late relates to hardening of
Aluminium prices. However your company is confident of passing on any cost escalationto the market without much lag. Your Company is continuously improving its efficienciesand is hopeful of dealing with the various challenges described in the preceding sections.Your Company will not compromise on the objective of growth and improving market share forthe sake of shortterm profits.
F. MEDIUM-TERM AND LONG-TERM STRATEGY
The various contours of Medium & Long Term strategy are mentioned in detail underPara B above. Based on this the Company has a goal of doubling its topline over the next 5years which is dependent upon overall GDP growth of domestic economy and revival of globaleconomy. Barring unforeseen circumstances the current operating EBIDTA margin and returnon operating capital employed can be improved upon.
G. RISK MANAGEMENT
Your Company has developed and implemented a Risk Management Policy which includesidentification of elements of risk if any which in the opinion of the Board maythreaten the existence of the Company.
Your Company has a risk identification and management frame work appropriate to thesize of your Company and the environment under which it operates.
Risks are being continuously identified in relation to business strategy operationsand transactions statutory/legal compliance financial reporting information technologysystem and overall internal control framework.
Your Company is utilizing the services of independent professional management auditorsfor advising the Company on a continuous basis on contemporary risk management frameworkappropriate to the size and operations of the Company. They are also carrying out riskaudit on a periodical basis.
Your Board is periodically reviewing the broad risk frame work to ensure that there isa dynamic process to capture and measure key elements of risks.
H. SHARE CAPITAL
The paid-up equity share capital as on 31st March 2018 was '11.56 Crores (PY' 11.66 Crores). During the year one lakh shares were bought back at a consideration of '70 Crores. The Company has not issued any shares with differential voting rights norgranted stock options nor sweat equity.
Your Company continues to generate substantial post-tax operating free cash flows andthe same have been applied to meet capital expenditure besides other uses includingretirement of debt and payment of dividend. Your Company on a standalone basis continuedto be debt-free and at the end of the year carried cash and liquid investments of aroundRs.231 Crores after 'buyback of shares for Rs. 70 Crores and further investments in UKsubsidiary to the tune of Rs. 12.87 Crores.
J. CAPITAL EXPENDITURE PLANS
Your company has drawn up a Long Range Plan pursuant to which your Company will beinvesting in additional capacities and facilities over the next 2-3 financial years theexpected outlay being in the region of Rs.250 Crores.
During the year your Company invested an additional amount of Rs. 12.87 Crores in thewholly owned UK subsidiary. Other than this your Company carries short-term investments inmutual funds as a part of treasury operations as mentioned in para I.
L. INTERNAL CONTROL SYSTEMS
Your Company has necessary Internal Control Systems in place which is commensurate withthe size scale and complexity of its operations. Your Company is continuously makingimprovements in internal control systems keeping in view the increasing level ofactivities. Independent team of Internal Auditors/Management Auditors are carrying outinternal audits and advising the management on strengthening of internal control systems.The reports are periodically discussed internally. Significant audit observations andcorrective actions thereon are presented to the Audit Committee.
M. DEVELOPMENTS IN HUMAN RESOURCES
In pursuit of the Long-Range Plan your Company has forayed into overseas markets byestablishing a subsidiary in UK. Your company is also expanding its operations beyondkitchen. Having due regard to entering new frontiers your Company has implementedstrategic HR initiatives covering competency development talent management leadershipdevelopment succession management etc. The in-house Human Resource Department isconstantly being strengthened. A host of people development programmes are put in place ona continuous basis.
The industrial relations across all the manufacturing units has been by and largecordial. Post 31.3.2018 a long-term settlement has been signed with the permanent workmenat the Uttarakhand Unit.
The direct employment strength stood at 1373 as compared to 1295 in the previous year.
The Company is neither inviting or accepting Deposits from public or shareholders andhence there are no deposits outstanding or remaining unpaid as at the end of 31stMarch 2018.
Your directors have recommended payment of dividend of '30/- per share for the yeartaking in to account the current profits and the cash requirements of the Company forexpanding the business operations.
This Directors' Report and the Management Discussion and Analysis included therein maycontain certain statements which are futuristic in nature. Such statements represent theintentions of the Management and the efforts being put in by them to realize certaingoals. The success in realizing these goals depends on various factors both internal andexternal. Therefore the investors are requested to make their own independent judgmentsby considering all relevant factors before taking any investment decision.
Report on Corporate Governance is separately presented as part of the Annual Report.
BUSINESS RESPONSBILITY REPORT
Your Company now forms part of the Top 500 listed companies of India and is mandatorilyrequired to provide a Business Responsibly Report as part of the Annual Report inaccordance with the provisions of SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015. This report is separately presented as part of this Annual Report.
Your Company's shares are listed in the BSE Limited (BSE) Mumbai and National StockExchange of India Limited (NSE) Mumbai 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 5 (Five) times during the year 2017-18. The details of theBoard Meetings and the attendance of the Directors are provided in the Report on CorporateGovernance.
(c) Corporate Social Responsibility (CSR) Committee:
As per the provisions of Section 135 of the Companies Act 2013 and the Rules madethereunder your Company has in place a Corporate
Social Responsibility Committee which comprises of Mr. T.T. Jagannathan as Chairman andMr. R Srinivasan Mr. K Shankaran as Members.
The Corporate Social Responsibility (CSR) Policy enumerating the CSR activities to beundertaken by the Company in accordance with Schedule VII to the Companies Act 2013 asadopted by the Board is available on the website of the Company www.ttkprestige.com . The Annual Report under CSRActivities is annexed to this report as Annexure B.
The details relating to the meetings convened etc. are furnished in the Report onCorporate Governance.
(d) Composition of Audit Committee:
The Audit Committee comprises of Mr. Dileep Krishnaswamy as Chairman and Mr. RSrinivasan and Mr. Arun K. Thiagarajan as Members. All the members are IndependentDirectors.
Mr. K Shankaran - Director and Whole-time 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 intoby the Company with its Promoters the Directors or the management their subsidiaries orrelatives 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 Boardfor approval. Prior omnibus approval of the Audit Committee is obtained on a yearly basisfor the transactions which are of unforeseen or repetitive nature. A Statement givingdetails of the transactions entered into with the related parties pursuant to the omnibusapproval so granted is placed before the Audit Committee and the Board of Directors fortheir approval/ratification on a quarterly basis.
The Register of Contracts containing transactions in which directors are interestedis placed before the Audit Committee/Board regularly.
The Board of Directors of the Company on the recommendation of the Audit Committeeadopted a policy on Related Party Transactions to regulate the transactions between theCompany and its Related Parties in compliance with the applicable provisions of theCompanies Act 2013 and the SEBI (LODR) Regulations 2015. The Policy as approved by theBoard is uploaded on the Company's website at www.ttkprestige.com .
The details of the Related Party Transactions in Form AOC-2 are annexed as Annexure Cto this Report.
(f) Directors and Key Managerial Personnel:
None of the Directors is disqualified from being appointed or holding office asDirectors as stipulated under Section 164 of the Companies Act 2013.
(i) Appointment/Re-appointment of Directors:
(a) Mr. K Shankaran liable to retire by rotation at the ensuing Annual General Meetingand being eligible offers himself for re-appointment. The Board recommends hisre-appointment.
(b) Mr. T.T.Jagannathan's current contractual term of appointment as Executive Chairmanof the Company expires on 30th June 2018. The Board of Directors in theirmeeting held on 12th April 2018 re-appointed him for a further period of 5years effective 1st July 2018 subject to the approval of the Shareholdersthrough a special resolution.
(ii) Statement on Declaration by the Independent Directors of the Company:
All the Independent Directors of the Company have given declarations under Section149(7) of the Companies Act 2013 that they meet the criteria of independence as laid downunder Section 149(6) of the Companies Act 2013 and Regulation 25 of SEBI (ListingObligations and Disclosure Requirements) Regulations 2015. The terms and conditions ofappointment of the Independent Directors are posted on the website of the Companywww.ttkprestige.com .
(iii) Key Managerial Personnel (KMP):
The following managerial personnel are Key Managerial Personnel (KMP):
Mr. Chandru Kalro Managing Director as Chief Executive Officer (CEO) w.e.f. 1stApril 2015.
Mr. K. Shankaran Director & Whole time Secretary as Company Secretary; and
Mr. V. Sundaresan Senior Vice President -Finance as Chief Financial Officer(CFO).
(iv) Performance Evaluation of the Board its Committees and Separate meeting ofIndependent Directors:
In compliance with the provisions of the Companies Act 2013 and Regulation 17(10) ofSEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 the performanceevaluation of the Board was carried out during the year under review. During the year 3separate meetings of Independent Directors were held to consider various aspects ofManagement of the Company as well as to review the performance of the Board and Non-
Independent Directors. More details on the same are given in the Report on CorporateGovernance.
(v) Remuneration Policy:
Your Company follows a policy on remuneration of Directors and Senior Management. Thepolicy 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.
(i) Statutory Auditors and their Report:
M/s. PKF Sridhar & Santhanam LLP who have been appointed as Statutory Auditors atthe AGM held on 11th August 2017 carried out the Audit for the financial yearunder review.
The Auditors' Report to the Shareholders for the year under review does not contain anyqualifications.
(ii) Cost Auditor and Cost Audit Report:
Appointment for the year 2018-19:
Pursuant to Section 148 of the Companies Act 2013 read with The Companies (CostRecords 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 2018-19 and fixedtheir remuneration.
Mr. V. Kalyanaraman has confirmed that his appointment is within the limits of theSection 141 of the Companies Act 2013 and has also certified that he is free from anydisqualifications specified under the provisions of Section 141 of the Companies Act2013.
The Audit Committee also received a Certificate from the Cost Auditor certifying theindependence and arm's length relationship with the Company.
Pursuant to the provisions of Section 148 of the Companies Act 2013 and the Rules madethereunder the approval of the Members is sought by means of an Ordinary Resolution forthe remuneration payable to Mr. V. Kalyanaraman Cost Auditor under Item No.4 of theNotice convening the Annual General Meeting.
The Cost Audit Report for the year ended 31st March 2018 would be filed onor before the due date (i.e.) 27th September 2018.
(iii) Secretarial Auditor and Secretarial Audit Report:
The Board had appointed Mr. Parameshwar G. Hegde Company Secretary in Whole-timePractice to carry out Secretarial Audit under the provisions of Section 204 of theCompanies Act 2013 for the financial year 2017-18. The Report of the Secretarial Auditorin Form MR-3 is annexed to this report as Annexure "G" The report does notcontain any qualification.
(h) Transfer to Investor Education and Protection Fund:
Unclaimed Dividends for the year ended 31st March 2010:
Your Company has transferred a sum of Rs. 1043490 during the financial year 201718 tothe Investor Education and Protection Fund established by the Central Government incompliance with Section 205C (2) of the Companies Act 1956. The said amount representsthe unclaimed dividends for the year ended 31st March 2010 which were lying unclaimedwith the Company for a period of seven years from their respective due dates of payment.
Transfer of Shares to the Demat Account of the IEPF Authority:
In accordance with the Investor Education and Protection Fund Authority (AccountingAudit Transfer and Refund) Rules 2016 and as amended from time to time your Companytransferred 37707 Equity Shares of Rs.10 each fully paid-up in respect of which thedividends unclaimed / unpaid for a period of seven consecutive years relating to thefinancial year 2008-09 to the Demat Account of the IEPF Authority held with NSDL &CDSL on 4th December 2017 & 8th December 2017.
(i) Disclosure with respect to Demat suspense account / unclaimed suspense account:
Your Company does not have any Unclaimed Shares.
(j) Conservation of Energy:
The prescribed particulars under Rule 8(3) of The Companies (Accounts) Rules 2014relating to conservation of energy technology absorption foreign exchange earnings andoutgo 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 Rulesmade thereunder are annexed to this Report as Annexure E & Annexure F.
(l) Subsidiary Company:
Your Company has an overseas subsidiary by name TTK British Holdings Limited (TTK Brit)which was incorporated in the United Kingdom on 24th March 2016 and capitalizedduring the FY 16-17. TTK Brit holds entire share capital of Horwood Homeware HoldingsLimited which in turn holds 100% of Horwood Homewares Limited being the ultimate operatingsubsidiary.
Pursuant to Sec. 129(3) of Companies Act 2013 the Consolidated Financial Statementsare attached to this Annual Report. The particulars of all the subsidiaries in theprescribed format AOC- 1 is also attached to the financial statements. In acordance withSec. 136 of the Companies Act 2013 the Financial Statements of each of the subsidiariesare available on the website of the Company www.ttkprestige.com
(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 madeany investment under Section 186 of the Companies Act 2013. Your Company holds 1440equity shares of Rs.10/- each in TTK Healthcare Limited and 10300000 shares of GBP 1each in TTK British Holdings Limited. Further 1400000 shares are pending allotment byTTK British Holdings Limited as at the date of the Balance sheet
(n) Significan and Material Orders passed by the Regulators or Courts:
There are no significant and material orders passed by the Regulators/Courts whichwould 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 theRules made thereunder and also SEBI (LODR) Regulations 2015 your Company has in place avigil mechanism termed as Whistle Blower Policy for directors and employees to reportconcerns about unethical behaviour actual or suspected fraud or violation of theCompany's Code of Conduct or Ethics Policy which also provides for adequate safeguardsagainst victimization of director(s)/employee(s) who avail of the mechanism and alsoprovide for direct access to the Corporate Governance Officer /Chairman of the AuditCommittee/Executive Chairman in exceptional cases.
The Whistle Blower Policy is made available on the website of the Companywww.ttkprestige.com .
(p) Obligation of your Company under the Sexual Harassment of Women at Workplace(Prevention Prohibition and Redressal) Act 2013:
To prevent sexual harassment of women at work place a new Act The Sexual Harassment ofWomen at Workplace (Prevention Prohibition and Redressal) Act 2013 has been notified on9th December 2013. Under the said Act every Company has to set up an Internal ComplaintsCommittee to look into complaints relating to sexual harassment at work place of any womenemployee.
Your Company has adopted a policy for prevention of Sexual Harassment of Women atWorkplace and has constituted a Committee for implementation of the said policy. Duringthe year 2017-18 there were no complaints.
DIRECTORS' RESPONSIBILITY STATEMENT
As required by Sec.134 (5) read with Sec.134 (3)(c) of the Companies Act 2013 yourDirectors confirm
a. that in the preparation of the annual accounts the applicable accounting standardshave been followed along with proper explanation relating to material departures;
b. that they have selected such accounting policies and applied them consistently andmade judgments and estimates that are reasonable and prudent so as to give a true andfair view of the state of affairs of the Company at the end of the financial year and ofthe profit or loss of the Company for that period;
c. that they have taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of this Act for safeguarding theassets of the Company and for preventing and detecting fraud and other irregularities;
d. that they have prepared the annual accounts on a going concern basis;
e. they have laid down internal financial controls to be followed by the Company andthat such internal financial controls are adequate and are operating effectively; and
f. they have devised proper systems to ensure compliance with the provisions of allapplicable laws and that such systems are adequate and operating effectively.
Your Directors deeply appreciate and acknowledge the significant and continuedco-operation given to your Company by the Bankers Financial Institutions and theemployees of the Company.
For and on behalf of the Board (T.T. JAGANNATHAN)
Plot No.38 SIPCOT
Industrial Complex Hosur - 635 126
Date: May 21 2018
Place : Bengaluru