(Including ManagementRss Discussion & Analysis Report)
Your directors have pleasure in presenting their Sixty Sixth AnnualReport together with the Audited Financials of the Company for the year ended March 312022 as follows:
FINANCIAL RESULTS (STAND ALONE)
(Rs in Crores)
| || ||2021-22 ||2020-21 |
|1 ||Sales (Net of discounts) ||2532.15 ||2033.05 |
|2 ||Other Income ||34.98 ||27.53 |
|3 ||EBITDA (Before Exceptional Items) ||441.21 ||342.17 |
|4 ||Profit Before Tax and Exceptional Items ||395.52 ||301.18 |
|5 ||Exceptional Items ||- ||11.90 |
|6 ||Profit Before Tax ||395.52 ||313.08 |
|7 ||Tax Provision ||101.87 ||77.94 |
|8 ||Profit After Tax ||293.65 ||235.14 |
|9 ||Other Comprehensive Income ||(0.73) ||(0.21) |
|10 ||Total Comprehensive Income ||292.92 ||234.93 |
|11 ||Transfer to General Reserve ||29.00 ||23.00 |
|12 ||Surplus carried to Balance Sheet ||263.92 ||211.93 |
REVIEW OF PERFORMANCE / HIGHLIGHTS
The economy that was severely impacted during most part of thefirst quarter due to second wave of Covid-19 pandemic showed recovery from second quarterof the year. Again it showed some strains from end December 2021 due to outbreak ofomicron which was compounded by geo-political conflict since end February 2022. Except forQ1 where online channel was the most active due to partial lockdown all channels becameactive from Q2 including rural channel. Unfortunately again in Q4 the Omicron outbreakwas a dampener. There was also pressure on consumer spending due to inflation as well asalternate avenues for spending like travel & tourism fashion etc. The pent-up demandfactor was also missing as compared to the previous year. Against this backdrop yourCompany by a judicial mix of products channel presence and market penetration achieved agrowth of 24.5% registering an all-time high top-line of Rs 2532 crores. Export businessgrew by 37% to reach an alltime high of Rs 98 crores in spite of container shortage andother logistic constraints.
Your Company remained focussed on digitalization of salesprocess and innovative marketing strategies which helped it to maintain robust salesduring the year. Your company has enlarged its customer base in
rural large-format and online channels thus de-risking from dependenceon a few customers in each of these channels.
Your company launched various innovative products in allcategories during the year including Svachh range of Gas Stoves. Pressure cooker categoryon Svachh platform continues to gain momentum.
The Year witnessed a continuous increase in costs of all inputs- be it commodity or power & fuel or movement of goods. Your Company also nursed idlecosts to the tune of Rs 4 crores during Q1 due to the lock-down caused by the second waveof Covid. However your Company was able to maintain a healthy margin through improvedefficiencies in operations and appropriate price increases without impacting customersentiments and market share. Despite pressures on various costs of operation your Companydelivered an all-time high EBITDA (before exceptional items) of Rs 441 Crores with agrowth of 29% (PY Rs 342 Crores) and Profit before tax at Rs 396 Crores with a growth of26% (PY Rs 313 Crores). Operating EBITDA margin significantly improved to 17.4% (PY16.8%).
The depreciation charge was higher at Rs 41.7 crores (PY Rs 37.9Crores) due to investment in fixed assets.
The Net Profit after Tax was higher at Rs 293.65 Crores (PY Rs235.14 Crores).
The standalone EPS (face value of Rs 1/-) was at Rs 21.18 (PY Rs16.96); a growth of 24.9%
As stated in the past years your company does not follow astand-alone margin led policy but is focussed on growth with a fair long-term return oncapital employed. Operating ROCE stood at 41.7% (PY 38.2%).
The Company is debt-free and carried a comfortable free cash ofaround Rs 700 Crores (including short term Liquid investments) as on March 31 2022.
The consolidated turnover and profit before tax of the Companyand the UK subsidiaries amounted to Rs 2723 Crores (PY Rs 2194 Crores) and Rs 411 Crores(PY Rs 323 Crores) respectively.
The factory at Khardi which was under lock-out since November2020 resumed its operation by end of August 2021 pursuant to a long-term settlemententered with the workers with improved productivity norms.
As you are aware your Company took a decision to stop import ofproducts from China effective October 2020 and developed most of those products withmanufacturers in India. While this had some impact during last year the process ofindigenisation has been completed during the year. Your company has taken
several steps to augment capacity maximise existing utilisation ofmachine and also improve efficiencies.
During Q4 your Company made a strategic investment in UltrafreshModular Solutions Ltd (Ultrafresh) engaged in the business of Modular Kitchens and kitchenappliances having many franchisee outlets across India.
Your Company during December 2021 split the face value of theequity shares of the Company from Rs 10/- per share to Rs 1/- per share to facilitatelarger shareholder base to increase the liquidity and to make the shares more affordableto investors.
Your Board of Directors consider the performance as admirable given thetough external environment. Your Company continues to maintain its leadership share invalue terms across major product categories.
During the year in February 2022 considering the improvement inoperating profits your directors paid an interim dividend of Rs 2.50 per share for FY 22.Your directors are happy to recommend a final dividend of Rs 3.50 per share for FY22totalling to Rs 6/- per share of face value Rs 1/- each for FY 22 including the interimdividend already paid (PY Rs 5/- per share of face value Rs 1/- each).
A detailed analysis is provided under the section RsManagementRssDiscussion and AnalysisRs forming part of this DirectorRss Report.
AWARDS AND RECOGNITIONS
Your Company continued to be recognized by various agencies for itshigh-quality performance under various parameters. During the Financial Year 2021-22 yourCompany bagged the following awards/recognitions.
"Great Place to Work" by Great Place to Work?Institute India
"Top 30 Companies with Great Managers" by PeopleBusiness in partnership with The Economic Times
"CIO100: Special Award on Game Changers" byInternational Data Group (IDG) in November 2021
"Technology LeaderRss Award 2021" - Awarded by TEKQGlobal CIO Forum in May 2021
"Trendsetter CIO Award 2022" - Awarded by ELETSTECHNOMEDIA in Mar 2022
Superbrand 2021 by Superbrands India Media Private Limited
Disruption Award for Svachh Pressure Cookers by EconomicTimes-Brand Equity
"Franchisor of the Year 2021- Home Product Category"by Franchiseindia.com
"Market Leadership Award 2021 for Excellence &Leadership in Marketing & Branding" by Golden Star Awards
"CEO of the Year 2021 " by World Leadership Awards
MANAGEMENTRsS DISCUSSION AND ANALYSIS
A. ECONOMY / INDUSTRY SCENARIO
General Economy: As mentioned in the highlights the pace of economicrecovery was impacted by the recurrence of Covid as well as the geo-political tensions.The economy had also seen unprecedented price increases in various commodities impactingthe prices for all the materials. Private Final Consumption index continues to be lowerthan the FY 19-20 levels. Both wholesale and consumer price indices reflect highinflationary trends. IndiaRss GDP grew by 8.7% in 2021-22 a tad lower than the 8.9%officially estimated earlier with growth slipping to 4.1% in the last quarter from 5.4%in the third quarter as per provisional national income estimates. While globally manycountries are still reeling under the impact of Covid 19 and facing recession India hassuccessfully stayed above the crisis through effective vaccination programme andmanagement of the pandemic. Good monsoon has aided the agricultural sector. The travel andhospitality industries have gained momentum from the second half of FY 22. However theRussia- Ukraine conflict is causing uncertainties as well as inflationary trends in itemsof day-to-day consumption. Further container shortages and resultant higher freight costscontinue to be a big impediment to shipments for exports as well as imports.
Industry: Your Company predominantly operates in the Kitchen and HomeAppliances segment with a wide range of product categories. The product categories broadlyconsist of Pressure Cookers Cookware Gas Stoves and Domestic Kitchen ElectricalAppliances. Your Company entered the Cleaning solutions from FY 17-18. The market for allthese segments consists of organized national brands regional brands as well asunorganized players. Except for Pressure Cookers Cookware and Induction Cooktops themarket for the rest of the key product lines is fragmented and is shared by severalplayers. Over the last five years or so many players both big and small have been enteringas well as exiting the appliance categories and the churn is still going on.Reorganization mergers/acquisitions etc are also seen in this industry. With E-Commercebecoming an active channel over the last few years it has become a platform for intensecompetition as even regional and small players could reach out to pan India through thischannel.
Consumer/Channel Scenario: The work-from-home norm that came into voguein FY 21 is gradually giving way to work-from-office or a hybrid structure. Thus pent-updemand as well as home improvement intensity seen in FY 21 is gradually tapering off andhence the demand pull is settling at normal levels that prevailed during pre-covid times.The inflation is impacting the consumption at lower-income
levels while the demand from upper middle-income group onwards issustaining. Value added innovative products are gaining ground. The revival in the real-estate construction industry is aiding demand from new homes.
While the online channels reached their peak during pandemic times theoff-line channels are regaining their space. The footfalls have increased in the off-linemarkets whether big or small. The organized off-line market is seeing uptrends andoff-line players also operate on digital platforms. The consumer now has several choicesin terms of channels products and price points. Competition both inter-channel andintrachannel is getting increasingly intense. Allocation of inventory to various channelswith healthy and realistic price-points is becoming a challenge.
Export Market: Though the global market currently if faced withrecession due to pandemic and geophysical conflict India is becoming an attractivedestination for sourcing. The RsMake in IndiaRs initiative and infrastructure push areexpected to drive expansion of manufacturing base India to tap the global market. YourCompany: Even under these uncertain conditions your Company maintained its leadershipposition in key categories like Pressure Cookers Cookware Value added Gas StovesInduction Cook top Kettles etc and is steadily improving its market share in the MixerGrinder segment. Indigenisation of some small appliances hitherto imported from China hasstabilized. The models launched under Svachh platform viz. Pressure Cookers and Gas Stovesdid very well during the year. Your Company is constantly investing in innovation and inaugmenting manufacturing and sourcing capacities through automation and buildingadditional facilities. Most importantly your Company has maintained healthy relations withall its channel partners - whether online or offline and has proactively minimised theconflict among the various channels without compromising on product offerings and withoutsuccumbing to predatory pricing trends. Your Company maintains significant presence in allchannels - traditional retail online large format stores rural institution CSD etcbesides your CompanyRss Prestige Xclusive network spread across India.
Your Company will continue to focus on product innovation anddifferentiation coupled with innovative distribution and digitalization of sales andmarketing processes to stay ahead in the marketplace.
B. ANALYSIS OF PERFORMANCE:
1. KITCHEN & HOME APPLIANCES:
The products include Pressure Cookers Cookware Kitchen ElectricalAppliances Gas Stoves and Home Appliances. The turnover of these product categories isgiven in the following table:
(Rs in Crores)
| || |
| ||Domestic ||Export ||Total ||Domestic ||Export ||Total |
|Pressure Cookers (including Microwave Pressure Cookers) ||740.18 ||45.80 ||785.98 ||562.57 ||38.02 ||600.59 |
|Cookware ||370.27 ||46.45 ||416.72 ||302.48 ||29.71 ||332.19 |
|Gas Stoves ||340.06 ||0.41 ||340.47 ||267.52 ||1.08 ||268.60 |
|Mixer Grinder ||245.18 ||4.37 ||249.55 ||219.08 ||1.49 ||220.57 |
|Other Kitchen/ Home Appliances ||597.15 ||0.28 ||597.43 ||471.82 ||0.20 ||472.02 |
|Cleaning Solutions ||43.66 ||_ ||43.66 ||50.08 ||_ ||50.08 |
|Others ||97.56 ||0.78 ||98.34 ||88.15 ||0.85 ||89.00 |
|Total ||2434.06 ||98.09 ||2532.15 ||1961.70 ||71.35 ||2033.05 |
a. As mentioned in the Highlights notwithstanding external factorsimpacting Q1 and Q4 your Company was able to register significant growth by a judicial mixof products channel presence and market penetration. The online channel continued to beactive during the year though it did not grow at the same pace as in the last year.
b. Your Company continued to manage its trade policy with general tradeas well as modern format stores cautiously to improve working capital efficiencies acrosschannels.
c. Except RsCleaning SolutionsRs all other categories registered growthboth in volume and value terms.
d. The Cleaning Solutions category has shown a decline during the yearprimarily due to higher base in FY 21 aided by Rswork from homeRs concept driven bypandemic. Your Company has taken appropriate corrective actions to reverse this trend inthe coming year.
e. During the year under report your Company introduced around 150 newSKUs covering Pressure Cookers Induction Cook tops Mixer Grinders Rice Cookers GasStoves and other Small Electric/Non-Electric Appliances and Cleaning Solutions.
f. Judge brand as a tactical brand is progressing well and contributedaround Rs 33 Crores to Sales (PY Rs 23 crores).
g. In spite of nursing some idle costs during Q1 and absorbingunprecedented material price increases various operating ratios were maintained athealthy/improved levels ensuring improvement in EBITDA margin
(before exceptional items) at 17.4% as against 16.8% in the previousyear. None of the key financial ratios (inventory turnover receivable turnovernet-current asset turnover margins and return on net worth) had a variance of 25% or moreas compared to the previous year.
h. Operating ROCE stood at 41.7% (PY 38.2%) on expanded manufacturingasset base. Your Company continued to be debt free and carried a sizeable free cashbalance of over Rs 700 Crores at the year end.
i. Your Company has over the last few years substantially reduced itsdependence on imports which has a positive impact on working capital efficiencies. Thiswas partially impacted by the increase in raw material inventory bought to manage thecontinuing price increases on materials.
j. Operating working capital efficiencies improved during the yearnotwithstanding the policy to offer friendlier terms to vendors to ensure operationalliquidity to them. The net current asset turnover has improved from 4.37 to 5.19.
k. Prestige Xclusive network was consolidated and rationalized wherenecessary and new outlets were added. The number of outlets as at March 31 2022 was 665(PY 620). The network now covers 28 States and 374 Towns. The spread of the network isalso evenly distributed between Metros MiniMetros Tier 1 Tier 2 and Tier 3 cities.
l. Service network was significantly expanded to 504 centres (PY - 464centres).
2. OVERSEAS SUBSIDIARY & CONSOLIDATED RESULTS:
The operating subsidiary Horwood Homewares Limited (HHL) achieved asale of ? 18.8 million (PY ? 16.2 million) a growth of 16% against the backdrop ofBrexit COVID-19 pandemic and geo-political tensions. Operating EBITDA was ? 2.0 million(PY ?1.6 million) a creditable increase of 25%. The subsidiary introduced new productsand strengthened its presence in the online channels during the year which helped itperform better than most of its peers and achieve a better profitability over the previousyear. During the year the subsidiary migrated to a new ERP system to support theexpansion of the business. This is expected to improve the operational efficienciesresulting in better customer experience in the coming years.
3. ASSOCIATE COMPANY
During the year your Company entered into an agreement for makingstrategic investment in Ultrafresh Modular Solutions Ltd (Ultrafresh) engaged in thebusiness of Modular Kitchens and kitchen appliances having many franchisee outlets acrossIndia. The total investment will be to the tune of around Rs 30 Crores towards primary aswell as secondary acquisition. Pursuant to this agreement during Q4 your Company made aninvestment of Rs 20 crores through primary and secondary modes to acquire around 41%shareholding in the Company rendering Ultrafresh an Associate as per Accounting Standardseffective from February 16 2022. Being an Associate Company from February 16 2022 theloss of Ultrafresh for the period from February 16 to March 312022 viz. Rs (0.59) Croresis consolidated appropriately in the consolidated financials proportionate to the votingshare of your Company in Ultrafresh.
The consolidated financials are attached to this Annual Reportseparately.
C. OUTLOOK & OPPORTUNITIES:
a. The Reserve Bank of India has projected a GDP growth of 7.8% for FY23 but with a caveat that the continued Russia-Ukraine conflict and rising fuel prices canhave an impact on this projection. The volatility in commodity prices cannot be ruled out.The near-term outlook is uncertain for growth prospects. Though your Company isregistering growth during April 22 and May 22 the same is with reference to a lower base.
b. The Union Budget for FY 23 has laid emphasis on governmentalinvestment and capital expenditure in several projects especially Housing and UrbanPlanning Sector. If these are implemented even amidst the current situation the outlookcan be on the positive side. Recent reduction of duties on fuel is expected to improve theprivate final consumption in the coming quarters.
c. As your Company is in the home and kitchen appliance domain thehybrid mode of working preferred today by most of the service industries may support theneed for improving kitchens and replacing appliances and thus support the demand for suchproducts. The improvement in the real estate sector rise in demand on account of giftingduring marriage and other occasions which was subdued due to restrictions on gatheringsmay further support the demand. The revival of the travel and hospitality industry willtrigger more employment opportunities yielding a larger customer base.
d. Your Company as always focuses on improvement in efficiencies andmanagement of critical costs to deliver decent profits even if growth may be impaired.
e. Your company is comparatively better placed owing to its brandsalience exclusive retail network across India besides strong presence in every otherchannel that reaches the end consumer. Your company is debt-free and all itsmanufacturing and sourcing outfits are in operational conditions with adequate humanresource and thus can increase supplies to the market at short notice.
f. IndiaRss underlying economic fundamentals are strong and despitethis turbulence the impact on the long-term outlook will be marginal. However it will belargely dependent on early resolution of geo-political conflicts and easening of thecommodity prices including fuel. If the projected GDP growth of 7.8% is realized yourCompany is confident of registering a growth in mid-teens.
g. The increased tendency among global brands to shift a sizeableportion of sourcing outside China with India as an alternative is continuing. YourCompanyRss export customers have increased their sourcing from the Company during FY 22and we expect this to further strengthen during FY 23.
D. MEDIUM & LONG-TERM STRATEGY:
a. As the members are aware your Company has adopted an expansiveVision - To Delight Home Makers with Innovation and To make CompanyRss products availableat every home. The focus is in providing a solution rather than just a product.
b. Your Company based on this vision had developed strategies toincrease its product base and customer base across India both rural and urban to doublethe turnover in about 5 years from the base of FY 21.
c. The blueprint that has been prepared is still relevant even underthe current uncertain conditions and some tweaking has been in tune with the changedconditions.
d. Shareholders are aware that your Company operates out of its corestrengths of brand innovation design manufacturing distribution sourcing and servicecapabilities and more importantly RsCustomer EngagementRs and will continue its efforts tofurther fortify these strengths.
e. In the medium and long-term your Company expects to maintain ahealthy EBITDA margin and Return on Capital Employed subject to commodity prices remainingstable within a range and the Covid-19 pandemic do not reoccur severely as in
past 2 years. It is also dependent on the easing of geo-politicaltensions.
While there are vast opportunities in the Domestic Market threats cancontinue in the form of new entrants or existing regional brands causing disruptionsthrough unrealistically low prices due to pressure from some channels. As the entrybarriers are low any lag in innovation can impact growth. Unprecedented rise in commodityprices is also a major threat as it may not be possible for your Company to pass on thecost increases to consumers in full. Your Company pursues a dynamic cost managementprocess to ensure healthy margins at EBITDA levels as demonstrated in the last couple ofyears.
F. RISKS AND CONCERNS
The various general economic risks and concerns which can impact yourCompany have already been outlined in the preceding sections. The concerns largely centrearound external factors.
G. RISK MANAGEMENT
Your Company has a Risk Management Committee in place as required underSEBI (LODR) Regulations the details of which are provided in the Report on CorporateGovernance.
Your Company has developed and implemented a Risk Management Policywhich includes identification of elements of risk if any which in the opinion of theBoard may threaten the existence of the Company. Your Company has a risk identificationand management framework appropriate to the size of your Company and the environment underwhich it operates. The process involves identifying both external and internal risks andthe readiness to respond to extreme risks like calamities and disasters.
Risks are being continuously identified in relation to businessstrategy business continuity/contingency plans operations and transactions statutory /legal compliance financial reporting information technology system cyber security andoverall internal control framework. In line with the recently notified amendments to theSEBI (LODR) Regulations the scope includes sustainability factors-environment social andgovernance.
Your Company is utilizing the services of independent professionalmanagement auditors for advising the Company on a continuous basis on contemporary riskmanagement framework appropriate to the size and operations of the Company. They are alsocarrying out risk audit on a periodical basis.
Your Board is periodically reviewing the broad risk framework to ensurethat there is a dynamic process to capture and measure key elements of risks.
H. CYBER SECURITY:
The new world reality is cyber-physical as people assets andtechnology increasingly combine due to macro trends driven by demographics economics andgeopolitics. This is a time of extraordinarily high volatility diverse uncertainties withan increase in cyber threats & risks. In addition acceleration on Digital andtransformation programs there is emergence of new cyber threats on progressiveorganisations like us! Your Company has devised cyber resilience strategies to not onlydefend our organisation from above uncertainties but gone ahead to next level of combatconsidering ever-changing world of cyber threats. We are establishing Cyber Securityhygiene to equip our organization with effective defence and more resistant to threats.
I. SHARE CAPITAL
The paid-up equity share capital as on March 31 2021 was Rs 13.86Crores (PY Rs 13.86 Crores).
During the year approval of members were obtained for Sub-Division /Spit of Equity Shares of the Company from face value of Rs 10/- each into Rs 1/- each tofacilitate larger shareholder base to increase the liquidity and to make the shares moreaffordable to investors. The memorandum of association of the Company was also amended forthis purpose.
Accordingly the Authorised Capital of your Company changed from Rs 15crores divided into 15000000 equity shares of Rs 10/- each to Rs 15 crores divided into150000000 equity shares of Rs 1/- each.
Your Company continues to generate substantial post-tax operating freecash flows and the same have been applied to meet capital expenditure besides other usesincluding investments in Ultrafresh Modular Solutions Limited and payment of dividend.Your Company on a standalone basis continued to be debt- free and at the end of the yearcarried cash and liquid investments of around Rs 700 Crores after investments inUltrafresh Modular Solutions Limited to the tune of Rs 20 Crores.
K. CAPITAL EXPENDITURE PLANS
Your Company has spent about Rs 42 crores in FY 22 including automationand establishing additional lines. The capex for FY 23 is estimated at around Rs 70 croresincluding normal capex logistics and capacity augmentation.
During the year your Company invested an amount of Rs 20 Crores in M/sUltrafresh Modular Solutions Limited through primary and secondary acquisition for ashareholding of around 41% in that company. Other than this your Company carriesshort-term investments in mutual funds as a part of treasury operations as mentioned inpara-J.
M. INTERNAL CONTROL SYSTEMS
Your Company has necessary Internal Control Systems in place which iscommensurate with the size scale and complexity of its operations. Your Company iscontinuously making improvements in internal control systems keeping in view theincreasing level of activities. Independent team of Internal Auditors/ Management Auditorsare carrying out internal audits and advising the management on strengthening of internalcontrol systems. The reports are periodically discussed internally. Significant auditobservations and corrective actions thereon are presented to the Audit Committee.
N. DEVELOPMENTS IN HUMAN RESOURCES
In line with the Long-Range Plan 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. Your Company continues to impart knowledge and talent developmentprogrammes through digital means and the training milestones were achieved across alllayers of management.
Keeping in mind the physical and mental well-being of the employeescaused by the pandemic your Company has organized healthcare infrastructure bothphysical and digital at various workplaces. Free vaccination for all employees includingcontract workers and their dependents were organized and all the employees in theorganisation are double vaccinated.
Financial and rehabilitation support for affected employees are beingprovided and also extended to the dependents of the employees who have unfortunatelysuccumbed to the infection.
During the lockdown in the first quarter of FY 22 your Companycontinued to pay the salaries to all the employees including the contract workers withoutany deduction and on time. Notwithstanding the external disturbances caused by pandemicgeo-political disturbances and unprecedented commodity price increases your Companyreleased increments to all employees for FY 23 effective from April 01 2022 as also theperformance linked variable pay.
The industrial relations across all the manufacturing units has been byand large cordial. The Khardi Unit which was under lock-out since November 2020 resumedits operation by end of August 2021 pursuant to a long-term settlement entered into withthe workers with improved productivity norms. Long term settlement was concluded duringthe year for Karjan Unit.
The direct employment strength stood at 1418 as compared to 1442 in theprevious year.
Your Company is neither inviting or accepting Deposits from public orshareholders and hence there are no deposits outstanding or remaining unpaid as at the endof March 312022.
During the year in February 2022 considering the improvement in thebusiness environment your Directors paid an interim dividend of Rs 2.50 per share for FY22. Your Directors are happy to recommend a final dividend of Rs 3.50 per share for FY 22totalling to Rs 6/- per share of face value Rs 1/- each for FY 22 including the interimdividend already paid. (PY Rs 5/- per share of face value Rs 1/- each).
This DirectorsRs Report and the Management Discussion and Analysisincluded therein may contain certain statements which are futuristic in nature. Suchstatements represent the intentions of the Management and the efforts being put in by themto realize certain goals. The success in realizing these goals depends on numerous factorsboth internal and external. Therefore the investors are requested to make their ownindependent judgments by considering all relevant factors before taking any investmentdecision. CORPORATE GOVERNANCE
Report on Corporate Governance is separately presented as part of theAnnual Report.
BUSINESS RESPONSBILITY REPORT
Your Company now forms part of the Top 500 listed companies of Indiaand is mandatorily required to provide a Business Responsibly Report as part of the AnnualReport in accordance with the provisions of SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015. This report is separately presented as part of this AnnualReport.
SUSTAINABILITY - ENVIRONMENTAL SOCIAL AND GOVERNANCE
Your Company has been proactively implementing various projects toaddress global environmental issues such as climate change global warming etc. The veryproducts such as pressure cookers induction cooktops etc. are designed to save energyas well as protect environment. Continuous design improvements investments inmanufacturing processes solar power and green environment in manufacturing locations aredirected to reduce the consumption of basic metals like aluminium steel etc besidesutilities like water power and fuel. This report is separately presented as part ofBusiness Responsibility Report.
Your Company has decided to adopt the ESG mandatory reportingrequirements one year ahead of the scheduled adoption and has developed a businesssustainability model which is being reviewed at the
Risk Management Committee and Board of Directors level. Based on themodel and assessment your Company does not foresee any challenges in businesssustainability in the near future.
Your CompanyRss shares are listed in the BSE Limited (BSE) Mumbai andNational Stock Exchange of India Limited (NSE) Mumbai and the applicable listing feeshave been paid.
FURTHER DISCLOSURES UNDER THE COMPANIES ACT 2013AND THE RULES MADE THEREUNDER:
(a) Number of Meetings of the Board:
The Board of Directors met six times during the year 2021-22. Thedetails of the Board Meetings and the attendance of the Directors are provided in theReport on Corporate Governance.
(b) Corporate Social Responsibility (CSR) Committee:
As per the provisions of Section 135 of the Companies Act 2013 and theRules made thereunder your Company has in place a Corporate Social ResponsibilityCommittee which comprises of Mr. T.T. Jagannathan as Chairman and Mr. R. Srinivasan Mr.K. Shankaran as Members. The Corporate Social Responsibility (CSR) Policy enumerating theCSR activities to be undertaken by the Company in accordance with Schedule VII to theCompanies Act 2013 as adopted by the Board is available on the website of the Company www.ttkprestige.com.The Annual Report under CSR Activities is annexed to this report as Annexure A.
The details relating to the meetings convened etc. are furnished inthe Report on Corporate Governance.
(c) Composition of Audit Committee:
The Audit Committee comprises of Mr. Dileep Krishnaswamy as ChairmanMr. R Srinivasan and Mr. Arun K. Thiagarajan as Members. All the members are IndependentDirectors. Mr. K. Shankaran Wholetime Director & Secretary is the Secretary of theCommittee. More details on the Committee are given in the Report on Corporate Governance.
(d) Related Party Transactions:
During the year under review no transaction of material nature hasbeen entered into by the Company with its Promoters the Directors or the managementtheir subsidiaries or relatives etc. that may have a potential conflict with theinterests of the Company.
All related party transactions are placed before the Audit Committee asalso the Board for approval. Prior omnibus approval of the Audit Committee is obtained ona yearly basis for the transactions which are of unforeseen or repetitive nature. AStatement giving details of the transactions entered into with the related partiespursuant to the omnibus approval so granted is placed before the Audit Committee and theBoard of Directors for their approval/ ratification on a quarterly basis. The Register ofContracts containing transactions in which directors are interested is placed before theAudit Committee / Board regularly.
The Board of Directors of the Company on the recommendation of theAudit Committee adopted a policy on Related Party Transactions to regulate thetransactions between the Company and its Related Parties in compliance with theapplicable provisions of the Companies Act 2013 and the SEBI (LODR) Regulations 2015.The Policy as approved by the Board is uploaded on the CompanyRss website at www.ttkprestige.com.
The details of the Related Party Transactions in Form AOC-2 are annexedas Annexure B to this Report.
(e) Directors and Key Managerial Personnel:
None of the Directors is disqualified from being appointed or holdingoffice as Directors as stipulated under Section 164 of the Companies Act 2013.
(i) Appointment / Re-appointment of Directors:
(a) Mr T.T. Raghunathan is liable to retire by rotation at the ensuingAnnual General Meeting and being eligible offers himself for re-appointment. TheNomination and Remuneration Committee has approved his re-appointment and the Boardrecommends his re-appointment.
(b) There are no changes to the composition of Directors during theyear.
(ii) Statement on Declaration by the Independent Directors of theCompany: All the Independent Directors of the Company have given declarations underSection 149(7) of the Companies Act 2013 that they meet the criteria of independence aslaid down under Section 149(6) of the Companies Act 2013 and Regulation 25 of SEBI(Listing Obligations and Disclosure Requirements) Regulations 2015. The terms andconditions of appointment of the Independent Directors
are posted on the website of the Company www.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).
Mr. K. Shankaran Wholetime Director & Secretary.
Mr. R. Saranyan Executive Vice President - Finance as ChiefFinancial Officer (CFO).
(iv) Performance Evaluation of the Board its Committees and Separatemeetings of Independent Directors:
In compliance with the provisions of the Companies Act 2013 andRegulation 17(10) of SEBI (Listing Obligations and Disclosure Requirements) Regulations2015 the performance evaluation of the Board was carried out during the year underreview. During the year three separate meetings of Independent Directors were held toconsider various aspects of management of the Company as well as to review the performanceof the Board its committees and non-independent Directors. More details on the same aregiven in the Report on Corporate Governance. The Board evaluation for FY 21-22 wascompleted at the Meeting held in March 2022.
(v) Remuneration Policy:
Your Company follows a policy on remuneration of Directors and SeniorManagement. The policy is framed by the Nomination and Remuneration Committee and approvedby the Board. The remuneration (including all components) to senior management i.e. tillone level below the CEO including functional heads are as approved by the Nomination andRemuneration Committee and the Board. More details on the same are given in the Report onCorporate Governance.
(i) Statutory Auditors and their Report and Reappointment:
Audit Report: M/s. PKF Sridhar & Santhanam LLP have carried out theAudit for the financial year under review. The AuditorsRs Report to the Shareholders forthe year under review does not contain any qualifications.
Reappointment of Auditors: M/s PKF
Sridhar & Santhanam LLP was appointed as Statutory Auditors of theCompany for a term of 5 years to hold office from the conclusion of the 61stAnnual General Meeting till the conclusion of 66th Annual General Meeting. TheBoard of Directors at their meeting held on May 28 2022 based on the recommendation ofthe Audit Committee considered and recommended to the Members of the Company thereappointment of M/s. PKF Sridhar & Santhanam LLP Chartered Accountants (FirmRegistration No.003990S / 200018) as Statutory Auditors for a further term of fiveyears to hold office from the conclusion of the 66th Annual General Meeting till theconclusion of 71st Annual General Meeting. A brief profile of M/s. PKF Sridhar &Santhanam LLP is provided below:
- The Firm has been in existence from 1978 initially as a PartnershipFirm and presently as a Limited Liability Partnership. They are one of the leadingProfessional Service Providers with Global experience.
- Has 23 partners as of now and has over 700 people - Directors withglobal exposures Professionals from multifarious disciplines and Staff with internationalassignments.
- Has its Head Office at Chennai and has offices in four cities viz.Mumbai New Delhi Bengaluru and Hyderabad.
- Is a member of PKF - a Global Network of Independent Accounting Firmsand an exclusive member of India.
- The Firm has a very impressive list of clients across multipleindustry verticals.
- The firm has been peer reviewed in 2019. Also as a part of the"Forum of Firms" an association of international networks of accounting firmsthat perform audits of financial statements that are or may be used across nationalborders the firm maintains international quality control standards.
- The Firm uses technology data analytics and audit software inconducting audits.
Their appointment if made will be in accordance with the provisionsof the Companies Act 2013 the Chartered Accountants Act 1949 and the Rules andRegulations made thereunder. They also
satisfy the criteria provided under Section 141 of the Companies Act2013 and are not disqualified under the said Acts. Accordingly a Resolution seekingmembersRs approval for the appointment of M/s PKF Sridhar & Santhanam LLP asStatutory Auditors of the Company is included under Item No.4 of the Notice convening theAnnual General Meeting.
(ii) Cost Auditor and Cost Audit Report: Appointment for the year2022-23: 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 Committeeappointed Ms. Jayanthi Hari as Cost Auditor of the Company for the financial year 2022-23and fixed her remuneration her remuneration at Rs 4 lakhs plus applicable taxes and leviesand reimbursement of travel and out-of-pocket expenses incurred in connection with theaudit..
Ms. Jayanthi Hari has confirmed that her appointment is within thelimits of the Section 141 of the Companies Act 2013 and has also certified that she isfree from any disqualifications specified under the provisions of Section 141 of theCompanies Act 2013.
The Audit Committee also received a Certificate from the Cost Auditorcertifying the independence and armRss length relationship with the Company.
Pursuant to the provisions of Section 148 of the Companies Act 2013and the Rules made thereunder the approval of the Members is sought by means of anOrdinary Resolution for the remuneration payable to Ms Jayanthi Hari Cost Auditor underItem No.5 of the Notice convening the Annual General Meeting.
The Cost Audit Report for the year ended March 31 2022 will be placedbefore the Audit Committee and the Board of Directors of the Company and filed on orbefore the due date.
Cost Audit Report for the year 2020-21:
The Cost Audit Report for the financial year ended 31st March 2021 wasfiled in Form CRA-4 vide SRN T-33744947 dated 3.8.2021 with the Central Government.
(iii) Secretarial Auditor and Secretarial Audit Report:
The Board had appointed Mr. Parameshwar G. Hegde Company Secretary inWholetime Practice to carry out Secretarial Audit under the provisions of Section 204 ofthe Companies Act 2013 for the financial year 2021-22. The Report of the SecretarialAuditor in Form MR-3 is annexed to this report as Annexure "F". The report doesnot contain any qualification.
g. Transfer to Investor Education and Protection Fund.
(i) Unclaimed Dividends for the year ended March 31 2014:
Your Company has transferred a sum of Rs 1639880 during the financialyear 2021-22 to the Investor Education and Protection Fund established by the CentralGovernment in compliance with Section 124 of the Companies Act 2013. The said amountrepresents the unclaimed dividends for the year ended March 31 2014 which were lyingunclaimed with the Company for a period of seven years from their respective due dates ofpayment.
(ii) Transfer of Shares to the Demat Account of the IEPF Authority:
In accordance with the Investor Education and Protection Fund Authority(Accounting Audit Transfer and Refund) Rules 2016 and as amended from time to timeyour Company transferred 2849 Equity Shares of Rs 10/- each fully paid-up in respect ofwhich the dividends unclaimed / unpaid for a period of seven consecutive years.
h. Disclosure with respect to Demat suspense account / unclaimedsuspense account. Your Company does not have any Unclaimed Shares issued in physical formpursuant to Public Issue / Rights Issue.
i. Conservation of Energy:
The prescribed 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 C to this Report.
j. Particulars of Employees:
The information required under Section 197 of the Companies Act 2013and the Rules made thereunder are annexed to this Report as Annexure D and Annexure E.
k. Subsidiary Company:
Your Company has an overseas subsidiary by name TTK British HoldingsLimited (TTK Brit) which was incorporated in the United Kingdom on March 24 2016 andcapitalized during the FY 16-17. TTK British Holdings Limited holds the entire sharecapital of Horwood Homewares Limited which is the operating subsidiary.
Pursuant to Sec.129(3) of Companies Act 2013 the ConsolidatedFinancial Statements are attached to this Annual Report. The particulars of all thesubsidiaries in the prescribed format AOC- 1 is also attached to the financial statements.In accordance with Sec.136 of the Companies Act 2013 the Financial Statements of each ofthe subsidiaries are available on the website of the Company www.ttkprestige.com.
l. Loans Guarantees and Investments under Section 186 of the CompaniesAct 2013: During the year your Company had not given any loan provided any guarantee ormade any investment under Section 186 of the Companies Act 2013 except for investmentsmade in the equity capital of the M/s Ultrafresh Modular Solutions Limited to the extentof Rs 20 Crores through primary and secondary acquisition.
Your Company holds 1440 equity shares of Rs 10/- each fully paid inTTK Healthcare Limited 20700000 shares of GBP 1 each in TTK British Holdings Limitedand 232860 equity shares of Rs 10 each fully paid-up and 300000 equity shares of Rs10/- each with paid up of Rs 4/- each in Ultrafresh Modular Solutions Limited.
m. 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 futureoperations.
n. Material Changes and Commitments affecting the financial position:
There were no material changes and commitments affecting the financialposition
of the Company which have occurred between the end of the financialyear of the Company to which the financial statements relate viz. March 31 2022 and thedate of this Report.
o. Whistle Blower Policy:
In accordance with the provisions of Section 177(9) of the CompaniesAct 2013 and the Rules made thereunder and also SEBI (LODR) Regulations 2015 yourCompany has in place a vigil mechanism termed as Whistle Blower Policy for directors andemployees to report concerns about unethical behaviour actual or suspected fraud orviolation of the CompanyRss Code of Conduct or Ethics Policy or Insider Trading Policywhich also provides for adequate safeguards against victimization ofdirector(s)/employee(s) who avail of the mechanism and also provide for direct access tothe Corporate Governance Officer/Chairman of the Audit Committee / Chairman of the Boardin exceptional cases.
The Whistle Blower Policy is made available on the website of theCompany www.ttkprestige.com.
p. Obligation of your Company under the Sexual Harassment of Women atWorkplace (Prevention Prohibition and Redressal) Act 2013:
Your Company has adopted a policy for prevention of Sexual Harassmentof Women at Workplace and has constituted the necessary Committee/(s) for implementationof the said policy and deal with any complaints. During the year 2021-22 there were twocomplaints and both have been resolved and closed in accordance with the policy. YourCompany regularly conducts awareness programmes across its units in this regard.
q. Registered Office: There has been no
change in the location of the Registered Office of your Company.
r. Annual Return: In accordance with the
Companies Act 2013 the annual return in the prescribed format isavailable at www.ttkprestige.com.
DIRECTORSRs RESPONSIBILITY STATEMENT
As required by Sec.134 (5) read with Sec.134 (3)(c) of the CompaniesAct 2013 your Directors confirm.
a. that in the preparation of the annual accounts the applicableaccounting standards have been followed along with proper explanation relating tomaterial departures.
b. that they have selected such accounting policies and applied themconsistently and made judgments and estimates that are reasonable and prudent so as togive a true and fair view of the state of affairs of the Company at the end of thefinancial year and of the profit or loss of the Company for that period;
c. that they have taken proper and sufficient care for the maintenanceof adequate accounting records in accordance with the provisions of this Act forsafeguarding the assets of the Company and for preventing and detecting fraud and otherirregularities.
d. that they have prepared the annual accounts on a going concernbasis.
e. they have laid down internal financial controls to be followed bythe Company and that such internal financial controls are adequate and are operatingeffectively; and
f. they have devised proper systems to ensure compliance with theprovisions of all applicable laws and that such systems are adequate and operatingeffectively.
Your directors deeply appreciate and acknowledge the significant andcontinued co-operation given to your Company by the Bankers Financial InstitutionsBusiness Partners and the employees of the Company.
|Place: Coimbatore For and on ||behalf of the Board |
|Date : May 28 2022 ||Sd/- |
|Registered Office: Plot No. 38 SIPCOT Industrial Complex Hosur - 635 126 Tamil Nadu ||T.T. JAGANNATHAN Chairman |