TTK Prestige Ltd.
|BSE: 517506||Sector: Consumer|
|NSE: TTKPRESTIG||ISIN Code: INE690A01010|
|BSE 13:23 | 22 Oct||9613.30||
|NSE 13:14 | 22 Oct||9654.80||
|Mkt Cap.(Rs cr)||13,324|
|Mkt Cap.(Rs cr)||13324.03|
TTK Prestige Ltd. (TTKPRESTIG) - Director Report
Company director report
(Including Management's Discussion & Analysis Report)
Your Directors have pleasure in presenting their Sixty Fifth AnnualReport together with the Audited Financials of the Company for the year ended March 312021 as follows:
FINANCIAL RESULTS (STANDALONE)
REVIEW OF PERFORMANCE/HIGHLIGHTS
The unprecedented Covid 19 pandemic seriously impacted thegeneral economy since March 2020 followed by total lockdown for major part of Q1 of FY 21.Your Company could commence sales and production in a limited way towards the end of May2020. Your Company drew up business contingency plans covering all the functions of thecompany during the lockdown period and bounced back from August 2020 onwards both inproduction and sales. The business contingency plans focussed on digitalization of salesprocess innovative marketing strategies and careful optimisation of supplies to variouschannels as and when each channel became operational. As a result the average domesticmonthly sales peaked to Rs. 200 crores during the nine months ended 31.03.21notwithstanding some limitations faced by the Company in supply chain both in the internalfacilities and the facilities of external vendors during Q2 and Q3.
During the lockdown period your Company continued to pay all itsemployees including contract employees without any pay-cuts and also fulfilled all itsobligations to the suppliers in full and on time. The idle overheads that were borne byyour Company during this period was of the order of Rs. 20 crores.
Release of pent-up demand and the need to upgrade home andkitchen as working from home became the norm contributed to the recovery of domestickitchen and home appliance business ever since July 2020. Till July 2020 online was themainstay and thereafter general trade modern trade etc. rural opened up one after theother during Q2 and Q3.
Rural demand showed encouraging revival signs since Q3 aided bygood monsoon and revival of refinance to micro-finance and NBFCs.
Export business continued to be robust though affected bylogistics issues at the fag in the last quarter of the year.
The exceptional item for the year refers to the reversal ofprovision for export obligation of the acquired business made in the previous years asthe same stands fulfilled.
During the year the Company took a decision to stop import ofproducts from China effective October 2020 and developed most of those products withmanufacturers in India. This decision had some impact on the sales during the year due tonon-availability of some of the key products pending indigenisation. Capacity constraintsduring Q2 did result in loss of some sale opportunities. Your company has taken severalsteps to augment capacity maximise existing utilisation of machine and also improveefficiencies.
Your company broadened its customer base by increasing dealercoverage especially in the nonsouth markets during the year through unique dealer programsattracting new deale
Your company launched various innovative products in allcategories during the year including a new category of casseroles.
In March 2021 some parts of the Country were affected by thesecond wave of Covid-19 but this did not materially impact the Company's performanceduring the month.
Against the backdrop of the turbulence period your Companyshowed an improved performance during the year with an all-time high Net Sales of Rs. 2033Crores a growth of 5% from Rs. 1937 Crores of the previous year. If the real operatingperiod of July 2020 to March 21 is considered the Year on Year growth for the nine monthperiod is in excess of 20%.
In spite of various constraints discussed above the Companydelivered an all-time high EBITDA (before exceptional items) of Rs. 342 Crores with agrowth of 20% (PY 285 Crores) and Profit before tax at Rs. 313 Crores with a growth of 26%(PY Rs. 248 Crores). The depreciation charge was higher at Rs. 37.9 crores (PY Rs. 34.6Crores) due to investment in fixed assets.
Operating EBITDA margin significantly improved to 16.8% (PY14.7%).
The Net Profit after Tax was higher at Rs. 235.14 Crores (PY Rs.198.51 Crores).
The standalone EPS was Rs. 169.64 (PY Rs. 143.21) a growth of18.5%.
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 38.2% (PY 31.6%).
The Company is debt-free and carried a comfortable free cash ofaround Rs. 530 Crores (including short term Liquid investments) as on 31st March 2021.
The consolidated turnover and profit before tax of the Companyand the UK subsidiaries amounted to Rs. 2187 Crores (PY '2073 Crores) and Rs. 323 Crores(PY Rs. 234 Crores) respectively.
Your Board of Directors consider the performance as commendable giventhe tough external environment. Your Company continues to maintain its leadership share invalue terms across major product categories.
In the previous year considering the uncertainty caused by COVID-19your Directors considered it prudent to recommend a lesser rate of dividend at Rs. 20 pershare. Later in November 2020 considering the improvement in the business environment yourDirectors paid an interim dividend of Rs. 20 per share for FY21. Now considering theannual performance during the year your Directors are happy to recommend a final dividendof Rs. 30 per share for FY21 totalling to Rs. 50 per share for FY21 including the interimdividend already paid. (PY Rs. 20 per share).
A detailed analysis is provided under the section 'Management'sDiscussion and Analysis' forming part of this Director's Report.
AWARDS AND RECOGNITIONS
Your Company continued to be recognized by various agencies for itshigh-quality performance under various paramete During the Financial Year 20-21 yourCompany bagged the following awards/recognitions.
Silicon India Magazine - Brand of the Year
Global Marketing Excellence Award
CIO 100 Honoree Award 2020 by IDG
CXO Tech Excellence Award 2020 by CXO TV
COVID - 19 Super Hero CIO Award by Enterprise IT World
Cloud Achiever's Award at India Cloud Summit 2020 by Dynamic CIO
Elite CIO Runner Up Award 2020 by Elite CEO Council
MANAGEMENT'S DISCUSSION AND ANALYSIS
A. ECONOMY / INDUSTRY SCENARIO
The domestic economy was severely impacted during the Q1 FY 21 due tothe lockdown announced by the Central and later by various State Governments to manage thespread of Covid-19 pandemic. The global economy also witnessed erosion in GDP thusimpacting the growth prospects of every industry during that period. Encouraging signswere seen only from Q2 and it improved during Q3 of FY 21 due to relaxation of Covid-19related restrictions and festive momentum aided by the economic package released by theCentral Government. Improvement in the economic activities was witnessed during Q3 exceptfor travel & hospitality. Even though the supply chain constraints eased during Q3aftereffect of the impact in Q1 and Q2 on supply chain continued in some measure both inQ3 and Q4. Rural demand showed good revival sign during Q3 aided by good monsoon andimplementation of State funded infrastructural projects. Large format channels startedfunctioning with limited restrictions during Q3. E-Commerce continued to be the activechannel during the year even though the other channels caught-up with the relaxation inthe lockdown restrictions. Export business continued to be robust though affected bylogistics issues towards the fag end of Q3 and it continued in Q4 of FY 21. All commodityprices witnessed steep increases from mid Q3 driving up the prices for almost all theproducts.
Your Company predominantly operates in the Kitchen Appliances segmentwith a wide range of product categories. The product categories broadly consist ofPressure Cookers Cookware Gas Stoves and Domestic Kitchen Electrical Appliances. YourCompany entered the Cleaning solutions segment from FY 17-18. The market for all thesesegments consists of organized national brands regional brands as well as unorganizedplaye Except for Pressure Cookers Cookware and Induction Cooktops the market for therest of the key product lines is fragmented and is shared by several playe Over the lastfive years or so many players both big and small have been entering as well as exiting theappliance categories and the churn is still going on. While the uncertainty caused by theCovid-19 pandemic existed among the people throughout the year the domestic kitchen andhome appliance demand has been encouraging from Q2 of FY 21 as people were working fromhome most of the time. With E-Commerce becoming an active channel it increased thecompetition in the market as even regional and small players could reach out to pan Indiathrough this channel. Supply chain constraints of large players during first half of FY 21provided the opportunity for regional brands and smaller players to fulfil the demand thatoutstripped supply.
Even in these turbulent conditions your Company maintained itsleadership position in key categories like Pressure Cookers Cookware Value added GasStoves Induction Cook top Kettles etc and is steadily improving its market share in theMixer Grinder segment. The company also entered in to Casserole segment during this year.Indigenisation of some small appliances hitherto imported from China has progressed wellbut the absence of some SKUs did have some impact on Q3 & Q4 growth. Manufacturingoperations stabilized during the quarter; though it partially struggled to meet the demanddriven by the festive season due to lower stocks on hand at the beginning of the secondquarter.
Your Company will continue to focus on proactive innovation and productdifferentiation 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:
a. As mentioned earlier the sales were adversely affected during theQ1 of FY 21 due to the lockdown restrictions owing to Covid-19 pandemic which startedrecovering from Q2 though some of the channels were still not active even during thisperiod. However E-Comm channels contributed largely during this period. As the customerswere working from home most of the time during this year this enabled an increased demandfor the domestic kitchen and home appliances segment.
b. Your Company also cautiously managed its trade policy with generaltrade as well as modern format stores in order to improve working capital efficiencies andinformation flow.
c. The new category of Cleaning Solutions has progressed satisfactorilyyielding significant growth facilitated by 'work from home' concept gaining ground due tothe pandemic.
d. Notwithstanding the severe Covid-19 impact in the first quarter ofthe year wherein the company incurred an idle cost of around Rs. 20 Crores the sales andcosts various operating ratios were maintained at healthy/improved levels ensuring EBITDAmargin (before exceptional items) at 16.8% as against 14.7% in the previous year. YourCompany did take timely price increases to accommodate the increase in input materialcosts.
e. Operating ROCE stood at 38.2% (PY 31.6%) on expanded manufacturingasset base which could not be optimally utilised during the year. Your Company continuedto be debt free and carried a sizeable free cash balance at the year end.
f. Your Company has over the last few years substantially reduced itsdependence on imports which has a positive impact on working capital efficiencies.
g. Operating working capital efficiencies improved during the yearnotwithstanding the policy to offer friendlier terms to vendors to ensure operationalliquidity to them.
h. During the year under report your Company introduced around 127 newSKUs covering Pressure Cookers Induction Cook tops Mixer Grinders Rice Cookers GasStoves and other Small Electric/Non-Electric Appliances and Cleaning Solutions. Companyalso entered into Casserole segment during the year. All these introductions received goodresponse.
i. Judge brand as a tactical brand is progressing well and contributedaround Rs. 23 Crores to Sales (PY Rs. 21 crores)
j. Prestige exclusive network was consolidated and rationalized wherenecessary and new outlets were added. The number of outlets as at 31.03.2021 was 620 (PY588). The network now covers 28 States and 363 Towns. The spread of the network is alsoevenly distributed between Metros Mini-Metros Tier 1 Tier 2 and Tier 3 cities.
k. Service network was significantly expanded to 464 centres (PY - 441centres)
C. OVERSEAS SUBSIDIARY & CONSOLIDATED RESULTS:
The operating subsidiary Horwood Homewares Limited (HHL) achieved itssales at 15.5 million (PY 15 million) a growth of 3.3% against the backdrop of Brexitand COVID-19 pandemic impact.
Operating EBITDA was 1.6 million (PY 0.7 million) a commendableincrease of 128%. The subsidiary introduced new products and expanded its presence in theonline channels during the year which helped it perform better than most of its peers andalso achieve a significant profitability over the previous year. The new category SMIDGErange which was introduced during FY 2019-20 also did well during the year.
During the previous year HHL had acquired Ecosoul life business throughits new 51% subsidiary Horwood Life Limited UK. In early Dec 2020 HHL divested its 51%stake in Horwood Life Limited UK in the light of long-term uncertainty over supply chainconstraints. A one-time impairment cost of Rs. 6.11 crores arising out of thisdiscontinued operation is reported under the head 'Loss from discontinued operations inthe consolidated financials
The consolidated financials are attached to this Annual Reportseparately.
D. COVID-19'S IMPACT ON OPERATIONS OUTLOOK & OPPORTUNITIES:
1. Current Standpoint:
a. The FY 21 ended in a positive note even though the second wave ofCovid-19 pandemic started hitting some parts of the country from mid / late March 2021.
b. From the 2nd week of April 2021 one by one the StateGovernments have started announcing lockdowns to control the spread of second wave ofCovid-19 pandemic. There was no major impact to the sales in April and all the factorieswere also working without any major impacts following the Covid-19 protocols announced bythe respective State Governments.
c. But by early May 2021 almost all States Governments have imposedlockdown of varying degrees to control the spread of second wave of Covid-19. This doeshave impact on the planned sales for May 21.
d. The factories at Karjan and Roorkee continue to function normallyfollowing local Covid-19 protocols while the factories in Hosur and Coimbatore had to beclosed from 2nd week of May 2021 due to the lockdown announced by the local government.Kharadi factory continues to be in lock-out.
e. Corporate and commercial offices which were functioning with 50%strength and remaining 50% working from home until April 2021 have moved to 100% workingfrom home from May 2021.
f. In the States affected by lockdown sales are being made via onlinechannels. Supplies are being managed through the operating factories and warehouses.
g. Company continues to pay all its employees including contractworkmen without any pay cuts and discharged all its statutory obligations and payments toall vendors within the due dates as it did during April / May 2020 lockdown.
h. From the experience of the previous lock down the company has beenadequately geared up to ensure that the lockdowns do not severely affect the operationsthat are possible during this period as well as post lockdown period.
i. Over the past several years your Company has been prudent inapplication of its free cash and built sufficient cash reserves to meet exigencies as wellas for business expansion. This continues to help your Company to tide over the currentdifficult business climate caused by the second wave of Covid-19. As of the date of thisreport your Company carries free cash of around Rs. 530 Crores.
j. At the start of FY 21-22 adequate inventory was available at thetrade level as well as at the company level to meet the end consumer demand during thelockdown and immediately after that.
k. Your Company has already improved its IT strength and continued itsengagement with all its stakeholderrs digitally and revamped its layout in allmanufacturing locations to yield better productivity and at the same time conforming to"social distancing" in workstations.
l. Following the lockdown last year your Company had educated andsupported the general trade channels and PXL network and oriented them to online bookingof orders and home delivery so that not a single opportunity to sell is missed. In thesame way service network was also geared up to attend to all the pending service requeststhat accumulated in sizable numbers during the relevant lockdown period. Your Company isconfident these initiatives will help the Company to bounce back to normalcy once thesituation improves and the lockdown restriction eases.
m. Your Company has also trained the sales force and also invested inadequate IT functionalities to deal with the trade partners digitally without the need toundertake the risk of travelling.
n. Export sales continues to be robust during this time.
o. Your Company has put in place a host of healthcare measures to takecare of its employees during this pandemic situation as detailed in the section'Developments in Human Resources'
?. As you are aware your Company has over the last few years beenactively pursuing 'Make In India' policy for appliances portfolio by fortifying localvendors thus reducing the dependence on imports from China. In continuation of thisstrategy the Company decided to put an hard stop on all imports from China effectiveOctober 2020 and developed vendors locally for most of those SKUs. Though it had its ownchallenges of supply chain issues in Q3 and Q4 the Company is successful in completingthis process by early April 2021.
2. Outlook & Opportunities:
a. Given the unrelenting spread of the second wave of pandemic and thelarge-scale impact on the lives of the people the near-term outlook for the Indianeconomy is uncertain impacting the growth prospects. The second wave is spreading in ruralareas which was not the case during the first wave. This is a cause for concern as it canimpact the rural demand which was looking up till March 2021.
b. The Union Budget for FY 22 has laid emphasis on investment inseveral projects especially in the non-urban areas. If these are implemented even amidstthe second wave the outlook can be rendered positive.
?. As your Company is in the home and kitchen appliance domain thestress caused by lockdown in domestic kitchens the need for improving kitchens andreplacing appliances is likely to support the demand for such products. While demandarising out of gifting during marriage and other occasions was minimal due to restrictionson gatherings the replacement demand at homes have increased which was witnessed duringFY 21. Further the reluctance to eat outside or order foods from outside is expected tocontinue and this will increase the dependence on domestic kitchens. Further working fromhome is expected to continue for some more time across industries and on long term in someof the industries like IT and IT related industry and this can give raise to demand for ahost of home appliances. All these factors can enable sustaining business at levels thatcan generate decent profits in the coming year.
d. Your Company has already put in place steps for improvement ofefficiencies and management of critical costs to deliver decent profits even if growth maybe 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. This was alsoexperienced during FY 21 in similar situation.
f. From the macroeconomic point of view impact of this second wave onthe economy is largely dependent on the containment measures. The localised nature ofrestrictions means that the actual impact is likely to be much less severe relative toApril-June 2020 when a strict nationwide lockdown was imposed. However since the secondwave is in the early stage it will be very difficult to predict the impact immediately.
g. Overall the private consumption cannot improve till completerestoration of the travel tourism and hospitality sectors and preparedness of public atlarge to travel for business and pleasure. The extent of vaccination of the population andits time duration will also play a major role in this process. Even if the pandemicsubsides in the near future the resurgence of these sectors may take a longer time.
h. During FY 21 we have seen increased tendency among global brands toshift a significant portion of sourcing outside China and India has been looked upon asone of the key alternative. Your Company's export customers have increased their sourcingfrom the Company during FY 21 and we expect this to further strengthen during FY22.
3. Impact on 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 Company's products availableat Every Home.
b. Based on this vision your Company had developed strategies toincrease its product base and customer base across India both rural and urban so as todouble the turnover in about 5 year
c. Covid-19 pandemic has become a speed breaker and it may take coupleof years more to reach this milestone. The investment on innovation and search forinorganic opportunities are always on. The blueprint that has been prepared is stillrelevant and we have made some tweaking in tune with the changed conditions.
d. Shareholders are aware that your Company operates out of its corestrengths of brand innovation design manufacturing distribution sourcing and servicecapabilities and more importantly 'Customer Engagement' and will continue its efforts tofurther fortify these strengths. For instance your Company is already geared to launchover 100 new SKUs in the market during FY 21-22 and the same will be timed keeping a watchon progressive relaxation of lockdown and consumer sentiments. e. In the medium andlong-term your Company expects to maintain a healthy EBITDA margin and Return on CapitalEmployed subject to Covid pandemic subsiding in early FY 22 itself.
While there are vast opportunities in the Domestic Market threats cancontinue in the form of unorganized sector and irrational discounting by regional brands.As the entry barriers are low any lag in innovation can impact growth. The proliferationof e-commerce companies while helping us to grow may also have some impact on grossmargin but your Company pursues a dynamic cost management process to ensure healthymargins at EBITDA levels.
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 factor.
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 disaste
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. SHARE CAPITAL
The paid-up equity share capital as on March 31 2021 was Rs. 13.86Crores (PY Rs. 13.86 Crores).
The Authorised Capital remains the same i.e. Rs. 15 crores divided into15000000 equity shares of Rs. 10 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 the UK Subsidiary retirement of debt 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. 530 Crores after further investments inthe UK subsidiary to the tune of Rs. 19.2 Crores.
J. CAPITAL EXPENDITURE PLANS
Your Company has spent about Rs. 49 crores in FY 20-21 includingautomation and establishing additional lines. The capex for FY 22 is estimated at around'70 crores including normal capex logistics and capacity augmentation.
During the year your Company invested an additional amount of Rs. 19.2Crores in the wholly owned UK subsidiary. Other than this your Company carries short-terminvestments in mutual 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 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.
M. 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 effectively used the lockdown period and work-from homeprocesses to impart knowledge and talent development programmes through digital means andthe training milestones were achieved across all layers 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 work places. Free vaccination for all employees includingcontract workmen and their dependents has been organized. Financial and rehabilitationsupport for affected employees are being provided and also extended to the dependents ofthe employees who have unfortunately succumbed to the infection.
During the lockdown in the first quarter of FY21 your Company continuedto pay the salaries to all the employees including the contract workmen without anydeduction and also on time. Notwithstanding the second wave of pandemic causing widespreadlockdown your Company has released increments to all employees for FY22 effective from1st April 2021 as also the performance linked variable pay.
The industrial relations across all the manufacturing units has been byand large cordial except in Kharadi Unit which is under lock-out since Nov 2020 due toillegal sit-down strike by the worke The management is making their best efforts torestore the normalcy in Kharadi factory through Company has got adequate alternatecapacities in other Factories. The financial impact is not expected to be material. Longterm settlement was concluded during the year for Coimbatore Unit.
The direct employment strength stood at 1442 as compared to 1443 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 312021.
Considering the uncertainty caused by COVID-19 your Directors considerit prudent to recommend a lesser rate of dividend at Rs. 20 per share for FY20. Later inNovember 2020 considering the improvement in the business environment your Directors paidan interim dividend of Rs. 20 per share for FY21. Now based on the performance in FY21your Directors are happy to recommend a final dividend of Rs. 30 per share for FY21totalling to Rs. 50 per share for FY21 including the interim dividend already paid (PY Rs.20 per share).
This Directors' 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 various factorsboth internal and external. Therefore the investors are requested to make their ownindependent judgments by considering all relevant factors before taking any investmentdecision.
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.
Your Company's 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 2013 AND THE RULES MADETHEREUNDER:
(a) Number of Meetings of the Board:
The Board of Directors met five times during the year 2020-21. 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 there under 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 Membe The Corporate Social Responsibility (CSR) Policy enumerating the CSRactivities 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
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 Membe All the members are IndependentDirecto
Mr. K. Shankaran Wholetime Director & Secretary is the Secretary ofthe Committee. More details on the Committee are given in the Report on CorporateGovernance.
(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 of Contracts containing transactions in which directorsare interested is placed before the Audit 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 Company's website at
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. K. Shankaran 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 Require-ments) Regulations 2015.Theterms andconditions of appointment of the Independent Directors are posted on the website of theCompany 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 and Secretary.
Mr. V. Sundaresan Senior Vice President - Finance as ChiefFinancial Officer (CFO) up to Sep 30 2020.
Mr. R. Saranyan Executive Vice President - Finance as ChiefFinancial Officer (CFO) from Oct 1 2020.
(iii) Performance Evaluation of the Board its Committees and Separatemeeting 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 separate meetings of Independent Directors were held to considervarious aspects of management of the Company as well as to review the performance of theBoard its committees and non-independent Director More details on the same are given inthe Report on Corporate Governance. The Board evaluation for FY 20-21 was completed at theMeeting held in February 2021.
(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:
(a) M/s. PKF Sridhar & Santhanam LLP have carried out the Audit forthe financial year under review.
The Auditors' Report to the Shareholders for the year under review doesnot contain any qualifications.
(ii) Cost Auditor and Cost Audit Report:
Pursuant to Section 148 of the Companies Act 2013 read with TheCompanies (Cost Records and Audit) Amendment Rules 2014 the Cost Records of the Companyrelating to "Stainless Steel Pressure Cookers and Cookware" are required to beaudited. The Board of Directors on the recommendation of the Audit Committee appointedMr. V. Kalyanaraman as Cost Auditor of the Company for the financial year 2019-20 andfixed his remuneration.
Mr. V. Kalyanaraman has confirmed that his appointment is within thelimits of the Section 141 of the Companies Act 2013 and has also certified that he 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 arm's 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 Mr. V. Kalyanaraman Cost Auditorunder Item No.4 of the Notice convening the Annual General Meeting.
The Cost Audit Report for the year ended March 31 2021 will be placedbefore the Audit Committee and the Board of Directors of the Company and filed on orbefore the due date.
(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 2020-21 The Report of the SecretarialAuditor in Form MR-3 is annexed to this report as Annexure "F The report does notcontain any qualification.
(g) Transfer to Investor Education and Protection Fund.
Unclaimed Dividends for the year ended March 31 2013:
Your Company has transferred a sum of Rs. 1504189 during thefinancial year 2020-21 to the Investor Education and Protection Fund established by theCentral Government in compliance with Section 124 of the Companies Act 2013. The saidamount represents the unclaimed dividends for the year ended March 31 2013 which werelying unclaimed with the Company for a period of seven years from their respective duedates of payment.
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 4114 Equity Shares of Rs. 10 each fully paid-up in respect ofwhich the dividends unclaimed / unpaid for a period of seven consecutive yea.
(h) Disclosure with respect to Demat suspense account / unclaimedsuspense account.
Your Company does not have any Unclaimed
(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 & 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 24th March 2016 andcapitalized during the FY 16-17. TTK British Holdings Limited holds the entire sharecapital of Horwood Homewares Limited which is the operating subsidiary. During the yearHorwood Homewares Limited divested its 51% stake in Horwood Life Limited UK which itacquired in the previous year.
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
(l) Loans Guarantees and Investments under Section 186 of theCompanies Act 2013:
During the year your Company had not given any loan provided anyguarantee or made any investment under Section 186 of the Companies Act 2013 except forinvestments made in the equity capital of the wholly owned UK subsidiary TTK BritishHoldings Limited to the extent of GBP 2 million. Your Company holds 1440 equity shares ofRs. 10 each in TTK Healthcare Limited and 20700000 shares of GBP 1 each in TTK BritishHoldings 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) 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 Company's 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
(o) 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 2020-21 there were nocomplaints. Your Company regularly conducts awareness programmes across its units in thisregard.
(p) Registered Office: There has been no change in the location of theRegistered Office of your Company.
(q) Annual Return: In accordance with the Companies Act 2013 theannual return in the prescribed format is available at
(r) Cybersecurity: The Outbreak and rapid spread of Covid 19 pandemicin the fiscal 2021 has roiled the organisations and disrupted business operations. Theyear was a very difficult one for the business to cope up with the unprecedentedchallenges. At TTK Prestige while our employees operated efficiently as a remoteworkforce we continue to keep vigil on information environments to ensure cybersecurityposture and resiliency.
We continued our efforts to keep ourselves up to date withcybersecurity events to achieve higher compliance and its continued sustenance.
During the year our focus to enhance cyber awareness to employee's andtrain the cybersecurity personnel went ahead as planned together with our initiatives onimproving cybersecurity processes and technologies.
DIRECTORS' 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 Institutions andthe employees of the Company.