INTRODUCTION:
BUSINESS SEGMENTS:
COOLING PRODUCTS:
For over five decades, Blue Star has been the exclusive distributor
in
India for many internationally renowned manufacturers of
professional
electronic equipment and services, as well as industrial products
and
systems. The Company is also in the business of specialized
industrial
projects for the steel industry.
FINANCIAL HIGHLIGHTS:
AIRCONDITIONING:
COMMERCIAL REFRIGERATION:
SEGMENT-WISE ANALYSIS:
The Company also booked some notable orders from power sector majors
such
as NTPC, Vindhyachal, Rihand and Nabinagar; Reliance
Infrastructure,
Raghunathpur; Essar, Mahan and Salaya; and Adani, Tiroda, amongst
others.
From the steel sector, the Company received notable orders from
IISCO,
Bokaro and Rourkela, and Jindal, Angul.
Blue Star has also been offering plumbing and fire fighting services
in
order to offer a single window, turnkey Mechanical, Electrical &
Plumbing
(MEP) solution to customers. The Company won several orders for
plumbing
and fire fighting services during the year, most of which were bundled
with
airconditioning and electrical contracting orders.
COOLING PRODUCTS:
With the legislation finally getting implemented, Blue Star has spruced
up
its product portfolio and has launched a comprehensive range of star-
rated
window and wall mounted split airconditioners to meet a wide range
of
requirements. The energy savings is expected to be a minimum 12% for 2-
star
and goes up to 25% in the case of 5-star. The Company has also improved
the
range of commercial split airconditioners by introducing flat paneled
mega
split airconditioners apart from energy efficient scroll compressor-
fitted
cassette and vertical split airconditioners.
Owing to the onset of early summer in the West and South, there
was
enhanced demand for room airconditioners from the residential
segment.
Focus on educational institutes yielded good business from
schools,
professional colleges, universities and coaching centres. The
National
Accounts Cell won several orders from key customers, especially banks,
ATM
infrastructure providers, financial service providers and telecom
players.
Over the years, the Company has changed its business model from being
only
a distributor of leading global manufacturers to that of a
system
integrator and value added reseller, thereby moving up the value chain.
The
Company has the expertise to build a complete system around the
products
offered, thereby offering a comprehensive single window, turnkey
solution.
MANUFACTURING FACILITIES:
Over the last few years, the Bharuch plant has been focusing on
the
refrigeration products and cold chain business and has invested
in
developing modern manufacturing facilities for polyurethane sandwich
panels
which has resulted in significant growth in capacity of panel
production.
During the review period, layout changes were carried out in the
deep
freezer assembly, resulting in enhanced deep freezer volumes.
The
implementation of TPM for manufacturing excellence resulted in
higher
productivity. The safety initiatives during the year enabled the plant
in
receiving the safety award for 'Exhibiting excellent safety measures
in
factory premises' by Gujarat Gas Ltd, for the second consecutive year.
The Himachal plant manufactures window and split airconditioners.
During
the year, a new range of upgraded products was introduced to meet the
now
mandatory energy labeling programme initiated by BEE (Bureau of
Energy
Efficiency). The manufacturing processes, reliability lab and online
run-
test setup was upgraded in line with the stringent BEE regulations. All
the
star-rated models have been tested at an independent Intertek Lab. The
new
initiatives including ISO, six sigma and TPM are being
pursued
enthusiastically at the plant, resulting in higher operational
efficiency.
This was the second full year of operation of Blue Star's latest
state-of-
the-art manufacturing facility at Wada. The plant manufactures the
entire
range of air handling units and specialized airconditioners for the
telecom
industry. The plant is equipped with modern manufacturing facilities
with
complete vertical integration. An Export Oriented Unit (EOU) is also
housed
within the main plant. The EOU is capable of manufacturing air
handling
units, storage water coolers and packaged airconditioning equipment.
During
the year, there was proactive participation at all levels for
various
initiatives such as TPM, SGA and Kaizen. The plant has also been
certified
for deployment of quality management systems (ISO 9001: Version 2008)
by
Underwriters Labs, USA. Vendor assessment audits for the factory
conducted
by multinationals such as Danfoss and Nokia Siemens resulted in
immediate
approvals.
Blue Star invested Rs. 9.7 crores on research and development during
the
year. The Company has invested in modern product development facilities
as
well as sophisticated test laboratories.
The year under review saw the development and launch of several
new
products as well as entire product lines. These included a new range
of
star-rated room airconditioners under the mandatory BEE energy
labeling
programme. The existing air handling units range was also redesigned
and a
new range was developed incorporating heat pipes and heat recovery
wheels.
A few models of ducted/packaged airconditioners with a 15% improvement
in
energy efficiency for green building applications were also
developed.
Further, a new range of VRF systems was also introduced in capacities
from
6 HP to 12 HP Specific models were developed for the exports
market
including roof top and top discharge split units and heat recovery
units
for fresh air applications.
EXPORTS:
The product export business saw a drop in revenues during the year due
to
the slack demand. The global economic slowdown adversely affected Dubai
and
several other Middle East nations, with the real estate business
severely
impacted. However, towards the end of the year, there was a slow
recovery
in some segments. The export business registered an overall increase
in
profitability due to a shift in product mix towards engineered and
niche
products which enjoy higher margins. During the year, the Company
signed
two MOUs - with Triangle Co., Syria and Alenaire Airconditioning
Phil.
Inc., Philippines as business partners. This appointment is expected
to
strengthen Blue Star's presence in West Asian and South East Asian
regions.
Blue Star continues to retain its eminent position in the market place
as a
superior value added service provider. The total tonnage maintained
under
various categories of after-sales solutions make the Company the
largest
after-sales service provider in the country. While the customary
warranty
and annual maintenance services continues to be the mainstay, the
Company's
focus into the service parts and accessories arena has resulted
in
increased responsiveness and easy availability of genuine parts.
In
addition, a variety of value added services in the areas of energy, air
and
water management as well as Green Building certification and
consultancy
have been widely accepted. The Company has begun to provide Total
Facility
Management solutions and has built the required infrastructure to meet
the
requirements of large sized industries, IT/ITES campuses and
commercial /
public utilities.
With a significant amount being spent on outside goods, the Company has
an
agile and adaptable supply chain incorporating modern procurement
practices
CHANNEL DEVELOPMENT:
FINANCIAL PERFORMANCE:
The analysis of the financial year performance for the year ended March
31,
2010 in comparison to the previous year is as under:
1. INCOME:
Total Income (net of excise duty) and before profit from sale
of
investments (exceptional item) for the year at Rs. 2556.11 crores
increased
marginally by 1.3% over Rs. 2524.38 crores in the previous year.
The cost of sales, work bills and services during the year was Rs.
1882.08
crores and was 74.5% of the revenue from sales, work bills and
commission
as compared to 74.9% in the previous year. Despite an increase in the
cost
of materials due to higher commodity prices for part of the year, the
cost
of sales for the year was contained due to significant savings as a
result
of value engineering, aided by the appreciation of the rupee in the
latter
part of the year.
S. FINANCIAL EXPENSES:
Financial cost at Rs. 8.45 crores for the year was significantly lower
than
Rs. 17.25 crores incurred in the previous year, primarily due to
better
cash management and reduction in bank interest rates during the
year.
Interest cost for the year was 0.33% of the Total Income as compared
to
0.68% in the previous year.
6. DEPRECIATION:
7. TAXATION:
Provision for taxation for the year was Rs. 65.13 crores which is 23.5%
of
the Profit before tax, as compared to 24.3% in the previous year.
The
decrease was mainly due to higher tax depreciation on account
of
significantly higher additions of fixed assets during the year and
the
increase in the quantum of profits of the Himachal factory which
are
eligible for tax holiday.
8. EXCEPTIONAL ITEM:
During the year, the Company realized a profit of Rs. 13.96 crores on
the
sale of its shareholding in Rolastar Pvt Ltd and Ravistar India Pvt Ltd.
9. NET PROFIT:
Net profit after tax for the year was Rs. 211.49 crores as compared to
Rs.
180.29 crores in the previous year, representing an increase of 17%.
Profit
before Tax and Exceptional items for the year at Rs. 262.66
crores,
recorded a growth of 10.2% over the Profit before Tax of Rs. 238.33
crores
in the previous year. Including the Exceptional item, the Profit before
Tax
for the year was Rs. 276.62 crores as compared to Rs. 238.22 crores in
the
previous year.
The strong fundamentals of the Company and its sound financial base
have
placed it in a strong position to face the vagaries of the market.
The
uncertain global economic scenario could affect the Indian economy.
This
could impact the growth of the Company to some extent. The Company
will
continue to remain vigilant and will proactively take steps to mitigate
the
adverse impact, if any, arising out of these concerns.
HUMAN RESOURCES:
During the review period, the Company reduced its total head
count
marginally from 2620 as on March 31, 2009 to 2603 on March 31, 2010.
The
focus of the function was to control costs and yet maintain a high
degree
of productivity. The Company released modest increases in salaries
which
helped maintain productivity and employee morale during the year.
The
Company saw harmonious industrial relations and the Company signed a
short
term settlement with the Union during the course of the year.
During the year, the Environment, Health and Safety (EHS) function
further
enhanced safety awareness among the employees and business partners.
Over
4000 employees and technicians/workers of business partners were
covered
under safety training. Safety systems and processes were developed
for
project sites / factories and the same were implemented, creating a
safe
work place for all stakeholders. Safety audits were conducted
engaging
external agencies like Central Labour Institute, Mumbai as well as
internal
safety professionals to measure safety compliance. Based on the
findings,
necessary corrective and preventive measures were undertaken on a
priority
basis. There was a 42% drop in the reported accidents in the
organization
during the year compared to the previous year. The EHS function was
further
strengthened by employing more safety professionals.
INFORMATION TECHNOLOGY:
BRAND EQUITY:
Apart from the mass media, the Company also made affordable investments
in
field marketing. These include participation in trade
exhibitions,
sponsorships of events by CII and others, IDEAC (Interior
Designers,
Architects and Consultants) relationship management, customer events
and
public relations through the Press. These field activities are critical
and
have gone along way in complementing mass media campaigns and
strengthening
brand equity.
CORPORATE OUTLOOK:
Market growth was modest in the first quarter of the financial year
2009-
2010 but picked up as the year progressed. The General Elections saw
the
ruling alliance return to power, signaling political stability at
the
centre. Strong GDP growth in the face of a contracting global
economy
infused confidence in business; the fiscal stimulus provided relief
from
inflationary pressures; and implementation of the 6th Pay
Commission
stimulated consumer purchase. All these combined to change the
consumer
sentiment from apprehension during the last two quarters of 2008-2009
to
positive as the new financial year progressed. The home appliance
industry
in particular was among the first to witness revival of growth.
Penetration of home appliances is still very low and the long term
growth
opportunity for this industry is very attractive. Out of every
100
consumers living in urban India, only 33 own a refrigerator and
13 a
washing machine and these numbers are miniscule in rural areas.
Penetration
of air conditioners, microwaves and electrical water purifiers is
even
lower. Hence, the industry can be expected to see sustained growth in
all
categories for many years to come and the government focus
on
infrastructure development - electricity in particular -will
accelerate
demand.
The company operates in only one segment of White Goods. Domestic sales
in
value terms grew by 30% and overall sales grew by 28%.
Overall Review:
Business Review:
E&P BU has doubled its turnover in the last 2 years and achieved a
record
turnover of Rs.755 crore with a growth of 39% and a CAGR of 40% in the
year
under review. The order book of the BU as on 1st April, 2010 stood
at
around Rs.750 crore.
The TLT Division has clocked a turnover of Rs.280 crore with 62%
growth,
whereas Special Projects Division has clocked a turnover of Rs.265
crore
with 64% growth.
The Ranjangaon Unit has achieved the highest tonnage of over 35,000
MT
which includes over 25,000 MT of Transmission Line Towers. This Unit
was
commissioned in April, 2001 and since then has made a steady progress
to
achieve near 90% capacity utilization.
The noteworthy achievements for the E&P BU for the year gone by are:
(i) the design, development, supply, installation and commission of
tallest
flag post of 63 m height in Kaithal, Kurukshetra District of
Haryana,
hoisting largest flag of 14 x 22 m which has already entered the LIMCA
Book
of records 2010-11;
(ii) the illumination of the Bandra Worli Sea Link bridge, which has
become
a new land mark of the city of Mumbai;
Appliances BU:
This BU has also entered the Modern Retail Format and Corporate Sales
in a
big way with a dedicated team focused on this business.
Fans BU:
Bajaj Fans introduced Star Rated decorative Fans, New Models under the
kids
fan category with Bajaj-Disney Brand, besides introducing many new
models.
The year gone by also saw the introduction of many new models of
Air-
circulators and a wide range of industrial exhaust fans, Cooler-kits,
Pumps
& motors.
Bajaj fans are sold in almost 50,000 outlets across the country - of
which
around 18% are in rural areas and small towns with below 50,000
population.
With an aggressive marketing and promotional strategy the BU is poised
to
take advantage of its unique position in the industry in the coming
years
too.
Chakan Unit of the Company has produced over 3,50,000 fans for the BU
and
has done innovative work on new product development, value
engineering
initiatives, quality improvement efforts, etc. during the year.
Luminaires BU:
Lighting BU:
Financial Performance:
Rs.
Crore
2009-10
2008-09
Financial Review:
The gross turnover and other income achieved for the year ended 31st
March,
2010 was Rs.2252.27 crore, a growth of 25.53% over the previous year.
PBDIT (excluding exceptional items) increased by 32.73% from Rs.
185.54
crore to Rs. 246.27 crore.
The net profit after tax at Rs.117.10 crore was 5.20 % as compared to
4.97%
in the previous year.
Transform 2010:
Opportunities:
Challenges:
Future Outlook:
Social Responsibility:
Cautionary Statement:
Shekhar
Bajaj
Place : Mumbai, Chairman & Managing
Director
C. ANALYSIS OF PERFORMANCE :
1. Kitchen Appliances :
(In Rupees
Lakhs)
2009-10 2008-09
Domestic Export Total Domestic Export
Total
g. Many new products and models were introduced during the year to make
the
range contemporary and competitive. Towards the end of the financial
year
your Company launched a new range of Induction Cook Tops, a whole new
range
of Pressure Cookers and Cookware with induction compatible base,
Microwave
Pressure Cookers and Apple Range of `inner lid' pressure cookers.
The original plan was to develop a Mall which would give recurring
income
stream of rentals. Due to change in market conditions the developer
has
suggested a mixed development of residential and office space.
The
developer has informed us that they are in the advanced stage of
getting
sanctions for the revised plans and that the construction can
commence
during the first half of the financial year 2010-11. Based on the
revised
plans for development the company expects to have both lump sum as well
as
recurring rent as and when the project is complete. The developer
has
estimated that the project can be completed within a period of 30
months
from the date of commencement of construction.
D. OUTLOOK
F. RISK MANAGEMENT
f. Financial Reporting.
G. FINANCES
Your Company has generated Post tax operational free cash flows of
more
than Rs.60 Crores during 2009-10, out of which Rs.18 crores have
been
applied to discharge borrowings from Banks. After spending
significant
amounts on capital expenditure your Company carries a free cash balance
of
Rs.30 crores besides normal operating cash float of Rs. 11 Crores.
Your
Company continues to maintain unutilized funded credit lines of
Rs.30
crores. Thus your Company has adequate cash resources to aggressively
look
for further long-term investments in the kitchen appliances segment.
H. INVESTMENTS
Opportunities:
Threats:
* Heavy competition from local and unorganised sector
3] Outlook:
5] Human resources:
The Company recognises that its personnel are one of the most
important
pillars of the organisation. A major exercise in training and
development
of employees has been undertaken at all levels. The Company gives a lot
of
importance to the human resources activities. These activities have
helped
to retain and motivate employees of the company even during
difficult
period. With their support we can look forward to a bright future for
the
Company.
6] Cautionary statement:
Air coolers use 100% fresh Air conditioners re-circulate the same
dry
and natural air for cooling. air for cooling.
Air coolers can be used Air conditioners are effective for closed
anywhere in open spaces areas only.
and in a closed
environment.
Global warming:
Income increase:
India's per capita income grew 10.5% from Rs. 40,141 in 2008-09 to
Rs.
44,345 in 2009-10 (Source: Economic Times). In terms of GDP, many
Indian
cities are expected to become larger than some countries. For instance,
the
GDP of Mumbai Metropolitan region is projected at US$265 billion by
2030,
larger than the GDP of countries like Malaysia, Portugal and Columbia.
Middle-class:
Urbanisation:
Rural growth:
Working population:
India has a young and rapidly growing population. India will have
the
largest growing workforce for the next 20 years as 270 million Indians
join
the net working age population till 2030. Moreover, cities will account
for
70% of all the new jobs created (Source: Mckinsey). The
domestic
consumption expenditure too is set to triple by 2020 from Rs. 30 lacs
crore
in 2009 to Rs. 113 lacs crore in 2020. Across 2010-20, India will add
120
million people in the working age-group seeking employment, making
India's
global working population 28%. China, on the other hand, is expected to
add
only 19 million people in the same period, contributing 5% to the
global
working population.
Nuclear families:
Power deficit:
Retail growth:
Hospitality sector:
Commercial space:
The IT and ITeS sectors require 150 million sq. ft of office space
across
urban India by end 2010. The organised retail industry is likely to
require
an additional 220 million sq. ft by end 2010. The commercial
market
(including IT/ITeS, BPO, banking and financial services, pharmaceutical
and
telecom) in India is expected to grow at 20-22% over the next five
years
(Source: Cushman & Wakefield report) in cities like Delhi,
Bangalore,
Mumbai, Chennai and Hyderabad, among others.
Business Drivers:
Product development:
During the year, the Company developed more than 200 moulds leading
to
faster product development.
Product launches:
In 2009-10, the Company launched four new models - three models of the
Diet
Cooler and one in the Ice Cube category.
The Company launched a new category of air coolers, the world's first
air
coolers with a fan in the personal category, suitable for smaller
places
like shops on account of lower noise and multiple applications (fan
and
cooler).
The Company introduced the slim and lean Diet Cooler, designed to
occupy
less space than conventional air-coolers and consume significantly
lower
electricity.
2. Operations:
Highlights, 2009-10:
* The Company's air cooler production increased from 242 thousand units
in
2008-09 to 420 thousand units a year in 2009-10.
* The Company demonstrated that its air cooler could operate without
water
in adverse situations, owing to innovations related to the thermal
overload
protector.
* The Company eliminated the odour of gum from the cooling pad
following
the cooler being switched on.
Outlook:
3. Marketing:
Outlook:
Finance review
Cool Numbers:
Net sales:-
This increased 53% from Rs. 12,422 lacs in 2008-09 to Rs. 18,977 lacs
in
2009-10, consequent to a 61% increase in sales volume from 2,62,067
units
to 4,21,355 units. Domestic sales accounted for Rs. 15,875 lacs, up
from
Rs. 9,833 lacs in 2008-09 - a 61% growth. This was largely owing to
two
factors - a stronger distribution network which enabled the Company
to
cater to a larger market opportunity, and the introduction of
niche
products with attractive customer acceptance. International business
grew
from Rs. 2,589 lacs in 2008-09 to Rs. 3,102 lacs in 2009-10 as
the
Company extended its presence to 54 geographies till 2009- 10.
Other income: Treasury income increased 49% from Rs. 256 lacs in
2008-09
to Rs. 381 lacs in 2009-10, largely owing to investable surplus
from
operation.
Operating expenses:
Material cost:
This was the largest cost component and constituted about 63% of the
total
operating cost. In 2009-10, the increase in material cost was largely
owing
to a growth in volumes (from the domestic market and exports) and
material
costs (owing to the northward movement in crude prices). The
Company
managed the latter largely through value engineering, which optimised
the
use of components in products.
Employee costs:
Interest 8 16 57
Margins:
EBIDTA increased 40% from Rs. 4,077 lacs in 2008-09 to Rs. 5721 lacs
in
2009-10 but increase in material cost dented profitability margins -
EBIDTA
margin declined from 32% in 2008-09 to 30% in 2009-10. Net
profit
(excluding the exceptional item) grew 29% from Rs. 2,857 lacs in
2008-09
to Rs. 3,693 lacs in 2009-10.
Taxation:
The Company's tax provision increased 15% from Rs. 1,598 lacs in
2008-09
to Rs. 1840 lacs in 2009-10 primarily owing to an increase in
taxable
profitability. The Company did not enjoy any tax shield. Its average
tax
rate stood at 33% calculated on profit before tax.
Balance Sheet:
Capital employed:-
Sources of funds:
The Company's net worth increased 68% to Rs. 8,620 lacs as on June
30,
2010, from Rs. 5,131 lacs as on June 30, 2009, owing to
increased
reserves. Consequently, book value per share increased from Rs. 73 as
on
June 30, 2009, to Rs. 123 as on June 30, 2010. Return on net worth
stood
at 43% in 2009-10 against 84% in 2008-09.
Equity capital:
External funds:
Application of funds:
Fixed assets: The Company's gross block increased 52% from Rs.1,286
lacs as
on June 30, 2009, to Rs. 1,958 lacs as on June 30, 2010, owing to
the
purchase of freehold land ( Rs. 566 lacs) and the addition of high-
quality
moulds which increased air cooler manufacturing capacity. The Company
added
Rs. 87 lacs to its plant and machinery account in 2009-10. As there is
no
debt on the Company's books, all assets are free from any encumbrances
- a
unique advantage.
Investments:
The Company's investments increased 70% from Rs. 3,138 lacs as on June
30,
2009, to Rs. 5,349 lacs as on June 30, 2010.
Managing Risks:
* For 2010-11, the Centre for Monitoring Indian Economy (CMIE) expects
the
sales of air conditioners and refrigerators to grow 24% against 19%
in
2009-10.
* The Company, recognised for its innovation, grew market share and
market
size. The 'Ice Cube' range (the only cooler which works as a fan
and
cooler) is proof.
Sale volumes grew at a 54% CAGR over the three years leading to 2009-10.
* The Company was the only one in the air cooler field to
periodically
launch new products with unique features.
* The Company periodically imbibed new technologies that reduced the
mind-
to-market cycle, optimised the use of components, reduced costs
and
enhanced the proportion of value-added products.
players.
IFB INDUSTRIES LIMITED Back
ANNUAL REPORT 2009-2010
The Home Appliance Division has improved its turnover and profitability
as
compared to last year. The profitability of the division has grown due
to
growth in volume and value as also reduction in freight cost and
material
cost. Introduction of new models in washing machine and microwave
oven
category at competitive prices has enabled good growth.
Cost reduction has been a major focus area for the plant keeping in
mind
competition. Cost reduction on plastic tubs, new programmer etc
resulted in
good savings. Cost reduction has been a major focus area for the
plant
keeping in mind competition. The company is adopting various cost
control
measures but a lot more need to be done in the areas of cost control.
All
our product categories have performed above industry average. To give
more
focus to Micro wave ovens, dishwasher and dryers independent managers
have
been given the responsibility for these product categories. The company
has
entered the commercial laundry equipment business & has launched the
same
pan India. Sales/ Enquiry of this segment has been very encouraging and
the
company expects good sales from these two categories going forward.
The
Company has also entered kitchen appliances and modular kitchen
business.
D) Outlook:
Thus for the year we expect more working capital requirements and for
that
purpose we may use banking facilities from Standard Chartered Bank
from
time-totime. However, at this point in time, the company continues to
be
completely 'zero' debt.
E) Concerns:
H) Human Resources:
I) Risk Management:
Some of the major risks in each category are described below. There
are
other risks that could have a material effect on the Company's
performance
and financial position. The Company has taken several mitigating
actions,
applied many strategies and introduced control and reporting systems
to
reduce and mitigate these risks.
OPERATIONAL RISKS
Environmental issue:
STRATEGIC RISKS
Dependence on supplier:
CAUTIONARY STATEMENT:
Air conditioner is now much more than a cooling appliance. Its image
has
transformed to being a stylish and intelligent indoor Air
conditioning
system. The customer's now look for various other features like
aesthetics,
comfort features, designs, colours, latest technologies, higher
energy
efficiency and better service. Split Air conditioners are fuelling
the
growth of the industry with design innovations, elegant looks in a
feature
packed indoor unit.
The Room Air conditioner category consists of both the Window and Split
Air
conditioners for the use in residential and commercial spaces.
The Room Air conditioning industry experienced a growth rate of close
to
25% in 2009-10 in comparison to about 7% growth in 2008-09.
However
penetration of Room Air conditioners in India is still low at around
3%
only.
Your company has grown @ 46% over the last year with 1.58 lac units
against
1.08 lac units in last financial year in Room Air conditioners segment.
Your Company has the Takumi range of Ductable Air conditioners, which
is
the emergence of Hitachi's engineered system to create One-of-a-
kind
solution to Air conditioning industry. Its unique energy
efficient
engineering design and flexibility in application provides
pragmatic
solutions to suit best for cooling requirements. The range of
these
products available is from 3.0 Tr. to 16.5 Tr. which are highly
appreciated
and well received in the market. The customer of this segment comprises
of
Retail Chains, MNCs, IT/ITES sectors, BPOs, Call Centers,
Institutes,
Malls, etc.
Refrigerators:
Your Company has grown by over 4% against last year. New models have
been
introduced in 2-door & big French category. It is expected that
your
Company will perform better in coming years in this category.
During the year under review, your Company has set up its own
Service
Centers. These centers will be entirely owned & operated by your
Company,
thereby assuring better & personalized service to every customer. In
the
metros the need of below 1.0 Tr. and between 1 Tr. and 1.5 Tr.
capacities
has emerged. Understanding that need of the market your Company
has
extended 'ACE Followme' range to 0.9, 1.2, 1.5 & 2.0 Tr. and other
models
'KAZE' & 'Ace Cutout' also have the same tonnage class.
1. During last one year the cost of steel, copper & plastic have
been
rising sharply. Energy labeling initiated by the government is also
adding
to the input cost of product.
3. Excise duty has gone upto 10% in the last union budget. Some of
the
states have also increased VAT additionally upto 2.5%.
Human Resources:
Economic Review:
The key growth drivers for the Indian consumer durables industry:
* Festive season sales: Demand for colour TVs usually pick up during
the
festive seasons. As a result most companies come out with offers
during
this period to cash in on the festive mood. This period will continue
to be
the growth driver for consumer durable companies.
Threats
* Rising inputs costs of raw materials viz. copper and steel will put
huge
pressure on the margins. Further with the recent increase in excise
duties
the pressure will be on manufacturers to pass on the burden to
consumers
which may lead to reduced demand.
* The Company faces stiff competition from South Korean companies like
LG
and Samsung. In last few years, they have been increasing their
market
share in India. Going forward, they are expected to give tough
competition
to Indian manufacturers with newer high-end technologies.
IV. Outlook
The Company has extended its offerings under the Onida brand
across
products as well as geographical boundaries.The Company expects to
increase
its presence in these products and emerge as a leading solutions
provider
for electronic home improvement goods. The Company has also positioned
an
exclusive brand `IGO' for the rural market to capture the potential
demand
from the rural areas, which is growing aggressively.
During the year under review the turnover of the Company increased
from
Rs.1517.72 crores to Rs.1568.35 crores. The Profit before tax
increased
from Rs. 10.15 crores to Rs.22.65 crores registering an increase of
123%
and the Profit after tax increased from Rs.8.95 crores to Rs.18.37
crores
registering an increase of 105%.
X. Cautionary Statement
INDUSTRIAL REVIEW:
The demand for consumer durables has increased with rising income
levels,
double-income families, changing lifestyles, availability of
credit,
increasing consumer awareness and introduction of new models. Apart
from
steady income gains, consumer financing has become a major driver in
the
consumer durables industry. The other factor for surging demand
for
consumer goods is the phenomenal growth of media in India. The flurry
of
television channels and the rising penetration of cinemas will continue
to
spread awareness of products in the remotest of markets.
RISK MANAGEMENT:
HUMAN RESOURCES:
CAUTIONARY STATEMENT: