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TTK PRESTIGE LIMITED

ANALYSIS OF ANNUAL REPORT 2009 OF TTK PRESTIGE LIMITED

Introduction
The TTK Group is an Indian business conglomerate with a presence across several segments of the industry including consumer durables, pharmaceuticals and supplements, bio-medical devices, maps and atlases, consular visa services, virtual assistant services and health care services. The TTK Group was started in 1928 by T. T. Krishnamachari, and is largely owned by the family. The group has revenues of over Rs. 10 billion with a presence across India and several international markets. The group has joint ventures with global corporations such as SSL International, who are the makers of Durex condoms and Dr. Scholl's foot care products. The group is also associated with several charitable and social organizations, such as the TTK Voluntary Blood Bank, the T.T. Ranganathan Clinical Research Foundation (a hospital for alcohol and drug addiction) and TTK Schools for the underprivileged. The TTK Group has been associated with several brands, which are now household names in India, such as: * Brylcreem * Kiwi (shoe polish) * Kohinoor condoms * Prestige pressure cookers * Woodward's gripe water
TTK PRESTIGE LIMITED

It was in the year 1928 that Mr. T.T.Krishnamachari the first finance minister of India founded TTK Prestige Limited one of oldest business houses in the country today. It made its humble beginning as a pressure cooker manufacturing and marketing company and soon rose to attain the status of being the market leader of pressure cookers in India. Through its constant research and product innovations, it offered the most comprehensive range of kitchen ware in the world.TTK attained its µleadership¶ status by providing, its customers quality products at an affordable price. It innovated and explored new business categories, all the while retaining its Indianess. Prestige has emerged as a household name and market leader with its unmatchable quality and customer appeal. It has successfully taken a big leap as a one- stop kitchen solutions provider bringing a smile of ease and satisfaction on every Prestige customer¶s face. Prestige have introduced a wide range of Gas stoves, mixer grinders, non-stick cookware, life- style products, hobs, electric

Rohidas Patil Institute Of Management Studies

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TTK PRESTIGE LIMITED chimney¶s and the latest addition being modular kitchens to become a complete kitchen solution provider. Rohidas Patil Institute Of Management Studies 2 . Its products are here to stay with a promise of quality and comfort.

14 105.33 57.34 16.34 11.18 14.55 105.63 11.83 0 0.33 2.87 115.39 61.) 2010/03 2009/03 2008/03 2007/03 2006/03 11.67 0 29.1 57.12 57.97 11.75 11.39 46.33 112.1 4.47 0 23.69 0 0.91 48.82 3.02 0 40.02 4.53 128.31 48.21 -3.33 35.31 0 0 84.97 12.17 0 2.84 20.29 27.1 46.26 11.55 0 0 68.06 128.45 39.92 26.28 10.32 46.32 0 0.12 73.49 43.69 0 1.11 0 3.76 61.15 11.68 47.TTK PRESTIGE LIMITED BALANCE SHEET As At 31/03/2010 SOURCES OF FUNDS : Share Capital Reserves Total Equity Share Warrants Equity Application Money Total Shareholders Funds Secured Loans Unsecured Loans Total Debt Total Liabilities APPLICATION OF FUNDS : Gross Block Less : Accumulated Depreciation Less:Impairment of Assets Net Block Lease Adjustment Capital Work in Progress Producing Properties Investments Current Assets.8 126.23 2.57 0 6.7 9.88 20.53 4.32 131.8 32.86 -0.09 0 31.39 50.96 64.75 14.18 23.08 Rohidas Patil Institute Of Management Studies 3 .59 59.5 8.57 15.48 0 24.58 73.57 0 35.93 0 18.97 42.75 62.99 0 0 47.41 65.77 0 0 55.24 34.9 10.64 16.64 17.26 43.58 208.16 -3.33 43.88 53.11 126.53 0 0.3 61. Loans & Advances Inventories Sundry Debtors Cash and Bank Loans and Advances Total Current Assets Less : Current Liabilities and Provisions Current Liabilities Provisions Total Current Liabilities Net Current Assets Miscellaneous Expenses not written off Deferred Tax Assets Deferred Tax Liability Net Deferred Tax Total Assets Contingent Liabilities (Rs in Cr.53 104.88 0 23.9 21.33 0 25.1 90.52 0 1.9 41.61 73.73 82.99 56.94 67.06 -3.28 0 0.84 0 0 124.92 139.25 52.29 60.8 2.48 26.57 83.7 105.32 6.54 75.86 2.39 60.74 17.43 59.99 135.08 115.26 0 18.33 73.16 142.25 77.8 39.5 0.77 44.9 -3.63 20.25 104.63 0.42 36.

TTK PRESTIGE LIMITED Rohidas Patil Institute Of Management Studies 4 .

6 1.28 3.01 347.93 57.32 0 100 359.83 9.38 0 22.86 0 0 0 20.76 7.52 11.59 75. below Net Profit P & L Balance brought forward Statutory Appropriations Appropriations P & L Balance carried down Dividend Preference Dividend Equity Dividend % 518.86 13.95 0 118.71 231.99 3.92 17.55 7.84 24.11 -0.53 25.67 2.89 1.64 0 218.4 39.51 75.9 0.98 5.25 11.93 401.91 33.19 0 0 0 7.03 82.94 Other Income 5.48 3.4 22.28 32.05 18.28 3.63 20.53 9.24 73.75 0.52 5.81 0.02 7.9 16.25 325.16 2008/03 339.11 0 2.65 290.17 Total Income EXPENDITURE : Raw Materials Power & Fuel Cost Employee Cost Other Manufacturing Expenses Selling and Administration Expenses Miscellaneous Expenses Less: Pre-operative Expenses Capitalised Total Expenditure Operating Profit Interest Gross Profit Depreciation Profit Before Tax Tax Fringe Benefit tax Deferred Tax Reported Net Profit Extraordinary Items Adjusted Net Profit Adjst.66 0 50 309.83 6.39 28.36 20.TTK PRESTIGE LIMITED PROFIT AND LOSS AS ON 31/09/2010 2010/03 INCOME : Sales Turnover 516.5 2.47 78.99 0.93 221.86 Net Sales 507.72 0 161.83 0 25 Rohidas Patil Institute Of Management Studies 5 .44 0 0 0 18.72 0.84 4.83 113.2 16.47 5.87 269.36 3.64 2.66 8.39 0 174.87 37.8 4.38 0 0 0 8.97 0 35 263.85 281.81 17.85 0 436.62 13.45 0.89 12 0.77 -0.74 25.22 28.81 -4.84 0 0 0 11.47 2.03 52.78 96.6 25.4 0.02 5.49 2009/03 416.38 Stock Adjustments 5.85 8.67 0 3.86 2.08 7.44 0 52.44 34 11.86 26.99 0 -0.31 3.41 0 30 202.83 4.8 2.85 14.06 22.46 3.) 2007/03 2006/03 293.51 6.9 2.54 2.62 399.07 11.21 14.57 0.22 222.98 0.77 0 3.4 (Rs in Cr.28 0.48 29 5.5 -2.8 Excise Duty 8.

This is due to company able to increase its flow of cash from operations.26 3.68 9.11 0. This is due to company has repaid its entire secured load with cash surplus they had this year.52 6.09 Net Cash Used in Financing -25.97 10. Bank balances of Company rise to Rs43 cr from 10cr.18 51.47 30 Rohidas Patil Institute Of Management Studies 6 .14 -15.63 21.03 1.65 4.9 10.TTK Prestige Ltd Debt-Equity Ratio has come down to 0.83 Net Cash Used in Investing Activities -2.TTK PRESTIGE LIMITED Earnings Per Share-Unit Curr Earnings Per Share(Adj)-Unit Curr Book Value-Unit Curr 44.07 0. Current ratio has increased to 1.92 5. this is because company has paid its entire secured loan.7 18.73 69.74 8.27 6.26 Equivalent Cash and Cash Equivalents at End of 43.88 9.36 in FY10 compare to FY 09 which was 1.63 9.48 Activities Net Inc/(Dec) in Cash and Cash 33.17 -2.66 6.TTK Prestige Ltd AS ON 31/03/2010 2010/03 2009/03 Cash Flow Summary Cash and Cash Equivalents at 10.64 ( Rs in Cr.95 CASH FLOW .e.74 46.98 33.9 9.92 38.01 7.62 107.64 Beginning of the year Net Cash from Operating Activities 61.) 2007/03 2006/03 9.64 17.66 -36.91 18.45 0.26 KEY FINANCIAL RATIOS .81 17.26 9.14 1.28 6.34 -4.45 %.9 the year 2008/03 6. Again.64 58.73 from 4.11 -38.9 10.52 -5. 2010/03 2009/03 Key Ratios Debt-Equity Ratio Long Term Debt-Equity Ratio Current Ratio Turnover Ratios Fixed Assets Inventory Debtors Interest Cover Ratio ROCE (%) RONW (%) 0. Which is a good sign.97 -12. Interest cover ratio has drastically increased to 22.88 45.47 22.62 44.27.66 42.75 0.93 -6. more than 350%.98 i.82 5.91 72.36 0.33 3.5 8.11% from 0.

ROE has been increased to 51.13 2.45 1.68 12.41% which indicate company is making good profit on sales.07 3.72 5. 2010/03 2009/03 Price Earning (P/E) Price to Book Value ( P/BV) Price/Cash EPS (P/CEPS) EV/EBIDTA Market Cap/Sales 13. DUPONT Analysis .95 The increase in Sales and PBIDT is due to increase in sales volume. This indicates the investors are paying more for each unit of net income.25 P/E ratio has increased to 13. A higher P/B ratio implies that investors expect management to create more value from the investment.8).96 9. It shows positive growth of 0.TTK Prestige Ltd 2010/03 2009/03 15.55 4.28 56.72 when compare to FY09 (4.28% more than 96% increase.59 1.TTK Prestige Ltd.34 4. It increased to 5. PBIDT/Sales(%) Assets Turnover ratio(sales / net assets) PAT/PBIDT(%) Net Assets/Net Worth ROE(%) 63.29 1.04 51. This is also the reason behind increase in share price in market.8 1. Which show good increase in profit for equity share holders.28 30 VALUATION RATIOS . Because company able to increase its sales by 24%.84 0.TTK PRESTIGE LIMITED Increase in Debtors turnover ratio shows the how the company is efficient in managing its debtors. and at the same time there is increase in cash inflow etc.25 4. so the stock is more expensive. RONW also increased more than 70%.82 ROEC ± Return in equity capital has increased more than 106% compare to FY09. PBIDT / Sales has also gone up by 6.81 8..68. Rohidas Patil Institute Of Management Studies 7 .

It seems that increase in operating cash flow has come from increase in Sundry creditors. but it should be taken into consideration that whether this product will do good in market. 2.83 cr in Fy09 become miserable & the company has done worse off in terms of operating cash flow.e.4% while exports declined by 20%. I personally believe that.83cr to Rs 61. But if we deduct the Creditors (29. induction Compatible Pressure Cookers and Cookware etc. Sales grew by over 24%. In the long run companies that follow it. it shows.urban and rural markets and in urban area also. But when we bifurcate sales into domestic and export. Reports says that company has came up with new outlets namely Prestige Smart Kitchen network but it did not indicate the value of increased stores because in the absence of Rohidas Patil Institute Of Management Studies 8 . -Domestic sales may be increased due to the Government scheme for rural employment guarantee which is creating purchasing power in semi.TTK PRESTIGE LIMITED 1.58cr) the increase in Operating cash flow Rs18. 5. But. weather organized or un-organized. will go bankrupt so that is not something to worry about. almost same percentage. have grown approx 23% & 22% respectively whereas on part of sales and Cost of Goods sold have increased by 24% and 16% respectively i.66 cr from Rs 42. -Export sales have been declined may be due to economic crisis in Middle East and Sri Lanka. Debtors and inventory. Domestic Sales grew 26.. Report also state that the company there has been threat to the domestic market from the unorganized markets and the regional brands because of their low unviable pricing strategy. Director¶s report says that they have lunched new product in market like apple range inner lid pressure cooker. 3. The company reports claim that free cash flow has been generated because of better inventory and debtor management which is INCORRECT. 4. It seems that the company has outsourced its most of work to third party manufacturers and hence there is big increase in Creditors. unviable pricing strategies are not long term events. Induction Cook Tops. Sometimes company makes minor improvements in existing products that make their way into their Annual Report but do not impact the top line as much as it appears at first glance.

(good sign) 7. Rohidas Patil Institute Of Management Studies 9 . Apart from this they have also not mention whether the current outlets are doing well. Investments in Property is always a grey area and instead of trying to secure their main business by entering into rental income business they should raise the cash & either expand their operations in their non cooker segment or Just return the money back to the shareholders. 6. Eventhough there is excess capacity at their current units in South India. Main motive behind this may be. Company wants to go in rental income. 8. Uttarakhand enjoys Excise and Sales Tax benefits.TTK PRESTIGE LIMITED that one cannot make out whether the numbers are significant or not. but why? when it is generating free cash flow and having better business competitiveness.10cr during the year including investments in the New Unit 2 of Uttarakhand. It is great idea. it makes sense from the financial and logistics angle to have one unit in North to take care of the demand in North and West. CAPEX: Report Say Company incurred a capital expenditure of around Rs. The Company has paid off its loans and become almost debt free.

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