Hawkins Cookers Ltd
Directors Reports
TO SHAREHOLDERS
We have the honour to present our Sixty-Third Annual Report and Audited Statement of
Accounts for the year ended March 31, 2023.
2022-23 Operations: Main Results
We are pleased to report excellent results in 2022-23. Once again, sales are the
highest ever. Revenue from operations in 2022-23 is Rs.1,005.79 crores (up 5.0% over the
previous year). Your Company has crossed Rs.1,000 crore turnover for the first time ever.
This year, profits are also the highest ever. Profit before tax is Rs.126.91 crores
(12.4% higher than the previous year). Net profit after tax is Rs.94.78 crores (13.0%
higher than the previous year).
Management Discussion And Analysis
We operate in the market consisting of Pressure Cookers and Cookware. The industry
structure is quite competitive with both small-scale and organized sector units.
The unprecedented inflation in raw material costs has moderated. Along with more
efficient operations this has helped improve our margins. We expect the competition to be
intense, but your brand has strengthened during the pandemic and is now stronger.
We expect our products to continue to do well with the 53 new product launches we have
done during the year at a rate of almost one launch per week. We have further plans.
Our permanent employees as on April 1,2022, were 589 and as on March 31, 2023, were 582
through normal attrition and recruitment. The morale of our employees at all locations is
high and industrial relations are normal. We appreciate the contribution of our employees
to the successful working of your Company.
Net profit after tax as a percentage of net sales in 2022-23 was 9.4% as against 8.8%
in 2021-22. The average shareholders' funds/net worth grew to Rs.244.66 crores vs.
Rs.195.40 crores in 2021-22. The net return after tax on shareholders' funds/net worth was
39% (in 2021-22: 43%).
Control Systems
In our judgment, the Company has adequate financial and administrative systems and
controls and an effective internal audit function.
Key Financial Ratios
The required details of significant changes (25% or more) in the key financial ratios
for the year 2022-23 as compared to the year 2021-22 are as follows:
Ratio |
FY 2022-23 |
FY 2021-22 |
Formula used |
Reason for change |
Debt Service Coverage Ratio |
16.72 |
6.81 |
Earnings available for debt service/ Debt service |
The debt service coverage ratio has improved due to better profits and
reduced debt repayment obligations during the year. |
Cash flow during the year was good. Cash and cash equivalents plus balances with banks
on deposit accounts as on March 31, 2023, were Rs. 100.82 crores (previous year: Rs.59.88
crores). We have plans to utilise these funds appropriately, including for managing
working capital, improving quality and in further expanding production capacity.
Risks and Concerns
Your Company has constituted a Risk Management Committee as required under the SEBI
(Listing Obligations and Disclosure Requirements) Regulations, 2015, the details of which
are provided in the Report on Corporate Governance.
Foreseeable risks that the Company may encounter and concerns have been addressed in a
documented Risk Management Framework and Policy which is reviewed by the Risk Management
Committee and the Board from time to time.
Our capital and financial resources, liquidity position, supply chain and assets remain
healthy.
Opportunities and threats
The excellent demand for our brands augurs well for the future of the Company.
While the cost of Aluminium, our main raw material, has moderated, the future outlook
on the trend continues to be difficult to predict. Your Company is taking effective steps
to deal with the challenge.
General inflation can impact the purchasing power of our customers.
Management continues to diligently watch the cost trends and pursues effective cost
controls from time to time to keep our products affordable.
Outlook
We believe the outlook for our business is excellent under the circumstances. In this
year, we have further strengthened the good reputation we have amongst our consumers and
traders, associates and vendors. We expect to continue to increase our sales and profits.
All forward-looking statements in our report are based on our assessments and judgments
exercised in good faith at this time. Of course, actual developments and/or results may
differ from our present anticipation.
Directors
Mr. Subhadip Dutta Choudhury was re-appointed by the shareholders on the
recommendations of the Board, the Nomination and Remuneration Committee and the Audit
Committee as the Chairman of the Board and Managing Director designated as the Chief
Executive Officer for three years with effect from October 1, 2022.
Mr. Sudeep Yadav was re-appointed by the shareholders on the recommendations of the
Board, the Nomination and Remuneration Committee and the Audit Committee as the
Vice-Chairman and Chief Financial Officer for three years with effect from October 1,
2022.
All the five Independent Directors, namely, General V. N. Sharma (Retd.), Mr. E. A.
Kshirsagar, Mr. Ravi Kant, Prof. Leena Chatterjee and Mr. Murli Aildas Teckchandani, have
given written declarations that they meet the criteria of independence as laid down under
Section 149(6) of the Companies Act, 2013, and Regulation 16(1 )(b) of the SEBI (Listing
Obligations and Disclosure Requirements) Regulations, 2015.
Mr. Tej Paul Sharma retires by rotation as a Director at the 63rd AGM of the Company
and, being eligible, offers himself for re-appointment for which the Board has resolved to
recommend to the shareholders a suitable resolution.
As required by the SEBI (Listing Obligations and Disclosure Requirements) Regulations,
2015, a special resolution is proposed for your approval at the 63rd Annual General
Meeting for the continuation of the directorship of Mrs. Susan M. Vasudeva, Non- Executive
Director, who will attain the age of 75 years in August 2023.
The present tenures of Mr. Tej Paul Sharma and Mr. Neil Vasudeva as Wholetime Directors
will end on September 30, 2023. Pursuant to the recommendations of the Nomination and
Remuneration Committee and the Audit Committee, the Board at its Meeting (Serial No.32)
held on May 24, 2023, approved and resolved to recommend to the shareholders suitable
resolutions for the re-appointments of Mr. Sharma and Mr. Vasudeva as Wholetime Directors
for a period of three years each with effect from October 1, 2023, on the revised terms as
stated in the Notice to Shareholders for the 63rd AGM of the Company.
All the Directors, including Independent Directors were updated on the Company's
performance and plans in detail on May 23, 2023. The required details of the Independent
Directors' Familiarization Programs are available at https://www.hawkinscookers.com/idfp.
2022-23 Operations: Other Aspects
The value of exports at Rs.61.72 crores in 2022-23 was down 10.4% over the previous
year. Foreign Exchange used in 2022-23 was Rs.10.46 crores (Rs.4.96 crores in the previous
year).
Our Research & Development Unit is recognised by the Department of Scientific and
Industrial Research. The expenditure on Research & Development in 2022-23 was Rs.6.20
crores, 17.6% higher than the previous year. Required details are given in appendix I.
Efforts continue in our factories and offices to save energy wherever possible.
The required details of Fixed Deposits taken under Sections 73 and 76 of the Companies
Act, 2013, are as follows:
(a) Additional Amount accepted during the year: Rs.5.26 crores.
(b) Amount that remained unpaid or unclaimed as at the end of the year is Nil.
(c) Default in repayment of deposits or payment of interest thereon: Nil.
dividend distribution policy
The Board of Directors has adopted the Dividend Distribution Policy in terms of the
requirements of the Listing Regulations. The Policy is available on the website of the
Company at https:// www.hawkinscookers.com/download/ DividendDistributionPolicy.pdf.
Appropriations and Dividend
Out of the amount available for appropriation of Rs.219.83 crores (previous year:
Rs.157.88 crores), we propose:
Rs.1.00 crore transfer to General Reserve (previous year: Rs.1.00 crore) and
Rs.218.83 crores as surplus carried to the Balance Sheet (previous year:
Rs.156.88 crores).
In accordance with the Dividend Distribution Policy of the Company we are pleased to
recommend Rupees One Hundred as dividend per Equity Share of Rs.10 (previous year Total of
interim and final dividends: Rupees One Hundred and Fifty per Equity Share).
Directors' Responsibility Statement
The Board confirms that:
1. The Directors have taken proper and sufficient care for the maintenance of adequate
accounting records in accordance with the provisions of the Companies Act, 2013, for
safeguarding the assets of the Company and for preventing and detecting fraud and other
irregularities.
2. In the preparation of the Annual Accounts, the applicable accounting standards have
been followed and proper explanation given relating to material departures, if any. The
Directors have prepared the Annual Accounts on a going-concern basis.
3. The Directors have selected such accounting policies and applied them consistently
and made judgments and estimates that are reasonable and prudent so as to give a true and
fair view of the state of affairs of the Company as at the end of the financial year and
of the profit and loss of the Company for that period.
4. Based on the framework of the internal financial controls and compliance systems
established and maintained by the Company, the work performed by the Internal, Statutory
and Secretarial Auditors, including audit of the internal financial controls over
financial reporting by the Statutory Auditors, and the reviews performed by the Management
and the relevant Board Committees, including the Audit and the Risk Management Committees,
the Board is of the opinion that the Company's internal financial controls were adequate
and effective during the financial year 2022-23.
5. The Directors have devised proper systems that are, in our opinion, adequate and
operating effectively to ensure compliance with the provisions of all applicable laws.
Code of Conduct
The Board has formulated a Corporate Governance Code of Conduct for all the Directors
of the Board and the Senior Managers of the Company. This Code is available on the website
of the Company. All Directors and Senior Management Personnel have affirmed compliance
with the Code. A declaration to this effect signed by the Chairman and Chief Executive
Officer of the Company appears elsewhere in this Annual Report.
Sexual Harassment of Women at Workplace (prevention, prohibition and redressal) act,
2013
The Company has constituted Internal Complaints Committees at each of the five
locations of the Company under the Sexual Harassment of Women at Workplace (Prevention,
Prohibition and Redressal) Act, 2013, to redress complaints received regarding sexual
harassment. In the year 2022-23, no case of sexual harassment was filed under the said
Act.
Business responsibility and Sustainability report
A separate section on Business Responsibility and Sustainability forms part of our
Report describing the initiatives taken by the Company from an environmental, social and
governance perspective. The Business Responsibility and Sustainability Policy has also
been placed on the Company's website at https://www.hawkinscookers.com/download/
BusinessResponsibilityandSustainabilityPolicy.pdf.
Corporate Governance
A separate section on Corporate Governance forms part of our Report. A certificate has
been received from the Auditors of the Company regarding compliance of the conditions of
Corporate Governance as stipulated under the SEBI (Listing Obligations and Disclosure
Requirements) Regulations, 2015. Both appear elsewhere in the Annual Report.
Auditors
M/s. Kalyaniwalla & Mistry LLP (Firm Registration No.104607W/W100166), Chartered
Accountants, had been re-appointed as the Statutory Auditors of the Company at the 62nd
Annual General Meeting held on August 4, 2022, for a second term of five years from the
conclusion of the 62nd Annual General Meeting till the conclusion of the 67th Annual
General Meeting of the Company.
Secretarial audit
Pursuant to the provisions of Section 204 of the Companies Act, 2013, the Company had
appointed M/s. Jayshree Dagli and Associates, Company Secretaries in Practice, to
undertake the secretarial audit of the Company for the year 2022-23. The Secretarial Audit
Report is annexed as Appendix ii.
Cost Records and Cost Audit
Maintenance of Cost Records and the requirement of a Cost Audit under the provisions of
Section 148(1) of the Companies Act, 2013, are not applicable to our Company.
Annual Return
The Annual Return of the Company for the year 2022-23 shall be filed within 60 days of
the ensuing 63rd AGM. The Return for the year 2021-22 duly filed with the Ministry of
Corporate Affairs after the 62nd AGM held in the year 2022 is available on the Company's
website at https://www.hawkinscookers.com/MGT-7.html.
Contracts or Arrangements with Related Parties
All related party transactions during the year were on arm's length basis and were not
material as per the Related Party Transactions Policy of the Company.
Corporate Social Responsibility
The Company has selected a project called Improving the Health of Women and Children
and Saving Energy and Money by using Pressure Cookers. The Company continued its
education effort through a public service campaign in newspapers about the dangers of
Indoor Air Pollution and how to use a pressure cooker to mitigate it, and how to make a
gas cylinder last double the time by using a pressure cooker thereby conserving the
environment as well as precious fuel resources for India. Additionally, the Company
donated to the Akhand Jyoti Eye Hospital and the Prime Minister's National Relief Fund.
The Company has spent the entire amount of Rs.212.87 lakhs required to be spent on
Corporate Social Responsibility (CSR) in the year 2022-23. The excess amount of Rs.2.57
lakhs spent on CSR in 2022-23 is carried forward to the financial year 2023-24 for set off
from the CSR spend target for 2023-24, as duly approved by the Board.
The required Annual Report on CSR is given as appendix iii.
Directors' performance Evaluation
The performance evaluation of each Director of the Board was carried out by the
Nomination and Remuneration Committee at its Meeting (Serial No.15) held on May 23, 2023,
as per the criteria set by it earlier. The said criteria are included in the Corporate
Governance Report enclosed herewith. The performance evaluation of the non-Independent
Directors, the Board as a whole and the Chairman of the Board was carried out by the
Independent Directors at their separate meeting held on May 23, 2023.
The Board of Directors at its Meeting (Serial No.32) held on May 24, 2023, reviewed the
reports of evaluation received from the Nomination and Remuneration Committee and the
Independent Directors and also the functioning of the Committees of the Board and carried
out the evaluation of the Board as a whole, the Committees of the Board and each Director
and found the performance of the Board, the Committees and all the individual Directors to
be satisfactory.
Remuneration policy
On the recommendation of the Nomination and Remuneration Committee, the Board has
framed a Remuneration Policy for all employees of the Company including senior management
and the Directors. The Remuneration Policy of the Company is designed to attract, motivate
and retain suitable manpower in a competitive market. The remuneration package for each
person is designed keeping a balance between fixed remuneration and profit and
performance-linked incentives in order to achieve corporate performance targets. The
Policy is aligned with the Company's mission, which states: "Our single-minded
determination to please customers drives the kind of people we employ and promote, the
investments we make and the results we produce."
The Remuneration Policy is placed on the Company's website at
https://www.hawkinscookers.com/download/ RemunerationPolicy.pdf. The Board affirms that
all the remunerations are as per the Remuneration Policy of the Company. Information as
per Section 197 of the Companies Act, 2013, is given in Appendix iV.
Vigil Mechanism
The Company has an established Vigil Mechanism/ Whistle Blower Policy for Directors and
employees to report concerns or grievances including unethical behaviour, fraud or
violation of the Company's Corporate Governance Code of Conduct. The authority for the
implementation of the Policy rests with the Vice-Chairman and Chief Financial Officer
under the overall supervision of the Audit Committee of the Board.
|
ON BEHALF OF THE BOARD OF DIRECTORS |
Mumbai |
SUBHADIP DUTTA CHOUDHURY |
July 1, 2023 |
CHAIRMAN |