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41
Annual Report 2011-12
40 Kajaria Ceramics Limited
DIRECTORS’
REPORT
Your Directors are pleased to present the 26th Annual Report together with the audited accounts of your Company
for the financial year ended 31st March 2012.
Financial review
In 2011-12, your Company successfully implemented
various strategic initiatives, improving business volumes
and profitability, despite a challenging external
environment plagued with stubborn inflation and rising
interest rates.
Gross sales grew 39% from
`
10,046 million to
`
14003
million, facilitated by a robust growth in sales volume and
an increased average realisation per sq mtr. The EBIDTA
increased from
`
1,486 million in 2010-11 to 2016 in
2011-12.
The net profit after tax increased from
`
607 million to
`
807 million, registering a 33% growth over the previous
year. The earnings per share increased from
`
8.24 to
`
10.97 per share during the same period. The book value
per share strengthened from
`
30.25 as on 31st March
2011 to
`
38.31 as on 31st March 2012. More importantly,
every rupee invested in business delivered superior
returns – reflected by the improved
return on employed capital.
Dividend
Considering business growth and
improved profitability, the Board of
Directors recommended a 125%
dividend on equity shares (
`
2.50 per
equity share, face value of
`
2.00).
The total payout will be
`
213.80
million
(including
dividend
distribution tax of
`
29.84 million).
Corporate highlights
Capacity addition:
The Company
embarked on a brownfield capacity
expansion project (from 2.30 MSM to
4.60 MSM) at its Soriso unit at total
investment of
`
30 million, which is
significantly lesser than the initial
investment. The Company’s 6 MSM
high-end polished and glazed
vitrified tile unit at the Gailpur unit
(a
brownfield
expansion)
commenced operations in March,
2011 and significantly contributed
to the Company’s growth.
Inorganic growth:
The Company
acquired 51% stake in Jaxx Vitrified
Pvt. Ltd, Gujarat, with an annual
capacity of 3.10 MSM of polished
vitrified tiles at an investment of
`
62.65 million. The unit commenced
operations in March, 2012. The
Company also acquired 51% stake
in Vennar Ceramics (2.30 MSM high-
end digitally printed ceramic tile
capacity) on 9th April, 2012 which is
expected to commence production
in June, 2012 at an investment of
`
136.50 million. The plant will cater
to the South Indian markets.
Recognition:
Awarded
the
‘Superbrand’ status for the sixth
consecutive time, emerging as the
only Indian tile company to create
this record.
Accounts of subsidiaries
Pursuant to the general circular no.
1/2011 dated 8th February, 2011,
issued by Ministry of Corporate
Affairs, Government of India the
Individual accounts of the three
subsidiaries of the Company (M/s
Soriso Ceramic Private Limited, M/s
Jaxx Vitrified Private Limited and M/s
Kajaria Ceramics Addis PLC, Ethiopia)
for the year ended on 31st March
2012 have not been attached to the
Annual Report. However, a statement
giving the information as required by
the aforesaid Circular is attached to
the Annual Report. The Annual
Accounts
of
the
subsidiary
companies will be available at the
registered office of the Company
and also at the venue during the
Annual General Meeting. The
Company shall provide, free of cost,
the copy Annual Accounts of its
subsidiary companies to the
shareholders upon their request.
Fixed deposits
The Company did not invite/accept
any fixed deposit within the
meaning of Section 58A of the
Companies Act, 1956, and the rules
made thereunder.
Outlook
The outlook for the tile industry
appears to be positive over the
medium term given the rising
aspirations and availability of high-
end tiles with a wide range of
The Company’s Board
approved an inorganic
initiative - a 51% stake
in Vennar Ceramics (2.30
MSM high-end digitally
printed ceramic tile
capacity) expected to
commercialise in June,
2012 at an investment
of
`
136.50 million.
(
`
million)
Particulars
Standalone
Consolidated
Year ended
Year ended
Year ended
Year ended
31st March 2012 31st March 2011 31st March 2012
31st March 2011
Gross Sales
14,003
10,046
14,072
10,051
Profit before interest, depreciation and tax
2,016
1,486
2,077
1,490
Financial charges
470
299
485
301
Depreciation
371
295
393
297
Profit before taxation
1,175
892
1199
892
Tax expenses
368
285
380
285
Minority interest
–
–
10
1
Profit after tax
807
607
809
607
Balance brought forward from the previous year 1,276
994
1,275
994
Profit available for appropriation
2,083
1,601
2,084
1,601
Transferred from debenture redemption reserve
–
(46)
–
(46)
Proposed dividend on equity shares
184
147
184
147
Corporate dividend tax
30
24
30
24
Transfer to General Reserve
250
200
250
200
Balance carried forward
1,619
1,276
1,620
1,276
2,083
1,601
2,084
1,601