45
Dividend
Considering business growth and improved profitability, the
Board of Directors recommended 150% dividend on equity
shares (
`
3 per equity share, face value of
`
2). The Total Payout
will be
`
256.56 Million (including dividend distribution tax
of
`
35.81 million).
Corporate highlights
Inorganic growth:
Your Company acquired a 51% stake in
Vennar Ceramics Ltd., Andhra Pradesh having a 2.30 MSM
ceramic wall tilesmanufacturing facility. The unit commenced
production on July 1, 2012 which facilitated your Company
strengthen its foothold in the South Indian markets.
Further, your Company acquired a 51% stake in Cosa
Ceramics, Gujarat, with an annual capacity of 2.70 MSM
double charge vitrified tile – a premium segment. This allows
your Company to cater to the well-heeled Western Indian
markets with speed and increased product diversity. In
addition, our subsidiary Jaxx Vitrified acquired a 2.60 MSM
polished vitrified tile plant proximate to its existing facility
in April 2013.
Your Company also converted the 3.00 MSM soluble salt
(low-end PVT segment) manufacturing line to a glazed
vitrified line which will produce polished GVT with nano-
finish – a better value added product.
We expect these initiatives will strengthen our capability to
provide better shareholder value, going ahead.
Consolidated Financial Statements
In accordance with the Accounting Standards (AS-21)
Consolidated Financial Statement are attached and form part
of the Annual Report and Accounts.
Accounts of subsidiaries
Pursuant to the general circular no. 1/2011 issued by Ministry
of Corporate Affairs, Government of India the Individual
accounts of the five subsidiaries of the Company (M/s Soriso
Ceramic Private Limited, M/s Jaxx Vitrified Private Limited,
M/s Vennar Ceramics Limited, M/s Cosa Ceramics Private
Limited and M/s Kajaria Ceramics Addis plc, Ethiopia) for the
year ended on 31st March 2013 have not been attached to
the Annual Report. However a statement giving 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 of 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 there under.
Outlook
The spread of roads, telephones and electricity is driving
productivity growth away from the big urban centres to Tier
II and Tier III locations – India’s ‘new urban areas’. Further,
as wage growth at the lower end remains robust, goods in
the “new urban” consumption basket (which includes tiles)
should see robust demand.
About 80%-85% of tile demand is driven by new housing
or first-time users, while the balance is derived from
replacement. Interestingly, new housing demand is expected
to emerge from non-metro locations (smaller urban centres,
Tier-II and III towns) while replacement demand is expected
to be largely a metro phenomenon.
This new phenomena will significantly expand the
opportunity pie for the Indian tiles sector over the coming
years.
Growth drivers for the current year
Your Company’s growth will be driven by a prudent volume-
value play that will strengthen business profitability and
facilitate in providing superior shareholder value.
Volume-led:
Business volumes will expand with the
acquisition of the new plant at Morbi, Gujarat by our
subsidiary Jaxx Vitrified. Other volume addition would come
from the full year operations of Vennar and Cosa units which
operated for only a part of the year in 2012-13.
Value driven:
We will continue to move up the tile value
pyramid through the following initiatives which we expect
will sustain our profitability in 2013-14.
• Sale of double-charge polished vitrified tiles (high value
product) from Cosa Ceramics
• Replacement of 3.00 MSM soluble salt PVT capacity by
GVT at our Sikandrabad unit – a margin-accretive initiative
• Increasing the proportion of digitally printed tiles by
investing in additional digital printing machines
Directors
Mr. R. R. Bagri andMr. B. K. Sinha, Directors of theCompany, will
retire by rotation at the forthcoming Annual General Meeting
and being eligible, offer themselves for reappointment.
In accordance with Article 122 to 124 of the Articles of
Association of the Company, Mr. B. K. Sinha, Director –
