I went through the AR16, sharing my notes from the same:
1.Sale of 482.45 cr (PY 508.02 cr). Although there was a decline in value of sales but in quantitative terms there was an increase of 27% approx. This is because there was a fall in the average price realization in the case of the sales.
2. PBT of 57.12 cr has registered an increase of 93% (PY 29.54 cr) which is mainly due to timely procurement of raw materials at very reasonable rates and through product innovative ideas of the management.
3. The company has developed a novel process for reducing energy and water requirements in paddy parboiling process. As a result the water consumption and energy expenditure in mechanical parboiling of paddy is greatly reduced.
4.The Company has also developed the novel process of recycling of most of hot water used for soaking of paddy during parboiling of rice, thereby generating little waste water and still having a high quality product.
5. Managerial remuneration of WTDs- Mr. Ankit Setia & Mr. Sankesh Setia have increased by 192.56%
6. The Increase in remuneration is on the back of:
a. Mr. Ankit Setia’s tremendous performance in the Company. He is the main engine for exports marketing and developing new market, after his joining in the company the exports which were to the tune of 100 crores have gone up to 400 crores approx.
b. Mr. Sankesh Setia has participated in various international food exhibition & has developed new foreign markets and added 82 international customers.
7. Promoter holding has increased by 0.49% to 74.86% (PY 74.37%).
8. Reduction in Indebtedness to the tune of 25.61 cr
9. The Promotion of ﬂagship brand Maharani is on the Top agenda of the company and plans to go for aggressive advertising in print and electronic media.
10. Company has explored new export market and the management continues to maintain its efforts for the same.
11. Actual productions (in Qtls): 310958 (PY 313252)
12. Directors have extended a loan of 17 cr @12%, an interest of 1.73 cr was paid to directors.
(All the above points are taken from the AR16 and can be found under different sections like MD&A, director’s report, notes etc)
Sharing my thoughts on few of the above points:
It is pleasing to see that firm has achieved a 27% volume growth, and will be interesting to see how well the company is able to sustain such growth. The efforts put in by the duo Ankit & Sankesh (WTDs) looks to be the driver for the same.
Another thing that caught my attention and requires further digging is the 93% rise in PBT (Which as per the co. is mainly due to timely procurement). Was this beneficial procurement a result of efficient managerial efforts or was there any bit of luck involved? in case the latter is true, this shouldn’t be a point of celebration…because what has gone in our favor this year might not do the same in next year. Also, what is the firm’s procurement process and how strong it is against such moves?
Few developments and achievements of the firm in process improvement are good news and exhibit management’s focus towards efficiency…reduction in debt level is another good point.
From the look of this AR16, management seems to be focused on achieving higher growth by tapping new exports and building the brand name “Maharani”.