Hawkins Cookers Ltd

TO SHAREHOLDERS

We have the honour to present our Sixty-Fourth Annual Report and Audited Statement of Accounts for the year ended March 31, 2024.

2023-24 Operations: Main Results

We are pleased to report excellent results in 2023-24. Once again, sales are the highest ever. Revenue from operations in 2023-24 is Rs.1,024.15 crores (up 1.8% over the previous year).

This year, profits are also the highest ever. Profit before tax is Rs.147.55 crores (16.3% higher than the previous year). Net profit after tax is Rs.109.84 crores (15.9% 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 raw material costs stayed moderate during the year. Along with more efficient operations this has helped improve our margins. We expect the competition to be intense, but your brand's strength has continued to improve. We expect our products to continue to do well with the 55 new product launches we have done during the year at a rate of almost one launch per week. We have further plans of launches in the next year.

Our permanent employees as on April 1,2023, were 582 and as on March 31, 2024, were 593 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 2023-24 was 10.7% as against 9.4% in 2022-23. The average shareholders' funds/net worth grew to Rs.304.81 crores vs. Rs.244.66 crores in 2022-23. The net return after tax on shareholders' funds/net worth was 36% (in 2022-23: 39%).

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 2023-24 as compared to the year 2022-23 are as follows:

Cash flow during the year was good. Cash and cash equivalents plus balances with banks on deposit accounts as on March 31, 2024, were Rs.182.56 crores (previous year: Rs.100.82 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 are healthier than ever.

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. Tej Paul Sharma was re-appointed by the shareholders on the recommendations of the Board, the Nomination and Remuneration Committee and the Audit Committee as the Wholetime Director designated as the Executive Director - Sales for three years with effect from October 1,2023.

Mr. Neil Vasudeva was re-appointed by the shareholders on the recommendations of the Board, the Nomination and Remuneration Committee and the Audit Committee as the Wholetime Director designated as the Executive Director - Marketing for three years with effect from October 1,2023.

Mr. E. A. Kshirsagar, Independent Director, ceased to be a Director with effect from November 11, 2023, due to his sad demise. The Directors place on record their highest gratitude and deep appreciation for his valuable guidance received during his tenure of over 9 years with the Company.

Mr. Shyamak Ramyar Tata and Mr. Sanjay Khatau Asher have been appointed as Independent Directors with effect from February 1,2024, for a first term of five consecutive years each by the shareholders through Postal Ballot on the recommendations of the Board and the Nomination and Remuneration Committee. The Board is pleased to state that their experience, expertise and integrity will assist the Board in its functioning.

All the six Independent Directors, namely, General V. N. Sharma (Retd.), Mr. Ravi Kant, Prof. Leena Chatterjee, Mr. Murli Aildas Teckchandani, Mr. Shyamak Ramyar Tata and Mr. Sanjay Khatau Asher, 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.

Mrs. Susan M. Vasudeva retires by rotation as a Director at the 64th AGM of the Company and, being eligible, offers herself for re-appointment for which the Board has resolved to recommend to the shareholders a suitable resolution.

The present tenure of Prof. Leena Chatterjee, Independent Director, will expire on August 5, 2024. Based on the recommendation of the Nomination and Remuneration Committee, the Board at its Meeting (Serial No. 37) held on May 29, 2024, has recommended to the shareholders a suitable resolution for her re-appointment for a second term of five consecutive years with effect from August 6, 2024. The Company has received a requisite notice from a Member in writing proposing the said re-appointment.

All the Directors, including Independent Directors were updated on the Company's performance and plans in detail on May 28, 2024. The required details of the Independent Directors' Familiarization Programs are available at https://www.hawkinscookers.com/idfp.

2023-24 Operations: Other Aspects

The value of exports at Rs.56.28 crores in 2023-24 was down by 8.82% over the previous year. Foreign Exchange used in 2023-24 was Rs.19.81 crores (Rs.10.46 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 2023-24 was Rs.7.68 crores, 24.0% 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.4.04 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.276.18 crores (previous year: Rs.219.83 crores), we propose:

• Rs.1.00 crore transfer to General Reserve (previous year: Rs.1.00 crore) and

• Rs.275.18 crores as surplus carried to the Balance Sheet (previous year: Rs.218.83 crores).

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In accordance with the Dividend Distribution Policy of the Company we are pleased to recommend Rupees One Hundred and Twenty as dividend per Equity Share of Rs.10 (previous year: Rupees One Hundred 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 2023-24.

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 2023-24, no case of sexual harassment was filed under the said Act.

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.

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/ BRSPolicy.pdf.

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 2023-24. 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 2023-24 shall be filed within 60 days of the ensuing 64th AGM. The Return for the year 2022-23 duly filed with the Ministry of Corporate Affairs after the 63rd AGM held in the year 2023 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 duly met its Corporate Social Responsibility (CSR) obligation of Rs.231.91 lakhs required to be spent in the year 2023-24, by spending on promoting Healthcare, Skill Training and donations to appropriate organisations.

An excess amount of Rs.9.13 lakhs spent on CSR in 2023-24 is being carried forward to the financial year 2024-25 for set off from the CSR spend target for 2024-25, 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.17) held on May 28, 2024, 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 28, 2024.

The Board of Directors at its Meeting (Serial No.37) held on May 29, 2024, 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 stakeholders including 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.