Annual Report: 2021
The annual report for 2020-21 of Studds Accessories Limited, an automobile accessories company specializing in helmets and motorcycle luggage, highlights the company's financial performance, strategic initiatives, and approach to value creation. Incorporated in 1983, STUDDS produces around 7 million helmets annually and exports to over 45 countries, holding the position of the largest helmet manufacturer in the world with 25.66% market share in India.
Corporate Overview STUDDS aims to be the top helmet company globally, ensuring safety for two-wheeler riders. Its mission focuses on safety, innovation, comfort, and quality, with a continuous commitment to excellence in every step of a rider's journey.
Financial Performance Despite challenges from the COVID-19 pandemic, STUDDS reported a total revenue of INR 4842.10 million for the year ended March 31, 2021. EBITDA was INR 1151.07 million and Profit After Tax stood at INR 739.96 million. The company has net worth of ₹2,898.91 million as on March 31, 2021 and term loan from bank of ₹270 million. The company attributes its resilience to innovation, digital solutions, and a focus on long-term objectives. Operations were affected in FY20-21 due to the pandemic, but production bounced back. New digital projects were expedited to respond to consumer needs.
Approach to Value Creation The company's value creation model involves financial capital, manufacturing capital (4 facilities), and human capital (2,722 employees) as key inputs. Key processes include supply chain management, distribution, branding and marketing, research and development, and manufacturing. Key outputs include ₹739.96 million PAT, 15.26% PAT margin, 1151.07 EBITDA, 37.61 EPS, 29.22% return on net worth, and 64,18,136 helmets produced. Outcomes involve sustainable economic growth, business continuity, highest quality standards, reduced environmental/social impact, innovation, improved efficiency, a healthy work environment, and nurturing employee skills.
Strategic Initiatives & Future Outlook STUDDS prioritized the safety and well-being of its employees and invested in research and development, launching new products in FY21. The company plans to develop an overarching CSR vision, emphasizing sustainable practices.
Management Discussion and Analysis The report provides an overview of the global and Indian economies, including the impact of the COVID-19 pandemic. Despite the economic downturn, the two-wheeler industry in India showed resilience. The helmet industry is expected to grow around 25% by 2022 as consumers become more safety-conscious and governments mandate helmet use.
Statutory Reports The company remains focused on continuous innovation and quality, along with effective human resource management and operational efficiency. As of March 31, 2021, the Company had 1778 employees and 944 off-roll employees. During the period under review, 377 hours of training was imparted to staff and associates of the Company. The directors' report details the financial performance, dividend recommendations (Rs. 4/- per share), and other statutory compliances. There have been no significant material orders passed by regulators impacting company status. Madhu Bhushan Khurana and Sidhartha Bhushan Khurana are related in accordance with the companies act. The board consists of two Executive Directors and three non-executive Independent Directors. Various committees are in place, including the Audit Committee, Nomination and Remuneration Committee, and Corporate Social Responsibility Committee. The report also contains sections on corporate social responsibility and risk management.
Financial Statements The audit report from Rajan Chhabra & Co. is unqualified. A separate report details the adequacy of internal financial controls. Disclosures regarding related party transactions and other financial matters are included. The company’s CSR spending has not reached 2% of the average net profits. The company has an wholly owned subsidiary (SMK EUROPE UNIPESSOAL, LDA) based in Portugal.
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