Annual Report ( 2017
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RAISING THE COMFORT QUOTIENT 2017-18 Annual Report What’s INSIDE? 01 - 16 Corporate Overview Corporate Snapshot 02 Raising the Comfort Quotient 04 Financial Highlights 06 Our Journey 08 Chairman’s Message 10 Corporate Social Responsibility 13 Board of Directors 14 Corporate Information 16 17 - 65 Statutory Reports Management Discussion and Analysis 17 Directors’ Report 24 Business Responsibility Report 60 66 - 183 Financial Statements Standalone Financial Statements 66 Consolidated Financial Statements 124 Forward-looking statements In this Annual Report, we have disclosed forward-looking information to enable investors to comprehend our prospects and take informed investment decisions. This report and other statements - written and oral - that we periodically make, contain forward-looking statements that set out anticipated results based on the management’s plans and assumptions. We have tried wherever possible to identify such statements by using words such as ‘anticipate’, ‘estimate’, ‘expects’, ‘projects’, ‘intends’, ‘plans’, ‘believes’, and words of similar substance in connection with any discussion of future performance. We cannot guarantee that these forward-looking statements will be realised, although we believe we have been prudent in assumptions. The achievement of results is subject to risks, uncertainties and even inaccurate assumptions. Should known or unknown risks or uncertainties materialise or should underlying assumptions prove inaccurate, actual results could vary materially from those anticipated, estimated or projected. Readers should bear this in mind. We undertake no obligation to publicly update any forward-looking statements, whether as a result of new information, future events or otherwise. Comfort – how to interpret this word? To some, comfort is a cosy relationship in which words flow without inhibitions. For others, it is a cool room and a good book in bed. For still others, it is an evening with friends and a favourite TV show. Comfort in its varied interpretations could mean fun, freedom, togetherness. But real comfort is that state in which we close our eyes and sink deep into complete relaxation. It is the state of sleeping in our mother’s lap. It is a feeling we always seek, all our life. We at Sheela Foam Limited have dedicated all our efforts to harnessing the warmth, permanence, and heavenly feeling of ‘Maa Jaisa Aaram’ in our products. In the middle of this hectic modern life, we help to create a perfect personal space where a great night’s sleep wipes away all the fatigue. And because every individual has unique needs, our cutting- edge research and ability to customise products ensure ‘Apnawala Aaram’ for everyone. OVER 45 YEARS OF EXPERIENCE IN THE INDUSTRY Sheela Foam has a strong presence in India and Australia. Sleepwell, the flagship brand of the Company, constantly innovates and develops products for that one beautiful thing: perfect rest. Sheela Foam Limited CORPORATE SNAPSHOT Sheela Foam Limited is India’s top player in the mattress and foam products industry. The Company enjoys strong brand awareness, a vast product portfolio, and presence in India and Australia. With 45 years of experience, the Company has robust capabilities of quality manufacturing and technological innovation. This is complemented by an extensive distribution network and pan-India sales. Supported by a highly qualified and professional management, the Company has well-integrated operations and economies of scale. It is also the first mattress and home comfort products company in India to be listed on the stock exchanges. OVERVIEW VISION AND MISSION Incorporated in 1971 We will continue the legacy of It is the flagship company of the being recognised as a leader in ` 2,000 Crores Sheela Group premium comfort products The Group companies include: We will always reinforce our core Sheela Foam Limited and its 100% values of integrity, reliability, pro- subsidiaries - Joyce Foam, Australia, activity and transparency Divya Software Solutions Private Every customer will be served Limited & Sleepwell Enterprises with a smile Private Limited Sleepwell is the flagship brand of We will remain committed to the Group society It is an ISO 9001 Certified Company GEograPHICAL PRESENCE DISTRIBUTORSHIP AND RETAIL PRESENCE Headquartered in the National Capital Region More than 110 exclusive distributors Runs 15 manufacturing units in India and Australia More than 2,750 exclusive retail dealers Has exports to 32 countries worldwide, including Middle East, More than 3,500 South Asia, Europe, Australia, multi-brand outlets New Zealand, North America, and South America — 2 — Annual Report 2017-18 Corporate Overview KEY STRENGTHS Strong Brand Name: Sleepwell, the flagship brand Customer-Centricity: A dedicated customer care of the Company for mattresses and home comfort team for: products, has a strong presence in the market and • Prompt and quality after-sales service Statutory Reports a high recall among consumers. The products • Informing customers about new technologies have a reputation of being highly durable and of • Helping them choose products based on their superior quality. specific needs through scientific analysis Research & Development: A dedicated team • Promoting the SLEEPEDIA initiative, which of engineers and scientists always strive to raises awareness on quality sleep for good health and psychological well-being improve on existing products or to create new innovative products. They also ensure quality Multi-location manufacturing presence: There are control. 10 manufacturing units across India. Five units are located in the North, two units in the West, two in Financial Statements Pan-India presence: The Company has a wide the South and one in the Eastern regions of India. distribution network of more than 110 exclusive Intellectual capital: The Company has a team of distributors, more than 2,750 exclusive highly qualified professionals and top management retail dealers and more than 3,500 multi-brand who tirelessly work to maintain quality and enhance outlets. customer satisfaction. PRODUCT PORTFOLIO Home Comfort Line Mattress Line Technical Foam Line Furniture Cushions My Mattress Automotive foams Pillows Spring range Reticulated foams Comforters/Duvets Technology range Ultra Violet Stable foams Sofa-cum-Beds Comfort Cell range Sound Absorption foams Back Support Range Flexi PUF range Economy range AWARDS AND ACCOLADES Star SME of the Year by Business Standard 2018 Won Silver medal in India Green Manufacturing Challenge 2017 by the International Research Institute for Manufacturing, India. Indian Express ,Intelligent Enterprise Award, 2017 Dataquest Digital Leadership Award, 2018 Cyber Media’s C-Change Award for most innovative Project-2017 Gems of Digitel Enterprise-2017 Best CIO Award from IBC 2017 — 3 — RAISING THE COMFORT QUOTIENT We at Sheela Foam Limited always strive to Sleepwell, launched in 1994, today stands as a raise the Comfort Quotient, i.e. always work popular brand that has fully earned consumer on giving our valued consumers the best night’s trust and delivers on its brand promise of sleep possible. premium quality and customised products. Sleepwell products have been developed We have almost five decades of experience in the through research and innovation at par with the ‘comfort industry’ and we consider it as a social highest international standards. The end result responsibility to provide the ultimate comfort is that unique feeling of ultimate comfort, ‘Maa products to our consumers. True comfort brings Jaisa Aaram’. back the feeling of sleeping in the mother’s lap, and it’s a feeling we always need, no matter at Technological innovations in Sleepwell include what age. It’s the feeling that helps us face the the ‘Zero Turn’, which ensures that Sleepwell world the next day in an energised state. mattresses do not require periodic turning to avoid sagging. Use of breathable visco-elastic The extensive and deep presence of Sheela –“Responsive Memory Foam” memory foam that Foam Limited in the mattress and comfort reduces stress, ensures correct sleep posture products industry is supported by a very high and improves blood circulation. brand recall and a reputation for unmatched innovation. With technological advancement Customised mattresses to suit an individual’s and constant up gradation in the quality of body structure, weight and pressure distribution products, Sheela Foam has successfully raised are also provided – it is as if the mattress was the Comfort Quotient of mattress users in all made for that individual only. its markets. Building on customer satisfaction and trust, Sleepwell has become a highly reliable brand, renowned for product quality and innovation in the industry. With the theme of Raising the Comfort Quotient, we have raised the bar – yet again. Sheela Foam Limited FINANCIAL HIGHLIGHTS SEGMENTAL REVENUE BREAK-up 84.4% ` 1,976 Crores INDIAN Operations Consolidated turnover 15.6% Australian Operations 3,295 REVENUE BREAK-up (IndIAN OPEraTIONS) Employee strength 80% HOME COMFORT LINE 20% 11% TECHNICAL Foam REVENUE growth – CAGR 2013-18 EBTIDA 22% Absolute (` in Crores) EBITDA growth – Margins (%) CAGR 2013-18 11.4% 11% 11.4% 36% 7.2% 6.4% 5.9% PAT growth – CAGR 2013-18 216.3 196.1 176.0 28% 90.6 NET worth growth – 82.5 CAGR 2013-18 74.9 2013 2014 2015 2016 2017 2018 — 6 — Annual Report 2017-18 Corporate Overview Statutory Reports Financial Statements PAT NET WORTH EARNINGS PER SHARE Absolute (` in Crores) Absolute (` in Crores) (In `) Margins (%) Margins (%) 6.8% 6.8% 30.9% 7.1% 27.1% 22.4% 17.2% 2.5% 16.5% 2.1% 3.0% 597.26 133.7 13.2% 27.4 463.6 125.6 25.6 104.7 338.4 21.5 42.3 245.1 8.67 28.3 197.0 5.8 26.1 171.7 5.4 2013 2014 2015 2016 2017 2018 2013 2014 2015 2016 2017 2018 2013 2014 2015 2016 2017 2018 — 7 — Sheela Foam Limited OUR JOURNEY Sheela foam journey started in 1971 at a small scale. Over 45 years, the Company has achieved the position of market leader-double the size of its nearest competitor.