Directors Report of K G Denim Ltd.
Mar 31, 2018
Dear Shareholders,
We have pleasure in presenting the Twenty-Sixth Annual Report of the Company together with the Audited Statement of Accounts for the year ended 31st March 2018.
FINANCIAL RESULTS_ (Rs. in lakhs)_
|
Standalone |
Consolidated |
|||
|
PARTICULARS |
For the year ended 31st March 2018 |
For the year ended 31st March 2017 |
For the year ended 31st March 2018 |
For the year ended 31st March 2017 |
|
Gross Profit |
4702 |
7901 |
4201 |
8068 |
|
Less : Finance Cost |
2435 |
2603 |
2582 |
2751 |
|
Profit prior to Depreciation and write off |
2267 |
5298 |
1619 |
5317 |
|
Less : Depreciation |
1391 |
1378 |
1445 |
1452 |
|
Profit before Tax |
876 |
3920 |
174 |
3865 |
|
Current, Deferred & earlier year tax |
293 |
1462 |
83 |
1529 |
|
Add : Other Comprehensive Income |
48 |
(39) |
32 |
(62) |
|
Net Profit for the year |
631 |
2419 |
123 |
2274 |
|
Balance Brought forward |
5832 |
3667 |
4873 |
3188 |
|
Ind AS adjustments for Depreciation/ Receivables |
- |
(22) |
- |
(357) |
|
Equity Dividend & Tax thereon |
232 |
232 |
232 |
232 |
|
Balance Carried Forward |
6231 |
5832 |
4765 |
4873 |
The Company has adopted Ind AS from 01.04.2017 for the first time.
STATE OF THE COMPANYâS AFFAIRS
During the period under review, the Company has earned revenue of Rs.63867 lakh and Net Profit of Rs.631 lakh on standalone basis and Rs.71985 lakh and Rs.123 lakh respectively on consolidated basis.
PERFORMANCE OF THE COMPANY
The Company has two main product segments viz., Fabric (Denim / Apparel) and Home Textiles.
During the year ended 31.03.2018 total Fabric production was 371 lakh meters as against 359 lakh meters in 2016-17.
Sale of Fabric was 355 lakh meters in 2017-18 as against 346 lakh meters in 2016-17.
The Net Profit had decreased due to increase in raw material cost and cost of fuel with no corresponding increase in sale price. DIVIDEND
The Board of Directors recommends a dividend of 7.50 % (i.e. Rs.0.75) per equity share of the Company for the year 2017-18. The Dividend tax payable amounts to Rs.39 lakh.
INDUSTRY STRUCTURE AND DEVELOPMENT
Textile Industry in India had witnessed downword trend both in the domestic as well as export markets. Certain Government policies like Demonitisation, Implementation of GST had resulted in reduced off take in the domestic markets. Competition from neighboring countries, reduction of export incentives and strengthening Indian Rupee had adverse impact on export realisation.
Inspite of the above, company has been able to marginally improve the turnover mainly by export sales of denim fabric and home textiles.
Company is making efforts to focus on new markets, new segments and other countries in the Far East and Middle East.
OPPORTUNITIES AND THREATS
With the stabilisation, after the initial glitches, in the implementation of GST, improvements are seen in the demand.
Good monsoon forecast in the current year augurs well for the overall improvement in the economy.
Necessary forward covers are also made to insulate against foreign currency fluctuations.
LISTING OF EQUITY SHARES
The Companyâs Equity shares are listed at the following Stock Exchange:
BSE Limited, PhirozeJeeJeebhoy Towers, Dalal Street, Mumbai-400 001.
The Company has paid the Annual Listing Fees to the said Stock Exchange for the Financial Year 2018-19.
PERFORMANCE AND FINANCIAL POSITION OF SUBSIDIARIES
The Company has two wholly owned subsidiaries Trigger Apparels Limited and KG Denim (USA) Inc.
The Companyâs wholly owned subsidiary Trigger Apparels Limited is engaged in the manufacture and marketing of readymade garments.
During the year, the gross turnover in Trigger Apparels Limited was Rs.11500 lakh against Rs. 11164 lakh during the previous year. The Subsidiary Company has registered a loss of Rs.504 lakh as against a loss of Rs.144 lakh in the previous year. The increase in losses is due to liquidation of old stocks. The subsidiary is reorganising its products and marketing channels.
KG Denim (USA) Inc. had achieved a turnover of Rs.29 lakh and registered a loss of Rs.5 lakh during the year.
As per the provisions of Section 129 of the Companies Act, 2013 read with Companies (Accounts) Rules, 2014, a separate statement containing the salient features of the financial statements of the Subsidiary companies is prepared in Form AOC-1 and same is enclosed to this report as Annexure-1.
CONSOLIDATED FINANCIAL STATEMENTS
Consolidated Financial Statements have been prepared by the Companyâs Management in accordance with the requirements of Accounting Standards 21 issued by The Institute of Chartered Accountants of India (ICAI) and as per the provisions of Companies Act, 2013.
As per the provisions of Section 136 of the Companies Act, 2013, the Company has placed separate audited accounts of its subsidiaries on its website www.kgdenim.com and copy of separate audited financial statements of its subsidiaries will be provided to the shareholders at their request.
CEO/CFO CERTIFICATION
The Managing Director and Chief Financial Officer of the Company have submitted a Certificate to the Board as required under Clause 49 of the Listing Agreement for the year ended 31st March, 2018.
MEETINGS OF THE BOARD OF DIRECTORS
During the year ended 31st March, 2018, six Board Meetings were held.
The dates on which the Board meetings were held are 23rd May 2017, 28th July 2017, 02nd September 2017, 17th November, 2017, 14th February 2018 and 24th March 2018.
A meeting of the Independent Directors of the Board was held on 14th February, 2018.
Details of meetings of the Board and its Committees are disclosed in the report on Corporate Governance.
DIRECTORSâ RESPONSIBILITY STATEMENT AS REQUIRED UNDER SECTION 134 OF THE COMPANIES ACT, 2013
Pursuant to the requirement under Section 134 of the Companies Act, 2013, with respect to the Directorsâ Responsibility Statement the Board of Directors of the Company hereby confirms:
i) that in the preparation of the Annual Accounts, the applicable accounting standards have been followed;
ii) that 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 31st March 2018 and Statement of Profit and Loss Account of the Company for that period;
iii) that the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;
iv) that the Directors have prepared the Annual Accounts for the Financial Year ended 31st March, 2018 on a going concern basis;
v) that the Directors have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively; and
vi) that the Directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively.
STATEMENT ON DECLARATION GIVEN BY INDEPENDENT DIRECTORS UNDER SUB-SECTION (7) OF SECTION 149 OF THE COMPANIES ACT, 2013
The Independent Directors have submitted the declarations of independence, as required pursuant to Section 149(7) of the Companies Act, 2013 stating that they meet the criteria of independence as provded in sub-section(6).
NOMINATION AND REMUNERATION COMMITTEE
The Nomination and Remuneration Committee consisted of Shri K N V Ramani, Chairman with Shri G V S Desikan and Shri V Jagadisan as members.
Consequent upon the demise of Shri V Jagadisan in March 2018 his vacancy was filled up by appointing Shri G P Muniappan as member in March 2018.
The Board of Directors appointed Shri G P Muniappan as member of the said Committee on 24.03.2018, who fulfills the criteria specified under Section 178(1).
Brief description of terms of reference:
1. identifying persons who are qualified to become directors and who may be appointed in senior management in accordance with the criteria laid down and recommend to the Board for their appointment and removal;
2. carry on the evaluation of every directorâs performance;
3. formulation of the criteria for determining qualifications, positive attributes and independence of a director;
4. recommend to the Board a policy relating to the remuneration of the directors, key managerial personnel and other employees;
5. formulation of criteria for evaluation of Independent Directors and the Board;
6. devising a policy on Board diversity; and
7. any other matter as the Board may decide from time to time.
NOMINATION AND REMUNERATION POLICY THE OBJECTIVES OF THE POLICY
1. To lay down criteria and terms and conditions with regard to identifying persons who are qualified to become Directors (Executive and Non-Executive) and persons who may be appointed in Senior Management and Key Managerial positions and to determine their remuneration.
2. To determine remuneration based on the Companyâs size and financial position and trends and practices on remuneration prevailing in peer companies.
3. To carry out evaluation of the performance of Directors.
4. To provide them reward linked directly to their effort, performance, dedication and achievement relating to the Companyâs operations.
5. To retain, motivate and promote talent and to ensure long term sustainability of talented managerial persons and create competitive advantage.
PARTICULARS OF LOANS, GUARANTEES AND INVESTMENTS UNDER SECTION 186 OF COMPANIES ACT, 2013
The details of Loans, Guarantees given and Investments made during the Financial Year ended on 31st March, 2018 are given in the notes to Financial Statements in compliance with the provisions of Section 186 of the Companies Act, 2013 read with Companies (Meetings of Board and its Powers) Rules, 2014.
PARTICULARS OF CONTRACTS AND ARRANGEMENTS WITH RELATED PARTIES REFERRED TO IN SUB-SECTION (1) OF SECTION 188 OF COMPANIES ACT, 2013
The Company adopted a Related Party Transaction Policy in terms of SEBI regulations for compliance with Corporate Governance and Clause 49 of the Listing Agreement. The policy has also been hosted on the Companyâs website. All transactions entered into with Related Parties for the year 2017-18 were on Armâs length basis.
There were no material related party transactions in terms of the Related Party Transaction Policy adopted.
Thus disclosures in Form AOC-2 as per Companies Act, 2013 and Rule 8 of Companies (Account) Rules, 2014 are not required. Further, there were no material related party transaction with the Promoters, Directors or Key Managerial Personnel during the year.
All related party transactions are placed before the Audit Committee as also to the Board for approval on a quarterly basis. Omnibus approval was obtained for transaction of repetitive nature.
TRANSFER OF AMOUNT TO RESERVES
The Company does not propose to transfer any amount to the general reserve for the Financial Year ended 31st March, 2018.
EXTRACT OF ANNUAL RETURN
The extract of Annual Return is prepared in Form MGT-9 as per the prov''sions of the Companies Act, 2013 and Rule 12 of Companies (Management and Administration) Rules, 2014 and the same is enclosed as Annexure - 2 to this Report.
THE CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO PURSUANT TO PROVISIONS OF SECTION 134(3)(m) OF THE COMPANIES ACT, 2013 READ WITH THE COMPANIES (ACCOUNTS) RULES, 2014
Information with respect to conservation of energy, technology absorption, foreign exchange earnings and outgo pursuant to Section 134(3)(m) of the Act read with Companies (Accounts) Rules, 2014 is prepared and the same is enclosed as Annexure - 3 to this Report.
RISK MANAGEMENT COMMITTEE
Risk Management Committee consists of Shri B Sriramulu as Chairman with Shri S Muthuswamy and Shri M Balaji as members.
The Committee had formulated a Risk Management Policy for dealing with different kinds of risks which it faces in day to day operations of the Company. Risk Management Policy of the Company outlines different kinds of risks and risk mitigating measures to be adopted by the Board. The Company has adequate internal control systems and procedures to combat the risk. The Risk management procedure is reviewed by the Audit Committee and Board of Directors on a Quarterly basis at the time of review of Quarterly Financial Results of the Company.
CORPORATE SOCIAL RESPONSIBILITY COMMITTEE
Corporate Social Responsibility is commitment of the Company to improve the quality of life of the workforce and their families and also the community and society at large. The Company believes in undertaking business in such a way that it leads to overall development of all stakeholders and Society.
The Board of Directors of the Company has constituted Corporate Social Responsibility Committee consisting of Shri KG Baalakrishnan as Chairman with Shri G V S Desikan and Shri A Velusamy as Members and adopted policy for Corporate Social Responsibility.
Corporate Social Responsibility policy was adopted by the Board of Directors on the recommendation of Corporate Social Responsibility Committee.
The Report on CSR activities, as required under the Companies (Corporate Social Responsibility Policy) Rules, 2014, is annexed as Annexure - 4.
EVALUATION OF BOARD
Evaluation of all Board members is done on an annual basis. The evaluation is done by the Board, Nomination and Remuneration Committee and Independent Directors with specific focus on the performance and effective functioning of the Board and Individual Directors.
The manner in which the evaluation has been done is explained in the report on Corporate Governance.
DIRECTORS
Shri V Jagadisan, Independent Director of the Company, had expired on 16.03.2018. The Board placed on record the invaluable contributions of Shri V Jagadisan towards the progress of the Company.
In accordance with the provisions of Section 152 of the Companies Act, 2013 and the Companyâs Articles of Association No.34, Shri A Velusamy retires by rotation at the forthcoming Annual General Meeting and being eligible offers himself for re-appointment. Due to amendments in SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2018 Messrs K N V Ramani, Shri G V S Desikan and Shri G P Muniappan, who are Non-Executive Directors and have attained 75 years of age are proposed to be appointed as Directors for 3 years from 01.04.2019 at the forthcoming Annual General Meeting.
Shri KG Baalakrishnan, Executive Chairman, Shri B Sriramulu, Managing Director and Shri B Srihari, Managing Director are being reappointed from 03.11.2018 for a period of 5 years.
The Board proposes to appoint Shri M B N Rao, an acclaimed Banking Professional, as an Independent Director at the forthcoming Annual General Meeting of the Company to fill in the vacancy caused due to the demise of Shri V Jagadisan.
KEY MANAGERIAL PERSONNEL
The following are the Key Managerial Personnel of the Company :
1. Shri B Sriramulu - Managing Director
2. Shri B Srihari - Managing Director
3. Shri S Muthuswamy - Chief Financial Officer
4. Shri M Balaji - Company Secretary
DEPOSITS
The Company has not accepted any deposits from the public in terms of Section 73 of the Companies Act, 2013.
STATUTORY AUDITORS
M/s. Mohan & Venkataraman were appointed as Auditors of the Company at the AGM held on 16.09.2017, to hold office as Auditors for a term of five Financial Years commencing from 2017-18 to 2021-22 till conclusion of AGM to be held for financial year 2021-22.
AUDITORS REPORT
M/s. Mohan & Venkataraman, Chartered Accountants (ICAI Regn. No.007321S) have issued Auditors Report for the Financial Year ended 31st March, 2018.
There are no qualifications in Auditorsâ Report.
INTERNAL AUDITORS
The Board of Directors of the Company had appointed Mr K Panneerselvam, Chartered Accountant (Membership No.220574) to conduct Internal Audit of the Company.
COST AUDITORS
As per the requirement of Central Government and pursuant to Section 148 of the Companies Act, 2013 read with the Companies (Cost Records and Audit) Rules, 2014 as amended from time to time, your Company has been carrying out audit of cost records relating to Textile Division every year.
The Board of Directors, on the recommendation of Audit Committee, has appointed Messrs M Nagarajan, Cost Accountants, (Firm Registration Number 6384) as Cost Auditor to audit the cost accounts of the Company for the Financial Year 2018-19. As required under the Companies Act, 2013, a resolution seeking memberâs approval for the remuneration payable to the Cost Auditor forms part of the Notice convening the Annual General Meeting for their ratification.
AUDIT COMMITTEE
Audit Committee consisted of Shri V Jagadisan as Chairman with Shri K N V Ramani and Shri G V S Desikan as members.
All the members of the Audit Committee are Independent Directors.
Consequent upon the demise of Shri V Jagadisan, Chairman of Audit Committee, vacancy had arisen in the Companyâs Audit Committee.
The Board of Directors appointed Shri G P Muniappan as member of the said Committee on 24.03.2018, who fulfils the criteria specified under Section 177(2).
There is no such incidence where Board has not accepted the recommendation of the Audit Committee during the year under review.
CORPORATE GOVERNANCE
A separate section on Corporate Governance and a Certificate from the Auditors of the Company regarding compliance of conditions of Corporate Governance as stipulated under Clause 49 of the Listing Agreement with the Stock Exchange, forms part of the Annual Report - Annexure - 5.
VIGIL MECHANISM
The Board of Directors have adopted a Whistle Blower Policy which is hosted on the Companyâs website. The Whistle Blower Policy aims for conducting the affairs in a fair and transparent manner by adopting highest standards of professionalism, honesty, integrity and ethical behaviour. All permanent employees of the Company are covered under the Whistle Blower Policy.
A mechanism has been established for employees to report concerns about unethical behavior, actual or suspected fraud or violation of Code of Conduct and Ethics. It also provides for adequate safeguards against the victimization of employees who avail of the mechanism and allows direct access to the Chairperson of the Audit Committee in exceptional cases.
SECRETARIAL AUDITORS REPORT
As per the provisions of Section 204 of the Companies Act, 2013, the Board of Directors have appointed ShriM.R.L.Narasimha, Practising Company Secretary (C.P.No:799) as Secretarial Auditor to conduct Secretarial audit of the Company for the Financial Year ended on 31st March, 2018.
Secretarial Audit Report issued by ShriM.R.L.Narasimha, Practising Company Secretary in form MR-3 is enclosed as Annexure - 6 to this Annual Report.
There are no qualifications in Secretarial Audit Report.
STATEMENT OF PARTICULARS OF APPOINTMENT AND REMUNERATION OF MANAGERIAL PERSONNEL
The Statement of particulars of Appointment and Remuneration of Managerial personnel as per Rule 5 of Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is enclosed as Annexure - 7 to this Annual Report.
ENVIRONMENT
The Company holds due certification under ISO 14001 : 2004 which is primarily focused on environmental management system. It ensures that the manufacturing of products is carried on without affecting the environment in the working area and surroundings.
The Company is a member of Sustainable Apparel Coalition (SAC). SAC provides credible, practical and industry wide guidelines and provides tools to define, measure and evaluate industryâs product environmental and social performance support.
The Company has achieved one of the best scores in the apparel industry as verified by a leading brand assessor.
During the current year, the Company has implemented various environmental measures and reduction program like Green House Gas inventory measurement, replacement of freon gas air conditioners, increasing the area of plantation etc.
The Company has improved effluent water treatment system conforming to the Pollution Control Board parameters. A new plant has been added which has increased the Biological treatment capacity by 60%. An advanced technology of Biological Diffuser Aeration system has been introduced which has resulted in reduction in chemicals usage. Consequently, reduction in sludge, improvement in outlet water quality and consistence and improvement in RO recovery were achieved. The highlights of our sustainability effort can be seen in the link https://youtu.be/uZGhiwq6XSM
HEALTH AND SAFETY
The Company has obtained certification under OHSAS 18001 : 2007 (Occupational Health and Safety Management Assessment Standard) which is an Integrated Management System focusing on an organizationâs occupational health and safety management system. This standard guides us to identify and control the conditions and factors that affect the well-being of employees, contractors, visitors and any other person in the work place.
The Company is implementing various health and safety practices in continuous manner as per OHSAS-18001 standards and legal requirements.
POLICY ON SEXUAL HARASSMENT
The Company has adopted policy on Prevention of Sexual Harassment of Women at Workplace in accordance with The Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. During the Financial Year ended 31st March, 2018, the Company has not received any complaints pertaining to sexual harassment.
LEGAL REQUIREMENTS
The Company is conscious of improving the occupational and personal health of its employees. In addition to free medical camps, the Company also organizes employeesâ health check up in outside hospitals on annual basis.
The Company provides a safer work environment for its employees. Basic equipments are provided to ensure safety from fire. Awareness classes are being conducted periodically with the help of external agencies about the basic safety, fire fighting, mock drills, mass evacuation, first aid etc.,
SOCIAL RESPONSIBILITIES
The Company is maintaining a hospital for serving the community including supply of medicines at subsidised costs. As a part of social environmental protection, agro forestry has been developed with a demo plant with the technical support of Forest College, Coimbatore.
INSURANCE
All properties and insurable interests of the Company including building, plant and machinery and stocks have been fully insured.
FINANCE
Your Directors acknowledge with gratitude, the valuable assistance and support extended by our Bankers for Term Loans and Working Capital ie., Indian Bank, Andhra Bank, State Bank of India, The South Indian Bank Limited and Allahabad Bank.
DETAILS IN RESPECT OF ADEQUACY OF INTERNAL FINANCIAL CONTROLS WITH REFERENCE TO THE FINANCIAL STATEMENTS
1. The Company maintains all its records in ERP System and the work flow and approvals are routed through ERP System;
2. The Company has appointed Internal Auditors to observe the Internal Controls, whether the work flow of organization is being done through the approved policies of the Company. In every Quarter during the approval of Financial Statements, Internal Auditors will present the Internal Audit Report and Management Comments on the Internal Audit observations; and
3. The Board of Directors of the Company have adopted various policies like Related Party Transactions Policy, Whistle Blower Policy, Policy to determine Material Subsidiaries and such other procedures for ensuring the orderly and efficient conduct of its business for safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records and the timely preparation of reliable financial information.
CHANGE IN THE NATURE OF BUSINESS
There is no change in the nature of business of the Company.
THE DETAILS OF SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALS IMPACTING THE GOING CONCERN STATUS AND COMPANYâS OPERATIONS IN FUTURE.
No Significant and material orders passed by the regulators or courts or tribunals impacting the going concern status and companyâs operations in future.
Details of pending legal cases are furnished in Note No.41 to the accounts.
MATERIAL CHANGES AND COMMITMENTS
There are no Material changes and commitments in the business operations of the Company from the Financial Year ended 31stMarch, 2018 to the date of signing of the Directorâs Report.
ACKNOWLEDGMENT
The Directors take this opportunity to place on record their sincere thanks to the Banks and Financial Institutions, Insurance Companies, Central and State Government Departments and the shareholders for their support and co-operation extended to the Company from time to time.
PERSONNEL
The Directors wish to place on record their appreciation for the co-operation extended by all sections of the employees.
CAUTIONARY STATEMENT
The statement in this Directorsâ Report & Management Discussion and Analysis contain forward looking statements regarding Companyâs projections & expectations and the actual results could differ materially from those expressed on account of various factors like raw material prices, change in demand, government regulation etc., and the readers are cautioned against placing undue reliance on the same.
PARTICULARS OF EMPLOYEES
Information pursuant to Section 197(12) of the Companies Act, 2013 read with Rule 5 (1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is given in Annexure - 7 to this report.
The particulars in respect of employees in receipt of remuneration exceeding Rs.60 lakhs per annum as per Section 197(12) read with Rule 5(2) of The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is given in Annexure-8.
The Company has presented in this Report, the consolidated financial statements of the holding company and all its subsidiaries, duly audited by the Statutory Auditors. The Company will make available the audited annual accounts and related information of its subsidiaries, upon request by any of its shareholders. The annual accounts of the subsidiary companies will also be kept for inspection by any member at the Registered Office of the Company and its subsidiary companies.
Our humble prayers to Sri VenkateswaraswamyVari of Then Thirumalai for the continued prosperity of the Company.
On behalf of the Board
KG Baalakrishnan
Coimbatore Executive Chairman
01.08.2018 DIN: 00002174
Mar 31, 2016
Dear Shareholders,
We have pleasure in presenting the Twenty-Fourth Annual Report of the Company together with the Audited Statement of Accounts for the year ended 31st March 2016.
FINANCIAL RESULTS
(Rs. in lakhs)
|
Standalone |
Consolidated |
|||
|
For the year ended |
For the year ended |
For the year ended |
For the year ended |
|
|
PARTICULARS |
31st March 2016 |
31st March 2015 |
31st March 2016 |
31st March 2015 |
|
Gross Profit |
8827 |
5093 |
8845 |
5203 |
|
Less : Finance Cost |
3241 |
2797 |
3355 |
2874 |
|
Profit prior to Depreciation and write off |
5586 |
2296 |
5490 |
2329 |
|
Less : Depreciation |
2048 |
2098 |
2072 |
2118 |
|
Net Profit |
3538 |
198 |
3418 |
211 |
|
Current, Deferred & earlier year tax |
1426 |
177 |
1376 |
174 |
|
Net Profit for the year |
2112 |
21 |
2042 |
37 |
|
Balance Brought forward |
1556 |
2197 |
1147 |
1775 |
|
Proposed Dividend & Tax thereon |
232 |
232 |
232 |
232 |
|
Additional Depreciation (Net of DTL) |
- |
430 |
- |
433 |
|
Balance Carried Forward |
3436 |
1556 |
2957 |
1147 |
STATE OF THE COMPANYâS AFFAIRS
During the period under review, the Company has earned revenue of Rs.65173 lakh and Net Profit of Rs.2112 lakh on standalone basis and Rs.71553 lakh and Rs.2042 lakh respectively on consolidated basis.
PERFORMANCE OF THE COMPANY
The Company has two main product segments viz., Denim, Apparel Fabric and Home Textiles.
During the year ended 31.03.2016, total Fabric production was 361 lakh meters as against 316 lakh meters in 2014-15.
Sale of Fabric was 360 lakh meters as against 309 lakh meters in 2014-15.
The improved profitability is mainly due to Denim division performing well both in terms of volume as well as realization.
DIVIDEND
The Board of Directors recommends a dividend of 7.50 % (i.e. Rs.0.75) per equity share of the Company for the year 2015-16. The Dividend tax payable amounts to Rs.39 lakh.
INDUSTRY STRUCTURE & DEVELOPMENT
The Indian denim industry is growing steadily with new mills being added and also existing mills increasing capacity. We are looking at increasing sales in international markets though it depends on the market conditions in Europe and USA. We have identified new markets in the Far East countries like Vietnam, Thailand and Indonesia to increase our sales. We are also focusing to increase our sales in African markets at Kenya and Tanzania .The fabrics are undergoing transformation in terms of colors, fibers and finishes. Trends are considered for new developments to cater to brands and retailers in both domestic and international markets.
OPPORTUNITIES AND THREATS
The Company is targeting full capacity utilization of production and sales volume for Denim Fabric in the current year. Efforts are being made to increase apparel fabrics and home textile exports.
The Company has successfully commissioned 9.9 MW Power Plant during the year. Sale of excess power generated is expected to happen in the second half of FY 2016-17.
The Company is subjected to risks of volatility in the prices of raw materials and fashion changes.
High interest rates and exchange rate volatility are areas of serious concern for the Company. The Company has taken steps to increase the exports and is actively managing the exchange risk by suitable forward cover.
LISTING OF EQUITY SHARES
The Companyâs Equity shares are listed at the following Stock Exchange:
(I) BSE Limited, Phiroze JeeJeebhoy Towers, Dalal Street, Mumbai-400 001.
The Company has paid the Annual Listing Fees to the said Stock Exchange for the financial year 2016-17.
PERFORMANCE AND FINANCIAL POSITION OF EACH OF THE SUBSIDIARIES
The Companyâs wholly owned subsidiary Trigger Apparels Limited is engaged in the manufacture and marketing of readymade garments. During the year 2015-16 it has undertaken export of garments besides the domestic marketing of Trigger brand jeans.
During the year, the gross turnover in Trigger Apparels Limited was Rs.92.83 crore against Rs.27.40 crore during the previous year. The Subsidiary Company has registered a loss of Rs.69.65 lakh as against a profit of Rs.15.56 lakh in the previous year.
No activity has taken place at KG Denim (USA) Inc. during the year.
As per the provisions of Section 129 of the Companies Act, 2013 read with Companies (Accounts) Rules, 2014, a separate statement containing the salient features of the financial statements of the Subsidiary companies is prepared in Form AOC-1 and same is enclosed to this report as Annexure-1.
CONSOLIDATED FINANCIAL STATEMENTS
Consolidated financial statements have been prepared by the Companyâs Management in accordance with the requirements of Accounting Standards 21 issued by The Institute of Chartered Accountants of India (ICAI) and as per the provisions of Companies Act, 2013.
As per the provisions of Section 136 of the Companies Act, 2013, the Company has placed separate audited accounts of its subsidiaries on its website www.kgdenim.com and copy of separate audited financial statements of its subsidiaries will be provided to the shareholders at their request.
CEO/CFO CERTIFICATION
The Managing Director and Chief Financial Officer of the Company have submitted a Certificate to the Board as required under Clause 49 of the Listing Agreement for the year ended 31st March, 2016.
MEETINGS OF THE BOARD OF DIRECTORS
During the year ended 31st March, 2016, four Board Meetings were held.
The dates on which the Board meetings were held are 23rd May 2015, 31st July 2015, 05th November 2015 and 05th February 2016.
A meeting of the Independent Directors of the Board was held on 05th February, 2016.
Details of meetings of the Board and its Committees are disclosed in the report on Corporate Governance.
DIRECTORSâ RESPONSIBILITY STATEMENT AS REQUIRED UNDER SECTION 134 OF THE COMPANIES ACT, 2013
Pursuant to the requirement under Section 134 of the Companies Act, 2013, with respect to the Directorsâ Responsibility Statement the Board of Directors of the Company hereby confirms:
i) that in the preparation of the Annual Accounts, the applicable accounting standards have been followed;
ii) that 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 31st March 2016 and Statement of Profit and Loss Account of the Company for that period;
iii) that the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;
iv) that the Directors have prepared the Annual Accounts for the Financial Year ended 31st March, 2016 on a going concern basis;
v) that the Directors have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively; and
vi) that the Directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively.
STATEMENT ON DECLARATION GIVEN BY INDEPENDENT DIRECTORS UNDER SUB-SECTION (7) OF SECTION 149 OF THE COMPANIES ACT, 2013
The independent directors have submitted the declaration of independence, as required pursuant to Section 149(7) of the Companies Act, 2013 stating that they meet the criteria of independence as provided in sub-section(6).
NOMINATION AND REMUNERATION COMMITTEE
The Nomination and Remuneration Committee consists of the following members namely Shri K N V Ramani, Chairman with Shri G V S Desikan and Shri V Jagadisan as members.
Brief description of terms of reference:
1. identifying persons who are qualified to become directors and who may be appointed in senior management in accordance with the criteria laid down and recommend to the Board for their appointment and removal;
2. carry on the evaluation of every directorâs performance;
3. formulation of the criteria for determining qualifications, positive attributes and independence of a director;
4. recommend to the Board a policy relating to the remuneration of the directors, key managerial personnel and other employees;
5. formulation of criteria for evaluation of Independent Directors and the Board;
6. devising a policy on Board diversity; and
7. any other matter as the Board may decide from time to time.
NOMINATION AND REMUNERATION POLICY THE OBJECTIVES OF THE POLICY
1. To lay down criteria and terms and conditions with regard to identifying persons who are qualified to become Directors (Executive and Non-Executive) and persons who may be appointed in Senior Management and Key Managerial positions and to determine their remuneration.
2. To determine remuneration based on the Companyâs size and financial position and trends and practices on remuneration prevailing in peer companies.
3. To carry out evaluation of the performance of Directors.
4. To provide them reward linked directly to their effort, performance, dedication and achievement relating to the Companyâs operations.
5. To retain, motivate and promote talent and to ensure long term sustainability of talented managerial persons and create competitive advantage.
The Nomination and Remuneration Committee has recommended fixation of fixed remuneration for Executive Chairman and Managing Directors from 01.04.2016 instead of 3% share of net profits on consideration of improved profitability. Further the Committee has recommend revision of remuneration to Smt T Anandhi, Non-Executive Director from 1% to 0.50% of net profit from 01.04.2016. PARTICULARS OF LOANS, GUARANTEES AND INVESTMENTS UNDER SECTION 186 OF COMPANIES ACT, 2013
The details of Loans, Guarantees given and Investments made during the Financial Year ended on 31st March, 2016 are given in the notes to Financial Statements in compliance with the provisions of Section 186 of the Companies Act, 2013 read with Companies (Meetings of Board and its Powers) Rules, 2014.
PARTICULARS OF CONTRACTS AND ARRANGEMENTS WITH RELATED PARTIES REFERRED TO IN SUB-SECTION (1) OF SECTION 188 OF COMPANIES ACT, 2013
The Company adopted a Related Party Transaction Policy in terms of SEBI regulations for compliance with Corporate Governance and Clause 49 of the Listing Agreement. The policy has also been hosted on the Companyâs website. All transactions entered into with Related Parties for the year 2015-16 were on Armâs length basis.
There were no material related party transactions in terms of the Related Party Transaction Policy adopted.
Thus disclosure in Form AOC-2 as per Companies Act, 2013 and Rule 8 of Companies (Account) Rules, 2014 is not required.
Further there were no material related party transaction with the Promoters, Directors or Key Managerial Personnel during the year.
All related party transaction are placed before the Audit Committee as also to the Board for approval on a quarterly basis. Omnibus approval was obtained for transaction of repetitive nature.
TRANSFER OF AMOUNT TO RESERVES
The Company does not propose to transfer any amount to the general reserve for the Financial Year ended 31st March, 2016. EXTRACT OF ANNUAL RETURN
The extract of Annual Return is prepared in Form MGT-9 as per the provisions of the Companies Act, 2013 and Rule 12 of Companies (Management and Administration) Rules, 2014 and the same is enclosed as Annexure - 2 to this Report.
THE CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO PURSUANT TO PROVISIONS OF SECTION 134(3)(m) OF THE COMPANIES ACT, 2013 (ACT) READ WITH THE COMPANIES (ACCOUNTS) RULES, 2014
Information with respect to conservation of energy, technology absorption, foreign exchange earnings and outgo pursuant to Section 134(3)(m) of the Act read with Companies (Accounts) Rules, 2014 is prepared and the same is enclosed as Annexure - 3 to this Report.
RISK MANAGEMENT COMMITTEE
Risk Management Committee consists of the following persons namely Shri B Sriramulu as Chairman, Shri S Muthuswamy and Shri M Balaji as members.
The Committee had formulated a Risk Management Policy for dealing with different kinds of risks which it faces in day to day operations of the Company. Risk Management Policy of the Company outlines different kinds of risks and risk mitigating measures to be adopted by the Board. The Company has adequate internal control systems and procedures to combat the risk. The Risk management procedure is reviewed by the Audit Committee and Board of Directors on a Quarterly basis at the time of review of Quarterly Financial Results of the Company.
CORPORATE SOCIAL RESPONSIBILITY COMMITTEE
Corporate Social Responsibility is commitment of the Company to improve the quality of life of the workforce and their families and also the community and society at large. The Company believes in undertaking business in such a way that it leads to overall development of all stakeholders and Society.
The Board of Directors of the Company has constituted Corporate Social Responsibility Committee consisting of following persons namely Shri KG Baalakrishnan, Chairman, Shri G V S Desikan, Member and Shri A Velusamy, Member and adopted policy for Corporate Social Responsibility.
Corporate Social Responsibility policy was adopted by the Board of Directors on the recommendation of Corporate Social Responsibility Committee.
The Report on CSR activities as required under the Companies (Corporate Social Responsibility Policy) Rules, 2014 is annexed as Annexure - 4.
EVALUATION OF BOARD
Evaluation of all Board members is done on an annual basis. The evaluation is done by the Board, Nomination and Remuneration Committee and Independent Directors with specific focus on the performance and effective functioning of the Board and Individual Directors.
The manner in which the evaluation has been done is explained in the report on Corporate Governance.
DIRECTORS
Shri M J Vijayaraaghavan, Independent Director expired on 10.06.2015.
The Board placed on record the valuable services rendered by him and prayed Almighty for the eternal peace of the departed soul. Shri Surinder Chhibber, Independent Director and Shri S Muthuswamy, Director resigned from the Board on 31.07.2015. The Board placed on record the valuable services rendered by them.
Shri A P Seturaaman was appointed as an Additional Director by the Board on 05.11.2015. He is seeking election as an Independent Director at the ensuing Annual General Meeting.
In accordance with the provisions of Section 152 of the Companies Act, 2013 and the Companyâs Articles of Association no. 34, Shri B Sriramulu retires by rotation at the forthcoming Annual General Meeting and being eligible offers himself for re-appointment.
KEY MANAGERIAL PERSONNEL
The following are the Key Managerial Personnel of the Company :
1. Shri B Sriramulu - Managing Director
2. Shri B Srihari - Managing Director
3. Shri S Muthuswamy - Company Secretary
4. Shri M Balaji - Chief Financial Officer
DEPOSITS
The Company has not accepted any deposits from the public in terms of Section 73 of the Companies Act, 2013.
STATUTORY AUDITORS
The Shareholders of the Company at the Annual General Meeting held on 28th September, 2015 have appointed M/s. Gopalaiyer and Subramanian, Chartered Accountants as Statutory Auditors of the Company.
The term of M/s. Gopalaiyer and Subramanian, Chartered Accountants, Statutory Auditors will expire on the date of 24th Annual General Meeting to be held on 28th September 2016.
It is proposed to re-appoint them as Statutory Auditors of the Company for a further period of one year. The members are requested to consider their re-appointment and authorize the Board of Directors to fix their remuneration.
M/s. Gopalaiyer and Subramanian, Chartered Accountants (ICAI Regn. No.000960S) have confirmed that their appointment, if made, shall be in accordance with the provisions of Section 139 of the Companies Act, 2013.
AUDITORS REPORT
M/s.Gopalaiyer and Subramanian, Chartered Accountants (ICAI Regn. No.000960S) have issued Auditors Report for the Financial Year ended 31st March, 2016 and there are no qualifications in Auditorsâ Report.
INTERNAL AUDITORS
The Board of Directors of the Company have appointed M/s Mohan & Venkatramanan, Chartered Accountants to conduct Internal Audit of the Company.
COST AUDITORS
As per the requirement of Central Government and pursuant to Section 148 of the Companies Act, 2013 read with the Companies (Cost Records and Audit) Rules, 2014 as amended from time to time, your Company has been carrying out audit of cost records relating to Textile Divisions every year.
The Board of Directors, on the recommendation of Audit Committee, has appointed Messrs M Nagarajan, Cost Accountants, (Firm Registration Number 6384) as Cost Auditor to audit the cost accounts of the Company for the financial year 2016-17. As required under the Companies Act, 2013, a resolution seeking memberâs approval for the remuneration payable to the Cost Auditor forms part of the Notice convening the Annual General Meeting for their ratification.
AUDIT COMMITTEE
Audit Committee consists of the following Directors namely Shri V Jagadisan, Chairman, Shri K N V Ramani and Shri G V S Desikan as members. All the members of the Audit Committee are Independent Directors.
There is no such incidence where Board has not accepted the recommendation of the Audit Committee during the year under review.
CORPORATE GOVERNANCE
A separate section on Corporate Governance and a Certificate from the Auditors of the Company regarding compliance of conditions of Corporate Governance as stipulated under Clause 49 of the Listing Agreement with the Stock Exchange, forms part of the Annual Report - Annexure - 5.
VIGIL MECHANISM
The Board of Directors have adopted a Whistle Blower Policy which is hosted on the Companyâs website. The Whistle Blower Policy aims for conducting the affairs in a fair and transparent manner by adopting highest standards of professionalism, honesty, integrity and ethical behaviour. All permanent employees of the Company are covered under the Whistle Blower Policy.
A mechanism has been established for employees to report concerns about unethical behavior, actual or suspected fraud or violation of Code of Conduct and Ethics. It also provides for adequate safeguards against the victimization of employees who avail of the mechanism and allows direct access to the Chairperson of the Audit Committee in exceptional cases.
SECRETARIAL AUDITORS REPORT
As per the provisions of Section 204 of the Companies Act, 2013, the Board of Directors have appointed Shri M.R.L.Narasimha, Practising Company Secretary (C.P.No:799) as Secretarial Auditor to conduct Secretarial audit of the Company for the Financial Year ended on 31st March, 2016.
Secretarial Audit Report issued by Shri M.R.L.Narasimha, Practising Company Secretary in form MR-3 is enclosed as Annexure - 6 to this Annual Report. There are no qualifications in Secretarial Audit Report.
STATEMENT OF PARTICULARS OF APPOINTMENT AND REMUNERATION OF MANAGERIAL PERSONNEL
The Statement of particulars of Appointment and Remuneration of Managerial personnel as per Rule 5 of Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is enclosed as Annexure - 7 to this Annual Report.
ENVIRONMENT
The Company holds due certification under ISO 14001 : 2004 which is primarily focused on environmental management system. It ensures that the manufacturing of products is carried on without affecting the environment in the working area and surroundings. The Company is a member of Sustainable Apparel Coalition (SAC). SAC provides credible, practical and industry wide guidelines and provides tools to define, measure and evaluate industryâs product environmental and social performance support.
The Company has achieved one of the best scores in the apparel industry as verified by a leading brand assessor.
During the current year, the Company has implemented various environmental measures and reduction program like Green House Gas inventory measurement, replacement of freon gas air conditioners, increasing the area of plantation etc.
The Company has improved effluent water treatment system conforming to the Pollution Control Board parameters. A new plant has been added which has increased the Biological treatment capacity by 60%. An advanced technology of Biological Diffuser Aeration system has been introduced which has resulted in reduction in chemicals usage. Consequently, reduction in sludge, improvement in outlet water quality and consistence and improvement in RO recovery were achieved. The highlights of our sustainability effort can be seen in the link https://youtu.be/uZGhiwq6XSM
HEALTH AND SAFETY
The Company has obtained certification under OHSAS 18001 : 2007 (Occupational Health and Safety Management Assessment Standard) which is an Integrated Management System focusing on an organizationâs occupational health and safety management system. This standard guides us to identify and control the conditions and factors that affect the well-being of employees, contractors, visitors and any other person in the work place.
The Company is implementing various health and safety practices in continuous manner as per OHSAS-18001 standards and legal requirements.
POLICY ON SEXUAL HARASSMENT
The Company has adopted policy on Prevention of Sexual Harassment of Women at Workplace in accordance with The Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. During the financial year ended 31st March,
2016, the Company has not received any complaints pertaining to sexual harassment.
LEGAL REQUIREMENTS
The Company is conscious of improving the occupational and personal health of its employees. In addition to free medical camps, the Company also organizes employeesâ health check up in outside hospitals on an annual basis.
The Company provides a safer work environment for its employees. Basic equipments are provided to ensure safety from fire. Awareness classes are being conducted periodically with the help of external agencies about the basic safety, fire fighting, mock drills, mass evacuation, first aid etc.,
SOCIAL RESPONSIBILITIES
The Company is maintaining a hospital for serving the community including supply of medicines at subsidized costs. As a part of social environmental protection, agro forestry has been developed with a demo plant with the technical support of Forest College, Coimbatore.
INSURANCE
All properties and insurable interests of the Company including building, plant and machinery and stocks have been fully insured.
FINANCE
Your Directors acknowledge with gratitude, the valuable assistance and support extended by our Bankers for term loans and working capital ie., Indian Bank, Bank of India, Allahabad Bank, State Bank of India, Indian Overseas Bank and The South Indian Bank Limited.
DETAILS IN RESPECT OF ADEQUACY OF INTERNAL FINANCIAL CONTROLS WITH REFERENCE TO THE FINANCIAL STATEMENTS
1. The Company maintains all its records in ERP System and the work flow and approvals are routed through ERP System;
2. The Company has appointed Internal Auditors to observe the Internal Controls, whether the work flow of organization is being done through the approved policies of the Company. In every Quarter during the approval of Financial Statements, Internal Auditors will present the Internal Audit Report and Management Comments on the Internal Audit observations; and
3. The Board of Directors of the Company have adopted various policies like Related Party Transactions Policy, Whistle Blower Policy, Policy to determine Material Subsidiaries and such other procedures for ensuring the orderly and efficient conduct of its business for safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information.
CHANGE IN THE NATURE OF BUSINESS
There is no change in the nature of business of the Company.
THE DETAILS OF SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALS IMPACTING THE GOING CONCERN STATUS AND COMPANYâS OPERATIONS IN FUTURE.
No Significant and material orders passed by the regulators or courts or tribunals impacting the going concern status and companyâs operations in future.
Details of pending legal cases are furnished in Note No.29 to the accounts.
MATERIAL CHANGES AND COMMITMENTS
There are no Material changes and commitments in the business operations of the Company from the Financial Year ended 31st March, 2016 to the date of signing of the Directorâs Report.
ACKNOWLEDGMENT
The Directors take this opportunity to place on record their sincere thanks to the Banks and Financial Institutions, Insurance Companies, Central and State Government Departments and the shareholders for their support and co-operation extended to the Company from time to time.
PERSONNEL
The Directors wish to place on record their appreciation for the co-operation extended by all sections of the employees. CAUTIONARY STATEMENT
The statement in this Directorsâ Report & Management Discussion and Analysis contain forward looking statements regarding Companyâs projections & expectations and the actual results could differ materially from those expressed on account of various factors like raw material prices, change in demand, government regulation etc., and the readers are cautioned against placing undue reliance on the same.
PARTICULARS OF EMPLOYEES
Information pursuant to Section 197(12) of the Companies Act, 2013 read with Rule 5 (1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is given in Annexure - 7 to this report.
The particulars in respect of employees in receipt of remuneration exceeding Rs.60 lakhs per annum as per Section 197(12) read with Rule 5(2) of The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is given in Annexure-8.
The Company has presented in this Report, the consolidated financial statements of the holding company and all its subsidiaries, duly audited by the Statutory Auditors. The Company will make available the audited annual accounts and related information of its subsidiaries, upon request by any of its shareholders. The annual accounts of the subsidiary companies will also be kept for inspection by any member at the Registered Office of the Company and its subsidiary companies.
Our humble prayers to Sri Venkateswaraswamy Vari of Then Thirumalai for the continued prosperity of the Company.
On behalf of the Board
KG Baalakrishnan
Coimbatore Executive Chairman
26.05.2016 DIN: 00002174
Mar 31, 2014
Dear Shareholders,
We have pleasure in presenting the Twenty-Second Annual Report of the
Company together with the Audited Statement of Accounts for the year
ended 31st March 2014.
FINANCIAL RESULTS (Rs. in lakhs)
PARTICULARS For the year ended For the year ended
31st March 2014 31st March 2013
Gross Profit 5149 6115
Less : Finance Cost 2805 2576
Profit prior to 2344 3539
Depreciation and
write off
Less : Depreciation 1335 1192
Net Profit 1009 2347
Current, Deferred & 350 794
earlier year tax
Net Profit for the year 659 1553
Balance Brought forward 1762 433
Proposed Dividend & Tax thereon 224 224
Balance Carried Forward 2197 1762
PERFORMANCE OF THE COMPANY
During the year ended 31.03.2014, the Company achieved an overall
production of 316 lakh meters of fabrics against the previous year''s
production of 296 lakh meters. The revenue for the year was Rs.59186
lakhs as against revenue of Rs.51483 lakhs during the previous year,
representing a growth of 15 %. The Company has three main product
groups Denim and Apparel Fabrics, Home Textiles and Sale of Apparel.
Denim Sales have inceased marginally but profitability was affected on
account of increase in input costs.
In the Home Textiles category, Company has registered significant
growth rate in sales compared to the previous year.
In the Ready Made Garments group also the Company has registered
significant growth in sales and profit.
The Board of Directors recommends a divdend of 7.50 % (i.e. Rs.0.75)
per equity share of the Company for the year 2013-14. The Divdend tax
payable amounts to Rs.31 lakhs.
INDUSTRY STRUCTURE & DEVELOPMENT
The Indian denim industry is showing steady growth in domestic and
international markets.
Our focus remains on sales to leading domestic and international brands
in India and also to large exporters of readymade garments. We are
concentrating on the Far East Countries of Vietnam, LaosPDR and China
besides direct sales to North America. Products are being developed to
cater to both retailers and fashion brands thereby gaining advantage in
both segments and increasing volumes. Sale of home textiles and
apparels improved during the year.
OPPORTUNITIES AND THREATS
The Company is targeting higher production and sales volume for denim
in the next year. Sale of Home Textiles and Apparel are also expected
to achieve higher volumes.
The Company is subjected to risks of volatility in the prices of raw
materials and fashion changes.
High interest rates and exchange rate volatility are areas of serious
concern for the Company. The Company has taken steps to increase the
exports and is actively managing the exchange risk by suitable forward
cover.
FINANCE
Your Directors acknowledge with gratitude, the valuable assistance and
support extended by our Bankers for term loans and working capital ie.,
Indian Bank, Bank of India, Allahabad Bank, State Bank of India, State
Bank of Hyderabad, Indian Overseas Bank and The South Indian Bank
Limited.
PERSONNEL
The Directors wish to place on record their appreciation for the
co-operation extended by all sections of the employees.
DIRECTORS'' RESPONSIBILITY STATEMENT
Your Directors confirm that:
a) In the preparation of the annual accounts, the applicable accounting
standards had been followed.
b) The Directors had 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 at the end of the financial year and of the Profit or Loss
of the Company for that period.
c) Company''s Directors had taken proper and sufficient care for the
maintenance of adequate accounting records in accordance with the
provisions of the Companies Act, 1956 for safeguarding the assets of
the Company and for preventing and detecting fraud and irregularities.
d) The annual accounts have been prepared on a going concern basis.
CONSOLIDATED ACCOUNTS
In accordance with the requirements of Accounting Standard (AS-21)
prescribed by The Institute of Chartered Accountants of India, the
Consolidated Accounts of the Company and its subsidiaries are annexed
to this Report.
SUBSIDIARIES
During the year, the gross turnover in Trigger Apparels Limited was to
Rs.39.22 crores against Rs.38.20 crores during the previous year. The
subsidiary has been able to register a profit of Rs.15.44 lakhs
compared to profit of Rs.31.95 lakhs in the previous year. No activity
has taken place at KG Denim (USA) Inc. during the year.
CEO/CFO CERTIFICATION
The Managing Directors and Director & Company Secretary of the Company
have submitted a Certificate to the Board as required under Clause 49
of the Listing Agreement for the year ended 31st March, 2014.
CORPORATE GOVERNANCE
A separate section on Corporate Governance and a Certificate from the
Auditors of the Company regarding compliance of conditions of Corporate
Governance as stipulated under Clause 49 of the Listing Agreement with
the Stock Exchange, forms part of the Annual Report.
LISTING
The Company''s shares are listed in the Bombay Stock Exchange Limited,
Mumbai.
CAPITAL EXPENDITURE
The Company incurred a Capital Expenditure of Rs.2202.75 lakhs during
the year.
DIRECTORS
Section 149 of the Companies Act, 2013 provides for the appointment of
Independent Directors on non-rotational basis. Accordingly, Shri K N V
Ramani, Shri V Jagadisan and Shri Surinder Chhibber, Independent
Directors who are retiring at the ensuing Annual General Meeting are
now being reappointed on non-rotational basis for a period of 5 years
till 31st March, 2019.
Further, Shri G V S Desikan, Shri M J Vijayaraaghavan and Shri G P
Muniappan, Independent Directors who are liable to retire by rotation
are now being re-appointed on non-rotational basis for a period of 5
years till 31st March, 2019.
AUDITORS
The present Auditors M/s Gopalaiyer and Subramanian retire at the
ensuing Annual General Meeting and are eligible for re-appointment.
Cost Audit Report for the financial year ending 31st March 2014 will be
submitted to the Central Government in accordance with Cost Audit
Report Rules, 2011.
CORPORATE SOCIAL RESPONSIBILITY
The Company is fully aware of its Corporate Social Responsibilities to
various stakeholders and has taken appropriate steps to meet the same.
With the enactment of Companies Act, 2013, Corporate Social
Responsibility has acquired statutory recognition. The Company had
already initiated several steps to meet its Corporate Social
Responsibilities.
ENVIRONMENT
The Company holds due certification under ISO 14001 : 2004 which is
primarily focused on environmental management system. It ensures that
the manufacturing of products is carried on without affecting the
environment in the working area and surroundings. The Company is a
member of Sustainable Apparel Coalition (SAC). SAC provides credible,
practical and industry wide guidelines and provides tools to define,
measure and evaluate industry''s product environmental and social
performance support.
The Company has achieved one of the best scores in the apparel industry
as verified by a leading brand assessor.
During the current year, the Company has implemented various
environmental measures and reduction program like Green House Gas
inventory measurement, replacement of floras gas air conditioners,
increasing the area of plantation etc.
The Company has improved effluent water treatment system conforming to
the Pollution Control Board parameters. A new plant has been added
which has increased the Biological treatment capacity by 60%. An
advanced technology of Biological Diffuser Aeration system has been
introduced which has resulted in reduction in chemicals usage.
Consequently, reduction in sludge, improvement in outlet water quality
and consistence and improvement in RO recovery were achieved.
HEALTH AND SAFETY
The Company has obtained certification under OHSAS 18001 : 2007
(Occupational Health and Safety Management Assessment Standard) which
is an Integrated Management System focusing on an organization''s
occupational health and safety management system. This standard guides
us to identify and control the conditions and factors that affect the
well-being of employees, contractors, visitors and any other person in
the work place.
The Company is implementing various health and safety practices in
continuous manner as per OHSAS-18001 standards and legal requirements.
LEGAL REQUIREMENTS
The Company is conscious of improving the occupational and personal
health of its employees. In addition to free medical camps, the Company
also organizes employees'' health check up in outside hospitals on an
annual basis.
The Company provides a safer work environment for its employees, basic
equipments are provided to ensure safety from fire. Awareness classes
are being conducted periodically with the help of external agencies
about the basic safety, fire fighting, mock drills, mass evacuation
first aid etc.,
SOCIAL RESPONSIBILITIES
The Company is maintaining a hospital for serving the community
including supply of medicines at subsidised costs. As a part of social
environmental protection, agro forestry has been developed with a demo
plant with the technical support of Forest College, Coimbatore.
CAUTIONARY STATEMENT
The statement in this Directors'' Report & Management Discussion and
Analysis contain forward looking statements regarding Company''s
projections & expectations and the actual results could differ
materially from those expressed on account of various factors like raw
material prices, change in demand, government regulation etc., and the
readers are cautioned against placing undue reliance on the same.
STATUTORY INFORMATION
During the year there were no employees in receipt of remuneration
covered by Section 217(2A) of the Companies Act, 1956, read with the
Companies (Particulars of Employees) Rules, 1975, as amended vide GSR
289 (E) dated March 31, 2011 [Companies (Particulars of Employees)
Amendments Rules, 2011].
Information pursuant to sub-section 1 (e) of Section 217 of the
Companies Act, 1956, read with the Companies (Disclosure of Particulars
in the Report of the Board of Directors) Rules, 1988 is given in
Annexure to this Report.
The Company has presented in this Report, the consolidated financial
statements of the holding company and all its subsidiaries, duly
audited by the Statutory Auditors. The Company has also disclosed in
the Consolidated Balance Sheet the information required to be provided
as per the aforesaid Notification dated February 8, 2011. The Company
will make available the audited annual accounts and related information
of its subsidiaries, upon request by any of its shareholders. The
annual accounts of the subsidiary companies will also be kept for
inspection by any member at the Registered Office of the Company and
its subsidiary companies.
Our humble prayers to Sri Venkateswaraswamy Vari of Then Thirumalai for
the continued prosperity of the Company.
On behalf of the Board
Coimbatore KG Baalakrishnan
24.05.2014 Executive Chairman
Mar 31, 2013
Dear Shareholders,
The have pleasure in presenting the Twenty-First Annual Report of the
Company together with the Audited Statement of Accounts for the year
ended 31st March 2013.
FINANCIAL RESULTS
(Rs. in lakhs)
For the
year ended For the
year ended
PARTICULARS 31st March 2013 31st March 2012
Gross Profit 6115 4735
Less : Finance Cost 2576 2323
Profit prior to Depreciation
and write off 3539 2412
Less : Depreciation 1192 1308
Net Profit 2347 1104
Current, Deferred & earlier year tax 794 367
Net Profit for the year 1553 737
Balance Brought forward 433 152
Arrears of Preferential
Dividend & Tax thereon 232
Proposed Dividend & Tax thereon 224 224
Balance Carried Forward 1762 433
FINANCE
Your Directors acknowledge with gratitude, the valuable assistance and
support extended by our Bankers for term loans and working capital ie.,
Indian Bank, Bank of India, Allahabad Bank, State Bank of India, State
Bank of Hyderabad and Indian Overseas Bank.
PERSONNEL
The Directors wish to place on record their appreciation for the
co-operation extended by all sections of the employees.
DIRECTORSÂ RESPONSIBILITY STATEMENT
Your Directors confirm that:
a) In the preparation of the annual accounts, the applicable accounting
standards had been followed.
b) The Directors had 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 at the end of the financial year and of the Profit or Loss
of the Company for that period.
c) The Directors had taken proper and sufficient care for the
maintenance of adequate accounting records in accordance with the
provisions of this Act for safeguarding the assets of the Company and
for preventing and detecting fraud and irregularities.
d) The annual accounts have been prepared on a going concern basis.
CONSOLIDATED ACCOUNTS
In accordance with the requirements of Accounting Standard (AS-21)
prescribed by The Institute of Chartered Accountants of India, the
Consolidated Accounts of the Company and its subsidiaries are annexed
to this Report.
SUBSIDIARIES
During the year, the gross turnover in Trigger Apparels Limited
increased to Rs.38 crores from Rs.31 crores for the previous year. The
subsidiary has been able to register a profit of Rs.31.95 lakhs
compared to profit of Rs.10.59 lakhs in the previous year. No activity
has taken place at KG Denim (USA) Inc. during the year.
CEO/CFO CERTIFICATION
The Managing Directors and Director & Company Secretary of the Company
have submitted a Certificate to the Board as required under Clause 49
of the Listing Agreement for the year ended 31st March, 2013.
CORPORATE GOVERNANCE
A separate section on Corporate Governance and a Certificate from the
Auditors of the Company regarding compliance of conditions of Corporate
Governance as stipulated under Clause 49 of the Listing Agreement with
the Stock Exchange, forms part of the Annual Report.
LISTING
The CompanyÂs shares are listed in the Bombay Stock Exchange Limited,
Mumbai.
CAPITAL EXPENDITURE
The Company incurred a Capital Expenditure of Rs.3052.46 lakhs during
the year.
DIRECTORS
Shri G P Muniappan, Shri M J Vijayaraaghavan and Shri G V S Desikan
retire by rotation and being eligible offer themselves for
reappointment at the ensuing Annual General Meeting.
The term of office of Shri KG Baalakrishnan, Executive Chairman, Shri B
Sriramulu and Shri B Srihari, Managing Directors comes to an end on
02.11.2013. The Board has, subject to approval of shareholders in the
forthcoming Annual General Meeting, re-appointed them as Executive
Chairman and Managing Directors of the Company for a term of five years
effective from 03.11.2013 to 02.11.2018.
AUDITORS
The present Auditors M/s Gopalaiyer and Subramanian retire at the
ensuing Annual General Meeting and are eligible for re-appointment.
Cost Audit Report for the financial year ending 31st March 2013 will be
submitted to the Central Government in accordance with Cost Audit
Report Rules, 2011.
Auditors.
The Audit Committee also closely reviews with the internal and external
auditors on the adequacy of internal control systems.
The Company has also initiated steps to obtain ISO 27001 : 2005
(Information Security Management System-ISMS) to control and manage our
data in secured manner.
The Company further has an Integrated Management System (IMS) in terms
of ISO 9001:2008 and is concerned with establishing quality management
system to achieve target set by top management and aims at continual
improvement based on the customer requirements.
ISO 14001:2004 is primarily focused on environmental management system
which guide us to manufacture the products without affecting the
environment in the working area and surroundings of our organization.
OHSAS 18001 : 2007 (Occupational Health and Safety Management
Assessment Standard) which is an Integrated Management System focusing
on an organizationÂs occupational health and safety management system.
This standard guide us to identify and control the conditions and
factors that affect the well-being of employees, contractors, visitors
and any other person in the work place.
STATUTORY INFORMATION
During the year there were no employees in receipt of remuneration
covered by Section 217(2A) of the Companies Act, 1956, read with the
Companies (Particulars of Employees) Rules, 1975, as amended vide GSR
289 (E) dated March 31, 2011 [Companies (Particulars of Employees)
Amendments Rules, 2011].
Information pursuant to sub-section 1 (e) of Section 217 of the
Companies Act, 1956, read with the Companies (Disclosure of Particulars
in the Report of the Board of Directors) Rules, 1988 is given in
Annexure to this Report.
As per Section 212 of the Companies Act, 1956, the Company is required
to attach the Directors Report, Balance Sheet, and Statement of Profit
and Loss of subsidiaries. The Central Government has granted general
exemption from complying with Section 212 of the Companies Act, 1956 to
all companies vide Notification No.5/12/2007-CL-III dated February 8,
2011. Accordingly, your Company has presented in this Report, the
consolidated financial statements of the holding company and all its
subsidiaries, duly audited by the Statutory Auditors. The Company has
also disclosed in the Consolidated Balance Sheet the information
required to be provided as per the aforesaid Notification dated
February 8, 2011. The Company will make available the audited annual
accounts and related information of its subsidiaries, upon request by
any of its shareholders. The annual accounts of the subsidiary
companies will also be kept for inspection by any member at the
Registered Offices of the Company and its subsidiary companies. Our
humble prayers to Sri Venkateswaraswamy Vari of Then Thirumalai for the
continued prosperity of the Company.
On behalf of the Board
Coimbatore KG Baalakrishnan
29.05.2013 Executive Chairman
Mar 31, 2012
The have pleasure in presenting the Twentieth Annual Report of the
Company together with the Audited Statement of Accounts for the year
ended 31st March 2012.
FINANCIAL RESULTS (Rs. in lakhs)
For the year
ended For the year
ended
PARTICULARS 31stMarch
2012 31st March
2011
Gross Profit 4735 3887
Less : Finance Cost 2323 1918
Profit prior to Depreciation and write off 2412 1969
Less : Depreciation 1308 1293
Net Profit 1104 676
Current, Deferred & earlier year tax 367 226
Net Profit for the year 737 450
Balance Brought forward 152 -298
Arrears of Preferential Dividend & Tax
thereon 232 -
Proposed Dividend & Tax thereon 224 -
Balance Carried Forward 433 152
PERFORMANCE OF THE COMPANY
During the year ended 31.03.2012, the Company achieved an overall
production of 229 lakh meters of fabrics against the previous year's
production of 241 lakh meters. The revenue for the year was Rs.40007
lakhs as against sales of Rs.34359 lakhs during the previous year,
representing an increase of 16 %. The company has three main product
groups, Denim and Apparel Fabrics, Home Textiles and sales of Apparel.
All the product groups are showing double digit growth levels and have
contributed to the profitability of the company.
The Company has been able to improve its profitability on account of
higher sales realization. The operating margins were maintained in spite
of lower production and increasing power costs.
Our investments in the home textiles category have started paying off
as we see large sales to well established retail houses abroad. The
recent depreciation of the rupee has helped our garment sales in export
markets.
The Board of Directors recommends a dividend of 7.50 % (i.e. Rs.0.75)
per equity share of the company for the year 2011-12. The Board further
recommends payment of arrears of cumulative preference dividend to
erstwhile preference shareholders at the rate of 10 % for the years
2005 to 2007 amounting to Rs.200 lakhs. The Dividend tax payable
amounts to Rs.63 lakhs.
INDUSTRY STRUCTURE a DEVELOPMENT
The Indian denim industry continues to enjoy a high growth potential.
The domestic as well as international demand is expected to grow. The
demand for the denim fabrics is increasing in the domestic market; our
sales to both premier international brands operating in India and also
to large exporters of readymade garments have increased. The recent
financial crisis in Europe has affected our sales in that region. Our
sales effort in the South American market has started to yield results,
to balance the negative sentiment in Europe. We are seeing sales
increase in North America as fashion has favored our products.
OPPORTUNITIES AND THREATS
The Company is expecting higher volumes in denim sale. The Company will
continue its focus on home textiles sales and is expected to do well in
this segment in the next year. Apparel exports is expected to be
maintained at current levels.
The Company is subjected to the risks of volatility in the prices of
raw material. Denim sales is highly dependant on fashion. The previous
year saw cotton prices reaching a peak of 200 cent/lb and then coming
down to 100 cent/lb.
The higher interest rates and the volatility in exchange rates are
serious concerns facing the Company. The Company is taking steps to
mitigate the effects of cost increases by suitable product mix changes
and also by actively managing the exchange risk.
FINANCE
Your Directors acknowledge with gratitude, the valuable assistance and
support extended by our Bankers fcr term loans and working capital ie.,
Indian Bank, Bank of India, Allahabad Bank, State Bank of India, State
Bank of Hyderabad and Indian Overseas Bank.
PERSONNEL
The Directors wish to place on record their appreciation for the
co-operation extended by all sections of the employees.
DIRECTORS' RESPONSIBILITY STATEMENT
Your Directors confirm that:
a) In the preparation of the annual accounts, the applicable accounting
standards had been followed.
b) The Directors had 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 at the end of the financial year and of the Profit or Loss
of the Company for that period.
c) The Directors had taken proper and sufficient care for the
maintenance of adequate accounting records in accordance with the
provisions of this Act for safeguarding the assets of the Company and
for preventing and detecting fraud and irregularities.
d) The annual accounts have been prepared on a going concern basis.
CONSOLIDATED ACCOUNTS
In accordance with the requirements of Accounting Standard (AS-21)
prescribed by The Institute of Chartered Accountants of India, the
Consolidated Accounts of the Company and its subsidiaries are annexed
to this Report.
SUBSIDIARIES
During the year, the gross turnover in Trigger Apparels Limited
increased to Rs.31.19 crores from Rs.30.48 crores for the previous
year. The subsidiary has been able to register a profit of Rs.10.59
lakhs compared to loss of Rs.68.42 lakhs in the previous year. No
activity has taken place at KG Denim (USA) Inc. during the year.
CEO/CFO CERTIFICATION
The Managing Directors and Director & Company Secretary of the Company
have submitted a Certificate to the Board as required under Clause 49
of the Listing Agreement for the year ended 31!t March, 2012.
CORPORATE GOVERNANCE
A separate section on Corporate Governance and a Certificate from the
Auditors of the Company regarding compliance of conditions of Corporate
Governance as stipulated under Clause 49 of the Listing Agreement with
the Stock Exchange, forms part of the Annual Report.
LISTING
The Company's shares are listed in the Bombay Stock Exchange Limited,
Mumbai.
CAPITAL EXPENDITURE
The Company incurred a Capital Expenditure of Rs.644.27 lakhs during
the year.
DIRECTORS
Shri V Jagadisan, Shri Surinder Chhibber and Smt T Anandhi retire by
rotation and being eligible offer themselves for reappointment at the
ensuing Annual General Meeting.
Shri S Muthuswamy, Director and Company Secretary (Whole-time), term of
office came to an end on 29.05.2012. The Board has subject to approval
of shareholders in the forthcoming Annual General Meeting, re-appointed
him as Director and Company Secretary (Whole-time) of the Company for a
term of five years effective from 30.05.2012 to 29.05.2017.
AUDITORS
The present Auditors M/s Gopalaiyer and Subramanian retire at the
ensuing Annual General Meeting and are eligible for re-appointment.
Cost Audit Report for the financial year ending 31st March 2012 will be
submitted to the Central Government in accordance with Cost Audit
Report Rules, 2011.
INTERNAL CONTROL SYSTEMS a THEIR ADEQUACY
The Company has put in place adequate internal control system and is
implementing the same to ensure reliability of financial and other
datas and their accuracy. Company is also strengthening its review
control system by appointing External Consultants as Auditors.
The Audit Committee also closely reviews with the internal and external
auditors on the adequacy of internal control systems. The Company has
also initiated steps to obtain ISO 27001 : 2005 (Information Security
Management System-ISMS) to control and manage our data in secured
manner.
The Company further has an Integrated Management System (IMS) which
consisting of ISO 9001:2008 is concerned with establishing quality
management system to achieve target set by top management and continual
improvement based on the customer requirements.
ISO 14001:2004 is primarily focused on environmental management system
which guide us to manufacture the products without affecting the
environment in the working area and surrounding of our organization.
OHSAS 18001 : 2007 (Occupational Health and Safety Management
Assessment Standard) which is an Integrated Management System focusing
on an organization's occupational health and safety management
system. This standard guide us to identify and control the conditions
and factors that affect the well-being of employees, contractors,
visitors and any other person in the work place.
CAUTIONARY STATEMENT
The statement in this Directors' Report & Management Discussion and
Analysis contain forward locking statements regarding Company's
projections & expectations and the actual results could differ
materially from those expressed on account of various factors like raw
material prices, change in demand, government regulation etc., and the
readers are cautioned against placing undue reliance on the same.
STATUTORY INFORMATION
During the year there were no employees in receipt of remuneration
covered by Section 217(2A) of the Companies Act, 1956, read with the
Companies (Particulars of Employees) Rules, 1975, as amended vide GSR
289 (E) dated March 31, 2011 [Companies (Particulars of Employees)
Amendments Rules, 2011].
Information pursuant to sub-section 1 (e) of Section 217 of the
Companies Act, 1956, read with the Companies (Disclosure of Particulars
in the Report of the Board of Directors) Rules, 1988 is given in
Annexure to this Report.
As per Section 212 of the Companies Act, 1956, the Company is required
to attach the Directors' Report, Balance Sheet, and Statement of
Profit and Loss of subsidiaries. The Central Government has granted
general exemption from complying with Section 212 of the Companies Act,
1956 to all companies vide Notification No.5/12/2007-CL-llt dated
February 8, 2011. Accordingly, your Company has presented in this
Report, the consolidated financial statements of the holding company
and all its subsidiaries, duly audited by the Statutory Auditors. The
Company has also disclosed in the Consolidated Balance Sheet the
information required to be provided as per the aforesaid Notification
dated February 8, 2011. The Company will make available the audited
annual accounts and related information of its subsidiaries, upon
request by any of its shareholders. The annual accounts of the
subsidiary companies will also be kept for inspection by any member at
the Registered Offices of the Company and its subsidiary companies.
Our humble prayers to Sri Venkateswaraswamy Vari of Then Thirumalai for
the continued prosperity of the Company.
On behalf of the Board
Coimbatore KG Baalakrishnan
07.06.2012 Executive Chairman
Mar 31, 2011
Dear Shareholders,
We have pleasure in presenting the Nineteenth Annual Report of the
Company together with the Audited Statement of Accounts for the year
ended 31st March 2011.
FINANCIAL RESULTS (Rs. in lakhs)
For the year ended For the year ended
PARTICULARS 31st March 2011 31st March 2010
Gross Profit 3911 3452
Less: Interest 1914 1965
Loss due to exchange variation 4 101
Profit prior to Depreciation
and write off 1993 1386
Less:Depreciation 1293 1290
Add : Prior Year Income /
(Expenditure) (Net) 19 2
Net Profit 681 94
Current, Deferred, FBT Tax &
earlier year tax 231 77
Net Profit for the year 450 17
Balance Brought forward -298 -315
Balance carried forward 152 -298
PERFORMANCE OF THE COMPANY
During the year ended 31.03.2011, the Company achieved an overall
production of 241 lakh meters of fabrics against the previous year's
production of 229 lakh meters. The sales for the year was Rs.32723
lakhs as against sales of Rs.25851 lakhs during the previous year,
representing an increase of 27 %.
The increased turnover coupled with the ability of the Company to pass
on the effects of higher raw material prices to the customers helped
the company in achieving higher profits for the year.
INDUSTRY STRUCTURE & DEVELOPMENT
The Indian denim industry has consolidated its position in the global
denim fabric and garment manufacturing during 2010-11. Its contribution
to the nation's GOP has been increasing significantly.
During 2010-11, the domestic as well as export demand continued to show
a healthy growth. The processed fabrics, particularly bed linens picked
up during the year. Apparel exports increased but were moderately
affected by rising input costs.
In the apparel segment, the preference by overseas customers for
packaged ready made garments continued to increase.
OPPORTUNITIES AND THREATS
The domestic demand for denim continued to aid the company's growth
plans. The company has stepped up its home textiles sales and is
expected to do well in this segment in the next year. Apparel exports
is expected to be maintained at current levels.
The increase in cotton and yarn prices during 2011-12, the higher
interest rates and the volatality in exchange rates are the serious
concerns facing the company. The company is taking steps to mitigate
the effects of cost increases by suitable product mix changes and also
by actively managing the exchange risk.
FINANCE
Your Directors acknowledge with gratitude, the valuable assistance and
support extended by our Bankers for term loans and working capital ie.,
Indian Bank, Bank of India, Allahabad Bank, State Bank of India, State
Bank of Hyderabad and Indian Overseas Bank.
PERSONNEL
The Directors wish to place on record their appreciation for the
co-operation extended by all sections of the employees.
DIRECTORS' RESPONSIBILITY STATEMENT
Your Directors confirm that:
a) In the preparation of the annual accounts, the applicable accounting
standards had been followed.
b) The Directors had 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 at the end of the financial year and of the Profit or Loss
of the Company for that period.
c) The Directors had taken proper and sufficient care for the
maintenance of adequate accounting records in accordance with the
provisions of this Act for safeguarding the assets of the Company and
for preventing and detecting fraud and irregularities.
d) The annual accounts have been prepared on a going concern basis.
CONSOLIDATED ACCOUNTS
In accordance with the requirements of Accounting Standard (AS-21)
prescribed by The Institute of Chartered Accountants of India, the
Consolidated Accounts of the Company and its subsidiaries are annexed
to this Report.
SUBSIDIARIES
During the year, the gross turnover in Trigger Apparels Limited
increased to Rs.30.48 crores from Rs.26.37 crores for the previous
year. The subsidiary has been able to reduce it losses to Rs.68 lakhs
from Rs.150 lakhs in the previous year.
No activity has taken place at KG Denim (USA) Inc. during the year.
CEO/CFO CERTIFICATION
The Managing Directors and Director & Company Secretary of the Company
have submitted a Certificate to the Board as required under Clause 49
of the Listing Agreement for the year ended 31st March, 2011.
TRANSFER OF UNCLAIMED DEBENTURE TO IEPF
Pursuant to Section 205C of the Act, all unpaid/ unclaimed mature
Debentures and interest thereon, remaining unpaid/ unclaimed for a
period of 7 years from the date they became due for payment, have been
transferred to the Investors Education and Protection Fund (IEPF)
established by the Central Government.
CORPORATE GOVERNANCE
A separate section on Corporate Governance and a Certificate from the
Auditors of the Company regarding compliance of conditions of Corporate
Governance as stipulated under Clause 49 of the Listing Agreement with
the Stock Exchange, forms part of the Annual Report.
LISTING
The Company's shares are listed in the Bombay Stock Exchange Limited,
Mumbai.
CAPITAL EXPENDITURE
The Company incurred a Capital Expenditure of Rs.264.67 lakhs during
the year.
DIRECTORS
Shri M J Vijayaraaghavan, Shri G V S Desikan and Shri K N V Ramani
retire by rotation and being eligible offer themselves for
reappointment at the ensuing Annual General Meeting.
AUDITORS
The present Auditors M/s Gopalaiyer and Subramanian retire at the
ensuing Annual General Meeting and are eligible for re-appointment.
Cost Audit report for the financial year ending 31st March 2011 will be
submitted to the Central Government in accordance with Cost Audit
Report Rules, 2001.
INTERNAL CONTROL SYSTEMS & THEIR ADEQUACY
Company already holds Certification under ISO 14001 : 2004 and ISO 9001
: 2008 to ensure confirmation of its process procedures to strict
quality standard. Company is also strengthening its review control
system by appointing External Consultants as Auditors. The Audit
Committee also closely reviews with the internal and external auditors
on the adequacy of internal control systems.
CAUTIONARY STATEMENT
The statement in this Directors' Report & Management Discussion and
Analysis contain forward looking statements regarding Company's
projections & expectations and the actual results could differ
materially from those expressed on account of various factors like raw
material prices, change in demand, government regulation etc., and the
readers are cautioned against placing undue reliance on the same.
STATUTORY INFORMATION
During the year there were no employees in receipt of remuneration
covered by Section 217(2A) of the Companies Act, 1956, read with the
Companies (Particulars of Employees) Rules, 1975, as amended vide GSR
289 (E) dated March 31, 2011 [Companies (Particulars of Employees)
Amendments Rules, 2011].
Information pursuant to sub-section 1 (e) of Section 217 of the
Companies Act, 1956, read with the Companies (Disclosure of Particulars
in the Report of the Board of Directors) Rules, 1988 is given in
Annexure to this Report.
As per Section 212 of the Companies Act, 1956, the Company is required
to attach the Directors' Report, Balance Sheet, and Profit and Loss
account of subsidiaries. The Central Government has granted general
exemption from complying with Section 212 of the Companies Act, 1956 to
all companies vide Notification No.5/12/2007-CL-III dated February 8,
2011. Accordingly, your Company has presented in this Report, the
consolidated financial statements of the holding company and all its
subsidiaries, duly audited by the Statutory Auditors. The Company has
also disclosed in the Consolidated Balance Sheet the information
required to be provided as per the aforesaid Notification dated
February 8, 2011. The Company will make available the audited annual
accounts and related information of its subsidiaries, upon request by
any of its shareholders. The annual accounts of the subsidiary
companies will also be kept for inspection by any member at the
Registered Offices of the Company and its subsidiary companies.
Our humble prayers to Sri Venkateswaraswamy Vari of Then Thirumalai for
the continued prosperity of the Company.
On behalf of the Board
KG Baalakrishnan
Executive Chairman
Coimbatore
27.05.2011
Mar 31, 2010
We have pleasure in presenting the Eighteenth Annual Report of the
Company together with the Audited Statement of Accounts for the year
ended 31st March 2010.
FINANCIAL RESULTS (Rs. in lakhs)
For the year ended For the year ended
PARTICULARS 31st March 2010 31st March 2009
Gross Profit 3452 1872
Less: Interest 1965 1978
Loss due to exchange
variation 101 277
Profit prior to
Depreciation and write off 1386 -383
Less:Depreciation 1290 1306
Add : Prior Year
Income/(Expenditure) (Net) 2 20
Net Profit / (Loss) 94 -1709
Current, Deferred, FBT
Tax & earlier year tax 77 -493
Net Profit / (Loss) for
the year 17 -1216
Balance Brought forward -315 901
Balance carried forward -298 -315
PERFORMANCE OF THE COMPANY
During the year ended 31.03.2010, the Company achieved an overall
production of 229 lakh meters of fabrics against the previous years
production of 215 lakh meters. The sales for the year ended 31.03.2010
was Rs.25851 lakhs as against sales of Rs.22054 lakhs during the
previous year, representing an increase of 17 %.
The company has been able to stem the losses of earlier years and
achieve positive results for the year.
INDUSTRY STRUCTURE & DEVELOPMENT
The Indian denim industry occupies an important position in the global
denim fabric and garment manufacturing. After China, it has the
strongest denim manufacturing base in Asia.
During 2009-10, the Indian denim industry witnessed a surge in demand,
particularly, in the domestic market. The exports were partially
affected by rise in the value of the rupee. In the processed fabric
sector, especially the bed linen demand for US markets showed signs of
improvement only towards the end of the year.
In the apparel segment, the preference by overseas customers for
packaged ready made garments continued to increase.
OPPORTUNITIES AND THREATS
The domestic demand for denim is growing and the company is focussing
on new product developments in this segment. The company is also
concentrating on increase sale of its home textiles. Apparel exports is
expected to grow significantly in the next year. The increase in
cotton and yarn prices in the beginning of 2010-11, the higher interest
rates and the volatality in exchange rates are the serious concerns
facing the company. The company is taking steps to mitigate the effects
of cost increases by suitable product mix changes and also by actively
managing the exchange risk.
SEGMENT WISE PERFORMANCE
The segment wise results are presented in item 2.19 of the Notes on
Accounts. Both fabric and Apparel division have done well during the
year in terms of volume and profitability.
Sales of denim fabrics in domestic market increased in this year. The
exports were maintained at previous year levels. The sales of processed
fabrics, including home textiles were also maintained. However, the
order position for home textiles improved in the last quarter of the
year. The company also augmented its income by doing job work for
processed fabrics for outsiders.
In the apparel segments, the sales nearly doubled with improved
profitability aided by the customer preference for packaged garments.
The higher sales volume and lower cotton and yarn costs helped in
posting positive results for the year, 2009-10.
FINANCE
Your Directors acknowledge with gratitude, the valuable assistance and
support extended by our Bankers for term loans and working capital ie.,
Indian Bank, Bank of India, Allahabad Bank, State Bank of India, State
Bank of Hyderabad, State Bank of Indore and Indian Overseas Bank.
PERSONNEL
The Directors wish to place on record their appreciation for the
co-operation extended by all sections of the employees.
DIRECTORS RESPONSIBILITY STATEMENT
Your Directors confirm that:
a) In the preparation of the annual accounts, the applicable accounting
standards had been followed.
b) The Directors had 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 at the end of the financial year and of the Profit or Loss
of the Company for that period.
c) The Directors had taken proper and sufficient care for the
maintenance of adequate accounting records in accordance with the
provisions of this Act for safeguarding the assets of the Company and
for preventing and detecting fraud and irregularities.
d) The annual accounts have been prepared on a going concern basis.
CONSOLIDATED ACCOUNTS
In accordance with the requirements of Accounting Standard (AS-21)
prescribed by The Institute of Chartered Accountants of India, the
Consolidated Accounts of the Company and its subsidiaries are annexed
to this report.
SUBSIDIARIES
The Annual report of the Subsidiaries of the Company Viz., Trigger
Apparels Limited and KG Denim (USA) Inc., is annexed to this report.
Trigger Apparels Limited is expected to consolidate its market position
with improved sales and profitability during the next year. No activity
has taken place at KG Denim (USA) Inc. during the year.
CEO/CFO CERTIFICATION
The Managing Directors and Director & Company Secretary of the Company
have submitted a certificate to the Board as required under Clause 49
of the Listing Agreement for the year ended 31st March, 2010.
CORPORATE GOVERNANCE
A separate section on Corporate Governance and a Certificate from the
Auditors of the Company regarding compliance of conditions of Corporate
Governance as stipulated under Clause 49 of the Listing Agreement with
the Stock Exchange, forms part of the Annual Report.
LISTING
The Companys shares are listed in the Bombay Stock Exchange Limited,
Mumbai.
CAPITAL EXPENDITURE
The Company incurred a capital expenditure of Rs.132.63 lakhs during
the year.
DIRECTORS
Shri Surinder Chhibber, Smt T Anandhi and Shri G P Muniappan retire by
rotation and being eligible offer themselves for reappointment at the
ensuing Annual General Meeting.
AUDITORS
The present Auditors M/s Gopalaiyer and Subramanian retire at the
ensuing Annual General Meeting and are eligible for re-appointment.
Cost Audit report for the financial year ending 31st March 2010 will be
submitted to the Central Government in accordance with Cost Audit
Report Rules, 2001.
INTERNAL CONTROL SYSTEMS & THEIR ADEQUACY
Company already holds Certification under ISO 9002 and ISO 14001 to
ensure confirmation of its process procedures to strict quality
standard. Company is also strengthening its review control system by
appointing External Consultants as Auditors.
The Audit Committee also closely reviews with the internal and external
auditors on the adequacy of internal control systems.
CAUTIONARY STATEMENT
The statement in this Directors Report & Management Discussion and
Analysis contain forward looking statements regarding Companys
projections & expectations and the actual results could differ
materially from those expressed on account various factors like raw
material prices, change in demand, government regulation etc., and the
readers are cautioned against placing undue reliance on the same.
INFORMATION PURSUANT TO SECTION 217 OF THE COMPANIES ACT, 1956.
The information required as per Section 217 (1) (e) of the Companies
Act, 1956 read with the Companies (Disclosure of Particulars in the
Report of the Board of Directors) Rules, 1988 is enclosed. The
particulars of employees covered under Section 217 (2A) of the
Companies Act, 1956 during the period under review is enclosed.
Our humble prayers to Sri Venkateswaraswamy Vari of Then Thirumalai for
the continued prosperity of the Company.
On behalf of the Board
Coimbatore KG Baalakrishnan
26.05.2010 Executive Chairman
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