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Directors Report of Kitex Garments Ltd.

Mar 31, 2017

The Directors are pleased to present the Twenty fifth Annual Report of the Company together with the Audited Statement of Accounts for the financial year ended March 31, 2017.

1. Financial Highlights

Highlights of financial Results for the year are as under:

(Rs. in Lakhs)

Particulars

Standalone

Consolidated

For the year ended March 31, 2017

For the year ended March 31, 2016

For the year ended March 31, 2017

For the year ended March 31, 2016

Sales and other Income

Revenue from operations

54,590.13

54,581.67

54,590.13

54,581.67

Other Income

199.77

1,981.66

199.77

1,981.66

Total Revenue

54,789.90

56,563.33

54,789.90

56,563.33

Profit Before Interest and Depreciation

17,233.07

20,608.48

17,233.07

20,608.48

Less: Finance Charges

926.68

1,375.67

926.68

1,375.67

Depreciation

2,036.28

2,127.31

2,036.28

2,127.31

Net Profit Before Tax

14,270.11

17,105.50

14,270.11

17,105.50

Less: Provision for Tax

5016.03

5,896.00

5016.03

5,896.00

Net Profit After Tax

9254.08

11,209.50

9254.08

11,209.50

Share Of Profit/ (Loss) Of Associates

-

-

(875.95)

(240.04)

Net Profit after share of profit of Associates

-

-

8,378.13

10,969.46

Balance of Profit brought forward

31,377.39

23,025.44

31,377.35

23,025.44

Balance available for appropriation

40,631.47

34,234.94

39,755.47

33,994.90

Dividend on Equity Shares

(Interim and Final Proposed)

712.50

712.50

712.50

712.50

Tax on proposed Dividend

145.05

145.05

145.05

145.05

Transfer to General Reserve

16,000.00

2,000.00

16,000.00

2,000.00

Surplus carried to Balance Sheet

23,773.92

31,377.39

22,897.93

31,177.35

2. Operations of the Company

Your Company is into 100% exports of cotton garments especially Infantswear. The Company exports its products to United States and European Markets.

a) Performance review

During the year under review, your Company has recorded its revenue from operations as Rs.54,590.13 lakhs which is at par with Rs.54,581.67 in the previous year. Profit before taxation is Rs.14,270.11 lakhs, which is 26% margin on its revenue from operations has declined at 16.58% against last year’s figure of Rs.17,105.50. Net profit after tax is Rs.9254.08 lakhs. The Basic Earnings per Equity Share (of face value of Rs.1/-) is Rs.19.48 compared to Rs.23.60 in the previous year.

Kitex USA LLC being Associate of your Company has posted considerably good initial turnover of around Rs.80 lakhs ($ 1,28,818.41) and Gross profit of around Rs.5.5 Lakhs ($ 8,815.41) for the year ended March 31, 2017. Your Company has consigned its product worth of Rs.20.01 Crores to its Associate during the previous year. It has opened World Class Design Studio in New Jersey in the month of April 2017. Major US Clients are investing huge money on designing. The newly inaugurated Studio gives designing services based on their unique requirements at free of cost. This value addition enables your company’s clients in cost saving to its buyer, thereby creating good relationship with their client. Further we have started direct business with WALMART & TARGET.

On a consolidated basis, there have been no significant changes in financial figures during the year under review except in case of appropriation of Rs. (875.95) Lakhs as against Rs. (240.04) lakhs in last year. Your Company has made investment in Kitex USA LLC of $ 10,50,000 in the previous year.

During the year under review, your company has received order confirmations from major Infant Garment buyers viz., Buy-Buy Baby, Ross Stores, Amazone, Target, Walmart who can contribute major part of your Company’s turnover in coming years.

No material changes and commitments have occurred after the close of the year till the date of this Report, which affect the financial position of the Company.

b) Dividend and Dividend Distribution Policy

As you are aware your Directors had recommended a 1st Interim dividend of Rs.0.75 per equity share of Rs.1/- each on October 31, 2016. The company has earned a net profit of Rs.9,254.07 lakhs for the year ended March 31, 2017 and accordingly your Directors have recommended a final dividend of Rs.0.75 per equity share of face value Rs.1/making it to a total of Rs.1.50 per equity share of Rs.1/- each which is 150%. The proposed final dividend is subject to the approval of the members at the ensuing Annual General Meeting.

The total dividend appropriation (excluding dividend tax) for the current year is Rs.712.50 lacs as against 712.50 lacs in the previous year. The Company has paid dividend distribution tax of Rs.145.05 lacs for the current year.

The Board at its meeting held on April 28, 2017 has adopted the dividend distribution policy for determining circumstances and parameters under which dividend pay-out could be made on periodical basis. Policy is available on the Company’s website www. kitexgarments.com and also annexed herewith as “Annexure A”.

c) Share Capital

During the year under review, there was no change in the Company’s issued, subscribed and paid-up equity share capital. On March 31, 2017, it stood at Rs.475 lacs divided into 4,75,00,000 equity of Rs.1 each.

With a view to distribute the benefit among the members in form of equity shares out free reserve of the Company without receiving any consideration, its Board of Directors at its meeting held on April 28, 2017 has recommended issue of equity share in ratio of 2:5 i.e. 2 shares for every 5 shares held by the shareholders, subject to their approval. The issue of bonus shares, by way of capitalizing reserves, is authorized by the Company’s Articles of Association.

d) Transfer to Reserve

Your Company has earned a total profit after tax of Rs.9,254.08 lakhs out of which a sum of Rs.16,000 lakhs has been transferred to General Reserve for the purpose of future expansions and acquisitions.

e) Transfer of amount to Investors Education and Protection Fund

The Company has transferred unclaimed dividend of Rs.6,06,754 for the financial year 2008-09 to Investors Education Protection Fund (IEPF) on 10.11.2016.

3. Capital Expenditure

As on 31st March, 2017, the gross Fixed Assets stood at Rs.27,153.84 lakhs and net fixed assets Rs.16,095.17 lakhs. Additions during the year amount to Rs.1,088.58 lakhs.

Your Directors have approved an expenditure of a total of Rs.7,110 lakhs for upgrading technology, modernization and infrastructural developments during the year under review.

4. Future Prospects

The Indian Textile Industry represents a rich and diverse spectrum of activities with the hand-woven sector on one end and capital intensive mill/ power loom on the other. The Spectrum includes activities in the decentralized powerlooms, hosiery and knitting sectors and the handicrafts segments to name a few. The textile industry plays a pivotal role through its contribution to industrial output and employment generation and export earnings of country. India is major exporting country as far as textile sector is concerned and not dependent on import. Majority of import takes place to re-export or special requirement. As per UN comtrade database, India is ranked as the 2nd largest textile and clothing exporter globally after china with US$ 38.6 billion worth of exports.

Your Directors approved phase I expansion of Rs.241 Crores of Capital Investment within 3 years for Automation, New Plant & Machinery and other amenities. This investment would bring an increase in the Company’s turnover by 90% - 100% being more than 1000 Crores. It has also approved investment of surplus funds upto 100 Crores p.a. in liquid funds, debt funds and other instruments.

The international buyers show preference to your company’s products due to its adherence to international quality standards, timely delivery and introduction of new designs based on contemporary market trends and hence your Directors are confident of achieving better working results in the coming year.

5. Awards and Recognition

The Company has received FE CFO Award (Financial Express - Capital Financial Operation) in the Medium Level Category for its robust performance during the last year.

6. Change in the Nature of Business

During the year under review, there was no change in the nature of the business.

7. Listing

The Equity Shares of the Company continue to remain listed on BSE Limited and National Stock Exchange of India Limited.

8. Fixed Deposit

The Company has not accepted any deposit within the meaning of Chapter V of the Companies Act, 2013 and the Rules framed there under.

9. Particulars of Loans, Guarantees or Investments:

Particulars of investments made during the period under review, are provided in the standalone financial statement (Please refer to Note. 13 to the standalone financial statement). There were no Loan given, guarantees given and securities provided by the Company during the reporting period.

10. Extract of Annual Return

Details forming part of the extract of the Annual Return in form MGT 9 is annexed herewith as “Annexure B”

11. Directors and Key Managerial Personnel

Mr. K. L. V. Narayanan retires in the forthcoming Annual General Meeting and being eligible offers himself for reappointment. The details of the aforesaid Directors, his expertise in various functional areas as required to be disclosed under Regulation 36 (3) of the Listing Regulations, form part of the Notice of the ensuing Annual General Meeting.

During the year under review, Mr. Sabu M Jacob being the Chairman & Managing Director was appointed by entrusting additional duty of Chief Financial officer w.e.f. 20.07.2016.

During the year under review, 5 (Five) meetings of the Board of Directors, Board Committees were held, details of which are set out in the Corporate Governance Report which forms a part of this Report.

11.1. Declaration by Independent Directors

Pursuant to sub section (6) of Section 149 of the Companies Act, 2013 and Reg 16(1) (b) of the SEBI (Listing Obligations and Disclosure Requirement) Regulations, 2015, the Independent Directors of the Company viz. Mr. Benni Joseph, Mr. E. M. Poulose, Mr. C. P. Philipose and Mr. K. L. V. Narayan have given declaration to the Company that they qualify the criteria of independence as required under the Act and the regulations.

11.2. Annual Board Evaluation and Familiarisation programme

The Board has carried out an annual evaluation of its own performance, the directors and also committees of the Board based on the guidelines formulated by the Nomination & Remuneration Committee. Board composition, quality and timely flow of information, frequency of meetings, and level of participation in discussions were some of the parameters considered during the evaluation process.

A note on the familiarizing programme adopted by the Company for the orientation and training of the Directors and the Board evaluation process undertaken in compliance with the provisions of the Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 is provided in the Corporate Governance Report which forms part of this Report.

Further, the Independent Directors of the Company met once during the year on January 30, 2017 to review the performance of the Non-executive directors, Chairman of the Company and performance of the Board as a whole. The manner in which the evaluation has been carried out has been set out in the Corporate Governance Report which forms an integral part of this Report. The details of the programme for familiarisation of the Independent Directors of your Company are available on the Company’s website, www. kitexgarments.com.

11.3. Policy on Nomination and Remuneration and Performance evaluation of Directors, KMP and Senior Management Personnel

The Company believes that a diverse and inclusive culture is integral to its success. A diverse Board, among others, will enhance the quality if decisions by utilizing different skills, qualifications, professional experience and knowledge of the Board members necessary for achieving sustainable and balanced development. Accordingly, Board based on the recommendation of the Nomination and Remuneration Committee has formulated a policy on remuneration of Directors, Key Managerial Personnel and Senior Management of the Company. The policy covers the appointment, including criteria for determining qualification, positive attributes, independence and remuneration of its Directors, Key Managerial Personnel and Senior Management Personnel. The Nomination and Remuneration Policy is annexed as Annexure - C to this report.

Nomination and Remuneration Committee has also carried out the evaluation of every director’s performance.

12. Board Committees

Detailed composition of the mandatory Board committees namely Audit Committee, Nomination and Remuneration Committee, CSR Committee, Stakeholders Relationship Committee, number of meetings held during the year under review and other related details are set out in the Corporate Governance Report which forms a part of this Report.

There have been no situations where the Board has not accepted any recommendation of the Audit Committee.

13. Directors’ Responsibility Statement

Pursuant to the requirement under section 134 (5) of the Act, the Board of Directors of the Company hereby state and confirm that;

a) in the preparation of the annual accounts for the financial year ended March 31, 2017, the applicable accounting standards had been followed and there were no material departures;

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 as at March 31, 2017 and of the profit 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 other irregularities;

d) the directors had prepared the annual accounts on a going concern basis;

e) the directors had laid down internal financial controls to be followed by the company and that such internal financial controls are adequate and were operating effectively.

f) the directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

14. Employees’ Stock Option Scheme

The Company has not granted any Employee Stock Option within the meaning of section 62 (1) (b) of the Companies Act, 2013 read with its Rules framed there under and respective SEBI regulations.

15. Subsidiary & Associate Company

As on March 31, 2017, the Company has a Associate Company, Kitex USA LLC, accounts of which shall be made available to the shareholders of the Company seeking such information at any point of time. The Consolidated Financial Statements of the Company along with its Associate prepared for the year 2016-17 in accordance with relevant Accounting Standard issued by Institute of Chartered Accountants of India forms part of this Annual Report. A Report on the highlights of performance of subsidiaries, associates and joint venture companies and their contribution to the overall performance of the company during the period under report is provided as Annexure-D.

The Company does not have any subsidiary as on reporting date. During the year under review, companies does not have become or ceased to be Company’s subsidiaries, joint ventures or associate companies.

16. Corporate Social Responsibility

The Company undertakes “Corporate Social Responsibility” initiatives directly to the public of Kizhakkambalam Panchayat in improving the quality of life. During the year 2016-17, the Company has undertaken many initiatives through a policy framework for expanding some of the present initiatives and undertaking newer CSR initiatives in the year to come.

The CSR Policy may be accessed on the Company’s website at the link: http://www. kitexgarments.com

Our vision on Corporate Social Responsibility, where we dream to make Kizhakkambalam Panchayat the best in the state among the total 978 Panchayaths.

The Annual Report on CSR Activities in prescribed format is enclosed with this as Annexure - E.

Detailed composition of the CSR Committee, number of meetings held during the year under review and other related details are set out in the Corporate Governance Report which forms a part of this Report.

17. Management’s Discussion and Analysis Report

The Management’s Discussion and Analysis Report for the year under review, as stipulated under Regulation 34(2)(e) of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, forms an integral part of this Report.

18. Corporate Governance

Your Board confirms their continued commitment to best practices of Corporate Governance. Corporate Governance principles form an integral part of the core values of your Company.

In terms of Regulation 34(3) of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, a separate report on Corporate Governance, along with a certificate from the Auditors’ on its compliance, forms an integral part of this Report.

19. Business Responsibility Report

As per Regulation 34(2)(f) of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, a separate section on Business Responsibility Report, describing the initiatives taken by your Company from environmental, social and governance perspective, forms an integral part of this Report “Annexure - F”

20. Business Risk Management

Your Company recognizes that Risk as an integral part of business and is committed to minimizing the risk in a pro-active and efficient manner. Your Company has a comprehensive risk management policy/framework which is reviewed by the Risk Management Committee. More details on risk management are covered in the Management Discussion and Analysis forming part of this Annual Report.

The Risk Management committee consists of Mr. Sabu M. Jacob as the Chairman and Mr. Benni Joseph and Mr. E. M. Paulose as the members. The Committee has been entrusted with the responsibility to assist the Board in (a) Reviewing and approving the Company’s enterprise wide risk management framework; and (b) Monitoring the risks which the Company faces such as Commodity Price Risks, Uncertain Global economic environment risk, Interest rate risk, Foreign Exchange Risk, Human Resource Risk, Competition Risk, Compliance Risk, Industrial Safety - Employee Health Risk and other risks have been identified and that procedure has been laid down to inform members of the Board of Directors about risk management plan for the minimization of risk.

Your Company’s Risk Management Committee periodically monitors, assesses the risk and uncertainties in the internal and external environment, along with the cost of mitigating risk and incorporates Risk Mitigation Plans in its strategy, business and operation plans. The Risk Management Policy has been adopted by the Committee.

A detailed report on Risk Management is included in Management Discussion and Analysis which forms part of this Report.

21. Internal Financial Control

Details in respect of adequacy of internal financial controls with reference to the Financial Statements are stated in Management Discussion and Analysis which forms part of this Report.

22. Conservation of Energy, Technology Absorption and Foreign Exchange earnings and outgo

The particulars relating to conservation of energy, technology absorption, foreign exchange earnings and outgo, as required to be disclosed under the Act, are provided in Annexure - G to this Report.

23. Auditors:

23.1. Statutory Auditors

Messrs Varma & Varma, Chartered Accountants (FRN 004532S) statutory auditors of the Company retires at this ensuing Annual General Meeting and are eligible for re-appointment. The Auditors if appointed shall hold office from the conclusion of this Annual General Meeting till the conclusion of next Annual General Meeting. Consent of the Auditors and certificate u/s 139 of the Act have been obtained from the Auditors to the effect that their re-appointment, if made, shall be in accordance with the applicable provisions of the Act and the Rules issued thereunder. As required under the SEBI (LODR), Regulations, 2015 M/s. Varma & Varma, Chartered Accountants have confirmed that they hold a valid certificate issued by the Peer Review Board of ICAI.

There is no qualification, disclaimer, reservation or adverse remark made by the Statutory Auditors in Auditors’ Report. Your Board of Directors recommends their appointment as Statutory Independent Auditors for the financial year 2017-18.

23.2. Secretarial Auditors

Pursuant to the provisions of Section 204 of the Act and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Board of the Directors of the Company had appointed M/s. SVJS & Associates, Company Secretaries to undertake the Secretarial Audit of the Company for the year ended March 31, 2017. The Secretarial Audit Report is annexed as Annexure - H.

23.3. Internal Auditor

The Board had appointed Messrs. K Venkitachalam Aiyer & Co, Chartered Accountants as Internal Auditors for the financial year 2016-17.

24. Related Party Transactions

During the financial year under review, all transactions entered into by the Company with the Related Parties were on an arm’s length basis and in the ordinary course of business. Prior approval of the Audit Committee of your Company has been obtained for all Related Party Transactions.

None of the Directors has any pecuniary relationships or transactions except to the extent of remuneration drawn by the directors.

The Particulars of contracts and arrangement with Related Parties of your Company referred to in Section 188(1) of the Companies Act, 2013 in prescribed form AoC-2 is appended as Annexure - I to the Director’s Report.

The Policy on Related Party Transactions, as approved by the Board, is available on your Company’s website, http://www.kitexgarments. com

25. Significant and Material Order

There were no significant and material orders passed by the Regulators or Courts or Tribunals impacting the going concern status and company’s operations in future for the year under review.

26. Whistle Blower Policy

Pursuant to Section 177 of the Companies Act, 2013 the rules made thereunder and the Regulation 22 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Company has established a Vigil Mechanism for directors and employees to report genuine concerns about any instance of any irregularity, unethical practice and/or misconduct. The Policy provides for framework and process whereby concerns can be raised by its employees against any kind of discrimination, harassment, victimization or any other unfair practice being adopted against them. Adequate safeguards are provided against victimization to those who avail of the mechanism, and access to the Chairman of the Audit Committee in exceptional cases is provided to them. The Details of the Vigil policy is explained in the Corporate Governance Report.

27. Disclosure as per Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013

Considering gender equality, the Company has zero tolerance for sexual harassment at workplace. The Company has an Anti Sexual Harassment Policy in line with the requirements of The Sexual Harassment of Women at the Workplace (Prevention, Prohibition and Redressal) Act, 2013. An Internal Complaints Committee (ICC) has been set up to redress complaints received regarding sexual harassment. All employees (permanent, contractual, temporary, trainees) are covered under this policy.

The following is a summary of sexual harassment complaints received and disposed off during the reporting period:

- No. of complaints received: Nil

- No. of complaints disposed off: Nil

The Company has filed Annual Report for the year ended December 31, 2016 under the Act with District officer.

28. Particulars of Employees

The Disclosure as required under Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is annexed as Annexure - J and forms a part of this report.

Information relating to remuneration of Directors under Section 197 read with Rule 5(2) of Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 has been given Annexure K to the Director’s Report

29. General

Your Directors state that no disclosure or reporting is required in respect of the following items as there were no transactions on these items during the year under review:

- Neither the Managing Director nor the Whole-time Directors of the Company receive any remuneration or commission from any of its subsidiaries.

- there were no frauds reported by the auditors under provisions of the Companies Act, 2013

- Issue of equity shares with differential rights as to dividend, voting or otherwise;

- There were no revisions in the financial statements

30. Acknowledgements

Your Directors thank various Central and State Government Departments, Organizations and Agencies for the continued help and cooperation extended by them. The Directors also gratefully acknowledge all stakeholders of the Company viz. customers, members, dealers, vendors, banks and other business partners for the excellent support received from them during the year. The Directors place on record their sincere appreciation to all employees of the Company for their unstinted commitment and continued contribution to the Company

For and on behalf of the Board of Directors

Kitex Garments Limited

Kizhakkambalam

April 28, 2017 Sabu M. Jacob

Chairman & Managing Director

(DIN: 00046016)


Mar 31, 2015

TO THE MEMBERS OF KITEX GARMENTS LIMITED

The Directors have pleasure to present their 23rd Annual Report and the audited Annual Accounts for the year ended 31st March 2015.

Financial Results

Year ended 31st Year ended 31st March, 2015 March, 2014 (Rs in lakhs) (Rs in lakhs)

Total Income 52451.93 45555.36

Profit before Depreciation 16299.69 9786.53

Profit before Tax 14166.75 8818.53

Profit After Tax 9851.75 5736.88

Transfer to General Reserve 1000.00 600.00

Performance Review

Your company achieved an all time high performance both in turnover and its profits. The Gross revenues touched Rs. 524.52 crores which is 15% more than last year and the Profit before depreciation and taxes recorded was Rs.163.00 Crores which is also up by 67% as compared to previous year. Your company had coupled with high level of modernization, concentrated efforts of both Management and 4000 dedicated employees, the whole hearted support of Banks, suppliers and customers attained these levels of performance. The earnings per equity share (of face value Re. 1) for the year increased to Rs. 20.74 from Rs. 12.08 for the previous year.

Dividend

Your directors recommend a dividend of 125% (Rs.1.25 per

Share of face value Re1/-) for the year, (as against 100% for the previous year ended 31st March, 2014), subject to the approval of the shareholders at the ensuing Annual General Meeting. An amount of Rs.10.00 crores has been transferred to General Reserve as per the existing provisions of Companies Act 2013 and rules thereunder.

Capital Expenditure

As at 31st March 2015 the gross fixed assets stood at Rs.263.53 crores and net fixed assets Rs 188.23 crores. Additions during the year amounted to Rs.31.93 crores, which include addition to land and building for Rs 50.88 lakhs, plant & machinery and other assets amounting to Rs 31.65 crores.

Future Prospects

Despite stiff competition from other countries, international buyers show preference to your company''s products for its quality and timely delivery and hence your Directors are confident of achieving better working results in the coming years. The US market grew on an average of 3% of GDP and is expected to further grow. The predicted GDP is about 3.4% for the year 2015. The Consumer sector is showing more strength and hence business improvement is on the upswing with a reduction in Federal deficit gap.

Your company has set up a joint venture in USA by name Kitex USA LLC. The brand marketing will commence during the 1st quarter of this year and company expects its first consignment to move into USA by the 3rd Quarter of financial year 2015-16

Your company plans to take the performance to the next level by modernization, installing high tech and time saving machinery and supportive systems, improving quality of work by employee training, and by Research and Development in major areas pertaining to the industry the company is in business. Your Company aspires to become FIRST in the World in INFANTWEAR APPAREL segment by 2018.

Expansion Project:

The expansion plan by further investment in technology upgradation and modern machinery for increasing the capacity of the existing garmenting Unit are being implemented and is expected to be completed by December, 2015.

Awards and Recognitions

Your Company has received an "Award of Excellance" from Kerala State Industrial Development Corporation Limited for the overall performance of the company for 2013-14 and its contribution to the state economy.

Your Company has been upgraded to A plus by the Credit Rating Agency ICRA during the year under review.

Directors'' Responsibility Statement

The directors report that

i) In the preparation of the annual accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures.

ii) 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 at the end of the financial year and of the profit and loss account of the company for that period.

iii) 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) The Directors have prepared the annual accounts on a going concern basis.

v) the Directors, had laid down internal financial controls to be followed by the company and that such internal financial controls are adequate and were operating effectively.

vi) the directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

Listing on Stock Exchanges

Your Company''s shares are listed on the National Stock Exchange and Bombay stock exchange. During the year under review, your company''s share price had touched Rs. 583.90 per equity share which clearly show that the markets have recognized its performance. The Share price quoted at BSE at the closing on 31.03.2015 which was Rs. 534 against a closing on 31.03.2014 which was Rs. 89 an increase of six folds. The strength of shareholders have also considerably increased from 6057 on 31.03.2014 to 16141 on 31.03.2015 which clearly shows that the investors have built a greater confidence in the company and its performance.

Corporate Governance

As required by Clause 49 of the Listing Agreement with the Stock Exchanges, the Corporate Governance Report, Management Discussion and Analysis, and the Auditor''s Certificate regarding compliance of conditions of Corporate Governance, form part of the Annual Report.

Secretarial Audit

Secretarial Audit Report as per Section 204 of Companies Act 2013 is placed as annexure to this report. No adverse comments have been made in the said report by the Practising Company Secretary.

Cost Audit Compliance

Pursuant to Sec. 209 (1)(d) of the Companies Act, 1956, Cost Audit Report for the financial year ended 31/03/2014 was submitted to the Central Government on 30/09/2014

Extracts of Annual Return and other disclosures under Companies (appointment & Remuneration) Rules, 2014

The Extract of Annual Return in form No. MGT-9 as per Section 134 (3) (a) of the Companies Act, 2013 read with Rule 8 of Companies Act (Accounts) Rules 2014 and Rule 12 of Companies (Management & Administration) Rules, 2014 duly certified by the Practising Company Secretary is annexed hereto and forms part of this report.

Further the Disclosure in the Board Report under Rule 5 of Companies (Appointment & Remuneration) Rules, 2014 is also annexed hereto and forms part of this report.

Declaration on Independent Directors

The Board of Directors declare that the Independent Directors Mr.Benni Joseph and Prof. E.M Paulose are :

(a) in the opinion of the Board, are persons of integrity and possesses relevant expertise and experience;

(b) (i) who were or were not a promoter of the company or its holding, subsidiary or associate company

(ii) who are not related to promoters or directors in the company, its holding, subsidiary or associate Company;

(c) Who have or had no pecuniary relationship with the company, its holding, subsidiary or associate company or their promoters or directors, during the two immediately preceding financial years or during the current financial year;

(d) None of whose relatives has or had pecuniary relationship or transaction with the company, its holding, subsidiary or associate company or their promoters, or directors, amounting to two percent or more of its gross turnover of total income or fifty lakh rupees or such higher amount as may be prescribed, whichever is lower, during the two immediately preceding financial years or during the current financial year;

(e) Who, either himself nor any of his relatives -

(i) holds or has held the position of a key managerial personnel or is or has been employee of the company or its holding, subsidiary or associate company in any of the three financial year immediately preceding the financial year in which he is proposed to be appointed;

(ii) is or has been an employee or propriety or a partner, in any of the three financial years immediately preceding the financial year in which he is proposed to be appointed, of -

(A) a firm of auditors or company secretaries in practice or cost auditors or the company or its holding, subsidiary or associate company; or

(B) any legal or a consulting firm that has or had any transaction with the company, its holding, subsidiary or associate company amounting to ten percent or more of the gross turnover of such firm;

(iii) holds together with his relative two per cent, or more of the total voting power of the company; or

(iv) is a Chief Executive or director, by whatever name called, of any nonprofit organization that receives twenty-five percent or more of its receipts from the company, any of its promoters, directors or its holding, subsidiary or associate company or that holds two per cent or more of the total voting power of the company; or

(f) who possesses such other qualification as may be prescribed.

Particulars of Loans, guarantees or investments

Your company has as a joint venture on 50:50 basis proposes to invest USD 1,00,000 in Kitex USA LLC a limited liability company Incorporated in Delaware, USA. As on 31.03.2015 your company has invested Rs. Nil to this effect.

Your company has not directly or indirectly

a) given any loan to any person or other body corporate other than usual advances envisaged in a contract of supply of materials if any,

b) given any guarantee or provide security in connection with a loan to any other body corporate or person and

c) acquired by way of subscription purchase or otherwise, the securities of any other body corporate exceeding sixty percent, of its paid-up share capital, free reserve and securities premium account or one hundred percent of its free reserves and securities premium account whichever is more.

Your company has not accepted deposits from public as envisaged under Sections 73 to 76 of Companies Act, 2013 read with Companies (acceptance of Deposit)Rules, 2014.

Related Party Transactions

A detailed report on contracts and arrangements made during the year 2014-15, being arm''s length transactions have been reported and annexed hereto in this report.

Conservation of Energy, technology absorption, foreign exchange earnings and outgo

Information as per Companies(Disclosure of particulars in the Report of Board of Directors) Rules, 1988 relating to conservation of energy, technology absorption, foreign exchange earnings and outgo are given in Annexure forming part of this report.

Risk Management Policy implementation

In today''s economic environment, Risk Management is a very important part of business. The main aim of risk management is to identify, monitor and take precautionary measures in respect of the events that may pose risks for the business. Your Company''s risk management is embedded in the business processes. Your company has identified the following risks:

Corporate Social Responsibility:

In Kitex Group, reaching out to underserved communities is part of our HERITAGE. We believe in the trusteeship concept. This entails transcending business interests and grappling with the "quality of life" challenges that underserved communities face and working towards making a meaningful difference to them.

Board of Directors, the Management and all of the employees subscribe to the philosophy of compassionate care. We believe and act on an ethos of generosity and compassion, characterised by a willingness to build a society that works for everyone. This is the cornerstone of our CSR policy.

Our Vision on Corporate Social Repsonsibility, where we dream to make Kizhakkambalam Panchayat the best in the State among the total 978 Panchayaths.

Company continued to undertake the following CSR work during the year under review on a voluntary basis over and above what has been required under CSR guidelines. The CSR activities were overseen by Chairman & Managing Director on a regular basis. The Annual report on CSR activities forming part of this Report is annexed hereto.

Your company''s investment in CSR activities for the year 2014- 15 was Rs.148.14 lakhs which is much above 2% the average profits of the Company for the last three years.

Disclosure under the Sexual Harassment of Women at Workplace( Prevention, Prohibition and Redressal) Act, 2013

The Company has been employing about 2600 women employees in various cadres within the factory premises. The Company has in place an Anti harassment policy in line with the requirements of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. Internal Complaint Committee are set up at shop floor level to redress complaints received regularly and are monitored by women line supervisors who directly report to the Chairman & Managing Director. All employees (permenant, contractual, temporary , trainees) are covered under the policy. There was no compliant received from any employee during the financial year 2014-15 and hence no complaint is outstanding as on 31.03.2015 for redressal.

Directors

In accordance with the Companies Act, 2013, Mr. K L V Narayanan retires by rotation and being eligible offers himself for reappointment. Mr.Benni Joseph and Prof. E.M.Paulose were appointed as Independent Directors as per provisions of Companies Act, 2013, though they were already Independent Directors under listing agreement. Your Directors recommend the appointment of these two Independent Directors for a period of Five years years w.e.from 12.01.2015. Mr.Sabu M Jacob, Chairman & Managing Director whose term ends on 15.08.2015 and your Directors recommend Mr.Sabu M Jacob''s re-appointment for a further period of five years upto 15.08.2020. In order to comply with the provisions of the Companies Act, 2013, Your company recommends appointment of Mrs. Sindhu Chandrasekhar as a Whole-time Director designated as Woman Director for a period of five years subject to retirement by rotation.

Auditors

M/S Kolath & Co., Chartered Accountants, Financial Auditors of the Company will retire at the forthcoming Annual General Meeting and are eligible for reappointment. In accordance with the Companies Act 2013, it is proposed to re-appoint them as Auditors for the financial year 2015-16 from the conclusion of this Annual General Meeting till the conclusion of the next Annual General Meeting, subject to the approval of shareholders.

Acknowledgement

Your Directors wish to place on record their appreciation for the whole hearted and sincere co-operation the Company has received from its banker, State Bank of India and various Government agencies. Your Directors also wish to thank all the employees for their co-operation.

For and on behalf of the Board of Directors

Place : Kizhakkambalam SABU M JACOB

Date : 04th April, 2015 Chairman & Managing Director


Mar 31, 2014

TO THE MEMBERS OF KITEX GARMENTS LIMITED

The Directors have pleasure to present their 22nd Annual Report and the audited Annual Accounts for the year ended 31st March 2014.

Financial Results

Year ended 31st March, 2014 Year ended 31st March, 2013 (Rs in lakhs) (Rs in lakhs)

Total Income 45555.36 32100.85

Profit before Depreciation 9786.53 5266.21

Profit before Tax 8818.53 4404.08

Profit After Tax 5736.88 2937.68

Transfer to General Reserve 600.00 300.00

Performance Review

Your company achieved an all time high performance both in turnover and its profits. The Gross revenues touched Rs. 455.55 crores which is 42% more than last year and the Profit before depreciation and taxes recorded was Rs.97.87 Crores which is also up by 86% as compared to previous year. Your company coupled high level of modernization with, concentrated efforts of both Management and employees, the whole hearted support of Banks, suppliers and customers to attain these levels of performance. The earnings per equity share (of face value Re. 1) for the year increased to Rs.12.08 from Rs.6.18 for the previous year.

Dividend

Your directors recommend a dividend of 100% (One Rupee per Share of face value Re1/-) for the year, (as against 80% for the previous year ended 31st March, 2013), subject to the approval of the shareholders at the ensuing Annual General Meeting. An amount of Rs.6.00 crores has been transferred to General Reserve as per the existing provisions of Companies Act 2013 read with Companies Act, 1956 and rules there under.

Capital Expenditure

As at 31st March 2014 the gross fixed assets stood at Rs.23739.64 lakhs and net fixed assets Rs.18120.61 lakhs. Additions during the year amounted to Rs.7363.99 lakhs, which include addition to land and building for Rs.248.98 lakhs, plant & machinery and other assets amounting to Rs.7115.01 lakhs.

Future Prospects

Despite stiff competition from other countries, international buyers show preference to your company''s product for its quality and timely delivery and hence your Directors are confident of achieving better working results in the coming years. The US market is expected to grow and the predicted GDP is about 2.5% for the year 2014. The Consumer sector is showing more strength and hence business improvement is on the upswing with a reduction in Federal deficit gap.

Major International buyers like KOHLS and THE CHILDRENS PLACE have shown interest in the company''s products by placing large orders. Your Company plans to introduce its own brand in USA and the initial efforts have already been commenced on a high note.

Your company plans to take the performance to the next level by modernization, installing high tech and time saving machinery and supportive systems, improving quality of work by employee training, and by Research and Development in major areas pertaining to the industry in which the company is in business. Your Company aspires to become FIRST in the World in INFANTWEAR APPAREL segment by 2015 Calendar year.

Expansion Project:

The expansion plan for increasing the capacity of the existing Fabric Processing Unit was implemented and completed by March,2014.

Awards and Recognitions

The company won the Best Manufacturer Supplier Award for the year 2011 and 2012 from Toys R Us, U.S.A. The Company was selected as No.1 from among 280 Competitors. The Company also won the Best Manufacturer supplier award from Gerber Children swear, USA for a second consecutive year

Your Company has been upgraded to A- by the Credit Rating Agency ICRA during the year under review.

Directors'' Responsibility Statement

The directors report that

i) In the preparation of the annual accounts, the applicable accounting standards have been followed.

ii) 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 at the end of the financial year and of the profit and loss account of the company for that period.

iii) 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) The Directors have prepared the annual accounts on a going concern basis.

v) The Directors, had laid down internal financial controls to be followed by the company and that such internal financial controls are adequate and were operating effectively.

vi) The directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

Listing on Stock Exchanges

Your Company''s shares are listed on the National Stock Exchange, Bombay Stock Exchange and Cochin Stock Exchanges. During the year under review, your company''s share price had touched a high of Rs.111/- per equity share which clearly show that the markets have recognized our performance.

Corporate Governance

As required by Clause 49 of the Listing Agreement with the Stock Exchanges, the Corporate Governance Report, Management Discussion and Analysis, and the Auditor''s Certificate regarding compliance of conditions of Corporate Governance, form part of this Annual Report.

Secretarial Compliance

Secretarial Compliance certificate as per Section 383A of Companies Act 1956 is placed as annexure to this report. No adverse comments have been made in the said report by the Practicing Company Secretary.

Cost Compliance

Pursuant to Sec. 209 (1)(d) of the Companies Act, 1956, Cost Audit Report for the financial year ended 31/03/2013 was submitted to the Central Government on 30/09/2013

Disclosure of Particulars

Information under Section 217(2A) of the Companies Act, 1956 read with the Companies(Particulars of Employees) Rules, 1975 and Information as per Companies (Disclosure of particulars in the Report of Board of Directors) Rules, 1988 relating to conservation of energy, technology absorption, foreign exchange earnings and outgo are given in Annexure forming part of this report.

Corporate Social Responsibility:

In Kitex Group, reaching out to underserved communities is part of our HERITAGE. We believe in the trusteeship concept. This entails transcending business interests and grappling with the "quality of life" challenges that underserved communities face, and working towards making a meaningful difference to them.

Board of Directors, the Management and all of the employees subscribe to the philosophy of compassionate care. We believe and act on an ethos of generosity and compassion, characterized by a willingness to build a society that works for everyone. This is the cornerstone of our CSR policy.

Our Vision on Corporate Social Responsibility is where we dream to make our Kizhakkambalam Panchayath the best in the State among the total 978 Panchayaths.

Company undertook the following CSR work during the year under review on a voluntary basis.

Health Care:

Company conducted Health-Medical Check-up Camps in which about 3800 families participated. Free Medicines were also distributed during the Health Camps. Further medical facilities were extended for 463 major/minor operations in some of the leading hospitals in the District. Medical Aid and support systems/equipments including wheel chairs were distributed to some of the patients. A detail presentation on the importance of upkeep of health was conducted by some of the leading Doctors in Kerala during these Camps.

Drinking Water

Company undertook a project for providing safe drinking water to some of the Backward colonies located in and near the factory. In this regard, SIX bore wells were provided in these colonies along with provision for water storage tanks for a total capacity of 1.02 lakhs liters. Under this programme another fourteen more bore wells are planned and the same is under implementation.

Housing

Company undertook the renovation work for forty houses in the economically backward colonies in Kizhakkambalam Panchayath during the year.

Agriculture

Participative Farming was undertaken on 300 acres with full co-operation of farmers in and near the Factory including multi-crop harvesting throughout the year. The benefits of the same was distributed to the participants.

Education

In the beginning of school calendar year 2013, your Company distributed 2278 bags to school children belonging to the economically backward areas of Ernakulam District, in an effort to extend primary education to financially backward students.

Food Security Programme

During the heavy rainy season in Kerala in 2013, your Company distributed 65 Tons of food materials which included rice, pulses and cereals to the needy in the flood affected areas. The benefit was extended to about 500 families on a regular basis.

Our Investment in CSR

Your company''s investment in CSR activities for the year 2013-14 was Rs.40.12 lakhs which is much above 2% the average profits of the Company for the last three years.

Directors

In accordance with the Companies Act, 2013, Mr. Benni Joseph retires by rotation and being eligible offers himself for reappointment.

Auditors

M/s Kolath & Co., Chartered Accountants, Independent Auditors of the Company will retire at the forthcoming Annual General Meeting and are eligible for reappointment. In accordance with the Companies Act 2013, it is proposed to reappoint them from the conclusion of this Annual General Meeting till the conclusion of the next Annual General Meeting, subject to the approval of shareholders.

Cost Auditors

It is proposed to reappoint M/s. Rajendran, Mani and Varier, Cost Accountants, Ravipuram, Cochin 682016 as cost Auditors for 2014-15 and in accordance with the Companies Act 2013 their remuneration is to be ratified at the forthcoming Annual General Meeting.

Acknowledgement

Your Directors wish to place on record their appreciation for the whole hearted and sincere co-operation the Company has received from its banker, State Bank of India and various Government agencies. Your Directors also wish to thank all the employees for their co-operation.

By Order of the Board of Directors

For KITEX GARMENTS LIMITED

Sd/-

Kizhakkambalam SABU M JACOB

3rd April, 2014 Chairman & Managing Director


Mar 31, 2013

The Directors have pleasure to present their 21st Annual Report and the audited Annual Accounts for the year ended 31st March 2013.

Financial Results

Year ended Year ended 31st March, 2013 31st March, 2012 (Rs in lakhs) (Rs in lakhs)

Total Income 32100.85 31834.69

Profit before Depreciation 5266.21 4697.46

Profit before Tax 4404.08 4010.81

Profit After Tax 2937.68 2711.55

Transfer to General Reserve 300.00 300.00

Performance Review

Even though the total income for the year was stable at the previous year''s level, the net profit after tax went up by 8% . The earnings per equity share (of face value Re. 1) for the year increased to Rs. 6.18 from Rs. 5.71 for the previous year.

Dividend

Your directors recommend a dividend of 80% ( 80 Ps per Share of face value Re1/-) for the year, (an increase of 20 Ps over the previous year ended 31st March, 2012), subject to the approval of the shareholders at the ensuing Annual General Meeting.

Capital Expenditure

As at 31st March 2013 the gross fixed assets stood at Rs. 16377.07 lakhs and net fixed assets Rs 11724.73 lakhs. Additions during the year amounted to Rs 303.70 lakhs, which include addition to land and building for Rs 151.14 lakhs, plant & machinery and other assets amounting to Rs 152.56 lakhs.

Future Prospects

Despite stiff competition from other countries, international buyers show preference to your company''s product for its quality and timely delivery and hence your Directors are confident of achieving better working results in the coming years.

Expansion Project:

The expansion plan for increasing the capacity of the existing Fabric Processing Unit is being implemented and is expected to be completed by December, 2013. This project envisages a total investment of Rs. 108 crores in build- ings and machinery, for which State Bank of India has sanctioned a term loan of Rs. 82 crores.

Directors'' Responsibility Statement

The directors report that

i) In the preparation of the annual accounts, the applicable accounting standards have been followed.

ii) 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 com- pany at the end of the financial year and of the profit and loss account of the company for that period.

iii) 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) The Directors have prepared the annual accounts on a going concern basis.

Listing on Stock Exchanges

The Directors are happy to inform that the company''s shares are listed on the National Stock Exchange with effect from 25th September, 2012, in addition to Bombay and Cochin Stock Exchanges.

Corporate Governance

As required by Clause 49 of the Listing Agreement with the Stock Exchanges, the Corporate Governance Report, Management Discussion and Analysis, and the Auditor''s Certificate regarding compliance of conditions of Cor- porate Governance, form part of the Annual Report.

Secretarial compliance

Secretarial compliance certificate from a practicing Company Secretary is enclosed.

Cost Compliance

Pursuant to Sec. 209 (1)(d) of the Companies Act, 1956, Cost Compliance Report for the financial year ended 31/03/2012 was submitted to the Central Government on 21/12/2012

Disclosure of Particulars

Information under Section 217(2A) of the Companies Act 1956, read with the Companies (Particulars of Employees) Rules, 1975 and Information as per Companies (Disclosure of particulars in the Report of Board of Directors) Rules, 1988 relating to conservation of energy, technology absorption, foreign exchange earnings and outgo are given in Annexure forming part of this report.

Corporate Social Responsibility:.

As a CSR activity, the Company organized a Medical Relief Camp on 3rd March, 2013 where 3800 patients residing in and around Kizhakkambalam were benefitted by medical treatment / advice free of cost from expert doctors. They were provided with medicines and follow up treatment also free of cost.

Directors

Due to personal reasons, Mr. M P Kuriakose resigned from the Directorship effective from 31/03/2013. In the vacancy caused thereby, Mr. K L V Narayanan has been appointed effective from 4/04/2013. He will have the remaining tenure of Mr. M P Kuriakose. The Directors place on record their appreciation for the services rendered by Mr. M.P. Kuriakose during his tenure. Mr. C Mohan retires by rotation at the ensuing Annual General Meeting and, being eligible, offers himself for reappointment. His tenure as Director - Finance expires at the meeting.

Auditors

M/S Kolath & Co., Chartered Accountants, Financial Auditors of the Company will retire at the forthcoming Annual General Meeting and are eligible for reappointment.

With the prior approval of the Central government, M/s. Rajendran Mani & Varier , Cost Accountants, Ernakulam have been appointed as Cost Auditors for the financial year ended 31/03/2013. They will submit their report to the Central Government before 30/09/2013.

Acknowledgement

Your Directors wish to place on record their appreciation for the whole hearted and sincere co-operation the Com- pany has received from its bankers, State Bank of India, Punjab National Bank, The Federal Bank Ltd and various Government agencies. Your Directors also wish to thank all the employees for their co-operation.

For and on behalf of the Board of Directors

Sd/-

Kizhakkambalam SABU M JACOB

4th April, 2013 Chairman & Managing Director


Mar 31, 2012

TO THE MEMBERS OF KITEX GARMENTS LIMITED

The Directors have pleasure to present their 20th Annual Report and the audited Annual Accounts for the year ended 31st March 2012.

Financial Results

Year ended Year ended 31st March, 2012 31st March, 2011 (Rs in lakhs) (Rs in lakhs)

Total Income 31834.69 26133.96

Profit before Depreciation 4697.46 3812.90

Profit before tax 4010.81 3124.30

Profit after tax 2711.55 2063.27

Transfer to General Reserve 300.00 250.00

Performance Review

The total income for the year increased by 22% over the previous year whereas the net profit after tax went up by 31% . This indicates the overall operational efficiency of the company during the year.

Dividend

Your directors recommend a dividend of 60% (60 Ps per Share of Re1/-) for the year, (an increase of 20 % over the previous year ended 31st March, 2011), subject to the approval of the shareholders at the ensuing Annual General Meeting.

Capital Expenditure

As at 31st March 2012 the gross fixed assets stood at Rs.16133.88 lakhs and net fixed assets Rs 12279.41 lakhs. Ad- dictions during the year amounted to Rs 740.09 lakhs, which include addition to land and building for Rs 614.55 lakhs, Plant & machinery and other assets amounting to Rs 125.54 lakhs.

Future Prospects

Despite stiff competition from other countries, international buyers show preference to your company's product for its quality and timely delivery and hence your Directors are confident of achieving better working results in the coming years.

Expansion Project:

The Company has embarked upon an ambitious expansion plan for increasing the capacity of the existing Fabric Processing Unit, which is expected to be completed by March, 2013. This project envisages a total investment of Rs. 108 crores in buildings and machinery, which will be financed by availing term loan of Rs. 82 crores from bank and the balance from internal accruals.

Directors' Responsibility Statement

The directors report that

i) In the preparation of the annual accounts, the applicable accounting standards have been followed.

ii) 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 at the end of the financial year and of the profit and loss account of the company for that period.

iii) The Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities.

iv) The Directors have prepared the annual accounts on a going concern basis.

Corporate Governance

As required by Clause 49 of the Listing Agreement with the Stock Exchanges, the report on Management Discus- soon and Analysis, Corporate Governance as well as the Auditor's Certificate regarding compliance of conditions of Corporate Governance, form part of the Annual Report. Secretarial compliance certificate from a practicing company secretary is also enclosed.

Disclosure of Particulars

Information under Section 217(2A) of the Companies Act 1956, read with the Companies (Particulars of Employ- eyes) Rules, 1975 and Information as per Companies (Disclosure of particulars in the Report of Board of Directors) Rules, 1988 relating to conservation of energy, technology absorption, foreign exchange earnings and outgo are given in Annexure forming part of this report.

Directors

The Board of Directors place on record, with profound grief, the sad demise of the illustrious Father of the Kite - Anna Family of companies, Mr. M C Jacob on 5th June, 2011 and his consequent cessation from the directorship of the Company effective from that date.

The Directors recall the services rendered by him to the industry as well as to the society during his lifetime and express their gratitude to Mr. Jacob for his valuable guidance and support for the promotion and growth of the Company from its inception.

Prof. E M Paulose was appointed in the vacancy caused by the death of Mr. M C Jacob. He is retiring by rotation and, being eligible, offers himself for re-appointment.

Auditors

M/S Kolath & Co., Chartered Accountants, Auditors of the Company will retire at the forthcoming Annual Gen- earl Meeting and are eligible for reappointment.

Acknowledgement

Your Directors wish to place on record their appreciation for the whole hearted and sincere co-operation the Com- pony has received from its bankers, State Bank of India, Punjab National Bank, The Federal Bank Ltd and various Government agencies. Your Directors also wish to thank all the employees for their co-operation.

For and on behalf of the Board of Directors

Sd/-

Kizhakkambalam SABU M JACOB

20th April, 2012 Chairman & Managing Director


Mar 31, 2011

The Directors have pleasure to present their Ninteenth Annual Report and the audited Annual Accounts for the year ended 31st March 2011.

FINANCIAL RESULTS

Year ended Year ended 31st March, 2011 31st March, 2010 (Rs in lakhs) (Rs in lakhs)

Income from operations 26133.96 27342.37

Operating Profit 6766.35 6207.18

Profit before Depreciation & 5346.48 4956.58 Finance charges

Profit before tax 3124.30 2779.03

Profit after tax 2063.27 1850.48

PERFORMANCE REVIEW

The total turnover for the year is Rs 24228.47 lakhs against the previous year turnover of Rs.24741.92 lakhs. The spurt in the price of yarn in the market and its consequent effect in the price of our product had affected the export in the first half of the financial year. However the revival of export sales in the second half year and the increase in sales in domestic market helped the company in maintaining the turnover at this level. The profit after tax is Rs.2063.27 lakhs against previous year profit after tax of Rs.1850.48 lakhs which shows an increase of 11.5% . This could be achieved by optimizing all operations.

FUTURE PROSPECTS

Despite escalating prices of yarn and stiff competition from other countries, international buyers show preference to your companys product for its quality and timely delivery and hence your Directors are confident of achieving better working results in the coming years.

DIVIDEND

Your directors recommend a dividend of 40% (40 Ps per Share of Re l/-) for the year ended 31st March, 2011, an increase of 10% over the previous year ended 31st March, 2010, subject to the approval of the shareholders at the ensuing Annual General Meeting.

CAPITAL EXPENDITURE

As at 31st March 2011 the gross fixed assets stood at Rs. 15403.53 lakhs and net fixed assets Rs 12231.21 lakhs. Additions during the year amounted to Rs 1055.38 lakhs, which include addition to land and building for Rs 106 lakhs, Plant & machinery and other assets amounting to Rs 949.38 lacs.

DIRECTORS RESPONSIBILITY STATEMENT

The directors report that

i) In the preparation of the annual accounts, the applicable accounting standards have been followed.

ii) 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 at the end of the financial year and of the profit and loss account of the company for that period.

iii) 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) The Directors have prepared the annual accounts on a going concern basis.

CORPORATE GOVERNANCE

As required by Clause 49 of the Listing Agreement with the Stock Exchanges, the report on Management Discussion and Analysis, Corporate Governance as well as the Auditors Certificate regarding compliance of conditions of Corporate Governance, form part of the Annual Report. Secretarial compliance certificate from a practicing company secretary is also enclosed.

DISCLOSURE OF PARTICULARS

Information under Section 217(2A) of the Companies Act 1956, read with the Companies (Particulars of Employees) Rules, 1975 and Information as per Companies (Disclosure of particulars in the Report of Board of Directors) Rules, 1988 relating to conservation of energy, technology absorption, foreign exchange earnings and outgo are given in Annexure forming part of this report.

DIRECTORS

Mr. M. P. Kuriakose is retiring by rotation and, being eligible, offers himself for re-appointment.

AUDITORS

M/s. Kolath & Co., Chartered Accountants, Auditors of the Company will retire at the forthcoming Annual General Meeting and are eligible for reappointment.

ACKNOWLEDGEMENT

Your Directors wish to place on record their appreciation for the whole hearted and sincere co-operation the Company has received from its bankers, State Bank of India, Punjab National Bank, The Federal Bank Ltd and various Government agencies. Your Directors also wish to thank all the employees for their co-operation.

For and on behalf of the Board of Directors

Sd/- SABU M JACOB Chairman & Managing Director

Ernakulam 25th April, 2011


Mar 31, 2010

The Directors have pleasure to present their Eighteenth Annual Report and the audited Annual Accounts for the year ended 31st March 2010.

FINANCIAL RESULTS

Year ended Year ended 31st March, 2010 31st March, 2009 (Rs in lakhs) (Rs in lakhs)

Income from operations 27342.37 20248.74

Operating Profit 5939.55 4510.69

Profit before Financing Charges 4956.58 3838.13 And Non cash expenditure

Profit before tax 2779.03 1605.34

Profit after tax 1850.48 995.90

PERFORMANCE REVIEW

The export turnover, which was Rs 17921.90 lacs in the previous year 2008-09, has increased to Rs 23659.48 lacs during 2009-10, an increase of 32%. The export sales mainly consisted of Infant and Childrens wear and Jackets intended for the USA market. The sale was effected through reputed US buyers. The increase in turnover with better foreign exchange realisation has resulted in increase in Operating profit from Rs. 4510.69 lacs to Rs5939.55 lacs during the year, an increase of 32 %.

FUTURE PROSPECTS

The investments in the new processing factory and additions to the existing garments factory are fully operational during the last year which is reflected in the Operational profits for the financial year, which shows a commendable growth of 32%. This is achieved amidst the adverse market conditions existing in the export sector of readymade garments due to stiff competition. However, the international buyers show preference to the Indian suppliers over the competitors in the neighbouring countries because of the superior quality of the products supplied and the capacity to meet the increasing demand in the international market. Your Directors are confident of achieving better working results for the next financial year.

DIVIDEND

Your directors recommend a dividend of 30% (30Ps per Share of Rel/-) for the year ended 31sl March, 2010, an increase of 5% over the previous year ended 31s March, 2009, subject to the approval of the shareholders at the ensuing Annual General Meeting.

CAPITAL EXPENDITURE

As at 31sl March 2010 the gross fixed assets stood at Rs.14351.94 lacs and net fixed assets Rsll866.23 lacs. Additions during the year amounted to Rs 935.01 lacs, which include addition to building for Rs33.50 lacs, Plant & machinery and other equipments amounting to Rs 847.87 lacs.

DIRECTORS RESPONSIBILITY STATEMENT

The directors report that

i) In the preparation of the annual accounts, the applicable accounting standards have been followed.

ii) 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 at the end of the financial year and of the profit and loss account of the company for that period.

iii) 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) The Directors have prepared the annual accounts on a going concern basis.

CORPORATE GOVERNANCE

As required by Clause 49 of the Listing Agreement with the Stock Exchanges, the report on Management Discussion and Analysis, Corporate Governance as well as the Auditors Certificate regarding compliance of conditions of Corporate Governance, form part of the Annual Report. Secretarial compliance certificate from a practicing company secretary is also enclosed.

DISCLOSURE OF PARTICULARS

Information under Section 217(2A) of the Companies Act 1956, read with the Companies (Particulars of Employees) Rules, 1975 and Information as per Companies (Disclosure of particulars in the Report of Board of Directors) Rules, 1988 relating to conservation of energy, technology absorption, foreign exchange earnings and outgo are given in Annexure forming part of this report.

DIRECTORS

Mr.Benni Joseph is retiring by rotation and, being eligible, offers himself for re-appointment.

AUDITORS

The retiring Auditors M/s. Venkit & Hari, Chartered Accountants, Ernakulam have given the Company a notice in writing informing their unavailability for reappointment. A notice has been received by the Company from a member proposing appointment of M/s. Kolath & Co., Chartered Accountants, 41/3951 A, Old Railway Station Road, Ernakulam 682 018 as Auditors in the place of the retiring auditors. M/s. Kolath & Co. have given a written certificate to the effect that the appointment, if made, will be within the limits specified in Section 224 (IB) of the Companies Act, 1956. The proposal is presented to the members at the ensuing Annual General Meeting for consideration and decision.

ACKNOWLEDGEMENT

Your Directors wish to place on record their appreciation for the whole hearted and sincere co-operation the Company has received from its bankers, State Bank of India, Punjab National Bank, The Federal Bank Ltd and various Government agencies. Your Directors also wish to thank all the employees for their co-operation.

For and on behalf of the Board of Directors

Sd/- Kochi SABU M JACOB

27th November, 2010 hairman & Managing Director

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