Home  »  Company  »  KPR Mill Ltd.  »  Quotes  »  Directors Report
Enter the first few characters of Company and click 'Go'

Directors Report of KPR Mill Ltd.

Mar 31, 2016

Dear Members,

The Board of Directors'' take pleasure in presenting the report on the operations and business of the Company along with Audited Financial Statements for the year ended 31st March, 2016.

FINANCIAL RESULTS (Rs. in Lakhs)

PARTICULARS STANDALONE CONSOLIDATED

2015-16 2014-15 2015-16 2014-15

Sales and Other Income

Domestic Sales (Net of Excise Duty) 1,37,522 1,54,752 1,59,386 1,68,413

Export Sales 54,397 48,803 90,654 80,432

Other Income 7,569 6,682 11,364 10,134

1,99,488 2,10,237 2,61,404 2,58,979

Profit before Interest & Depreciation 38,962 37,843 49,252 46,134

Less : Interest 4,442 6,450 5,729 8,394

Depreciation 12,384 12,587 15,205 15,402

Profit Before Tax 22,136 18,806 28,318 22,338

Less : Taxation

Provision for Current Tax 6,574 5,546 8,390 6,573

Tax relating to earlier years 145 (82) 165 (95)

MAT Credit - 1,281 1,119 1,522

6,719 4,183 7,436 4,956

Deferred Tax Expense / (Credit) (137) 25 (129) 25

Profit After Tax 15,554 14,598 21,011 17,357

REVIEW OF OPERATIONS

In the year under review, despite challenges faced by the Industry & Economy in general, the Company has performed better. The decline in cotton price over 15%, created an equivalent adverse impact on Yarn & Fabric prices. Though power cut in the State has been lifted, the continued evacuation issue deteriorated our wind power generation considerably. However with value added products, optimum utilization of capacities and improved business & margin in Garment, the profitability of the Company has improved. Sensing the need of customers for speciality products, the Company started producing the Slub effect Melange (Colour Melange) and Polyester Cotton Yarn, besides converting the existing facility to value added Compact yarn producing facility. These products carry higher margin and consistent demand. The Garment Industry is expected to continue it''s upbeat. Exports from Tirupur Market, the knitwear hub of India, the value of shipments crossed Rs.21,000 Crores for the fiscal 2015. If the same trend continues for three years, the exports will double. Our expansion initiatives are progressing well as contemplated. With the above strategies, the Company is hoping to secure higher margin in the coming years. With comfortable cash flow, it is expected that the debt level may come down gradually leading to a debt free entity in 3-4 Years.

DIVIDEND

Your Company has been maintaining a consistent dividend track record. Considering better performance and strong liquidity, during the year the Board of Directors have declared two interim dividends, 50% (Rs.5) during lanuary 2016 and 40% (Rs.4) during March 2016. The Board in its Meeting held on 28th April, 2016 has recommended a final dividend of 10% (Rs.1) on Equity Shares, thus aggregating to 100% (Rupees Ten per Share on Equity Share of Rupees Ten each), subject to the approval of the Members at the Thirteenth Annual General Meeting.

RESERVES

During the year under review the Company has transferred Rs.1,500 Lakhs to the Capital Redemption Reserve towards redemption of Preference Shares and Rs.15,554 Lakhs were transferred to General Reserve.

GARMENTS EXPANSION

The expansion of Garment capacity by 36 million garments to cope up with the upsurge in market demand is progressing well and nearing completion. It would entail KPR as one of the largest Garment producing Corporates in India. The response from existing customers as well as from new markets is much encouraging. The interest evinced by leading Brands from new markets substantiates our right move. It is expected to be commissioned during the First Quarter of Financial Year 2016-17.

DOUBLING OF PROCESSING CAPACITY

The sustained growth foreseen in global apparel industry coupled with a shift in overall trade towards Asia over the years in view of lower cost of production, has made India the most preferred, competitive textile manufacturing hub. To keep pace with fast-changing customer demand, design and technology, increase of production capacity coupled with technological advancement has become essential. Currently, India lags in processing capacities in terms of modern technology. Bearing it in mind and commensurate with the increased in-house requirement on account of Garment capacity expansion and future market potential, an expansion drive has been mooted in its Fabric processing facility which has a backing of strong Effluent Treatment Plant. The key factors of expansion are:

- 100% capacity addition - From 25 MT to 50 MT per day

- Advanced continuous process technology minimizing cost of production.

- Hi-tech Rotary screen printing to escalate operations The expansion drive facilitates the Company''s commitment to grow with the market trend. Its salient features are;

- elimination of salt usage in dyeing that considerably reduces the water & energy consumption, effluent etc., thereby minimising cost of production.

- ensuring improved quality, higher color uniformity;

- garnering large overseas customers from new giant markets besides widening the current client base;

- safe processing of delicate & sensitive Fabrics with minimal interruption through Rotary screen printing;

- eligible for 10% capital subsidy under A - TUF scheme.

Investment to ensure this capacity addition will be Rs.120 Crores funded through internal accruals and Bank finance. The project is estimated to be completed in 9 Months'' time.

SUBSIDIARY COMPANIES

The Company has Four Wholly Owned Subsidiary Companies, their financials and details as required Under Section 136 of the Companies Act, 2013 (hereinafter referred to as the ''Act'') are available in the website of the Company.

Statements pursuant to Section 129 (3) of the Act, in ''Form AOC - 1'' forms part of this Annual Report. However as required by the ''Act'', we give below a brief report on their performance.

QUANTUM KNITS PVT. LIMITED

During the year under review the high growth in apparel market and its exports enabled the Company a better margin. The significant increase in the Apparel consumption in developing economies is expected to sustain the growth level for a long term.

K.PR.SUGAR MILL LIMITED

Consequent on the delay in fixation of cane price by the Government during the year also, there has been a delay in Sugar crushing. The drought prevailed at Karnataka, after 5 years of good monsoon, has curtailed sugarcane availability. The Sugar price which was reeling under tremendous pressure due to sluggish demand had a reprieve during the last Quarter of the Financial Year. Produced 66,335 metric tons of sugar. Out of 1005 Lakhs units of power generated 760 Lakhs units were sold and 245 Lakhs units captively consumed.

JAHNVI MOTOR PRIVATE LIMITED

In Financial Year 2015-16, the Company sold 271 Cars and with improved Service Income, it earned a total Revenue of Rs.131.60 Crores. Its effective marketing setup sustained the ''No.1'' Position under category ''B'' Dealership, besides securing ''All India Best Partner'' title in after Sales Service.

GALAXY KNITS LIMITED

The Company has not yet commenced its operation.

FIXED DEPOSITS

The Company has not accepted any fixed deposits from public during the year under review.

FINANCE

Our prompt repayments and pre-closure of certain high cost debts, facilitated by healthy Cash flow, elevated the credibility of your Company. It enabled prudent application of funds and better negotiation strength. This exemplary trend is expected to continue.

DIRECTORS

Sri. M.J. Vijayaraaghavan, Director passed away on 10.06.2015. Taking note of his long association and sane advice, the Board placed on record the invaluable services rendered by him as a Senior Director and Audit Committee Chairman.

Sri. A. Sekar, Whole time Director had retired on 27.07.2015 and Sri. P. Selvakumar, Senior Executive of the Company was appointed as a Whole Time Director of the Company. The Board in its Meeting held on 09.03.2016 has co-opted Sri. E.K. Sakthivel, as Additional Director, under the designation ''Executive Director'' subject to the approval of the Company at Annual General Meeting. At the ensuing Annual General Meeting suitable Resolution has been included in the Notice of the said Meeting to regularize his appoinment.

The Company has adequate Independent Directors in compliance with the Act and SEBI (LODR) Regulations, 2015 hereinafter referred to as Listing Regulations. Familiarization Program on the Company and its operation was conducted for the Independent Directors. Requisite declaration from the Independent Directors of the Company under Section 149 (7) of the Act confirming that they meet with the criteria of their Independence laid in Section 149 (6) have been obtained.

Sri. P. Selvakumar, Director retires by Rotation at the ensuing Annual General Meeting and is eligible for reappointment.

The details of the aforesaid Directors, required to be disclosed under Regulation 36 (3) of the Listing Regulations, form part of the Notice of the ensuing Annual General Meeting. Your Directors recommend their appointment / re-appointment. All the Directors of the Company have confirmed that they are not disqualified from being appointed as Directors in terms of Section 164 (2) of the Act.

KEY MANAGERIAL PERSONNEL AND MANAGERIAL REMUNERATION CRITERIA

In pursuance of the Act the Company has Key Managerial Personnel. None of the Managing Directors or Whole Time Directors receive any remuneration or commission from the Subsidiary Companies and the remuneration paid to them is within the purview of the provisions of Section 197 read with Schedule V of the Act. The Company pays remuneration by way of salary, perquisites, commission (variable component) to its Chairman, Managing Directors and fixed monthly remuneration to its Executive Directors and Whole Time Director in line with the approvals accorded by the General Meetings in pursuance of the recommendation of the Nomination and Remuneration Committee as per the guiding principles laid down in the Nomination and Remuneration Policy and also by the Board of Directors. The information as required by Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is appended.

ANNUAL PERFORMANCE EVALUATION

In line with the criteria evolved by the Nomination and Remuneration Committee, the performance of all Directors, Committees, Chairman etc., have been evaluated pursuant to the provisions of the Act and the Listing Regulations.

COMMITTEES

As required by the provisions of the Act and Listing Regulations, the Company has already formed the following Committees, the details of which are disclosed in the Report on Corporate Governance forming part of this Report.

I. Audit Committee

II. Stakeholders Relationship Committee

III. Nomination and Remuneration Committee

IV. Corporate Social Responsibility (CSR) Committee

POLICIES

In pursuance of the Act and the Listing Regulations, the following policies have been framed and disclosed on the Company''s website ''www.kprmilllimited.com''.

I. Nomination & Remuneration Policy

II. Related Party Transaction Policy

III. CSR Policy

IV. Whistle Blower Policy consisting of Vigil Mechanism

V. Policy on Determining Material Subsidiaries

VI. Code for Fair Disclosure

VII. Risk Management Policy

RISK MANAGEMENT

Pursuant to section 134 (3) (n) of the Companies Act, 2013 & Regulation 17 (9) of the Listing Regulations, the Company has framed a Risk Management Policy. In the opinion of the Board there appears to be no element of risk which may threaten the existence of the Company.

VIGIL MECHANISM & WHISTLE BLOWER POLICY

The Company has an established Vigil Mechanism for Directors / Employees to report concerns about unethical behaviors, actual or suspected fraud or violation of the code of conduct or ethics policy. It also provides for adequate safeguards against victimization of Directors / Employees who avail of the mechanism. The Company affirms that no personnel have been denied access to the Audit Committee. The Company has formulated a Policy of Vigil Mechanism and has established a mechanism that any personnel may raise reportable matters. All suspected violations and reportable matters can be reported to the Chairman of the Audit Committee at e-mail id ''whistleblower@kprmill.com''. The key directions / actions can be informed to the Chairman / Managing Director of the Company.

The Whistle Blower Policy has been framed and displayed in the Company''s Website.

CSR EXPENDITURE

During the year, in pursuance of the recommendations of the CSR Committee, the Company has contributed Rs.338 Lakhs being 2% of the average three years Net Profit of the Company towards implementing the CSR activities. Annual Report on CSR, as required by the Act is appended.

BOARD MEETINGS

The Board of Directors met five times during the financial year on 05.05.2015, 27.07.2015, 27.10.2015, 27.01.2016 and 09.03.2016. The Composition of Board, procedure, dates and other details are included in the Corporate Governance Report that forms part of this Report.

CONSOLIDATED FINANCIAL STATEMENTS

Your Directors have pleasure in attaching the Consolidated Financial Statements pursuant to the provisions of the ''Act'' and the Listing Regulations entered into with the Stock Exchanges. They are prepared in accordance with the Accounting Standards prescribed by the Institute of Chartered Accountants of India, in this regard. The Consolidated Financials also marked a significant increase in its Revenue as well as Profitability.

PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS

The Company has duly complied with the provisions of Section 186 of the Act and as required therein the details of the Borrowals, Security, Investment etc., are annexed by way of notes to accounts.

RELATED PARTY TRANSACTIONS

All Related Party Transactions that were entered into during the financial year were only between Holding Company and Wholly owned Subsidiary Companies in the ordinary course of business, whose accounts are consolidated with Holding Company and placed before the shareholders at the General Meeting for approval. Accordingly, pursuant to Section 134 (3) (h) read with Rule 8 (2) of the Companies (Accounts) Rules, 2014 and Regulation 23 of the Listing Regulations there are no transactions to be reported under Section 188 (1) of the Act.

However, the Transactions as required under Accounting Standards AS-18 are reported in the Notes to Accounts of the Consolidated Financial Statements as well as Standalone Financial Statements of your Company. The Company''s Policy on dealing with related party transactions is available on the Company''s website.

EMPLOYEE WELFARE

The Employee Welfare Initiatives and practices followed by the Company, acclaimed as one of the best in the Corporate World, have got far reaching impact on the societal development. KPR Group employs over 15,000 Workers. The unique labour model uplifting the marginalized section of the society - especially women folk - plays a vital role in improving the efficiency and productivity of the employees, besides ensuring them quality life both at work and family life.

Textile Industry is labour intensive and the Indian Textile Industry faces labour shortage. However, the impeccable welfare measures extended by KPR facilitate the process of mobilization of labour resources with ease. Extension of higher education facilities, the flagship of the welfare measures, is continuously best utilized by the workers as can be evidenced by their commendable performance in the Government examinations. So far over 15,000 employees have been benefited by the higher education facilities. The workforce becomes skilled, educated and employable wherever they are. Their consistent dedication and support are considered as invaluable resources for the Company.

Under the Central Government Skill Development initiative (PMKVY), over 2000 Employees of our Company have been enrolled during the year.

PARTICULARS OF EMPLOYEES

The information required pursuant to Section 197 read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 in respect of Employees of the Company, will be provided upon request. In terms of Section 136 of the Act, the reports and accounts are being sent to the members and others entitled thereto, excluding the information on employees particulars which is available for inspection by the members at the Registered Office of the Company during business hours on working days of the Company up to the date of ensuing Annual General Meeting. If any member is interested in inspecting the same, such member may write to the Company Secretary in advance.

PREVENTION OF SEXUAL HARASSMENT OF WOMEN AT WORKPLACE

Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 provides for protection against sexual harassment of women at workplace and for the prevention and redressal of complaints of sexual harassment and also for the matters incidental thereto. The Company has accordingly adopted the policy against Sexual Harassment of Women at Workplace, for the purpose of preventing, prohibiting and redressing sexual harassment of female employees at all the workplace within the Company which are based on fundamental principles of justice and fair play.

Further, Anti Sexual Harassment Committee has been constituted at each unit which shall be responsible for redressal of complaints related to sexual harassment. The details of all such complaints and its proper redressal through prompt corrective steps are informed to the Top Management so as to ensure that suitable processes and mechanisms are put in place to ensure that issues of sexual harassment, if any, are effectively addressed. During the year, no complaints of sexual harassment were received by the Company from any of its Units.

ENERGY CONSERVATION, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

The particulars relating to energy conservation, technology absorption, foreign exchange earnings and outgo, as required to be disclosed under the Act read with the Companies (Accounts) Rules, 2014 are provided in the Annexure to the Report.

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;

I. In the preparation of the Annual Accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures.

II. The Directors had selected 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 of the Company for the year under review.

III. The Directors had taken proper and sufficient care for the maintenance of adequate record in accordance with the provisions of the Companies Act, 2013, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities.

IV. The Directors had arranged preparation of the accounts for the financial year ended 31.03.2016 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.

CORPORATE GOVERNANCE REPORT AND MANAGEMENT DISCUSSION AND ANALYSIS STATEMENT

In pursuance of Listing Regulations the Corporate Governance Report and Management Discussion and Analysis Statement are attached to this Report. Certificate from the Statutory Auditors of the Company confirming the compliance with the conditions of Corporate Governance is also attached to this report.

INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY

The Company has an Internal Control System, commensurate with the size, scale and complexity of its operations. The details of Internal financial control and their adequacy are included in the Report of Management Discussion and Analysis, which forms part of this report.

RATIO OF REMUNERATION TO EACH DIRECTOR

Details / Disclosures of Ratio of Remuneration of Director to the median employee''s remuneration as required by the Act and Companies Rules are appended.

SIGNIFICANT & MATERIAL ORDER PASSED BY THE REGULATORS

No significant and material order was passed by any Regulators that have any impact on the going concern status and the operations of the Company.

DETAILS REGARDING ISSUE OF SHARES

During the year under review the Company has not issued any shares. The Company has redeemed 15,00,000, 7% Redeemable Cumulative Non - Convertible Preference Shares of Rs.100 each, at par.

AUDITORS

M/s. Deloitte Haskins & Sells, Chartered Accountants, Coimbatore, (ICAI No: 008072S) the Statutory Auditors of the Company retire at the ensuing Annual General Meeting and are eligible for re-appointment.

AUDITORS REPORT

The Auditor''s Report to the Shareholders does not contain any qualification.

COST AUDIT

In pursuance of Companies (Cost Records and Audit) Rules, 2014, the Company has appointed a Cost Auditor for the Company to audit the cost records for the Financial Year 2016-17.

SECRETARIAL AUDIT REPORT

As required by the Act a Secretarial Audit Report issued by a Company Secretary in practice is annexed and does not contain any qualifications and adverse remarks.

EXTRACT OF ANNUAL RETURN

Pursuant to section 92 (3) of the Act and Rule 12 (1) of the Companies (Management and Administration) Rules, 2014, an extract of annual return in MGT 9 forms part of this Report.

ACKNOWLEDGEMENT

Your Directors acknowledge with gratitude and express their appreciation for the assistances and co-operation received from the Bankers, Government Authorities, Customers, Vendors and Members during the year under review. Your Directors also wish to thank the employees at all levels for their co-operation and dedication.

By order of the Board of Directors

Coimbatore K.P. Ramasamy

28.04.2016 Chairman


Mar 31, 2015

Dear Members,

We take pleasure in presenting the Report on our Business and Operations for the year ended 31st March 2015.

FINANCIAL RESULTS (Rs.in Lakhs)

PARTICULARS STANDALONE

2014-15 2013-14

Sales and Other Income

Domestic Sales (Net of Excise Duty) 1,54,752 1,50,300

Export Sales 48,803 42,851

Other Income 6,682 5,800

2,10,237 1,98,951

Profit before Interest & Depreciation 37,843 38,184

Less : Interest 6,450 7,234

Depreciation 12,587 12,982

Profit Before Tax 18,806 17,968

Less : Taxation

Provision for Current Tax 5,546 5,034

Tax relating to earlier years (82) 94

Less : MAT Credit Entitlement 1,281 -

4,183 5,128

Provision for Deferred Tax Liability 25 (216)

Profit After Tax 14,598 13,056

PARTICULARS CONSOLIDATED

2014-15 2013-14 Sales and Other Income

Domestic Sales (Net of Excise Duty) 1,68,413 1,65,208

Export Sales 80,432 65,844

Other Income 10,134 9,154

2,58,979 2,40,206

Profit before Interest & Depreciation 46,134 45,327

Less : Interest 8,394 10,450

Depreciation 15,402 15,670

Profit Before Tax 22,338 19,207

Less : Taxation

Provision for Current Tax 6,573 5,313

Tax relating to earlier years (95) 87

Less : MAT Credit Entitlement 1,522 135

4,956 5,265

Provision for Deferred Tax Liability 25 (226)

Profit After Tax 17,357 14,168

REVIEW OF OPERATIONS

Indian Textile Industry, one of the key drivers of Indian Economy, is passing through a positive phase. Our expanded Garment capacity has joined the mainstream. During the year, production levels at all segments of textiles have gone up. However, the steep decline in Cotton prices has impacted the yarn realisation by around 10% over previous year. The up-trend in demand at the Garment Segment entailed the Company to achieve the reported Turnover, despite the challenges faced by the Spinning Segment. Evacuation issue at Power front in the State still continues. Cost of Power and Labour has gone up due to increase in Power charges & Minimum Wages by the Government. Comfortable cash flow enabled the Company to lower working capital loan and Finance cost. The Company earned a Cash Profit of Rs. 272 Crores and Cash EPS of Rs. 72 as against Rs. 260 Crores and Rs. 69 in the previous year. The favourable market trend and the enhanced Garment capacity would strengthen the prospects of the Company. Competing countries' higher cost of production would further widen India's stake at International Market.

DIVIDEND

In its Meeting held on 5th February 2015, Your Board of Directors had declared an interim dividend of 40% on the Equity Shares of the Company. The Board has recommended a final dividend of 50% on Equity Shares, subject to the approval of the Members at the ensuing 12th Annual General Meeting.

Your Directors have recommended the payment of Dividend of 7% on Redeemable Cumulative Non-Convertible Preference Shares of Rs. 100 each.

GARMENTS EXPANSION

Driven by consistent demand, the Global Textile & Apparel Trade is growing rapidly. The core competency enabled Indian Textile Industry to emerge as the World's second largest Textile Exporter. The uptrend is expected to remain for a long term. The Garment capacity expansion mooted during last year has been successfully completed as detailed below.

BROWN FIELD

The Brown field Garment expansion at our Arasur Garment Facility upgrading its capacity by 10 million pieces per annum was completed as scheduled and its Production had commenced from 24th June 2014 onwards.

GREEN FIELD

We are pleased to announce that the Green field Garment expansion at Thekkalur has also been successfully completed as contemplated. It has commenced commercial production from March 2015 onwards. These enhanced our overall Garment Production capacity from 37 Million Pieces to 59 Million Pieces per annum. The increased capacity is fully backed up by firm orders. The Financial Year 2015-16 shall witness its full-fledged operations.

FURTHER EXPANSION

To convert its potential into reality, K.P.R. is planning to add a further large Green field manufacturing facility of 36 Million garments per annum at an estimated cost of Rs. 175 Crores. With this, the total garment capacity will become 95 Million garments per annum, one of the largest in the Country. The project is expected to complete during this financial year. Considering the impelling orders from the existing Buyers and the encouraging response from U.S. market, the Board has considered and accorded its approval to the proposal.

SUBSIDIARY COMPANIES

The Company has the following four Wholly Owned Subsidiary Companies and the Statements pursuant to Section 129 (3) of the Companies Act, 2013 (Hereinafter referred to as the 'Act') in 'Form AOC- 1' containing the details of Subsidiaries forms part of this Annual Report. However as required by the 'Act', we give below a brief report on their performance.

Quantum KNITS PVT. LIMITED

During the year the Company made a Turnover of Rs. 209.26 Crores and a Net Profit of Rs. 13.37 Crores.

K.P.R SUGAR MILL LIMITED

Due to the delay in fixation of cane price by the Government for the Sugar Season 2014-15, the Production had commenced during the month of December 2014 only. Produced 8.83 Crore units of power, out of which 6.13 Crore units sold and 2.70 Crore units captively consumed. 92,285 metric tonnes sugar was produced.

JAHNVI MOTOR PRIVATE LIMITED

During the year the Company sold 265 cars clocking a revenue of Rs. 113.21 Crores. Considering the enlarged demand for 'Audi' vehicles, the Company has extended its network at Madurai in Tamil Nadu. It continues to maintain the 'No.1' position under category 'B' Dealers. New Models were introduced and market response was good.

GALAXY KNITS LIMITED

The Company has not yet commenced its operation.

FIXED DEPOSITS

The Company has not accepted any fixed deposits from public during the year under review.

FINANCE

Your Company has been regular in meeting its obligation towards payment of Principal & Interest. Comfortable cash scenario enabled lesser Working Capital Loan vis-a-vis Finance Cost.

DIRECTORS

In pursuance of Section 149 and other applicable provisions of the Act & Clause 49 of the Listing Agreement, Independent Directors were appointed for a Term at the last Annual General Meeting. Pursuant to the provisions of the Act and Listing Agreement Dr. S. Ranganayaki, M.B.B.S., has been co-opted as a Woman Independent Director at the Meeting of the Board of Directors of the Company held on 12.03.2015, subject to her appointment at the Annual General Meeting. To regularise her appointment at the ensuing Annual General Meeting suitable Resolution has been included in the Notice of the said meeting.

Familiarisation Program on the Company and its operations was conducted for the Independent Directors. Requisite declaration from the Independent Directors of the Company under Section 149 (7) of the Act confirming that they meet with the criteria of their Independence laid down in Section 149 (6) have been obtained.

Consequent on the cessation of right to appoint a Director in our Board, as per the Agreement, the Private Equity Investors had withdrawn their Nominee Director Sri. Shujaat Khan from our Board with effect from 30.12.2014. The Board wishes to place on record its appreciation for the valuable services rendered by him during the tenure of his Directorship.

Sri. C.R. Anandakrishnan, Director retire by rotation at the ensuing Annual General Meeting and is eligible for reappointment.

The details of the aforesaid Directors, required to be disclosed under clause 49 of the Listing Agreement, form part of the Notice of the ensuing Annual General Meeting. Your Directors recommend their appointment. All the Directors of the Company have confirmed that they are not disqualified from being appointed as Directors in terms of Section 164 (2) of the Act.

KEY MANAGERIAL PERSONNEL AND MANAGERIAL REMUNERATION CRITERIA

In pursuance of the Act, Key Managerial Personnel (KMP) for the Company were appointed. None of the Managing Directors or Whole Time directors receive any remuneration or commission from the Subsidiary Companies and the remuneration paid to them is within the purview of the provisions of Section 197 of the Act. The Company pays remuneration by way of salary, perquisites, commission (variable component) to its Chairman, Managing Directors and fixed monthly remuneration to its Executive Director and Whole Time Director in line with the approvals accorded by the General Meetings in pursuance of the recommendation of the Nomination and Remuneration Committee as per the guiding principles laid down in the Nomination and Remuneration Policy. The information as required by Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is appended.

ANNUAL PERFORMANCE EVALUATION

In line with the criteria evolved by the Nomination and Remuneration Committee, the performance of all Directors, Committees, Chairman etc., have been evaluated pursuant to the provisions of the Act and the Listing Agreement.

COMMITTEES

As required by the provisions of the Companies Act and Listing Agreement, the Company has already formed the following Committees, the details of which are disclosed in the Report on Corporate Governance forming part of this Report.

I. Audit Committee

II. Stake Holders Relationship Committee

III. Nomination and Remuneration Committee

IV. Corporate Social Responsibility (CSR) Committee

POLICIES

In pursuance of the Companies Act, 2013 and the Listing Agreement, the following policies have been framed and disclosed on the Company's website 'www.kprmilllimited.com'.

I. Nomination & Remuneration Policy

II. Related Party Transaction Policy

III. CSR Policy

IV. Whistle Blower Policy consisting of Vigil Mechanism

V. Policy on Determining Material Subsidiaries

VI. Code for Fair Disclosure

RISK MANAGEMENT

Pursuant to section 134 (3) (n) of the Companies Act, 2013 & Clause 49 of the Listing Agreement, the Company has framed a Risk Management Policy. In the opinion of the Board there appears to be no element of risk which may threaten the existence of the Company.

VIGIL MECHANISM & WHISTLE BLOWER POLICY

The Company has an established Vigil Mechanism for Directors / Employees to report concerns about unethical behaviors, actual or suspected fraud, or violation of the code of conduct or ethics policy. It also provides for adequate safeguards against victimization of Directors / Employees who avail of the mechanism. The Company affirms that no personnel have been denied access to the audit committee. The Company has formulated a Policy of Vigil Mechanism and has established a mechanism that any personnel may raise Reportable Matters. All suspected violations and Reportable Matters are reported to the Chairman of the Audit Committee at e-mail id 'whistleblower@kprmill.com'. The key directions / actions will be informed to the Chairman / Managing Director of the Company.

The Whistle Blower Policy has been framed and displayed in the Company's Website.

CSR EXPENDITURE

During the year, in pursuance of the recommendations of the CSR committee, the Company has contributed Rs. 2.32 Crores being 2% of the average net profit of the Company towards implementing the CSR activities. Annual Report on CSR, as required by the Act is appended.

BOARD MEETINGS

The Board of Directors met Six times during the financial year on 19.04.2014, 22.05.2014, 04.08.2014, 06.11.2014, 05.02.2015 and 12.03.2015. The Composition of Board, procedure, dates and other details are included in the Corporate Governance Report that forms part of this Report.

CONSOLIDATED FINANCIAL STATEMENTS

Your Directors have pleasure in attaching the Consolidated Financial Statements pursuant to the provisions of the 'Act' and the Listing Agreement entered into with the Stock Exchanges. They are prepared in accordance with the Accounting Standards prescribed by the Institute of Chartered Accountants of India, in this regard. The Consolidated Financials also marked a significant increase in its Revenue as well as Profitability.

PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS

The Company has duly complied with the provisions of Section 186 of the Act and as required therein the details of the Borrowals, Security, Investment etc., are annexed by way of notes to accounts.

RELATED PARTY TRANSACTIONS

All Related Party Transactions that were entered into during the financial year were only between Holding Company and Wholly owned Subsidiary Companies in the ordinary course of business, whose accounts are consolidated with Holding Company and placed before the shareholder at the General Meeting for approval. Accordingly, pursuant to Section 134 (3) (h) read with Rule 8 (2) of the Companies (Accounts) Rules,2014 and clause 49 of the Listing Agreement there are no transactions to be reported under Section 188 (1) of the Companies Act, 2013.

However, the Transactions as required under Accounting Standards AS-18 are reported in Note 31 of the Notes to Accounts of the Consolidated Financial Statements as well as Standalone Financial Statements of your Company. The Company's Policy on dealing with related party transactions is available on the Company's website.

EMPLOYEE WELFARE

Strong and dedicated work force is one of our Key Strengths. The Company continues to extend exemplary facilities to the Employees. Their sustained involvement enabled higher productivity and efficiency with low attrition rate. Their consistent record making ability in Government examinations evidences the high standard of unique educational facilities extended by the Company to the Employees.

PARTICULARS OF EMPLOYEES

The information required pursuant to Section 197 read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 in respect of Employees of the Company, will be provided upon request. In terms of Section 136 of the Act, the reports and accounts are being sent to the members and others entitled thereto, excluding the information on employees' particulars which is available for inspection by the members at the Registered Office of the Company during business hours on working days of the Company up to the date of ensuing Annual General Meeting. If any member is interested in inspecting the same, such member may write to the Company Secretary in advance.

PREVENTION OF SEXUAL HARASSMENT OF WOMEN AT WORKPLACE

Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 provides for protection against sexual harassment of women at workplace and for the prevention and redressal of complaints of sexual harassment and also for the matters incidental thereto. The Company has accordingly adopted the policy against Sexual Harassment of Women at Workplace, for the purpose of preventing, prohibiting and redressing sexual harassment of female employees at all the workplace within the Company which are based on fundamental principles of justice and fair play.

Further, Anti Sexual Harassment Committee has been constituted at each unit which shall be responsible for redressal of complaints related to sexual harassment. The details of all such Complaints and its proper redressal through prompt corrective steps are informed to the Top Management so as to ensure that suitable processes and mechanisms are put in place to ensure that issues of sexual harassment, if any, are effectively addressed. During the year, no complaints of sexual harassment were received by the Company from any of its Units.

ENERGY CONSERVATION, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

The particulars relating to energy conservation, technology absorption, foreign exchange earnings and outgo, as required to be disclosed under the Act read with the Companies (Accounts) Rules, 2014 are provided in the Annexure to the Report.

DIRECTORS RESPONSIBILITY STATEMENT

Pursuant to the requirement under section 134(5) of the Companies Act, 2013, the Board of Directors of the Company hereby state and confirm 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 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 of the Company for the year under review.

III. The Directors have taken proper and sufficient care for the maintenance of adequate record in accordance with the provisions of the Companies Act, 2013, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities.

IV. The Directors have arranged preparation of the accounts for the financial year ended 31.03.2015 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.

CORPORATE GOVERNANCE REPORT AND MANAGEMENT DISCUSSION AND ANALYSIS STATEMENT

Corporate Governance Report and Management Discussion and Analysis Statement are attached to this Report. Certificate from the Statutory Auditors of the Company confirming the compliance with the conditions of Corporate Governance as stipulated under Clause 49 of the Listing Agreement is also attached to this report.

INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY

The Company has an Internal Control System, commensurate with the size, scale and complexity of its operations. The details of internal financial control and their adequacy are included in the Report of Management Discussion & Analysis, which forms part of this report.

RATIO OF REMUNERATION TO EACH DIRECTOR

Details / Disclosures of Ratio of Remuneration of Director to the median employee's remuneration as required by the Act and Companies Rules are appended.

SIGNIFICANT & MATERIAL ORDER PASSED BY THE REGULATORS

No significant and material order was passed by any Regulators that have any impact on the going concern status and the operations of the Company.

DETAILS REGARDING ISSUE OF SHARES

During the year under review the Company has not issued any shares.

AUDITORS

M/s. Deloitte Haskins & Sells, Chartered Accountants, Coimbatore, (ICAI No: 008072S) the Statutory Auditors of the Company retire at the ensuing Annual General Meeting and are eligible for Re-appointment.

AUDITORS REPORT

The Auditor's Report to the Shareholders does not contain any qualification.

COST AUDIT

In pursuance of Companies (Cost Records and Audit) Rules, 2014, the Company has appointed a Cost Auditor for the Company to audit the cost records for the Financial Year 2015-16.

SECRETARIAL AUDIT REPORT

As required by the Act a Secretarial Audit Report issued by a Company Secretary in practice is annexed.

EXTRACT OF ANNUAL RETURN

Pursuant to section 92(3) of the Act and Rule 12(1) of the Companies (Management and Administration) Rules, 2014, an extract of annual return in MGT 9 forms part of this Report.

ACKNOWLEDGEMENT

Your Directors acknowledge with gratitude and express their appreciation for the assistances and co-operation received from the Bankers, Government Authorities, Customers, Vendors, Private Equity Investors and Members during the year under review. Your Directors also wish to thank the employees at all levels for their co-operation and dedication.

By order of the Board of Directors

Coimbatore K.P. Ramasamy 05.05.2015 Chairman


Mar 31, 2013

Dear Shareholders,

The are delighted to present the report on our business and operations for the year ended March 31, 2013.

(Rs. in Lakhs)

FINANCIAL RESULTS STANDALONE CONSOLIDATED

Particulars 2012-13 2011-12 2012-13 2011-12

Sales and Other Income

Domestic Sales (Net of Excise Duty) 1,18,937 89,346 1,19,225 81,240

Export Sales 27,157 19,493 43,368 39,130

Other Income 3,835 10,427 4,447 6,868

1,49,929 1,19,266 1,67040 1,27238

Profit before Interest & Depreciation 36,312 18,376 39,303 18,676

Less : Interest 8,008 4,704 9,803 4,817

Depreciation 14,181 10,362 15,093 10,362

Profit Before Tax 14,123 3,310 14,407 3,497

Less : Taxation

Provision for Current Tax 2,798 591 2,877 648

Less : MAT Credit Entitlement 244 590 263 598

Tax relating to earlier years - 360 12 378

2,554 (359) 2,602 (328)

Provision for Deferred Tax Liability 1,493 546 1,504 546

Profit After Tax 10,076 3,123 10,301 3,279

REVIEW OF OPERATIONS

Your Company is one of the largest vertically integrated textile players with presence across the entire value chain from "fibre to fashion".

During the year under consideration the Company witnessed a good surge in its top line. Even though the year 2012-13 was marked by a significant volatility in the National Economy, the Company delivered a commendable performance. The increase in EBITDA was driven mainly by growth in sales, stable raw-material pricing and continued optimization of costs.

Consistent expansion with continuous focus on delivering value added products at customer acclaimed Quality and recent diversification activities have started yielding the desired results. The year under review witnessed establishment of the Melange yarn facility which is a value added yarn yielding higher margins .Price stability and adequate availability of Cotton, increased demand for Yarn and Fabrics both at domestic and international Markets resulted an impressive performance during the year under review over previous year.

Growing response for our superior quality products in the markets led to improved profitability. Your Company generated a Cash Profit of Rs. 243 Crores and Cash EPS of Rs. 64 as against Rs. 135 Crores and Rs. 36 in the previous year.

DIVIDEND

Your Board of Directors at their Meeting held on 07.02.2013 had declared an interim dividend of 30% on the Equity Shares of the Company. Your Board has recommended a final dividend of 30% on Equity Shares of the Company, which is subject to approval of the Members at the ensuing 10th Annual General Meeting

PROJECTS

Melange Yarn Project at Karumathampatti with 16,128 Spindles and Expansion cum Modernisation at Sathyamangalam were completed.

FIXED DEPOSITS

The Company has not accepted any fixed deposits from public during the year under review.

FINANCE

Your Company has been regular in meeting its obligation towards payment of Principal / Interest to Banks.

DIRECTORS

Sri.M.I.Vijayaraaghavan, SriAM.Palanisamy and Sri.C.Thirumurthy, Directors retire by rotation at the ensuing Annual General Meeting and are eligible for reappointment.

As required under clause 49 of the Listing Agreement, the brief resumes of those Directors are furnished in the Notice of Annual General Meeting.

SUBSIDIARY COMPANIES

The Company has following four Subsidiary Companies with 100% Beneficial Interest and the Statements pursuant to Section 212 of the Companies Act, 1956 containing details of Subsidiaries forms part of this Annual Report.

1. Quantum KNITS PVT. LIMITED 2. K.P.R. Sugar Mill Limited

3. Jahnvi Motor Private Limited 4. Galaxy Knits Limited

COGEN CUM SUGAR PROJECT- K.P.RSUGAR MILL LIMITED:

We are glad to announce that the Cogen Cum Sugar Factory with 30 MW and 5000 TCD respectively, established at Almel Village, Sindagi Taluk, Bijapur (DT), Karnataka, commenced commercial production from November 2012 onwards. During five months of its maiden year of operations produced 7.23 Crores units of Power, out of which 5.24 Crores Units sold and the remaining 1.99 Crores units captively consumed; 66234 MT of Sugar produced, out of which 8939 MT sold. Adequate availability of Men, Material and Strategic Management Policies enabled a comfortable operation in its first year itself.

PREMIUM CAR DEALERSHIP- JAHNVI MOTOR PRIVATE LIMITED

During the year, your company has invested Rs. 1.51 Crores in M/s.Jahnvi Motors Private Limited. Consequently the said Company has become our Wholly Owned Subsidiary w.e.f. 30.10.2012.

In view of the general exemption granted by the Central Government vide its Circular No: 2/2011 dated 8th February, 2011 the Audited Statement of Accounts, the reports of the Board of Directors and Auditors of the Subsidiary Companies are not annexed as required under section 212(8) of the Companies Act, 1956. Shareholders who wish to have a copy of the full report and accounts of the Subsidiaries will be provided on receipt of written request from them. These documents will be put up on the Company''s Website viz. www.kprmilllimited.com and will also be available for inspection by any Shareholder at the Registered Office of the Company on any working day during business hours.

CONSOLIDATED FINANCIAL STATEMENTS

Your Directors have pleasure in attaching the Consolidated Financial Statements pursuant to Clause 32 of the Listing Agreement entered into with the Stock Exchanges and prepared in accordance with the Accounting Standards prescribed by the Institute of Chartered Accountants of India, in this regard.

The consolidated Financials also marked a significant increase in its Revenue as well as Profitability.

PARTICULARS OF EMPLOYEES

The information required under Section 217 (2A) of the Companies Act 1956 and the Rules made thereunder, is provided in an Annexure forming part of this Report. In terms of Section 219 (1) (b) (iv) of the Companies Act 1956, the Report and Accounts are being sent to Shareholders excluding the aforesaid Annexure. Any Shareholder interested in obtaining a copy of the same may write to the Company Secretary.

ENERGY CONSERVATION, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

The particulars relating to energy conservation, technology absorption, foreign exchange earnings and outgo, as required to be disclosed under section 217(1)(e) of the Companies Act 1956, read with the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules 1988 are provided in the Annexure to the Report.

DIRECTORS RESPONSIBILITY STATEMENT

Pursuant to the requirement under section 217(2AA) of the Companies Act, 1956, the Board of Directors of the Company hereby state and confirm 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 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 of the Company for the year under review.

iii. The Directors have taken proper and sufficient care for the maintenance of adequate record in accordance with the provisions of the Companies Act, 1956, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities.

iv. The Directors have arranged preparation of the accounts for the financial year ended March 31, 2013 on a going concern basis.

CORPORATE GOVERNANCE REPORT AND MANAGEMENT DISCUSSION AND ANALYSIS STATEMENT

Corporate Governance Report and Management Discussion and Analysis Statement are attached to this Report.

AUDITORS

M/s.Deloitte Haskins & Sells, Chartered Accountants, Coimbatore, the Statutory Auditors of the Company retire at the ensuing Annual General Meeting and are eligible for Re-appointment.

AUDITORS REPORT

The Auditor''s Report to the Shareholders does not contain any qualification.

COST AUDITOR

The Company has reappointed Sri.B.Venkateswar, B.Sc., ACMA, Coimbatore, as the Cost Auditor to audit cost accounts for the year ending on 31.03.2014.

INDUSTRIAL RELATIONS

The relationship with employees continued to remain cordial throughout the year under review.

ACKNOWLEDGMENT

Your Directors acknowledge with gratitude and express their appreciation for the assistances and cooperation received from the Bankers, Government Authorities, Customers, Vendors, Private Equity Investors and Members during the year under review. Your Directors also wish to thank the employees at all levels for their co-operation and dedication.

Coimbatore By order of the Board of Directors

2105 2013 K.P. Ramasamy

Chairman


Mar 31, 2012

The Directors have pleasure in presenting the Ninth Annual Report including the Audited Financial Statements of the Company for the year ended 31st March 2012.

FINANCIAL RESULTS STANDALONE CONSOLIDATED

Particulars 2011-12 2010-11 2011-12 2010-11

Sales and Other Income

Domestic Sales 90,265 86,107 82,148 77,980

Export Sales 20,728 15,958 39,454 29,989

Other Income 9,496 3,830 5,949 2,987

1,20,489 1,05,895 1,27551 1,10,956

Profit before Interest & Depreciation 18,376 24,887 18,676 25,146

Less : Interest 4,704 3,116 4,817 3,235

Depreciation 10,362 12,568 10,362 12,568

Profit Before Tax 3,310 9,203 3,497 9,343

Tax 187 2,077 218 2,122

Profit After Tax 3,123 7126 3,279 7221

REVIEW OF OPERATIONS

During the year, your Company has successfully installed value- added capacities of Compact Yarn. The Melange Yarn capacity addition and modernization of our Sathyamangalam plant is also nearing completion. Your Company's drive towards 100% self- sufficiency in power is also on-course through its Co-gen cum Sugar plant at Bijapur.

Your Company achieved a growth in exports of 32% resulting in overall turnover growth of 15% in a year that witnessed unprecedented volatility in raw material prices and acute power shortage. Your Company's efficient operations helped us to close another profitable year with a Profit after tax of Rs. 32.79 Crores, though at a lower margin of 2.6%. Your Company earned a Cash profit of Rs. 136 Crores and Cash EPS of Rs. 36.

DIVIDEND

The Board of Directors at their Meeting held on 14.05.2012 had paid an interim dividend of 30% on the Equity Shares of the Company. The Board has recommended a final dividend of 20% on Equity Shares of the Company, which is subject to the approval of the Members at the 9th Annual General Meeting.

EXPANSION AND MODERNIZATION

The expansion into higher value products initiated with Compact Spinning capacity addition has been completed and its commercial production commenced. Your Company's other value-add project, Melange Yarn, is expected to be completed by mid July 2012. The modernisation at Sathyamangalam consisting of replacement of ring frames is nearing completion.

FIXED DEPOSITS

The Company has not accepted any fixed deposits from public during the year under review.

FINANCE

Your Company has been regular in meeting its obligation towards payment of Principal / Interest to Banks.

DIRECTORS

Dr.K.Sabapathy, Sri.K.N.V.Ramani and Sri.G.P.Muniappan, Directors retire by rotation at the ensuing Annual General Meeting and are eligible for reappointment.

Resolutions seeking the approval of the Members for the aforesaid re-appointments are included in the notice calling the ensuing Annual General Meeting. As required under clause 49 of the Listing Agreement, the brief resumes of those Directors are also furnished in the said Notice.

SUBSIDIARY COMPANIES

The Company has two Subsidiary Companies and the Statements pursuant to Section 212 of the Companies Act, 1956 containing details of Subsidiaries forms part of this Annual Report.

In view of the general exemption granted by the Central Government vide its Circular No: 2/2011 dated 8th February, 2011 the Audited Statement of Accounts, the reports of the Board of Directors and Auditors of the Subsidiary Companies are not annexed as required under section 212(8) of the Companies Act, 1956. Shareholders who wish to have a copy of the full report and accounts of the Subsidiaries will be provided on receipt of written request from them. These documents will be put up on the Company's Website viz. www.kprmilllimited.com and will also be available for inspection by any Shareholder at the Registered Office of the Company on any working day during business hours.

As regards the 'Cogen cum Sugar Project' implemented by the Subsidiary M/s.K.P.R. Sugar Mill Limited, its construction activities are in progress and is expected to be commissioned by October 2012.

CONSOLIDATED FINANCIAL STATEMENTS

Your Directors have pleasure in attaching the Consolidated Financial Statements pursuant to Clause 32 of the Listing Agreement with the Stock Exchanges and prepared in accordance with the Accounting Standards prescribed by the Institute of Chartered Accountants of India, in this regard.

PARTICULARS OF EMPLOYEES

The information required under Section 217 (2A) of the Companies Act 1956 and the Rules made there under, is provided in an Annexure forming part of this Report. In terms of Section 219 (1) (b) (iv) of the Companies Act 1956, the Report and Accounts are being sent to Shareholders excluding the aforesaid Annexure. Any Shareholder interested in obtaining a copy of the same may write to the Company Secretary.

ENERGY CONSERVATION, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

The particulars relating to energy conservation, technology absorption, foreign exchange earnings and outgo, as required to be disclosed under section 217(1)(e) of the Companies Act 1956, read with the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules 1988 are provided in the Annexure to the Report.

DIRECTORS RESPONSIBILITY STATEMENT

Pursuant to the requirement under section 217(2AA) of the Companies Act, 1956, the Board of Directors of the Company hereby state and confirm 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 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 of the Company for the year under review.

iii. The Directors have taken proper and sufficient care for the maintenance of adequate record in accordance with the provisions of the Companies Act, 1956, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities.

iv. The Directors have arranged preparation of the accounts for the financial year ended March 31, 2012 on a going concern basis.

CORPORATE GOVERNANCE REPORT AND MANAGEMENT DISCUSSION AND ANALYSIS STATEMENT

Corporate Governance Report and Management Discussion and Analysis Statement are attached to this Report.

AUDITORS

M/s. Deloitte Haskins & Sells, Chartered Accountants, Coimbatore, the Statutory Auditors of the Company retire at the ensuing Annual General Meeting and are eligible for Re-appointment.

COST AUDITOR

In conformity with the General Circular issued by the Ministry of Corporate Affairs, the Company has appointed Sri.B.Venkateswar, B.Sc., ACMA, 31/3-E, Sri Ramakrishna Nagar, Kavundampalayam, Coimbatore - 641 030, as the Cost Auditor to audit cost accounts for the year ending on 31.03.2013.

AUDITORS REPORT

The Auditor's Report to the Shareholders does not contain any qualification.

INDUSTRIAL RELATIONS

The relationship with employees continued to remain cordial throughout the year under review.

ACKNOWLEDGMENT

Your Directors acknowledge with gratitude and express their appreciation for the assistances and co-operation received from the Bankers, Government Authorities, Customers, Vendors, Private Equity Investors and Members during the year under review. Your Directors also wish to thank the employees at all levels for their co-operation and dedication.

On Behalf of the Board of Directors

Coimbatore K.P. Ramasamy

28.06.2012 Chairman


Mar 31, 2011

The Directors have pleasure In presenting the Eighth Annual Report together with the Audited Financial Statements of the Companyfor the year ended 31st March 2011:

CONSOLIDATED FINANCIAL RESULTS Rs. In Lakhs

Particulars 2010-11 2009-10

Sales and Other Income:-

DomesticSales 74,948.04 56,903.84

Export Sales 29,988.84 23,417.07

OtherIncome 6,019.16 3,388.27

1,10,956.04 83,709.18

Profit before Interest* Depreciation 25,145.34 16,717.41

Less: Interest 3,234.56 2,733.25

Depreciation 12,567.54 7,049.73

Profit Before Tax 9,343.24 6,934.43

Less: Taxation:-

Provision for Current Tax 3,275.05 1,185.05

Less: MAT Credit Entitlement - 676.85

3,275.05 508.20

Deferred Tax Charge (1,152.55) 1,382.72

ProfitAfterTax 7,220.74 5,043.51

Add: Balance in Profit &LossAccount 19,764.62 17,642.25

Amount available for Appropriation 26,985.36 22,685.76

Appropriation:

Transfer to General Reserve 712.59 504.35

Interim Dividend 1,130.49 1,507.32

Tax on Interim Dividend 187.76 250.35

Proposed Dividend on Equity Shares 1,130.50 565.24

Tax on proposed Dividend 183.40 93.88

Provision for Dividend on Preference Shares 61.56 -

Taxon Preference dividend 10.22 -

Surplus Transferred to Balance Sheet 23,568.84 19,764.62

26,985.36 22,685.76

REVIEW OF OPERATIONS

With constant growth in all its activities, your Company could cross a milestone of achieving more than Rs.1000 Crores Turnover during the financial year under review. With operations at 90 % capacity utilization, the Yam Division witnessed a strong traction in its revenues. Similar trends prevailed in Garment and Processing Divisions too. Your Companys Export Revenue increased by 28% over last year to Rs.299.88 Crores, of which around 94% contributed by Garment Division. These enabled your Company to attain commendable total revenue of Rs.1109.56 Crores, @ 33% over last years Rs.837.09 Crores registering an enhanced profitability with EBITDA for Current Year Rs.251.45 Crores, from Rs.167.17 Crores in previous year, an increase of 50%. Net Profit increased to Rs.72.21 Crores in current year from Rs.50.44 Crores of previous year. Overall improvement in Capacity Utilisation and the encouraged market conditions enabled the achievement.

DIVIDEND

Considering the better performance and profitability the Board of Directors in its Meeting held on 29.10.2010 had declared an Interim Dividend of Rs.3/- per share on the Equity Capital of the Company absorbing a sum of Rs.13.18 Crores, including tax on Dividend. Taking into account the prospective business outlook more particularly the growth in revenue assured by the expanded capacity, your Directors are glad to recommend a Final Dividend of Rs.3/- per Equity Share (30%) with a cash outflow of Rs.13.14 Crores (including Tax on Dividend) that may result in a total Dividend of Rs.6/- per share (60%) for the financial year 2010-2011. During last year, the Dividend declared was Rs.5.50/- per share (55%) with a cash outflow of Rs.24.16 Crores (including Tax on Dividend) Dividend on Preference Share amounts to Rs 0.72 Crore (including tax)

EXPANSION AND MODERNIZATION

The ongoing expansion and modernization projects undertaken byyourCompany comprise of:

1. Compact Spinning Expansion

As reported last year the Company expands in high margin, high value-add compact yarn segment. Addition of 1,03,680 spindles with a total outlay of Rs.310 crores at Karumathampatti utilising the Term Loan assistance from Banks and the unutilized IPO Funds is in progress. Around 80% of the civil construction work that was commenced during May 2010, has been completed. 34560 spindles have been installed, in which 10080 spindles were already put in to operation. Commercial production commenced during April 2011 which is expected to be fully operational by September 2011. Entire Term Loan availed is eligible for TUF subsidy.

2. Windmill

Added 25 Wind Mills of 21.25 MW capacity to the present 39.82 MW thereby enhancing its Wind Power generation capacity to 61.07 MW to support its Compact Spinning capacity Expansion. The strategic approach of supplementing all its expansion activities with simultaneous wind energy capacity addition:

1. Reassures KPR s ability to meet its power requirements through wind energy

2. Reduces its Power cost significantly

3. Reiterates its commitments towards Green initiatives

3. Modernisation at Sathyamangalam Mill

Through Modernisation cum Expansion plan at an estimated cost of Rs 38.45 Crores at Sathyamangalam, the total Spindles envisaged are 51,456, out of which 21,216 Spindles have been erected during March 2011 and the balance is expected to be completed in a phased manner by October 2011.

4. Melange Yarn Spinning

Enthused by the domestic and export market demand, the Company has initiated. Installation of 16,128 Spindles of Melange Yam capacity at Karumathampatti plant considering the cost and location benefits. The total cost of the expansion is estimated at Rs 17.72 Crores and average cost per Spindle will be Rs 11,000 which has leverage of economics. The unique features of Melange Yam are the natural fiber with excellent treatment enabling coziness, softness and lively color. Besides meeting 25% of captive consumption it shall cater to the needs of market. Around 20% Civil work is completed and the project is expected to be fully operational by January 2012 in a phased manner.

After completion of the aforesaid projects the total spinning capacity will rise to 3,53,088 spindles from the existing 212,064 (up 66%)

FUTURE OUTLOOK

Your Company continues to accelerate growth through its focused approach in higher value- add segments of the textile value chain by expansion and modernisation. Further, to maintain its self-reliance in power requirements, additional wind power capacity is added. These new endeavors promises sustained growth in the years to come enhancing its profitability and returns.

Contrary to the surge prevailed in most part of the financial year under review, the prices of cotton vis-a-vis yarn are witnessing sharp decline. However Your Company believes that this short term trend would bounce back once the prices stabilize.

With concerted efforts to move deeper into premium margin segments and strong cost competitiveness, your Company expects to continue to deliver consistent growth and performance.

FIXED DEPOSITS

The Company has not accepted any fixed deposits from public during the year under review.

FINANCE

Your Company has been regular in meeting its obligation towards payment of Principal / Interest to Banks.

DIRECTORS

Mr. C.R.Anandakrishnan and Mr. C. Thirumurthy were appointed as Additional Directors in the Board Meeting held on 31.01.2011. Sri.C.R.Anandakrishnan was also appointed as Executive Director in the said meeting.

The aforesaid Directors and Sri.A.M.Palanisamy who was appointed as a Director in the casual vacancy on February 22, 2010 will hold offices upto the date of the ensuing Annual General Meeting of the Company. Notices under section 257 of the Companies Act, 1956, have been received from Members proposing their appointment as Directors.

Sri. Shujaat khan and Sri.M.J. Vijayaraaghavan retire by rotation at the ensuing Annual General Meeting and are eligible for reappointment.

Resolution seeking the approval of the Members for the aforesaid appointments are included in the notice calling the ensuing Annual General Meeting. As required under clause 49 of the Listing Agreement, the brief resumes of the Directors proposed to be appointed / re-appointed are furnished in the Notice of the Annual General Meeting.

SUBSIDIARY COMPANY

The statement pursuant to Section 212 of the Companies Act, 1956 containing details of Subsidiary of the Company forms part of thisAnnual Report. In view of the general exemption granted by the Central Government vide its Circular No: 2/2011 dated 8th February, 2011 the Audited Statement of Accounts,. the reports of the Board of Directors and Auditors of the Subsidiary Companies are not annexed as required under section 212(8) of the Companies Act, 1956. Shareholders who wish to have a copy of the full report and accounts of the Subsidiary will be provided on receipt of written request from them. These documents will be put up on the Companys Website viz. www.kprmilllimited.com and will also be available for inspection by any Shareholder at the Registered Office of the Company on any working day during business hours.

PROPOSED FINANCIAL PARTICIPATION:

The Board of Directors in its Meeting held on 30.05.2011, approved "In-Principle" Financial participation upto Rs.72.50 Crores, to be met out of internal accruals over 2 years, in K.P.R. Sugar Mills Private Limited for setting up a Sugar cum Co-gen Project at Bijapur District, Karnataka. K.P.R. Sugar Mills Private Limited will be a Subsidiary of your Company and by virtue of this participation there will be access to 34 MW of Green Power. This along with our existing investments in wind power will position your Company with an unique distinction of having 100% Green Power of 95 MW.

SHARE CAPITAL:

As approved in the 7th Annual General Meeting of the Company 15,00,000, 7% Redeemable Cumulative Non-Convertible Preference Shares of Rs.100/- each were allotted to K.P.R. Developers Limited as a consideration other than cash.

CONSOLIDATED FINANCIAL STATEMENTS

Your Directors have pleasure in attaching the Consolidated Financial Statements pursuant to Clause 32 of the Listing Agreement entered into with the Stock Exchanges and prepared in accordance with the Accounting Standards prescribed by the Institute of Chartered Accountants of India, in this regard.

AUDIT COMMITTEE

TheAudit Committee of the Company comprises of 4 Directors viz.,

Sri.M.J.Vijayaraaghavan-Independent and Non-Executive Director (Chairman)

Dr. K. Sabapathy- Independent and Non - Executive Director

Sri. G.P. Muniappan - Independent and Non - Executive Director

Sri. P. Nataraj - Non - Independent and Executive Director

AUDITORS REPORT

The Auditors Report to the Shareholders does not contain any qualification.

PARTICULARS OF EMPLOYEES

The information required under Section 217 (2A) of the Companies Act 1956 and the Rules made thereunder, is provided in an Annexure forming part of this Report. In terms of Section 219 (1) (b) (iv) of the Companies Act 1956, the Report and Accounts are being sent to Shareholders excluding the aforesaid Annexure. Any Shareholder interested in obtaining a copy of the same may write to the Company Secretary.

ENERGY CONSERVATION, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

The particulars relating to energy conservation, technology absorption, foreign exchange earnings and outgo, as required to be disclosed under section 217(1 )(e) of the Companies Act 1956, read with the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules 1988 are provided in the Annexure to the Report.

DIRECTORS RESPONSIBILITY STATEMENT

Pursuant to the requirement under section 217(2AA) of the Companies Act, 1956, the Board of Directors of the Company hereby state and confirm 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 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 of the Company for the year under review.

iii. The Directors have taken proper and sufficient care for the maintenance of adequate record in accordance with the provisions of the Companies Act, 1956, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities.

iv. The Directors have arranged preparation of the accounts for the financial year ended March 31,2011 on a going concern basis.

CORPORATE GOVERNANCE

Pursuant to clause 49 of the Listing Agreement a Report on Corporate Governance along with Auditors Certificate of its compliance forms part of the Annual Report.

MANAGEMENTS DISCUSSION AND ANALYSIS REPORT

Management Discussion and Analysis Report as required under the Listing Agreements with the Stock Exchanges forms part of theAnnual Report.

AUDITORS

M/s.Deloitte Haskins & Sells, Chartered Accountants, Coimbatore, the Statutory Auditors of the Company retire at the ensuing Annual General Meeting and are eligible for re-appointment. A certificate under section 224(1 B) of the Companies Act 1956, has been obtained from them.

INDUSTRIAL RELATIONS

The relationship with employees continued to remain cordial throughout the year under review.

ACKNOWLEDGMENT

Your Directors acknowledge with gratitude and express their appreciation for the assistances and cooperation received from the Bankers, Government Authorities, Customers, Vendors, Private Equity Investors and Members during the year under review. Your Directors also wish to thank the employees at all levels for their co-operation and dedication.

Coimbatore On Behalf of the Board of Directors

30.05.2011 K.P. Ramasamy

Chairman



 
Subscribe now to get personal finance updates in your inbox!