Making growth fashionable. - Kewal Kiran Clothing Limited · 2018-12-15 · During the year your...
Transcript of Making growth fashionable. - Kewal Kiran Clothing Limited · 2018-12-15 · During the year your...
318th Annual Report
Making growth fashionable.
MILESTONES
Launch of the first‘K-LOUNGE’
Launch of ‘KILLER’
Launch of‘LAWMAN’ &
‘EASIES’
Launch of ‘INTEGRITI’
IPO of 31 Lac Shares
M/s Keval Kiran &Co wasincorporated
Export of ‘KILLER’brand to UAE
Consolidation ofbusiness under
one entity
Move towardscorporate structure
Awarded thebest SMEcompany inTextiles/ApparelSector byCNBC TV 18and ICICI Bank
KILLERWOMENWearLaunched
1980
1989
1994
1998
2000
2002
2004
2005
2006
2007
200
8
200
9
Launch of Exclusive Brand OutletKILLER, LAWMAN & INTEGRITI
FlagshipBrandKILLERcompletes20 yearssinceinception.
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• Target Age Group 16-25• Latest collection - One on One• Price Range
� Jeans Rs. 899 - Rs. 2599� Trousers Rs. 999 - Rs. 1599� T Shirts Rs. 399 - Rs. 1499� Shirts Rs. 699 - Rs. 1599� Jackets Rs. 1299 - Rs. 2799� Innerwear Rs. 199 - Rs. 299� Sneakers Rs. 1699 - Rs. 1899� Accessories Rs. 699 - Rs. 1399
• Target Age Group 18-28
• Latest collection - Casino
• Price Range
� Jeans Rs. 799 - Rs. 1699
� Trousers Rs. 795 - Rs. 1699
� Shirts Rs. 695 - Rs. 1899
� Jackets/Blazers Rs. 2599 - Rs. 3999
� Shoes Rs. 1299 - Rs. 2899
� Accessories Rs. 499 - Rs. 1099
• Innovation in Fabric and designs
• Target Age Group 23-40
• Latest collection - After Dark
• Price Range
� Trousers Rs. 995 - Rs. 1695
� T-Shirts Rs. 645 - Rs. 1095
� Shirts Rs. 895 - Rs. 1595
� Jackets/Blazers Rs. 2295 - Rs. 4595
• Target Age Group 18-30
• Latest Collection - Fashion Friction
• Price Range
� Jeans Rs. 695 - Rs. 1295
� Trousers Rs. 745 - Rs. 995
� T-Shirts Rs. 395 - Rs. 695
� Shirts Rs. 695 - Rs. 1095
� Jackets Rs. 895 - Rs. 2200
� Sweaters Rs. 895 - Rs. 1095
� Accessories Rs. 199 - Rs. 399
• Launched in 1989• Power Brand for youth with
an international feel andunique style quotient
• Casual Men’s wear• Launched Women’s wear in
2007
• Launched in 1998
• Design led brand
• Men’s Club wear
• Launched high fashionrange of shoes andeyewear
• Exclusive Retail StoreConcept under brand name“K-Lounge” displaying ourfour brands creating acompelling mix of fashion,price and quality
EASIES
• Launched in 1998
• Fashion Brand for office andafter office hours
• Men’s formal and semi formalwear
• Launched in 2002
• Mass market brand
• Fashionable yet affordable
• Men’s formal and semiformal wear
• K-Lounge stores help in presenting thecomplete brand experience to consumers
• Improves brand visibility.
• Current Focus is on small format storesbut plans to open mid format and largeformat stores.
• Exclusive brand outlets showcasingproducts of individual brand under theBrand name KILLER, LAWMAN ANDINTEGRITI.
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INDEX
General Information 06
Letter to the Shareholders 08
Notice 10
Directors’ Report 16
Report on Corporate Governance 23
Management Discussion and Analysis 36
Auditors’ Report 41
Balance Sheet 44
Profit & Loss Account 45
Cash Flow Statement 46
Schedules forming part of Accounts 48
Balance Sheet Abstract & Company’s General Business Profile 69
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GENERAL INFORMATION
Board of Directors Mr. Kewalchand P. Jain
Chairman & Managing Director
Mr. Hemant P. JainWhole-time Director
Mr. Dinesh P. Jain
Whole-time Director
Mr. Vikas P. JainWhole-time Director
Mr. Popatlal F. Sundesha
Non-Executive Independent Director
Mr. Mrudul D. InamdarNon-Executive Independent Director
Dr. Prakash A. Mody
Non-Executive Independent Director
Mr. Nimish G. PandyaNon-Executive Independent Director
Committees of the Board
Audit Committee Mr. Mrudul D. InamdarChairman
Mr. Nimish G. Pandya
Mr. Popatlal F. Sundesha
Remuneration Committee Mr. Nimish G. Pandya
Chairman
Mr. Popatlal F. SundeshaDr. Prakash Mody
Shareholders’ & Investors’ Mr. Nimish G. PandyaGrievance Committee Chairman
Mr. Kewalchand P. Jain
Mr. Hemant P. Jain
Company Secretary Mr. Abhijit B. Warange& Sr. Manager-Legal
Statutory Auditors M/s. Jain & Trivedi
Chartered Accountants
M/s. N.A. Shah Associates
Chartered Accountants
Internal Auditors M/s. Bhandarkar & Kale
Chartered Accountants
Solicitors & Advocates Solomon & Co.
Bankers Standard Chartered BankBarclays Bank PLC
The Hongkong & Shanghai BankingCorporation Ltd.
Registered Office B-101 to 107, Synthofine Estate,
Opp. Virwani Industrial Estate,Goregaon (East), Mumbai: 400 063
Corporate Office Kewal Kiran Estate, Behind Tirupati Udyog,460/7, I.B. Patel Road, Goregaon (East),
Mumbai: 400 063
Registrars & Link Intime India Pvt. Ltd.
Transfer Agents C-13, Pannalal Silk Mills Compounds,
L.B.S. Marg, Bhandup (West),Mumbai: 400 078
Factories Vapi
Plot No. 787/1, 40, shedIInd Phase, G.I.D.C.,
Vapi: 396 195
Gujarat
Daman
697/3/5/5A, Near Maharani Estate,Somnath Road, Dhabel,
Daman: 396 210
Mumbai
Synthofine Estate,Opp Virwani Industrail Estate,
Goregaon (East),
Mumbai: 400 063
71-73, Kasturchand Mill Estate,Bhawani Shankar Road,
Dadar (West),Mumbai: 400 028
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Standing from (L-R) : Mr. Hemant Jain, Mr. Vikas Jain, Mr. Popatlal Sundesha, Mr. Mrudul Inamdar,
Mr. Dinesh Jain.
Sitting from (L-R) : Dr. Prakash Modi, Mr. Kewalchand Jain, Mr. Nimesh Pandya.
Board of Directors
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From the Chairman’s Desk
Dear Shareholders,
India is a country full of surprises! A few years ago, the term ‘organised retail’ was almost non-existent in the minds of
people and in the dictionary of an average Indian layman. But suddenly, we witnessed a boom in retail and organised
retail became talk of the town.
Organised retail acts as an interface between branded fashion lifestyle apparel makers and the end consumers. The
Indian retailing industry, which has been traditionally dominated by small and family-run stores, has come of age. The
retail sector is the second largest employer after agriculture in the country and also the second largest untapped
market after China. There are some 12 million retail outlets in India. Besides, the country is also dotted with low-cost
kiosks and pushcarts.
Over the past couple of years there have been sweeping changes in the general retailing business, mainly in apparel
retailing which was once strictly a made-to-order market for clothing has changed to a ready-to-wear market. Preference
for readymade garments is increasing and this has become inevitable with the rise in urbanization. The preference for
the branded Western and Indo-western apparels among the working women is on the rise, which is a welcome relief
for the manufacturer and retailers of branded apparel. The dressing habits are getting refined if not changed specifically
among the working women.
When we were just about to experience a revolution in the organized retail the world economy witnessed a global
financial turmoil and recession crept in having its impact on developed and developing economies. Inspite of having a
robust financial system India could not remain insulated from the ensuing fall-out.
The year under review has not been very encouraging for the apparel and retail industry. With the suddenly disturbed
economical status, consumers are gradually losing interest on buying. And for the interested, the unbalanced income,
followed by the economic slowdown, is not meeting their buying requirements. This evolution had soon disappointed
the hopes of retail industry.
When the economy sputters, people close their wallets and delay purchases, and retail industry suffers. With fears
that the coming months could be the toughest, retailers are fighting to gain any edge they can over their rivals and to
cushion themselves from the slide in customer spending. Many of them are redeploying staff and revising promotions;
some are putting a new stress on low prices. Retailers have also resorted to measures such as shutting unviable
stores, trimming inventory, slicing payroll and taking other strategic steps they hope will help them endure the pain.
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While it is not possible to fully escape the impact of the global financial meltdown, the Indian economy is better placed
than many to withstand the shock, given that it is driven more by domestic consumption, has a sound banking system,
a young population, and a strong savings culture. Therefore, although growth may be relatively muted in the range of
6% to 6.5% for the next couple of years, the future prospects for sustained growth remain very bright.
In the backdrop of the aforesaid scenario your company has for the financial year ended March 31, 2009 witnessed a
revenue of Rs. 152.42 Crores. The net profit after tax for the year under review stood at Rs.14.26 Crores.
Your Board of Directors appreciate the continued investor confidence reposed in the company and recommend a final
dividend of 30% per equity share i.e. Rs. 3/- per equity share of Rs. 10/- each for the year ended March 31, 2009.
On the retail front during the financial year 2008-09, your company opened 11 K-Lounge stores, 6 Killer Exclusive
Brand Outlets (EBO), 7 Integriti EBO, 3 Lawman EBO, and 8 Factory Outlets. During the year your company closed/
relocated 12 stores due to location disadvantage. As on March 31, 2009 your company had 123 operational retail
stores across the country.
During the year your company has procured one 0.6 MW capacity, Wind Turbine Generator (WTG) from M/s. Suzlon
Energy Limited. The said WTG is installed on Government Land R.S.No. 1119 /p at Village Kuchhadi, Taluka Porbundar
in the registration District of Porbundar in the State of Gujarat. The WTG bearing No. SEL/600/08-09/1249 has been
in operation on the above land with effect from 30th July 2008. The said WTG is connected by 33KV grid line to 33/66
KV, 25MVA capacity Suthri site sub-station at Kuchhadi. The Kuchhadi site sub-station is connected to Gujarat Energy
Transmission Corporation Ltd. (GETCO) Bokhira sub station. As on the date of this report, the WTG has generated
906,350 KWH, thus paving way for reduction in energy cost of your company.
Your company has completed the construction of the new factory building at Daman. The construction of the factory
building at Vapi is in full swing and we expect the same to be completed by December 2009.
I am also pleased to inform my co-owners that ‘KILLER’, the flagship brand of your company has completed two
decades of existence from its inception in the year 1989. A dream which was conceptualized in 1989 by a few has now
grown to be the nation’s most preferred indigenous denim brand. The brand equity of ‘KILLER’ keeps getting stronger
by each passing day.
With this note I thank you all for being a part of the Kewal Kiran Family. I take this opportunity to thank our dedicated
team for their valuable support and cooperation without which the company would not have been able to reach the
position it enjoys today. I would also take this opportunity to thank my colleagues on the Board for their valuable
participation and contribution while guiding the course of the company.
Kewalchand P. Jain
Chairman and Managing Director
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NOTICE OF 18TH ANNUAL GENERAL MEETING
NOTICE is hereby given that the 18th Annual General Meeting of Kewal Kiran Clothing Limited will be held on Monday,August 3, 2009 at M.C. Ghia Hall, Bhogilal Hargovindas Building, 2nd floor, 18/20 Kaikhushru Dubash Marg, (BehindPrince of Wales Museum), Mumbai - 400 001 at 3.00 p.m. to transact the following business:
ORDINARY BUSINESS:
1. To receive, consider and adopt the Audited Balance Sheet as on March 31, 2009 and the Profit and Loss Accountfor the financial year ended March 31, 2009 together with the report of the Directors and Auditors thereon.
2. To declare dividend on Equity shares.
3. To appoint a Director in place of Mr. Hemant P. Jain, who retires by rotation and being eligible, offers himself for re-appointment.
4. To appoint a Director in place of Mr. Dinesh P. Jain, who retires by rotation and being eligible, offers himself for re-appointment.
5. To appoint a Director in place of Mr. Vikas P. Jain, who retires by rotation and being eligible, offers himself for re-appointment.
6. To appoint M/s. Jain & Trivedi, Chartered Accountants as the Statutory Auditors of the company and fix theirremuneration.
7. To appoint M/s. N.A. Shah Associates, Chartered Accountants as the joint Statutory Auditors of the company andfix their remuneration.
SPECIAL BUSINESS:
8. To consider and if though fit, to pass with or without modification, the following resolution as a Special Resolution:-
“RESOLVED THAT pursuant to Section 314(1) and other applicable provision, if any of the Companies Act, 1956consent of the members be and is hereby accorded to appoint Mr. Pankaj Jain, a relative of Mr. Kewalchand P.Jain, Mr. Hemant P. Jain, Mr. Dinesh P. Jain and Mr. Vikas P. Jain, Directors of the company to hold an office ofprofit under the company as a Manager not being a Manager within the meaning of Section 2(24) read withSection 385 of the Companies Act, 1956 with effect from October 19, 2008 on a salary (CTC) of Rs. 4,99,380/- perannum as per the terms and conditions mentioned herein below:
I. Salary
a. Basic and Dearness Allowance – Rs. 19,000/- per month.
b. Other allowances including House Rent Allowance, Education Allowance, Conveyance Allowance, MedicalAllowance etc. not exceeding Rs. 19,000/- per month.
II. Perquisites
In addition to the salary and allowances payable as above, Mr. Pankaj Jain will also be entitled to the followingperquisites:
a. Medical reimbursement from time to time upto a limit of Rs.15,000/- per annum, for himself and his familymembers.
b. Company’s contribution to Provident Fund as per rules of the company.
FURTHER RESOLVED THAT Mr. Pankaj Jain would be responsible to assist the management in its finance andretail operations;
LASTLY RESOLVED THAT Mr. Abhijit Warange, Company Secretary and Sr. Manager be and is hereby authorizedto file the necessary forms, if any and make the necessary applications, if any and do all such acts, deeds, mattersand things as are necessary to give effect to this resolution.”
By order of the Board of DirectorsABHIJIT B. WARANGE
COMPANY SECRETARYRegd. Office:B101-107, Synthofine Estate, Opposite Virwani Industrial Estate,
Goregaon (E), Mumbai-400 063Date: May 21, 2009
Place: Mumbai
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NOTES:
1. A MEMBER ENTITLED TO ATTEND AND VOTE IS ENTITLED TO APPOINT A PROXY TO ATTEND AND VOTEINSTEAD OF HIMSELF AND THE PROXY NEED NOT BE A MEMBER. IN ORDER TO BE VALID, PROXIESDULY STAMPED, SHOULD BE LODGED WITH THE COMPANY AT ITS REGISTERED OFFICE NOT LATERTHAN FORTY EIGHT HOURS BEFORE THE COMMENCEMENT OF THE MEETING.
2. Corporate Members intending to send their authorized representatives to attend the meeting are requested tosend a certified copy of the Board Resolution authorizing their representatives to attend and vote on their behalfat the meeting.
3. The relevant explanatory statement pursuant to Section 173(2) of the Companies Act, 1956 in respect of item no.8 stated above is annexed hereto.
4. The Register of Members and the Share Transfer Books of the company will remain closed from Tuesday, July21, 2009, to Monday, August 3, 2009 (both days inclusive).
5. The dividend as may be declared shall be payable to members of the company whose names appear:
a) As Beneficial Owners as at the end of business hours on July 20, 2009 as per the list to be furnished byNational Securities Depository Ltd. and Central Depository Services (India) Ltd., in respect of the shares heldin electronic form and
b) As members on the Register of Members of the Company as at August 3, 2009 after giving effect to validtransfers in respect of transfer request lodged with the company on or before the close of business hours onJuly 20, 2009.
6. The Securities and Exchange Board of India (SEBI) and the Reserve Bank of India (RBI) have advised all listedcompanies to mandatorily use the Electronic Clearing Services (ECS) facility wherever possible for dividendpayment to the shareholders. In view of this stipulation the company proposes to implement the ECS facility.Members are requested to provide the company with ECS mandate for crediting the future dividend paymentdirectly to their respective bank accounts. The Company shall be able to coordinate with the bankers only onreceipt of the necessary information. The main information required therein is the type of account, name of thebank and the account number. It should be signed by all the holders, as per the specimen signature recorded withthe Company/Depository Participant.
7. Members who have not claimed refund of their application money or not encashed the dividend warrant(s) forDividends declared by the Company so far are requested to make their claims to the Company immediately. Thesaid amounts remaining unpaid or unclaimed for seven years from the date they became due for payment arerequired to be transferred to investor education and protection fund pursuant to Section 205C of the CompaniesAct, 1956. Please note that as per Section 205C of the Companies Act, 1956, no claim shall lie against theCompany or the said fund in respect of individual amounts which remain unclaimed or unpaid for a period ofseven years from the dates that they first became due for payment and no payment shall be made in respect ofany such claims.
8. Members holding shares in the same set of names under different ledger folios are requested to apply for consolidationof such folios alongwith relevant share certificates to the company’s Registrar & Transfer Agents, Link Intime IndiaPrivate Limited, C-13, Pannalal Silk Mills Compound, L.B.S Marg, Bhandup (West), Mumbai 400 078.
9. Members holding shares in physical segment are requested to notify change in their address/status, if any,immediately to the company’s Registrar & Transfer Agents, M/s Link Intime India Private Limited, C-13, PannalalSilk Mills Compound, L.B.S Marg, Bhandup (West), Mumbai 400 078.
10. The company has designated an exclusive e-mail id called [email protected] for redressalof shareholders complaints /grievances. In case you have any queries/complaints or grievances then please writeto us at [email protected]
11. Members who would like to ask any questions on the accounts are requested to send their questions at RegisteredOffice of the company at least 10 days before the Annual General Meeting to enable the company to answer theirqueries satisfactorily.
12. Members are requested to bring their copies of the Annual Report to the Annual General Meeting.
13. The members/proxies should bring the attendance slip duly filled in and signed for attending the meeting.
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14. Information required under clause 49 of the Listing Agreement on Appointment/ Reappointment of Directors:
Profile of Directors retiring by rotation and offering for re-appointment:
At the ensuing Annual General Meeting Mr. Hemant P. Jain retires by rotation and being eligible, offers himself forre-appointment. Pursuant to Clause 49 of Listing Agreement relating to Code of Corporate Governance, theparticulars of the aforesaid Directors are given below:
1. Mr. Hemant P. Jain:
Born in 1965, Mr. Jain decided to join the business at early age after completing school. He learnt business onthe job and leads the marketing functions of the company. He is instrumental in launching the brands of thecompany. He is also instrumental in setting up and expanding the network of the retail stores of the companyunder the banner of K-LOUNGE. An avid traveler and field person, he keeps a keen eye on the latest trendsin international men’s fashion.
Mr. Jain holds 7,03,150 shares which includes 16,000 shares held as a Karta of Hemant P. Jain (H.U.F.) and75,900 shares held j/w Lata H. Jain in the company as on the date of this notice.
The details of other directorships of Mr. Hemant P. Jain are as follows:-
NAME OF THE COMPANY BOARD POSITION HELD
Kornerstone Retail Ltd. Director
Kewal Kiran Realtors and Infrastructures Pvt. Ltd. Director
Kewal Kiran Retail India Pvt. Ltd. Director
Kewal Kiran Finance Pvt. Ltd. Director
Kewal Kiran Media and Communication. Ltd. Director
White Knitwears Pvt. Ltd. Director
The details of committee memberships of Mr. Hemant P. Jain are as follows:-
NAME OF THE COMPANY NAME OF THE COMMITTEE POSITION HELD
Kewal Kiran Clothing Ltd. Shareholders and Investors Member Grievance Committee
2. Mr. Dinesh P. Jain:
Born in 1969, Mr. Dinesh Jain joined the business in 1990. Mr. Jain heads the manufacturing operations of thecompany. He specializes in Production and HR related issues. Mr. Jain is also responsible for ensuringoptimum utilization of production facilities of the company at its units at Dadar, Goregaon, Daman and Vapi.Mr. Jain is a trustee of Jatnobai Karmchandji Ratanparia Chauhan Charitable Trust. He is also the treasurerof Daman Industries Association.
Mr. Jain holds 7,28,650 shares which includes 16,000 shares as a Karta of Dinesh P. Jain (H.U.F.) and85,400 shares held j/w Sangeeta D. Jain in the company as on the date of this notice.
The details of other directorships of Mr. Dinesh P. Jain are as follows:-
NAME OF THE COMPANY BOARD POSITION HELD
Kornerstone Retail Ltd. Director
Kewal Kiran Retail India Pvt. Ltd. Director
Kewal Kiran Realtors and Infrastructures Pvt. Ltd. Director
Kewal Kiran Media and Communication Ltd. Director
Kewal Kiran Finance Pvt. Ltd. Director
Synthofine Chemicals of India Ltd. Director
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3. Mr. Vikas P. Jain:
Born in 1970, Mr. Vikas P. Jain joined the business in 1992, after completing his graduation in commerce. Mr.Jain heads the operations and distribution functions of the company. He is responsible for marketing ofLawman and Integriti brands. He also looks after the retail business of the company. Mr. Jain travels extensivelyand scouts for new technologies in garment manufacturing. He is a trustee of Jatnobai Karmchandji RatanpariaChauhan Charitable Trust.
Mr. Jain holds 7,29,086 shares which includes 16,000 shares as a Karta of Vikas P. Jain (H.U.F.) and 85,836shares held j/w Kesar V. Jain in the company as on the date of this notice.
The details of other directorships of Mr. Vikas P. Jain are as follows:-
NAME OF THE COMPANY BOARD POSITION HELD
Kornerstone Retail Ltd. Director
Kewal Kiran Retail India Pvt. Ltd. Director
Kewal Kiran Realtors and Infrastructures Pvt. Ltd. Director
Kewal Kiran Media and Communication Ltd. Director
Kewal Kiran Finance Pvt. Ltd. Director
EXPLANATORY STATEMENT PURSUANT TO SECTION 173 (2) OF
THE COMPANIES ACT, 1956
Item No. 8:
In the Board Meeting held on October 18, 2008 the Board of Directors had subject to the approval of the membersapproved the appointment of Mr. Pankaj Jain, a relative of the executive directors of the company. Mr. Pankaj is aqualified Chartered Accountant from the Institute of Chartered Accountants of India and he would assist the managementin finance and retail operations.
Mr. Pankaj Jain will be appointed as a Manager not being a Manager within the meaning of Section 2(24) read withSection 385 of the Companies Act, 1956. Since Mr. Pankaj is related to the Directors his appointment would begoverned by the provisions of Section 314 of the Companies Act, 1956.
Section 314(1) of the Companies Act, 1956 provides for members approval at General Meeting for his appointment.
Your Directors have recommended the Special Resolution for the approval of members.
Except Mr. Kewalchand P. Jain, Mr. Hemant P. Jain, Mr. Dinesh P. Jain and Mr. Vikas P. Jain, no other Director is inany way concerned/ interested in the resolution.
By order of the Board
For Kewal Kiran Clothing Limited
ABHIJIT B. WARANGECOMPANY SECRETARY
Date: May 21, 2009
Place: Mumbai
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DIRECTORS’ REPORT
To The Members:
Your Directors have pleasure in presenting the 18th Annual Report together with the audited accounts of the Companyfor the year ended 31st March, 2009.
FINANCIAL RESULTS:Amount (Rs.)
Sr. 31st March 2009 31st March 2008No.
1 Net Sales/Income from operations 1,445,834,477 1,595,966,556
2 Other Income 83,519,187 87,227,403
3 Total Expenditure 1,244,649,455 1,291,690,202
4 Gross Profit (Before deducting any of the following) 284,704,209 391,503,757
a. Finance Charges 27,088,815 28,377,762
b. Provision for Depreciation 50,410,084 39,202,528
c. Tax Provision 64,628,280 111,544,862
5 Net Profit for the year 142,577,029 212,378,605
i Prior Period Expenses (Net of Tax) – 1,330,750
ii Balance of Profit/(Loss) 142,577,209 211,047,854
6 Appropriation of Profit
i Bonus Shares issued during the year – –
ii Proposed Dividend (Including Dividend Tax) 43,259,031 28,839,354
iii Transfer to General Reserve 14,257,703 22,500,000
7 Dividend (in Rs.) per ordinary share 3 4
8 Paid up Equity Capital 123,250,037 123,250,037
9 Reserves except Revaluation Reserve 1,389,713,050 1,290,395,052
10 Surplus c/f 480,278,361 395,218,066
TURNOVER & PROFITS:
Your Directors wish to inform you that during the financial year ended 31st March, 2009, the sales and operatingincome was Rs. 1,445,834,477. The net profit before tax stood at Rs. 207,205,309. The net profit after tax stood at Rs.142,577,029.
DIVIDEND:
Your directors are pleased to recommend a final dividend of Rs. 3.00 per equity share of Rs. 10/- each for the yearended March 31, 2009.
The dividend once approved by the members in the ensuing Annual General Meeting will be paid out of the profits ofyour company for the year and will sum up to a total of Rs. 43,259,031 including dividend distribution tax.
An amount of Rs. 14,257,703 would be transferred to the reserves.
IPO FUND UTILISATION:
Your company entered the capital market with an issue of 3,100,037 Equity shares of Rs. 10/- each through 100%Book Building Route which opened for public subscription on March 20, 2006 and closed on March 23, 2006. Theallotment of the shares was made on April 5, 2006. The shares of your company got listed on Bombay Stock ExchangeLtd. (BSE) and National Stock Exchange of India Ltd. (NSE) on April 13, 2006.
The object of the issue were to finance your company’s capital expenditure in setting up new manufacturing facilities,expansion of distribution network by opening additional exclusive outlets, building corporate office, to meet generalcorporate purposes and achieve the benefits of listing.
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The company had in its prospectus projected attainment of the objects of the issue by 31st March, 2008. Howeverthere has been a delay in attainment of few objects for which the necessary approvals from the shareholders wastaken in the last annual general meeting held on August 4, 2008. The lower utilization on the projects is due to nonavailability of quality retail space at affordable rates and due to delay in getting possession of retail and manufacturingpremises. Unutilized Funds as on 31st March 2009 have been invested in fixed deposits with banks.
The details of the utilization of funds as on the date of this report is detailed below:(Amount Rs.)
Purpose of utilization of fund Projected utilization Actual utilization uptoupto year ended 31st March 200931st March 2010
Corporate Office 50,000,000 43,424,814
Setting Up Retail Stores 346,760,000 197,343,937(K-Lounge/ Exclusive Brand Outlets)
Setting up of Manufacturing unit 323,990,000 131,240,433
Share Issue Expenses 72,550,000 78,085,396
Total Expenses 793,300,000 450,094,580
During the year ended March 31, 2009 your company has opened 11 K-Lounge stores, 6 Killer Exclusive BrandOutlets (EBO), 7 Integriti EBO, 3 Lawman EBO, and 8 Factory Outlets. During the year your company closed / relocated12 stores due to location disadvantage. As on March 31, 2009 your company has 123 operational retail stores acrossthe country. The details of the K-Lounge stores and the EBO’s can be viewed on the company’s websitewww.kewalkiran.com
CAPITAL STRUCTURE:
The pre issue issued, subscribed and paidup capital of your company was Rs. 92,250,000/- comprising of 9,225,000Equity shares of Rs. 10/- each. Post issue of 3,100,037 Equity shares of Rs. 10/- each the issued, subscribed andpaidup capital of your company is Rs. 123,250,370/- comprises of 12,325,037 Equity shares of Rs. 10/- each.
CASH FLOW STATEMENT:
In conformity with the provisions of Clause 32 of the Listing Agreement with Stock Exchanges, the Cash Flow Statementfor the year ended 31st March 2009 is annexed hereto.
RELATED PARTY TRANSACTION:
Related party transactions have been disclosed in the notes to accounts.
DIRECTORS:
In accordance with the provisions of the Companies Act, 1956, and the Articles of Association of your company, Mr.Hemant P. Jain, Mr. Dinesh P. Jain and Mr. Vikas P. Jain, Directors of your Company would retire by rotation at theensuing Annual General Meeting and being eligible have offered themselves for reappointment.
DIRECTORS’ RESPONSIBILITY STATEMENT:
Pursuant to the requirement under Section 217(2AA) of the Companies Act, 1956 with respect to Director’s ResponsibilityStatement, it is hereby confirmed:
(i) that in the preparation of the annual accounts for the financial year ended 31st March 2009, the applicable accountingstandards have been followed along with proper explanation relating to material departures;
(ii) that the directors have selected such accounting policies and applied them consistently and made judgementsand estimates that are reasonable and prudent so as to give true and fair view of the state of affairs of theCompany at the end of the financial year and of the profit of the Company for the year under review;
(iii) that the directors have taken proper and sufficient care for the maintenance of adequate accounting records inaccordance with the provisions of the Companies Act,1956 for safeguarding the assets of the Company and forpreventing and detecting fraud and other irregularities;
(iv) that the directors have prepared the accounts for the financial year ended 31st March 2009 on a ‘going concern’basis.
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CORPORATE GOVERNANCE:
Kewal Kiran Clothing Limited is committed to conducting business of your company with the highest level of integrityand transparency. The commitment of your company is clearly reflected in the business activities of the company.Report on Corporate Governance as stipulated by Clause 49 of the Listing Agreement with the Stock Exchangesforms a part of the Annual Report. The Auditors’ certificate confirming compliance of the Corporate Governancerequirements by your company is attached to the Report on Corporate Governance.
MANAGEMENT DISCUSSION AND ANALYSIS:
A detailed review of operations, performance and future outlook of the company is given separately under the headManagement Discussion and Analysis and forms a part of this report.
COMPLIANCE WITH THE CODE OF CONDUCT:
Your company has put in place a Code of Conduct effective 14th January 2006, for its Board members and SeniorManagement Personnel. Declaration of compliance with the code of conduct have been received from all the BoardMembers and Senior Management Personnel. A certificate to this effect from Mr. Kewalchand P. Jain, Chairman &Managing Director forms a part of this Report.
AUDIT COMMITTEE:
In accordance with Clause 49 of the Listing Agreement your company has constituted an Audit Committee whichconsists of three non-executive independent directors of the company viz. Mr. Mrudul D. Inamdar (Chairman of AuditCommittee), Mr. Popatlal F. Sundesha and Mr. Nimish G. Pandya.
WIND TURBINE GENERATOR:
Your company has procured one 0.6. MW capacity, Wind Turbine Generator (WTG) from M/s. Suzlon Energy Limited.The said WTG is installed on Government Land R.S.No. 1119 /p at Village Kuchhadi, Taluka Porbundar in the registrationDistrict of Porbundar in the State of Gujarat. The WTG bearing No. SEL/600/08-09/1249 has been in operation on theabove land with effect from 30th July 2008. The said WTG is connected by 33KV grid line to 33/66 KV, 25MVA capacitySuthri site sub-station at Kuchhadi. The Kuchhadi site sub-station is connected to Gujarat Energy TransmissionCorporation Ltd. (GETCO) Bokhira sub station. As on the date of this report the WTG has generated 906,350 KWH,thus paving way for reduction in energy cost of your company.
INVESTMENT IN WHITE KNITWEAR PRIVATE LIMITED:
Your company has invested Rs. 33 Lacs in 333,000 Equity shares in the first phase of investment in White KnitwearPrivate Limited (WKPL) being 1/3rd equity capital of the WKPL. WKPL has acquired land in Surat SEZ for manufacturingapparels for European and American market. In the second phase of investment your company has invested Rs.27,100,000/- in 2,710,000, 9% Redeemable Cumulative Preference Shares of Rs. 10/- each. Your company intends tomake further investments in the WKPL based on the expansion plan in two phases.
OUTLOOK:
The year under review has not been very encouraging for the retail industry. Retailers in India have reported someslowdown, Your Company has not been affected thus far, mainly because of the strength of KILLER, LAWMAN,EASIES and INTEGRITI brands as well as our strengths in product design and quality, which are recognised by ourconsumers, as well as our competitors. The aggressive rollout of planned new stores, will continue to drive the brandedbusiness, especially in the Indian market, which is relatively less turbulent than other markets.
The medium/long term India story continues to look strong.
FIXED DEPOSIT:
Your company has not accepted any deposit within the meaning of Section 58A of the Companies Act, 1956.
ELECTRONIC FILING:
Since SEBI has stipulated electronic filing of Annual Report including Corporate Governance Report, ShareholdingPattern etc. on website of SEBI i.e. www.sebiedifar.nic.in statements of your company will also be accessible at thiswebsite. These statements are also displayed on your company’s website viz. www.kewalkiran.com.
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LISTING FEES:
The equity shares of your company are listed on the Bombay Stock Exchange Limited and National Stock Exchangeof India Limited. Your company has paid the applicable listing fees to the above Stock Exchanges upto date.
DEMATERIALISATION OF SHARES:
Your company has entered into agreements with the National Securities Depository Limited (NSDL) and CentralDepository Services (India) Limited (CDSL) for dematerialization of the shares of the company. Accordingly the sharesof your company are available for dematerialization and can be traded in Demat form.
PENDING SHARES UPLOAD:
The Company has opened a demat suspense account with Edelwise Securities Ltd. and credited all the shares issuedpursuant to the Initial Public Offer (IPO), which remain unclaimed despite the best efforts of the Company and Registrarto Issue.
i) Number of Shareholders outstanding at the beginning of the year : 15
Outstanding shares in the demat suspense account at the beginning of the year : 405
ii) Number of shareholders who approached the company for transfer of shares from suspense account during theyear : 7
iii) Number of shareholders to whom shares were transferred from suspense account during the year : 7
iv) Aggregate number of shareholders outstanding at the end of the year : 8Outstanding shares in the suspense account lying at the end of the year : 215
v) The voting rights on these shares are frozen till the rightful owner of such shares claims the shares.
AUDITORS:
Your company’s auditors M/s. Jain & Trivedi, Chartered Accountants and the joint auditors M/s. N.A. Shah Associates,Chartered Accountants, retire at the conclusion of the ensuing Annual General Meeting of the company and beingeligible offer themselves for re-appointment.
PERSONNEL:
Employee relations continued to be cordial during the year ended 31st March 2009. Your Company continued its thruston Human Resource Development. Your company has initiated various customized training programs viz. personalitydevelopment, development of inter personal skills, communication skills, public speaking etc. for its employees thatenhance both personal as well career growth of the employees. These programs are conducted round the year byprofessional trainers as well as by the human resource department of your company. Your company has also encouragedits employees to attend seminars and discussions conducted by professional institutions and trade bodies. The Boardwishes to place on record its appreciation to all the employees in the company for their sustained efforts and immensecontribution to the high level of performance and growth of the business during the year.
INFORMATION UNDER SECTION 217 (2A) OF COMPANIES ACT, 1956 READ WITH COMPANIES (PARTICULARSOF EMPLOYEES) RULES 1975:
Information in accordance with Section 217 (2A) of the Companies Act, 1956 read with the Companies (Particulars ofEmployees) Rules 1975 forms a part of the Directors Report for the year ended 31st March 2009. However pursuantto the provisions of Section 219 (1)(b)(iv) of the Companies Act, 1956, the Directors Report and Statement of Accountsare being sent to all shareholders excluding the statement of particulars of employees under Section 217 (2A) of theAct. Any shareholder interested in obtaining a copy of the said statement may write to the Company Secretary at thecorporate office of your Company.
INFORMATION UNDER SECTION 217 (1)(e) OF COMPANIES ACT, 1956 READ WITH COMPANIES (DISCLOSUREOF PARTICULARS IN THE REPORT OF THE BOARD OF DIRECTORS) RULES 1988:
The information pursuant to Section 217(1)(e) of the Companies Act,1956, read with Companies (Disclosure ofParticulars in the report of the Board of Directors) Rules 1988 is given below:
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A. CONSERVATION OF ENERGY:
The operations of your company are not energy intensive. However wherever possible your company strives tocurtail the consumption of energy on a continued basis.
B. TECHNOLOGY ABSORPTION, ADAPTATIONS & INNOVATION: Not Applicable
C. FOREIGN EXCHANGE EARNINGS AND OUTGO:
Activities relating to exports, initiatives taken to increase exports, development of new export markets for productsand services and export plans.
Total Foreign Exchange used and earned:
FOB Value Rs. 53,730,794
Domestic Sales Rs. 6,603
Total Foreign Exchange outgo Rs. 14,017,139
ACKNOWLEDGEMENTS:
The Board would like to place on record its sincere appreciation for the wholehearted support and contribution madeby its customers, its shareholders, and all its employees across the country, as well as the various GovernmentDepartments, Banks, Distributors, Suppliers and other business associates towards the conduct of efficient and effectiveoperations of your company.
For and on behalf of the Board
KEWALCHAND P. JAINCHAIRMAN & MANAGING DIRECTOR
Dated: May 21, 2009Place: Mumbai
CERTIFICATE OF COMPLIANCE WITH THE CODE OF CONDUCT
I, Kewalchand P. Jain, Chairman & Managing Director of the company, hereby declare that the company has adopteda Code of Conduct for its Board Members and Senior Management, at a meeting of the Board of Directors held onJanuary 14, 2006 and the Board Members and Senior Management have affirmed compliance with the said Code ofConduct for the financial year ended March 31, 2009.
FOR KEWAL KIRAN CLOTHING LIMITED
KEWALCHAND P. JAINCHAIRMAN & MANAGING DIRECTOR
Dated: May 21, 2009Place: Mumbai
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CORPORATE GOVERNANCE REPORT FOR THE YEAR 2008-09
I. COMPANY’S PHILOSOPHY ON CODE OF CORPORATE GOVERNANCE:
Kewal Kiran Clothing Ltd. is committed to good corporate governance in order to enhance shareholders’ value.The company believes that Corporate Governance is not an end in itself but a catalyst in the process towardsmaximization of shareholder value. The company’s philosophy on Corporate Governance enshrines the goal ofachieving the highest levels of transparency, accountability and equity in all spheres of its operations and in all itsdealings with the shareholders, employees, the Government and other parties. It is the company’s belief that goodethics make good business sense and our business practices are in keeping with the spirit of maintaining thehighest level of ethical standards.
In so far as compliance of Clause 49 of the Listing Agreement with the Stock Exchanges is concerned, thecompany has complied in all material respects with the requirements of Corporate Governance specified in theListing Agreement with Bombay Stock Exchange Ltd. and National Stock Exchange of India Limited.
II. BOARD OF DIRECTORS:
(a) Composition of the Board:
The Board of Directors of Kewal Kiran Clothing Limited have an optimum combination of executive and nonexecutive directors. As on March 31, 2009, the Board of Directors of the company comprises of the Chairmanand Managing Director, Mr. Kewalchand P. Jain, who is an executive director and one of the promoters of thecompany. Besides, there are three executive directors viz. Mr. Hemant P. Jain, Mr. Dinesh P. Jain and Mr.Vikas P. Jain, who are also the promoters of the company. The Board comprises of four non–executiveindependent directors, which accounts for fifty percent of the strength of Board. The non executive independentdirectors are eminent professionals with wide range of knowledge and experience in various spheres ofbusiness and industry, finance and law. The composition of the Board and other relevant details relating toDirectors as on March 31, 2009 are given below: –
Name of the Director Designation Category of **No. of **No. ofDirectorship other Committee
Directorship Chairmanship/Membership
Mr. Kewalchand P. Jain Chairman & Promoter & 6 1 Managing Director Executive
Mr. Hemant P. Jain Whole-time Promoter & 7 1Director Executive
Mr. Dinesh P. Jain Whole-time Promoter & 5 0Director Executive
Mr. Vikas P. Jain Whole-time Promoter & 5 0Director Executive
Mr. Popatlal F. Sundesha Director Independent 3 3 Non Executive
Mr. Mrudul D. Inamdar Director Independent 1 1Non Executive
Dr. Prakash A. Mody Director Independent 10 1 Non Executive
Mr. Nimish G. Pandya Director Independent 0 3 Non Executive
** Details of other directorships/committee memberships of all directors are given by way of a separateAnnexure. The committee chairmanship/membership of the Directors are restricted to the chairmanship/membership of Audit Committee, Shareholders/Investors Grievance committee and RemunerationCommittee.
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(b) Number of Board Meetings held and attended by Directors
(i) The meetings of the Board of Directors are scheduled well in advance. The Board Members are presentedin advance with the detailed agenda in respect of all Board meetings. During the year under review 4meetings of the Board of Directors were held on the following dates: –
May 11, 2008, July 26, 2008, October 18, 2008, and January 17, 2009. The gap between two boardmeetings is less than four months.
(ii) The attendance record of each of the Directors at the Board Meetings during the year ended on March31, 2009 and during the last Annual General Meeting is as under: –
Directors No. of Board Meetings Attended Attendance At The Last AGM
Mr. Kewalchand P. Jain 4 Present
Mr. Hemant P. Jain 3 Present
Mr. Dinesh P. Jain 4 Present
Mr. Vikas P. Jain 2 Present
Mr. Popatlal F. Sundesha 3 Absent
Mr. Mrudul D. Inamdar 4 Present
Dr. Prakash A. Mody 1 Present
Mr. Nimish G. Pandya 4 Present
(c) Code of Conduct
In line with the company’s objective of following the best Corporate Governance Standards the Board ofDirectors have laid down a Code of Conduct for all Board Members and Senior Management of the company.The Code is effective from January 14, 2006.
(d) Details of shares held in the company as on March 31, 2009
Name of the Directors Number of shares held
Mr. Kewalchand P. Jain* 6,90,411
Mr. Hemant P. Jain* 7,03,150
Mr. Dinesh P. Jain* 7,27,650
Mr. Vikas P. Jain* 7,27,086
Mr. Popatlal F. Sundesha** Nil
Mr. Mrudul D. Inamdar Nil
Dr. Prakash A. Mody 336
Mr. Nimish G. Pandya Nil
*Note:
Mr. K.P. Jain holds 16,000 equity shares in his capacity of Karta of Kewalchand P. Jain H.U.F. and 63,161shares held j/w Veena K. Jain
Mr. H.P. Jain holds 16,000 equity shares in his capacity of Karta of Hemant P. Jain H.U.F. and 75,900 sharesheld j/w Lata H. Jain
Mr. D.P. Jain holds 16,000 equity shares in his capacity of Karta of Dinesh P. Jain H.U.F. and 84,400 sharesheld j/w Sangeeta D. Jain
Mr. V.P. Jain holds 16,000 equity shares in his capacity of Karta of Vikas P. Jain H.U.F. and 83,836 sharesheld j/w Kesar V. Jain
**Note:
Fulchand Exports Private Limited is the holder of 20,000 Equity Shares. Further, Fulchand Finance PrivateLimited is the holder of 16,000 Equity Shares. Mr. Popatlal Sundesha, Independant Non-Executive Director ofthe company is a director & shareholder of Fulchand Finance Private Limited. Relatives of Mr. Popatlal Sundeshaare directors and shareholders of Fulchand Exports Private Limited.
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III. AUDIT COMMITTEE:
Constitution of Audit Committee
The Audit Committee was constituted on November 14, 2005 in accordance with Clause 49 of the Listing Agreement,consisting of three Directors all being non–executive and independent. The Committee consists of the followingnon executive independent directors:
NAME OF THE DIRECTOR POSITION HELD
Mr. Mrudul D. Inamdar Chairman
Mr. Popatlal F. Sundesha Member
Mr. Nimish G. Pandya Member
Mr. Abhijit B. Warange, Company Secretary acts as the secretary of the Committee.
All the members of the Audit Committee are financially literate and Mr. M.D. Inamdar, Chairman of the AuditCommittee possesses financial/accounting expertise.
Meetings of Audit Committee
During the year ended 31st March, 2009, six Audit Committee meetings were held on May 11, 2008, July 26,2008, October 18, 2008, January 17, 2009, February 28, 2009 and March 26, 2009. The attendance of each AuditCommittee member is given hereunder: –
Name of the Audit Committee Member No. of meetings held No. of meetings attended
Mr. Mrudul D. Inamdar 6 6
Mr. Popatlal F. Sundesha 6 4
Mr. Nimish G. Pandya 6 6
Attendees
The Audit Committee invites such of the executives and directors, as it considers appropriate to be present at itsmeetings. The Executive Directors, the Chief Financial Officer and the Statutory Auditors are the permanentinvitees to the Audit Committee meetings.
The terms of reference of the Audit Committee includes:
Powers
1. To investigate any activity within its terms of reference.
2. To seek information from any employee.
3. To obtain outside legal or other professional advice.
4. To secure attendance of outsiders with relevant expertise, if it considers necessary.
Roles
1. Oversight of the company’s financial reporting process and the disclosure of its financial information to ensurethat the financial statement is correct, sufficient and credible.
2. Recommending to the Board, the appointment, re-appointment and, if required, the replacement or removalof the statutory auditor and the fixation of audit fees.
3. Approval of payment to statutory auditors for any other services rendered by the statutory auditors.
4. Reviewing, with the management, the annual financial statements before submission to the board for approval,with particular reference to:
a. Matters required to be included in the Director’s Responsibility Statement to be included in the Board’sreport in terms of clause (2AA) of section 217 of the Companies Act, 1956;
b. Changes, if any, in accounting policies and practices and reasons for the same;
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c. Major accounting entries involving estimates based on the exercise of judgment by management;
d. Significant adjustments made in the financial statements arising out of audit findings;
e. Compliance with listing and other legal requirements relating to financial statements;
f. Disclosure of any related party transactions;
g. Qualifications in the draft audit report.
5. Reviewing, with the management, the quarterly financial statements before submission to the board for approval.
6. Reviewing, with the management, performance of statutory and internal auditors, adequacy of the internalcontrol systems.
7. Reviewing the adequacy of internal audit function, if any, including the structure of the internal audit department,staffing and seniority of the official heading the department, reporting structure coverage and frequency ofinternal audit.
8. Discussion with internal auditors any significant findings and follow up there on.
9. Reviewing the findings of any internal investigations by the internal auditors into matters where there issuspected fraud or irregularity or a failure of internal control systems of a material nature and reporting thematter to the board.
10. Discussion with statutory auditors before the audit commences, about the nature and scope of audit as wellas post-audit discussion to ascertain any area of concern.
11. To look into the reasons for substantial defaults in the payment to the depositors, debenture holders,shareholders (in case of non payment of declared dividends) and creditors.
12. To review the functioning of the Whistle Blower mechanism, in case the same is existing.
13. Carrying out any other function as is mentioned in the terms of reference of the Audit Committee.
IV. REMUNERATION COMMITTEE:
Composition of Committee
The Remuneration Committee was constituted on November 14, 2005. The Committee consists of the followingnon executive independent Directors:
NAME OF THE DIRECTOR POSITION HELD
Mr. Nimish G. Pandya Chairman
Mr. Popatlal F. Sundesha Member
Dr. Prakash A. Mody Member
Mr. Abhijit B. Warange, Company Secretary acts as the secretary of the Committee.
The terms of reference of Remuneration Committee includes determining and reviewing the remuneration payableto managerial personnel and any revision thereof.
During the year ended March 31, 2009 one meeting of the Remuneration Committee was held on May 11, 2008.
NAME OF REMUNERATION COMMITTEE MEMBER NO. OF MEETINGS HELD NO. OF MEETINGS ATTENDED
Dr. Prakash A. Mody 1 1
Mr. Popatlal F. Sundesha 1 1
Mr. Nimish G. Pandya 1 1
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Details of sitting fees, remuneration etc., paid to Directors for the year ended March 31, 2009.
Name of the Directors Sitting Fees Salary Perquisites Total
Mr. Kewalchand P. Jain Nil Rs. 24,00,000 Rs. 1,44,000 Rs. 25,44,000
Mr. Hemant P. Jain Nil Rs. 24,00,000 Rs. 1,44,000 Rs. 25,44,000
Mr. Dinesh P. Jain Nil Rs. 24,00,000 Rs. 1,44,000 Rs. 25,44,000
Mr. Vikas P. Jain Nil Rs. 24,00,000 Rs. 1,44,000 Rs. 25,44,000
Mr. Popatlal F. Sundesha Rs. 1,60,000 Nil Nil Rs. 1,60,000
Mr. Mrudul D. Inamdar Rs. 2,00,000 Nil Nil Rs. 2,00,000
Dr. Prakash A. Mody Rs. 40,000 Nil Nil Rs. 40,000
Mr. Nimish G. Pandya Rs. 2,20,000 Nil Nil Rs. 2,20,000
The aforesaid remuneration paid to the Wholetime Directors is excluding the provision for gratuity as separateactuarial valuation for the Wholetime Directors is not available.
Service contracts, notice period and severance fee
The appointment of the executive directors is governed by the Articles of Association of the company, the resolutionof the Board of Directors and the members.
There is no provision for severance fees.
Remuneration Policy of the company
Remuneration Policy for Executive Directors
The Board of Directors of the company presently comprises of four executive directors namely Mr. Kewalchand P.Jain, Chairman & Managing Director, Mr. Hemant P. Jain, Mr. Dinesh P. Jain and Mr. Vikas P. Jain Directors.
The remuneration of the executive directors is governed by the Articles of Association of the company, the resolutionof the Board of Directors and the members. The remuneration paid to the executive directors has been approvedby the members in the annual general meeting held on August 4, 2008. The details of the remuneration paid to theexecutive directors have been detailed aforesaid.
Revisions, if any in the remuneration of the executive directors are deliberated by the Remuneration Committee ofthe Board. Based on the recommendation of the Remuneration Committee, the Board decides on the revisionsubject to the shareholders approval.
Remuneration Policy for Non-Executive Directors
Non Executive Directors of a company’s Board of Directors can add substantial value to the company throughtheir contribution to the Management of the company. In addition, they can safeguard the interest of the investorsat large by playing an appropriate control role. Non executive directors bring in their long experience and expertiseand add substantial value to the deliberations of the Board and its Committee.
Apart from receiving sitting fees for attending the Board/Committee meetings the non executive directors have noother pecuniary relationship or transaction with the company. The sitting fees paid to the non executive directorsis within the statutory limits prescribed under the Companies Act, 1956 for payment of sitting fees without theapproval of the Central Government.
V SHAREHOLDERS AND INVESTORS GRIEVANCE COMMITTEE:
Composition of Committee:
The Shareholders and Investors Grievance Committee has been constituted to look into investors’ complaints/queries.
The Committee is headed by a non executive independent director and comprises of the following directors:
NAME OF THE DIRECTOR POSITION HELD
Mr. Nimish G. Pandya Chairman
Mr. Kewalchand P. Jain Member
Mr. Hemant P. Jain Member
Mr. Abhijit B. Warange, Company Secretary acts as the secretary of the Committee.
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The terms of reference of Shareholders and Investors Grievance Committee are to specifically look into theredressal of shareholders and investors complaints like transfer of shares, non receipt of balance sheet, nonreceipt of dividends, etc.
Status report of Investors complaints for the year ended March 31, 2009
No. of complaints received - 10
No. of complaints resolved - 10
No. of complaints pending - NIL
Name and Designation of the compliance officer:
Mr. Abhijit B. Warange – Company Secretary & Sr. Manager - Legal.
V. GENERAL BODY MEETINGS:
Location, time and date where the three immediately preceding Annual General Meetings of the company wereheld are given below:
Financial Year Day & Date Time Venue
2005-06 Thursday, September 14, 2006 3.00 p.m Indian Education Societies, ManikSabhagriha, Opp Lilavati Hospital,Bandra Reclamation, Bandra(w),Mumbai : 400 050
2006-07 Tuesday, August 7, 2007 3.00 p.m M. C. Ghia Hall, Bhogilal HargovindasBuiding, 2nd floor, 18/20, KaikhushruDubash Marg (Behind Prince of WalesMuseum), Mumbai – 400 001
2007-08 Monday, August 4, 2008 3.00 p.m M. C. Ghia Hall, Bhogilal HargovindasBuiding, 2nd floor, 18/20, KaikhushruDubash Marg (Behind Prince of WalesMuseum), Mumbai – 400 001
Special Resolutions passed in previous three Annual General Meetings:-
15th Annual General Meeting: At this meeting one Special Resolution was proposed, seconded and passed withmore than three-fourths majority on show of hands. This special resolution was with regard to maintaining theRegister and Index of Members of the company with Link Intime India Pvt. Ltd. (Formerly known as M/s. IntimeSpectrum Registry Limited) Registrar and Transfer Agents at their office situated at C-13, Pannalal Silk MillsCompound, L.B.S Marg, Bhandup (West), Mumbai 400 078.
16th Annual General Meeting: At this meeting there was no special resolution passed by the members of thecompany.
17th Annual General Meeting: At this meeting one Special Resolution was proposed, seconded and passed withmore than three-fourths majority on show of hands. This special resolution was with regard to extending the timefor attainment of the objects of the Initial Public Offer (IPO), reallocate the utilization of proceeds of the InitialPublic Offer (IPO) and reallocation of balance unutilized amount allocated for acquiring property, cost of furniture,electrical fittings/lightings/air conditioning for security system or for display equipments or for other assets andsignages for K-Lounge/EBO retail stores.
Special Resolutions whether passed by postal ballot:
No special resolution was passed by postal ballot in the last Annual General Meeting and also no resolutionrequiring approval of shareholders by way of postal ballot is proposed to be passed in the ensuing Annual GeneralMeeting.
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VI. DISCLOSURES:
(i) Disclosure regarding materially significant related party transaction: -
The Register of Contracts containing the transactions in which Directors are interested is placed before theBoard regularly for its approval. There are no materially significant related party transactions which havepotential conflict with the interest of the company at large. Transactions with related parties are disclosedseparately in note no. 14 of part B of Schedule 21 to the Accounts in the Annual Report.
(ii) No penalties or strictures have been imposed on the company by the Stock Exchanges or SEBI or any otherStatutory Authority on any matter related to capital market during the last three years.
(iii) The Board hereby confirms that no personnel have been denied access to the audit committee.
(iv) The company has complied with all the mandatory requirements of Clause 49 of the Listing Agreement.Except for the composition of the Remuneration committee of the Board of Directors, the company has notadopted any other non mandatory requirements of Clause 49 of the Listing Agreement.
(v) The company paid Rs. 20,000/- to M/s. Bansi S. Mehta and Co. to represent the company in an income taxmatter before the income tax tribunal. Mr. Mrudul Inamdar, Non Executive Independent Director is a partner inBansi S. Mehta and Co.
(vi) Disclosure of relationship between Directors inter-se:
Mr. Kewalchand P. Jain, Mr. Hemant P. Jain, Mr. Dinesh P. Jain and Mr. Vikas P. Jain are brothers.
VII. MEANS OF COMMUNICATION:
The results of the company for the financial year ended March 31, 2009 are published in Business Standard,Lokmat and DNA. The results of the company are normally published in The Economic Times/ Business Standard/Business Line/ DNA and Maharashtra Times/Hindustan Times/Lokmat. The financial results and other informationare displayed on the company’s website viz. www.kewalkiran.com The company also displays official news releaseson its website for the information of its shareholders/investors. Even presentations made to institutional investorshave been displayed on the website of the company.
The company does not have the system of intimating shareholders individually of its quarterly results. However,investors/shareholders desirous of getting the quarterly unaudited results are given copies thereof after considerationof results by the Board and publication in newspapers.
The company has been complying with the provisions of Clause 51 of the Listing Agreement pertaining to ElectronicData Information Filing & Retrieval (EDIFAR) System since March, 2006. The audited financial results of thecompany for the financial year ended March 31, 2009 have been uploaded on the EDIFAR web site. The samehas also been uploaded on the company’s website viz. www.kewalkiran.com
The Management discussion and Analysis Report forms a part of the Annual Report.
VIII.GENERAL SHAREHOLDERS’ INFORMATION:
a) Annual General Meeting:
Date & Time : August 3, 2009 at 3.00 pm.
Venue : M.C. Ghia Hall, Bhogilal Hargovindas Building, 2nd floor, 18/20 Kaikhushru,Dubash Marg, (Behind Prince of Wales Museum), Mumbai - 400 001
b) Financial Year : April 1 to March 31
c) Dates of Book Closure:
July 21, 2009 to August 3, 2009 (both days inclusive)
d) Dividend Payment Date:
Dividend when sanctioned by shareholders will be made payable on or after August 7, 2009.
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e) Listing on Stock Exchanges:
The equity Shares of the company got listed on April 13, 2006 and continue to be listed at the following StockExchanges: –
Bombay Stock Exchange Ltd., Mumbai, Phiroze Jeejeebhoy Towers, Dalal Street, Mumbai: 400 001.
National Stock Exchange of India Ltd., Exchange Plaza, Bandra Kurla Complex Bandra (E), Mumbai: 400 051.
Note:
Listing fees for the financial year 2009–10 has been paid to both the stock exchanges i.e Bombay StockExchange Ltd. and National Stock Exchange of India Ltd.
f) Stock Code/Symbol:
Bombay Stock Exchange Ltd., Mumbai : 532732
The National Stock Exchange of India Ltd. : KKCL
ISIN No. : INE401H01017
g) Market Price Data:
The monthly high & low quotations of the company’s shares traded on the Bombay Stock Exchange Limitedand the National Stock Exchange of India Limited during the financial year 2008-2009 are as under:
Months BSE NSE
High Low High Low
April 2008 330.00 270.05 344.90 279.10
May 2008 352.10 240.00 340.00 237.00
June 2008 299.00 211.00 299.00 228.00
July 2008 260.00 193.20 268.00 195.00
August 2008 242.00 183.50 240.00 184.00
September 2008 209.80 143.00 204.00 134.00
October 2008 173.95 119.60 185.00 115.50
November 2008 164.95 100.05 159.00 100.00
December 2008 188.00 95.00 182.00 96.70
January 2009 160.00 103.00 159.80 95.00
February 2009 130.70 101.15 139.90 101.10
March 2009 110.00 95.10 110.00 86.50
h) Performance in comparison to broad based indices:
0
50
100
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3118th Annual Report
Making growth fashionable.
i) Registrar & Share Transfer Agents:
Link Intime India Pvt. Ltd.C-13, Pannalal Silk Mills Compounds,L.B.S. Marg, Bhandup (West),Mumbai-400078
Tel: +91 22 2594 6970-77Fax: +91 22 2596 2691Email: [email protected]: www.intimespectrum.com
j) Share Transfer System:
Shares held in the dematerialised form are electronically traded in the Depositories and the Registrar andShare Transfer Agents of the company, viz. Link Intime India Private Limited periodically receive from theDepository the beneficial holdings data, so as to enable them to update their records and to send all corporatecommunications, dividend warrants etc. Physical shares received for dematerialisation are processed andcompleted within a period of 15 days from the date of receipt provided they are in order in every respect. Baddeliveries are immediately returned to Depository participants under advice to the shareholders within theaforesaid period.
Transfers in Physical forms are registered by the registrar and transfer agents immediately on receipt of thecompleted documents and certificates are issued with in one month of the date of lodgment of transfer. Invalidshare transfer are returned within fifteen days of receipt.
k) Distribution Pattern of shareholding as on March 31, 2009:
No of equity shares Shareholders Amount
Number % to total In Rs. % to total
1–5000 4339 96.14 17,80,760 1.44
5001–10000 39 0.86 3,15,450 0.26
10001–20000 34 0.75 5,05,440 0.41
20001–30000 13 0.29 3,20,460 0.26
30001–40000 9 0.20 3,14,490 0.26
40001–50000 18 0.40 8,66,070 0.70
50001–100000 19 0.42 14,29,970 1.16
100001 & above 42 0.94 11,77,17,730 95.51
Total 4513 100.00 12,32,50,370 100.00
Shareholding Pattern as on March 31, 2009
Category No. of Shares % to total
Indian Promoters 9097297 73.811
Mutual Funds 1019936 8.275
FII’s 1208000 9.801
NRI 14444 0.117
Bodies Corporate 145037 1.177
Independent Director 336 0.003
Clearing Members 3534 0.029
Public 836453 6.787
Total 12325037 100.00
18th Annual Report32
Making growth fashionable.
As per Regulation 3 of SEBI Takeover Code, 1992 as amended upto date, group companies include KornerstoneRetail Limited, Kewal Kiran Retail India Pvt. Ltd., Kewal Kiran Realtors and Infrastructures Pvt. Ltd., WhiteKnitwears Pvt. Ltd., Kewal Kiran Finance Pvt. Ltd., Kewal Kiran Media and Communication Ltd. as also thefirm viz. Kewal Kiran Enterprises.
Shareholding pattern graph as on March 31, 2009
l) Dematerialisation of Equity Shares:
The shares of the company are compulsorily traded in dematerialised form and are available for trading underboth the Depository Systems –NSDL (National Securities Depository Limited ) and CDSL (Central DepositoryServices (India) Limited ). Nearly 28.46 % of total equity shares of the company are held in dematerialisedform with NSDL & CDSL as on March 31, 2009.
Liquidity
Kewal Kiran Clothing Limited Shares are actively traded on Bombay Stock Exchange Ltd. and National StockExchange of India Ltd.
m) Outstanding GDRS/ADRS/Warrants or any Convertible Instruments conversion date and likely impacton equity:
The company has not issued any GDRS/ADRS/Warrants or any convertible instruments.
n) Plant Locations:
Vapi
Plot No. 787/1, 40, shedIInd Phase, G.I.D.CVapi: 396 195Gujarat
Daman
697/3/5/5A, Near Maharani Estate,Somnath Road, DhabelDaman: 396 210
Mumbai
Synthofine Estate,Opp Virwani Industrail EstateGoregaon (East),Mumbai: 400 063
Bodies Corporate1.18%
Mutual Funds8.28%
FII’s & NRI9.92%
Public6.81%
Indian Promoters
73.81%
Indian Promoters
Mutual Funds
Bodies Corporate
FII’s & NRI
Public
3318th Annual Report
Making growth fashionable.
71-73, Kasturchand Mill EstateBhawani Shankar Road,Dadar (West),Mumbai; 400 028
o) Wind Mill:
R.S.No. 1119/pVillage Kuchhadi,Taluka Porbundar,Gujarat
p) Address for Investor Correspondence:
Shareholding related queries
Link Intime India Private LimitedC-13, Pannalal Silk Mills Compounds,L.B.S. Marg, Bhandup (West),Mumbai-400078
Tel: +91 22 2594 6970-77Fax: +91 22 2596 2691Email: [email protected]: www.intimespectrum.com
General correspondence
Kewal Kiran Estate,Behind Tirupati Udyog,460/7, I.B. Patel Raod,Goregaon (East), Mumbai: 400 063
Tel: +91 22 26814400Fax: +91 22 26814410Email: [email protected]: www.kewalkiran.com
An exclusive id, [email protected] for redressal of investor complaints has been createdand the same is available on company’s website www.kewalkiran.com
18th Annual Report34
Making growth fashionable.
ANNEXURE TO CORPORATE GOVERNANCE
DETAILS OF OTHER DIRECTORSHIPS/ COMMITTEE MEMBERSHIPS OF ALL DIRECTORS
[1] BODIES CORPORATE OF WHICH MR. KEWALCHAND P. JAIN IS A CHAIRMAN/ DIRECTOR
NAME OF THE COMPANY BOARD POSITION HELD
Kornerstone Retail Ltd. Chairman
Kewal Kiran Realtors and Infrastructures Pvt. Ltd. Chairman
Kewal Kiran Retail India Pvt. Ltd. Chairman
Kewal Kiran Finance Pvt. Ltd Chairman
Kewal Kiran Media and Communication Ltd. Chairman
White Knitwears Pvt. Ltd. Director
COMMITTEE MEMBERSHIPS
NAME OF THE COMPANY NAME OF THE COMMITTEE POSITION HELD
Kewal Kiran Clothing Ltd. Shareholders and Investors Grievance Committee Member
[2] BODIES CORPORATE OF WHICH MR. HEMANT P. JAIN IS A CHAIRMAN/ DIRECTOR
NAME OF THE COMPANY BOARD POSITION HELD
Kornerstone Retail Ltd. Director
Kewal Kiran Realtors and Infrastructures Pvt. Ltd. Director
Kewal Kiran Retail India Pvt. Ltd. Director
Kewal Kiran Finance Pvt. Ltd Director
White Knitwears Pvt. Ltd. Director
Kewal Kiran Media and Communication Ltd. Director
Synthofine Chemicals of India Ltd. Director
COMMITTEE MEMBERSHIPS
NAME OF THE COMPANY NAME OF THE COMMITTEE POSITION HELD
Kewal Kiran Clothing Ltd. Shareholders and Investors Grievance Committee Member
[3] BODIES CORPORATE OF WHICH MR. DINESH P. JAIN IS A CHAIRMAN/ DIRECTOR
NAME OF THE COMPANY BOARD POSITION HELD
Kornerstone Retail Ltd. Director
Kewal Kiran Realtors and Infrastructures Pvt. Ltd. Director
Kewal Kiran Retail India Pvt. Ltd. Director
Kewal Kiran Finance Pvt. Ltd Director
Kewal Kiran Media and Communication Ltd. Director
[4] BODIES CORPORATE OF WHICH MR. VIKAS P. JAIN IS A CHAIRMAN / DIRECTOR
NAME OF THE COMPANY BOARD POSITION HELD
Kornerstone Retail Ltd. Director
Kewal Kiran Realtors and Infrastructures Pvt. Ltd. Director
Kewal Kiran Retail India Pvt. Ltd. Director
Kewal Kiran Finance Pvt. Ltd Director
Kewal Kiran Media and Communication Ltd. Director
3518th Annual Report
Making growth fashionable.
[5] BODIES CORPORATE OF WHICH MR. POPATLAL F. SUNDESHA IS A CHAIRMAN/ DIRECTOR
NAME OF THE COMPANY BOARD POSITION HELD
Apaksh Broadband Ltd. Chairman
Aksh Opti Fibre Ltd. Director
Fulchand Finance Pvt. Ltd. Chairman
COMMITTEE MEMBERSHIPS
NAME OF THE COMPANY NAME OF THE COMMITTEE POSITION HELD
Kewal Kiran Clothing Ltd. Audit Committee Member
Kewal Kiran Clothing Ltd. Remuneration Committee Member
Aksh Opti Fibre Ltd. Audit Committee Member
[6] BODIES CORPORATE OF WHICH MR. MRUDUL D. INAMDAR IS A CHAIRMAN/ DIRECTOR
NAME OF THE COMPANY BOARD POSITION HELD
Kanbans Consultancy Services Pvt. Ltd. Director
COMMITTEE MEMBERSHIPS
NAME OF THE COMPANY NAME OF THE COMMITTEE POSITION HELD
Kewal Kiran Clothing Ltd. Audit Committee Chairman
[7] BODIES CORPORATE OF WHICH DR. PRAKASH A. MODY IS A CHAIRMAN/ DIRECTOR
NAME OF THE COMPANY BOARD POSITION HELD
Unichem Laboratories Ltd. Chairman
Viramrut Trading Pvt. Ltd. Director
A.V.M. Capital Services Pvt. Ltd. Director
PM Capital Services Pvt. Ltd. Director
Pranit Trading Pvt. Ltd. Director
Chevy Capital Services Pvt. Ltd. Director
Niche Generics Ltd. U.K Director
Unichem Farmaceutica Do Brazil Ltda. Director
Unichem SA (Pty) Ltd. (South Africa) Director
Unichem Pharmaceuticals (USA) Inc Director
COMMITTEE MEMBERSHIPS
NAME OF THE COMPANY NAME OF THE COMMITTEE POSITION HELD
Kewal Kiran Clothing Ltd. Remuneration Committee Member
[8] BODIES CORPORATE OF WHICH MR. NIMISH G. PANDYA IS A CHAIRMAN/ DIRECTOR
NAME OF THE COMPANY BOARD POSITION HELDNil Nil
COMMITTEE MEMBERSHIPS
NAME OF THE COMPANY NAME OF THE COMMITTEE POSITION HELD
Kewal Kiran Clothing Ltd. Remuneration Committee Chairman
Kewal Kiran Clothing Ltd. Shareholders and Investors Grievance Committee Chairman
Kewal Kiran Clothing Ltd. Audit Committee Member
18th Annual Report36
Making growth fashionable.
MANAGEMENT DISCUSSION AND ANALYSIS
Economy:
The economic landscape looks significantly different compared to the situation twelve months ago. At that time GDPgrowth was at record levels of 9% plus, and it was expected that 10 % was within reach. In the meantime the sub-prime issue in the US evolved in to a full scale global financial crisis and India, although having a relatively robustfinancial system, could not remain insulated from the ensuring fall-out.
The global meltdown had an increasingly severe impact on the Indian economy in the second half of 2008. The rapidoutflow of institutional funds caused a sudden liquidity crisis, a slump in stock markets, and a precipitous fall in thevalue of the rupee. Reserve Bank of India (RBI) policy bias shifted markedly from controlling inflation to stimulatinggrowth and boosting liquidity, and a number of monetary measures have been implemented in order to shore upfinancial markets and try to limit the spillover effect on the real economy. Some further easing of monetary policyseems likely, but may be limited by the continuing threat of inflationary pressures.
India is the fifth largest retail destination; globally. Despite recession, India is still maintaining itself as an attractivedestination for retail industry and foreign investments. While it is not possible to fully escape the impact of the globalfinancial meltdown, the Indian economy is better placed than many to withstand the shock, given that it is driven moreby domestic consumption, has a sound banking system, a young population, and a strong savings culture.
Market:
The inflation or the economic slowdown is adversely affecting the retail industry. With the suddenly disturbed economicalstatus, consumers are gradually losing interest on buying. And for the interested, the unbalanced income, followed bythe economic slowdown, is not meeting their buying requirements. This evolution had soon disappointed the hopes ofretail industry.
The bright side of the story is that property for retail is getting cheaper by the day. The retailers utilized this opportunityto change the rental model striking a partnership between the land lord and themselves. In revenue sharing rentalmodel the retailers share a percentage of their sales with the landlords thereby reducing the risk. Employment costcan now get rationalized. Merchandise costs and the non-merchandise cost can be negotiated to levels never seenbefore
Reduce cost and drive efficiency is the mantra of the day. The other mantra that seemed to have worked for theretailers is to lure the customers with big discounts and offers. The last festive season witnessed retailers luringbuyers with discounts as high as 50% to the MRP and a plethora of schemes and freebes to drive sales.
Opportunities & Threats:
KKCL is a branded apparel company in the domestic market which presents a huge opportunity today with the younggeneration with high incomes and aspiration for wearing brands. The domestic Indian consumer becoming moreaware of international brands, trends and products due to the huge inflow of information through internet and electronicmedia and this has led to a demand in the lifestyle industry like apparel for quality branded products. Our knowledgeof latest manufacturing technology combined with best practices in distribution and retail allows us to provide highquality products at competitive prices.
We employ latest available technology, these when coupled with the knowledge and productivity gives us a tremendousedge over competition.
The four popular and well accepted brands of the Company viz. KILLER, INTEGRITI, Pg3 LAWMAN & EASIESprovide a great opportunity in the domestic market. The products manufactured and provided under the brands are ofa very high quality and fashion. They have an enviable reputation in the market. The different brands of the companyoperate in different design and price segments. We have added women’s wear to KILLER and INTEGRITI brands. Wehave also introduced men’s formal wear in INTEGRITI brand. The presence of accessories like time-wear, footwear,knitwear and eyewear under the existing brands give a complete lifestyle shopping experience to our customers.
The biggest threat in our industry is not being able to understand the customer preference and trends. We will alsohave to be well versed with best retail practices. Availability of quality retail space in time, imposition of service tax onrentals are few other contributing factors which are taking a toll on the retail industry.
3718th Annual Report
Making growth fashionable.
Risks and Concerns:
Risk Management:
A slowdown in economic growth in India could cause the business to suffer as the Company’s performance is highlydependent on the growth of economy, which in turn leads to a rise in disposable incomes and consumption in thecountry.
Favourable population growth, a large pool of highly skilled workers, greater integration with the world economy andincreasing domestic and foreign investment suggest that the Indian economy will continue its growth momentum forseveral years to come.
Business Risk:
The company operates in fashion life style products associated with high advertisement costs and risk related to brandmanagement. The inventory cost related to lifestyle garments is traditionally a matter of risk. However through effectiveinventory management the company has reduced the risk to a minimal level.
Fashion Risk:
This risk would arise through Company’s inability to identify and understand contemporary and evolving fashion trends,which can lead to lower sales and profitability.
However, it is the Company’s constant endeavour to be closer to the customer through its diversified retail outlets. Wealso have a talented design team in place that is in step with the latest national and international fashion trends andensures that they are reflected in our designs for our customers.
Brand Risk:
Any event that tarnishes the image of the brands can lower the value of the brands and adversely affects the Company’sbusiness.
The Company’s business model revolves around its brands and, therefore, the Company ensures that none of thecharacteristics and attributes of the brands are compromised within the Company’s communication to its customers.The Company also gives wide focus on customer preferences and conducts extensive in-house research to maintaintop-of-the-mind recall with the customer base with respect to the brand.
Internal control systems and their adequacy:
The Company has a proper and adequate system of internal controls commensurate with the size of the company andthe nature of its business to ensure that all assets are safe guarded and protected against loss from unauthorized useor disposition and that transactions are authorized and recorded reported correctly and adequately. The company’sinternal control are supplemented by internal audits, review by management and documented policies, guidelines andprocedures. The internal control is designed to ensure that financial and other records are reliable for preparingfinancial information and for maintaining accountability of assets.
The key constituents of the internal control system are:
� Establishment and review of business plans
� Identification of key risks and opportunities
� Clear and well defined organizational structure and limits of financial authority
� Continuous identification of area requiring strengthening of internal controls
� Operating procedures to ensure effectiveness of business process
� Systems of monitoring compliance with statutory regulations
� Well defined principles and procedures for evaluation of new business proposals capital expenditure
� A robust management information system
� A robust internal audit and review system
The Company has appointed independent firm as Internal Auditors to monitor the Internal Control systems and itsimplementation.
The Audit Committee of the Board of Directors actively reviews the adequacy and effectiveness of internal controlssystems and suggests improvement for strengthening them. The company has a strong Management InformationSystem which is an integral part of the control mechanism.
18th Annual Report38
Making growth fashionable.
AUDITORS’ CERTIFICATE
To,The Members ofKewal Kiran Clothing Limited
1. We have examined the compliance of conditions of corporate governance by Kewal Kiran Clothing Limited, for theyear ended on March 31, 2009, as stipulated in Clause 49 of the Listing Agreement of the said Company withstock exchanges.
2. The compliance of conditions of corporate governance is the responsibility of the management. Our examinationwas limited to procedures and implementation thereof, adopted by the Company for ensuring the compliance ofthe conditions of the Corporate Governance. It is neither an audit nor an expression of opinion on the financialstatements of the Company.
3. In our opinion and to the best of our information and according to the explanations given to us and representationsmade by the management, we certify that the Company has complied with the conditions of Corporate Governance,as stipulated in the abovementioned clause of the Listing Agreement, to the extent applicable.
4. We state that such compliance is neither an assurance as to the future viability of the Company nor the efficiencyor effectiveness with which the management has conducted the affairs of the Company.
For N.A. Shah Associates For Jain & TrivediChartered Accountants, Chartered Accountants,
Sandeep Shah Satish C. TrivediPartner PartnerMembership No.: 37381 Membership No.: - 38317
Place: MumbaiDate: May 21, 2009
Environment and Safety:
The company is conscious of the need for environmentally clean and safe operations. The company’s policy requiresthe conduct of all operations in such manner so as to ensure safety of all concerned, compliance of statutory andindustrial requirements for environment protection and conservation of natural resources to the extent possible.
Human Resources:
As on 31st March 2009, we had 1615 employees. We are focused on attracting and retaining the best manpoweravailable. We strive to provide to our employees high degree of motivation, training and structured compensationpackage.
Focused and organized investment in training and development, continuance of productive improvement efforts andan employee satisfaction survey are some of the highlights of our HR activities this year.
We have excellent industrial relations with all our employees at manufacturing facilities. Adequate safety and welfaremeasures are in place and we will continue to improve the same on ongoing basis.
Cautionary Statements:
This discussion contains certain forward-looking statements within the meaning of applicable securities laws. Readersare cautioned not to place undue reliance on these forward looking statements, which reflects management’s analysisdescribing our objectives and expectations based on certain information and assumptions. Our operations are dependenton various internal and external factors within and outside the control of the management.
We assume no responsibility in respect of forward looking statements herein which may undergo changes in future onthe basis of subsequent developments, information or events.
3918th Annual Report
Making growth fashionable.
102, Hitawala Complex, Opp. Soni Hospital, Saheli Marg, Udaipur.
341-A, Raghuleela Mega Mall, 1st Floor, Behind Poisar Bus Depot, Kandivali (W), Mumbai: 400 067Phoenix Mill, Gala No. 13, Janta Ind. Estate, 1/162, Senapati Bapat Marg,
Opp. Phoenix Mill Gate, Lower Parel, Mumbai - 400 013.
18th Annual Report40
Making growth fashionable.
644, 4th Block, 80 Feet Road, Koramangala, Bangalore - 560034.
4118th Annual Report
Making growth fashionable.
AUDITORS’ REPORT
To,The Members ofKewal Kiran Clothing Limited
1. We have audited the attached Balance Sheet of Kewal Kiran Clothing Limited as at March 31, 2009 and alsothe Profit and Loss Account and the Cash Flow Statement for the year ended on that date annexed thereto. Thesefinancial statements are the responsibility of the Company’s management. Our responsibility is to express anopinion on these financial statements based on our audit.
2. We conducted our audit in accordance with auditing standards generally accepted in India. Those standardsrequire that we plan and perform the audit to obtain reasonable assurance about whether the financial statementsare free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amountsand disclosures in the financial statements. An audit also includes assessing the accounting principles used andsignificant estimates made by management, as well as evaluating the overall financial statement presentation.We believe that our audit provides a reasonable basis for our opinion.
3. As required by the Companies (Auditor’s Report) Order 2003 as amended by the Companies (Auditor’s Report)(Amendment) order, 2004 issued by the Central Government of India in terms of sub-section (4A) of section 227of the Companies Act, 1956, we enclose in the Annexure a statement on the matters specified in paragraphs4 and 5 of the said Order.
4. Further to our comments in the Annexure referred to in paragraph 3 above, we report as follows:
a. we have obtained all the information and explanations, which to the best of our knowledge and belief were
necessary for the purposes of our audit;
b. in our opinion, proper books of account as required by law have been kept by the Company so far as appearsfrom our examination of those books;
c. the Balance Sheet, Profit & Loss Account and Cash Flow Statements dealt with by this report are in agreementwith the books of account;
d. in our opinion, the Balance Sheet, Profit and Loss Account and Cash Flow Statements dealt with by this reportcomply with the Accounting Standards referred to in the Companies (Accounting Standard) Rule, 2006, issuedby the Central Government, read together with sub-section (3C) of Section 211 of the Companies Act, 1956;
e. on the basis of the written representation received from the directors, and taken on record by the Board ofDirectors, as on 31st March, 2009, we report that none of the directors is disqualified as on 31st March, 2009from being appointed as a director in terms of clause (g) of sub-section (1) of section 274 of the CompaniesAct, 1956;
f. in our opinion and to the best of our information and according to the explanations given to us, the saidaccounts read together with Significant accounting policies and notes to accounts give the information requiredby the Companies Act, 1956, in the manner so required and give a true and fair view in conformity with theaccounting principles generally accepted in India:
i) in the case of Balance Sheet, of the state of affairs of the Company as at 31st March, 2009;
ii) in the case of Profit & Loss Account, of the profit of the Company for the year ended on that date; and
iii) in the case of Cash Flow Statement, of the cash flows for the year ended on that date.
For N.A. Shah Associates For Jain & TrivediChartered Accountants, Chartered Accountants,
Sandeep Shah Satish C. TrivediPartner PartnerMembership No.: - 37381 Membership No.: - 38317
Place: MumbaiDate: May 21, 2009
18th Annual Report42
Making growth fashionable.
ANNEXURE TO THE AUDITORS’ REPORT
(Referred to in paragraph 3 of our report of even date)
(i) In respect of fixed assets:
(a) The Company has maintained proper records showing full particulars including quantitative details and situationof its fixed assets.
(b) The company has a regular programme of physical verification of its fixed assets by which fixed assets areverified in a phased manner over a period of three years. In accordance with this programme, certain fixedassets are verified during the year and no material discrepancies were noticed on such verification. In ouropinion, this periodicity of physical verification is reasonable having regard to the size of the Company and thenature of its assets.
(c) Fixed assets disposed off during the year were not substantial, and therefore, do not affect the going concernassumption.
(ii) In respect of its inventories:
(a) As explained to us, the inventories have been physically verified by the management during the year afterreasonable intervals. In case of stock lying at third parties, certificates confirming the stocks so held have beenreceived from parties.
(b) In our opinion and according to the information and explanations given to us, the procedures of physical verificationof inventory followed by the management are reasonable and adequate in relation to the size of the companyand nature of its business.
(c) In our opinion and according to the information and explanations given to us, the company has maintainedproper records of its inventories. The discrepancies noticed on verification between the physical stocks and thebook records were not material.
(iii) In respect of loans taken / granted:
(a) According to the information and explanation given to us, the Company has not taken loans from companies,firms and other parties covered in the register maintained under section 301 of the Companies Act, 1956.
(b) According to the information and explanation given to us, the Company has not granted loans to Companies firms,Directors and other parties covered in the register maintained under section 301 of the Companies Act, 1956.
(c) Accordingly, since there are no loans taken or granted by the Company, no comment is required for rate ofinterest and other terms and condition and of regularity in receipt /payment of principal and interest (clause4(iii)(b, c, f and g) of the order)
(iv) In our opinion, and according to the information and explanations given to us, there are adequate internal controlprocedures commensurate with the size of the Company and nature of its business for the purchase of inventoryand fixed assets and for the sale of goods and services. During the course of our audit, we have not observed anycontinuing failure to correct major weaknesses in such internal controls.
(v) In respect of register maintained under section 301 of the Companies Act, 1956:
(a) Based on the information and explanations given to us, the transactions pertaining to contracts and arrangementsthat need to be entered into a register in pursuance of section 301 of the Companies Act, 1956 have been soentered.
(b) According to information and explanation given to us, the transactions made in pursuance of such contracts orarrangements entered in the register maintained under section 301 of the Companies Act, 1956 and aggregatingduring the year to Rs. 500,000/- or more in respect of a party were made at prices which are reasonable havingregard to the prevailing market prices at the relevant time.
(vi) The company has not accepted any deposits as referred to in section 58 and 58AA of the Companies Act 1956.We are informed that no order relating to the Company has been passed by the Company law Board or NationalCompany Law Tribunal or Reserve Bank of India or any Court or any other Tribunal.
(vii) In our opinion, the internal audit functions carried out during the year by a firm of Chartered Accountants appointedby the Company have been commensurate with the size of the Company and nature of its business.
(viii)We have broadly reviewed the books of accounts maintained by the Company pursuant to the rules made by theCentral Government for the maintenance of cost records under section 209(1) (d) of the Companies Act, 1956,and are of the opinion that prima facie, the prescribed accounts and records have been made and maintained inrespect of generation of electricity from wind power.
4318th Annual Report
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(ix) In respect of statutory dues:
(a) According to the information and explanations given to us and on the basis of our examination of the books ofaccount, the Company has been generally regular in depositing undisputed statutory dues including InvestorEducation and Protection Fund, Income-tax, Income Tax collected at source, Sales-tax / VAT, Service Tax,Wealth Tax, Custom Duty, Excise Duty, Cess and any other dues during the year with the appropriate authoritiesexcept minor delays in payment of Tax Deducted at Source, Service Tax, VAT. According to the informationand explanation given to us, there are no undisputed statutory dues outstanding for a period of more than sixmonths from the date they became payable.
(b) According to information and explanations given to us, there is no disputed Sales-tax, VAT, Wealth Tax, ServiceTax as on 31st March, 2009. The details of disputed Income-tax , which have not been deposited as on 31stMarch, 2009 are given as follows:
Name of Nature Amount Period to Forum where disputethe Statute of Dues (In Rs.) which it relates is pending
Income Tax Tax liability 10,241 Assessment Income Tax AppellateAct 1961 year 2002-03 Tribunal
Tax liability 1,933,765 Assessment Income Tax Appellate year 2005-06 Tribunal
Tax liability 1,084,014 Assessment year Commissioner of2006-07 Income Tax (Appeals)
Foreign Trade Penalty 1,320,780 Year 1996 Additional Director& Development General of Foreign Trade.Act, 1992
(x) The Company does not have any accumulated losses at the end of the financial year and has not incurred cashlosses during the financial year covered by our audit and the immediately preceding financial year.
(xi) Based on our audit procedures and the information and explanations given by the management, we are of theopinion that the Company has not defaulted in repayment of dues to bank during the year.
(xii) According to the information and explanations given to us, the Company has not granted loans and advances onthe basis of security by way of pledge of shares, debentures and other securities.
(xiii) The Company is not a chit fund / nidhi / mutual benefit fund / society.
(xiv) The Company has maintained proper records of transactions and contracts in respect of investments in MutualFunds and Shares and timely entry has been made therein. All the Investments made by the company are in thename of the Company.
(xv) The Company has given guarantee to Bankers in respect of loans taken by others and based on the informationand explanation given to us we are of the opinion that the terms and conditions thereof are not prima facieprejudicial to the interest of the company.
(xvi) To the best of our knowledge and belief and according to the information and explanation given to us, in ouropinion, term loans availed by the Company were, prima facie, applied for the purposes for which the loans wereobtained, other than temporary deployment pending application.
(xvii) On the basis of our examination of Cash Flow Statement, the funds raised on short-term basis have not been usedfor long term investments, as they have been financed out of internal accruals.
(xviii) The Company has not made any preferential allotment of shares during the year.
(xix) According to the information and explanation given to us the Company has not issued any debentures andaccordingly no comments in terms of para (xix) are required.
(xx) We have verified the end use of money raised by public issue in the earlier year and the same is disclosed in notesto the financial statements (Note B -5 of Schedule 21)
(xxi) To the best of our knowledge and belief and according to the information and explanations given to us, no fraud onor by the Company has been noticed or reported during the year.
For N.A. Shah Associates For Jain & TrivediChartered Accountants, Chartered Accountants,
Sandeep Shah Satish C. TrivediPartner PartnerMembership No.: - 37381 Membership No.: - 38317
Place: MumbaiDate: May 21, 2009
18th Annual Report44
Making growth fashionable.
BALANCE SHEET AS AT 31ST MARCH, 2009
PARTICULARS SCH. AS AT 31ST MARCH, 2009 AS AT 31ST MARCH, 2008
NO. AMOUNT(RS.) AMOUNT(RS.)
SOURCES OF FUNDS
SHAREHOLDER’S FUNDS
Share Capital 1 123,250,370 123,250,370
Reserves and surplus 2 1,389,713,050 1,290,395,052
1,512,963,420 1,413,645,422
LOAN FUNDS
Secured loans 3 235,866,413 274,465,694
TOTAL 1,748,829,833 1,688,111,116
APPLICATION OF FUNDS
FIXED ASSETS 4
Gross block 613,421,868 472,412,494
Less : Depreciation/Amortization 164,336,981 118,412,148
Net block 449,084,887 354,000,346
Capital work-in-progress 6,437,493 13,936,520
455,522,380 367,936,866
INVESTMENTS 5 308,229,303 110,535,670
DEFERRED TAX ASSETS (NET) 14,437,054 14,512,193(Refer Note B - 17 to Schedule 21)
CURRENT ASSETS, LOANS AND ADVANCES
Inventories 6 162,614,025 281,201,044
Sundry debtors 7 200,209,150 324,050,805
Cash and bank balances 8 652,501,360 648,299,713
Other Current Assets 9 27,087,155 35,831,504
Loans and advances 10 140,156,031 115,131,869
1,182,567,721 1,404,514,935LESS: CURRENT LIABILITIES AND PROVISIONS 11
Current Liabilities 158,788,452 173,000,124
Provisions 53,138,173 36,388,424
211,926,625 209,388,548NET CURRENT ASSETS 970,641,096 1,195,126,387
TOTAL 1,748,829,833 1,688,111,116
Significant accounting policies and 21notes to accounts
Schedules referred to above and notes form integral part of balance sheet.
As per our report of even dateFor and on behalf of For and on behalf of For and on behalf of the BoardN. A. Shah Associates Jain & TrivediChartered Accountants Chartered Accountants
Sandeep Shah Satish C. Trivedi Kewalchand P. Jain Hemant P. Jain Abhijit B. WarangePartner Partner Chairman & Wholetime Director Company Secretary(Membership No.: - 37381) (Membership No.: - 38317) Managing Director
Place: Mumbai Place: MumbaiDate: May 21, 2009 21May 11, 2008 Date: May 21, 2009
4518th Annual Report
Making growth fashionable.
PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED 31ST MARCH, 2009
PARTICULARS SCH. For the Year ended For the year endedNO. 31ST March, 2009 31ST March, 2008
AMOUNT (Rs.) AMOUNT (Rs.)
INCOMESales Income 12 1,445,834,477 1,595,966,556Other Income 13 83,519,187 87,227,403
1,529,353,664 1,683,193,959EXPENDITURE
(Increase)/ Decrease in Stocks 14 112,432,686 (36,257,134)Cost of Material consumed 15 519,790,586 733,336,110Purchase of Trading Material 16,251,241 9,046,361Personnel Cost 16 181,150,912 181,187,779Manufacturing and Operating Expenses 17 66,047,202 120,375,787Administrative and Other Expenses 18 102,280,936 63,748,096Selling and Distribution Expenses 19 246,695,892 220,253,204Finance Expenses 20 27,088,815 28,377,762Depreciation/ Amortization 4 50,410,084 39,202,528
1,322,148,355 1,359,270,492Net Profit Before Tax and Prior Period items 207,205,309 323,923,467Provisions for TaxationCurrent Tax [including Rs. 80,000 (P.Y. Rs. 40,000) for Wealth Tax] 61,580,000 109,100,000Deferred Tax 75,139 (155,138)Fringe Benefit Tax 2,300,000 2,600,000Net Profit after tax and before Prior Period Items 143,250,170 212,378,605Prior Period Item: Lease Rental (Net of Tax) – 1,330,750Short Provision of Tax 673,141 –Net Profit for the Year 142,577,029 211,047,854Balance brought forward 395,218,066 264,348,920Appropritions Proposed Dividend 36,975,111 24,650,074Tax on Proposed Dividend 6,283,920 4,189,280Interim Dividend – 24,650,074Tax on Interim Dividend – 4,189,280Transfer to General Reserves 14,257,703 22,500,000Balance carried to balance sheet 480,278,361 395,218,066Earnings per Share - Basic & Diluted (Face value of Rs. 10 each) 11.57 17.12(Refer Note B - 16 to Schedule 21)Significant accounting policies and notes to accounts 21
Schedules referred to above and notes form integral part of profit and loss account
As per our report of even dateFor and on behalf of For and on behalf of For and on behalf of the BoardN. A. Shah Associates Jain & TrivediChartered Accountants Chartered Accountants
Sandeep Shah Satish C. Trivedi Kewalchand P. Jain Hemant P. Jain Abhijit B. WarangePartner Partner Chairman & Wholetime Director Company Secretary(Membership No.: - 37381) (Membership No.: - 38317) Managing Director
Place: Mumbai Place: MumbaiDate: May 21, 2009May 11, 2008 Date: May 21, 2009
18th Annual Report46
Making growth fashionable.
STATEMENT OF CASH FLOWS FOR THE YEAR ENDED 31ST MARCH, 2009
PARTICULARS 2008-09 2007-08
AMOUNT (Rs.) AMOUNT (Rs.)
A. CASH FLOW FROM OPERATING ACTIVITIES
Net Profit before taxes as per 207,205,309 321,907,426Profit and Loss Account
Adjustments for:
Depreciation/ Amortization 50,410,084 39,202,528
(Profit)/ Loss on Sale of Fixed Assets 1,019,379 (48,681)
(Gain)/Loss on Redemption of units of Mutual Fund (2,852,352) (2,081,153)
Finance Charges 22,790,995 22,902,680
Dividend Income on Mutual fund (7,184,902) (2,774,521)
Provision for Doubtful Debts 4,900,000 1,650,000
Provision for Diminution in Value of Inventory 430,000 1,570,000
Provision for Contingencies 1,346,000 1,800,000
Provision for Diminution in Value of Investment 1,455,311 373,509
Exchange Rate Fluctuation 28,598,334 (5,060,552)
Rent Income (579,646) (155,000)
Interest earned (64,457,492) (67,685,648)
35,875,711 (10,306,838)
Operating Profit before Working 243,081,020 311,600,588
Capital Changes
Adjustments for:
Trade and other receivables 99,319,267 (129,972,599)
Inventories 118,157,019 (34,543,788)
Trade payables and other liabilities (13,279,479) 58,512,964
204,196,807 (106,003,423)
Net Cash Inflow from Operating Activities 447,277,827 205,597,165
Direct Taxes paid (30,747,957) (89,933,515)
Net Cash Inflow from Operating Activities 416,529,870 115,663,650
B. CASH FLOW FROM INVESTING ACTIVITIES
Purchase of Fixed Assets (137,153,036) (104,606,706)
Sale of Fixed Assets 2,442,226 505,335
Investments in Joint Venture (12,350,000) (14,750,000)
Intercorporate Deposits (20,000,000) –
Tax on Interest on Intercorporate Deposits (275,645) –
Purchase of Investments in FMP and Shares (107,527,000) (41,781,463)
Redemption of Investments(FMP) 40,512,477 30,000,000
Gain on Redemption of Mutual Fund 2,852,352 2,081,153
Dividend Received 7,184,902 2,774,521
Recovery of Loans given – 450,000
Interest received 72,144,567 56,740,971
Less :Tax Paid 21,909,102 50,235,465 23,006,352 33,734,620
Rent Income 334,439 155,000
Less :Tax Paid 197,022 137,417 32,550 122,450
Net Cash Outflow From Investing Activities (173,940,842) (91,470,090)
4718th Annual Report
Making growth fashionable.
PARTICULARS2008-09 2007-08
AMOUNT (Rs.) AMOUNT (Rs.)
C. CASH FLOW FROM FINANCING ACTIVITIES
Secured Loans taken – 273,196,894
Secured Loans repaid (16,198,213) (221,696,450)
Realised Exchange Loss on payment of foreign currency Loan (659,723) –
Secured Loans - Bank Overdraft (Net) (49,347,915) 18,530,033
Interest paid (23,616,213) (23,649,386)
Repayment of Application Money – (154,600)
Payment of Dividend (Including Dividend Tax) (28,858,207) (64,759,890)
Net Cash Outflow From Financing Activities (118,680,271) (18,533,399)
NET INCREASE IN CASH AND CASH EQUIVALENTS 123,908,757 5,660,161
CASH AND CASH EQUIVALENTS - OPENING BALANCE 699,377,424 693,717,263
CASH AND CASH EQUIVALENTS - CLOSING BALANCE 823,286,181 699,377,424
Notes:
1. Cash and Cash Equivalents includes fixed deposits of Rs.3,133,609 (P.Y. Rs.20,224,148) under lien. (ReferSchedule 8)
2. Cash and Cash Equivalents includes Rs. 221,129 (P.Y Rs. 239,982) lying in Escrow Account & Unpaid DividendAccount.
3. The Cash Flow Statement is prepared under ‘Indirect Method’ as set out in Accounting Standard - 3 on Cash FlowStatements issued by the Institute of Chartered Accountants of India.
4. The Aggregate Tax paid during the period is Rs. 53,129,725 ( P.Y. Rs.112,972,416).
5. Investment in mutual fund in nature of fixed maturity plan (short term maturity) are not treated as Cash and CashEquivalent and accordingly the previous years figures has also been reclassified.
6. Component of cash and cash equivalent includes as at :
31ST March, 2009 31ST March, 2008(Rs.) (Rs.)
Cash And Bank Balances 652,501,360 648,299,713
Add: Investments in Liquid Fund 170,862,124 51,077,711
Less: Exchange Rate differences 77,303 –
Total 823,286,181 699,377,424
7. Previous year’s figures have been regrouped, wherever necessary.
STATEMENT OF CASH FLOWS FOR THE YEAR ENDED 31ST MARCH, 2009
As per our report of even dateFor and on behalf of For and on behalf of For and on behalf of the BoardN. A. Shah Associates Jain & TrivediChartered Accountants Chartered Accountants
Sandeep Shah Satish C. Trivedi Kewalchand P. Jain Hemant P. Jain Abhijit B. WarangePartner Partner Chairman & Wholetime Director Company Secretary(Membership No.: - 37381) (Membership No.: - 38317) Managing Director
Place: Mumbai Place: MumbaiDate: May 21, 2009May 11, 2008 Date: May 21, 2009
18th Annual Report48
Making growth fashionable.
SCHEDULES ‘1’ TO ‘21’ ANNEXED TO AND FORMING PART OF THE BALANCE SHEET
AND THE PROFIT & LOSS ACCOUNT FOR THE YEAR ENDED 31ST MARCH, 2009
PARTICULARSAs at 31ST March, 2009 As at 31ST March, 2008
AMOUNT (Rs.) AMOUNT (Rs.)
SCHEDULE - 1 : SHARE CAPITAL
Authorised capital20,000,000 (P.Y 20,000,000) equity shares of Rs.10 each 200,000,000 200,000,000
Issued and subscribed :
12,325,037 (P.Y. 12,325,037) equity shares of Rs.10 each, fully paid up 123,250,370 123,250,370
(of the above 3,000,000 (P.Y. 3,000,000) shares are allotted as fully paid up
by way of bonus shares by Capitalisation of Profits)123,250,370 123,250,370
SCHEDULE - 2 : RESERVES AND SURPLUS
Securities Premium Account 842,676,986 842,676,986
(As per last Balance Sheet)
General Reserve
Opening Balance 52,500,000 30,000,000
Add: Transfer from Profit & Loss account 14,257,703 22,500,000
66,757,703 52,500,000
Closing Balance in Profit and Loss account 480,278,361 395,218,066
1,389,713,050 1,290,395,052
SCHEDULE - 3 : SECURED LOANS(Refer Note B - 4 to Schedule 21)
1) Term Loan from Bank 33,309,504 47,092,747(Amount due within a year Rs. 13,783,243) P.Y. Rs. 13,783,243))
2) Foreign Currency Demand Loan 127,689,650 102,808,423(Amount due within a year Rs. 127,689,650 (P.Y. Rs. 102,047,565))(Interest accrued & Due included in above Rs. Nil (P.Y. Rs. 760,858))
3) Working Capital Loans from Banks 74,867,259 124,564,524(Interest accrued & Due included in above Rs. 158,219 (P.Y. Rs. Nil))
235,866,413 274,465,694
4918th Annual Report
Making growth fashionable.
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18th Annual Report50
Making growth fashionable.
PARTICULARSAs at 31st March, 2009 As at 31st March, 2008
AMOUNT (Rs.) AMOUNT (Rs.)
SCHEDULE - 5 : INVESTMENTSLONG TERM INVESTMENTSa) Trade Investments
(Refer Note No. 6 of Schedule B -21)In Equity shares, Fully paid (unquoted)White Knitwear Private Limited (Joint Venture) 3,300,000 3,300,000(330,000 (P.Y. 330,000 ) Shares of face value Rs. 10 each, fully paid up)In Preference shares, Fully paid (unquoted)9% Cumulative Redeemable Preference Shares 27,100,000 14,750,000of White Knitwear Private Limited (Joint Venture)(2,710,000 (P.Y. 1,475,000 ) Shares of face value Rs. 10 each, fully paid up)
b) Other than Trade InvestmentsIn Equity shares, Fully paid (Quoted)Reliance Power Limited 1,269,000 1,269,000(4,512 ( P.Y. 2,820) including 1,692 Bonus shares received)Less: Provision for Diminution in value of Investment 806,520 373,509
30,862,480 18,945,491CURRENT INVESTMENTSa) Other than Trade Investments
Mutual Fund (Un-Quoted) Fully paidi) Liquid & Debt Fund (Face Value of Rs 10/- each)
HDFC Cash Management Fund Saving Plus Plan – 20,774,285[Units: Nil (P.Y.2,070,905 )]Kotak Income Plus-Monthly Dividend – 10,000,000[Units: Nil (P.Y.936566.36 )]Kotak Bond (Short Term)-Monthly Dividend – 20,303,426[Units: Nil (P.Y. 2,019,839.39 )]Birla Sunlife Income Plus - Quarterly Dividend - Reinvestment 10,377,478 –[Units: 880,364.56 (P.Y. Nil )]DWS Short Maturity Fund - Institutional Weekly Dividend Plan 10,084,949 –[Units: 1,007,054.84 (P.Y. Nil )]DWS Ultra Short Term Fund - Institutional Growth 15,138,602 –[Units: 1,468,597.98 (P.Y. Nil )]ICICI Pru Short Term Plan - Dividend Fortnightly 21,167,331 –[Units: 1,761,337.55 (P.Y. Nil ) ]ICICI Pru Inst Income Plan - Dividend Quarterly 10,098,889 –[Units: 817,213.53 (P.Y. Nil )]IDFC Liquid Plus Fund- Treasury Plan - Institutional Plan B- Daily Dividend 20,411,576 –[Units: 2,026,908.41 (P.Y. Nil ) ]IDFC-SSIF Short Term- Plan B - Fortnightly Dividend 11,232,325 –[Units: 1,089,632.80 (P.Y. Nil ) ]JP Morgan India Liquid Plus Fund Growth Plan 10,238,286 –[Units: 897,292.46 (P.Y. Nil )]KOTAK Bond Short Term - Monthly Dividend 21,322,424 –[Units: 2,116,984.93 (P.Y. Nil )]Reliance Short Term Fund 10,041,830 –[Units: 941,939.04 (P.Y. Nil )]Tata Floater Fund Growth 20,637,247 –[Units: 1,579,050.86 (P.Y. Nil )]Tata Short Term Bond Fund 10,111,186 –[Units: 835,357.73 (P.Y. Nil )]Less: Provision for Diminution in value of Investment 1,022,300 –
169,839,823 51,077,711
SCHEDULES ‘1’ TO ‘21’ ANNEXED TO AND FORMING PART OF THE BALANCE SHEETAND THE PROFIT & LOSS ACCOUNT FOR THE YEAR ENDED 31ST MARCH, 2009
5118th Annual Report
Making growth fashionable.
PARTICULARSAs at 31st March, 2009 As at 31st March, 2008
AMOUNT (Rs.) AMOUNT (Rs.)
ii) Fixed Maturity Plan (FMP’s) (Face Value of Rs 10/- each)Kotak FMP 3M Series 27 - Dividend – 20,000,000[Units: Nil (P.Y.2,000,000 )]Reliance Fixed Horizon Fund-VI-Series 2 – 10,512,468[Units: Nil (P.Y. 1,051,246.82 )]Reliance Fixed Horizon Fund-VI-Series 3 – 10,000,000[Units: Nil (P.Y. 1,000,000 )]Birla Sun Life FTP-Series BI-Institutional Growth 40,000,000 –[Units: 4,000,000 (P.Y. Nil )]HSBC Fixed Term Series 63-Institutional Growth 47,527,000 –[Units: 4,752,699.99 (P.Y. Nil )]KOTAK FMP 12M Series 9 Institutional Growth 20,000,000 –[Units: 2,000,000 (P.Y. Nil )]
107,527,000 40,512,468308,229,303 110,535,670
Aggregate Cost (Net of Provisions )- Quoted 462,480 895,491- Unquoted Shares 30,400,000 18,050,000- Unquoted Mutual Fund 277,366,823 91,590,179
Aggregate Market / Net asset Value- Quoted 462,480 895,491- Unquoted Mutual Fund 282,563,150 91,927,203
SCHEDULE - 6 : INVENTORIES(As taken, valued and certified by the management)Finished goods [Includes Stock in transit of Rs. 969,956 ( P.Y. Rs. 3,402,465 )] 88,800,336 171,197,978Work-in-process 45,074,822 75,109,866Raw material 21,136,041 27,450,053Packing material & Accessories 6,133,318 6,769,742Stores, chemicals and consumables 1,469,508 673,405
162,614,025 281,201,044SCHEDULE - 7 : SUNDRY DEBTORSa) Debtors (Secured)
i) Over Six Months – –ii) Others 8,543,427 –
b) Over Six Months(Unsecured)i) Considered Good 1,208,705 19,838,122ii) Doubtful 7,400,000 2,500,000
c) Other Debts (Unsecured, Considered Good) 190,457,018 304,212,683199,065,723 326,550,805
Less : Provision for Doubtful Debts 7,400,000 2,500,000200,209,150 324,050,805
Note: Rs. 245,207 (P.Y. Rs. Nil ) due from company in which Directors areInterested as a Director/Member
SCHEDULE - 8 : CASH & BANK BALANCESCash on hand 918,269 1,997,415Bank balances with scheduled banks :-In current accounts 12,065,080 2,675,923In EEFC account (Foreign Currency) 3,275,037 -In Public Issue Escrow Accounts 111,325 111,325In Unpaid Dividend Account 109,804 128,657In Fixed Deposits 636,021,845 643,386,393[Out of the above Fixed deposits under lien are Rs. 3,133,609 (P.Y. Rs.20,224,148)]
652,501,360 648,299,713
SCHEDULES ‘1’ TO ‘21’ ANNEXED TO AND FORMING PART OF THE BALANCE SHEETAND THE PROFIT & LOSS ACCOUNT FOR THE YEAR ENDED 31ST MARCH, 2009
18th Annual Report52
Making growth fashionable.
PARTICULARSAs at 31st March, 2009 As at 31st March, 2008
AMOUNT (Rs.) AMOUNT (Rs.)
SCHEDULE - 9 : OTHER CURRENT ASSETS
Interest Accrued but not due on Fixed Deposits 26,786,525 34,473,600
Duty Drawback Receivable 300,630 1,357,904
27,087,155 35,831,504
SCHEDULE - 10 : LOANS AND ADVANCES
(Unsecured, considered good except otherwise stated)
Loans given to employees 1,952,986 1,488,377
Loan given to others 50,000 50,000
Deposits [Includes deposits with Directors Rs.324,000 (P.Y. Rs. 324,000)] 99,254,418 76,620,195(Also Refer Note B - 7 to Schedule 21)
Intercorporate Deposits (Including Interest accrued but not due there onRs. 1,062,437 ( P.Y. Rs. Nil )) 21,062,437 –
Advances recoverable in cash or in kind or for value to be received 11,801,105 14,989,440
Advance for Capital Expenditure 2,733,402 5,575,372
Advance tax / tax deducted at source (Net of Provision) 3,301,683 16,408,484
140,156,031 115,131,869
SCHEDULE - 11 : CURRENT LIABILITIES & PROVISIONS
(A) Liabilities :
Sundry Creditors for ( Refer Note (1) below)
a) Capital Expenditure 7,179,604 5,433,339
b) Materials & Services 48,643,740 76,633,728
c) Expenses 89,940,703 74,715,005
Security Deposit 5,911,192 1,975,000
Advance from customers 6,892,084 14,003,070
Excess Share Application Money to be refunded (Refer Note (2) below) 111,325 111,325
Unclaimed Dividend (Refer Note (2) below) 109,804 128,657
158,788,452 173,000,124
Note :
i Refer Note No. 9 of Schedule B -21 for Amount due to Micro, Smalland Medium Enterprises.
ii There are no amounts due & outstanding to be credited to InvestorEducation & Protection fund as at 31st March, 2009.
(B) Provisions :
For Fringe Benefit Tax (Net of Advance Tax) 1,266,613 1,150,000
For Proposed Dividend 36,975,111 24,650,074
For Tax on Proposed Dividend 6,283,920 4,189,280
For Employee benefits 5,466,529 4,599,070
For Contingencies 3,146,000 1,800,000
53,138,173 36,388,424
TOTAL (A + B) 211,926,625 209,388,548
SCHEDULES ‘1’ TO ‘21’ ANNEXED TO AND FORMING PART OF THE BALANCE SHEETAND THE PROFIT & LOSS ACCOUNT FOR THE YEAR ENDED 31ST MARCH, 2009
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PARTICULARS
For the Year Ended For the Year Ended31st March, 2009 31st March, 2008
AMOUNT (Rs.) AMOUNT (Rs.)
SCHEDULE - 12 : SALES INCOMESales of Apparel and Accessories 1,445,400,666 1,595,966,556Sale of Power 433,811 –
1,445,834,477 1,595,966,556SCHEDULE - 13 : OTHER INCOMEInterest on Bank Deposits 63,055,246 67,635,233[(Tax Deducted at Source - Rs. 12,867,438 (P.Y. Rs. 12,579,016)]Interest - others 1,402,246 50,415[(Tax Deducted at Source - Rs. 280,571 (P.Y. Rs .8,151)]Income from other than Trade Investments:Dividend Income 7,184,902 2,774,521Gain on redemption on Mutual Fund 2,852,352 2,081,153Profit on Sale of Assets (Net) – 48,681Export Incentives (Net) 4,632,201 5,494,737Rent Income 579,646 155,000[(Tax Deducted at Source - Rs. 124,156 (P.Y. Rs. 34,782 )]Exchange Rate Fluctuation (Net) – 4,816,231Service Income 447,135 2,722,291Sundry Income 3,365,459 1,449,141[(Tax Deducted at Source - Rs. 2,039 (P.Y. Rs .Nil)]
83,519,187 87,227,403SCHEDULE - 14 : INCREASE / (DECREASE) IN FINISHED& PROCESS STOCKOpening stock
Work - in- Process 75,109,866 70,045,285Finished goods (includes Stock in Transit) 171,197,978 140,005,425
246,307,844 210,050,710Closing Stock
Work - in- Process 45,074,822 75,109,866Finished goods (includes Stock in Transit) 88,800,336 171,197,978
133,875,158 246,307,844Increase / (Decrease) in stock (112,432,686) 36,257,134
SCHEDULE - 15 : COST OF MATERIALa. Raw Material Consumed:
Opening stock 27,450,053 27,114,193Add: Purchases 292,083,373 408,885,593
319,533,426 435,999,786Less: Closing stock 21,136,041 27,450,053
298,397,385 408,549,733b. Semi-finished material 114,147,311 172,658,096c. Packing material, Accessories and other cost 78,408,692 112,502,280d. Stores, chemicals and consumables 28,837,198 39,626,000
519,790,586 733,336,109SCHEDULE - 16 : PERSONNEL COSTSalary, Wages and other amenities to Staff 158,727,810 158,131,599(Refer Note B - 10 to Schedule 21)Contribution to Provident and other Funds 12,341,766 12,718,974Gratuity (Refer Note B - 12 to Schedule 21) 1,706,599 2,404,771Bonus and ex-gratia 5,778,891 5,237,492Leave Salary 2,595,846 2,694,943
181,150,912 181,187,779
SCHEDULES ‘1’ TO ‘21’ ANNEXED TO AND FORMING PART OF THE BALANCE SHEETAND THE PROFIT & LOSS ACCOUNT FOR THE YEAR ENDED 31ST MARCH, 2009
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PARTICULARS
For the Year Ended For the Year Ended31st March, 2009 31st March, 2008
AMOUNT (Rs.) AMOUNT (Rs.)
SCHEDULE - 17 : MANUFACTURING AND OPERATING EXPENSES
Embroidery expenses 4,963,169 10,927,642Electricity expenses (Net of credit received from 7,325,295 9,809,102Windmill of Rs. 3,098,380 (P.Y. Rs. Nil ))Factory rent 2,299,114 2,370,264General factory expenses 2,315,053 1,838,539Processing charges 26,496,877 67,121,518Fuel expenses 14,131,033 20,887,164Water Charges 2,556,320 3,006,320Waste Disposal Charges 1,125,169 1,378,651Repairs to Machinery 4,835,172 3,036,587
66,047,202 120,375,787SCHEDULE - 18 : ADMINISTRATION & OTHER EXPENSES
Rent, Rates and Taxes 6,182,977 6,438,748Communication expenses 7,135,851 6,533,223Insurance Premium 1,919,587 2,336,175Legal, professional fees and consultancy charges 14,581,646 11,835,695Printing and Stationery 2,726,058 3,807,324Donations 476,721 2,122,549Vehicle expenses 2,444,833 1,346,469Auditors Remuneration (Refer Note B - 11 to Schedule 21) 1,469,302 1,494,186Conveyance & Travelling 3,860,699 3,524,185Electricity Expenses 4,064,532 2,803,587Staff Welfare 4,667,455 5,794,832Repairs to Building 721,581 380,996Repairs & Maintenance (others) 6,487,496 6,855,054Sundry balance written off – 20,802Directors Sitting Fees 620,000 480,000General office expenses 11,522,971 6,324,271Exchange rate fluctuation 26,710,041 –Provision for Doubtful debts 4,900,000 1,650,000Bad Debts 572,405 –Wind Turbine expenses 197,402 –Loss on Sale of Assets (Net) 1,019,379 –
102,280,936 63,748,096SCHEDULE - 19 : SELLING & DISTRIBUTION EXPENSESCommission on Sales 2,338,005 2,987,647Discount and rebates on Sales 74,478,442 40,510,659Octroi, clearing and forwarding charges 10,348,462 9,980,861Tour and travelling expenses 12,462,167 11,196,620Advertisement and publicity expenses (Net of recoveries) 80,557,133 92,982,523Sales promotion expenses 9,936,701 13,937,926Owned / Leased & Managed Retail outlet Expenses 56,574,982 48,656,968
246,695,892 220,253,204
SCHEDULE - 20 : FINANCE EXPENSESBank charges 1,968,564 4,925,648Finance charges 2,407,274 674,300Interest on Working Capital Loan 18,090,115 16,447,753Interest on Term Loan 4,622,862 6,330,061
27,088,815 28,377,762
SCHEDULES ‘1’ TO ‘21’ ANNEXED TO AND FORMING PART OF THE BALANCE SHEETAND THE PROFIT & LOSS ACCOUNT FOR THE YEAR ENDED 31ST MARCH, 2009
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SCHEDULE 21 - SIGNIFICANT ACCOUTING POLICIES AND NOTES TO ACCOUNTS FOR THE YEAR ENDED31ST MARCH, 2009
NOTES FORMING PART OF FINANCIAL STATEMENTS.
A. Significant Accounting Policies:
1. Basis of Accounting:
The financial statements are prepared in accordance with Indian Generally Accepted Accounting Principles (“GAAP”)under the historical cost convention on the accrual basis. GAAP comprises mandatory accounting standards asspecified in the Companies (Accounting Standards) Rules, 2006, the provisions of the Companies Act, 1956 andguidelines issued by the Securities and Exchange Board of India. Accounting policies have been consistently appliedexcept where a newly issued accounting standard is initially adopted or a revision to an existing accounting standardrequires a change in the accounting policy hitherto in use.
2. Use of Estimates:
The presentation of financial statements in conformity with the generally accepted accounting principles requiresestimates and assumptions to be made that may affect the reported amount of assets and liabilities and disclosuresrelating to the contingent liabilities as at the date of the financial statements and the reported amount of revenuesand expenses during the reporting period. Actual results could differ from those estimates.
3. Fixed Assets & Capital Work-in-Progress:
Fixed assets are stated at cost less depreciation/amortization and/or at recoverable value in case of impairment, ifany. The cost of fixed assets includes interest on borrowings attributable to acquisition of fixed assets up to the dateof commissioning of the assets and other incidental expenses incurred up to that date.
Capital work-in-progress is carried at cost comprising direct cost and related incidental expenses.
4. Depreciation/Amortization:
a) Depreciation is provided on written down value method at the rates prescribed under Schedule XIV of theCompanies Act, 1956 for all assets except those given below and such rates not being lower than the ratesprescribed by the said Schedule XIV.
b) Assets lying at retail stores are depreciated over a period of five years on straight-line basis.
c) Software is amortized over a period of three years on straight-line basis.
d) Leasehold Lands are amortized over the period of lease.
5. Impairment:
Impairment loss is recognized whenever the carrying amount of the asset is in excess of its recoverable amount andthe same is recognized as an expense in the statement of profit and loss and the carrying amount of the asset isreduced to its recoverable amount.
6. Investments:
Long-term investments are stated at cost less diminution (other than temporary) in value. Current investments arestated at cost or market value / net asset value, whichever is lower, computed category wise for related investments.
Investment transactions are accounted for on a trade date basis. In determining the holding cost of investments andthe gain or loss on sale of investments, the ‘Simple Weighted Average’ method is followed.
7. Inventories:
a) Raw material, packing material, accessories, stores and consumables are valued at lower of cost or net realizablevalue.
b) Work-in-process and finished products are valued at lower of cost or estimated net realizable value.
c) Cost is ascertained on specific identification method and includes appropriate production overheads in case ofwork-in-process and finished goods.
8. Foreign Currency Transactions:
Income and expenses in foreign currency are converted at rates prevailing as on the date of the transaction. Foreigncurrency monetary assets and liabilities are translated at the exchange rate prevailing as on the balance sheet dateand the resulting exchange differences are recognized in the profit and loss account.
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SCHEDULE 21 - SIGNIFICANT ACCOUTING POLICIES AND NOTES TO ACCOUNTS FOR THE YEAR ENDED31ST MARCH, 2009
The Central Government, vide notification dated 31st March 2009 has amended Accounting Standard (AS) - 11‘The Effects of changes in Foreign Exchange Rates’ notified under the Companies (Accounting Standard) Rules,2006. The company has decided to continue the existing accounting policy to charge off all exchange difference tothe profit and loss account. Accordingly, the company has not amended its accounting policy to adopt the alternatetreatment / option as per the above notification.
9. Revenue Recognition:
a) Sales are recognized when significant risks and rewards of ownership of the goods have passed to the buyerthat coincides with delivery and are recorded net of trade discount, rebates and taxes. Sales do not includeinter-divisional transfers.
b) Service charges are recognized after rendering of services.
c) Export incentives under the Duty Drawback Scheme are recognized on accrual basis in the year of export.
d) Power generation income is recognized on the basis of electrical units generated in excess of captive consumptionand recognized at prescribed rate as per agreement of sale of electricity by the company.
e) Interest income is recognized on accrual basis and Dividend income is accounted for when the right to receivepayment is established.
10. Employees’ Benefits:
Employees’ benefits are dealt with in the following manner:
a) Provident Fund is defined contribution plan and charged to Profit and Loss Account on accrual basis withcorresponding contribution to recognized funds.
b) Gratuity is defined benefit plan and payment for present liability of future payment of gratuity is made to anapproved gratuity fund, which fully covers the said liability under Cash Accumulation Policy of Life InsuranceCorporation of India (LIC). The additional liability arising out of the difference between the actuarial valuationand the fund balance with the LIC, if any, is accrued at the year-end.
c) Leave entitlement is short term employees benefit and determined arithmetically and charged to Profit & LossAccount on accrual basis.
11. Taxes on Income:
Tax expenses for the year comprises of current tax, deferred tax and fringe benefit tax. Current tax provision hasbeen determined on the basis of reliefs and deductions available under the Income Tax Act, 1961. Deferred tax isrecognized for all timing differences, subject to consideration of prudence, applying tax rates that have beensubstantively enacted by the Balance Sheet date. Provision for Fringe benefit tax is made in accordance withChapter XII- H of the Income Tax Act, 1961.
12. Provisions and Contingent Liabilities:
Provisions are recognized when the company has a legal and constructive obligation as a result of a past event, for whichit is probable that a cash outflow will be required and a reliable estimate can be made of the amount of the obligation.
Contingent liabilities are disclosed when the company has a possible obligation or a present obligation and it isprobable that a cash outflow will not be required to settle the obligation.
13. Operating Lease:
Lease arrangements where risks and rewards incidental to ownership of an asset substantially vests with thelessor are classified as operating lease.
Rental income and expense on assets given or obtained under operating lease arrangements are recognized ona straight-line basis over the term of relevant lease.
14. Earnings Per Share (EPS):
Basic earnings per share are calculated by dividing the net profit (after tax) for the period attributable to the equityshareholders by the weighted average number of equity shares outstanding during the period.
For the purpose of calculating diluted earnings per share, the net profits (after tax) for the period attributable to theequity shareholders and the weighted average number of shares outstanding during the period are adjusted for theeffect of all dilutive potential equity shares.
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B. Notes to Accounts:
1. Contingent Liabilities:
a. Disputed demands in respect of income tax not acknowledged as debt - Rs. 3,034,459 (P.Y. Rs. 4,291,973)excluding show cause notice issued by the income tax department not considered in nature of demand.
b. Disputed demands in respect of Custom Duty against Advance License not acknowledged as debt - Rs. 1,320,720(P.Y. Rs. Nil)
c. The company has purchased capital assets under EPCG license against which the company has an export obligationof Rs. 25,211,933 (P.Y. Rs.11,290,589). Contingent liability, to the extent of duty saved in respect of EPCG isRs. 3,151,492 (P.Y. Rs. 1,411,324). Balance Export obligation to be fulfilled as per license up to the year 2014 / 2016.
d. Bank guarantees of Rs. 3,941,109 (P.Y. Rs. 2,174,420).
e. Letter of Credit of Rs. Nil (P.Y. Rs. 1,998,414) discounted with Banks.
f. Guarantee (in the nature of First Loss Deficiency) to Banker Rs. 12,914,720 (P.Y Rs. 42,060,744) (For securityprovided, refer Note B – 4 c (ii) of schedule 21)
Note : Future cash outflows in respect of (a) and (b) above are determinable on receipt of decisions / judgementspending with forums/ authorities.
2. The company has fulfilled its export obligation with regards to certain EPCG License. However, the discharge fromCustom authorities is under process. The export obligation fulfilled against these licenses aggregates to Rs. 18,601,084.
3. Estimated amount of contracts remaining to be executed on Capital Account and not provided for - Rs. 25,671,603(net of advances) (P.Y. Rs. 62,745,316)
4. Secured Loans:
a. Term Loan from Standard Chartered Bank is secured by first charge on specified immovable properties situatedat Goregaon, Mumbai.
b. Foreign Currency Demand Loan from Barclays Inc. is secured by pari-passu first charge on all movable properties(present and future) including stocks, Book debts, movable plant and machinery etc.
c. Working Capital Loans from
i. Standard Chartered Bank is secured by pari-passu first charge on Stocks and receivables. Modificationof charge for release of collateral security by way of mortgage of specified immovable properties atGoregaon, Mumbai is in the process of being filed.
ii. HSBC Ltd is secured by pari-passu first charge on Stocks and Receivables.
5. Details of IPO Proceeds Utilization:
Purpose of Utilization of Fund 31-03-2009 31-03-2008(Rs.) (Rs.)
Net Issue Proceeds 806,009,620 806,009,620Utilized as under:Corporate Office 43,424,814 43,424,814Setting up Retail Stores (K-Lounge/ Exclusive Brand Outlets) 197,343,937 131,787,879Setting up Manufacturing Unit 131,240,433 95,691,886Share Issue Expenses 78,085,396 78,085,396Total Expenses 450,094,580 348,989,975
In the Annual General Meeting held on August 4, 2008, the members have accorded their consent for extensionof time to attain the object of proceeds of the Initial Public Offer stated in the prospectus by a further period of twoyears from 31st March, 2008 to 31st March, 2010. The balance Unutilized Proceeds are kept in Fixed Deposit withScheduled Banks.
6. Investment in Joint Venture:
The company has in aggregate invested Rs. 30,400,000 (P.Y. Rs. 18,050,000) in White Knitwear Private Limited,(Joint Venture). The joint venture has not commenced its in-house commercial production. Considering that thejoint venture is in nascent stage and investments are not held for immediate sale but as strategic long term
SCHEDULE 21 - SIGNIFICANT ACCOUTING POLICIES AND NOTES TO ACCOUNTS FOR THE YEAR ENDED31ST MARCH, 2009
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investment and the joint venture expects improvement in the long run, no provision has been considered necessaryin the accounts of the company for possible diminution in the value of investments in joint venture.
7. Deposits grouped under Loan and Advances includes earnest money deposits of Rs. 8,407,081 in respect ofpremises to be taken on lease and in respect of which there have been delays in handing over of possession bylessors. The company is taking necessary legal /persuasive action for recovery of the deposits and accordingly inthe opinion of the management the same are considered good and recoverable. However by way of abundantprecaution, the management has provided a sum of Rs. 346,000 in respect of small deposits towards possiblenon recovery of the total deposits given.
8. Aggregate Expenses:
The aggregate amounts incurred on certain specific expenses are:
Particulars31-03-2009 31-03-2008
(Rs.) (Rs.)
Rent Including Common Area Maintenance Charges 51,117,960 46,490,431
Electricity Expenses 22,593,302 17,117,087
Communication Expenses 4,712,950 4,498,760
Repair & Maintenance (Building) 6,288,549 8,575,644
Repair & Maintenance (Machinery) 4,895,072 3,036,587
Insurance Premium 1,953,215 2,336,175
Rates & Taxes 3,590,183 4,363,902
9. Disclosure U/s 22 of Micro, Small and Medium Enterprises Development Act, 2006:
a. Principle amount remaining unpaid to suppliers as on 31st March, 2009: Rs. 7,311,640
b. Amount of Interest paid u/s 16: Rs. Nil
c. Amount of Interest due and remaining unpaid as on 31st March, 2009: Rs. 2,055
d. Amount of Interest accrued and remaining unpaid on 31st March, 2009: Rs. 2,055
The Company has compiled this information based on the current information in its possession. As at 31stMarch, 2009, few suppliers/service providers have intimated the company about their status as micro or smallenterprises or their registration with the appropriate authority under the Micro, Small and Medium EnterprisesDevelopment Act, 2006.
Note: Previous year figures are not available since in the earlier year the company was under the process ofcompiling the relevant information.
10. Managerial Remuneration to Directors:
Particulars31-03-2009 31-03-2008
(Rs.) (Rs.)
Managerial remuneration 10,176,000 10,176,000
Total 10,176,000 10,176,000
Note:
a. Managerial remuneration is paid as per the provisions of Section I of Part II of Schedule XIII to the CompaniesAct, 1956.
b. The computation of profits under Section 349 of the Companies Act, 1956 has not been given as no commissionis payable to the Directors.
c. The directors are covered under the company’s scheme of gratuity along with the other employees of thecompany. The proportionate amount of gratuity is not included in the aforementioned disclosure, as the amountattributable to directors is not ascertainable.
SCHEDULE 21 - SIGNIFICANT ACCOUTING POLICIES AND NOTES TO ACCOUNTS FOR THE YEAR ENDED31ST MARCH, 2009
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11. Auditors Remuneration:
Particulars31-03-2009 31-03-2008
(Rs.) (Rs.)
As Auditors (includes service tax of Rs. 98,880 (P.Y. Rs. 98,880)) 1,058,880 898,880For taxation matters (includes service tax of Rs. 17,510 (P.Y. Rs. 29,664)) 187,510 417,181For Others matters (includes service tax of Rs. 11,412 (P.Y. Rs. 19,282)) 222,912 175,282
1,469,302 1,491,343Out of Pocket Expenses (includes service tax of Rs. Nil (P.Y. Rs. 313)) – 2,844Total 1,469,302 1,494,186
12. Employee Benefits:
The following table set out the status of the gratuity plan as required under AS 15.
Reconciliation on Change in Benefit Obligation :31-03-2009 31-03-2008
(Rs.) (Rs.)
Liability at the beginning of the year 6,365,143 4,519,768Interest Cost 507,408 384,058Current Service Cost 2,041,462 758,453Benefit Paid (798,903) (954,999)Actuarial (gain)/loss on obligations (399,645) 1,657,863Liability at the end of the year 7,715,465 6,365,143
Reconciliation of Fair value of Plan Assets :31-03-2009 31-03-2008
(Rs.) (Rs.)
Fair Value of Plan Assets at the beginning of the year 4,200,890 3,553,200Expected Return on Plan Assets 442,626 342,623Contributions 1,002,377 1,207,086Benefit Paid (798,903) (954,999)Actuarial gain/(loss) on Plan Assets – 52,980Fair Value of Plan Assets at the end of the year 4,846,990 4,200,890Total Actuarial Gain/(Loss) to be recognized (399,645) (1,604,883)
Amount recognized in the Balance Sheet :31-03-2009 31-03-2008
(Rs.) (Rs.)
Liability at the end of the year 7,715,465 6,365,143Fair Value of Plan Assets at the end of the year 4,846,990 4,200,890Liability in the Balance Sheet (2,868,475) (2,164,253)
Gratuity recognized in the Income Statement :31-03-2009 31-03-2008
(Rs.) (Rs.)
Current Service Cost 2,041,462 758,453Interest Cost 507,408 384,058Expected Return on plan Assets (442,626) (342,623)Actuarial Gain or Loss (399,645) 1,604,883Expense Recognized in Profit & Loss Account 1,706,599 2,404,771
Principal Assumption used in determining Gratuity :31-03-2009 31-03-2008
(Rs.) (Rs.)
Discount Rate 8% 8%Expected Rate of return 9.15% 9.15%Employee Turnover 1-3% 2%Salary Escalation 5% 5%Mortality Table LIC (1994-96) Ultimate
SCHEDULE 21 - SIGNIFICANT ACCOUTING POLICIES AND NOTES TO ACCOUNTS FOR THE YEAR ENDED31ST MARCH, 2009
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Investment details of plan assets:
100% of the plan assets are invested in insurer Managed fund.
The estimates of future salary increases, considered in actuarial valuation, take account of inflation, seniority,promotion and other relevant factors such as supply and demand factors in the employment market.
13. Segment Reporting:
a. Primary Segment:
The company is primarily engaged in single business segment of manufacturing and marketing of apparel &apparel accessories. During the year, the Company has also commissioned Wind Turbine Generator. Thepower generated from the same would be predominantly used for captive consumption. However, its operationfor the period is within the threshold limit stipulated under AS – 17 “Segment Reporting” and hence it does notrequire disclosure as a separate reportable segment.
(in Rs.)
Particulars
Apparel Other / Unallocated Total& Apparel Reconciling
Accessories Item
1. Segment RevenueNet Sales/Income from Operation 1,450,913,814 3,532,191 – 1,454,446,005
(1,604,183,584) (–) (–) (1,604,183,584)Less: Inter Segment Revenue – -3,098,380 – -3,098,380
(–) (–) (–) (–)Total Segment Revenue 1,450,913,814 433,811 – 1,451,347,625
(1,604,183,584) (–) (–) (1,604,183,584)2. Segment ResultSegment Result 184,940,011 -368,961 – 184,571,050
(266,458,643) (–) (–) (266,458,643)Less : Interest expenditure 27,088,815
(28,377,762)Add: Other unallocable income net 49,723,074of unallocable expenditure
(85,842,586)Profit before Tax 207,205,309
(323,923,467)Less : Provision For Tax 63,955,139
(111,544,862)Prior Period Expenses 673,141
(1,330,750)Net Profit 142,577,029
(211,047,854)3. Other InformationSegment Assets 940,203,372 37,500,764 983,052,322 1,960,756,458
(1,112,656,922) (–) (784,842,741) (1,897,499,663)Segment Liabilities 211,910,543 16,082 235,866,414 447,793,039
(209,388,548) (–) (274,465,694) (483,854,242)Depreciation/ Amortization 46,706,334 3,703,750 – 50,410,084
(39,202,528) (–) (–) (39,202,528)Non Cash Expenses other than 7,662,948 103,874 29,512,366 37,279,188Depreciation
(8,255,660) (–) (373,509) (8,629,169)Capital Expenditure 112,390,841 36,565,389 – 148,956,230
(89,096,862) (–) (–) (89,096,862)*As per the Expert advisory opinion electricity generated from Wind Turbine Generator and used for captiveconsumption is reduced from the electricity expenses in profit and loss account but shown as segment revenuefor the purpose of segment reporting as per AS-17.
SCHEDULE 21 - SIGNIFICANT ACCOUTING POLICIES AND NOTES TO ACCOUNTS FOR THE YEAR ENDED31ST MARCH, 2009
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b. Secondary Segment (By Geographical Segment):
(in Rs.)
Particulars India Outside India Total
Sales and Services Income 1,391,228,023 54,606,454 1,445,834,477(1,540,157,215) (55,809,341) (1,595,966,556)
Segment Assets* 1,959,668,423 -187,640 1,959,480,783(1,714,114,152) (2,836,260) (1,716,950,412)
(Figures in bracket indicate previous year’s figures)
*Segment Assets from outside India represents receivables from Export Sales (net of advances in relation toexports). In view of the interwoven / intermix nature of business and manufacturing facility, other informationis not ascertainable.
14. Related Party Disclosure:
As per Accounting Standard (AS-18) – ‘Related Party Disclosures’ as notified by the rules, the disclosures of thetransactions with the related parties as defined in the accounting standard are given below:
a. Name of the enterprises having same Key Management Personnel and/or their relatives as the reportingenterprise:
Kewal Kiran EnterprisesKewal Kiran Finance Private LimitedKewal Kiran Realtors & Infrastructures Private LimitedKewal Kiran Retail India Private LimitedKornerstone Retail LimitedKarwa & Kewal Kiran RealtorsRaj & Karwa Kewal Kiran RealtorsKewal Kiran Media Limited
b. Joint Ventures:
White Knitwear Private Limited
c. Relatives / Other concerns of Key Management Personnel:
Shantaben P JainVeena K. JainLata H. JainSangita D. JainKesar V. JainPankaj K. JainHitendra H. JainArpita K. JainPukhraj K. Jain (HUF)Kewalchand P. Jain (HUF)Hemant P. Jain (HUF)Dinesh P. Jain (HUF)Vikas P. Jain (HUF)P.K. Jain Family Holding Trust
d. Key Management Personnel:
Kewalchand P. Jain Chairman & Managing DirectorHemant P. Jain Whole-time DirectorDinesh P. Jain Whole-time Director
Vikas P. Jain Whole-time Director
SCHEDULE 21 - SIGNIFICANT ACCOUTING POLICIES AND NOTES TO ACCOUNTS FOR THE YEAR ENDED31ST MARCH, 2009
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e. Nature of Transaction Enterprises Joint Ventures Relatives/Other Keyunder the Same Concerns of Key Management
management Management PersonnelPersonnel
Miscellaneous Purchase – – – –(39,368) (–) (–) (–)
Purchase of Assets – – – –(12,471,970) (–) (–) (–)
Investment in Preference Shares – 12,350,000 – –(–) (14,750,000) (–) (–)
Rent Expenses – – 918,000 2,989,200(–) (–) (918,000) (3,013,200)
Managerial Remuneration – – – 10,176,000(–) (–) (–) (10,176,000)
Salary – – 232,690 –(–) (–) (–) (–)
Rent Income 579,646 – – –(exclusive of service tax) (–) (–) (–) (–)
Dividend Paid – – 12,626,000 4,954,000(–) (–) (28,408,500) (11,146,500)
Outstanding balance as on 31.03.2009
Sundry Payable as – – – 2,749,400Managerial Remuneration (–) (–) (–) (857,053)
Sundry Payable as salary – – 55,405 –(–) (–) (–) (–)
Sundry Payable as Rent – – 317,495 1,041,105(–) (–) (–) (–)
Sundry Receivable as Rent 245,207 – – –(inclusive of service tax) (–) (–) (–) (–)
Deposit Receivable – – 459,000 324,000(–) (–) (459,000) (324,000)
Security Deposit Return – – – –(4,800,000) (–) (–) (–)
Investments – 30,400,000 – –(–) (18,050,000) (–) (–)
f. Disclosure of Related Party Transactions, the amounts of which are in excess of 10% of total related partytransactions of the same type:
Nature of Transaction Name of the related party Amount
Purchase of Assets Kornerstone Retail Limited –(12,471,970)
Investment in Preference Shares White Knitwear Private Limited 12,350,000(14,750,000)
Rent Expenses Kewalchand P. Jain 997,800(1,009,800)
Hemant P. Jain 859,800(871,800)
SCHEDULE 21 - SIGNIFICANT ACCOUTING POLICIES AND NOTES TO ACCOUNTS FOR THE YEAR ENDED31ST MARCH, 2009
6318th Annual Report
Making growth fashionable.
Nature of Transaction Name of the related party Amount
Dinesh P. Jain 565,800(565,800)
Vikas P. Jain 565,800(565,800)
Shantaben P. Jain 918,000(918,000)
Managerial Remuneration Kewalchand P. Jain 2,544,000(2,544,000)
Hemant P. Jain 2,544,000(2,544,000)
Dinesh P. Jain 2,544,000(2,544,000)
Vikas P. Jain 2,544,000(2,544,000)
Rent Income (exclusive of service tax) Kornerstone Retail Limited 579,646(–)
Salary Pankaj K. Jain 232,690(–)
Dividend Paid P.K.Jain Family holding trust 12,306,000(27,688,500)
Misc Purchases Kornerstone Retail Limited –(39,368)
Security Deposit Return Kornerstone Retail Limited –(4,800,000)
Note:
i) Figures in brackets represents corresponding amount of previous year.
ii) Managerial Remuneration excludes Gratuity provision.
iii) Reimbursements of expenses made to Key Management Personnel are not included in the above figures.
15. Operating Lease Arrangements:
Pursuant to the Accounting Standard (AS-19) – “Leases” issued by the Institute of the Chartered Accountants ofIndia, the following information is given:
a. As lessee:
Rental expenses of Rs. 51,117,960 (P.Y. Rs. 46,490,431) in respect of obligation under operating leaseshave been recognized in the profit and loss account.
At balance sheet date, minimum lease payments under non-cancelable operating leases fall due as follows:
PARTICULARS31-03-2009 31-03-2008
(Rs.) (Rs.)
Due not later than one year 37,853,294 56,810,857
Due later than one year but not later than five years 131,427,955 227,829,160
Later than five years 68,756,698 128,175,819
Total 238,037,947 412,815,836
The above figures include:
i. Lease rentals calculated based on estimated date of commencement of lease in cases where theagreements / MOU’s have been entered into but the date of commencement of lease is dependent on thedate of construction/renovation of premises and based on the commitment for delivery by lessors.
SCHEDULE 21 - SIGNIFICANT ACCOUTING POLICIES AND NOTES TO ACCOUNTS FOR THE YEAR ENDED31ST MARCH, 2009
18th Annual Report64
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ii. The afore-mentioned lease rentals include a lease the period of which is dependent on the occurrence ofan event, the date of which is not ascertainable beyond five years. Hence the lease rentals are consideredup to a period of five years only.
iii. Lease rentals do not include common area maintenance charges and tax payable, if any.
iv. The above details of Lease Rental obligation exclude the amounts payable by franchisee in accordancewith the arrangement with them (a) not later than 1 year Rs. 11,633,898 (P.Y. Rs. 10,082,901) (b) between1 to 5 year Rs. 35,579,020 (P.Y. Rs. 33,247,121) (c) more than 5 years – Rs. 10,230,877 (P.Y.Rs. 12,282,818)
b. As lessor:
Rental Income recognized in the Profit & Loss account during the year Rs. 579,646 (P.Y. Rs. 155,000) relatinglease arrangements. At balance sheet date, Lease rent in respect of these leases recognized in the Profit andLoss account is Rs. Nil (P.Y. Rs. Nil).
16. Earnings per Share (EPS) are calculated as under:
Particulars 31-03-2009 31-03-2008
Net Profit after Tax and Prior Period Items Rs. 142,577,029 211,047,854
Weighted average number of Equity Shares Nos. 12,325,037 12,325,037
Basic & Diluted Earning per share Rs. 11.57 17.12
17. Deferred Tax:
In view of the Accounting Standard (AS) - 22 “Accounting for Taxes of Income” issued by Institute of CharteredAccountants of India, the significant component and classification of deferred tax liability/asset on account oftiming difference comprises of the following:
Particulars31-03-2009 31-03-2008
(Rs.) (Rs.)
Deferred Tax Asset:
Share Issue Expenses 13,698,133 13,698,133(Tax effect of share issue expenses eligible for the Income taxdeduction, under section 35D, credited to securities premiumaccount)
Miscellaneous 6,260,041 3,978,754
Deferred Tax Liability:
Depreciation (5,521,120) (3,164,694)
Net deferred tax (liability)/asset 14,437,054 14,512,193
Deferred tax asset is recognized only on those timing differences, which reverse in the post tax free period, ascompany enjoys exemption under section 80-IA of Income Tax Act, 1961 in respect of revenue generated fromWind Turbine Generator.
18. Joint Ventures Information:
Details as required by Accounting Standard (AS) -27 “Financial Reporting of Interest in Joint Venture” are given below:
(i) Detail of Joint Venture Interest
Name Description of Country of Percentage of Percentage ofInterest Incorporation interest as on interest as on
31.03.2009 31.03.2008
White Knitwear P. Limited Equity Shareholding India 33.33% 33.33%
SCHEDULE 21 - SIGNIFICANT ACCOUTING POLICIES AND NOTES TO ACCOUNTS FOR THE YEAR ENDED31ST MARCH, 2009
6518th Annual Report
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(ii) Company’s Interest in the Joint Venture
Name As on Assets Liabilities For the Year Income Expenditure(Rs.) (Rs.) Ended (Rs.) (Rs.)
White Knitwear P. 31.03.2009 22,365,761 21,391,610 31.03.2009 540,341 1,331,347Limited (13,739,241) (11,088,835) (31,779) (137,924)
The company’s share in the Contingent Liability and Capital Commitment of the Joint Venture are Rs. Nil (P.Y. Rs.Nil) and Rs. 2,000,000 (P.Y. Rs. 8,704,510) - respectively.
The company’s Contingent Liability and capital commitment in relation to joint venture Rs. Nil (P.Y. Rs. Nil) andRs. 22,900,000 (P.Y. Rs. 35,250,000)
The current year figures are based on latest available un-audited accounts of the Joint Venture and previous yearfigures are based on the audited financial accounts of the joint venture.
19. Disclosure regarding Derivative instruments and unhedged Foreign Currency Exposure:
Company does not enter into any forward exchange contracts being derivative instruments, for trading, speculativeor hedging purposes.
The year end foreign Currency exposures that have not been hedged by a derivative instrument or otherwise aregiven below:
2008-09 2007-08
Particulars Currency Amt. in Rs. Currency Amt. in Rs.Foreign Foreign
Currency Currency
Loan Availed USD 2,483,365 127,689,650 USD 2,543,558 102,047,565
Interest Payable USD – – USD 18,927 760,858
Sundry Debtors USD 376 14,777 USD 72,966 2,843,490
Sundry Creditors USD 56 2,741 USD 10,850 435,736
Advance from Customer USD 4,875 202,417 USD 3,518 141,276
Advance to Supplier USD 9,277 475,029 USD – –
20. Pursuant to the Accounting Standard (AS) 29 – Provision, Contingent Liabilities and Contingent Assets,the disclosure relating to provisions made in the accounts for the year ended 31st March, 2009 is asfollows:
ParticularsProvision for Discount on Provision for DoubtfulSales / Selling Expenses1 Earnest Money Deposit2
Opening Balance 1,800,000 –
Addition 1,000,000 346,000
Utilization – –
Reversals – –
Closing Balance 2,800,000 346,000
1 General Provision made for Discount on sales and selling expenses.
The timing of the outflow coincided with claims of customers and hence the Company is not able to reasonablyascertin the timing of the outflow .
2 Refer Note No. 7 of Schedule 21-B
The timing of the outflow will be based on outcome of the legal/ persuasive action for recovery of the depositsand hence the company is not able to reasonably ascertin the timing of the outflow.
SCHEDULE 21 - SIGNIFICANT ACCOUTING POLICIES AND NOTES TO ACCOUNTS FOR THE YEAR ENDED31ST MARCH, 2009
21. Investments purchased and sold/redeemed during the year:
Particulars No. of Units Cost (Rs.)
Mutual Funds
Birla Sunlife Cash Plus-Institutional (Daily Dividend) 943,715 10,194,295
DWS Insta Cash Plus Fund-Institutional (Daily Dividend) 998,237 10,001,832
DWS Liquid Plus Fund-Institutional (Daily Dividend) 1,006,984 10,084,949
DWS Ultra Short Term Fund-Institutional (Daily Dividend) 1,511,155 15,134,223
HDFC Cash Management Fund Saving Plan (Daily Dividend) 13,185 132,270
HSBC Cash Fund-Inst(Daily Dividend) 1,955,372 20,414,280
HSBC Fixed Term Series 55-Institutional Dividend 1,041,877 10,418,769
HSBC Liquid Plus-Inst(Daily Dividend) 4,746,767 47,527,000
ICICI Pru Inst Liquid Plan (Daily Dividend) 844,019 10,001,792
ICICI Pru Inst Income Plan 869,819 10,001,792
IDFC Cash Fund-Inst Plan B (Daily Dividend) 945,205 10,001,777
IDFC Dynamic Bond Plan A (Quarterly Dividend) 909,608 10,001,777
IDFC Fixed Maturity Plan-Monthly Series 7-Dividend 1,007,830 10,078,300
ING Liquid Fund-Inst(Daily Dividend) 3,007,120 30,107,587
J P Morgan India Liquid Plus Fund-Super Inst (Daily Dividend) 1,022,918 10,238,286
Kotak Flexi Debt Scheme Weekly Dividend 1,992,631 20,027,299
Kotak Flexi Debt (Daily Dividend) 995,495 9,985,911
Kotak FMP 1M Series 1 (Dividend) 2,015,191 20,151,909
Kotak FMP 3M Series 33 (Dividend) 2,058,241 20,582,409
Kotak Bond Short Term-Monthly Dividend 50,078 501,876
Kotak Income Plus Monthly Dividend 15,647 167,152
Kotak Quarterly Interval Plan Series 10 Growth 2,058,241 20,582,409
LIC FMP Series 41 (3 Months) Dividend Plan 1,263,131 12,631,306
LICMF Liquid Plus Fund (Daily Dividend) 1,263,131 12,631,306
Lotus India Qtrly Interval Fund Plan A 933,445 10,000,000
Principal PNB (FMP-52) 91 Days-Series XVII 1,000,000 10,000,000
Reliance Fixed Horizon Fund-VIII-Series 11 Inst Dividend Plan 1,000,000 10,000,000
Reliance Fixed Horizon Fund-VIII-Series 12 Inst Dividend Plan 1,000,000 10,000,000
Reliance Fixed Horizon Fund-X-Series 13 Super Inst Dividend 1,000,000 10,000,000
Sundaram BNP Paribas Liquid Plus Fund (Daily Dividend) 1,010,869 10,133,962
Sundaram BNP Paribas Money Fund (Daily Dividend) 990,719 10,001,605
Tata Floater Fund(Daily Dividend) 2,056,404 20,637,247
SCHEDULE 21 - SIGNIFICANT ACCOUTING POLICIES AND NOTES TO ACCOUNTS FOR THE YEAR ENDED31ST MARCH, 2009
Investments purchased and sold during the previous year:
Particulars No. of Units Cost (Rs.)
Birla Liquid Plus - Retail Growth 719,037 10,216,005Birla Sunlife Cash Manager IP (Daily Dividend) 10,939 109,417Birla Sunlife Cash Manager IP –Growth 799,781 10,148,183ICICI Prudential Institutional Liquid Plan (Daily Dividend) 2,117,075 25,087,764ICICI Prudential Institutional Liquid Plan (Growth) 1,332,804 25,087,764Kotak Bond (Short Term) Growth 3,408,066 50,008,591Kotak Flexi Debt 831,297 10,000,000Kotak Flexi Debt Scheme (Daily Dividend) 5,050,102 50,658,075Kotak Liquid Fund 4,088,943 50,000,000Reliance Liquid Plus Fund – Growth 70,405 72,500,000LIC MF Liquid Plus Fund (Daily Dividend) 6,034,340 60,343,399
22. Value of Imports (C.I.F. Value):
Particulars31-03-2009 31-03-2008
(Rs.) (Rs.)
i. Capital goods 9,253,004 6,477,880
ii. Components and spare parts 2,118,325 48,396
iii. Accessories 2,328,309 125,025
Total 13,699,638 6,651,301
23. Expenditure in Foreign Currencies (on accrual basis):
Particulars31-03-2009 31-03-2008
(Rs.) (Rs.)
i. Traveling expenses 700,206 456,982
ii. Interest on Bank Loan 10,131,698 8,828,858
iii. Advertisement expenses 1,014,435 2,907,933
iv. Legal expenses 833,978 410,689
v. Bank Charges 625,946 683,058
vi. Others 710,876 52,140
Total 14,017,139 13,339,660
24. Earnings in Foreign Currencies (on accrual basis):
Particulars31-03-2009 31-03-2008
(Rs.) (Rs.)
i. Export of goods (F.O.B. value) 53,730,794 55,354,686
ii. Domestic Sales 6,603 –
Total 53,737,397 55,354,686
25. Power Generation produced & consumed/Sale:
Opening stock Production Sales/Captive Closing StockConsumption
ParticularsQty. Rs. Qty. Qty. Rs. Qty. Rs.
(Units) (Units) (Units)
Power Generation – – 746,465 746,465 3,532,191 – –
SCHEDULE 21 - SIGNIFICANT ACCOUTING POLICIES AND NOTES TO ACCOUNTS FOR THE YEAR ENDED31ST MARCH, 2009
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26. Imported and indigenous consumption:
Particulars31-03-2009 31-03-2008
(Rs.) % (Rs.) %
Indigenous 516,796,526 99.42 732,847,682 99.93Imported 2,994,060 0.58 488,426 0.07Total 519,790,586 100% 733,336,108 100%
27. Raw Material Consumed:
Material Measure 31-03-2009 31-03-2008Qty. Rs. Qty. Rs.
i. Woven Fabric Mtrs. 2,667,249 298,376,492 3,151,353 408,279,453ii. Knitted Fabric Kgs. 74 20,894 1,939 270,279iii. Semi-finished Pcs. 344,001 114,147,311 628,529 172,658,096iv. Packing material & ** ** 78,408,692 ** 112,502,280
Accessoriesv. Stores, chemicals ** ** 28,837,197 ** 39,626,000
and consumablesTotal 519,790,586 733,336,108
** Comprises of various items the value of which is less then 10% of the total Cost of Material.
28. Particulars of Finished Products:(Qty in Pcs.)
Parti- Opening stock Production Sales Closing stock
culars Qty. Rs. Qty. Qty. Rs. Qty. Rs.
Apparel 477,214 167,027,959 2,104,651 2,360,487 1,435,972,552 221,378 80,673,517(416,745) (13,723,193) (2,867,240) (2,806,771) (1,583,342,975) (477,214) (167,027,959)
Note:a. Figures in brackets indicate previous year’s figuresb. Sales includes samples distributed free of costc. Closing stock is after adjusting shortages on physical verification of inventories
29. Particulars of Trading Activities: Apparel Accessories:(Qty in Pcs.)
Opening stock Purchase Sales Closing stock
Qty. Rs. Qty. Rs. Qty. Rs. Qty. Rs.
42,869 4,170,020 50,099 16,251,241 58,406 9,428,114 34,562 8,126,819(30,684) (3,423,495) (67,730) (9,046,361) (55,545) (1,262,358) (42,869) (4,170,020)
Note:a. Figures in brackets indicate previous year’s figuresb. Sales includes samples distributed free of costc. Closing stock is after adjusting shortages on physical verification of inventories
30. Previous year’s figures are regrouped, rearranged or recast wherever considered necessary.
As per our report of even dateFor and on behalf of For and on behalf of For and on behalf of the BoardN. A. Shah Associates Jain & TrivediChartered Accountants Chartered Accountants
Sandeep Shah Satish C. Trivedi Kewalchand P. Jain Hemant P. Jain Abhijit B. WarangePartner Partner Chairman & Wholetime Director Company Secretary(Membership No.: - 37381) (Membership No.: - 38317) Managing Director
Place: Mumbai Place: MumbaiDate: May 21, 2009 Date: May 21, 2009
SCHEDULE 21 - SIGNIFICANT ACCOUTING POLICIES AND NOTES TO ACCOUNTS FOR THE YEAR ENDED31ST MARCH, 2009
6918th Annual Report
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As per our report of even dateFor and on behalf of For and on behalf ofN. A. Shah Associates Jain & Trivedi For and on behalf of the BoardChartered Accountants Chartered Accountants
Sandeep Shah Satish C. Trivedi Kewalchand P. Jain Hemant P. Jain Abhijit B. WarangePartner Partner Chairman & Wholetime Director Company Secretary(Membership No.: - 37381) (Membership No.: - 38317) Managing Director
Place: Mumbai Place: MumbaiDate: May 21, 2009 Date: May 21, 2009
ADDITIONAL INFORMATION PURSUANT TO PART IV OFTHE COMPANIES ACT, 1956.
Balance Sheet abstract and Company’s general business profileRegistration DetailsRegistration No. 6 5 1 3 6 State Code 1 1
Balance Sheet date 3 1 0 3 2 0 0 9
Capital Raised During the Year (Amount in Rs. Thousand)
Public Issue N I L Rights Issue N I L
Bonus Issue N I L Private Placement N I L
Position of Mobilisation and Deployment of Funds (Amount in Rs Thousand)
Total Liabilities 1 7 4 8 8 3 0 Total Assets 1 7 4 8 8 3 0
Sources of Funds
Paid -up Capital 1 2 3 2 5 0 Reserves & Surplus 1 3 8 9 7 1 3
Secured Loans 2 3 5 8 6 7 Unsecured Loans N I L
Application of Funds
Net Fixed Assets 4 5 5 5 2 2 Investments 3 0 8 2 2 9
Net Current Assets 9 7 0 6 4 1 Misc. Expenditure N I L
Deferred tax Assets 1 4 4 3 7
Performance of Company (Amount in Rs. Thousand)
Turnover (Incl. Other Income) 1 5 2 9 3 5 4 Total Expenditure 1 3 2 2 1 4 8
Profit / Loss Before Tax 2 0 7 2 0 6 Profit / Loss After Tax 1 4 2 5 7 7
Earning per share 1 1 . 5 7 Dividend Rate % 3 0
Generic Name of Principal Product / Service of Company (as per monetary terms)
Item Code No. (ITC Code): 6 2 0 4 6 2 1 1
Product description : Men Trouser 100% Cotton
Earning Per share
Basic 1 1 . 5 7
Diluted 1 1 . 5 7
Net Profit / (Loss)(Rs. in thousands)
Basic 1 4 2 5 7 7
Diluted 1 4 2 5 7 7
Average no. of shares (Rs. 10/- each)
Basic 1 2 3 2 5 0 3 7
Diluted 1 2 3 2 5 0 3 7
Signatures to Schedules and Notes
7118th Annual Report
Making growth fashionable.
Making growth fashionable.
Making growth fashionable.
Making growth fashionable.
Making growth fashionable.
25% or Rs. 1,250/- Whichever is lower
25% or Rs. 1,250/- Whichever is lower
25% or Rs. 1,250/- Whichever is lower
25% or Rs. 1,250/- Whichever is lower
Serial No. :
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Serial No. :
Serial No. :
Serial No. :
Serial No. :
Serial No. :
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Valid upto March 31, 2010
Valid upto March 31, 2010
Valid upto March 31, 2010
Valid upto March 31, 2010
18th Annual Report72
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Terms and Conditions:
� Redeemable against purchases at K-Lounge stores / Killer Stores / Integriti Stores / Lawman Stores only.
� This offer cannot be clubbed with any other offer.
� This voucher is non-encashable or refundable.
� Discount coupon purchases shall not be acceptable during the annual or any other sale period at K-Lounge stores /Killer Stores / Integriti Stores / Lawman Stores.
� Discount coupon must be presented intact at the time of purchase.
� Validity of the coupon will not be extended and no duplicate coupon will be issued.
� Photocopy of the discount coupon will not be accepted.
� Not more than one discount coupon can be redeemed against a single purchase.
� Disputes, if any rising out of or in conjunction with or as a result of this offer or otherwise relating hereto shall be subjectto the exclusive jurisdiction of the competent courts/tribunals in Mumbai only.
Please visit the company’s website www.kewalkiran.com for details of stores.
Terms and Conditions:
� Redeemable against purchases at K-Lounge stores / Killer Stores / Integriti Stores / Lawman Stores only.
� This offer cannot be clubbed with any other offer.
� This voucher is non-encashable or refundable.
� Discount coupon purchases shall not be acceptable during the annual or any other sale period at K-Lounge stores /Killer Stores / Integriti Stores / Lawman Stores.
� Discount coupon must be presented intact at the time of purchase.
� Validity of the coupon will not be extended and no duplicate coupon will be issued.
� Photocopy of the discount coupon will not be accepted.
� Not more than one discount coupon can be redeemed against a single purchase.
� Disputes, if any rising out of or in conjunction with or as a result of this offer or otherwise relating hereto shall be subjectto the exclusive jurisdiction of the competent courts/tribunals in Mumbai only.
Please visit the company’s website www.kewalkiran.com for details of stores.
Terms and Conditions:
� Redeemable against purchases at K-Lounge stores / Killer Stores / Integriti Stores / Lawman Stores only.
� This offer cannot be clubbed with any other offer.
� This voucher is non-encashable or refundable.
� Discount coupon purchases shall not be acceptable during the annual or any other sale period at K-Lounge stores /Killer Stores / Integriti Stores / Lawman Stores.
� Discount coupon must be presented intact at the time of purchase.
� Validity of the coupon will not be extended and no duplicate coupon will be issued.
� Photocopy of the discount coupon will not be accepted.
� Not more than one discount coupon can be redeemed against a single purchase.
� Disputes, if any rising out of or in conjunction with or as a result of this offer or otherwise relating hereto shall be subjectto the exclusive jurisdiction of the competent courts/tribunals in Mumbai only.
Please visit the company’s website www.kewalkiran.com for details of stores.
Terms and Conditions:
� Redeemable against purchases at K-Lounge stores / Killer Stores / Integriti Stores / Lawman Stores only.
� This offer cannot be clubbed with any other offer.
� This voucher is non-encashable or refundable.
� Discount coupon purchases shall not be acceptable during the annual or any other sale period at K-Lounge stores /Killer Stores / Integriti Stores / Lawman Stores.
� Discount coupon must be presented intact at the time of purchase.
� Validity of the coupon will not be extended and no duplicate coupon will be issued.
� Photocopy of the discount coupon will not be accepted.
� Not more than one discount coupon can be redeemed against a single purchase.
� Disputes, if any rising out of or in conjunction with or as a result of this offer or otherwise relating hereto shall be subjectto the exclusive jurisdiction of the competent courts/tribunals in Mumbai only.
Please visit the company’s website www.kewalkiran.com for details of stores.