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K P R Mill Ltd.

BSE: 532889 Sector: Industrials
NSE: KPRMILL ISIN Code: INE930H01023
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OPEN 772.85
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VOLUME 2777
52-Week high 882.00
52-Week low 500.00
P/E 24.31
Mkt Cap.(Rs cr) 5,816
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OPEN 772.85
CLOSE 775.45
VOLUME 2777
52-Week high 882.00
52-Week low 500.00
P/E 24.31
Mkt Cap.(Rs cr) 5,816
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

K P R Mill Ltd. (KPRMILL) - Director Report

Company director report

Dear Shareholders

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

FINANCIAL RESULTS

(Rs. in Lakhs)

PARTICULARS

STANDALONE

CONSOLIDATED

2014-15 2013-14 2014-15 2013-14
Sales and Other Income
Domestic Sales (Net of Excise Duty) 154752 150300 168413 165208
Export Sales 48803 42851 80432 65844
Other Income 6682 5800 10134 9154
210237 198951 258979 240206
Profit before Interest & Depreciation 37843 38184 46134 45327
Less : Interest 6450 7234 8394 10450
Depreciation 12587 12982 15402 15670
Profit Before Tax 18806 17968 22338 19207
Less : Taxation
Provision for Current Tax 5546 5034 6573 5313
Tax relating to earlier years (82) 94 (95) 87
Less : MAT Credit Entitlement 1281 - 1522 135
4183 5128 4956 5265
Provision for Deferred Tax Liability 25 (216) 25 (226)
Profit After Tax 14598 13056 17357 14168

REVIEW OF OPERATIONS

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

DIVIDEND

In its Meeting held on 5th February 2015 Your Board of Directors haddeclared an interim dividend of 40% on the Equity Shares of the Company. The Board hasrecommended a final dividend of 50% on Equity Shares subject to the approval of theMembers at the ensuing 12th Annual General Meeting.

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

GARMENTS EXPANSION

Driven by consistent demand the Global Textile & Apparel Trade is growing rapidly.The core competency enabled Indian Textile Industry to emerge as the World’s secondlargest Textile Exporter. The uptrend is expected to remain for a long term. The Garmentcapacity expansion mooted during last year has been successfully completed as detailedbelow.

BROWN FIELD

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

GREEN FIELD

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

FURTHER EXPANSION

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

SUBSIDIARY COMPANIES

The Company has the following four Wholly Owned Subsidiary Companies and the Statementspursuant to Section 129 (3) of the Companies Act 2013 (Hereinafter referred to as the‘Act’) in ‘Form AOC- 1’ containing the details of Subsidiaries formspart of this Annual Report. However as required by the ‘Act’ we give below abrief report on their performance.

Quantum KNITS PVT. LIMITED

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

K.P.R SUGAR MILL LIMITED

Due to the delay in fixation of cane price by the Government for the Sugar Season2014-15 the Production had commenced during the month of December 2014 only. Produced8.83 Crore units of power out of which 6.13 Crore units sold and 2.70 Crore unitscaptively consumed. 92285 metric tonnes sugar was produced.

JAHNVI MOTOR PRIVATE LIMITED

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

GALAXY KNITS LIMITED

The Company has not yet commenced its operation.

FIXED DEPOSITS

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

FINANCE

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

DIRECTORS

In pursuance of Section 149 and other applicable provisions of the Act & Clause 49of the Listing Agreement Independent Directors were appointed for a Term at the lastAnnual General Meeting. Pursuant to the provisions of the Act and Listing Agreement Dr. S.Ranganayaki M.B.B.S. has been co-opted as a Woman Independent Director at theMeeting of the Board of Directors of the Company held on 12.03.2015 subject to herappointment at the Annual General Meeting. To regularise her appointment at the ensuingAnnual General Meeting suitable Resolution has been included in the Notice of the saidmeeting. Familiarisation Program on the Company and its operations was conducted for theIndependent Directors. Requisite declaration from the Independent Directors of the Companyunder Section 149 (7) of the Act confirming that they meet with the criteria of theirIndependence laid down in Section 149 (6) have been obtained.

Consequent on the cessation of right to appoint a Director in our Board as per theAgreement the Private Equity Investors had withdrawn their Nominee Director Sri. ShujaatKhan from our Board with effect from 30.12.2014. The Board wishes to place on record itsappreciation for the valuable services rendered by him during the tenure of hisDirectorship.

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

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

KEY MANAGERIAL PERSONNEL AND MANAGERIAL REMUNERATION CRITERIA

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

ANNUAL PERFORMANCE EVALUATION

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

COMMITTEES

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

I. Audit Committee

II. Stake Holders Relationship Committee

III. Nomination and Remuneration Committee

IV. Corporate Social Responsibility (CSR) Committee

POLICIES

In pursuance of the Companies Act 2013 and the Listing Agreement the followingpolicies have been framed and disclosed on the Company’s website’www.kprmilllimited.com’.

I. Nomination & Remuneration Policy

II. Related Party Transaction Policy

III. CSR Policy

IV. Whistle Blower Policy consisting of Vigil Mechanism

V. Policy on Determining Material Subsidiaries

VI. Code for Fair Disclosure

RISK MANAGEMENT

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

VIGIL MECHANISM & WHISTLE BLOWER POLICY

The Company has an established Vigil Mechanism for Directors / Employees to reportconcerns about unethical behaviors actual or suspected fraud or violation of the code ofconduct or ethics policy. It also provides for adequate safeguards against victimizationof Directors / Employees who avail of the mechanism. The Company affirms that no personnelhave been denied access to the audit committee. The Company has formulated a Policy ofVigil Mechanism and has established a mechanism that any personnel may raise ReportableMatters. All suspected violations and Reportable Matters are reported to the Chairman ofthe Audit Committee at e-mail id ‘whistleblower@kprmill.com’. The key directions/ actions will be informed to the Chairman / Managing Director of the Company. The WhistleBlower Policy has been framed and displayed in the Company’s Website.

CSR EXPENDITURE

During the year in pursuance of the recommendations of the CSR committee the Companyhas contributed Rs. 2.32 Crores being 2% of the average net profit of the Companytowards implementing the CSR activities. Annual Report on CSR as required by the Act isappended.

BOARD MEETINGS

The Board of Directors met Six times during the financial year on 19.04.201422.05.2014 04.08.2014 06.11.2014 05.02.2015 and 12.03.2015. The Composition of Boardprocedure dates and other details are included in the Corporate Governance Report thatforms part of this Report.

CONSOLIDATED FINANCIAL STATEMENTS

Your Directors have pleasure in attaching the Consolidated Financial Statementspursuant to the provisions of the ‘Act’ and the Listing Agreement entered intowith the Stock Exchanges. They are prepared in accordance with the Accounting Standardsprescribed by the Institute of Chartered Accountants of India in this regard. TheConsolidated Financials also marked a significant increase in its Revenue as well asProfitability.

PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS

The Company has duly complied with the provisions of Section 186 of the Act and asrequired therein the details of the Borrowals Security Investment etc. are annexed byway of notes to accounts.

RELATED PARTY TRANSACTIONS

All Related Party Transactions that were entered into during the financial year wereonly between Holding Company and Wholly owned Subsidiary Companies in the ordinary courseof business whose accounts are consolidated with Holding Company and placed before theshareholders at the General Meeting for approval. Accordingly pursuant to Section 134 (3)(h) read with Rule 8 (2) of the Companies (Accounts) Rules 2014 and clause 49 of theListing Agreement there are no transactions to be reported under Section 188 (1) of theCompanies Act 2013. However the Transactions as required under Accounting StandardsAS-18 are reported in Note 31 of the Notes to Accounts of the Consolidated FinancialStatements as well as Standalone Financial Statements of your Company. The Company’sPolicy on dealing with related party transactions is available on the Company’swebsite.

EMPLOYEE WELFARE

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

PARTICULARS OF EMPLOYEES

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

PREVENTION OF SEXUAL HARASSMENT OF WOMEN AT WORKPLACE

Sexual Harassment of Women at Workplace (Prevention Prohibition and Redressal) Act2013 provides for protection against sexual harassment of women at workplace and for theprevention and redressal of complaints of sexual harassment and also for the mattersincidental thereto. The Company has accordingly adopted the policy against SexualHarassment of Women at Workplace for the purpose of preventing prohibiting andredressing sexual harassment of female employees at all the workplace within the Companywhich are based on fundamental principles of justice and fair play.

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

ENERGY CONSERVATION TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

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

DIRECTORS RESPONSIBILITY STATEMENT

Pursuant to the requirement under section 134(5) of the Companies Act 2013 the Boardof Directors of the Company hereby state and confirm that;

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

II. The Directors have selected accounting policies and applied them consistently andmade judgments and estimates that are reasonable and prudent so as to give a true and fairview of the state of affairs of the Company at the end of the financial year and of theprofit of the Company for the year under review.

III. The Directors have taken proper and sufficient care for the maintenance ofadequate record in accordance with the provisions of the Companies Act 2013 forsafeguarding the assets of the Company and for preventing and detecting fraud and otherirregularities.

IV. The Directors have arranged preparation of the accounts for the financial yearended 31.03.2015 on a going concern basis.

V. The Directors had laid down internal financial controls to be followed by theCompany and that such internal financial controls are adequate and were operatingeffectively.

VI. The Directors had devised proper systems to ensure compliance with the provisionsof all applicable laws and that such systems were adequate and operating effectively.

CORPORATE GOVERNANCE REPORT AND MANAGEMENT DISCUSSION AND ANALYSIS STATEMENT

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

INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY

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

RATIO OF REMUNERATION TO EACH DIRECTOR

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

SIGNIFICANT & MATERIAL ORDER PASSED BY THE REGULATORS

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

DETAILS REGARDING ISSUE OF SHARES

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

AUDITORS

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

AUDITORS REPORT

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

COST AUDIT

In pursuance of Companies (Cost Records and Audit) Rules 2014 the Company hasappointed a Cost Auditor for the Company to audit the cost records for the Financial Year2015-16.

SECRETARIAL AUDIT REPORT

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

EXTRACT OF ANNUAL RETURN

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

ACKNOWLEDGEMENT

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

By order of the Board of Directors
Coimbatore K.P. Ramasamy
05.05.2015 Chairman

Annexure to the Directors’ Report

Form AOC-1

(Pursuant to first provisio to sub-section (3) of Section 12 read with Rule 5 of theCompanies (Accounts) Rules 2014)

Financial Summary of Subsidiary Companies

(Rs. in Lakhs)
Particulars Quantum KNITS PVT. LIMITED K.P.R.Sugar Mill Limited Galaxy Knits Limited Jahnvi Motor Private Limited
Share Capital 10 583 5 193
Reserves & Surplus 1958 11042 (1) 460
Total Assets 9186 60892 4 5150
Total Liabilities 7218 49267 - 4497
Investments - - - -
Turnover (Net of Excise Duty) 20926 55389 - 11321
Profit Before Taxation 2018 1206 - 308
Provision for Taxation 681 - - 92
Profit After Taxation 1337 1206 - 216
Proposed Dividend - 26 - -
% of Share Holding 100 100 100 100

Particulars of Employees - (Companies (Appointment and Remuneration of ManagerialPersonnel) Rules 2014)

a) Information as per Rule 5(1) of Chapter XII Companies (Appointment and Remunerationof Managerial Personnel) Rules 2014

1. Remuneration paid to Whole-Time Directors (WTD)

Ratio of Remuneration on (fiscal 2014-15)

Name of the Director Title % Increase over previous year Ratio of Remuneration to MRE Revenues Net Profit
Sri. K.P.Ramasamy Chairman 25.99* 97.44 0.27 3.91
Sri. KPD Sigamani Managing Director 25.99* 97.44 0.27 3.91
Sri. P.Nataraj Managing Director 25.99* 97.44 0.27 3.91
Sri. C.R.Anandakrishnan Executive Director Nil 4.08 0.02 0.16
Sri. A.Sekar Whole-Time Director Nil 2.04 0.01 0.08

* On account of Commission on Net Profits.

2. Remuneration paid to Non-Executive Directors

The Non-Executive Directors of the Company are entitled for sitting fee only and itsdetails are provided in the Corporate Governance Report.

3. Remuneration of other Key Managerial Personnel (KMP)

Name of the KMP Title % Increase over previous year Ratio of Remuneration on (fiscal 2014-15)
Revenues Net Profit
Sri. PL.Murugappan Chief Financial Officer 15.29 0.01 0.10
Sri. P.Kandaswamy Company Secretary 8.00 0.00 0.05

4. Percentage increase in the median remuneration of employees in the financial year :13%.

5. Number of Permanent employees on the roll of the Company at the end of the year :7748

6. Explanation on the relationship between average increase in remuneration and theCompany’s performance

The revenue growth during fiscal 2015 on standalone basis was 6% and net profit growthwas 12%. The average increment of 14% was in line with the industry benchmark cost ofliving index etc. Increase in Managerial remuneration is determined by the shareholders.

7. Variations in the market capitalization of the Company price earning ratio as atthe closing date of the current and previous year.

Particulars Market Capitalization (Rs. in lakhs) Price Earnings Ratio
31.03.2015 181255 12.53
31.03.2014 45464 3.52
Change % 298.67 255.97

Percentage increase or decrease in the market quotations of the share of the Company incomparison to the rate at which the Company came out with the last public officer.

Particulars NSE BSE
31.03.2015 - Market Quote - Rs. 475.05 481.00
07.08.2007 - IPO - Rs. 225.00 225.00
Change % 111.13 113.77

8. Average percentile increase already made in the salaries of employees otherthan the managerial personnel in the last financial year and its comparison with thepercentile increase in the managerial remuneration and justification thereof and point outif there are any exceptional circumstances for increase in the managerial remuneration.

The average annual increase in the salaries of employees during the year was 13% whilethe average increase in managerial remuneration during the year was 25%. The ManagerialRemuneration and its increment are fixed by the Shareholders on recommendation ofNomination and Remuneration Committee and Board.

9. Key parameters for any variable component of remuneration availed by theDirectors

The variable component of Managerial Remuneration (commission) is based on theperformance of the Company.

10. The ratio of remuneration of the highest paid Director to that of the Employees whoare not Directors but receive remuneration in excess of the highest paid Director duringthe year : Not Applicable

11. It is hereby affirmed that the remuneration paid during the year is as per theRemuneration policy of the Company.

Annual Report on Corporate Social Responsibility (CSR) activities for Financial Year2014-15.

A brief outline of the Company's CSR policy including overview of projects or programsproposed to be undertaken and a reference to the web-link to the CSR policy and projectsor programs.

CSR activities are not new to KPR and have been practiced ever since it started settingup the main business. Be it environment friendly measures promotion of educationempowering downtrodden etc. The CSR activities under the Policy are those covered underthe ambit of Schedule VII of the Companies Act 2013. Maiden initiatives on Promotion ofeducation ensuring environmental sustainability Medical aid etc. The Policy isavailable in the website of the Company at www.kprmilllimited.com. CSR projects aresubject to audit.

1. The Composition of the CSR Committee

The Composition of the Committee is as follows:

a) Sri. K.P. Ramasamy - Chairman

b) Sri. M.J. Vijayaraaghavan – Independent Director

c) Sri. KPD Sigamani – Managing Director

d) Sri. P. Nataraj – Managing Director

2. Average Net Profit of the Company for last three financial years

Rs. 11596.05 Lakhs

3. Prescribed CSR Expenditure (two percent of the amount as in item 2 above)

Rs. 231.92 Lakhs

4. Details of CSR spent during the financial year

During the financial year funds were utilised towards Promotion of EducationEnvironment sustainability making available safe drinking water etc. directly andthrough agency.

5. Total amount to be spent for the financial year

Rs. 231.92 Lakhs

6. Amount unspent if any

Nil

7. Manner in which the amount spent during the financial year is detailed below

(Rs. in Lakhs)

S.No CSR project or activity identified Sector in which the Project is covered Projects or programs (1) Local area or other (2) Specify the State and district where projects or programs was undertaken Amount outlay (budget) project or program wise (Rs.) Amount spent on the projects or Programs Subheads: 1. Direct expenditure on projects or program 2. Overhead (Rs.) Cumulative expenditure upto to the reporting period (Rs.) Amount spent: Direct or through implementing agency (Rs.)
(1) (2) (3) (4) (5) (6) (7) (8)
1. Promotion of Education Education Arasur & Kalliyampudur Coimbatore & Erode Districts Tamil Nadu. 228.21 i. 3.21 Direct Expenditure 228.21 i. Direct 3.21
ii. 225.00 Overhead ii. Through Implementing Agency 225.00
2. Environmental Environment Kalliyampudur Erode District Tamil Nadu. 2.15 2.15 Direct Expenditure 2.15 Direct 2.15
3. Aid to Drinking Water Facility Safe Drinking Water Sathyamangalam Erode District Tamil Nadu. 2.00 2.00 Direct Expenditure 2.00 Direct 2.00
TOTAL 232.36 232.36 232.36 232.36

8. Details of implementing agency

1. District Collector Erode Tamilnadu 2. District Collector Coimbatore Tamilnadu 3.K.P.R. Charities Coimbatore Tamil Nadu.

9. The Committee hereby state that the implementation and monitoring of CSR Policyis in compliance with CSR objectives and Policy of the Company.

P. Nataraj K.P. Ramasamy
Managing Director Chairman
CSR Committee

INFORMATION PURSUANT TO COMPANIES (ACCOUNTS) RULES 2014

A) CONSERVATION OF ENERGY

a) ENERGY CONSERVATION MEASURES TAKEN

In lighting system the Energy saver equipment have been installed at all mills. LEDTube Lights installed at Neelambur unit replacing the regular tubes in order to economisethe power consumption and improve the illumination level at low maintenance cost.

b) ADDITIONAL INVESTMENTS AND PROPOSALS IF ANY BEING IMPLEMENTED FOR REDUCTION OFCONSERVATION OF ENERGY

Harmonic filters have been installed in Karumathampatti (Compact) and Sathy units toimprove the quality of electrical network. Besides reducing the issues in electronicdevices to achieve better efficiency level in all energy intensive equipments.

c) IMPACT OF THE MEASURE (a) & (b) ABOVE FOR REDUCTION OF ENERGY CONSUMPTION ANDCONSEQUENT IMPACT ON COST OF PRODUCTION OF GOODS

The above measures enabled economised power and fuel consumption vis-a-vis reduction inthe cost of production. Total Energy Consumption equipments Consumption per unit ofproduction are as per Form ‘A’ below:

FORM A – PARTICULARS IN RESPECT OF ENERGY CONSUMPTION

I Power and Fuel Consumption

Particulars Units 2014-15 2013-14
1. Power & Fuel Consumption
A) Electricity
i) Connected Load KVA 35915 33915
ii) Purchase of Units Lakh Units 468 665
iii) Total Amount Rs. Lakhs 2830 3857
iv) Rate Per Unit (Average) Rs. 6.05 5.80
v) Demand Charges Rs. Lakhs 1109 1002
B) Electricity from Third Party
i) Purchase of Units Lakh Units 795 470
ii) Total Amount Rs. Lakhs 5594 5387
iii) Rate Per Unit (Average) Rs. 7.04 11.46
2. Own Generation
i) Through Diesel Generator
Units generated Lakh Units 2 8
Total Amount Rs. Lakhs 58 145
Cost / Unit Rs. 23.24 18.53
Units / Litre of Diesel Units 2.84 3.01
ii) Through Wind Mill
Units generated Lakh Units 997 1084
iii) Through Steam
Turbine Units
Coal / Furnace Oil / Others Units NIL NIL
II Consumption per unit of Production
(a) Production of Yarn Kgs. 76829637 70508301
Electricity (units) per Kg of Yarn Production Units 2.70 2.85
(b) Processed Fabric Kgs. 6576897 7930238
Electricity (units) per Kg of Fabric Processed Units 1.20 1.18

B. TECHNOLOGY ABSORPTION RESEARCH AND DEVELOPMENT (R&D)

1. Specific areas in which R&D carried out by the Company: Further Improvement inQuality of Products Development of new Products and Designs Cost control measures andEnergy Conservation etc.

2. Benefits derived as a result of above R&D:

Sustained quality of products at economized cost.

3. Future Plan of Action:

Continuous focus on innovations in Textile development process & products.

4. Expenditure on R&D : Rs. 138.33 Lakhs

5. Technology absorption adaptation and innovation:

For consistent production of higher quality products besides State of the ArtMachinery each of our manufacturing facilities is equipped with high-tech quality controlequipment and well trained Personnel. Effluent Treatment Plant at Processing Division hasZero Discharge System.

C. FOREIGN EXCHANGE EARNINGS AND OUTGO

(Rs. in Lakhs)
S.No Particulars 2014-15 2013-14
1 Foreign Exchange earned through exports 48803 42851
2 Foreign exchange used 31338 35932

Secretarial Audit Report

SECRETARIAL AUDIT REPORT

FOR THE FINANCIAL YEAR ENDED ON 31st MARCH 2015

[Pursuant to section 204(1) of the Companies Act 2013 and Rule No. 9 of the Companies

(Appointment and Remuneration of Managerial Personnel) Rules 2014]

To

The Members

M/s. K.P.R. Mill Limited

Coimbatore.

I have conducted the secretarial audit of the compliance of applicable statutoryprovisions and the adherence to good corporate practices by K.P.R. Mill Limited(hereinafter called the Company). Secretarial Audit was conducted in a manner thatprovided me a reasonable basis for evaluating the corporate conducts / statutorycompliances and expressing our opinion thereon.

Based on my verification of the Company's books papers minute books forms andreturns filed and other records maintained by the Company and also the informationprovided by the Company its officers agents and authorized representatives during theconduct of secretarial audit I hereby report that in my opinion the Company has duringthe audit period covering the financial year ended on 31st March 2015 compliedwith the statutory provisions listed hereunder and also that the Company has properBoard-processes and compliance mechanism in place to the extent in the manner and subjectto the reporting made hereinafter:

I have examined the books papers minute books forms and returns filed and otherrecords maintained by K.P.R. Mill Limited for the financial year ended on 31stMarch 2015 according to the provisions of:

(i) The Companies Act 2013 (the Act) and the rules made thereunder;

(ii) The Securities Contracts (Regulation) Act 1956 ('SCRA') and the rules madethereunder;

(iii) The Depositories Act 1996 and the Regulations and Bye-laws framed thereunder;

(iv) Foreign Exchange Management Act 1999 and the rules and regulations madethereunder;

(v) The Regulations and Guidelines prescribed under the Securities and Exchange Boardof India Act 1992 (’SEBI Act') viz. :-

(a) The Securities and Exchange Board of India (Substantial Acquisition of Shares andTakeovers) Regulations 2011;

(b) The Securities and Exchange Board of India (Prohibition of Insider Trading)Regulations 1992;

(c) The Securities and Exchange Board of India (Issue of Capital and DisclosureRequirements) Regulations 2009;

(d) The Securities and Exchange Board of India (Employee Stock Option Scheme andEmployee Stock Purchase Scheme) Guidelines 1999;

(e) The Securities and Exchange Board of India (Share Based Employee Benefit)Regulations 2014;

(f) The Securities and Exchange Board of India (Issue and Listing of Debt Securities)Regulations 2008;

(g) The Securities and Exchange Board of India (Registrars to an Issue and ShareTransfer Agents) Regulations 1993 regarding the Companies Act and dealing with client;

(h) The Securities and Exchange Board of India (Buyback of Securities) Regulations1998;

(vi) and other applicable laws applicable to a Textile Industry Viz. Textile ControlOrders Textile Committee Produce Cess Act Textile (Development and Regulation) Orderetc.

I have also examined compliance with the applicable clauses of the following:

(i) Secretarial Standards issued by The Institute of Company Secretaries of India.

(ii) The Listing Agreements entered into by the Company with Bombay Stock ExchangeLimited and National Stock Exchange of India Limited.

During the period under review the Company has complied with all the applicable ActsRules Regulations Guidelines Standards etc. including the laws mentioned above.

I further report that

The Board of Directors of the Company is duly constituted with proper balance ofExecutive Directors Non-Executive Directors and Independent Directors. The changes in thecomposition of the Board of Directors that took place during the period under review werecarried out in compliance with the provisions of the Act.

Adequate notice is given to all directors to schedule the Board Meetings agenda anddetailed notes on agenda were sent at least seven days in advance a system exists forseeking and obtaining further information and clarifications on the agenda items beforethe meeting and for meaningful participation at the meeting.

Majority decision is carried through while the dissenting members’ views arecaptured and recorded as part of the minutes.

I further report that there are adequate systems and processes in the companycommensurate with the size and operations of the company to monitor and ensure compliancewith applicable Laws Rules Regulations and Guidelines.

I further report that during the audit period there were no instances of:

• Public / Rights / Preferential Issue of shares / Debentures / Sweat Equity

• Redemption / Buy Back of Securities

• Major decisions taken by measures in pursuance of section 180 of the CompaniesAct 2013

• Foreign Technical Collaboration

Soundararajan.G ACS
Coimbatore Practicing Company Secretary
25th April 2015 ACS No. 13993 CP No. 4993

This report is to be read with our letter of even date which is annexed as Annexure Aand forms an integral part of this report.

‘Annexure A’

The Members

M/s. K.P.R. Mill Limited

Coimbatore.

Our report of even date is to be read along with this letter.

1. Maintenance of secretarial records is the responsibility of the management of theCompany. Our responsibility is to express an opinion on these secretarial records based onour audit.

2. We have followed the audit practices and processes as were appropriate to obtainreasonable assurance about the correctness of the contents of the secretarial records. Theverification was done on test basis to ensure that correct facts are reflected insecretarial records. We believe that the processes and practices we followed provide areasonable basis for our opinion.

3. We have not verified the correctness and appropriateness of financial records andBooks of Accounts of the Company.

4. The Company has maintained Legal Management System which takes care of regularCompliance of applicable laws and the amendments are updated then and there by theCompany. Wherever required we have obtained the Management representation about thecompliance of Laws Rules and Regulations and Happening of events etc.

5. The compliance of the provisions of Corporate and other applicable Laws RulesRegulations Standards is the responsibility of Management. Our examination was limited tothe verification of procedures on test basis.

6. The Secretarial Audit Report is neither an assurance as to the future viability ofthe Company nor of the efficacy or effectiveness with which the Management has conductedthe affairs of the Company.

Soundararajan.G ACS
Coimbatore Practicing Company Secretary
25th April 2015 ACS No. 13993 CP No. 4993

Form No. MGT-9

EXTRACT OF ANNUAL RETURN

As on the financial year ended on 31.03.2015

[Pursuant to section 92(3) of the Companies Act 2013 and rule 12(1) of the

Companies (Management and Administration) Rules 2014]

I. REGISTRATION AND OTHER DETAILS

i) CIN : L17111TZ2003PLC010518
ii) Registration Date : 19.03.2003
iii) Name of the Company : K.P.R. Mill Limited
iv) Category / Sub-Category of the Company : Public Company Limited by shares
v) Address of the Registered office and contact details : Registered Office Corporate Office
No.9 Gokul Buildings 1st Floor
1st Floor A.K.S. Nagar Srivari Shrimat
Thadagam Road 1045 Avinashi Road
Coimbatore – 641 001. Coimbatore – 641 018.
Ph: 0422-2478090 Ph: 0422-2207777
Fax: 0422-2478050 Fax: 0422-2207778
vi) Whether listed Company (Yes / No) : Yes
vii) Name Address and Contact details of : Karvy Computershare Private Limited
Registrar and Transfer Agent if any Unit: K.P.R. Mill Limited
Karvy Selenium Tower B Plot 31-32 Gachibowli
Financial District Nanakramguda Hyderabad – 500 032
Ph : 040 6716 2222 Fax : 040 2300 1153
Toll Free No : 1800 345 4001.

II. PRINCIPAL BUSINESS ACTIVITIES OF THE COMPANY

All the business activities contributing 10 % or more of the Total Turnover of theCompany shall be stated

S.No Name and Description of Main Products / Services NIC Code of the Product / Service % to Total Turnover of the Company
1 Yarn 17121 53.39
2 Fabric 17115 28.21
3 Garment 18101 14.50

III. PARTICULARS OF HOLDING SUBSIDIARY AND ASSOCIATE COMPANIES

S.No Name and Address of the Company CIN / GLN Holding / Subsidiary / Associate % of Shares held Applicable Section
1 M/s. K.P.R.Sugar Mill Limited No-5 AKS Nagar Thadagam Road Coimbatore – 641 001. U15421TZ2006PLC012633 Subsidiary 100 2 (87)
2 M/s. Jahnvi Motor Private Limited No-5 AKS Nagar Thadagam Road Coimbatore – 641 001. U50100TZ2011PTC017370 Subsidiary 100 2 (87)
3 M/s. Quantum KNITS PVT. LIMITED S.F. No.181 Kollupalayam Village Arasur Coimbatore – 641 407. U18101TZ2009PTC015251 Subsidiary 100 2 (87)
4 M/s. Galaxy Knits Limited 252 Periyar Colony Anupparpalayam Tirupur – 641 652. U18100TZ2012PLC018577 Subsidiary 100 2 (87)

IV. SHARE HOLDING PATTERN (EQUITY SHARE CAPITAL BREAKUP AS PERCENTAGE OF TOTAL EQUITY)

i) Category-wise Share Holding

No of Shares held at the beginning of the year

No of Shares held at the end of the year

Code Category of Shareholder Demat Physical Total % of Total Shares Demat Physical Total % of Total Shares % Change During the Year
(I) (II)
(A) PROMOTER AND PROMOTER GROUP
(1) INDIAN
(a) Individual / HUF 27208725 - 27208725 72.21 27208725 - 27208725 72.21 -
(b) Central Government/ State Government(s) - - - - - - - - -
(c) Bodies Corporate 1038000 - 1038000 2.75 1038000 - 1038000 2.75 -
(d) Financial Institutions / Banks - - - - - - - - -
(e) Others - - - - - - - - -
Sub-Total A(1) 28246725 - 28246725 74.96 28246725 - 28246725 74.96 -
(2) FOREIGN
(a) Individuals (NRIs / Foreign Individuals) - - - - - - - - -
(b) Bodies Corporate - - - - - - - - -
(c) Institutions - - - - - - - - -
(d) Qualified Foreign Investor - - - - - - - - -
(e) Others - - - - - - - - -
Sub-Total A(2) - - - - - - - - -
Total A=A(1)+A(2) 28246725 - 28246725 74.96 28246725 - 28246725 74.96 -
(B) PUBLIC SHAREHOLDING
(1) INSTITUTIONS
(a) Mutual Funds / UTI 400163 - 400163 1.06 3450718 - 3450718 9.16 8.10
(b) Financial Institutions / Banks 30390 - 30390 0.08 5410 - 5410 0.01 -0.07
(c) Central Government / State Government(s) - - - - - - - - -
(d) Venture Capital Funds - - - - - - - - -
(e) Insurance Companies - - - - - - - - -
(f) Foreign Institutional Investors 42114 - 42114 0.11 814166 - 814166 2.16 2.05
(g) Foreign Venture Capital Investors 2554994 - 2554994 6.78 683294 - 683294 1.81 -4.97
(h) Qualified Foreign Investor - - - - - - - - -
(i) Others - - - - - - - - -
Sub-Total B(1) 3027661 - 3027661 8.03 4953588 - 4953588 13.14 5.11
(2) NON-INSTITUTIONS
(a) Bodies Corporate 792861 - 792861 2.10 484693 - 484693 1.29 -0.82
(b) Individuals
(i) Individuals holding nominal share capital upto Rs. 1 lakh 1487965 1213 1489178 3.95 1572858 8863 1581721 4.20 0.25
(ii) Individuals holding nominal share capital in excess of Rs. 1 lakh 1573795 - 1573795 4.18 2219183 - 2219183 5.89 1.71
(c) Qualified Foreign Investor - - - - - - - - -
(d) Others
Trusts 2 - 2 - - - - - -
Overseas Corporate Bodies 505165 1106784 1611949 4.28 - - - - -4.28
Foreign Corporate Bodies 792191 - 792191 2.10 45065 - 45065 0.12 -1.98
Non Resident Indians 93705 - 93705 0.25 148338 - 148338 0.39 0.14
Clearing Members 54825 - 54825 0.15 3579 - 3579 0.01 -0.14
Sub-Total B(2) 5300509 1107997 6408506 17.01 4473716 8863 4482579 11.90 -5.11
Total B=B(1)+B(2) 8328170 1107997 9436167 25.04 9427304 8863 9436167 25.04 -
Total (A+B) 36574895 1107997 37682892 100 37674029 8863 37682892 100 -
(C) SHARES HELD BY CUSTODIANS AGAINST WHICH DEPOSITORY RECEIPTS HAVE BEEN ISSUED
(1) Promoter and Promoter Group - - - - - - - - -
(2) Public - - - - - - - - -
Sub-Total C - - - - - - - - -
GRAND TOTAL (A+B+C) 36574895 1107997 37682892 100 37674029 8863 37682892 100 -

(ii) Shareholding of Promoters

Shareholding at the beginning of the year

Shareholding at the end of the year

S. No Name of the Shareholder No of Shares % of shares of the Company % of shares Pledged/ encumbered to total shares No of Shares % of shares of the Company % of shares Pledged/ encumbered to total shares % change in shareholding during the year
1 Sri. K.P.Ramasamy 8127684 21.57 - 8127684 21.57 - -
2 Sri. KPD Sigamani 8128634 21.57 - 8128634 21.57 - -
3 Sri. P. Nataraj 8127733 21.57 - 8127733 21.57 - -
4 M/s. K.P.R.Developers Limited 1038000 2.75 - 1038000 2.75 - -
5 Smt. N Jayanthi 941842 2.50 - 941842 2.50 - -
6 Smt. K R Parvathi 941171 2.50 - 941171 2.50 - -
7 Smt. D. Radhamani 940941 2.50 - 940941 2.50 - -
8 Sri. C.R.Anandakrishnan 720 - - 720 - - -
Total 28246725 74.96 - 28246725 74.96 - -

(iii) Change in Promoters’ Shareholding: None

(iv) Shareholding Pattern of Top Ten Shareholders (Other than Directors Promoters andHolders of GDRs and ADRs)

Shareholding at the beginning of the year

Cumulative Shareholding during the year

S.No. Top Ten Shareholders No. of shares % of total shares of the Company No. of shares % of total shares of the Company
1 DSP Blackrock Micro Cap Fund NIL NA 1072441 2.84
2 L and T Mutual Fund Trustee Ltd - L and T Tax Advant NIL NA 744672 1.97
3 Ares Investments 2554994 6.78 683294 1.81
4 DSP Blackrock 3 Years Close Ended Equity Fund NIL NA 537563 1.42
5 IDFC Equity Opportunity Series 2 NIL NA 425000 1.12
6 Shivani T Trivedi NIL NA 375000 0.99
7 Tejas B Trivedi 170978 0.45 350000 0.92
8 Gopinath C K NIL NA 254287 0.67
9 Chander Bhatia 280000 0.74 180000 0.47
10 Kamlesh Navinchandra Shah NIL NA 165000 0.43

(v) Shareholding of Directors and Key Managerial Personnel

Shareholding at the beginning of the year

Cumulative Shareholding during the year

S.No. For Each of the Directors No. of shares % of total shares of the Company No. of shares % of total shares of the Company
1 Sri. K.P. Ramasamy 8127684 21.57 8127684 21.57
2 Sri. KPD Sigamani 8128634 21.57 8128634 21.57
3 Sri. P. Nataraj 8127733 21.57 8127733 21.57
4 Sri. C.R. Anandakrishnan 720 0.0019 720 0.0019
5 Sri. K.N.V. Ramani - - - -
6 Sri. M.J. Vijayaraaghavan 100 0.0001 100 0.0001
7 Sri. G.P.Muniappan - - - -
8 Dr. K. Sabapathy - - - -
9 Sri. A.M. Palanisamy - - - -
10 Sri. A. Sekar - - - -
11 Sri. C.Thirumurthy 175 0.0001 5 0.0001
12 Dr. S. Ranganayaki - - - -

 

Shareholding at the beginning of the year Cumulative Shareholding during the year
S.No. For Each of the KMP No. of shares % of total shares of the Company No. of shares % of total shares of the Company
1 Sri. PL. Murugappan Chief Financial Officer NIL NA NIL NA
2 Sri. P.Kandaswamy Company Secretary NIL NA NIL NA

V. INDEBTEDNESS

Indebtedness of the Company including interest outstanding / accrued but not due forpayment

(Rs. in Lakhs)
Particulars Secured Loans Unsecured Loans Deposits Total
Indebtedness at the beginning of the FY
i) Principal Amount 51651 322 - 51973
ii) Interest due but not paid - - - -
iii) Interest accrued but not due 310 - - 310
Total (i + ii + iii) 51961 322 - 52283
Change in Indebtedness during the FY
Addition 79105 26 - 79131
Reduction 64861 246 - 65107
Net Change 14244 -220 - 14024
Indebtedness at the end of the FY
i) Principal Amount 65628 102 - 65730
ii) Interest due but not paid - - - -
iii) Interest accrued but not due 577 - - 577
Total (i + ii + iii) 66205 102 - 66307

VI. REMUNERATION OF DIRECTORS AND KEY MANAGERIAL PERSONNEL

A. Remuneration to Managing Directors Whole-Time Directors and / or Manager

(Rs. in Lakhs)
Name of MD / WTD / Manager
S.No. Particulars of Remuneration Sri.K.P.Ramasamy Sri.KPD.Sigamani Sri.P.Nataraj Sri.C.R. Ananda krishnan Sri.A.Sekar Total Amount
1 Gross salary
(a) Salary as per provisions contained in section 17(1) of the Income-Tax Act 1961 72 72 72 24 12 252
(b) Value of perquisites u/s 17(2) of the Income-Tax Act 1961 - - - - - -
(c) Profits in lieu of salary under section 17(3) of the Income-Tax Act 1961 - - - - - -
2. Stock Option - - - - - -
3. Sweat Equity - - - - - -
4. Commission
- as % of profit 500 500 500 - - 1500
- others - - - - - -
5. Others - - - - - -
Total (A) 572 572 572 24 12 1752
Ceiling as per the Act

10% of the Net Profit of the Company calculated as per Section 198 of the Act.

B. Remuneration to other Directors

(Rs. in Lakhs)
Name of Directors
S. No. Particulars of Remuneration Sri. M.J. Vijayaraaghavan Dr. K. Sabapathy Sri. G.P. Muniappan Sri. K.N.V. Ramani Sri. A.M. Palanisamy Sri. C. Thirumurthy Sri. Shujaat Khan * Total Amount
1. Independent Directors
• Fee for attending board and Committee Meeting 3 3 2 1 1 1 - 11
• Commission - - - - - - - -
• Others - - - - - - - -
Total (1) 3 3 2 1 1 1 - 11
2. Other Non-Executive Directors
• Fee for attending board and Committee Meeting - - - - - - 1 1
• Commission - - - - - - - -
• Others - - - - - - - -
Total (2) - - - - - - 1 1
Total (B) = (1 + 2) 3 3 2 1 1 1 1 12
Total Managerial Remuneration 3 3 2 1 1 1 1 12
Overall Ceiling as per the Act 1% of the Net Profits of the Company calculated as per Section 198 of the Act.

* Non - Independent. Ceased to be a Director with effect from 30.12.2014

C. Remuneration to Key Managerial Personnel other than MD / Manager/WTD

(Rs. in Lakhs)

Key Managerial Personnel

S. No. Particulars of Remuneration Company Secretary Chief Financial Officer Total
1 Gross salary
(a) Salary as per provisions contained in section 17(1) of the Income-Tax Act 1961 10 14 24
(b) Value of perquisites u/s 17(2) of the Income-Tax Act 1961 - - -
(c) Profits in lieu of salary under section 17(3) of the Income-Tax Act 1961 - - -
2 Stock Option - - -
3 Sweat Equity - - -
4 Commission - - -
(i) as a percentage of Profit - - -
(ii) others - - -
5 Others - Bonus 2 2 4
Total 12 16 28