LETTER TO SHAREHOLDERS
"We have evolved from Kallam Group with hard work consistent and stood for ourmoral values".
Cotton is one of the most important elements in the spinning industry our focus hasbeen to develop competencies in this area. We directly source cotton (kappas) from thefarmers and have created long-standing relationship with our suppliers.
Our international relationships give us the leeway to export if so desirable.
Dear Fellow Share holders
We are happy to announce excellent performance results of your company for thefinancial year ended 2017-18 with a record annual turnover of Rs 3107 million growth of8.3% y-o-y and exports of Rs 911.57 million and record profit after tax of Rs 156million growth of 23.4% y-o-y.
Your company is celebrating silver jubilee of 25 years in operation. Your company isdiversified with vertical value addition and steered by visionary independent directorsand guiding your company since inception. They also have an excellent track record and intheir own fields. They were questioning each and every move of the company and goingthrough balance sheet with minute details. All the working directors are dedicated andcontribute at least twelve hours every day and six days a week. The company had encouragedall the employees to be hardworking and loyal to the company. More than 25% of theemployees have been working since the inception of each of its divisions.
Your company had grown many folds from 12096 to 59280 ring spindles. Your company hadits core values taken from its founder Mr. Kallam Haranadha Reddy who is a mentorphilosopher guide and philanthropist. He stood for his moral values even during toughtimes.
Your company believes in core competency in textiles and focuses on value additionpath.
Your company christened as "Kallam Textiles Ltd" in line with the change inBusiness profile. The company started with spinning and since the last 25 Years Yourcompany has moved to value added activities such as Ginning Spinning Open End WeavingYarn Dyeing and Hydel Power Projects. We also have fabric processing fabric dyeing andprinting in our future pipeline. Keeping in view of all the above activities the new nameto be broad-based representing all the activities.
Your company had been listed on the Bombay Stock Exchange from 1995 with 100%compliance. The CAPEX of the company crossed to Rs 4200 million from Rs 120 million within23 years. The CAPEX also has grown year after year without any setbacks.
Recognition of Excellence
Your company is committed to quality and certified ISO 9000 since 1999. In additionyour company is certified for BCI 5S OCS Oeko- tex etc. Your company has best qualitytesting laboratories with a wide range of testing equipment. We test not only internallybut also for various spinning mills around us.
Govt of India Ministry of Textiles had introduced Technology Upgradation Fund since1999. All the loans taken by your company are backed by Technology Upgradation Fundincentives. The weaving and yarn dyeing had Technology Upgradation Fund subsidy of 10 %capital subsidy and 5% interest subsidy. In addition Govt of Andhra Pradesh is providingpower subsidy of Rs 1.50/unit for the first five years of operation and Rs 2.00/unit fromsixth to the tenth year of operation. In addition there is further interest subsidy of 8%for weaving and dyeing units.
Zero bad debt
Your company has a very strict policy for collection of receivables. The company has nobad debts since the inception of the company. This is possible due to repeat ordercustomers payment against cash Letter of Credit etc and Post Dated Cheques from acustomer with a guarantee from the sales agent. We have credit limits to every customerand agent.
We have been consistently upgrading our machinery. The machinery is replaced every tento fifteen years depending on the type of machinery to keep us competitive with lowerpower cost lower labour cost and high-quality product. Your company also follows thebest plant preventive maintenance programs to keep the machinery fit to operate 24/7. Yourcompany also buys the best lubricants original spare parts from OEMs.
Your company is a star export house. This year we crossed Rs 91.57 Cr in exports. Thefabric exports attract 3% subvention on the packing credit and 1.2% duty drawback and afurther 2.0% under MEIS.
Mr P Venkateswara Reddy Managing director has more than 40 years experience inprocurement of kappas & cotton. The quality of each bale of kappas and cottoncarefully is tested and approved by him.
Mr GVK Reddy JMD & CEO is a technocrat takes care of selection of machineryoperations marketing liasoning strategy etc.
Mr MV Subba Reddy whole time director look after finance and accounts.
Your company has many plans towards future expansion. The Looms are to be increasedfrom 248 to 310nos. The yarn dyeing to be increased from 5 tons to 10 tons/day. Theprocess house to dye cloth and printing to one Lakh meters/day to be set up.
Andhra Pradesh state also has good potential to install windmills in Rayalaseemaregion. The Govt of AP also is giving a number of incentives. Your company also intends toincrease captive power by windmills.
Reward Good Work
In order to create a sense of ownership and participation among employees to rewardlong-term employee's loyalty towards the company to motivate the employees withincentives to inspire loyalty and reward opportunities to provide means to enable thecompany to attract and retain appropriate human talent in the employment of the companyand to achieve sustained growth of the company the board of directors in its meeting heldon 28th May 2018 have approved and proposed for the approval of theshareholders for the issue of stock options as per which employees who comply withcertain eligibility criteria would be granted stock option to subscribe a specified numberof equity shares of the company offered to them at a price to be determined. The proposedplan would be subject to and in Conformity with the SEBI guidelines.
Your company also has townships both at Chowdavaram Guntur and kunkupadu (weavingplant). Each Employee provided with 500 sqft single BHK apartment. The provisions areprovided by Employees departmental stores which operates on no profit & no losspolicy. The groceries are around 10% cheaper than market prices due to mass procurement.Employee townships are provide with facilities such as Doctor Tailor Barber Bank ATMmineral water plant vegetable shops Fast food restaurant cloth shop etc so that theyare self-sufficient and employees need not go out for their daily needs. Each township isalso served by at least six different school buses so that each and every child has adecent education.
There are parks playgrounds and cruche for the children. Every year we plant at least20000 saplings.
The quarters are provided with a green environment. The employees and their familiescan take walk in the morning or evening in the parks. In addition we also providescholarships to employees children in order to encourage them for university education.
The Journey Continues
We see an unprecedented amount of opportunity in our future. Although we still have alot of hard work ahead our products are generating excitement among our customers. Andwhen I pause to reflect on how far we've come over the past few years and how much furtherwe'll go in the next one I couldn't be more excited and optimistic.
We believe this solid performance will be the result of our various managementapproaches. Above all we are resolved to making unrelenting efforts to raise corporatevalue by refocusing on the basics of manufacturing; strengthening our corporateconstitution and providing products that ensure the satisfaction of customers worldwide.
We have been rewarding our shareholders for the last 12 years by paying dividends.Further shareholders also rewarded by issuing one bonus share for every four shares held.
Invitation to Shareholders
I want to thank you for your trust and companionship. We will continue to play the longgame. We invite you to Kallam Textiles Ltd-AGM 2018 and meet Team of Kallam Textiles andlook forward for your attendance.
As always thank you for your support.
|G.V Krishna Reddy || |
|JMD & CEO ||Date: 09-08-2018 |