To ensure quality reliability and for the better co-creation of value many buyers aredoing away with multiple suppliers and are consolidating the purchase from large and moredependable partners. Our company being one of the largest infant garment manufacturer inthe world is poised to benefit from this trend.
Welcome to the 26th annual report of your company Kitex Garments Limited.
Kitex business is undergoing a dynamic transition taking the company to the next level.The management is deeply involved in further improving our global advantage. Thesucceeding few years are going to be very important to our company as we capitalize on thecompany's inherent strengths which are primarily our profoundly advanced processespractices and the way we engage with our customers.
FY17-18 has been a challenging year with respect to our top line and margins.
Revenue from operations grew by 2% on year to year basis. Our margins and performancewere adversely impacted due to Increase in raw material costs Reduction in exportIncentives due to GST implementation and further one of our client has filed a petition inthe bankruptcy court in USA to wind down its US operations. A motion before the court ispending from suppliers including our company. The company is in the process of recovery ofreceivables. We consider this as an impact limited to FY18 as the allocated capacity forthe client has already been taken up by other clients.
Innovation is our key constituent for increasing our competitive advantage. Despite theunforeseen challenges from the external environment we continue to strengthen our internaloperations by upgrading technology streamlining processes and rationalization of humanresources. This is in line with our goal to enhance our capacity by the year 2021. Thisstrategy is also consistent with supplier consolidation trend among major infant garmentbuyers in our markets. To ensure quality reliability and for the better co creation ofvalue many buyers are doing away with multiple suppliers and are consolidating thepurchase from large and more dependable partners. Our company being one of the largestinfant garment manufacturers in the world is poised to benefit from this trend. The KitexUSA LLC licensed brand "Lamaze" and Own Brand "Little Star" havealready started establishing their market presence. The company is providing value addedservice in the form of design services to its clients.
The global market is abuzz with debates and impact analysis on the recent escalation oftrade sanctions between USA and China. In the event of further escalation of thisdevelopment global buyers particularly those based in the US may restructure their supplychains and opt for sourcing products from countries other than China. This could create asubstantial opportunity for manufacturers in other countries including India. The supplierconsolidation trend as well as the Trade war related fallout is already unfolding moreopportunities that support growth in the near future as well as long term.
Stepping into FY19 towards the vision of becoming a global player of substance dueattention is being given to our quality processes with focus on health safety and comfortof Infants - who are end users of our products. Read Page 8 and 10 for more details on ourvalue chain and product stewardship
Corporate Social Responsibility
In our founding principle adding socio economic value is considered as the essentialcore outcome of doing business. Over the years we have been able to transform lives inKizhakkambalam Panchayath where our unit is located with respect to improvinglivelihoods creatinghousing and public infrastructure food security programs educationagriculture and health.
During the year we carried out several social initiatives and took up many newinitiatives touching upon Housing Food Security Education Health Drinking Water andLivelihood. Read Page 14 15 & 16 for more details.
The Board joins me in expressing our deep appreciation for the interest shown byvarious stakeholders and this is clearly depicted by the growth in numbers of ourShareholder community from 28000 to 40000 shareholders as on the close of the financialyear 2017-18. I take this opportunity to thank our employees customers bankersinvestor's suppliers and Government for reposing their trust in the management. We assureyou our commitment for continued growth.
Sabu M Jacob
Chairman & Managing Director