PAGE INDUSTRIES LIMITED
ANNUAL REPORT 2011-2012
Your Directors take pleasure in presenting the 17th Annual Report of the
Company together with audited accounts of the Company for the year ended
31st March 2012.
Financial results for the year under review are summarised below:
(Rupees in Million)
Particulars For the For the
year ended year ended
31st March 31st March 2012 2011
Sales 6834.09 4915.62
Other Income 183.56 120.95
Profit before Interest, Depreciation &
Prior period Adj. 1513.91 1016.63
(Less): Financial Charges 66.73 47.75
(Less): Depreciation 106.22 98.30
(Less): Prior period Adjustments 0.01 (3.51)
Net Profit Before Tax 1340.95 877.61
(Less): Provision for
- Current taxes 403.00 286.31
- Prior Year taxes 27.80 18.17
- Deferred taxes 10.28 5.81
- Wealth Tax 0.25 0.23
Profit After Tax 899.85 585.49
Less: Interim Dividend 301.15 245.39
Proposed Dividend 111.54 44.62
Corporate Dividend Tax
(Including tax on proposed dividend) 66.95 47.99
Transferred to General Reserve 97.00 60.00
Surplus carried to Balance Sheet 858.93 535.72
FINANCIAL HIGHLIGHTS & PERFORMANCE
Your Directors wish to inform you that during the financial year ended 31st
March 2012, the sales of the Company increased from Rs. 4,915.62 million to
Rs. 6,834.09 million registering a growth of 39 %. The net profit before
tax for the year under review has increased to Rs.1,340.95 million from Rs.
877.61 million of last year, which is an increase of 53%. The net profit
stood at Rs.899.85 million as against Rs. 585.49 million of the previous
year representing a growth of 54%.
During the year 2011-12, your directors have declared three interim
dividends on 27th May 2011 (Rs. 5 per share), 10th November 2011 (Rs.12 per
share) and 9th February 2012 (Rs. 10 per share) on an equity share value of
Rs. 10 each and are also pleased to recommend a final dividend of Rs. 10/-
per share aggregating to a total dividend of Rs. 37 per share of an equity
share value of Rs. 10 each amounting to Rs. 41,26,93,338/- for the year
ended 31st March 2012. The final dividend if approved at the forthcoming
Annual General meeting will be paid out of the profits of the Company. The
dividend will be paid to those shareholders whose names appears on the
Register of Members of the Company after giving effect to all valid share
transfers lodged with the share transfer agent on or before 16th July 2012
and to those whose names appears as beneficial owners in the records of
National Securities Depositories Limited and Central Depository Services
(India) Limited as on the said date.
EXPANSION OF CAPACITY:
Begur Road Complex: Production capacity at Begur Road Complex has
stabilised at 35 million pieces including partial shift working.
Bommasandra Complex: The capacity at Bommasandra complex has stabilised at
27 million pieces of garments per annum.
Kodichikkanahalli Complex: The capacity has been stepped up to 24 million
pieces of garments per annum. We have also installed centralised automated
cutting of garments in this complex.
Hosa Road Complex: The capacity of this unit has stabilised at 4 million
pieces of garments.
Other Garmenting units: The unit set up at Kudlu Gate has stabilised with a
capacity of 15 million garments per annum. We have also set up a unit at
Mangammanapalya with a capacity of 7 million pieces per annum.
Elastic Unit: Your Company has expanded capacity for the manufacture of
woven elastic to 29 million metres per annum. The capacity for manufacture
of knitted elastic has been enhanced to 14 million metres per annum.
Socks Unit: The capacity of socks unit has been expanded to 4.4 million
pairs per annum.
The four acres of land allotted to us by Karnataka Industrial Areas
Development Board (KIADB) at
Gowribidanur Area, Chikkaballapura District has been physically handed over
to us. We have obtained approval from KIADB for construction of the factory
which is expected to commence by September' 12.
Your Directors are happy to announce that the company has appointed a UAE
Distributor for Jockey and has made the first shipment to UAE during the
year under review. Our objective is to carry out brand building activities
in the region and portray a high brand image as was done in India.
BRAND BUILDING AND EXCLUSIVE BRAND OUTLETS (EBOs)
During the year 2011-12, we have, through our authorised franchisees,
opened eleven Jockey Exclusive Brand Outlets. Including these outlets, the
total EBOs now number 71, well spread out in all major cities.
As per the provisions of the Companies Act 1956 and the Articles of
Association of the Company, Mr. G P Albal and Mr. Sunder Genomal, Directors
of the Company would be retiring by rotation at the ensuing Annual General
Meeting and being eligible have offered themselves for re-appointment.
The Board of Directors at their meeting held on 28th May 2010 re-appointed
Mr. Sunder Genomal as Managing Director of the Company for a period of 5
years with effect from 1st August 2011.The same got subsequently approved
by the shareholders at their meeting held on 30th July 2010.
Considering the increase in the business volume and the contribution made
by the Managing Director, the Board revised the remuneration payable to the
Managing Director as set out in resolution No.6 in the notice. The Board
places the resolution for your approval.
The Company's exports during the year under review amounted to Rs.14.53
In the year under review, your company commissioned 'Nielsen' research
agency to conduct an independent 'brand health' study for the Jockey brand
in India. The research involved fourteen cities in all four zones across
the nation. Your Directors are happy to inform you that the results of the
study were very heartening and showed that Jockey scored a Brand Equity
Index of 4.6 on a scale of ten in the Men's Innerwear category and 2.9 in
the Women's innerwear category. To put things in perspective, worldwide
only 23% of brands across all product categories score a Brand Equity Index
3.0 or over on a scale of ten and only 8% of brands score 5.0 and above.
Jockey India Brand Equity Index scores were way above all other brands in
both the Men's and Women's Innerwear categories. The research agency has
rated the Jockey brand health in India among the most powerful brands in
their research experience across all categories.
Jockey is indeed a very well entrenched and well respected brand in its
category, not just among consumers but the trade as well. Your company is
highly encouraged by the brand image, strength and leadership in the market
and will continue its unrelenting endeavour to satisfy consumers with the
best products in terms of style, design, comfort, fit and quality.
The Indian consumer growth story remains healthy particularly in the
premium segment (our target market). Apart from general growth in
disposable incomes, the factors that determine consumption (education,
occupation, exposure to the world, urbanization, rise in nuclear families,
retail becoming more organized and consumers becoming more aspirational,
discerning and brand savvy) are all evolving in favour of the Jockey brand
as a leading brand in its category.
With the backing of Jockey International, USA, and access to ideas, trends
and innovations from forty other Jockey international licensees throughout
the world, your company's long term commitment to newness & innovation will
never waver be it product, back end processes or marketing. With the
company's strong in-house back end capabilities, manufacturing expertise
and state of the art technology, combined with a very strong distribution
network, your Directors are optimistic about the future prospects of the
Company and expect continued healthy sales growth and profitability in the
coming years, further consolidating its position in the premium market for
innerwear, leisurewear and sportswear.
AGREEMENT WITH SPEEDO INTERNATIONAL LIMITED:
We have on 1st July 2012 entered into a License and Distribution agreement
with M/S. Speedo International Limited, London, UK for the exclusive right
to manufacture and distribute Speedo products in India consisting of
swimwear, apparel, water shorts, equipments and footwear. We launched
Speedo brand of products in January of 2012 and have achieved Sales of Rs.
27.75 million during the current financial year.
Speedo is the number one brand and product choice for swimmers around the
world. While swimwear in India is still at a nascent stage, the prospects
for this category blossoming are exciting.
It is a matter of great pride for all of us at Page Industries to partner
with a brand of this stature. We are sure that Speedo's product technology
& marketing leadership, clubbed with our expertise in manufacturing and
distribution will go a long way in forging a very successful and mutually
HEALTH, SAFETY AND ENVIRONMENT
Health, safety and the environment are always areas of concern for the
Company. Your directors are committed to providing optimum safety to the
employees, public, plant and equipment, as embedded in the organisational
values, by reviewing our safety aspects on regular intervals and by
adhering to strict compliance of laws related to safety. Your company not
only ensures strictest statutory compliance but goes a step further by
commissioning external international agencies to conduct periodic audits of
the plant and outsourcing agencies, in the areas of health, security and
safety. Your Company is an environment friendly organisation as it is a
non-polluting and non-effluent generating manufacturing setup. During the
year under review, we have carried out safety inspection audit by
independent agency and the agency expressed their satisfaction over our
safety aspects. We have also set up RO (Reverse Osmosis) water treatment
plants at our factories at Bommasandra, Begur Road, Hosa Road and
Kodichikkanahalli Road to make available clean drinking water to our
employees. The same will be extended to all units.
Industrial relations are cordial at all levels and your Directors sincerely
acknowledge the exemplary dedication of all its employees.
The Company has not accepted any fixed deposits during the year under
MANAGEMENT DISCUSSION AND ANALYSIS REPORT & CORPORATE GOVERNANCE
As required in the Listing Agreement, a Management Discussion and Analysis
Report, and a separate report on Corporate Governance are enclosed as part
of this Annual Report. A certificate from the Practicing Company Secretary
regarding compliance of conditions of Corporate Governance is also annexed
to the report on Corporate Governance.
The Company is committed to maintaining the highest standards of corporate
governance. The report on corporate governance as stipulated under clause
49 of the listing agreement forms part of the annual report.
Your Company's shares are listed in the Bombay Stock Exchange Limited,
Mumbai (BSE) and National Stock Exchange of India Limited, Mumbai (NSE) and
the listing fees have been duly paid.
M/s Haribhakti & Co., Chartered Accountants, Mumbai, the retiring auditors
have given the certificate pursuant to Section 224(1-B) of the Companies
Act, 1956 and are eligible for re-appointment.
FOREIGN EXCHANGE EARNINGS AND OUT GO
The Foreign Exchange earnings and outgo during the year under review were
Foreign Exchange Earned Rs.10.47 Million
Foreign Exchange Outgo Rs. 503.42 Million
INFORMATION PURSUANT TO SECTION 217 OF THE COMPANIES ACT, 1956
Pursuant to the provisions of sub-section (2A) of Section 217 of the
Companies Act, 1956, read with the Companies (Particulars of Employees)
Amendment Rules, 2011, the statement relating to the particulars of
employees forming part of this Report is given below:
Name Sunder Genomal Vedji Ticku
Designation Managing Director Chief Operating Officer
during 2011-12 Rs. 1,02,85,306 Rs. 75,00,000
Other terms and
conditions NA NA
Nature of employment Liable to retire by Permanent
Nature of duties Overall control on the Overall management
affairs of the company of entire operations
sales and marketing
Qualification M. Tech (Industrial B.E (Mech)
Experience Three decades of Having 19 years to
experience in various experience in
facets of the textile sales field
Age 57 years 45 years
Last Employment P.T.Velveteens Eureka Forbes
Date of commencement 01-04-1996 as 07-05-1997
of employment Managing Director
No of shares 22,12,500 shares NA
% of paid up share
capital 19.8360% NA
No other persons during the year 2011-12 were drawing remuneration in
excess of the limit prescribed in the Companies (Particulars of Employees)
Amendment Rules, 2011.
CONSERVATION OF ENERGY :
All machinery and equipment are continuously serviced, updated and
overhauled in order to maintain them in good condition. This resulted in
consumption of lesser energy consumption particulars as required by Rule 2
of the Companies (Disclosure of Particulars in the Report of the Board of
Directors) Rules, 1988 are given in the Annexure A attached.
The Company continually takes steps to absorb and adopt the latest
technologies and innovations
in the Garment Industry. These initiatives should enable the facilities to
become more efficient and productive as the company expands, thus helping
DIRECTORS' RESPONSIBILITY STATEMENT
In compliance of Section 217(2AA) of the Companies Act, 1956, the Directors
of your Company confirm that:
- all applicable Accounting Standards have been followed in the preparation
of annual accounts and that there is no material departure;
- such accounting policies have been selected and applied consistently and
such judgments and estimates made are reasonable and prudent so as to give
a true and fair view of the state of affairs of the Company as at March 31,
2012 and of the profit of the Company for the year ended on that date;
- proper and sufficient care has been taken for the maintenance of adequate
accounting records in accordance with the provisions of the Act for
safeguarding the assets of the Company and for preventing and detecting
fraud and other irregularities;
- the annual accounts have been prepared on a 'going concern' basis.
The Directors acknowledge the support given by the Licensor M/s Jockey
International Inc., USA, M/s Speedo International Limited, UK and the
Distributors. The Board also wishes to place on record their sincere thanks
and appreciations to the Government of Karnataka, Bankers of the Company
and the Co-operation extended by the employees at all levels.
By Order of the Board
For and on behalf of the Board of Directors
30th May, 2012 CHAIRMAN
Statement appended to the Directors' Report pursuant to Rule 2(A) of the
Companies (Disclosure of Particulars in the Report of Board of Directors)
Rules, 1988 and forming part of the Directors' Report for the year ended
March 31, 2012.
FORM - A
(Form for Disclosure of Particulars with respect to Conservation of Energy)
A. POWER AND FUEL CONSUMPTION
a. Purchased :
Units 7,628,088 6,261,304
Total Amount Rs. 45,746,390 33,848,478
Rate / Unit Rs. 6.00 5.41
b. Own Generation :
i) Through Diesel Generator (Units) 448,609 760,492
Units per ltr. of Diesel Oil 2.91 3.01
Cost / Unit Rs. 13.65 12.53
ii) Through steam turbine / Generator Ltr / Hour Nil Nil
2. Coal (Specify quality and where used) Nil Nil
3. Furnace Oil Nil Nil
4. Other / Internal generation
Quantity (in Litres) 2070 4440
Total Cost Rs. 81,323 161,879
Hired Generation - Ltr/ Hr 11.67 18.96
B. CONSUMPTION PER UNIT OF PRODUCTION
Product name Garments Garments
Knitted Garments 72,574,011 67,846,000
Consumption per No.
Electricity (Rs.) 0.71 0.64
Furnace Oil Nil Nil
Coal Nil Nil
C. Others (Specify) Nil Nil
REPORT ON CORPORATE SOCIAL RESPONSIBILITY
1. Have a Heart Foundation
Your company made donations to 'Have a Heart' Foundation that saves lives
by providing free heart surgeries to poor children, young mothers, youth
and breadwinners. The company's donations helped provide surgeries to
seventeen individuals who desperately needed surgical treatment but simply
could not afford this one time life saving expenditure.
'Have a Heart' surgeries have made a lasting difference to the lives of
thousands of needy people in India. The foundation has tie ups with
Bangalore's leading hospitals such as Narayana Hrudayalaya, Jayadeva
Institute of Cardiac Sciences, St. John's Hospital and Bhagwan Mahaveer
Jain Hospital to sponsor subsidized surgeries for the poor.
2. SOS Children's Villages of India
Your company helped brightened the lives of twenty-five children at SOS
Children's Villages of India by sponsoring their education and helping them
live a life of dignity and security. Over the years, children at SOS have
grown up to become engineers, doctors, nurses, social workers, technicians,
journalists, and management and IT professionals. The organization is
committed to the care of children in need and to strengthening families
around the world.
The core focus is to overcome the obstacles faced by children to stay in
school, improve academic performance, ensure overall personality
development, integrate children in mainstream society, and help them become
self-reliant and contributing members of society. There are 40 SOS
Children's Villages in India including facilities for Tibetan children, 122
allied projects like kindergartens, schools, social, medical and vocational
training centres spread out across the country reaching out to over 22,000
3. Christel House India
Your company made donations to Christel House's educational program that
concentrates, among other areas, on providing children with quality
education, nutritious meals, health care, transportation, life skills
training and character development. The company's donations helped provide
fifty-three children with textbooks, uniforms, better transportation, and
The children belong to slums and deprived neighborhoods, and come from
families with low monthly income. The Learning Centre provides them with
free, rigorous academic education, which stresses competencies in English,
Math, Science, Computer and basic skills. While instilling universal values
of respect, responsibility, independence and integrity, it helps children
achieve success by providing vocational training and mentoring them until
they are integrated into work and society.
4. The National Association for the Blind
Your company sponsored cataract eye surgeries at a camp organized by The
National Association for the Blind (NAB) in Hediyala village of Nanjangud
taluk in Karnataka. There were 458 patients in the outpatient department of
the camp, out of which glasses were provided to 85 people and surgery
performed on 68 patients.
For holistic development of the visually challenged and with a vision to
lead the visually challenged from darkness to light, this one-of-a-kind
organization has established a wide range of projects and services in the
field of education, training, prevention of blindness, employment
generation, and general welfare of people at no charge.
5. Launching of Sankalp Project (A project of ESIC)
General health camp and special day programme
The Sankalp project was inaugurated by Mr. Sunder Genomal in the presence
of the medical team headed by Dr. Shashirekha Sateesh, MD (OBG), Medical
Advisor of the Company. Under her supervision along with the Sankalp
Project coordinator the following programmes were conducted:
1. Free medical check-up and counseling of the employees.
2. Investigation of RBS for diabetes mellitus, BP check up for HTN, Hb %
for Anemia and Optional HIV and STI for the employees.
3. Display of charts and handbills detailing on Diabetes Mellitus, HTN,
Obesity, Heart Diseases, Dengue fever, Malaria, Chikangunya and
4. Peer group training conducted by Sankalp Project co-ordinator. The
training was informative and interactive, thus facilitating the group to
train their fellow mates.
A 'well baby' show was also organized for the creche children wherein their
height, weight and mid-arm circumference (nutritional status) were
examined. The children were categorized under three zones viz., green zone
marked as excellent, yellow zone as borderline malnutrition and red zone as
malnourished. Prizes were distributed by Mr. Pius Thomas, VP-Finance to
children who were in their best as per height, weight and nutritional
status. The mothers of the children belonging to yellow and red zone were
given proper instructions regarding food preparation and prevention of
MANAGEMENT DISCUSSION AND ANALYSIS
The year under review ended with softening of inflation and interest rates
which augured well for better growth prospects of the economy. This trend
would benefit infrastructure, construction and real estate sectors which
would in turn spur demand growth in the textile sector. The economy is
expected to grow at a healthy pace in the medium to long term due to its
strong fundamentals and steady domestic consumptions.
Industry Structure and Development:
One of India's leading sectors, the textile industry contributes 4% to the
country GDP, provides direct employment to 35 Million people, accounts for
14% of the industrial production, 12 % of the total exports and 17% of
Break-up of the Indian textiles industry:
The Indian textile and apparel industry was valued at INR 3,900 Billion in
2010-11 and is expected to reach INR 6,700 Billion in 2015 and INR 11,000
Biliion by 2020 at a CAGR of 11%.The domestic market is expected to
register a CAGR of 11 % for the same period.
The Indian domestic apparel sector is expected to grow from INR 1,850
billion in 2010 to INR 5,300 billion by 2020, representing CAGR of 11 %. Of
this , the innerwear market currently valued at INR 143 Billion (in 2011)
is expected to grow to INR 437 Billion by 2020 growing at CAGR of 13.2%,
outpacing the growth of the overall apparel market.
The innerwear market in India is underpenetrated with per capita spend -
90% below Thailand and China. The market has been growing faster than the
overall clothing market, driven by premiumisation. With discretionary
consumer spend in India continuing to grow, these trends should persist,
aided by rising urbanization and growth in consumer incomes.
Indian consumer spend on innerwear products is significantly lower than
other Asian peers. This trend is visible across both men's and women's
segments with gaps of over 90% against countries like Thailand and China.
This suggests that there is significant room for growth driven by rising
per capita spending on such products.
Looking ahead, we expect growth in the innerwear market to be driven by
broad based consumer trends in the form of rising discretionary spend,
growing number of mid-high income house hold and rising urbanization.
Government of India has extended the Technology Upgradation Fund (TUF) for
the eleventh five year plan and has increased fund allocation. Government
of India is also setting up various apparel Parks, integrated textile parks
and Special Economic Zones in partnership with private sector.
Opportunities and Threats
Opportunities: The premium innerwear industry is expected to grow at high
rate due to the following factors.
a) Increased urbanization
b) Higher Disposable Income
c) Change in Consumer behavior particularly in our target 15-34 age group
d) Larger marketing spend by Companies creating general awareness for the
e) Increased brand awareness by consumers
f) Shift from unorganized to organized sector
g) Rapid expansion of modern retail format Threats:
All the major international innerwear Brands have commenced operations in
India realizing that Indian Market is likely to emerge as one of the
largest market in the World in the next few decades.
In anticipation of growing demand, the Company has substantially expanded
its installed production capacity. And with the ongoing addition of new
buildings, infrastructure and facilities, the installed capacity is
scalable and can be ramped up with incremental machinery to meet the
expected healthy growth in demand.
Segment wise Performance
The Company is engaged in the business of manufacturing garments. Therefore
there is no separate reportable segment.
Risk and Concern:
The areas of risk and concern are:
1. Increase in labour costs
2. Increase in input cost.
However we are confident that increase in input cost can be passed on to
consumers. We are also taking steps to monitor and improve labour
productivity which will mitigate the impact of increase in labour cost to
some extent. Moreover there has been softening trend in the price of input
material especially cotton.
Internal Control System and Adequacy
The Company has an adequate internal control system commensurate with its
size and nature of its business. Management has overall responsibility for
the Company's internal control system to safeguard the assets and to ensure
reliability of financial records. The Company has a detailed budgetary
control system and the actual performance is reviewed periodically and
decisions taken accordingly.
Internal audit program covers all areas of activities and periodical
reports are submitted to the Management. Audit Committee reviews all
financial statements and ensures adequacy of internal control systems. The
Company has a well-defined organization structure, authority levels and
internal rules and guidelines for conducting business transactions.
The successful implementation of SAP software from 1-4-2009 has been
stabilized. SAP has provided the Company with the best structures,
disciplined systems, best practices, enabling the Company to improve
efficiency, planning and control. This implementation is proving to be an
extremely useful and essential tool for the Company as it embarks on its
aggressive growth plans. An exciting extension of the SAP is the Business
Intelligence/Business Objects software, the implementation of which has
been completed. The BI/BO software will create smart management reports
that will aid decision making profoundly.
Financial Performance and Analysis:
(Rs. in Millions)
Particulars 2011-12 2010-11 Change Percentage
Turnover 6834.09 4915.62 1918.47 39%
Other Income 183.56 120.95 62.61 52%
Profit before Interest,
Depreciation and Prior Period
Adjustments 1513.91 1016.63 497.28 49%
Less: Interest 66.73 47.75 18.98 40%
Profit before Depreciation &
Prior Period Adjustment 1447.17 972.39 474.78 49%
Less: Depreciation 106.22 98.30 7.92 8%
Less: Prior Period Adjustment 0.01 (3.51) (3.52) -
Profit before tax 1340.94 877.61 463.33 53%
Less: Tax 441.08 292.12 148.96 51%
Profit after tax 899.85 585.49 314.36 54%
The Company's HR objectives seek to attain a high performing organization,
where each individual is motivated to perform to fullest capacity; where
every employee feels a sense of belonging to the company and the team,
aspiring for individual excellence while contributing to achieve
departmental objectives. As of 31st March, 2012, the Company had 12,027
employees on its roll.
Statements in the management discussion and analysis describing the
Company's objectives, projections, estimates and expectations may be
considered as 'forward looking statements' within the meaning of applicable
securities laws and regulations. Actual results could differ materially
from those expressed or implied. The factors that might influence the
operations of the Company are economic conditions, government regulations,
WTO and natural calamities over which the Company has no control.
The Company assumes no responsibility in respect of the forward looking
statements herein which may undergo changes in future on the basis of
subsequent developments, information or events.