k g denim ltd share price Directors report


Dear Shareholders,

Your Directors have pleasure in presenting the 31st Annual Report and Audited Accounts of the Company for the year ended 31st March, 2023.

FINANCIAL RESULTS

The highlights of the standalone and consolidated performance of your Company during the financial year 2022-23 are given

hereunder;

(Rs.in Lakhs)

Particulars

Standalone

Consolidated

Current Year

2022-23

Previous Year

2021-22

Current Year

2022-23

Previous Year

2021-22

Total Revenue

51,563.20

59 ,226.53

53,713.61

61,784.49

Total Expenditure before interest, depreciation, exceptional, extraordinary

items and income tax

51,436.69

56 ,014.09

53 ,539.45

58 ,455.29

Gross Profit before interest, depreciation, exceptional, extraordinary items and

income tax

126.51

3,212.44

174.16

3,329.20

Finance Cost

2,230.46

2,430.15

2,320.18

2,503.47

Depreciation

1,572.21

1,564.14

1,582.58

1,572.58

Profit/(Loss) before Exceptional & Extra-ordinary items

(3,676.16)

(781.85)

(3,728.60)

(746.85)

Exceptional Items (Income)

-

-

-

-

Profit / (Loss) before tax

(3,676.16)

(781.85)

(3,728.60)

(746. 85)

Provision for Income tax

-

-

-

-

for Deferred tax

(936.70)

(76.47)

( 931.67 )

92.21

Profit / (Loss) for the period

(2,739.46)

(705.38)

(2 ,796. 93)

(839.06)

OPERATIONS

The Total Revenue of the Company has dropped by 14.86% from Rs.59,226.53 Lakhs in the previous year to Rs.51,563.20 Lakhs in the current year. After charging depreciation, interest and other overheads, the Company recorded a loss of Rs.3676.16 Lakhs as compared to the loss of Rs.781.85 Lakhs in the previous year. The details of division-wise performance and other operational details are discussed at length in the Management Discussion and Analysis section.

There has been no change in the nature of business of the Company.

ENVIRONMENT, SOCIAL AND GOVERNANCE

The Company holds due certification under Occupational Health and Safety Management System-ISO-45001 which is also focused on environmental management systems. It ensures that the manufacturing of products is carried on without affecting the environment in the working area and surroundings.

The Company has again achieved one of the best scores in the apparel industry as verified by a leading brand assessor continuously this year also and has been meticulously following various environmental measures and corbon or pollution reduction programs to achieve the above. The Company has introduced in-house developed Agitated Thin Film Dryer (ATFD) to concentrate the RO reject water to fine tune the existing Zero Liquid Discharge system.

The Company is maintaining a hospital for serving the community including the supply of medicines at subsidised costs. As a part of social environmental protection, agro forestry has been developed with a demo plant with the technical support of Forest College, Coimbatore. Besides necessary essential services like providing potable drinking water to nearby villages, financial aid to schools etc., are also rendered.

HEALTH AND SAFETY

The Company has obtained certification under Occupational Health and Safety Management System-ISO-45001 which is an Integrated Management System focusing on an organizations occupational health and safety management system. This standard guides us to identify and control the conditions and factors that affect the well-being of employees, contractors, visitors and any other person in the work place.

The Company is implementing various health and safety practices in a continuous manner as per Occupational Health and Safety Management System-ISO-45001 standards and legal requirements.

The Company is conscious of improving the occupational and personal health of its employees. In addition, the Company contributes to the well-being of its employees as also people living around the factory premises by organising free medical camps and health check-ups at in-house hospitals on a regular basis.

The Company provides a safer work environment for its employees. Basic personal protective equipment are provided to ensure safety from fire.

Awareness classes are being conducted periodically with the help of internal/external agencies about basic safety, fire fighting, mock drills, mass evacuation, first aid etc.,

DIVIDEND

Since the Company has incurred loss during the year under review, the Board of Directors are not in a position to recommend any dividend for the year 2022-23.

TRANSFER TO RESERVES

The Company has not transferred any amount to the General Reserve during the year under review. However, the amount of loss of Rs. 2636.79 Lakhs for the current year has been adjusted against the surplus under the head "other equity" of the Company.

SHARE CAPITAL

The paid-up capital of the Company as at 31.03.2023 stood at Rs.2563.78 Lakhs divided into 2,56,37,825 equity shares of Rs.10/- each. During the year under review, the Company has not made any fresh issue of shares.

TRANSFER OF UNCLAIMED DIVIDEND/SHARES TO INVESTOR EDUCATION AND PROTECTION FUND

In terms of Sections 124 and 125 of the Companies Act, 2013, ("Act") unclaimed or unpaid dividend relating to the financial year 2015- 16 is due for remittance on 3rd November, 2023 to the Investor Education and Protection Fund ("IEPF") established by the Central Government.

Further, pursuant to Section 124(6) of the Act, read with IEPF Authority (Accounting, Audit, Transfer and Refund) Rules, 2016, 42,099 equity shares of Rs.10/- each on which dividend had remained unclaimed for a period of 7 years have been transferred to the credit of demat account identified by the IEPF Authority during the year under review.

WEB LINK OF ANNUAL RETURN

The Annual Return of the Company for the financial year 2022-23 as required under Section 92(3) of the Companies Act, 2013 is available on the website of the Company and can be accessed on the Companys website at the link https://www.kgdenim.com/ annual-return/.

BOARD AND ITS COMMITTEE MEETINGS CONDUCTED DURING THE PERIOD UNDER REVIEW

The details of the composition of the Board and its Committees namely Audit Committee, Nomination and Remuneration Committee, Stakeholders Relationship Committee, Corporate Social Responsibility Committee and of the Meetings held and attendance of the Directors at such Board / Committee Meetings are provided in the Corporate Governance Report under relevant heads which forms a part of this Report

STATEMENT ON COMPLIANCE WITH SECRETARIAL STANDARDS

The Directors have devised proper systems to ensure compliance with the provisions of all applicable Secretarial Standards and that such systems are adequate and operating effectively. The Company has duly complied with Secretarial Standards issued by the Institute of Company Secretaries of India on meeting of the Board of Directors (SS-1) and General Meetings (SS-2).

DIRECTORS RESPONSIBILITY STATEMENT

Pursuant to the requirement of Section 134(3)(c)of the Companies Act 2013, with respect to Directors Responsibility Statement, it is hereby confirmed that –

In the preparation of the annual accounts, the applicable accounting standards have been followed and there are no material departure from those standards;

The Directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the loss of the Company for that period;

The Directors have taken proper and sufficient care for maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

The Directors have prepared the annual accounts on a going concern basis;

The Directors have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively; and

The Directors had devised proper system to ensure compliance with the provisions of all the applicable laws and such systems were adequate and operating effectively;

DETAILS IN RESPECT OF FRAUDS REPORTED BY AUDITORS UNDER SECTION 143(12) OF THE COMPANIES ACT, 2013 OTHER THAN THOSE WHICH ARE REPORTABLE TO THE CENTRAL GOVERNMENT

There was no instance of fraud identified or reported by the Statutory Auditors during the course of their audit.

DECLARATION OF INDEPENDENT DIRECTORS

The Independent Directors have submitted their disclosures to the Board that they fulfill all the requirements as stipulated in Section 149(6) of the Companies Act, 2013 and Regulation 16(1)(b) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 [‘SEBI (LODR) / Listing Regulations] so as to qualify themselves as Independent Directors under the provisions of the Companies Act, 2013 and the relevant rules of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 [‘SEBI (LODR) / Listing Regulations]. Further, they have also declared that they are not aware of any circumstance or situation, which exists or may be reasonably anticipated, that could impair or impact their ability to discharge their duties with an objective independent judgment and without any external influence.

Based on the confirmation / disclosures received from the Directors and on evaluation of the relationships disclosed, the following Non-Executive Directors are Independent:

Shri Jaganmohan Ramachandran, Smt Lakshmi Pattabi Raman, Shri A P Seturaaman, Shri N Govindarajan and Shri D Kumaravel.

Pursuant to Rule 6(3) of the Companies (Appointment and Qualification of Directors) Rules, 2014, the independent directors have submitted a necessary declaration of compliance with Rule 6(1) and Rule 6(2) of the said Rules. They have confirmed that their names have been included in the data bank of the Indian Institute of Corporate Affairs.

STATEMENT REGARDING THE OPINION OF THE BOARD WITH REGARD TO INTEGRITY, EXPERTISE AND EXPERIENCE (INCLUDING THE PROFICIENCY) OF THE INDEPENDENT DIRECTORS APPOINTED DURING THE YEAR

The Board of Directors have evaluated the Independent Directors appointed/ re-appointed during the year 2022-23 and opined that the integrity, expertise and experience (including proficiency) of the Independent Directors are satisfactory.

MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANCIAL POSITION OF THE COMPANY

There have been no material changes and commitments, if any, affecting the financial position of the Company which have occurred between the end of the financial year of the Company to which the financial year ended 31st March, 2023 relate and the date of the report.

COMPANYS POLICY RELATING TO DIRECTORS APPOINTMENT, PAYMENT OF REMUNERATION AND OTHER MATTERS PROVIDED UNDER SECTION 178(3) OF THE COMPANIES ACT, 2013

The Company pursuant to the provisions of Section 178 of the Companies Act, 2013 and in terms of Regulation 19(4) of the SEBI Listing Regulations and on the recommendation of the Nomination and Remuneration Committee, framed a policy on nomination, appointment and remuneration of Directors, Key Managerial Personnel, Senior Management Personnel and employees of the Company including criteria for determining qualifications, positive attributes, independence of a director and other matters pursuant to the provisions of Section 178 of the Companies Act, 2013 and in terms of Regulation 19(4) of the SEBI Listing Regulations. The

detailed Remuneration Policy can be accessed on the Companys website at the link https://www.kgdenim.com/wp- content/uploads/2022/06/nominationandremunerationcommitteepolicy.pdf

COMMENTS ON AUDITORS REPORT

There are no qualifications, reservations or adverse remarks or disclaimers made by M/s. Gopalaiyer and Subramanian, Statutory Auditors in their report. However, MDS & Associates LLP, Secretarial Auditors of the Company have qualified in their Secretarial Audit Report, that the Company has paid remuneration to executive directors in excess of 5% of the net profits of the Company but within the limits approved by members at the Annual General Meeting held on 27th September 2021 by passing an ordinary resolution which was not in compliance with Regulation 17(6)(e) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

In reply, your Director wish to state that the Company is taking necessary steps to comply with Regulation 17(6) (e) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS MADE UNDER SECTION 186 OF THE COMPANIES ACT, 2013

There were no loans, guarantees or investments made by the company during the year under review pursuant to Section 186 of the Companies Act, 2013.

PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES

All transactions entered into with related parties as defined under the Companies Act, 2013 and Regulation 23 of SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015 (as amended) during the financial year 2022-23 were in the ordinary course of business and on an arms length basis and not material in nature and thus disclosure in Form AOC-2 is not required.

The Policy on Related Party Transactions as approved by the Board of Directors of the Company has been uploaded on the Companys website at the link https://www.kgdenim.com/wp-content/uploads/2022/06/rpt.pdf.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO

The information pertaining to conservation of energy, technology absorption, Foreign Exchange Earnings and outgo as required under Section 134(3)(m) of the Companies Act, 2013 read with Rule 8(3) of the Companies (Accounts) Rules, 2014 is furnished in Annexure-1 and is attached to this report.

STATEMENT CONCERNING DEVELOPMENT AND IMPLEMENTATION OF RISK MANAGEMENT POLICY OF THE COMPANY

The Committee has formulated a Risk Management Policy for dealing with different kinds of risks which it faces in day-to-day operations of the Company. The Risk Management Policy of the Company outlines different kinds of risks and risk mitigating measures to be adopted by the Board. The Company has adequate internal control systems and procedures to combat the risk. The Risk management procedure is reviewed by the Audit Committee and Board of Directors on a Quarterly basis at the time of review of Quarterly Financial Results of the Company.

DETAILS OF POLICY DEVELOPED AND IMPLEMENTED BY THE COMPANY ON ITS CORPORATE SOCIAL RESPONSIBILITY INITIATIVES

The Board had formed a Corporate Social Responsibility Committee of the Board of Directors comprising of Shri. KG Baalakrishnan, Shri A P Seturaaman and Shri A Velusamy. The CSR policy of the Company deals with allocation of funds, activities, identification of programs, approval, implementation, monitoring and reporting mechanisms under the policy.

The Company has incurred a loss during the immediately preceding financial year and hence no amount has been prescribed/allocated for the CSR expenditure. Thus, no amount has been spent on the CSR activities of the Company for the financial year 2022-23.

The Annual Report on Companys CSR activities and initiatives of the Company is furnished in the prescribed format as Annexure-2 to this Report. The policy relating to CSR has been displayed on the Companys website and can be accessed at the link https://www.kgdenim.com/wp-content/uploads/2016/04/corporate-social-responsibility-policy.pdf.

ANNUAL EVALUATION OF THE BOARD ON ITS OWN PERFORMANCE AND OF THE INDIVIDUAL DIRECTORS

Pursuant to the provisions of the Companies Act, 2013, the Board of Directors evaluated the annual performance of the members of the Board and its Committees vis a vis the nature of business of the Company, its performance during the year and the contribution of each of the Directors based on the criteria laid down by the Nomination and Remuneration Committee.

The Independent Directors held a meeting during the year and inter-alia, reviewed the performance of the Non-Independent Directors and the Board as a whole and assessed the quality, quantity and timeliness of flow of information between the Company and the Board.

DIRECTORS & KEY MANAGERIAL PERSONNEL

During the year under review, Shri M B N Rao (DIN: 00287260) was retired from the Company with effect from 31st March 2023. The Board wishes to place on record its appreciation for the invaluable services rendered by Shri M B N Rao (DIN: 00287260) as Independent Director of the Company.

The Board of Directors at their meeting held on 1st April 2023 has appointed Shri D Kumaravel (DIN: 00004827) as an Additional Director of the Company and subsequently, the Company has obtained necessary approval of the members through special resolution for appointment of Shri D Kumaravel as Independent Director of the Company with effect from 1st April 2023 for a term of five consecutive years through postal ballot on 12 th May 2023.

Shri B Sriramulu and Shri B Srihari, Managing Directors of the Company retire by rotation at this Annual General Meeting and being eligible, offer themselves for re-appointment. Your directors recommend their re-appointment.

The Board of Directors at their meeting held on 7th August 2023 have recommended the re-appointment of Shri KG Baalakrishnan (DIN: 00002174) as Executive Chairman, Shri B Sriramulu (DIN: 00002560) and Shri B Srihari (DIN: 00002556) as Managing Directors of the Company for a further period of 3 (three) years with effect from 3rd November 2023, on the terms and conditions as set out in the Notice convening the ensuing Annual General Meeting. Necessary resolutions in this regard has been proposed for the approval of the members at this Annual General Meeting.

Smt T Anandhi (DIN : 00050786) was resigned from the Company with effect from 4th August, 2023. The Board wishes to place on record its appreciation for the invaluable services rendered by Smt T Anandhi as Director of the Company. Shri R Selvakumar (DIN: 00051608) was appointed as Additional Director of the Company in the capacity of Whole-time Director, by the Board of Directors with effect from 7th August 2023 and holds office up to the date of this Annual General Meeting. Accordingly, necessary resolutions proposing the appointment of Shri R Selvakumar as Director / Whole-time Director of the Company has been included in the Agenda of the Notice convening the Annual General Meeting for the approval of the members.

Key Managerial Personnel of the Company as required pursuant to Section 2(51) and 203 of the Companies Act, 2013 are Shri KG Baalakrishnan - Executive Chairman,

Shri B Sriramulu - Managing Director,

Shri B Srihari - Managing Director, Shri R Selvakumar - Whole-time Director,

Shri S Manickam - Chief Financial Officer and Smt P Krishnaveni - Company Secretary.

SUBSIDIARIES, JOINT VENTURES AND ASSOCIATE COMPANIES

The Company has 2 (Two) subsidiaries namely, Trigger Apparels Limited and KG Denim (USA) Inc.

Trigger Apparels Limited

Trigger Apparels Limited is engaged in the marketing of readymade garments. The turnover of the Company during the year under review was Rs.4663.45 Lakhs as against Rs.6096.83 Lakhs during the previous year. During the year the Company has earned a net profit of Rs.5.85 Lakhs as against a net loss of Rs.139.30 Lakhs during the previous year.

KG Denim (USA) Inc.

The turnover of the Company during the year under review was Rs. 84.98 Lakhs (INR) as against Rs.3.29 Lakhs (INR) during the

previous year. During the year the Company has incurred a net loss of Rs. 63.32 Lakhs as against a net loss of Rs. 7.86 Lakhs during the previous year. The operations of the Company are expected to improve in the forthcoming reporting period.

The Consolidated Financial Statements incorporating the Financial Statements of the subsidiary companies are attached to the Annual Report as required under the applicable Accounting Standard(s) and the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. The standalone Annual Financial Statements of Trigger Apparels Limited and KG Denim (USA) Inc., subsidiary companies are posted on the Companys website at the link https://www.kgdenim.com/investors-page/annual- reports/.

However, the Company does not have any Joint Venture or Associate Companies. The Statement containing salient features of the Financial Statement of the subsidiaries pursuant to the provision of Section 129 of the Companies Act, 2013 is attached herewith in Form AOC-1 and is attached as Annexure-3 to this report.

FIXED DEPOSITS

Since the Company has not accepted any fixed deposit covered under Chapter V of the Companies Act, 2013, there was no deposits

remaining unclaimed or unpaid as on 31st March, 2023 and accordingly, the question of default in repayment of deposits or payment of interest thereon during the year did not arise.

DETAILS OF SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALS IMPACTING THE GOING CONCERN STATUS AND COMPANYS OPERATION IN FUTURE

There were no significant and material orders passed by the Regulators or Courts or Tribunals impacting the going concern status and

Companys operation in future.

ADEQUACY OF INTERNAL FINANCIAL CONTROLS WITH REFERENCE TO THE FINANCIAL STATEMENTS

The Company has an adequate Internal Control System, commensurate with the size, scale and complexity of its operations. The

Audit Committee of the Board periodically reviews the Internal Financial Control Systems and their adequacy and recommends corrective action as and when necessary to ensure that an effective internal control mechanism is in place.

The Directors confirm that the Internal Financial Control (IFC) systems are adequate with respect to the operations of the Company. The report of Auditors pursuant to Section 143(3)(I) of the Companies Act, 2013 certifying the adequacy of Internal Financial Control is annexed with the Auditors Report.

AUDITORS STATUTORY AUDITORS

Pursuant to Section 139 of the Companies Act, 2013 read with the Companies (Audit and Auditors) Rules, 2014, M/s. Gopalaiyer and

Subramanian (Firm Registration No. 000960S), Chartered Accountants, Coimbatore, were appointed as the Statutory Auditors of the Company at the 30th Annual General Meeting held on 28th September, 2022 for a period of 5 (five) consecutive years from the conclusion of the 30th Annual General Meeting till the conclusion of the 35thAnnual General Meeting to be held in the year 2027.

The Company has obtained the necessary consent and certificate from M/s. Gopalaiyer and Subramanian, Chartered Accountants, to the effect that their appointment, if made, would be in conformity with the provisions of the Companies Act, 2013.

SECRETARIAL AUDITORS

Pursuant to the provisions of Section 204 of the Companies Act, 2013 and the Companies (Appointment and Remuneration of

Managerial Personnel) Rules, 2014, the Company has appointed MDS & Associates LLP, Company Secretaries, Coimbatore as the Secretarial Auditors of the Company for the year 2023-24 to carry out the Secretarial Audit, pursuant to the provisions of Section 204 of the Companies Act, 2013.

The report of the Auditors for the financial year 2022-23 is annexed as Annexure-4 to this Report.

COST AUDITORS

The Board of Directors on the recommendation of the Audit Committee, has appointed Shri M Nagarajan, Cost Accountant as the Cost

Auditor of the Company for the financial year 2023- 24. Pursuant to Section 148 of the Companies Act, 2013 read with Rule 14 of the Companies (Accounts) Rules, 2014, the remuneration payable for the year 2023-24 to the Cost Auditor of the Company is subject to ratification by the Shareholders at the ensuing Annual General Meeting. The Board recommends his remuneration.

DISCLOSURE ON MAINTENANCE OF COST RECORDS UNDER SUB-SECTION (1) OF SECTION 148 OF THE COMPANIES ACT, 2013

The maintenance of cost records as specified by the Central Government under Section 148(1) of the Companies Act, 2013 is

applicable to the Company and accordingly, the cost accounts and records are made and maintained.

DETAILS OF APPLICATION MADE OR ANY PROCEEDING PENDING UNDER THE INSOLVENCY AND BANKRUPTCY CODE, 2016 DURING THE YEAR

No applications have been made and no proceedings are pending against the Company under the Insolvency and Bankruptcy Code,

2016.

DETAILS OF THE DIFFERENCE BETWEEN THE AMOUNT OF THE VALUATION DONE AT THE TIME OF ONE TIME SETTLEMENT AND THE VALUATION DONE WHILE TAKING A LOAN FROM THE BANKS OR FINANCIAL INSTITUTIONS ALONG WITH THE REASONS THEREOF

The disclosure under this clause is not applicable and the Company has not undertaken any one-time settlement with the banks or

financial institutions.

INDUSTRIAL RELATIONS

The relationship between the management and the employees at all levels during the year under review has been cordial and

productive.

DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORK PLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013

The Company has complied with the provisions relating to the constitution of the Internal Complaints Committee under the Sexual

Harassment of Women at Workplace in line with the requirements of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. An Internal Complaints Committee has been set up to define the policy and redress complaints received. All employees (permanent, contractual, temporary, trainees) are covered under this policy.

The following is a summary of sexual harassment complaints received and disposed of during the year 2022-23:

I. Number of complaints received - Nil

Number of complaints disposed of – NA

Number of complaints pending - NA

PARTICULARS OF EMPLOYEES

The statement pursuant to Section 134 of the Companies Act, 2013, read with the Companies (Particulars of Employees) Rules, 1975

and Section 197(12) of the Companies Act, 2013 read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, is annexed as Annexure-5 is attached to this report.

CORPORATE GOVERNANCE

A report on Corporate Governance is annexed and forms part of this report. The Company has complied with the conditions relating to

Corporate Governance as stipulated in Regulation 27 of SEBI (Listing Obligation & Disclosure Requirements) Regulations, 2015.

AUDIT COMMITTEE

The Audit Committee of the Board of Directors has been duly constituted in accordance with the provisions of Section 177 of the

Companies Act, 2013. The details relating to the composition, meetings and functions of the Committee are set out in the Corporate Governance Report forming part of this Annual Report. The Board has accepted the Audit Committee recommendations during the year whenever required and hence no disclosure is required under Section 177(8) of the Companies Act, 2013 with respect to rejection of any recommendations of the Audit Committee by the Board.

CEO/CFO CERTIFICATION

As required under Regulation 33(2)(a) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the

Managing Director and the Chief Financial Officer of the Company have furnished necessary certificates to the Board on the Financial Statements presented.

VIGIL MECHANISM AND WHISTLE BLOWER POLICY

The Company has provided for adequate safeguards to deal with instances of fraud and mismanagement and to report concerns

about unethical behavior or any violation of the Companys Code of Conduct. During the year under review, there were no complaints received under this mechanism. The policy can be accessed on the Companys website at the link https://www.kgdenim.com/wp-

content/uploads/2015/10/Whistle-Blower-Policy.pdf.

CAUTIONARY STATEMENT

The statement in this Directors Report & Management Discussion and Analysis contains forward looking statements regarding

Companys projections & expectations and the actual results could differ materially from those expressed on account of various factors like raw material prices, change in demand, government regulation etc., and the readers are cautioned against placing undue reliance on the same.

ACKNOWLEDGEMENT

The Directors take this opportunity to place on record their sincere thanks to the Banks and Financial Institutions, Insurance

Companies, Central and State Government Departments and the shareholders for their support and co-operation extended to the Company from time to time. The Directors further wish to place on record their appreciation for the co-operation extended by all sections of the employees.

Our humble prayers to Sri Venkateswaraswamy Vari of Then Thirumalai for the continued prosperity of the Company.

Annexure-1

PARTICULARS PURSUANT TO SECTION 134(3)(m) OF THE COMPANIES ACT, 2013 READ WITH THE COMPANIES (ACCOUNTS) RULES, 2014:

Conservation of Energy:

Steps Taken for Conservation of Energy:

The energy review meetings are regularly conducted by Energy Cell headed by Certified Energy Auditor. Benchmark figures arrived in all the utilities and deviations are monitored on a regular basis and corrective and preventive actions are taken as and when required.

The major efforts are mentioned below:

Usage of LED lights have been encouraged and all the new lights to be purchased will be only LEDs.

All our climate-controlled Labs have been renovated with PUF insulation wall and ceiling panels for thermal insulation to bring down the energy consumption of HVAC equipment, about a 10% reduction in energy consumption on this account has been achieved.

Continued monitoring of leakages in Air, Steam, Water and Gas lines have been in force and reviewed periodically to control the energy consumption.

Steps Taken by the Company for utilizing alternate sources of energy:

The Company has installed Solar Cells and linked the same to LED streetlights for energy conservation

Capital Investment on energy conservation equipment: Nil

Technology absorption & Research & Development

Efforts made towards technology absorption, adaptation and innovation: Nil

The Benefits derived like product improvement, cost reduction, product development or import substitution: Nil

Information on Imported Technology (imported during the last 5 years from the beginning of the Financial Year)

Technology Imported None

Year of Import N.A.

Technology absorption N.A.

Expenditure incurred on Research & Development:

Foreign Exchange earnings & outgo:

The details of foreign exchange earnings and outgo are furnished below:

Particulars

2022-23

2021-22

Foreign Exchange Earnings

16,650.77

18746.36

Foreign Exchange Outgo

537.24

309.50