k p r mill ltd share price Directors report


Dear Members,

The Board of Directors takes pleasure in presenting the report on the operations and business of the Company along with Audited Financial

Statements for the Financial Year ended 31 March, 2023.

FINANCIAL RESULTS

(Rs in Lakhs)

Particulars

Standalone Consolidated
2022-23 2021-22 2022-23 2021-22

Sales and Other Income:-

Domestic Sales 2,85,579 2,42,442 3,69,601 2,95,811
Export Sales 1,71,502 1,52,427 2,26,417 1,71,667
Other Income 29,886 20,961 28,802 23,492
4,86,967 4,15,830 6,24,820 4,90,970

Pro t before Interest & Depreciation

92,909 1,06,853 1,33,671 1,30,593
Less : Interest 2,670 1,339 7,886 2,329
Depreciation 7,764 7,565 17,369 14,112

Pro t Before Tax

82,475 97,949 1,08,416 1,14,152
Less : Taxation:-
Provision for Current Tax 18,324 24,870 25,273 29,706
Tax relating to earlier years (802) (75) (982) (53)
17,522 24,795 24,291 29,653
Deferred Tax expense / Credit 1,449 74 2,715 315
Pro t After Tax 63,504 73,080 81,410 84,184
Other Comprehensive Income (Net of tax) - - - -

Total Comprehensive Income

63,504 73,080 81,410 84,184

REVIEW OF OPERATIONS

The year began with a positive note of robust growth and pro tability. But the steep increase in cotton prices at all time high level coupled with lower yarn price realisation has trimmed the cotton-yarn spreads. However, the supportive trends in garment segment enabled better performance, overcoming these challenges. The wind power generation during the year was good. Despite the adverse factors like Global recession, Ukraine war, huge volatility in cotton prices, high in ation etc., the inherent strengths enabled KPR repeating a better performance during the year also.

WAY FORWARD

The cotton prices have started stabilising and the garment order position continues to be encouraging. The Indian textile industry is optimistic of retaining the growth level with the supportive Government policies, FTAs with significant markets that are likely to create more market opportunities for entire textile value chain. To improve its performance further, KPR has contemplated certain modernisation and expansion plans.

EXPANSION

During the year, we have installed 10 MW rooftop Solar Power plant whose benefit can be derived from the current year, upon receipt of the approval from TANGEDCO.

The Company also have plans to establish separate Spinning Mill for Viscose Yarn production, besides expanding Ethanol production capacity through our Wholly Owned Subsidiary Companies. Considering the developments in the textile market further plans may be decided by the Board at appropriate time.

BRANDED RETAIL BUSINESS

FASO

Consumers increasing focus on sustainability and ethical production has added significance to our FASO products, which are organic centric. Enthused by the response to various styles in Mens wear, we have introduced Womens wear also in October 2022, which is also well received in the Market. Consequent on better handling of the pandemic by Indian Authorities over the years, its impact started receding that enabled resurgence of our efforts towards ‘Pan-India spread. In addition to the Southern States, we have already launched FASO products in some of the States of commercial importance and planning to add more such States in the current year.

DIVIDEND

Considering better performance and strong liquidity during the year, the Board of Directors have declared an Interim Dividend @ 200% on equity shares (Rs 2 per Equity Share) at their meeting held on 06.02.2023. The Board in its meeting held on 03.05.2023 also has recommended a Final Dividend of 200% (Rs 2 per Equity Share) on Equity Shares, thus aggregating to 400 % (Rs 4 per Share on Equity Share of Face Value of Rs 1 each), for the Financial Year 2022-23, subject to the approval of the Members of the Company at the 20 (Twentieth) Annual General Meeting.

FINANCE

Consequent to the expansion of Garment & Sugar business and the availment of additional Working Capital, the nance charges has gone up over previous year. However, led by the successful financial planning comfortable financial position continued during the year also. Some of the term loans availed for the new garment project were repaid and fresh term loan from Banks was availed towards the expansion of Ethanol project in our wholly owned Subsidiary Company.

SUBSIDIARY COMPANIES

The statements pursuant to Section 129(3) of the Companies Act, 2013 (Hereinafter referred to as the Act) in ‘Form AOC - 1‘ containing the details of following Wholly Owned Subsidiary Companies forms part of this Annual Report. However as required by the Act, we give below a brief report on their performance.

I. K.P.R. Sugar Mill Limited

II. KPR Sugar and Apparels Limited

III. Jahnvi Motor Private Limited

IV. Quantum Knits Pvt. Limited

V. Galaxy Knits Limited

VI. KPR Exports Plc

VII. KPR Mill Pte. Ltd.

SUGAR

The year under review was a successful year for the Indian Sugar industry and is on track for steady growth in the current year too. Though the acreage remains the same, the yield was better due to crop variety, better farming practices, etc. With the Governments continuous support towards the sugar sector and increasing focus on diversion towards ethanol production to promote Ethanol Blending Program in India, the sugar sector is likely to gain traction going forward.

ETHANOL

Encouraged by the success of achieving the target of 10 percent Ethanol blending in petrol, much ahead of the target date, the

Government advanced the target of 20 percent ethanol blending to the year 2025 (earlier 2030). To increase revenue we are planning to expand Ethanol production capacity.

K.P.R. SUGAR MILL LIMITED

The sugarcane crushing for sugar season 2022-23 commenced in October 2022, produced 1,22,730 MT of Sugar. The Co-gen plant produced 1437.38 lakhs units of Power. Out of the same, 796.21 lakhs units were sold and 641.17 lakh units were captively consumed. During the year 38,936.42 KL of Ethanol was produced, using Sugar Syrup and Molasses and the entire production was sold to Oil Marketing Companies. The expansion plan to increase Ethanol production capacity from 90 KLPD to 240 KLPD with Zero Liquid Discharge System is in progress.

During the year, an Interim Dividend of Rs 130/- on the Equity shares of Face Value of Rs 10/- each was declared by its Board in its meeting held on 06.02.2023.

KPR SUGAR AND APPARELS LIMITED

Ramping up of production in the new 42 million Garments capacity at Chengapally, Tirupur district, Tamil Nadu has been completed and is successfully executing the orders from International Buyers.

The sugarcane crushing for sugar season 2022-23 commenced in November 2022, produced 98,565 MT of Sugar. The Co-gen plant produced 1,468.85 lakhs units of power. Out of the same, 900.34 lakhs units were sold and 568.51 lakh units were captively consumed. During the year 29,866 KL of Ethanol was produced, using Sugar Syrup and Molasses and the entire production was sold to Oil Marketing Companies.

JAHNVI MOTOR PRIVATE LIMITED

During the year, the Company could sell 156 Audi Cars and earned a total revenue of Rs 113.91 Crores. Steady economic growth amid signs of moderating in ation, coupled with strong earnings, is fueling the demand at the higher end of the market and supporting sales of luxury vehicles. Local demand continues to be strong.

QUANTUM KNITS PVT. LIMITED

During the year, an Interim Dividend of Rs 1500/- on the Equity shares of Face Value of Rs 10/- each out of accumulated reserves was declared by its Board in its meeting held on 06.02.2023.

GALAXY KNITS LIMITED

The Company has not yet commenced its operation.

K P R EXPORTS PLC (ETHIOPIA)

As informed in the earlier report, we have already approached the Ethiopian Authorities seeking their assistance to formally close the Apparel manufacturing unit at Ethiopia due to civil disturbance and to bring back capital materials therein. The same is being followed up.

KPR MILL PTE. LTD ( SINGAPORE )

The Company was established primarily for the purpose of marketing the products manufactured at Ethiopia. However, considering the changed business environment therein and the growing International trade at our Company, the Management is planning to utilise the services of this Company for its future business plans.

DEPOSITS

The Company has not accepted any deposits from public during the year under review.

DIRECTORS

Mr. K.N.V. Ramani, Independent Director passed away on 30.03.2023. Taking note of his long association and sane advice, the Board placed on record the invaluable services rendered by him as Lead Independent Director and Corporate Lawyer.

The Board of Directors, at its meeting held on May 03, 2023, based on the recommendation of the Nomination & Remuneration Committee appointed Mrs V. Bhuvaneshwari (DIN: 01628512) as an Additional Director (Non-Executive & Independent) to hold officetill the conclusion of the ensuing Annual General Meeting and subject to the approval of the members in the said Annual General Meeting appointed as ‘Woman Independent Director of the Company to hold officefor a term upto 5 consecutive years. To regularize her appointment in the 20 Annual General Meeting (AGM) of the Company, suitable resolution is included in the notice of AGM proposing her appointment.

Pursuant to the provisions of Rule 6 of the Companies (Appointment and Qualifications of Directors) Rules, 2014, Mrs.V.Bhuvaneshwari (DIN: 01628512) had passed the online pro ciency self-assessment test conducted by the ‘Indian Institute of Corporate A airs.

The Company has adequate Independent Directors in compliance with the Act and SEBI (Listing Obligations and Disclosures Requirements) Regulation, 2015 (Hereinafter referred to as Listing Regulations). Familiarization Program on the Company and its operation was conducted for the Independent Directors. Requisite declaration from the Independent Directors of the Company under Section 149 (7) of the Act confirming that they meet with the criteria of their Independence laid in Section 149 (6) have been obtained.

Mr.C.R.Anandakrishnan, Executive Director, retires by rotation at the ensuing Annual General Meeting and is eligible for re-appointment.

KEY MANAGERIAL PERSONNEL AND MANAGERIAL REMUNERATION CRITERIA

In pursuance of the Act the Company has Key Managerial Personnel. None of the Managing Directors or Whole Time Directors receives any remuneration or commission from the Subsidiary Companies and the remuneration paid to them is within the purview of the provisions of Section 197 of the Act. The Company pays remuneration by way of salary, perquisites, commission etc., to its Chairman, Managing Directors and xed monthly remuneration to its Executive Directors and Whole Time Director in line with the approvals accorded by the General Meetings and in pursuance of the recommendation of the Nomination and Remuneration Committee as per the guiding principles laid down in the Nomination and Remuneration Policy. The information as required by Companies (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, the performance of all Directors, Committees, Chairman etc., have been evaluated pursuant to the provisions of the Act and the Listing Regulations.

COMMITTEES

As required by the provisions of the Act and Listing Regulations, the Company has already formed the following Committees, the details of which are disclosed in the Report on Corporate Governance forming part of this Report.

I. Audit Committee

II. Stakeholders Relationship Committee

III. Nomination and Remuneration Committee

IV. Corporate Social Responsibility (CSR) Committee

V. Risk Management Committee

POLICIES

In pursuance of the Act and the Listing Regulation, the following policies have been framed and disclosed on the Companys 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

VII. Risk Management Policy

VIII.Dividend Distribution Policy The Web-link - https://kprmilllimited.com/ le/wp-content/uploads/2018/11/DD-Policy.pdf

IX. Policy for Disclosure of Material Events / Information

X. Policy on Succession Planning for Board and Senior Management

RISK MANAGEMENT

Pursuant to section 134(3) (n) of the Act & Regulation 17(9) of the Listing Regulation, the Company has a Risk Management Policy and has constituted a Risk Management Committee. The Risk Management Committee held its meetings on 29.06.2022 and 19.12.2022 in which all members were present.

VIGIL MECHANISM & WHISTLE BLOWER POLICY

The Company has an established Vigil Mechanism for Directors and Employees to report concerns about unethical behaviors, actual or suspected fraud or violation of the code of conduct or ethics policy. It also provides for adequate safeguards against victimization of Directors/Employees who avail of the mechanism. The Company a rms that no personnel have been denied access to the Audit Committee. The Company has a Policy of Vigil Mechanism and has established a mechanism that any personnel may raise reportable matters. All suspected violations and reportable matters can be reported to the Chairman of the Audit Committee at e-mail id whistleblower@kprmill.com The key directions/ actions can be informed to the Chairman/ Managing Director of the Company. The Whistle Blower Policy has been reviewed by the Board of Directors and displayed in the Companys website.

CSR EXPENDITURE

During the year, in pursuance of the recommendations of the CSR committee the Company has contributed Rs 6307.89 Lakhs towards implementing the CSR activities including an advance contribution of Rs 5017.30 lakhs which is equal to 3 Years estimated CSR contribution to be set-off against subsequent years CSR obligation. Annual Report on CSR, as required by the Act, is appended.

BOARD MEETINGS

The Board of Directors met Four times during the financial year on 27.04.2022, 28.07.2022, 07.11.2022 and 06.02.2023 through physical mode. The Composition of Board, procedure, venue, dates, time and other details are included in the Corporate Governance Report that forms part of this Report.

CONSOLIDATED FINANCIAL STATEMENTS

Your Directors have pleasure in annexing the Consolidated Financial Statements pursuant to the provisions of the Act and the Listing Regulations entered into with the Stock Exchanges. They are prepared in accordance with the Ind-AS prescribed by the Institute of Chartered Accountants of India, in this regard. The Consolidated Financials also marked a significant increase in its Revenue as well as Pro tability.

PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS

The Company has duly complied with the provisions of Section 186 of the Act and as required therein the details of the Borrowals, Security, Investment etc., are annexed by way of notes to accounts.

RELATED PARTY TRANSACTIONS

All Related Party Transactions that were entered into during the financial year were only between Holding Company and Wholly owned Subsidiary Companies in the ordinary course of business, whose accounts are consolidated with Holding Company and placed before the shareholders at the General Meeting for approval. However, as per regulatory requirements an omnibus approval of the audit committee for such transactions has been obtained.

The Transactions as required under Indian Accounting Standards ‘Ind AS-24 are reported in Note 40 of the Notes to Accounts of the Standalone Financial Statements as well as Note 40 of the Notes to Accounts of the Consolidated Financial Statements of your Company. The Companys Policy on dealing with related party transactions is available on the Companys website.

EMPLOYEE WELFARE

India has a large working population, a prominent asset in the labour-intensive textiles sector particularly in Garment industry. They are crucial stakeholders playing an integral role in the success of an organisation. KPR continuously takes concrete steps to promote the wellbeing of work force at work and good work-life balance. One of the significant efforts towards the same is provision of Higher Education facility. Employees who receive higher education tend to have improved sense of self-worth with more opportunities to grow besides contributing to the success of the Organisation. Our unique Career development process for the employees based on their educational qualification also continues.

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 Employees of the Company, will be provided upon request. In terms of Section 136 of the Act, the reports and accounts are being sent to the members and others entitled thereto, excluding the information on employees particulars which is available for inspection by the members at the Registered O ce of the Company during business hours on working days of the Company upto the date of ensuing Annual General Meeting. If any member is interested in 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) Act, 2013 provides for protection against sexual harassment of women at workplace and for the prevention and redressal of complaints of sexual harassment and also for the matters incidental thereto. The Company has accordingly adopted the policy against Sexual Harassment of Women at Workplace, for the purpose of preventing, prohibiting and redressing sexual harassment of female employees at all the workplace within the Company which are based on fundamental principles of justice and fair play.

According to the noti cations of corporate affairs ministry dated 31 July 2018, Internal Complaints Committee under the sexual harassment of women at Workplace (Prevention, Prohibition and Redressal) Act, 2013, has been formed and complied with. Further, Anti Sexual Harassment Committee has been constituted at each unit which shall be responsible for redressal of complaints related to sexual harassment. The details of all such Complaints and its proper redressal through prompt corrective steps are informed to the Top Management so as to ensure that suitable processes and mechanisms are put in place 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 any of its Units.

ENERGY CONSERVATION, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

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

DIRECTORS RESPONSIBILITY STATEMENT

Pursuant to the requirement under section 134(5) of the Act, the Board of Directors of the Company hereby state and con rm that;

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

II. The Directors have selected 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 a airs of the Company at the end of the financial year and of the profit of the Company for the year under review.

III. The Directors have taken proper and sufficient care for the maintenance of adequate record 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.

IV. The Directors have arranged preparation of the accounts for the financial year ended 31.03.2023 on a going concern basis.

V. 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.

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

CORPORATE GOVERNANCE REPORT AND MANAGEMENT DISCUSSION AND ANALYSIS REPORT

Corporate Governance Report and Management Discussion and Analysis Report are attached to this Report. Certificate from the Statutory Auditors of the Company confirming the compliance with the conditions of Corporate Governance as stipulated under Schedule V of the Listing Regulation is also attached to this report.

BUSINESS RESPONSIBILITY AND SUSTAINABILITY REPORT

In pursuance of Regulation 34(2)(f) of the Listing Regulations, the Business Responsibility and Sustainability Report, containing the initiatives taken by the company from environmental, social and governance perspective, forms part of this Report.

INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY

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

RATIO OF REMUNERATION TO EACH DIRECTOR

Details / Disclosures of Ratio of Remuneration of Director to the median employees 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 on the 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.

BUYBACK

The Buyback of 22,36,000 Equity Shares mooted during the FY 2021-22 was completed on 26 April 2022. The present Paid up Capital post Buyback is 34.18 Crores.

AUDITORS

In the 19 Annual General Meeting of the Company held on 23.08.2022 M/s. B S R & Co LLP, Chartered Accountants (ICAI Firm Regn. No.101248W/W-100022) were re-appointed as Statutory Auditors of the Company for second term of ve consecutive years from the Financial Year 2022-23.

AUDITORS REPORT

The Auditors Report to the Shareholders does not contain any quali cation. There were no frauds reported by the Statutory Auditors under provisions of Section 143 (12) of the Companies Act, 2013 and rules made thereunder.

COST RECORDS

Pursuant to Section 148 of the Act, the company falls under the limits specified under this section and hence the company has maintained proper books of accounts with all the particulars relating to the utilization of material, labour and to other items of cost.

COST AUDIT

In pursuance of Companies (Cost Records and Audit) Rules, 2014, the Company has appointed a Cost Auditor for the Company to audit the cost records for the Financial Year 2022-23.

SECRETARIAL AUDIT REPORT & CERTIFICATES AND SECRETARIAL STANDARDS COMPLIANCE

The Company has complied with the applicable Secretarial Standards issued by ICSI. As required by the Act a Secretarial Audit Report issued by a Company Secretary in practice (PCS) a Peer Reviewed Unit in Form MR 3 is annexed with this report and it does not contain any quali cation. Certificate from PCS that none of the Directors are debarred or disqualified forms part of this Annual Report. Annual Secretarial Compliance Report certifying compliance of SEBI Regulations has been obtained and led with the Stock Exchanges.

ANNUAL RETURN

Pursuant to section 92 of the Act and Rule 12 of the Companies (Management and Administration) Rules, 2014, the Annual Return in the prescribed form is available on the Companys website: https://kprmilllimited.com/ nancial-result_annual-reports/

DETAILS OF DEMAT/UNCLAIMED SUSPENSE ACCOUNT

The status of unclaimed shares of the Company transferred to the demat account, ‘K.P.R. Mill Limited - Unclaimed Shares Demat Suspense Account, in accordance with the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, is as follows:

Particulars

No. of Shareholders No. of Shares

Aggregate number of shareholders and the outstanding shares in the suspense account lying at the beginning of the year

2 2750

Number of shareholders who approached listed entity for transfer of shares from suspense account during the year

- -

Number of shareholders to whom shares were transferred from suspense account during the year

- -

Aggregate number of shareholders and the outstanding shares in the suspense account lying at the end of the year

2 2750

The Voting rights in respect of these shares will remain frozen till the time such shares are transferred from the Unclaimed Suspense Account to the concerned Shareholders.

MATERIAL CHANGES AND COMMITMENTS

No material changes and commitments affecting the financial position of the Company occurred between the end of the financial year as on 31.03.2023 and the date of this Report.

NO CHANGES IN THE BUSINESS

Your Directors would like to inform that Company is doing its regular business and there has been no change in its objectives.

GENERAL

Disclosures under sub rule 5 (xi) and (xii) of rule 8 of Companies (Accounts) Rules, 2014 are not applicable to the Company.

ACKNOWLEDGEMENT

Your Directors acknowledge with gratitude and express their appreciation for the assistances and co-operation received from the Bankers, Government Authorities, Customers, Vendors, and Members during the year under review. Your Directors also wish to thank the employees at all levels for their co-operation and dedication.

FOR AND ON BEHALF OF THE BOARD

Coimbatore K.P. Ramasamy
03.05.2023 Chairman
DIN: 00003736