K P R Mill Ltd Management Discussions.




Global economic growth appears firm and is expected to expand at a solid pace of 3 per cent in 2019. In more than half of the worlds economies growth accelerated both in 2017 and 2018. In many developed countries, growth rates have risen close to their potential, while unemployment rates have dropped to historical lows. Among the developing economies, the East and South Asia regions remain on a relatively strong growth trajectory, amid robust domestic demand conditions. However, economic progress has been highly uneven across regions amid escalating trade disputes, risks of financial stress & volatility and an undercurrent of geopolitical tensions.


India has emerged as the fastest growing major economy in the world and is expected to be one of the top three economic powers of the world over the next 10-15 years, backed by its strong democracy and partnerships. Indias GDP growth is estimated to be 7 per cent in 2018-19. India has retained its position as the third largest startup base in the world. Indias labour force is expected to touch 160-170 million by 2020, based on rate of population growth, increased labour force participation and higher education enrolment.


Some of the important recent developments in Indian economy are merchandise exports & service exports have grown; Net direct tax collection for 2018-19 had crossed Rs 10 trillion; Indias Foreign Direct Investment (FDI) equity inflows reached US$ 409.15 billion; Net employment generation has reached a higher level. On the demand side, domestic consumption remained the primaiy growth driver, but gross fixed capital formation and exports both made growing contributions. The GST and the e-way bill system have proved to be beneficial for the industiy.


The global textile market size was valued at USD 925.3 billion in 2018 and is expected to register a CAGR of 4.24% over years. This growth is attributed to the high demand for apparels, particularly in the developing economies including India, China, Bangladesh and Mexico as a result of growing population. Moreover, rising disposable income levels and rapid urbanization in these countries have led to the increased number of retail outlets and supermarkets; thereby supporting overall market growth.


Indias textile exports to major consuming countries got a boost with the recent government move to reimburse all state and central levies on such shipments. The sector appears to be finally recovering, as reflected by the improvement in the Index of Industrial Production (IIP) and exports data over the last few months. Economic expansion is happening across Asia, but we expect that 2019 will be the year in which India will take centre stage. The Countiy is being propelled by strong macroeconomic tail winds and is predicted to grow at a stronger phase. The Indian middle class is forecast to expand vigorously outpacing China, Mexico and Brazil. As a result, India is set to move from being an increasingly important sourcing hub to being one of the most attractive consumer markets outside the Western world. Stable outlook is projected for the textile sector for 2019-20 following strong domestic demand, waning impact of the disruptions due to GST and demonetization and rising exports aided by a weak rupee. Meanwhile, the Indias textile exporters are likely to continue to benefit from improved cost competitiveness due to a weak rupee, which would drive volume growth.

The textile industry is important not just for labour absorption and as a source of foreign exchange, but also as a symbol of Indias rich heritage. We have the required ingredients in the form of raw material availability and abundant labour to make the industiy a success story. There is a need to work on correcting the challenges in the form of outdated technology, inflexible labour laws and infrastructure bottlenecks. The government also needs to re-look at and evaluate various trade agreement opportunities, while domestically focusing more on technology up-gradation and skill development.


Cotton plays an important role in the Indian economy as the counties textile industiy is predominantly cotton based. As per the Market Reports the global cotton production is likely to decline in cotton year 2018-19 owing to a low acreage and adverse weather conditions in key cotton-growing nations. While expectations of a high acreage during cotton year 2019-20 narrowing, global production gap could keep prices range-bound. With Chinas cotton reserves declining, the sensitivity of global cotton prices to Chinas cotton policies have increased in the past few quarters. Any decision by China to further increase imports could lead to a rise in global cotton prices.

The deficit rain fall in key cotton growing states during the season has declined the Indian crop level compared to last year. Though the prices were high during the commencement of the Cotton season, they softened on weak demand in the third quarter .However the ambiguity over cotton production estimates has created panic in the market driving up prices. The industiy has now demanded that the government should come out with its own official production estimate to clear the ambiguity. The cotton yield in India has fallen below the global average yield/acre. Serious measures should be taken to address this issue.


As on 31.03.2019 ( In Lakh Bales]
Opening Stock 47.12
Production 361.00
Imports 15.00
Consumption 31700
Exports 65.00
Closing Stock 41.12

(Source: Cotton Advisory Board) YARN

The yarn market has gained momentum and unsold yarn stock level of the Industry was one of the lowest in recent years. With increased fabric demand, yarn prices increased to some extent. India remains the largest exporter of cotton yarn in the world. The surge in export demand for cotton yarn over the past few months has come as a major respite for the domestic spinners. India is set to record strong growth in cotton yarn exports during FY 2019, according to an ICRA report.


As per the Ministiy of Commerce & Industry, DGCI&S data, IIP production for Textile & Cloth witnessed robust year-on-year growth and the apparel exports have grown at a whopping rate. The ICRA research reports that large, listed, domestic as well as export-focused garment manufacturing companies has continued to perform well, reporting a 13% (YoY) growth presence in the niche and value-added product segments, together with access to an established client base has helped export-based companies to maintain revenue growth.

The growing positive trend shows visible signs of recoveiy after a difficult period. The industry is hopeful that the government would take suggested measures to boost exports and limit imports. Gauging the current scenario, we are confident that in the coming months with the government support, the industiy would be in a much more comfortable position. The internal factors are improving and with the external factors already in favour, India will certainly gain from the fact that China is retreating from a large part of the textile value chain. It will be ready to explore the opportunities arising in the global market.


In Financial Year 2019, the total revenue increased about 12% over previous year. The revenue from garment was Rs. 1341 Crores and the Yarn & Fabrics Rs. 1618 Crores. The Government Regulatory measures minimized the revenue from Sugar. The full- fledged expanded garment activities are expected to fetch the desired results in the current year. The new retail business is also expected to contribute to the revenue in the current year.


Internal controls are policies & procedures put in place to ensure the continued reliability of accounting & financial systems, compliance, security and efficiency. Internal controls are effectively a set of checks and balances that are critical to any business. Adequate internal controls can reduce the risk and help decision making in the best interest of the organization. Our Internal control System is fully equipped with necessary checks and balances ensuring that the transactions are adequately authorized and reported correctly. The Internal Auditor conducts regular Audits of various departments and Units to ensure that necessaiy controls are in place.

The Audit Committee while reviewing the system and the Internal Audit Report, call for comments of Auditors on internal control systems and discuss any related issues with the Auditors and the Management of the company before submission to the Board. The independent Directors also satisfy themselves on the integrity of financial information and ensure that financial controls including Signature controls. Budget Controls, Data control and systems of risk management are in place. The systems and procedures documented by way of Manual were perused by the Board of Directors.


Employee welfare has huge benefits for both employer and employee. An employee who feels more fulfilled, satisfied will be more productive. This will not only lead to higher productivity but also satisfied customers and hence performance for the company.

KPR Group has over 24,000 Employees, out of which 90% are Women. As already reported its Employee initiatives are one of the best in the Industiy the Master piece of which is its Commendable Higher Education facility that has tie-up with renowned Universities. Quality is the watchword, be it the products KPR Group manufactures or the sen/ice it provides. With the high standard of education provided at KPR through excellent coaching of well - trained & experienced Teachers and best Infrastructures, every year its employees continue to prove their outstanding talent in the Government conducted Examinations securing Gold Medal and top ranks. This year also many have excelled in the Examinations. KPRs social up-liftment of rural public, particularly womanhood, by enabling them to stand on their own equipping with the financial empowerment besides skill and strength is acclaimed as one of the best in the corporate world.


As regards business risks assessment, the general risks for the Textile Industry as a whole and the factors of mitigation are as follows:

1. Availability of cotton, the major raw material

Cotton plays a vital role in the Indian economy as the countrys textile industiy is predominantly cotton based. India is one of the largest producers as well as exporters of cotton yarn. Cotton crop is grown in about 70 countries across the world. India commands highest share globally (36%) in terms of area under cultivation and accounting for one-fourth of the global cotton production. As India continues to be a Cotton surplus Countiy the availability of sufficient cotton is rest assured.

2. Labour Shortage

Despite having a favorable demographic profile, labor and skill shortage continues to be one of the key concerns for the Indian Textile industry. The Government besides mooting labour friendly reforms has setup Textile Sector Skill Council with the assistance of leading textile associations. It develops skilled work force for the textile industry through setting curriculum for training and accreditation of trade competency so as to create a deployable talent pool of workforce for the textile industiy. However KPR which is well equipped with the commendable HR Policies is able to attract the required labour for expanded activities without any hurdle.

3. Forex Fluctuation

As our Forex exposures are mostly covered, this risk does not impact us.

4. Stiff competition from low cost Countries enjoying duty concessions

Mega FTAs that exclude India may pose a threat to Indian exporters. However, India is vigorously pursuing multilateral trade arrangements with major markets that were pending for a longtime due to various issues relating to other major Industries. In- house cotton strength, availability of labour with high efficiency, good quality products, growing support from government policies, better compliance of code of conduct norms, initiative towards expediting FTA are some of the encouraging factors that would mitigate the stiff competition from low cost countries.

5. Global Economic Trend

India will remain the fastest-growing economy in the world. Indias growth rate is poised to pick up in 2019. The reduced growth rates are attributed to lower global expansion in the second half of 2018 caused by U.S.-China trade tensions, macroeconomic stress. After the weak start, growth is projected to pick up in the second half of 2019. This pickup is supported by significant monetaiy policy accommodation by major economies, made possible by the absence of inflationaiy pressures despite growing at near potential. With improved prospects for the second half of 2019, global growth in 2020 is projected to return to 3.6 percent.


Continuous growth in exports and Index of Industrial Production (IIP) would result in boosting employment, scaling up production and most importantly making Make in India initiative a reality for the T&C Industiy. Indias apparel market is expected to grow at a faster phase making it comparable to the developed economies. Higher incomes are likely to create a whole new class of consumer. To build momentum around conventional stores, Indian players are innovating the retail experience. Retailers are leveraging technology to enhance the in-store experience with digital marketing displays and improved check-out. These together, with strong economic fundamentals and growing tech- sawy, make India too important for international brands to ignore. The supply side of the industry is equally robust and the growth of textile and apparel exports is expected to accelerate. In short, the Indian market offers great promise. Despite structural challenges that include inequality, infrastructure and market fragmentation, we expect strong economic growth-scale and rising tech-sawies will combine to make it the next big global opportunity in Apparels.

For and on behalf of the board
Coimbatore K.P. Ramasamy
29.04.2019 Chairman



1. Corporate Identity Number
(CIN) of the Company L17111TZ2003PLC010518
2. Name of the Company K.P.R Mill Limited
3. Registered address No. 9 Gokul Buildings,
1st Floor, A K S Nagar,
Thadagam Road,
Coimbatore - 641001,
Tamil Nadu.
4. Website www.kprmilllimited.com
5. E-mail id kandaswamy@kprmill.com
6. Financial Year reported 2018-19

7. Sector(s) that the Company is engaged in (Industrial activity code-wise)

a) Yam (17121)

b) Fabric (17115)

c) Garment (18101)

8. List three key products/services that the Company manufactures/ provides (as in balance sheet)

a) Yarn

b) Fabric

c) Garment

9. Total number of locations where business activity is undertaken by the Company:

(a) Number of International Locations - Nil

(b) Number of National Locations - 12

10.Markets served by the Company

Local State National International
1. Paid up Capital - 3,628
2. Total Turnover - 2,97853
3. Total profit after taxes - 28,911

4. Total Spending on Corporate Social Responsibility (CSR) as percentage of profit after tax (%) - 2.039%

5. List of activities in which expenditure in 4 above has been incurred: -

- Promotion of Education

- Disaster relief

- Sports

1. Does the Company have any Subsidiary Company/ Companies?


YES. It has five Subsidiary Companies
(i) K.P.R Sugar Mill Limited
(ii) Quantum Knits PVT. Limited
(iii) jahnvi Motor Private Limited
(iv) Galaxy Knits Limited
(v) KPR Exports PLC.

2. Do the Subsidiary Company / Companies participate in the BR Initiatives of the parent company? If yes, then indicate the number of such subsidiaiy company(s) -NO

3. Do any other entity/entities (e.g. suppliers, distributors etc.) that the Company does business with, participate in the BR initiatives of the Company? If yes, then indicate the percentage of such entity/entities? [Less than 30%, 30-60%, More than 60%]-NO


1. Details of Director/Directors responsible for BR

(a) Details of the Director/Directors responsible for implementation of the BR policy/policies

1. DIN Number: 07228760

2. Name: Mr. P. SELVAKUMAR

3. Designation: Whole Time Director

(b) Details of the BR head

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Particulars Details
DIN Number (if applicable) 07228760
Designation Whole Time Director
Telephone number 9865254203
e-mail id selvakumar@kprmill.com

2. Principle-wise (as per NVGs) BR Policy/policies


S.No Particulars
PI Businesses should conduct and govern themselves with Ethics, Transparency and Accountability
P2 Businesses should provide goods and services that are safe and contribute to sustainability throughout their life cycle
P3 Businesses should promote the well-being of all employees
P4 Businesses should respect the interests of and be responsive towards all stakeholders, especially those who are disadvantaged, vulnerable and marginalized.
P5 Businesses should respect and promote human rights
P6 Business should respect, protect and make efforts to restore the environment
P7 Businesses when engaged in influencing public and regulatory policy, should do so in a responsible manner
P8 Businesses should support inclusive growth and equitable development
P9 Businesses should engage with and provide value to their customers and consumers in a responsible manner

(a) Details of Compliance (Reply in Y/N)

Sr.No Questions PI P2 P3 P4 PS P6 P7 P8 P9
1 Do you have a policy/ policies for Y Y Y Y Y Y Y Y Y
2 Has the policy being formulated in
consultation with the relevant stakeholders? Y Y Y Y Y Y Y Y Y
3 Does the policy conform to any national / international standards?

Policies are prepared ensuring adherence to applicable laws and internal standards of the company

If yes, specify? (50 words)
4 Has the policy being approved by the Board?
If yes, has it been signed by MD/ owner/
CEO/ appropriate Board Dilector? Y Y Y Y Y Y Y Y Y
5 Does the company have a specified committee of the Board/ Director/ Official to oversee the implementation of the policy? Y Y Y Y Y Y Y Y Y
6 Indicate the link for the policy to be viewed online?


7 Has the policy been formally communicated to all relevant internal and external stakeholders?

The policy have been communicated to all relevant stakeholders wherever required

8 Does the company have in-house structure to implement the policy/ policies Y Y Y Y Y Y Y Y Y
9 Does the Company have a grievance redressal mechanism related to the policy/ policies to address stakeholders grievances related to the policy/ policies? Y Y Y Y Y Y Y Y Y
10 Has the company earned out independent audit/ evaluation of the working of this policy by an internal or external agency?

Such evaluation will be considered at appropriate time.

(b) If answer to the question at serial number 1 against any principle, is No, please explain why: (Tick up to 2 options) -NOT APPLICABLE

3. Governance related to BR

(a) Indicate the frequency with which the Board of Directors, Committee of the Board or CEO to assess the BR performance of the Company. Within 3 months, 3-6 months. Annually, More than 1 year

Assessed annually

(b) Does the Company publish a BR or a Sustainability Report? What is the hyperlink for viewing this report? How frequently it is published?

The Company publishes it as a part of the Annual Report


Principle 1

1. Does the policy relating to ethics, bribery and corruption cover only the company?


Does it extend to the Group/joint Ventures/ Suppliers/ Contractors/ NGOs /Others?


2. How many stakeholder complaints have been received in the past financial year and what percentage was satisfactorily resolved by the management? If so, provide details thereof, in about 50 words or so.

No Stakeholder complaints were received during the year on the conduct of business involving ethics, transparency and accountability.

Principle 2

1. List up to 3 of your products or seivices whose design has incorporated social or environmental concerns, risks and/or opportunities.

All our Factories are approved by Pollution Control Board which ensures environmental compliances. Our Arasur Garment factory has been ranked as Eco-Friendly by some of reputed brands. Besides, we hold certificates such as WRAP, GOTS, OEKO-TEX, ISO 14001:2007, ISO 9001:2008, ISO 18001:2004, SA 8000:2014 etc., relating to social or environmental concerns.

2. For each such product, provide the following details in respect of resource use (energy, water, raw material etc.) per unit of product (optional):

(a) Reduction during sourcing/production/ distribution achieved since the previous year throughout the value chain?

We produce cotton based textile products, which is eco-friendly and does not pollute environment and saves water and eneigy. We continuously adopt energy saving measures in our production process which enables minimal resources utilization.

(b) Reduction during usage by consumers (energy, water) has been achieved since the previous year?

As our products are cotton based, it would enable reduced usage of eneigy & water by the consumers also.

3. Does the company have procedures in place for sustainable sourcing (including transportation)?

(a) If yes, what percentage of your inputs was sourced sustainably? Also, provide details thereof, in about 50 words or so.

Yes. We have procedures in place. Our major input is Cotton. We buy cotton and produce Cotton Yam/ Fabric/ Garment and supply to Various Buyers including overseas customers.

4. Has the company taken any steps to procure goods and seivices from local & small producers, including communities surrounding their place of work?

(a) If yes, what steps have been taken to improve their capacity and capability of local and small vendors?

Yes. We procure goods and seivices foim local & small producers, including communities surrounding the place of woik, if quality of goods supplied by them suits our quality parameters. We encourage them to improve the quality of the products that leads to improving their capacity and capability.

5. Does the company have a mechanism to recycle products and waste? If yes what is the percentage of recycling of products and waste (separately as <5%, 5-10%, >10%). Also, provide details thereof, in about 50 words or so.

The Company has installed an Advanced Water Treatment Technology from ITALY in the Processing Unit which takes care of the effluent treatment norms and facilitates reuse of water up to 95%.

The advanced technology of cold processing adopted at the State of the Art Processing Unit II reduces the water consumption by 30% and eliminated the usage of Salt completely.

We have Bio- Gas Generation facility that reduces the usage of LPG.

We also have Waste water recycling process across all our units which reduces the water consumption around 25%.

Principle 3

1. Please indicate the Total number of employees -18631.

2. Please indicate the Total number of employees hired on temporaiy/ contractual/ casual basis - Nil.

3. Please indicate the Number of permanent women employees.-16956.

4. Please indicate the Number of permanent employees with disabilities - Nil

5. Do you have an employee association that is recognized by management?

Each unit has various workers committees taking care of their requirements.

6. What percentage of your permanent employees is members of this recognized employee association? - NA.

7. Please indicate the Number of complaints relating to child labour, forced labour, involuntary labour, sexual harassment in the last financial year and pending, as on the end of the financial year-Nil.

8. What percentage of your under mentioned employees were given safety & skill up-gradation training in the last year?

(a) Permanent Employees - 100%

(b) Permanent Women Employees - 100%

(c) Casual/ Temporaiy/ Contractual Employees - NA

(d) Employees with Disabilities - NA

Principle 4

1. Has the company mapped its internal and external stakeholders? YES

2. Out of the above, has the company identified the disadvantaged, vulnerable & marginalized stakeholders? YES

3 Are there any special initiatives taken by the company to engage with the disadvantaged, vulnerable and maiginalized stakeholders. If so, provide details thereof, in about 50 words or so.

Our HR initiative itself proves our special initiatives towards this, KPR recruits employees from the down trodden villages. We provide trendsetter employee welfare facilities, besides nutritious food, hygienic and comfortable living & working conditions, entertainment etc. In order to add value to their livelihood, the Company is providing higher education and vocational training facilities to them. The employees are also making best use of them. This initiative helps them in a big way by making them independent both economically and socially.

Principle 5

1. Does the policy of the company on human rights cover only the company or extend to the Group / joint Ventures / Suppliers / Contractors / NGOs / Others?

YES. Extended to the Group.

2. How many stakeholder complaints have been received in the past financial year and what percent was satisfactorily resolved by the management?


Principle 6

1. Does the policy related to Principle 6 cover only the company or extends to the Group/Joint Ventures/Suppliers/Contractors/ NGOs/Others.

Yes, it extends to the group.

2. Does the company have strategies/ initiatives to address global environmental issues such as climate change, global warming, etc.?YES


I. ISO - 14001: 2004 Certifications for Environment Management Systems

II. OEKO-TEX - for environment friendly operations

III. Global Organic Textile Standard (GOTS) - for organic cotton products.

IV. SA 8000: 2014 for Social Accountability Management Systems.

Towards augmenting green cover, the company has planted more than one lakh fifty thousand saplings in the villages.

3. Does the company identify and assess potential environmental risks? YES

4. Does the company have any project related to Clean Development Mechanism? If so, provide details thereof, in about 50 words or so. Also, if yes, whether any environmental compliance report is filed? No

5. Has the company undertaken any other initiatives on - clean technology, energy efficiency, renewable eneigy, etc.. If yes, please give hyperlinkfbr web page etc.

Yes, in an effort to generate power in eco-friendly ways the Company has installed windmills at Theni, Tirunelveli, Tenkasi and Coimbatore districts in India. It takes care of most of our power requirement.

6. Are the Emissions/Waste generated by the company within the permissible limits given by CPCB/SPCB for the financial year being reported? - YES

7. Number of show cause/ legal notices received from CPCB/SPCB which are pending (i.e. not resolved to satisfaction) as on end of Financial Year. NIL

Principle 7

1. Is your company a member of any trade and chamber or association? If Yes, Name only those major ones that your business deals with:






2. Have you advocated/lobbied through above associations for the advancement or improvement of public good?; if yes specify the broad areas (drop box: Governance and Administration, Economic Reforms, Inclusive Development Policies, Eneigy Security, Water, Food Security, Sustainable Business Principles, Others)

YES, wherever required we advocated for the improvement of export policies, economic reforms etc., through the associations.


1. Does the company have specified programmers/ initiatives/projects in pursuit of the policy related to Principle 8? If yes details thereof.

Our CSR policy and the human value adding labour practices take care of this.

The key areas of CSR activities are; A. Promotion of Education B. Environmental and livelihood C. Social Empowerment D. Rural Development

As Education plays a vital role in progressing the social welfare and economic prosperity of the Countiy, the Company concentrates primarily on the Promotion of education under its CSR activities. Our extension of higher education facilities that has tie-up with reputed universities and vocational training empower our employees with financial & social strength. It would also have positive impact on their family and the village they belong that would support the inclusive growth and equitable development. Extensive coverage on this is furnished in the Reports of Directors & MDAR forming part of the Annual report.

2. Are the programmes/projects undertaken through in-house team/own foundation/external NGO/government structures/any other organization?

Our CSR activities are implemented through in- house and Charitable Trust.

3. Have you done any impact assessment of your initiative?


4. What is your companys direct contribution to community development projects- Amount in INR and the details of the projects undertaken?

During the year, the Company has spent Rs. 589.67 lakhs towards CSR activities. The details are furnished in the CSR Report.

5. Have you taken steps to ensure that this community development initiative is successfully adopted by the community? Please explain in 50 words, or so.

Yes, Secured ranks & gold medals in the government examinations and employment opportunities in the Government Departments, by availing our higher education and vocational training facility itself reflect the success of our initiative. As mentioned eariier it elevated the standard of the employee as well as their family and the village they belong. So far, more than 24,000 employees are benefitted by availing higher education & vocational training facilities extended to them. On an average, eveiy year over 3000 employees are availing the aforesaid facilities.

Principle 9

1. What percentage of customer complaints/ consumer cases are pending as on the end of financial year.

No Case is pending.

2. Does the company display product information on the product label, over and above what is mandated as per local laws? Yes/No/N A /Remarks(additional information)


3. Is there any case filed by any stakeholder against the company regarding unfair trade practices, irresponsible advertising and/or anti-competitive behaviour during the last five years and pending as on end of financial year. If so, provide details thereof, in about 50 words or so.


4. Did your company cariy out any consumer suivey/ consumer satisfaction trends? YES