The Directors have pleasure in presenting the Twenty Second Annual
Report and Audited Statement of Accounts for the year ended 31st March,
2012. Your Company has achieved yet another year of satisfactory
performance in turnover and profitability.
2011-12 2010-11 2011-12 2010-11
Particulars Consolidated Consolidated Standalone Standalone
1 Revenue from
Operations (Net) 6,35,462 5,18,082 3,51,083 2,75,762
2 Other Income 967 4,206 201 355
3 Profit From
Operations (PBIDT) 1,34,701 1,06,578 77,501 59,350
Less: Finance Costs 53,331 38,458 40,356 31,891
Amortisation expenses 14,777 12,468 9,222 7,400
4 Profit Before Tax 66,593 55,652 27,923 20,059
5 Provision For Taxation 19,508 16,403 9,966 2,789
6 Profit After Tax 47,085 39,249 17,957 17,270
Less: Minority Interest
* 7,591 6,155 - -
7 Amount Available For
Appropriation 39,494 33,094 17,957 17,270
8 Balance b/f from
Previous Year 57,401 29,204 17,421 5,048
9 Transfer to Debenture
Redemption Reserve 203 950 203 950
10 Balance in Restructured
Financial Cost written
Off 16,288 - 14,310 -
11 Provision for
Preference Dividend 32 535 32 535
12 Tax on Preference
Dividend 5 89 5 89
13 Proposed Equity
Dividend 2,974 2,850 2,974 2,850
14 Tax on proposed Equity
Dividend 494 473 494 473
15 Surplus / (Deficit)
carried to Balance
Sheet 76,899 57,401 17,360 17,421
*The minority interest pertains to investment in Company''s
subsidiaries, namely Reid & Taylor (India) Ltd. upto 25.61%, HMX
Corporation upto 5% and SKNL (UK) Ltd. upto 20% and Marling & Evans
Ltd. UK upto 35%.
Your Directors are pleased to recommend a dividend on equity shares of
Rs.1 for every share of Rs.10 i.e. @ 10% aggregating payout of Rs.2,974.03
lacs excluding Dividend Tax, which will be paid after obtaining
approval of members in general meeting and other necessary permissions.
The Directors are also recommending the payment of dividend on
preference shares which will be aggregating Rs.31.65 lacs excluding
YEAR IN RETROSPECT
The financial highlights reflect a continued and steady growth for your
Company at all levels. Your Company''s performance is to be viewed
against the background of a slowdown in the world economy and a
hesitantly progressing economy on the Indian front. Your Company has
achieved and demonstrated its ability to deliver substantial
performance through variable and challenging environments which
reflects upon the strength and diversity of its business model. Your
Company has been able to develop its reputation and image across a
number of products and brands in the domestic and international
markets. Operating in various product categories and in multiple
markets ensures the Company''s consistent growth.
Your Company manufactures worsted and viscose blended suitings, yarn
dyed shirtings, workwear fabric, home textiles and ready- to-wear
garments. The Company has achieved consistent revenue growth with
satisfactory profit margins - consolidated Sales rose by 22.7% over the
previous year and Consolidated Net Profit after Minority interest
recorded a 19.3% growth. This is despite not so favourable market
conditions and a sluggish economic climate. This is essentially because
your Company is present in all product categories - Fabrics, Apparels,
Home Textiles, and has brands catering to different socio-economic
segments. Your Company is a customer-led, design-centric player with
focused brands for each market segment and having manufacturing units
in India, Italy, UK, USA and Canada. Your Company''s strength is derived
from diversity in products and markets. Furthermore, your Company
historically has a multi-format distribution network.
Because of the extension of fabrics brands into garments and launch of
new garment brands, the share of Ready-to-Wear in total revenues is
gradually increasing. In the Home Textiles market, however, the growth
is stunted. The Baruche Shirt division continued to perform better.
Luxury Textiles also grew smartly. On the international front, the
progress of Leggiuno in Italy and HMX in USA has improved inspite of
the sluggish economies in Europe and USA.
In the overall scheme of things, the Sales contribution of SKNL
(Standalone) was 55%, RTIL 24% and International Business 21% while
proportion of EBIDTA was 57%, 38% and 5% respectively.
The performance of Belmonte Uniformity Division was at par compared to
the previous year. The sharp rise in input costs was offset by an
increase in selling price. Your Company was able to maintain its market
Belmonte Ready-to-Wear is now well-positioned in the fashion business.
It delivers high quality products at a reasonable price and in line
with changing trends. With more and more top-of-the-line international
brands entering the Indian market, the competition in the branded
apparel industry continues to be getting sharper by the day. However,
our in-house teams of designers track national and international trends
to create innovative fashionable products that customers would relate
and we are able to capitalize on the rebound in customer confidence.
The TWS factory in Bangalore is making shirts and trousers largely for
domestic market. The Suit factory which is relatively new has focused
and developed customers in the domestic market with the brands and also
In the Luxury Textiles division, in order to neutralize the steep
increase in wool prices, selling prices were suitably increased. New
and innovative products were developed and introduced such as Showcase
suiting fabric, pure wool suiting with Jacquard designs, designing with
Laser engraving, etc.
The International Business segment includes HMX of USA, Leggiuno of
Italy and DKNY related operations in the U.K. International
acquisitions facilitate transfer of technical know-how for high value
shirting and garmenting.
The ongoing volatility on the Europe front and lack of economic spark
in the American market has caused greater pressure on the country''s
exports. This has affected India''s foreign trade in the past year.
The slowdown has also been more obvious in the emerging and developing
economies. The overall consumption of textile fabric and apparel in the
world markets reportedly went down. Though, your Company is
predominantly a domestic player, it was able to almost maintain its
exports at Rs.66.92 crores as against Rs.68.50 crores in the previous year.
Additionally, exports from the Company''s subsidiary Reid & Taylor
(India) Ltd. reached Rs.37.47 crores (previous year Rs.42.47crores). New
markets in Africa, South America and Japan are being explored so that
we can establish our presence with our premium brand image and quality
CURRENT BUSINESS OUTLOOK AND PLANS
''Belmonte'' in the Consumer Textiles segment and ''Reid & Taylor'' in the
Luxury Textiles segment remain key contributors to the overall
performance of the Company.
Going forward, the management is confident about your Company''s
continued progress. Strong synergies between domestic and international
business through ''back-end front-end'' model, enhanced distribution
network, a comprehensive portfolio of 45 brands addressing all
demographic segments, vertically and laterally integrated business,
seamless supply chain and presence across the value chain have provided
for a strong foundation to step up growth over the coming years.
We anticipate healthy demand for the textiles and apparel industry in
India driven by growth in organized retailing, increasing consumerism,
expanding middle class and heightened brand consciousness among the
youth. We plan to expand the retail network through exclusive brand
outlets largely in the tier 1 & 2 cities. Your Company will also
increase presence of its products in Large Format Stores in the current
Your Company is engaged in capacity expansion to keep up with the
increasing demand for its products. Expansion of weaving and finishing
capacity is under implementation and suit factory has been set up and
part production has commenced. This will help cater to the increasing
demand in the Ready-to-Wear segment.
Luxury Cotton division is growing at a rapid pace re''istering
noticeable growth in revenues and profitability with improved assets
utilization and productivity levels. Additionally, the World Player''
brand which addresses the economy segment, witnessed strong traction.
We anticipate significant volumes from the brand as the market
penetration and operational efficiencies improve. Plans for the
nationwide unveiling of Kruger, a premium casual brand, have been
progressing well with the launch expected soon.
Raw material prices are expected to be stable although at higher
levels. The outlook for the current year looks bright as more
Corporates as well as Government institutions are looking for reliable
and good brands for their consumption. We are poised very favourably in
the garment and apparel space given the depth and diversity of our
Reid & Taylor (India) Ltd. (RTIL) Initial Public Offering (IPO):
Members are aware that the Company''s subsidiary Reid & Taylor (India)
Ltd. had completed all the required formalities to make an Initial
Public Offering of issue size Rs.1000 crores, of which Rs.500 crores was
primary issue for funding growth and Rs.500 crores was secondary issue
being offer for sale of equity shares by existing shareholders.
However, because of the sluggish market conditions throughout the past
months and an uncertain IPO climate, RTIL management has decided to
defer its IPO for the time being.
CORPORATE SOCIAL RESPONSIBILITY (CSR)
Your Company is committed to support CSR initiatives and contribute
towards the welfare and social upliftment of the community. In the
year under review, your Company donated sums upto Rs.40,25,000 towards
educational activities of youth and tribals. Furthermore, your
Companys'' subsidiary Anjaneya Foundation, which is set up in order to
promote and support charitable activities, donated a sum of
Rs.32,75,000/- towards educational and medical assistance.
The equity share capital of the Company as at 31st March, 2012 has gone
up by ^12,42,50,000/- from the previous year-end. This is as a result
of allotment of 1,24,25,000 equity shares ofRs. 10/- each to Sansar Exim
Private Limited, a promoter group Company on 13th December, 2011 on
conversion of 1,24,25,000 Equity Share Warrants into equivalent numbers
of equity shares of Rs. 10/- each at a premium ofRs. 54.53 per share. The
said Equity Share Warrants were issued pursuant to the Special
Resolution passed by the shareholders through Postal Ballot Notice
dated 19th April, 2010 and Postal Ballot result declared on 31st May,
EMPLOYEES STOCK OPTION SCHEME (ESOP)
As at 31st March, 2012 there were 9,11,820 nos. of options in force to
the senior employees at a price ofRs. 89.60 per option.
No options were exercised during the year under report.
The Company cancelled / withdrew 5,75,080 ESOPs granted under Employees
Stock Option Scheme to the ex-employees of the Company who did not
subscribe shares under ESOP Scheme.
Your Company recognizes that employees play a key role in making our
business successful and we achieve that through empowering our
employees. Your Company maintained an environment dedicated to
maintaining high employees'' sense of pride, morale and teamwork. The
Human Resource Development activities focused on multi-skills training
and performance management workshops. The functioning and activities
were further aligned to Company''s business objectives. The ongoing
thrust on rationalization of manpower with focus on proper utilization
continued with implementation of Zero-base manpower budget.
To comply with the conditions of Corporate Governance, pursuant to
Clause 49 of the Listing Agreement with the Stock Exchange, a separate
section on Management Discussion and Analysis and Corporate Governance
together with a certificate from the Company''s Auditors confirming
compliance is included in the Annual Report.
Your Company is in the process of Enterprise Resource Planning (ERP)
implementation. Keeping in mind our business requirements, Management
evaluated and decided to implement combination of two ERP''s, i.e. NOW
from Datatex for all operational areas and ORACLE FINANCIALS for
financial accounting. Several modules of the above two ERP''s are being
implemented for the Company''s Textile and Apparel business in India. In
totality, the Company will have 16 implementation locations including
Mysore as base location, where the connectivity through dedicated lease
lines and video conference facility has been given.
The management is sad to inform about the demise of Dr. A.C.Shah, the
then Chairman of the Company, who passed away on 16th January, 2012 due
to ill-health. He was Chairman of the Company from 8th July, 2005. The
Board placed on record the invaluable contribution to the
deliberations, advice and guidance given by late Dr. A. C. Shah during
his tenure as Chairman. The Board unanimously appointed Shri Nitin S.
Kasliwal, Vice Chairman and Managing Director to be the Chairman of the
Board w.e.f from 13th February, 2012.
Vide letter dated 15th September, 2011, India Debt Management Private
Limited appointed Shri Susheel Kak as Nominee Director vice Shri Anish
Modi. The Board placed on record the guidance, advice and support given
by Shri Anish Modi during his tenure as Director. We look forward to
the guidance and experience of Shri Susheel Kak to help the Company in
achieving its objectives.
Vide letter dated 18th April, 2012, Exim Bank appointed Shri Sujeet
Bhale as Nominee Director vice Dr. Vinayshil Gautam. The Board placed
on record the guidance, advice and support given by Dr. Vinayshil
Gautam during his tenure as Director. We look forward to the guidance
and experience of Shri Sujeet Bhale to help the Company in achieving
In accordance with the Companies Act, 1956 and the Company''s Articles
of Association, Shri M. Damodaran, Shri Jitender Balakrishnan and Shri
Denys Firth retire by rotation and being eligible offer themselves for
DIRECTOR''S RESPONSIBILITY STATEMENT
To the best of their knowledge and belief and according to the
information and explanations obtained by them, your Directors make the
following statement in terms of Section 217(2AA) of the Companies Act,
1) that in preparation of the Annual accounts the applicable Accounting
Standards have been followed along with proper explanations relating to
material departures, if any;
2) that such accounting policies have been selected and applied
consistently, and judgements and estimates have been made that are
reasonable and prudent so as to give a true and fair view of the state
of affairs of the Company as at 31st March, 2012 and of the Statement
of Profit and Loss of the Company for the year ended on that date;
3) that proper and sufficient care has been taken for the maintenance
of adequate accounting records in accordance with the provisions of the
Companies Act, 1956 for safeguarding the assets of the Company and for
preventing and detecting fraud and other irregularities;
4) that the annual accounts have been prepared on a going concern
Fixed Deposits received from the shareholders and the public stood at Rs.
Nil as on 31st March, 2012 (Previous year Rs. Nil).
There is no deposit or interest claimed but remained unpaid. All the
claimed deposits with interest have been repaid in time. Members are
aware that the fixed deposit schemes have been discontinued with effect
from 1st April, 2001, as benefits were not commensurate with
FINANCE AND ACCOUNTS
The observations made by the Auditors in their Report and included in
the relevant notes forming part of the Accounts, are self explanatory.
CONSOLIDATED FINANCIAL STATEMENTS
The consolidated financial statements have been prepared by your
Company in accordance with the applicable Accounting Standards (AS 21,
AS 23 and AS 27) issued by the Institute of Chartered Accountants of
India and the same together with Auditors Report thereon form part of
the Annual Report.
The statement pursuant to Section 212 of the Companies Act, 1956
containing the details of the Company''s subsidiaries is attached.
Pursuant to direction under section 212(8) of the Companies Act, 1956
by Government of India, Ministry of Corporate Affairs, New Delhi vide
General Circular No. - 2/2011 No. 51/12/2007-CL-III dated 8th February,
2011, the Board of Directors, by passing resolution on 30th May, 2012,
gave consent for not publishing / attaching copies of the Balance
Sheets, Statement of Profit & Loss, Reports of the Board and the
Auditors of all the Subsidiary Companies with the audited financial
statements of the Company as at 31st March, 2012.
The annual accounts of the subsidiary companies are kept for inspection
by any shareholder at the registered office of the Company and shall be
made available to shareholders seeking such information at any point of
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE
EARNINGS AND OUTGO
Additional information required under the Companies (Disclosure of
Particulars in the Report of the Board of Directors) Rules, 1988 in
respect of Conservation of Energy and Technology Absorption is given in
the prescribed forms which are given in Annexure ''1'' to the Directors''
PARTICULARS OF EMPLOYEES
Information as per Section 217 (2A) of the Companies Act, 1956 read
with Companies (Particulars of Employees) Rules, 1975, as amended,
forms part of this Report. However, as per the provisions of Section
219 (1) (iv) of the Companies Act, 1956, the Report and Accounts are
being sent to all shareholders of the Company excluding the statement
of particulars of employees under Section 217 (2A) of the Companies
Act. Any shareholder interested in obtaining a copy of the said
statement may write to the Company Secretary at the Registered Office
of the Company.
The Board, on the recommendation of the Audit Committee, has proposed
that M/s. Haribhakti & Co. Chartered Accountants, Mumbai, be
re-appointed as the Statutory Auditors of the Company and to hold
office till the conclusion of the next Annual General Meeting of the
Company. M/s. Haribhakti & Co., have forwarded their certificate to the
Company stating that their re-appointment, if made, will be within the
limit specified in that behalf in sub-section (IB) of section 224 of
the Companies Act, 1956.
In respect of observations made by the Auditors, please refer to notes
to Financial Statements, note no. 27 in respect of Standalone Financial
Statements and notes no. 27 to 31 in respect of Consolidated Financial
Statements which are self - explanatory and hence in the opinion of the
Directors, do not require any further explanation. With respect to
other observations, these are receiving the management''s attention and
will be satisfactorily resolved.
Your Directors wish to place on record the excellent support,
assistance and guidance provided by the financial institutions, banks,
customers, suppliers and other business associates. Thanks are also due
to your Company''s employees for their tireless efforts and high degree
of commitment and dedication. Your Directors especially appreciate the
continued understanding and confidence of the Members.
By Order of the Board
For S. KUMARS NATIONWIDE LIMITED
Place : Mumbai Nitin S. Kasliwal
Date : 30th May, 2012 Chairman & Managing Director