Directors Report of K G Denim Ltd.

Mar 31, 2025

Your Directors hereby present the 33rd Annual Report and Audited Accounts of the Company for the year ended 31 st March.
2025.

FINANCIAL RESULTS

The highlights of the standalone and consolidated performance of your Company during the financial year 2024-25 are given
hereunder , ....

Particulars	Standalone		Consolidated
	Current	Previous	Current	Previous
	Year	Year	Year	Year
	2024-25	2023-24	2024-25	2023-24
Total Revenue	5,705.85	25,969.55	7,332.20	26.774.95
Total Expenditure before interest, depreciation, exceptional, extraordinary items and income tax	8,650.90	25.891.88	10,140.80	26,579.01
Gross Profit before interest, depreciation, exceptional, extraordinary items and income tax	(2.945.05)	77.67	(2,808.60)	195.94
Less: Finance Cost	2,889.07	2,391.47	3,014.76	2,557.82
Depreciation	886.69	1,457.21	897.99	1.470.86
Profit/(Loss) before Exceptional & Extra-ordinary items	(6,720.81)	(3,771.01)	(6,721.35)	(3,832.74)
Add: Exceptional Items (Income)	2.039.72	256.75	2.039.72	256.75
Profit /(Loss) before tax	(4,681.09)	(3,514.26)	(4,681.63)	(3,575.99)
Less: Tax Expense (Current Tax & Deferred tax)	(1,093.12)	(988.21)	(1.207.83)	(1,003.25)
Profit / (Loss) for the period	(3.587.97)	(2.526.05)	(3.473.80)	(2,572.74)

OPERATIONS

The Operating Revenue of the Company stands reduced by 78.03% from Rs. 25,969.55 Lakh in the previous year to Rs.
5.705.85 Lakh in the current year After charging depreciation, interest and other overheads the Company recorded a loss of
Rs. 4.681.09 Lakh as compared to loss of Rs. 3.514.26 Lakh 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.

During the year under review, the Government of Tamil Nadu directed through local District administration stoppage of water
supply to the Company due to prevailing drought conditions, hence the operations had come to a grinding halt for most part of
the year. The problems were further compounded due to the delay In sanctioning of the restructuring relief announced by the
State Level Bankers'' Committee (SLBC) for natural calamities under Hydrological drought, as per the RBI Master Directions.

After due negotiations with the Bankers, restructuring was sanctioned on 5th March 2025 and implementation is in progress.
Thero has been no change in the nature of business of the Company during the yoar under review.

FUTURE PROSPECTS

Apart from Denim and Apparel Fabrics, your Company is planning to manufacture and market performance fabrics using
specialized materials, technologies and value additions including moisture-wicking athletic wear, antibacterial medical
garments, and UV-protective clothing.

The Indian context is significant due to diverse climate (demand for UV protection, moisture management) and societal needs
(hygiene). Relevant categories include functionality-based (moisture management, waterproof, thermal regulating,
antimicrobial. UV protection, flame retardant, etc.), responsiveness-based (responsive, smart, bio-responsive), and
application-based (Meditoch, Sportech, Protech. Agrotech. Oekotech. Buildtech, Mobiltech. Hometech. Indutech. Packtech,
Clothtech. Geotech) Traditional Indian lextiles possess some inherent functional attributes (e.g., khadi''s breathability.
certain silks'' thermal regulation).

Opportunities: Growing demand across diverse industries, increasing consumer awareness, strong government support,
untapped rural markets, focus on sustainability, niche markets, integration with traditional handlooms, rising populanty of
performance apparel

ENVIRONMENT. SOCIAL AND GOVERNANCE

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

The Company has been maintaining a hospital for serving the community, including supply of medicines at subsidized cost.
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 aids to schools etc., are also rendered.

HEALTH AND SAFETY

The Company prioritizes the health and safety of its employees, contractors, and visitors, holding ISO 45001 certification for
its Occupational Health and Safely Management System. This certification guides the Company in Identifying and controlling
workplace hazards and continuously implementing health and safety practices in line with the standard and legal
requirements.

Beyond the workplace, the Company actively contributes to the well-being of employees and the local community through
initiatives like free medical camps and regular health check-ups at its in-house hospitals. They also provide a safer work
environment by supplying basic fire safety equipment and conducting periodic awareness classes and drills on topics like
firefighting, mass evacuation and first aid.

DIVIDEND

Since the Company has incurred loss during tho year under review, the Board of Directors has not recommended dividend for
the year 2024-25

TRANSFER TO RESERVES

The Company has not transferred any amount to the General Reserve during the year under review However. the loss of
Rs.3,587.97 Lakh for the current year has been accumulated to deficit balance of surplus under the head other equity in
financial statements of the Company

SHARE CAPITAL

During the year under review the Company has not altered/modified its aulhonsed share capital and the Company has not
made any fresh issue of shares.

As on 31" March 2025. the authorized capital of the Company is Rs. 41,00.00,000/- divided into 3,10,00.000 equity shares of
Rs.10/- each, and 10,00,000 10% Cumulative Redeemable Preference Shares of Rs.100 each/- and the Issued, Subscribed
and Paid-up equity capital of the Company is Rs. 25.63,78,250/- divided into 2.56,37,825 equity shares of Rs.10/- each fully
paid up.

The Board of Directors of the Company at their meeting hold on 11" August 2025 had approved the issuance of warrants,
each convertible inio or exchangeable for paid up equity shares of the Company, by way of a preferential issue through
private placement offer, and also approved offer and issue of non-convertible Cumulative Redeemable Preference Shares
(NCRPS) on a pnvate placement basis, subject to the approval of the members by means of a special resolution (s) and such
other authorities as may be required in this connection respectively.

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

In terms of Sections 124 and 125 of the Companies Act. 2013. (the Act) unclaimed or unpaid dividend relating to the financial
year 2017-18 is due for remittance to the Investor Education and Protection Fund (IEPF) established by the Central
Government.

During the year under review, as per the requirements of Section 124(6) of the Act and Investor Education and Protection
Fund Authority (Accounting. Audit. Transfer and Refund) Rules. 2016, (IEPF Rules) 1.46.198 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 tho demat account
Identified by the IEPF Authority. Accordingly. 9,71.328 Equity Shares of the Company stand transferred to the credit of the
Demat Account of tho IEPF Authority as on 31st March 2025.

WEB LINK OF ANNUAL RETURN

The Annual Return of the Company for the financial year 2024-25 as required under Section 92(3) of the Act can be accessed
on the Company s website at the link https://www.kgdenim.com/annual-retum/

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 (CSR) Committee and 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 requirement of Section 134{3)( c )of the Act. 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 v/ere 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 ACT OTHER THAN
THOSE WHICH ARE REPORTABLE TO THE CENTRAL GOVERNMENT

There was no instance of fraud as 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 Act and Regulation 16(1 )(b) of SEBI (Listing Obligations and Disclosure Requirements) Regulations.
2015 (SEBI Listing Regulations) so as to qualify themselves as Independent Directors. 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 verification of the relationships disclosed, the
following Non-Executive Directors are Identified as Independent''

Mr. Jaganmohan Ramachandran. Mr. N Govindarajan. Mr. Duraipandian Kumaravel. Mr N B Anand and Mrs. Geetha.

Pursuant to Rule 6(3) of the Companies (Appointment and Qualification of Directors) Rules. 2014. the names of all the
Independent Directors have been included in the data bank of the Indian Institute of Corporate Affairs.

STATEMENT REGARDING 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 2024-25 and
opined that the integrity, expertise and experience (including proficiency) of the Independent Directors are satisfactory

MATERIAL CHANGES AND COMMITMENTS AFFECTINGTHE FINANCIAL POSITION OFTHE COMPANY

Subsequent to the end of the financial year, the matenal changes and commitments affecting the financial position of the
Company are as follows.

The Bankers consortium, led by Indian Bank and member banks viz.. Union Bank of India. State Bank of India and Bank of
Maharashtra has provided restructuring of the loan facilities under the consortium as per the natural calamity restructuring
under RBI Master Directions. All banks have implemented the restructuring scheme except for The South Indian Bank,
holding 7% share and considered as a dissenting member.

The restructuring Is over a span of 5 years starting from 5” March 2025 with one year moratorium for payment of principal and
Interest repayable over the remaining 4 years Finance cost of Rs. 2889.07 Lakh consist of Rs 1785.20 Lakh interest which is
converted to a funded interest term loan repayable over a period of 5 years.

The Company, as part of the restructunng plan, has some non- core assets which would be sold to infuse funds to the extent of
Rs. 100 crore over a period of 2 years for the revival of the Unit. Out of this. Rs 5 crore has been realised from sale of non¬
factory land in the month of May 2025.

One NBFC, with loan outstanding of Rs.625 Lakh, has not implemented the restructuring scheme The Company had filed a
writ petition before the Hon’bte High Court. Madras, and an Injunction order has been obtained The matter Is sub-judice

Apart from the above 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 and the date of the report

COMPANY''S POLICY RELATING TO DIRECTORS'' APPOINTMENT. PAYMENT OF REMUNERATION AND OTHER
MATTERS

Pursuant to the provisions of Section 178 of the Act and in terms of Regulation 19(4) of the SEBI Listing Regulations on the
recommendation of the Nomination and Remuneration Committee, the Company has 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 Act and in terms of Regulation 19(4) of the SEBI Listing Regulations.
The Remuneration Policy can be accessed on the Company''s website at the link https://www.kqdenim.com/wp-content
/uploads/2022/Q6/nomlnationandremunerationcommittee policv.pdf

3 Directors viz.. Shri KG Baalaknshnan. Executive Chairman. Shri B Sriramulu. Managing Director. Shn B Srihari. Director,
have voluntarily waived their entire remuneration for the financial year 2024-25.

COMMENTS ON AUDITORS¹ REPORT

There Is no qualification, reservation or adverse remark or disclaimer made by M/s. Gopalaiyer and Subramanian. Statutory
Auditors in their report. Observations made in Key Audit matters have been sufficiently explained in Notes to accounts.

Regarding the qualifications made by M''s. MDS & Associates LLP. Secretarial Auditors of the Company in their report
(Annexure-5) your Directors’ ensure timely and due compliance going forward.

PARTICULARS OF LOANS. GUARANTEES OR INVESTMENTS MADE UNDER SECTION 186 OF THE ACT

The Company has not given any loans, provided guarantee or made Investment under Section 186 of the Act during the year
under review Further, the details of investments made dunng the earlier years are provided under the notes to Balance Sheet
appearing elsewhere in this Annual Report.

PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES

All transactions entered into with related parties as defined under the Act and SEBI Listing Regulations during the financial
year 2024-25 were in the ordinary course of business and on an arm''s length basis and not material in nature and thus a
disclosure in Form AOC-2 is exempted.

The Policy on Related Party Transactions can be accessed through the link at https://www.kgdenim.com/wp-

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

Though the Company was witnessing under utilization of capacity, efforts were taken to monitor on regular basis, the efficient
level of energy consumption. The information pertaining to conservation of energy, technology absorption, foreign exchange
earnings and outgo as required under Section 134(3)(m) of the Act read with Rule 8(3) of the Companies (Accounts) Rules,
2014 is furnished in Annexure-1 attached to this report.

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

The Board had formulated a Risk Management Policy for dealing with different kinds of risks which it faces on 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.
Further, the results of the risk mitigating measures implemented by the Company are detailed below
To address and mitigate potential future water supply issues, the company has identified a strategic and sustainable solution
leveraging a newly commissioned government facility. This proposal outlines a plan to secure a consistent water source,
particularly dunng dry seasons

The Company proposes utilizing treated sewage water from the new Sewage Treatment Plant (STP) recently commissioned
by the Mettupalayam Sewage Department of the Tamil Nadu Government

The STP. which began operations In July 2024, has a total capacity of 85 KLD (Kilo Litres per Day). The plant''s water
requirement is approximately 25 KLD. meaning the STP''s capacity is more than sufficient to meet the Company''s needs. The
Company’s unit is conveniently located just 4 kms from the treatment plant, making transportation and logistics efficient. This
proximity also makes it a rational and cost-effective option compared to other available sources. This process of selling
treated sewage water to industries has already been successfully implemented by other sewage water boards in the district,
demonstrating its viability. The treated water from the STP will serve as the raw water source. The Company can then use its
already established Effluent Treatment Plant (ETP) to further process it and reduce the TDS (Total Dissolved Solids) levels to
meet the required standards, ensuring a continuous and high-quality water supply for operations

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

The Board had formed a Corporate Social Responsibility (CSR) Committee of Board of Directors comprising of Mr. KG
Baalakrishnan. Mr A Velusamy and Mr D Kumaravel The CSR policy of the Company deals with allocation of funds,
activities, identification of programs, approval, implementation, monitonng and reporting mechanisms under the policy.

Mr.A.P. Seturaaman, ceased to be a member and Mr. Mr.D.Kumaravel, Director of the Company, was appointed as Member
of the Committee with effect from 31st March 2025.

The Company incurred a loss In the immediately preceding financial year. As a result no amount was allocated towards the
CSR expenditure Consequently, no amount has been spent on the CSR activities of the Company during the financial year
2024-25. Therefore, the disclosure of Annual Report on Company''s CSR activities is not applicable. The policy relating to
CSR has been displayed on the Company''s website and can be accessed at the link https://www.kqdenim.com/wp-
£Q.Otgnt/ypiogd.^2016/^.c.grpg.rgle:^qQijl-re§pon§!bQ!ty_rp.oh£y_Jp.gf

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

Pursuant to the provisions of the Act. 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 dunng the year and the contribution of
each of the Directors based on the entena laid down by the Nomination and Remuneration Committee.

Tho Independent Directors have also convened a separate meeting for this purpose and inter-alia reviowod the
performances 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

Shri Balakrishnan Sriramulu (DIN: 00002560). Managing Director and Shri Ramaswamy Selvakumar (DIN: 00051608),
Whole-Time Director of the Company are liable to retire by rotation at this Annual General Meeting and being eligible, offer
themselves for re-appointment. Accordingly, your directors recommend their reappointment.

During the year under review. Mr. N Govmdarajan (DIN: 00366402) was re-appointed as Non-Executive Independent
Director of the Company for the 2'' term of 5 consecutive years with effect from 29" July 2024 and approved the continuation

of his directorship on attaining the age of 75 years on 29'' December 2024 by the members at the Annual General Meeting
held on 30” Septomber 2024.

The Board of Directors at their meeting held on 24 ” August 2024 had appointed Mr. N B Anand (DIN: 00785555) and Mrs.
Geetha (DIN 10753728) as Additional Director(s) in the capacity as Non-Executive Independent Directors) of the Company
for a period of first term of 5 consecutive years with effect from 24” August 2024 and 29” August 2024 respectively and
subsequently, obtained approval from members at the Annual General Meeting held on 30^r September 2024 for the said
appointment(s).

Mr Balakrishnan Srihari (DIN. 00002556) resigned as Managing Director but continued as Non-Executive Director of the
Company with effect from 31 March 2025.

Mr. A P Seturaaman (DIN: 07331898) retired consequent to the completion of his 2‘ term of 5 consecutive years, with effect
from 31" March 2024 as an Independent Director of the Company The Board wishes to place on record their sincere
appreciation for the valuable services rendered by Mr. A P Seturaaman dunng his tenure of office as Director of the Company.

Mr Sivagamlnathan Manickam resigned and in his place Mrs. Ramaprabha was appointed as Chief Financial Officer of the
Company with effect from 14” August 2024 respectively

Mr. P Rajesh. resigned as Company Secretary and Compliance Officer of the Company with effect from 1^J October 2024 and
in his place. Mr. M. Balaji was appointed as Company Secretary and Compliance Officer of the Company with effect from 25 ”
December 2024.

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

Sri. GovindaswamyNaidu Balakrishnan - Executive Chairman.

Sri. B. Sriramulu - Managing Director.

Sri. R Salvakumar - Whole-time Director
CA Ramaprabha S - Chief Financial Officer and
Sri. M Balaji - Company Secretary

SUBSIDIARIES. JOINTVENTURESAND 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 dunng the year
under review was Rs. 1.702.68 Lakh as against Rs 1.698.93 Lakh dunng the previous year. Dunng the year the Company
has earned a net profit of Rs. 12.58 Lakh as against a net loss of Rs. 46.54 Lakh during the previous year.

KG Denim (USA) Inc.

The turnover of the Company during the year under review was Rs. 4.85 Lakh (INR) as against Rs. 57 49 Lakh (INR) during
the previous year. Dunng the year the Company has incurred a net loss of Rs 181 Lakh as against a net loss of Rs. 0.15 Lakh
in 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 Regulations. The
Standalone Annual Financial Statements of Trigger Apparels Limited and KG Denim (USA) Inc., subsidiary companies are
posted on the Company''s website at the link https://www.kqdenim.com/investors-paqeyannual-reports/

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 Act is attached herewith In Form AOC-1
and is attached as Annexure-2 to this report.

FIXED DEPOSITS

Since the Company has not accepted any fixed deposit covered under Chapter V of the Act. there are no deposits remaining
unclaimed or unpaid as on 31st March. 2025 and accordingly, the question of default in repayment of deposits or payment of
interest thereon during the year does not arise.

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

There was no significant and material order passed by the Regulators or Courts or Tribunals impacting the going concern
status and Company''s 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 systems are adequate with respect to the operations of Ihe
Company. The report of Auditors pursuant to Section 143(3)(l) of the Act certifying the adequacy of Internal Financial Control
is annexed with the Auditors Report.

AUDITORS

STATUTORY AUDITORS

Pursuant to Section 139 of the Act read with the Companies (Audit and Auditors) Rules. 2014. M/s Gopalaiyer and
Subramanlan (Firm Registration No. 000960S). Chartered Accountants. Coimbatore, have been appointed as the Statutory
Auditors of the Company at the 30th Annual General Meeting held on 28th September. 2022 for a penod of 5 (five)
consecutive years from the conclusion of the 30th Annual General Meeting till Ihe conclusion of the 35th Annual General
Meeting to be held in the year 2027.

The Company has obtained the necessary certificate from the said auditors confirming that they are eligible to continue and
hold office as the Statutory Auditors of the Company,

SECRETARIAL AUDITORS

Pursuant to Regulation 24Aof SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and the provisions
of Sections 179 & 204 of the Companies Act. 2013. read wiih the Companies (Meetings of Board and its Powers) Rules. 2014,
and subject to the approval of Shareholders in the ensuing Annual General Meeting, the Board of Directors of the Company
have recommended the appointment of MDS & Associates LLP. Company Secretaries, Coimbatore as Secretarial Auditors of
the Company for a first term of 5 (five) consecutive financial years commencing from the financial year 2025-26.

MDS & Associates LLP have consented and confirmed their eligibility for appointment as Secretarial Auditors of the
Company. The necessary Resolution for their appointment has been included in the Agenda of the Annual General Meeting
Notice for the approval of the Members.

The report of the Secretarial Auditors for the financial year 2024-25 is annexed as Annexure-3 to this Report

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

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

The Company has total Trade Creditors of Rs. 10599 Lakh as on 31.03.2025. Out of these, some trade creditors have issued
notices for recovery of their outstanding dues as on 31.03.2025. amounting to Rs.2252 lakh. The Company is negotiating with
such creditors for amicable settlements and some settlements have already happened and MOU has been negotiated with
the parties remaining amounts.

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

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

HUMAN RESOURCES AND INDUSTRIAL RELATIONS

The management had paid full wages even during non-operational and under utilized months and tried to retain the
workforce. The Company continues to enjoy a cordial relationship with its employees at all levels. The total strength of
employees as on March 31.2025. was 152.

DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORK PLACE

The Company has complied with the provisions relating to the constitution of 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 2024-25:

I. Number of complaints received - Nil

II. Number of complaints disposed of - NA
III Number of complaints pending - NA

PARTICULARS OF EMPLOYEES

The statement pursuant to Section 134 of the Act read with the Companies (Accounts) Rules, 1975 and Section 197( 12) of the
Act read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules. 2014, is attached to
this report as Annexure-4.

CORPORATE GOVERNANCE

Pursuant to Regulation 34(3) of the SEBI Listing Regulations, a report on Corporate Governance along with a Certificate from
the Company Secretary in Practice confirming the compliance of the provisions of Corporate Governance, is attached to this
report as Annexuro-5 which forms an integral part of this Annual Report.

AUDIT COMMITTEE

The Audit Committee of the Board of Directors has been duly constituted In accordance with the provisions of Section 177 of
the Act. The details relating to the composition, meetings and (unctions 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 Act with respect to
rejection of any recommendations of Audit Committee by the Board

CEO/CFO CERTIFICATION

As required under Regulation 33(2)(a) of the SEBI Listing Regulations, the Managing Director and the Chief Financial Officer
of the Company have furnished necessary certificate to the Board on the Financial Statements presented, which is annexed
to this report

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 Company’s Code of Conduct. During the year under review, there
was no complaint received under this mechanism. The policy can be accessed on the Company''s website at the link
https//www, kgdenim convwp-content/uploads/2023/09/KGDl._Whistle-Blower-Policypdf

CAUTIONARY STATEMENT

The statoment in this Directors’ Report & Management Discussion and Analysis contain forward looking statements
regarding Company''s projections & expectations and the actual results could differ matenally from those expressed on
account of vanous factors like raw matenal 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 ail sections of the employees.

Our humble prayers to Sri Venkateswaraswamy Van of Then Thirumalai for the prosperity of the Company

By Order of the Board
For K G DENIM LIMITED

Coimbatore

11.08.2025

KG Baalakrishnan
Executive Chairman
DIN: 00002174

---

Mar 31, 2024

Your Directors have pleasure in presenting the 32^nd Annual Report and Audited Accounts of the Company for the year ended 31^st March, 2024.

FINANCIAL RESULTS

The highlights of the standalone performance of your Company during the financial year 2023-24 are given hereunder;

(Rs. In lakhs)

Particulars	Standalone		Consolidated
	Current Year 2023-24	Previous Year 2022-23	Current Year 2023-24	Previous Year 2022-23
Total Revenue	25,969.55	51,563.20	26,774.95	53,713.61
Total Expenditure before interest, depreciation, exceptional, extraordinary items and income tax	25,891.89	51,436.69	26,579.01	53,539.45
Gross Profit before interest, depreciation, exceptional, extraordinary items and income tax	77.66	126.51	195.94	174.16
Less: Finance Cost	2,391.47	2,230.46	2,557.82	2,320.18
Depreciation	1,457.21	1,572.21	1,470.86	1,582.58
Profit/(Loss) before Exceptional & Extra-ordinary items	(3,771.01)	(3,676.16)	(3,832.74)	(3,728.60)
Add: Exceptional Items (Income)	256.75	-	256.75	-
Profit /(Loss) before tax	(3,514.26)	(3,676.16)	(3,575.99)	(3,728.60)
Less: Deferred tax	(988.21)	(936.70)	(1,003.25)	(931.67)
Profit / (Loss) for the period	(2,526.05)	(2,739.46)	(2,572.74)	(2,796.93)

OPERATIONS

The Operating Revenue of the Company stands reduced by 49.64% from Rs. 51,563.20 Lakhs in the previous year to Rs. 25,969.55 Lakhs in the current year. After charging depreciation, interest and other overheads, the Company recorded a loss of Rs. 3,514.26 Lakhs as compared to the loss of Rs. 3,676.16 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.

During the year the Company has received notice from the Government of Tamil Nadu through the local District Administration directing the Company not to draw the water from Bhavani river which is the only source of water for the Company. Hence, major operations of the Company remain shut down in view of the prevailing water scarcity.

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 system. It ensures that the manufacturing of products is carried on without affecting the environment in the working area and surroundings.

The Company has once again achieved outstanding 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 carbon 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 supply of medicines at subsidised cost. 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 aids 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 organization''s 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 workplace.

The Company is implementing various health and safety practices in 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, health check-up at in-house hospitals on regular basis.

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

Awareness classes are being conducted periodically with the help of internal/external agencies about the 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 has not recommend dividend for the year 2023-24.

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. 2323.35 Lakhs for the current year has been adjusted against the surplus under the head “other equity” of the Company.

SHARE CAPITAL

During the year under review, the Company has not altered/modified its authorised share capital and the Company has not made any fresh issue of shares.

As on 31^st March 2024, the authorized capital of the Company is Rs. 31,00,00,000/- divided into 3,10,00,000 equity shares of Rs. 10/- each, and the Issued, Subscribed and Paid-up equity capital of the Company is Rs. 25,63,78,250/- divided into 2,56,37,825 equity shares of Rs. 10/- each fully paid up.

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

In terms of Sections 124 and 125 of the Companies Act, 2013, (the “Act”) unclaimed or unpaid dividend relating to the financial year 2016-17 is due for remittance to the Investor Education and Protection Fund (“IEPF”) established by the Central Government.

During the year under review, as per the requirements of Section 124(6) of the Act and Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) Rules, 2016, (IEPF Rules) 53,535 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 the demat account identified by the IEPF Authority. Accordingly, 8,25,130 Equity Shares of the Company stand transferred to the credit of the Demat Account of the IEPF Authority as on 31^st March 2024.

WEB LINK OF ANNUAL RETURN

The Annual Return of the Company for the financial year 2023-24 as required under Section 92(3) of the Act can be accessed on the Company''s 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 (CSR) Committee and 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 requirement of Section 134(3)© of the Act, with respect to Directors'' Responsibility Statement, it is hereby confirmed that

observations in their Secretarial Audit Report:

Delay in submission of certain events or information to the stock exchange which are material in nature pursuant to Regulation 30 of SEBI Listing Regulations and disclosure of related party transactions for the half year ended 31^st March 2023.

The information regarding the issue of duplicate certificate to one shareholder was not intimated to the stock exchange.

The management stated that the lapses were noted for future compliances in a timely manner.

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

No loan, guarantee or investment was made by the Company under Section 186 of the Act during the year under review. Details of investments made during the earlier years are provided under the notes to Balance Sheet appearing elsewhere in this Annual Report.

PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES

All transactions entered into with related parties as defined under the Act and SEBI Listing Regulations during the financial year 2023-24 were in the ordinary course of business and on an arm''s length basis and not material in nature and thus a disclosure in Form AOC-2 is exempted.

The Policy on Related Party Transactions can be accessed through the link at 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 Act read with Rule 8(3) of the Companies (Accounts) Rules, 2014 is furnished in Annexure-1 attached to this report.

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

The Board had 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.

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

The Board had formed a Corporate Social Responsibility (CSR) Committee of Board of Directors comprising of Mr. KG Baalakrishnan, Mr. A P Seturaaman and Mr. 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 had been allocated for the CSR expenditure. Thus, no amount has been spent on the CSR activities of the Company for the financial year 2023-24. Hence disclosure of Annual Report on Company''s CSR activities is not applicable. The policy relating to CSR has been displayed on the Company''s website and can be accessed at the link https://www.kgdenim.com/wp-ontent/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 Act, 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 has also convened a separate meeting for this purpose on 13^th February 2024 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

The Board of Directors at their Meeting held on 7^th August 2023 have appointed Mr. Ramaswamy Selvakumar (DIN: 00051608) as a Whole-time Director of the Company with effect from 7^th August 2023 for a term of three (3) consecutive years. Subsequently, his appointment was approved by the Shareholders at their Meeting held on 29^th September 2023.

Shri A Velusamy (DIN: 00002204), Director and Shri KG Baalakrishnan (DIN: 00002174), Executive Chairman of the Company retire

by rotation at this Annual General Meeting and being eligible, offer themselves for re-appointment. Your directors recommend their reappointment.

The Nomination and Remuneration Committee and Board of Directors at their respective meetings held on 14^th August, 2024 after considering the qualifications, credentials and the required criteria as per statutory requirements, have recommended to the Shareholders for their approval, the proposal for:

Re-appointment of Shri N Govindarajan (DIN: 00366402) as Non-Executive Independent Director of the Company for a further period of 5 (five) years with effect from 29^th July 2025 and continuance of the Directorship of Shri N Govindarajan, who will attain the age of 75 years on 29^th December, 2024.

During the period under review, Smt.Lakshmi Pattabi Raman (DIN: 09488828) has resigned from Directorship of the company with effect from 15^th July 2024. The Board wishes to place on record their sincere appreciation for the valuable services rendered by Smt.Lakshmi Pattabi Raman during her tenure of office as Director of the Company.

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

CA Ramaprabha S - Chief Financial Officer and

Shri P Rajesh - Company Secretary.

During the year, CS Rajesh P was appointed as the Company Secretary w.e.f 15.12.2023 in place of CS Krishnaveni P and CA Ramaprabha S was appointed as the Chief Financial Officer w.e.f 14.08.2024 in place of CA Manickam S

SUBSIDIARIES, JOINT VENTURES AND ASSOCIATE COMPANIES

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

I. 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. 1698.93 Lakh as against Rs. 4663.45 Lakh during the previous year. During the year the Company has incurred a net loss of Rs. 46.54 Lakh as against a net profit of Rs. 5.85 Lakh during the previous year.

II. KG Denim (USA) Inc.

The turnover of the Company during the year under review was Rs. 57.49 Lakh (INR) as against Rs. 84.98 Lakh (INR) during the previous year. During the year the Company has incurred a net loss of Rs. 0.15 Lakh as against a net loss of Rs. 63.32 Lakh 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 Regulations. The standalone Annual Financial Statements of Trigger Apparels Limited and KG Denim (USA) Inc., subsidiary companies are posted on the Company''s 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 Act is attached herewith in Form AOC-1 and is attached as Annexure-2 to this report.

FIXED DEPOSITS

Since the Company has not accepted any fixed deposit covered under Chapter V of the Act, there are no deposits remaining unclaimed or unpaid as on 31^st March, 2024 and accordingly, the question of default in repayment of deposits or payment of interest thereon during the year does not arise.

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

There was no significant and material order passed by the Regulators or Courts or Tribunals impacting the going concern status and Company''s 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 systems are adequate with respect to the operations of the Company. The report of Auditors pursuant to Section 143(3)(I) of the Act certifying the adequacy of Internal Financial Control is annexed with the Auditors Report.

AUDITORS

STATUTORYAUDITORS

Pursuant to Section 139 of the Act read with the Companies (Audit and Auditors) Rules, 2014, M/s. Gopalaiyer and Subramanian (Firm Registration No. 000960S), Chartered Accountants, Coimbatore, have been appointed as the Statutory Auditors of the Company at the 30^th Annual General Meeting held on 28^th September, 2022 for a period of 5 (five) consecutive years from the conclusion of the 30^th Annual General Meeting till the conclusion of the 35^th Annual 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 would be within the prescribed limits under Section 141(3) of the Act and that they are not disqualified from being appointed as the Statutory Auditors of the Company.

SECRETARIAL AUDITORS

MDS & Associates LLP, Company Secretaries, Coimbatore (LLPIN: ABZ 8060) (Peer Review No: 3030/2023) have been appointed as the Secretarial Auditors of the Company for the year 2024-25 to carry out the Secretarial Audit, pursuant to the provisions of Section 204 of the Companies Act, 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014.

The report of the Secretarial Auditors for the financial year 2023-24 is annexed as Annexure-3 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 2024-25. Pursuant to Section 148 of the Act read with Rule 14 of the Companies (Accounts) Rules, 2014, the remuneration payable for the year 2024-25 to the Cost Auditor of the Company is subject to ratification by the Shareholders at the ensuing Annual General Meeting.

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

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

There are three petitions filed against the Company by the operational creditors and the proceedings are pending against the Company under the Insolvency and Bankruptcy Code, 2016. However, the management is confident of settling issues out of the Court.

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

The disclosure under this clause is not applicable as 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

The Company has complied with the provisions relating to the constitution of 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 2023-24:

i. Number of complaints received - Nil

ii. Number of complaints disposed of - NA

iii. Number of complaints pending - NA

PARTICULARS OF EMPLOYEES

The statement pursuant to Section 134 of the Act read with the Companies( Accounts ) Rules, 2014 and Section 197(12) of the Act read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, is attached to this report as Annexure-4.

CORPORATE GOVERNANCE

Pursuant to Regulation 34(3) of the SEBI Listing Regulations, a report on Corporate Governance along with a Certificate from the Company Secretary in Practice confirming the compliance of the provisions of Corporate Governance, is attached to this report as Annexure-5 which forms an integral part of this Annual Report.

AUDIT COMMITTEE

The Audit Committee of the Board of Directors has been duly constituted in accordance with the provisions of Section 177 of the Act. 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 Act with respect to rejection of any recommendations of Audit Committee by the Board.

CEO/CFO CERTIFICATION

As required under Regulation 33(2)(a) of the SEBI Listing Regulations, the Managing Director and the Chief Financial Officer of the Company have furnished necessary certificate to the Board on the Financial Statements presented, which is annexed to this report.

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 Company''s Code of Conduct. During the year under review, there was no complaint received under this mechanism. The policy can be accessed on the Company''s 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 contain forward looking statements regarding Company''s 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.

By Order of the Board For K G DENIM LIMITED

Coimbatore 14^th August, 2024

KG Baalakrishnan Executive Chairman DIN: 00002174

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Mar 31, 2023

Your Directors have pleasure in presenting the 31 Annual Report and Audited Accounts of the Company for the year ended 31^st 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)

	Standalone		Consolidated
Particulars	Current	Previous	Current	Previous
	Year	Year	Year	Year
	2022-23	2021-22	2022-23	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 incometax	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)	*^1 o cn GO 00	(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 organization''s 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 201516 is due for remittance on 3^rd 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 Company’s 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 -

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

b) 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;

c) 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;

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

e) 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

f) 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 31^st March, 2023 relate and the date of the report.

COMPANY’S 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 Company’s 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 27^th 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 arm''s 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 Company’s 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 Company’s 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 Company’s 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 31^st 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 1^st 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 1^st 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 7^th 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 3"ⁱ 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 4^th 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 7^th 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.

I. 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.

II. 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 Company’s 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 31^st 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 COMPANY’S OPERATION IN FUTURE

There were no significant and material orders passed by the Regulators or Courts or Tribunals impacting the going concern status and Company’s 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 Auditor''s 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 30^th Annual General Meeting held on 28^th September, 2022 for a period of 5 (five) consecutive years from the conclusion of the 30^th Annual General Meeting till the conclusion of the 35^thAnnual 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

ii. Number of complaints disposed of - NA

iii. 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 Company’s Code of Conduct. During the year under review, there were no complaints received under this mechanism. The policy can be accessed on the Company’s 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 Company''s 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.

By Order of the Board For K G DENIM LIMITED

^{Place: Coimbatore} KG Baalakrishnan

Date : 7 August 2023 Executive Chairman

DIN:00002174

---

Mar 31, 2018

Dear Shareholders,

We have pleasure in presenting the Twenty-Sixth Annual Report of the Company together with the Audited Statement of Accounts for the year ended 31^st March 2018.

FINANCIAL RESULTS_ (Rs. in lakhs)_

	Standalone		Consolidated
PARTICULARS	For the year ended 31st March 2018	For the year ended 31st March 2017	For the year ended 31st March 2018	For the year ended 31st March 2017
Gross Profit	4702	7901	4201	8068
Less : Finance Cost	2435	2603	2582	2751
Profit prior to Depreciation and write off	2267	5298	1619	5317
Less : Depreciation	1391	1378	1445	1452
Profit before Tax	876	3920	174	3865
Current, Deferred & earlier year tax	293	1462	83	1529
Add : Other Comprehensive Income	48	(39)	32	(62)
Net Profit for the year	631	2419	123	2274
Balance Brought forward	5832	3667	4873	3188
Ind AS adjustments for Depreciation/ Receivables	-	(22)	-	(357)
Equity Dividend & Tax thereon	232	232	232	232
Balance Carried Forward	6231	5832	4765	4873

The Company has adopted Ind AS from 01.04.2017 for the first time.

STATE OF THE COMPANY’S AFFAIRS

During the period under review, the Company has earned revenue of Rs.63867 lakh and Net Profit of Rs.631 lakh on standalone basis and Rs.71985 lakh and Rs.123 lakh respectively on consolidated basis.

PERFORMANCE OF THE COMPANY

The Company has two main product segments viz., Fabric (Denim / Apparel) and Home Textiles.

During the year ended 31.03.2018 total Fabric production was 371 lakh meters as against 359 lakh meters in 2016-17.

Sale of Fabric was 355 lakh meters in 2017-18 as against 346 lakh meters in 2016-17.

The Net Profit had decreased due to increase in raw material cost and cost of fuel with no corresponding increase in sale price. DIVIDEND

The Board of Directors recommends a dividend of 7.50 % (i.e. Rs.0.75) per equity share of the Company for the year 2017-18. The Dividend tax payable amounts to Rs.39 lakh.

INDUSTRY STRUCTURE AND DEVELOPMENT

Textile Industry in India had witnessed downword trend both in the domestic as well as export markets. Certain Government policies like Demonitisation, Implementation of GST had resulted in reduced off take in the domestic markets. Competition from neighboring countries, reduction of export incentives and strengthening Indian Rupee had adverse impact on export realisation.

Inspite of the above, company has been able to marginally improve the turnover mainly by export sales of denim fabric and home textiles.

Company is making efforts to focus on new markets, new segments and other countries in the Far East and Middle East.

OPPORTUNITIES AND THREATS

With the stabilisation, after the initial glitches, in the implementation of GST, improvements are seen in the demand.

Good monsoon forecast in the current year augurs well for the overall improvement in the economy.

Necessary forward covers are also made to insulate against foreign currency fluctuations.

LISTING OF EQUITY SHARES

The Company’s Equity shares are listed at the following Stock Exchange:

BSE Limited, PhirozeJeeJeebhoy Towers, Dalal Street, Mumbai-400 001.

The Company has paid the Annual Listing Fees to the said Stock Exchange for the Financial Year 2018-19.

PERFORMANCE AND FINANCIAL POSITION OF SUBSIDIARIES

The Company has two wholly owned subsidiaries Trigger Apparels Limited and KG Denim (USA) Inc.

The Company’s wholly owned subsidiary Trigger Apparels Limited is engaged in the manufacture and marketing of readymade garments.

During the year, the gross turnover in Trigger Apparels Limited was Rs.11500 lakh against Rs. 11164 lakh during the previous year. The Subsidiary Company has registered a loss of Rs.504 lakh as against a loss of Rs.144 lakh in the previous year. The increase in losses is due to liquidation of old stocks. The subsidiary is reorganising its products and marketing channels.

KG Denim (USA) Inc. had achieved a turnover of Rs.29 lakh and registered a loss of Rs.5 lakh during the year.

As per the provisions of Section 129 of the Companies Act, 2013 read with Companies (Accounts) Rules, 2014, a separate statement containing the salient features of the financial statements of the Subsidiary companies is prepared in Form AOC-1 and same is enclosed to this report as Annexure-1.

CONSOLIDATED FINANCIAL STATEMENTS

Consolidated Financial Statements have been prepared by the Company’s Management in accordance with the requirements of Accounting Standards 21 issued by The Institute of Chartered Accountants of India (ICAI) and as per the provisions of Companies Act, 2013.

As per the provisions of Section 136 of the Companies Act, 2013, the Company has placed separate audited accounts of its subsidiaries on its website www.kgdenim.com and copy of separate audited financial statements of its subsidiaries will be provided to the shareholders at their request.

CEO/CFO CERTIFICATION

The Managing Director and Chief Financial Officer of the Company have submitted a Certificate to the Board as required under Clause 49 of the Listing Agreement for the year ended 31^st March, 2018.

MEETINGS OF THE BOARD OF DIRECTORS

During the year ended 31^st March, 2018, six Board Meetings were held.

The dates on which the Board meetings were held are 23^rd May 2017, 28^th July 2017, 02^nd September 2017, 17^th November, 2017, 14^th February 2018 and 24^th March 2018.

A meeting of the Independent Directors of the Board was held on 14^th February, 2018.

Details of meetings of the Board and its Committees are disclosed in the report on Corporate Governance.

DIRECTORS’ RESPONSIBILITY STATEMENT AS REQUIRED UNDER SECTION 134 OF THE COMPANIES ACT, 2013

Pursuant to the requirement under Section 134 of the Companies Act, 2013, with respect to the Directors’ Responsibility Statement the Board of Directors of the Company hereby confirms:

i) that in the preparation of the Annual Accounts, the applicable accounting standards have been followed;

ii) that 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 as at 31^st March 2018 and Statement of Profit and Loss Account of the Company for that period;

iii) that the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

iv) that the Directors have prepared the Annual Accounts for the Financial Year ended 31^st March, 2018 on a going concern basis;

v) that 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

vi) that the Directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively.

STATEMENT ON DECLARATION GIVEN BY INDEPENDENT DIRECTORS UNDER SUB-SECTION (7) OF SECTION 149 OF THE COMPANIES ACT, 2013

The Independent Directors have submitted the declarations of independence, as required pursuant to Section 149(7) of the Companies Act, 2013 stating that they meet the criteria of independence as provded in sub-section(6).

NOMINATION AND REMUNERATION COMMITTEE

The Nomination and Remuneration Committee consisted of Shri K N V Ramani, Chairman with Shri G V S Desikan and Shri V Jagadisan as members.

Consequent upon the demise of Shri V Jagadisan in March 2018 his vacancy was filled up by appointing Shri G P Muniappan as member in March 2018.

The Board of Directors appointed Shri G P Muniappan as member of the said Committee on 24.03.2018, who fulfills the criteria specified under Section 178(1).

Brief description of terms of reference:

1. identifying persons who are qualified to become directors and who may be appointed in senior management in accordance with the criteria laid down and recommend to the Board for their appointment and removal;

2. carry on the evaluation of every director’s performance;

3. formulation of the criteria for determining qualifications, positive attributes and independence of a director;

4. recommend to the Board a policy relating to the remuneration of the directors, key managerial personnel and other employees;

5. formulation of criteria for evaluation of Independent Directors and the Board;

6. devising a policy on Board diversity; and

7. any other matter as the Board may decide from time to time.

NOMINATION AND REMUNERATION POLICY THE OBJECTIVES OF THE POLICY

1. To lay down criteria and terms and conditions with regard to identifying persons who are qualified to become Directors (Executive and Non-Executive) and persons who may be appointed in Senior Management and Key Managerial positions and to determine their remuneration.

2. To determine remuneration based on the Company’s size and financial position and trends and practices on remuneration prevailing in peer companies.

3. To carry out evaluation of the performance of Directors.

4. To provide them reward linked directly to their effort, performance, dedication and achievement relating to the Company’s operations.

5. To retain, motivate and promote talent and to ensure long term sustainability of talented managerial persons and create competitive advantage.

PARTICULARS OF LOANS, GUARANTEES AND INVESTMENTS UNDER SECTION 186 OF COMPANIES ACT, 2013

The details of Loans, Guarantees given and Investments made during the Financial Year ended on 31^st March, 2018 are given in the notes to Financial Statements in compliance with the provisions of Section 186 of the Companies Act, 2013 read with Companies (Meetings of Board and its Powers) Rules, 2014.

PARTICULARS OF CONTRACTS AND ARRANGEMENTS WITH RELATED PARTIES REFERRED TO IN SUB-SECTION (1) OF SECTION 188 OF COMPANIES ACT, 2013

The Company adopted a Related Party Transaction Policy in terms of SEBI regulations for compliance with Corporate Governance and Clause 49 of the Listing Agreement. The policy has also been hosted on the Company’s website. All transactions entered into with Related Parties for the year 2017-18 were on Arm’s length basis.

There were no material related party transactions in terms of the Related Party Transaction Policy adopted.

Thus disclosures in Form AOC-2 as per Companies Act, 2013 and Rule 8 of Companies (Account) Rules, 2014 are not required. Further, there were no material related party transaction with the Promoters, Directors or Key Managerial Personnel during the year.

All related party transactions are placed before the Audit Committee as also to the Board for approval on a quarterly basis. Omnibus approval was obtained for transaction of repetitive nature.

TRANSFER OF AMOUNT TO RESERVES

The Company does not propose to transfer any amount to the general reserve for the Financial Year ended 31^st March, 2018.

EXTRACT OF ANNUAL RETURN

The extract of Annual Return is prepared in Form MGT-9 as per the prov''sions of the Companies Act, 2013 and Rule 12 of Companies (Management and Administration) Rules, 2014 and the same is enclosed as Annexure - 2 to this Report.

THE CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO PURSUANT TO PROVISIONS OF SECTION 134(3)(m) OF THE COMPANIES ACT, 2013 READ WITH THE COMPANIES (ACCOUNTS) RULES, 2014

Information with respect to conservation of energy, technology absorption, foreign exchange earnings and outgo pursuant to Section 134(3)(m) of the Act read with Companies (Accounts) Rules, 2014 is prepared and the same is enclosed as Annexure - 3 to this Report.

RISK MANAGEMENT COMMITTEE

Risk Management Committee consists of Shri B Sriramulu as Chairman with Shri S Muthuswamy and Shri M Balaji as members.

The Committee had formulated a Risk Management Policy for dealing with different kinds of risks which it faces in day to day operations of the Company. 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.

CORPORATE SOCIAL RESPONSIBILITY COMMITTEE

Corporate Social Responsibility is commitment of the Company to improve the quality of life of the workforce and their families and also the community and society at large. The Company believes in undertaking business in such a way that it leads to overall development of all stakeholders and Society.

The Board of Directors of the Company has constituted Corporate Social Responsibility Committee consisting of Shri KG Baalakrishnan as Chairman with Shri G V S Desikan and Shri A Velusamy as Members and adopted policy for Corporate Social Responsibility.

Corporate Social Responsibility policy was adopted by the Board of Directors on the recommendation of Corporate Social Responsibility Committee.

The Report on CSR activities, as required under the Companies (Corporate Social Responsibility Policy) Rules, 2014, is annexed as Annexure - 4.

EVALUATION OF BOARD

Evaluation of all Board members is done on an annual basis. The evaluation is done by the Board, Nomination and Remuneration Committee and Independent Directors with specific focus on the performance and effective functioning of the Board and Individual Directors.

The manner in which the evaluation has been done is explained in the report on Corporate Governance.

DIRECTORS

Shri V Jagadisan, Independent Director of the Company, had expired on 16.03.2018. The Board placed on record the invaluable contributions of Shri V Jagadisan towards the progress of the Company.

In accordance with the provisions of Section 152 of the Companies Act, 2013 and the Company’s Articles of Association No.34, Shri A Velusamy retires by rotation at the forthcoming Annual General Meeting and being eligible offers himself for re-appointment. Due to amendments in SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2018 Messrs K N V Ramani, Shri G V S Desikan and Shri G P Muniappan, who are Non-Executive Directors and have attained 75 years of age are proposed to be appointed as Directors for 3 years from 01.04.2019 at the forthcoming Annual General Meeting.

Shri KG Baalakrishnan, Executive Chairman, Shri B Sriramulu, Managing Director and Shri B Srihari, Managing Director are being reappointed from 03.11.2018 for a period of 5 years.

The Board proposes to appoint Shri M B N Rao, an acclaimed Banking Professional, as an Independent Director at the forthcoming Annual General Meeting of the Company to fill in the vacancy caused due to the demise of Shri V Jagadisan.

KEY MANAGERIAL PERSONNEL

The following are the Key Managerial Personnel of the Company :

1. Shri B Sriramulu - Managing Director

2. Shri B Srihari - Managing Director

3. Shri S Muthuswamy - Chief Financial Officer

4. Shri M Balaji - Company Secretary

DEPOSITS

The Company has not accepted any deposits from the public in terms of Section 73 of the Companies Act, 2013.

STATUTORY AUDITORS

M/s. Mohan & Venkataraman were appointed as Auditors of the Company at the AGM held on 16.09.2017, to hold office as Auditors for a term of five Financial Years commencing from 2017-18 to 2021-22 till conclusion of AGM to be held for financial year 2021-22.

AUDITORS REPORT

M/s. Mohan & Venkataraman, Chartered Accountants (ICAI Regn. No.007321S) have issued Auditors Report for the Financial Year ended 31^st March, 2018.

There are no qualifications in Auditors’ Report.

INTERNAL AUDITORS

The Board of Directors of the Company had appointed Mr K Panneerselvam, Chartered Accountant (Membership No.220574) to conduct Internal Audit of the Company.

COST AUDITORS

As per the requirement of Central Government and pursuant to Section 148 of the Companies Act, 2013 read with the Companies (Cost Records and Audit) Rules, 2014 as amended from time to time, your Company has been carrying out audit of cost records relating to Textile Division every year.

The Board of Directors, on the recommendation of Audit Committee, has appointed Messrs M Nagarajan, Cost Accountants, (Firm Registration Number 6384) as Cost Auditor to audit the cost accounts of the Company for the Financial Year 2018-19. As required under the Companies Act, 2013, a resolution seeking member’s approval for the remuneration payable to the Cost Auditor forms part of the Notice convening the Annual General Meeting for their ratification.

AUDIT COMMITTEE

Audit Committee consisted of Shri V Jagadisan as Chairman with Shri K N V Ramani and Shri G V S Desikan as members.

All the members of the Audit Committee are Independent Directors.

Consequent upon the demise of Shri V Jagadisan, Chairman of Audit Committee, vacancy had arisen in the Company’s Audit Committee.

The Board of Directors appointed Shri G P Muniappan as member of the said Committee on 24.03.2018, who fulfils the criteria specified under Section 177(2).

There is no such incidence where Board has not accepted the recommendation of the Audit Committee during the year under review.

CORPORATE GOVERNANCE

A separate section on Corporate Governance and a Certificate from the Auditors of the Company regarding compliance of conditions of Corporate Governance as stipulated under Clause 49 of the Listing Agreement with the Stock Exchange, forms part of the Annual Report - Annexure - 5.

VIGIL MECHANISM

The Board of Directors have adopted a Whistle Blower Policy which is hosted on the Company’s website. The Whistle Blower Policy aims for conducting the affairs in a fair and transparent manner by adopting highest standards of professionalism, honesty, integrity and ethical behaviour. All permanent employees of the Company are covered under the Whistle Blower Policy.

A mechanism has been established for employees to report concerns about unethical behavior, actual or suspected fraud or violation of Code of Conduct and Ethics. It also provides for adequate safeguards against the victimization of employees who avail of the mechanism and allows direct access to the Chairperson of the Audit Committee in exceptional cases.

SECRETARIAL AUDITORS REPORT

As per the provisions of Section 204 of the Companies Act, 2013, the Board of Directors have appointed ShriM.R.L.Narasimha, Practising Company Secretary (C.P.No:799) as Secretarial Auditor to conduct Secretarial audit of the Company for the Financial Year ended on 31^st March, 2018.

Secretarial Audit Report issued by ShriM.R.L.Narasimha, Practising Company Secretary in form MR-3 is enclosed as Annexure - 6 to this Annual Report.

There are no qualifications in Secretarial Audit Report.

STATEMENT OF PARTICULARS OF APPOINTMENT AND REMUNERATION OF MANAGERIAL PERSONNEL

The Statement of particulars of Appointment and Remuneration of Managerial personnel as per Rule 5 of Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is enclosed as Annexure - 7 to this Annual Report.

ENVIRONMENT

The Company holds due certification under ISO 14001 : 2004 which is primarily focused on environmental management system. It ensures that the manufacturing of products is carried on without affecting the environment in the working area and surroundings.

The Company is a member of Sustainable Apparel Coalition (SAC). SAC provides credible, practical and industry wide guidelines and provides tools to define, measure and evaluate industry’s product environmental and social performance support.

The Company has achieved one of the best scores in the apparel industry as verified by a leading brand assessor.

During the current year, the Company has implemented various environmental measures and reduction program like Green House Gas inventory measurement, replacement of freon gas air conditioners, increasing the area of plantation etc.

The Company has improved effluent water treatment system conforming to the Pollution Control Board parameters. A new plant has been added which has increased the Biological treatment capacity by 60%. An advanced technology of Biological Diffuser Aeration system has been introduced which has resulted in reduction in chemicals usage. Consequently, reduction in sludge, improvement in outlet water quality and consistence and improvement in RO recovery were achieved. The highlights of our sustainability effort can be seen in the link https://youtu.be/uZGhiwq6XSM

HEALTH AND SAFETY

The Company has obtained certification under OHSAS 18001 : 2007 (Occupational Health and Safety Management Assessment Standard) which is an Integrated Management System focusing on an organization’s 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 continuous manner as per OHSAS-18001 standards and legal requirements.

POLICY ON SEXUAL HARASSMENT

The Company has adopted policy on Prevention of Sexual Harassment of Women at Workplace in accordance with The Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. During the Financial Year ended 31^st March, 2018, the Company has not received any complaints pertaining to sexual harassment.

LEGAL REQUIREMENTS

The Company is conscious of improving the occupational and personal health of its employees. In addition to free medical camps, the Company also organizes employees’ health check up in outside hospitals on annual basis.

The Company provides a safer work environment for its employees. Basic equipments are provided to ensure safety from fire. Awareness classes are being conducted periodically with the help of external agencies about the basic safety, fire fighting, mock drills, mass evacuation, first aid etc.,

SOCIAL RESPONSIBILITIES

The Company is maintaining a hospital for serving the community including 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.

INSURANCE

All properties and insurable interests of the Company including building, plant and machinery and stocks have been fully insured.

FINANCE

Your Directors acknowledge with gratitude, the valuable assistance and support extended by our Bankers for Term Loans and Working Capital ie., Indian Bank, Andhra Bank, State Bank of India, The South Indian Bank Limited and Allahabad Bank.

DETAILS IN RESPECT OF ADEQUACY OF INTERNAL FINANCIAL CONTROLS WITH REFERENCE TO THE FINANCIAL STATEMENTS

1. The Company maintains all its records in ERP System and the work flow and approvals are routed through ERP System;

2. The Company has appointed Internal Auditors to observe the Internal Controls, whether the work flow of organization is being done through the approved policies of the Company. In every Quarter during the approval of Financial Statements, Internal Auditors will present the Internal Audit Report and Management Comments on the Internal Audit observations; and

3. The Board of Directors of the Company have adopted various policies like Related Party Transactions Policy, Whistle Blower Policy, Policy to determine Material Subsidiaries and such other procedures for ensuring the orderly and efficient conduct of its business for safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records and the timely preparation of reliable financial information.

CHANGE IN THE NATURE OF BUSINESS

There is no change in the nature of business of the Company.

THE DETAILS OF SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALS IMPACTING THE GOING CONCERN STATUS AND COMPANY’S OPERATIONS IN FUTURE.

No Significant and material orders passed by the regulators or courts or tribunals impacting the going concern status and company’s operations in future.

Details of pending legal cases are furnished in Note No.41 to the accounts.

MATERIAL CHANGES AND COMMITMENTS

There are no Material changes and commitments in the business operations of the Company from the Financial Year ended 31^stMarch, 2018 to the date of signing of the Director’s Report.

ACKNOWLEDGMENT

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.

PERSONNEL

The Directors wish to place on record their appreciation for the co-operation extended by all sections of the employees.

CAUTIONARY STATEMENT

The statement in this Directors’ Report & Management Discussion and Analysis contain forward looking statements regarding Company’s 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.

PARTICULARS OF EMPLOYEES

Information pursuant to Section 197(12) of the Companies Act, 2013 read with Rule 5 (1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is given in Annexure - 7 to this report.

The particulars in respect of employees in receipt of remuneration exceeding Rs.60 lakhs per annum as per Section 197(12) read with Rule 5(2) of The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is given in Annexure-8.

The Company has presented in this Report, the consolidated financial statements of the holding company and all its subsidiaries, duly audited by the Statutory Auditors. The Company will make available the audited annual accounts and related information of its subsidiaries, upon request by any of its shareholders. The annual accounts of the subsidiary companies will also be kept for inspection by any member at the Registered Office of the Company and its subsidiary companies.

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

On behalf of the Board

KG Baalakrishnan

Coimbatore Executive Chairman

01.08.2018 DIN: 00002174

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Mar 31, 2016

Dear Shareholders,

We have pleasure in presenting the Twenty-Fourth Annual Report of the Company together with the Audited Statement of Accounts for the year ended 31^st March 2016.

FINANCIAL RESULTS

(Rs. in lakhs)

	Standalone		Consolidated
	For the year ended	For the year ended	For the year ended	For the year ended
PARTICULARS	31st March 2016	31st March 2015	31st March 2016	31st March 2015
Gross Profit	8827	5093	8845	5203
Less : Finance Cost	3241	2797	3355	2874
Profit prior to Depreciation and write off	5586	2296	5490	2329
Less : Depreciation	2048	2098	2072	2118
Net Profit	3538	198	3418	211
Current, Deferred & earlier year tax	1426	177	1376	174
Net Profit for the year	2112	21	2042	37
Balance Brought forward	1556	2197	1147	1775
Proposed Dividend & Tax thereon	232	232	232	232
Additional Depreciation (Net of DTL)	-	430	-	433
Balance Carried Forward	3436	1556	2957	1147

STATE OF THE COMPANY’S AFFAIRS

During the period under review, the Company has earned revenue of Rs.65173 lakh and Net Profit of Rs.2112 lakh on standalone basis and Rs.71553 lakh and Rs.2042 lakh respectively on consolidated basis.

PERFORMANCE OF THE COMPANY

The Company has two main product segments viz., Denim, Apparel Fabric and Home Textiles.

During the year ended 31.03.2016, total Fabric production was 361 lakh meters as against 316 lakh meters in 2014-15.

Sale of Fabric was 360 lakh meters as against 309 lakh meters in 2014-15.

The improved profitability is mainly due to Denim division performing well both in terms of volume as well as realization.

DIVIDEND

The Board of Directors recommends a dividend of 7.50 % (i.e. Rs.0.75) per equity share of the Company for the year 2015-16. The Dividend tax payable amounts to Rs.39 lakh.

INDUSTRY STRUCTURE & DEVELOPMENT

The Indian denim industry is growing steadily with new mills being added and also existing mills increasing capacity. We are looking at increasing sales in international markets though it depends on the market conditions in Europe and USA. We have identified new markets in the Far East countries like Vietnam, Thailand and Indonesia to increase our sales. We are also focusing to increase our sales in African markets at Kenya and Tanzania .The fabrics are undergoing transformation in terms of colors, fibers and finishes. Trends are considered for new developments to cater to brands and retailers in both domestic and international markets.

OPPORTUNITIES AND THREATS

The Company is targeting full capacity utilization of production and sales volume for Denim Fabric in the current year. Efforts are being made to increase apparel fabrics and home textile exports.

The Company has successfully commissioned 9.9 MW Power Plant during the year. Sale of excess power generated is expected to happen in the second half of FY 2016-17.

The Company is subjected to risks of volatility in the prices of raw materials and fashion changes.

High interest rates and exchange rate volatility are areas of serious concern for the Company. The Company has taken steps to increase the exports and is actively managing the exchange risk by suitable forward cover.

LISTING OF EQUITY SHARES

The Company’s Equity shares are listed at the following Stock Exchange:

(I) BSE Limited, Phiroze JeeJeebhoy Towers, Dalal Street, Mumbai-400 001.

The Company has paid the Annual Listing Fees to the said Stock Exchange for the financial year 2016-17.

PERFORMANCE AND FINANCIAL POSITION OF EACH OF THE SUBSIDIARIES

The Company’s wholly owned subsidiary Trigger Apparels Limited is engaged in the manufacture and marketing of readymade garments. During the year 2015-16 it has undertaken export of garments besides the domestic marketing of Trigger brand jeans.

During the year, the gross turnover in Trigger Apparels Limited was Rs.92.83 crore against Rs.27.40 crore during the previous year. The Subsidiary Company has registered a loss of Rs.69.65 lakh as against a profit of Rs.15.56 lakh in the previous year.

No activity has taken place at KG Denim (USA) Inc. during the year.

As per the provisions of Section 129 of the Companies Act, 2013 read with Companies (Accounts) Rules, 2014, a separate statement containing the salient features of the financial statements of the Subsidiary companies is prepared in Form AOC-1 and same is enclosed to this report as Annexure-1.

CONSOLIDATED FINANCIAL STATEMENTS

Consolidated financial statements have been prepared by the Company’s Management in accordance with the requirements of Accounting Standards 21 issued by The Institute of Chartered Accountants of India (ICAI) and as per the provisions of Companies Act, 2013.

As per the provisions of Section 136 of the Companies Act, 2013, the Company has placed separate audited accounts of its subsidiaries on its website www.kgdenim.com and copy of separate audited financial statements of its subsidiaries will be provided to the shareholders at their request.

CEO/CFO CERTIFICATION

The Managing Director and Chief Financial Officer of the Company have submitted a Certificate to the Board as required under Clause 49 of the Listing Agreement for the year ended 31^st March, 2016.

MEETINGS OF THE BOARD OF DIRECTORS

During the year ended 31^st March, 2016, four Board Meetings were held.

The dates on which the Board meetings were held are 23^rd May 2015, 31^st July 2015, 05^th November 2015 and 05^th February 2016.

A meeting of the Independent Directors of the Board was held on 05^th February, 2016.

Details of meetings of the Board and its Committees are disclosed in the report on Corporate Governance.

DIRECTORS’ RESPONSIBILITY STATEMENT AS REQUIRED UNDER SECTION 134 OF THE COMPANIES ACT, 2013

Pursuant to the requirement under Section 134 of the Companies Act, 2013, with respect to the Directors’ Responsibility Statement the Board of Directors of the Company hereby confirms:

i) that in the preparation of the Annual Accounts, the applicable accounting standards have been followed;

ii) that 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 as at 31^st March 2016 and Statement of Profit and Loss Account of the Company for that period;

iii) that the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

iv) that the Directors have prepared the Annual Accounts for the Financial Year ended 31^st March, 2016 on a going concern basis;

v) that 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

vi) that the Directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively.

STATEMENT ON DECLARATION GIVEN BY INDEPENDENT DIRECTORS UNDER SUB-SECTION (7) OF SECTION 149 OF THE COMPANIES ACT, 2013

The independent directors have submitted the declaration of independence, as required pursuant to Section 149(7) of the Companies Act, 2013 stating that they meet the criteria of independence as provided in sub-section(6).

NOMINATION AND REMUNERATION COMMITTEE

The Nomination and Remuneration Committee consists of the following members namely Shri K N V Ramani, Chairman with Shri G V S Desikan and Shri V Jagadisan as members.

Brief description of terms of reference:

1. identifying persons who are qualified to become directors and who may be appointed in senior management in accordance with the criteria laid down and recommend to the Board for their appointment and removal;

2. carry on the evaluation of every director’s performance;

3. formulation of the criteria for determining qualifications, positive attributes and independence of a director;

4. recommend to the Board a policy relating to the remuneration of the directors, key managerial personnel and other employees;

5. formulation of criteria for evaluation of Independent Directors and the Board;

6. devising a policy on Board diversity; and

7. any other matter as the Board may decide from time to time.

NOMINATION AND REMUNERATION POLICY THE OBJECTIVES OF THE POLICY

1. To lay down criteria and terms and conditions with regard to identifying persons who are qualified to become Directors (Executive and Non-Executive) and persons who may be appointed in Senior Management and Key Managerial positions and to determine their remuneration.

2. To determine remuneration based on the Company’s size and financial position and trends and practices on remuneration prevailing in peer companies.

3. To carry out evaluation of the performance of Directors.

4. To provide them reward linked directly to their effort, performance, dedication and achievement relating to the Company’s operations.

5. To retain, motivate and promote talent and to ensure long term sustainability of talented managerial persons and create competitive advantage.

The Nomination and Remuneration Committee has recommended fixation of fixed remuneration for Executive Chairman and Managing Directors from 01.04.2016 instead of 3% share of net profits on consideration of improved profitability. Further the Committee has recommend revision of remuneration to Smt T Anandhi, Non-Executive Director from 1% to 0.50% of net profit from 01.04.2016. PARTICULARS OF LOANS, GUARANTEES AND INVESTMENTS UNDER SECTION 186 OF COMPANIES ACT, 2013

The details of Loans, Guarantees given and Investments made during the Financial Year ended on 31^st March, 2016 are given in the notes to Financial Statements in compliance with the provisions of Section 186 of the Companies Act, 2013 read with Companies (Meetings of Board and its Powers) Rules, 2014.

PARTICULARS OF CONTRACTS AND ARRANGEMENTS WITH RELATED PARTIES REFERRED TO IN SUB-SECTION (1) OF SECTION 188 OF COMPANIES ACT, 2013

The Company adopted a Related Party Transaction Policy in terms of SEBI regulations for compliance with Corporate Governance and Clause 49 of the Listing Agreement. The policy has also been hosted on the Company’s website. All transactions entered into with Related Parties for the year 2015-16 were on Arm’s length basis.

There were no material related party transactions in terms of the Related Party Transaction Policy adopted.

Thus disclosure in Form AOC-2 as per Companies Act, 2013 and Rule 8 of Companies (Account) Rules, 2014 is not required.

Further there were no material related party transaction with the Promoters, Directors or Key Managerial Personnel during the year.

All related party transaction are placed before the Audit Committee as also to the Board for approval on a quarterly basis. Omnibus approval was obtained for transaction of repetitive nature.

TRANSFER OF AMOUNT TO RESERVES

The Company does not propose to transfer any amount to the general reserve for the Financial Year ended 31^st March, 2016. EXTRACT OF ANNUAL RETURN

The extract of Annual Return is prepared in Form MGT-9 as per the provisions of the Companies Act, 2013 and Rule 12 of Companies (Management and Administration) Rules, 2014 and the same is enclosed as Annexure - 2 to this Report.

THE CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO PURSUANT TO PROVISIONS OF SECTION 134(3)(m) OF THE COMPANIES ACT, 2013 (ACT) READ WITH THE COMPANIES (ACCOUNTS) RULES, 2014

Information with respect to conservation of energy, technology absorption, foreign exchange earnings and outgo pursuant to Section 134(3)(m) of the Act read with Companies (Accounts) Rules, 2014 is prepared and the same is enclosed as Annexure - 3 to this Report.

RISK MANAGEMENT COMMITTEE

Risk Management Committee consists of the following persons namely Shri B Sriramulu as Chairman, Shri S Muthuswamy and Shri M Balaji as members.

The Committee had formulated a Risk Management Policy for dealing with different kinds of risks which it faces in day to day operations of the Company. 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.

CORPORATE SOCIAL RESPONSIBILITY COMMITTEE

Corporate Social Responsibility is commitment of the Company to improve the quality of life of the workforce and their families and also the community and society at large. The Company believes in undertaking business in such a way that it leads to overall development of all stakeholders and Society.

The Board of Directors of the Company has constituted Corporate Social Responsibility Committee consisting of following persons namely Shri KG Baalakrishnan, Chairman, Shri G V S Desikan, Member and Shri A Velusamy, Member and adopted policy for Corporate Social Responsibility.

Corporate Social Responsibility policy was adopted by the Board of Directors on the recommendation of Corporate Social Responsibility Committee.

The Report on CSR activities as required under the Companies (Corporate Social Responsibility Policy) Rules, 2014 is annexed as Annexure - 4.

EVALUATION OF BOARD

Evaluation of all Board members is done on an annual basis. The evaluation is done by the Board, Nomination and Remuneration Committee and Independent Directors with specific focus on the performance and effective functioning of the Board and Individual Directors.

The manner in which the evaluation has been done is explained in the report on Corporate Governance.

DIRECTORS

Shri M J Vijayaraaghavan, Independent Director expired on 10.06.2015.

The Board placed on record the valuable services rendered by him and prayed Almighty for the eternal peace of the departed soul. Shri Surinder Chhibber, Independent Director and Shri S Muthuswamy, Director resigned from the Board on 31.07.2015. The Board placed on record the valuable services rendered by them.

Shri A P Seturaaman was appointed as an Additional Director by the Board on 05.11.2015. He is seeking election as an Independent Director at the ensuing Annual General Meeting.

In accordance with the provisions of Section 152 of the Companies Act, 2013 and the Company’s Articles of Association no. 34, Shri B Sriramulu retires by rotation at the forthcoming Annual General Meeting and being eligible offers himself for re-appointment.

KEY MANAGERIAL PERSONNEL

The following are the Key Managerial Personnel of the Company :

1. Shri B Sriramulu - Managing Director

2. Shri B Srihari - Managing Director

3. Shri S Muthuswamy - Company Secretary

4. Shri M Balaji - Chief Financial Officer

DEPOSITS

The Company has not accepted any deposits from the public in terms of Section 73 of the Companies Act, 2013.

STATUTORY AUDITORS

The Shareholders of the Company at the Annual General Meeting held on 28^th September, 2015 have appointed M/s. Gopalaiyer and Subramanian, Chartered Accountants as Statutory Auditors of the Company.

The term of M/s. Gopalaiyer and Subramanian, Chartered Accountants, Statutory Auditors will expire on the date of 24^th Annual General Meeting to be held on 28th September 2016.

It is proposed to re-appoint them as Statutory Auditors of the Company for a further period of one year. The members are requested to consider their re-appointment and authorize the Board of Directors to fix their remuneration.

M/s. Gopalaiyer and Subramanian, Chartered Accountants (ICAI Regn. No.000960S) have confirmed that their appointment, if made, shall be in accordance with the provisions of Section 139 of the Companies Act, 2013.

AUDITORS REPORT

M/s.Gopalaiyer and Subramanian, Chartered Accountants (ICAI Regn. No.000960S) have issued Auditors Report for the Financial Year ended 31^st March, 2016 and there are no qualifications in Auditors’ Report.

INTERNAL AUDITORS

The Board of Directors of the Company have appointed M/s Mohan & Venkatramanan, Chartered Accountants to conduct Internal Audit of the Company.

COST AUDITORS

As per the requirement of Central Government and pursuant to Section 148 of the Companies Act, 2013 read with the Companies (Cost Records and Audit) Rules, 2014 as amended from time to time, your Company has been carrying out audit of cost records relating to Textile Divisions every year.

The Board of Directors, on the recommendation of Audit Committee, has appointed Messrs M Nagarajan, Cost Accountants, (Firm Registration Number 6384) as Cost Auditor to audit the cost accounts of the Company for the financial year 2016-17. As required under the Companies Act, 2013, a resolution seeking member’s approval for the remuneration payable to the Cost Auditor forms part of the Notice convening the Annual General Meeting for their ratification.

AUDIT COMMITTEE

Audit Committee consists of the following Directors namely Shri V Jagadisan, Chairman, Shri K N V Ramani and Shri G V S Desikan as members. All the members of the Audit Committee are Independent Directors.

There is no such incidence where Board has not accepted the recommendation of the Audit Committee during the year under review.

CORPORATE GOVERNANCE

A separate section on Corporate Governance and a Certificate from the Auditors of the Company regarding compliance of conditions of Corporate Governance as stipulated under Clause 49 of the Listing Agreement with the Stock Exchange, forms part of the Annual Report - Annexure - 5.

VIGIL MECHANISM

The Board of Directors have adopted a Whistle Blower Policy which is hosted on the Company’s website. The Whistle Blower Policy aims for conducting the affairs in a fair and transparent manner by adopting highest standards of professionalism, honesty, integrity and ethical behaviour. All permanent employees of the Company are covered under the Whistle Blower Policy.

A mechanism has been established for employees to report concerns about unethical behavior, actual or suspected fraud or violation of Code of Conduct and Ethics. It also provides for adequate safeguards against the victimization of employees who avail of the mechanism and allows direct access to the Chairperson of the Audit Committee in exceptional cases.

SECRETARIAL AUDITORS REPORT

As per the provisions of Section 204 of the Companies Act, 2013, the Board of Directors have appointed Shri M.R.L.Narasimha, Practising Company Secretary (C.P.No:799) as Secretarial Auditor to conduct Secretarial audit of the Company for the Financial Year ended on 31^st March, 2016.

Secretarial Audit Report issued by Shri M.R.L.Narasimha, Practising Company Secretary in form MR-3 is enclosed as Annexure - 6 to this Annual Report. There are no qualifications in Secretarial Audit Report.

STATEMENT OF PARTICULARS OF APPOINTMENT AND REMUNERATION OF MANAGERIAL PERSONNEL

The Statement of particulars of Appointment and Remuneration of Managerial personnel as per Rule 5 of Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is enclosed as Annexure - 7 to this Annual Report.

ENVIRONMENT

The Company holds due certification under ISO 14001 : 2004 which is primarily focused on environmental management system. It ensures that the manufacturing of products is carried on without affecting the environment in the working area and surroundings. The Company is a member of Sustainable Apparel Coalition (SAC). SAC provides credible, practical and industry wide guidelines and provides tools to define, measure and evaluate industry’s product environmental and social performance support.

The Company has achieved one of the best scores in the apparel industry as verified by a leading brand assessor.

During the current year, the Company has implemented various environmental measures and reduction program like Green House Gas inventory measurement, replacement of freon gas air conditioners, increasing the area of plantation etc.

The Company has improved effluent water treatment system conforming to the Pollution Control Board parameters. A new plant has been added which has increased the Biological treatment capacity by 60%. An advanced technology of Biological Diffuser Aeration system has been introduced which has resulted in reduction in chemicals usage. Consequently, reduction in sludge, improvement in outlet water quality and consistence and improvement in RO recovery were achieved. The highlights of our sustainability effort can be seen in the link https://youtu.be/uZGhiwq6XSM

HEALTH AND SAFETY

The Company has obtained certification under OHSAS 18001 : 2007 (Occupational Health and Safety Management Assessment Standard) which is an Integrated Management System focusing on an organization’s 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 continuous manner as per OHSAS-18001 standards and legal requirements.

POLICY ON SEXUAL HARASSMENT

The Company has adopted policy on Prevention of Sexual Harassment of Women at Workplace in accordance with The Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. During the financial year ended 31^st March,

2016, the Company has not received any complaints pertaining to sexual harassment.

LEGAL REQUIREMENTS

The Company is conscious of improving the occupational and personal health of its employees. In addition to free medical camps, the Company also organizes employees’ health check up in outside hospitals on an annual basis.

The Company provides a safer work environment for its employees. Basic equipments are provided to ensure safety from fire. Awareness classes are being conducted periodically with the help of external agencies about the basic safety, fire fighting, mock drills, mass evacuation, first aid etc.,

SOCIAL RESPONSIBILITIES

The Company is maintaining a hospital for serving the community including supply of medicines at subsidized 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.

INSURANCE

All properties and insurable interests of the Company including building, plant and machinery and stocks have been fully insured.

FINANCE

Your Directors acknowledge with gratitude, the valuable assistance and support extended by our Bankers for term loans and working capital ie., Indian Bank, Bank of India, Allahabad Bank, State Bank of India, Indian Overseas Bank and The South Indian Bank Limited.

DETAILS IN RESPECT OF ADEQUACY OF INTERNAL FINANCIAL CONTROLS WITH REFERENCE TO THE FINANCIAL STATEMENTS

1. The Company maintains all its records in ERP System and the work flow and approvals are routed through ERP System;

2. The Company has appointed Internal Auditors to observe the Internal Controls, whether the work flow of organization is being done through the approved policies of the Company. In every Quarter during the approval of Financial Statements, Internal Auditors will present the Internal Audit Report and Management Comments on the Internal Audit observations; and

3. The Board of Directors of the Company have adopted various policies like Related Party Transactions Policy, Whistle Blower Policy, Policy to determine Material Subsidiaries and such other procedures for ensuring the orderly and efficient conduct of its business for safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information.

CHANGE IN THE NATURE OF BUSINESS

There is no change in the nature of business of the Company.

THE DETAILS OF SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALS IMPACTING THE GOING CONCERN STATUS AND COMPANY’S OPERATIONS IN FUTURE.

No Significant and material orders passed by the regulators or courts or tribunals impacting the going concern status and company’s operations in future.

Details of pending legal cases are furnished in Note No.29 to the accounts.

MATERIAL CHANGES AND COMMITMENTS

There are no Material changes and commitments in the business operations of the Company from the Financial Year ended 31^st March, 2016 to the date of signing of the Director’s Report.

ACKNOWLEDGMENT

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.

PERSONNEL

The Directors wish to place on record their appreciation for the co-operation extended by all sections of the employees. CAUTIONARY STATEMENT

The statement in this Directors’ Report & Management Discussion and Analysis contain forward looking statements regarding Company’s 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.

PARTICULARS OF EMPLOYEES

Information pursuant to Section 197(12) of the Companies Act, 2013 read with Rule 5 (1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is given in Annexure - 7 to this report.

The particulars in respect of employees in receipt of remuneration exceeding Rs.60 lakhs per annum as per Section 197(12) read with Rule 5(2) of The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is given in Annexure-8.

The Company has presented in this Report, the consolidated financial statements of the holding company and all its subsidiaries, duly audited by the Statutory Auditors. The Company will make available the audited annual accounts and related information of its subsidiaries, upon request by any of its shareholders. The annual accounts of the subsidiary companies will also be kept for inspection by any member at the Registered Office of the Company and its subsidiary companies.

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

On behalf of the Board

KG Baalakrishnan

Coimbatore Executive Chairman

26.05.2016 DIN: 00002174

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Mar 31, 2014

Dear Shareholders,

We have pleasure in presenting the Twenty-Second Annual Report of the Company together with the Audited Statement of Accounts for the year ended 31st March 2014.

FINANCIAL RESULTS (Rs. in lakhs)

PARTICULARS For the year ended For the year ended 31st March 2014 31st March 2013

Gross Profit 5149 6115

Less : Finance Cost 2805 2576

Profit prior to 2344 3539 Depreciation and write off

Less : Depreciation 1335 1192

Net Profit 1009 2347

Current, Deferred & 350 794 earlier year tax

Net Profit for the year 659 1553

Balance Brought forward 1762 433

Proposed Dividend & Tax thereon 224 224

Balance Carried Forward 2197 1762

PERFORMANCE OF THE COMPANY

During the year ended 31.03.2014, the Company achieved an overall production of 316 lakh meters of fabrics against the previous year''s production of 296 lakh meters. The revenue for the year was Rs.59186 lakhs as against revenue of Rs.51483 lakhs during the previous year, representing a growth of 15 %. The Company has three main product groups Denim and Apparel Fabrics, Home Textiles and Sale of Apparel. Denim Sales have inceased marginally but profitability was affected on account of increase in input costs.

In the Home Textiles category, Company has registered significant growth rate in sales compared to the previous year.

In the Ready Made Garments group also the Company has registered significant growth in sales and profit.

The Board of Directors recommends a divdend of 7.50 % (i.e. Rs.0.75) per equity share of the Company for the year 2013-14. The Divdend tax payable amounts to Rs.31 lakhs.

INDUSTRY STRUCTURE & DEVELOPMENT

The Indian denim industry is showing steady growth in domestic and international markets.

Our focus remains on sales to leading domestic and international brands in India and also to large exporters of readymade garments. We are concentrating on the Far East Countries of Vietnam, LaosPDR and China besides direct sales to North America. Products are being developed to cater to both retailers and fashion brands thereby gaining advantage in both segments and increasing volumes. Sale of home textiles and apparels improved during the year.

OPPORTUNITIES AND THREATS

The Company is targeting higher production and sales volume for denim in the next year. Sale of Home Textiles and Apparel are also expected to achieve higher volumes.

The Company is subjected to risks of volatility in the prices of raw materials and fashion changes.

High interest rates and exchange rate volatility are areas of serious concern for the Company. The Company has taken steps to increase the exports and is actively managing the exchange risk by suitable forward cover.

FINANCE

Your Directors acknowledge with gratitude, the valuable assistance and support extended by our Bankers for term loans and working capital ie., Indian Bank, Bank of India, Allahabad Bank, State Bank of India, State Bank of Hyderabad, Indian Overseas Bank and The South Indian Bank Limited.

PERSONNEL

The Directors wish to place on record their appreciation for the co-operation extended by all sections of the employees.

DIRECTORS'' RESPONSIBILITY STATEMENT

Your Directors confirm that:

a) In the preparation of the annual accounts, the applicable accounting standards had been followed.

b) The Directors had 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 Profit or Loss of the Company for that period.

c) Company''s Directors had taken proper and sufficient care 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 irregularities.

d) The annual accounts have been prepared on a going concern basis.

CONSOLIDATED ACCOUNTS

In accordance with the requirements of Accounting Standard (AS-21) prescribed by The Institute of Chartered Accountants of India, the Consolidated Accounts of the Company and its subsidiaries are annexed to this Report.

SUBSIDIARIES

During the year, the gross turnover in Trigger Apparels Limited was to Rs.39.22 crores against Rs.38.20 crores during the previous year. The subsidiary has been able to register a profit of Rs.15.44 lakhs compared to profit of Rs.31.95 lakhs in the previous year. No activity has taken place at KG Denim (USA) Inc. during the year.

CEO/CFO CERTIFICATION

The Managing Directors and Director & Company Secretary of the Company have submitted a Certificate to the Board as required under Clause 49 of the Listing Agreement for the year ended 31st March, 2014.

CORPORATE GOVERNANCE

A separate section on Corporate Governance and a Certificate from the Auditors of the Company regarding compliance of conditions of Corporate Governance as stipulated under Clause 49 of the Listing Agreement with the Stock Exchange, forms part of the Annual Report.

LISTING

The Company''s shares are listed in the Bombay Stock Exchange Limited, Mumbai.

CAPITAL EXPENDITURE

The Company incurred a Capital Expenditure of Rs.2202.75 lakhs during the year.

DIRECTORS

Section 149 of the Companies Act, 2013 provides for the appointment of Independent Directors on non-rotational basis. Accordingly, Shri K N V Ramani, Shri V Jagadisan and Shri Surinder Chhibber, Independent Directors who are retiring at the ensuing Annual General Meeting are now being reappointed on non-rotational basis for a period of 5 years till 31st March, 2019.

Further, Shri G V S Desikan, Shri M J Vijayaraaghavan and Shri G P Muniappan, Independent Directors who are liable to retire by rotation are now being re-appointed on non-rotational basis for a period of 5 years till 31st March, 2019.

AUDITORS

The present Auditors M/s Gopalaiyer and Subramanian retire at the ensuing Annual General Meeting and are eligible for re-appointment. Cost Audit Report for the financial year ending 31st March 2014 will be submitted to the Central Government in accordance with Cost Audit Report Rules, 2011.

CORPORATE SOCIAL RESPONSIBILITY

The Company is fully aware of its Corporate Social Responsibilities to various stakeholders and has taken appropriate steps to meet the same. With the enactment of Companies Act, 2013, Corporate Social Responsibility has acquired statutory recognition. The Company had already initiated several steps to meet its Corporate Social Responsibilities.

ENVIRONMENT

The Company holds due certification under ISO 14001 : 2004 which is primarily focused on environmental management system. It ensures that the manufacturing of products is carried on without affecting the environment in the working area and surroundings. The Company is a member of Sustainable Apparel Coalition (SAC). SAC provides credible, practical and industry wide guidelines and provides tools to define, measure and evaluate industry''s product environmental and social performance support.

The Company has achieved one of the best scores in the apparel industry as verified by a leading brand assessor.

During the current year, the Company has implemented various environmental measures and reduction program like Green House Gas inventory measurement, replacement of floras gas air conditioners, increasing the area of plantation etc.

The Company has improved effluent water treatment system conforming to the Pollution Control Board parameters. A new plant has been added which has increased the Biological treatment capacity by 60%. An advanced technology of Biological Diffuser Aeration system has been introduced which has resulted in reduction in chemicals usage. Consequently, reduction in sludge, improvement in outlet water quality and consistence and improvement in RO recovery were achieved.

HEALTH AND SAFETY

The Company has obtained certification under OHSAS 18001 : 2007 (Occupational Health and Safety Management Assessment Standard) which is an Integrated Management System focusing on an organization''s 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 continuous manner as per OHSAS-18001 standards and legal requirements.

LEGAL REQUIREMENTS

The Company is conscious of improving the occupational and personal health of its employees. In addition to free medical camps, the Company also organizes employees'' health check up in outside hospitals on an annual basis.

The Company provides a safer work environment for its employees, basic equipments are provided to ensure safety from fire. Awareness classes are being conducted periodically with the help of external agencies about the basic safety, fire fighting, mock drills, mass evacuation first aid etc.,

SOCIAL RESPONSIBILITIES

The Company is maintaining a hospital for serving the community including 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.

CAUTIONARY STATEMENT

The statement in this Directors'' Report & Management Discussion and Analysis contain forward looking statements regarding Company''s 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.

STATUTORY INFORMATION

During the year there were no employees in receipt of remuneration covered by Section 217(2A) of the Companies Act, 1956, read with the Companies (Particulars of Employees) Rules, 1975, as amended vide GSR 289 (E) dated March 31, 2011 [Companies (Particulars of Employees) Amendments Rules, 2011].

Information pursuant to sub-section 1 (e) of Section 217 of the Companies Act, 1956, read with the Companies (Disclosure of Particulars in the Report of the Board of Directors) Rules, 1988 is given in Annexure to this Report.

The Company has presented in this Report, the consolidated financial statements of the holding company and all its subsidiaries, duly audited by the Statutory Auditors. The Company has also disclosed in the Consolidated Balance Sheet the information required to be provided as per the aforesaid Notification dated February 8, 2011. The Company will make available the audited annual accounts and related information of its subsidiaries, upon request by any of its shareholders. The annual accounts of the subsidiary companies will also be kept for inspection by any member at the Registered Office of the Company and its subsidiary companies.

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

On behalf of the Board

Coimbatore KG Baalakrishnan 24.05.2014 Executive Chairman

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Mar 31, 2013

Dear Shareholders,

The have pleasure in presenting the Twenty-First Annual Report of the Company together with the Audited Statement of Accounts for the year ended 31st March 2013.

FINANCIAL RESULTS

(Rs. in lakhs) For the year ended For the year ended PARTICULARS 31st March 2013 31st March 2012

Gross Profit 6115 4735

Less : Finance Cost 2576 2323

Profit prior to Depreciation and write off 3539 2412

Less : Depreciation 1192 1308

Net Profit 2347 1104

Current, Deferred & earlier year tax 794 367

Net Profit for the year 1553 737

Balance Brought forward 433 152

Arrears of Preferential Dividend & Tax thereon 232

Proposed Dividend & Tax thereon 224 224

Balance Carried Forward 1762 433

FINANCE

Your Directors acknowledge with gratitude, the valuable assistance and support extended by our Bankers for term loans and working capital ie., Indian Bank, Bank of India, Allahabad Bank, State Bank of India, State Bank of Hyderabad and Indian Overseas Bank.

PERSONNEL

The Directors wish to place on record their appreciation for the co-operation extended by all sections of the employees.

DIRECTORS’ RESPONSIBILITY STATEMENT

Your Directors confirm that:

a) In the preparation of the annual accounts, the applicable accounting standards had been followed.

b) The Directors had 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 Profit or Loss of the Company for that period.

c) The Directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the Company and for preventing and detecting fraud and irregularities.

d) The annual accounts have been prepared on a going concern basis.

CONSOLIDATED ACCOUNTS

In accordance with the requirements of Accounting Standard (AS-21) prescribed by The Institute of Chartered Accountants of India, the Consolidated Accounts of the Company and its subsidiaries are annexed to this Report.

SUBSIDIARIES

During the year, the gross turnover in Trigger Apparels Limited increased to Rs.38 crores from Rs.31 crores for the previous year. The subsidiary has been able to register a profit of Rs.31.95 lakhs compared to profit of Rs.10.59 lakhs in the previous year. No activity has taken place at KG Denim (USA) Inc. during the year.

CEO/CFO CERTIFICATION

The Managing Directors and Director & Company Secretary of the Company have submitted a Certificate to the Board as required under Clause 49 of the Listing Agreement for the year ended 31st March, 2013.

CORPORATE GOVERNANCE

A separate section on Corporate Governance and a Certificate from the Auditors of the Company regarding compliance of conditions of Corporate Governance as stipulated under Clause 49 of the Listing Agreement with the Stock Exchange, forms part of the Annual Report.

LISTING

The Company’s shares are listed in the Bombay Stock Exchange Limited, Mumbai.

CAPITAL EXPENDITURE

The Company incurred a Capital Expenditure of Rs.3052.46 lakhs during the year.

DIRECTORS

Shri G P Muniappan, Shri M J Vijayaraaghavan and Shri G V S Desikan retire by rotation and being eligible offer themselves for reappointment at the ensuing Annual General Meeting.

The term of office of Shri KG Baalakrishnan, Executive Chairman, Shri B Sriramulu and Shri B Srihari, Managing Directors comes to an end on 02.11.2013. The Board has, subject to approval of shareholders in the forthcoming Annual General Meeting, re-appointed them as Executive Chairman and Managing Directors of the Company for a term of five years effective from 03.11.2013 to 02.11.2018.

AUDITORS

The present Auditors M/s Gopalaiyer and Subramanian retire at the ensuing Annual General Meeting and are eligible for re-appointment. Cost Audit Report for the financial year ending 31st March 2013 will be submitted to the Central Government in accordance with Cost Audit Report Rules, 2011.

Auditors.

The Audit Committee also closely reviews with the internal and external auditors on the adequacy of internal control systems.

The Company has also initiated steps to obtain ISO 27001 : 2005 (Information Security Management System-ISMS) to control and manage our data in secured manner.

The Company further has an Integrated Management System (IMS) in terms of ISO 9001:2008 and is concerned with establishing quality management system to achieve target set by top management and aims at continual improvement based on the customer requirements.

ISO 14001:2004 is primarily focused on environmental management system which guide us to manufacture the products without affecting the environment in the working area and surroundings of our organization. OHSAS 18001 : 2007 (Occupational Health and Safety Management Assessment Standard) which is an Integrated Management System focusing on an organization’s occupational health and safety management system. This standard guide 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.

STATUTORY INFORMATION

During the year there were no employees in receipt of remuneration covered by Section 217(2A) of the Companies Act, 1956, read with the Companies (Particulars of Employees) Rules, 1975, as amended vide GSR 289 (E) dated March 31, 2011 [Companies (Particulars of Employees) Amendments Rules, 2011].

Information pursuant to sub-section 1 (e) of Section 217 of the Companies Act, 1956, read with the Companies (Disclosure of Particulars in the Report of the Board of Directors) Rules, 1988 is given in Annexure to this Report.

As per Section 212 of the Companies Act, 1956, the Company is required to attach the Directors’ Report, Balance Sheet, and Statement of Profit and Loss of subsidiaries. The Central Government has granted general exemption from complying with Section 212 of the Companies Act, 1956 to all companies vide Notification No.5/12/2007-CL-III dated February 8, 2011. Accordingly, your Company has presented in this Report, the consolidated financial statements of the holding company and all its subsidiaries, duly audited by the Statutory Auditors. The Company has also disclosed in the Consolidated Balance Sheet the information required to be provided as per the aforesaid Notification dated February 8, 2011. The Company will make available the audited annual accounts and related information of its subsidiaries, upon request by any of its shareholders. The annual accounts of the subsidiary companies will also be kept for inspection by any member at the Registered Offices of the Company and its subsidiary companies. Our humble prayers to Sri Venkateswaraswamy Vari of Then Thirumalai for the continued prosperity of the Company.

On behalf of the Board

Coimbatore KG Baalakrishnan

29.05.2013 Executive Chairman

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Mar 31, 2012

The have pleasure in presenting the Twentieth Annual Report of the Company together with the Audited Statement of Accounts for the year ended 31st March 2012.

FINANCIAL RESULTS (Rs. in lakhs) For the year ended For the year ended PARTICULARS 31stMarch 2012 31st March 2011

Gross Profit 4735 3887

Less : Finance Cost 2323 1918

Profit prior to Depreciation and write off 2412 1969

Less : Depreciation 1308 1293

Net Profit 1104 676

Current, Deferred & earlier year tax 367 226

Net Profit for the year 737 450

Balance Brought forward 152 -298

Arrears of Preferential Dividend & Tax thereon 232 -

Proposed Dividend & Tax thereon 224 -

Balance Carried Forward 433 152

PERFORMANCE OF THE COMPANY

During the year ended 31.03.2012, the Company achieved an overall production of 229 lakh meters of fabrics against the previous year's production of 241 lakh meters. The revenue for the year was Rs.40007 lakhs as against sales of Rs.34359 lakhs during the previous year, representing an increase of 16 %. The company has three main product groups, Denim and Apparel Fabrics, Home Textiles and sales of Apparel. All the product groups are showing double digit growth levels and have contributed to the profitability of the company.

The Company has been able to improve its profitability on account of higher sales realization. The operating margins were maintained in spite of lower production and increasing power costs.

Our investments in the home textiles category have started paying off as we see large sales to well established retail houses abroad. The recent depreciation of the rupee has helped our garment sales in export markets.

The Board of Directors recommends a dividend of 7.50 % (i.e. Rs.0.75) per equity share of the company for the year 2011-12. The Board further recommends payment of arrears of cumulative preference dividend to erstwhile preference shareholders at the rate of 10 % for the years 2005 to 2007 amounting to Rs.200 lakhs. The Dividend tax payable amounts to Rs.63 lakhs.

INDUSTRY STRUCTURE a DEVELOPMENT

The Indian denim industry continues to enjoy a high growth potential. The domestic as well as international demand is expected to grow. The demand for the denim fabrics is increasing in the domestic market; our sales to both premier international brands operating in India and also to large exporters of readymade garments have increased. The recent financial crisis in Europe has affected our sales in that region. Our sales effort in the South American market has started to yield results, to balance the negative sentiment in Europe. We are seeing sales increase in North America as fashion has favored our products.

OPPORTUNITIES AND THREATS

The Company is expecting higher volumes in denim sale. The Company will continue its focus on home textiles sales and is expected to do well in this segment in the next year. Apparel exports is expected to be maintained at current levels.

The Company is subjected to the risks of volatility in the prices of raw material. Denim sales is highly dependant on fashion. The previous year saw cotton prices reaching a peak of 200 cent/lb and then coming down to 100 cent/lb.

The higher interest rates and the volatility in exchange rates are serious concerns facing the Company. The Company is taking steps to mitigate the effects of cost increases by suitable product mix changes and also by actively managing the exchange risk.

FINANCE

Your Directors acknowledge with gratitude, the valuable assistance and support extended by our Bankers fcr term loans and working capital ie., Indian Bank, Bank of India, Allahabad Bank, State Bank of India, State Bank of Hyderabad and Indian Overseas Bank.

PERSONNEL

The Directors wish to place on record their appreciation for the co-operation extended by all sections of the employees.

DIRECTORS' RESPONSIBILITY STATEMENT

Your Directors confirm that:

a) In the preparation of the annual accounts, the applicable accounting standards had been followed.

b) The Directors had 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 Profit or Loss of the Company for that period.

c) The Directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the Company and for preventing and detecting fraud and irregularities.

d) The annual accounts have been prepared on a going concern basis.

CONSOLIDATED ACCOUNTS

In accordance with the requirements of Accounting Standard (AS-21) prescribed by The Institute of Chartered Accountants of India, the Consolidated Accounts of the Company and its subsidiaries are annexed to this Report.

SUBSIDIARIES

During the year, the gross turnover in Trigger Apparels Limited increased to Rs.31.19 crores from Rs.30.48 crores for the previous year. The subsidiary has been able to register a profit of Rs.10.59 lakhs compared to loss of Rs.68.42 lakhs in the previous year. No activity has taken place at KG Denim (USA) Inc. during the year.

CEO/CFO CERTIFICATION

The Managing Directors and Director & Company Secretary of the Company have submitted a Certificate to the Board as required under Clause 49 of the Listing Agreement for the year ended 31!t March, 2012.

CORPORATE GOVERNANCE

A separate section on Corporate Governance and a Certificate from the Auditors of the Company regarding compliance of conditions of Corporate Governance as stipulated under Clause 49 of the Listing Agreement with the Stock Exchange, forms part of the Annual Report.

LISTING

The Company's shares are listed in the Bombay Stock Exchange Limited, Mumbai.

CAPITAL EXPENDITURE

The Company incurred a Capital Expenditure of Rs.644.27 lakhs during the year.

DIRECTORS

Shri V Jagadisan, Shri Surinder Chhibber and Smt T Anandhi retire by rotation and being eligible offer themselves for reappointment at the ensuing Annual General Meeting.

Shri S Muthuswamy, Director and Company Secretary (Whole-time), term of office came to an end on 29.05.2012. The Board has subject to approval of shareholders in the forthcoming Annual General Meeting, re-appointed him as Director and Company Secretary (Whole-time) of the Company for a term of five years effective from 30.05.2012 to 29.05.2017.

AUDITORS

The present Auditors M/s Gopalaiyer and Subramanian retire at the ensuing Annual General Meeting and are eligible for re-appointment. Cost Audit Report for the financial year ending 31st March 2012 will be submitted to the Central Government in accordance with Cost Audit Report Rules, 2011.

INTERNAL CONTROL SYSTEMS a THEIR ADEQUACY

The Company has put in place adequate internal control system and is implementing the same to ensure reliability of financial and other datas and their accuracy. Company is also strengthening its review control system by appointing External Consultants as Auditors.

The Audit Committee also closely reviews with the internal and external auditors on the adequacy of internal control systems. The Company has also initiated steps to obtain ISO 27001 : 2005 (Information Security Management System-ISMS) to control and manage our data in secured manner.

The Company further has an Integrated Management System (IMS) which consisting of ISO 9001:2008 is concerned with establishing quality management system to achieve target set by top management and continual improvement based on the customer requirements.

ISO 14001:2004 is primarily focused on environmental management system which guide us to manufacture the products without affecting the environment in the working area and surrounding of our organization.

OHSAS 18001 : 2007 (Occupational Health and Safety Management Assessment Standard) which is an Integrated Management System focusing on an organization's occupational health and safety management system. This standard guide 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.

CAUTIONARY STATEMENT

The statement in this Directors' Report & Management Discussion and Analysis contain forward locking statements regarding Company's 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.

STATUTORY INFORMATION

During the year there were no employees in receipt of remuneration covered by Section 217(2A) of the Companies Act, 1956, read with the Companies (Particulars of Employees) Rules, 1975, as amended vide GSR 289 (E) dated March 31, 2011 [Companies (Particulars of Employees) Amendments Rules, 2011].

Information pursuant to sub-section 1 (e) of Section 217 of the Companies Act, 1956, read with the Companies (Disclosure of Particulars in the Report of the Board of Directors) Rules, 1988 is given in Annexure to this Report.

As per Section 212 of the Companies Act, 1956, the Company is required to attach the Directors' Report, Balance Sheet, and Statement of Profit and Loss of subsidiaries. The Central Government has granted general exemption from complying with Section 212 of the Companies Act, 1956 to all companies vide Notification No.5/12/2007-CL-llt dated February 8, 2011. Accordingly, your Company has presented in this Report, the consolidated financial statements of the holding company and all its subsidiaries, duly audited by the Statutory Auditors. The Company has also disclosed in the Consolidated Balance Sheet the information required to be provided as per the aforesaid Notification dated February 8, 2011. The Company will make available the audited annual accounts and related information of its subsidiaries, upon request by any of its shareholders. The annual accounts of the subsidiary companies will also be kept for inspection by any member at the Registered Offices of the Company and its subsidiary companies. Our humble prayers to Sri Venkateswaraswamy Vari of Then Thirumalai for the continued prosperity of the Company.

On behalf of the Board Coimbatore KG Baalakrishnan

07.06.2012 Executive Chairman

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Mar 31, 2011

Dear Shareholders,

We have pleasure in presenting the Nineteenth Annual Report of the Company together with the Audited Statement of Accounts for the year ended 31st March 2011.

FINANCIAL RESULTS (Rs. in lakhs)

For the year ended For the year ended PARTICULARS 31st March 2011 31st March 2010

Gross Profit 3911 3452

Less: Interest 1914 1965

Loss due to exchange variation 4 101

Profit prior to Depreciation and write off 1993 1386

Less:Depreciation 1293 1290

Add : Prior Year Income / (Expenditure) (Net) 19 2

Net Profit 681 94

Current, Deferred, FBT Tax & earlier year tax 231 77

Net Profit for the year 450 17

Balance Brought forward -298 -315

Balance carried forward 152 -298

PERFORMANCE OF THE COMPANY

During the year ended 31.03.2011, the Company achieved an overall production of 241 lakh meters of fabrics against the previous year's production of 229 lakh meters. The sales for the year was Rs.32723 lakhs as against sales of Rs.25851 lakhs during the previous year, representing an increase of 27 %.

The increased turnover coupled with the ability of the Company to pass on the effects of higher raw material prices to the customers helped the company in achieving higher profits for the year.

INDUSTRY STRUCTURE & DEVELOPMENT

The Indian denim industry has consolidated its position in the global denim fabric and garment manufacturing during 2010-11. Its contribution to the nation's GOP has been increasing significantly.

During 2010-11, the domestic as well as export demand continued to show a healthy growth. The processed fabrics, particularly bed linens picked up during the year. Apparel exports increased but were moderately affected by rising input costs.

In the apparel segment, the preference by overseas customers for packaged ready made garments continued to increase.

OPPORTUNITIES AND THREATS

The domestic demand for denim continued to aid the company's growth plans. The company has stepped up its home textiles sales and is expected to do well in this segment in the next year. Apparel exports is expected to be maintained at current levels.

The increase in cotton and yarn prices during 2011-12, the higher interest rates and the volatality in exchange rates are the serious concerns facing the company. The company is taking steps to mitigate the effects of cost increases by suitable product mix changes and also by actively managing the exchange risk.

FINANCE

Your Directors acknowledge with gratitude, the valuable assistance and support extended by our Bankers for term loans and working capital ie., Indian Bank, Bank of India, Allahabad Bank, State Bank of India, State Bank of Hyderabad and Indian Overseas Bank.

PERSONNEL

The Directors wish to place on record their appreciation for the co-operation extended by all sections of the employees.

DIRECTORS' RESPONSIBILITY STATEMENT

Your Directors confirm that:

a) In the preparation of the annual accounts, the applicable accounting standards had been followed.

b) The Directors had 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 Profit or Loss of the Company for that period.

c) The Directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the Company and for preventing and detecting fraud and irregularities.

d) The annual accounts have been prepared on a going concern basis.

CONSOLIDATED ACCOUNTS

In accordance with the requirements of Accounting Standard (AS-21) prescribed by The Institute of Chartered Accountants of India, the Consolidated Accounts of the Company and its subsidiaries are annexed to this Report.

SUBSIDIARIES

During the year, the gross turnover in Trigger Apparels Limited increased to Rs.30.48 crores from Rs.26.37 crores for the previous year. The subsidiary has been able to reduce it losses to Rs.68 lakhs from Rs.150 lakhs in the previous year.

No activity has taken place at KG Denim (USA) Inc. during the year.

CEO/CFO CERTIFICATION

The Managing Directors and Director & Company Secretary of the Company have submitted a Certificate to the Board as required under Clause 49 of the Listing Agreement for the year ended 31st March, 2011.

TRANSFER OF UNCLAIMED DEBENTURE TO IEPF

Pursuant to Section 205C of the Act, all unpaid/ unclaimed mature Debentures and interest thereon, remaining unpaid/ unclaimed for a period of 7 years from the date they became due for payment, have been transferred to the Investors Education and Protection Fund (IEPF) established by the Central Government.

CORPORATE GOVERNANCE

A separate section on Corporate Governance and a Certificate from the Auditors of the Company regarding compliance of conditions of Corporate Governance as stipulated under Clause 49 of the Listing Agreement with the Stock Exchange, forms part of the Annual Report.

LISTING

The Company's shares are listed in the Bombay Stock Exchange Limited, Mumbai.

CAPITAL EXPENDITURE

The Company incurred a Capital Expenditure of Rs.264.67 lakhs during the year.

DIRECTORS

Shri M J Vijayaraaghavan, Shri G V S Desikan and Shri K N V Ramani retire by rotation and being eligible offer themselves for reappointment at the ensuing Annual General Meeting.

AUDITORS

The present Auditors M/s Gopalaiyer and Subramanian retire at the ensuing Annual General Meeting and are eligible for re-appointment. Cost Audit report for the financial year ending 31st March 2011 will be submitted to the Central Government in accordance with Cost Audit Report Rules, 2001.

INTERNAL CONTROL SYSTEMS & THEIR ADEQUACY

Company already holds Certification under ISO 14001 : 2004 and ISO 9001 : 2008 to ensure confirmation of its process procedures to strict quality standard. Company is also strengthening its review control system by appointing External Consultants as Auditors. The Audit Committee also closely reviews with the internal and external auditors on the adequacy of internal control systems.

CAUTIONARY STATEMENT

The statement in this Directors' Report & Management Discussion and Analysis contain forward looking statements regarding Company's 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.

STATUTORY INFORMATION

During the year there were no employees in receipt of remuneration covered by Section 217(2A) of the Companies Act, 1956, read with the Companies (Particulars of Employees) Rules, 1975, as amended vide GSR 289 (E) dated March 31, 2011 [Companies (Particulars of Employees) Amendments Rules, 2011].

Information pursuant to sub-section 1 (e) of Section 217 of the Companies Act, 1956, read with the Companies (Disclosure of Particulars in the Report of the Board of Directors) Rules, 1988 is given in Annexure to this Report.

As per Section 212 of the Companies Act, 1956, the Company is required to attach the Directors' Report, Balance Sheet, and Profit and Loss account of subsidiaries. The Central Government has granted general exemption from complying with Section 212 of the Companies Act, 1956 to all companies vide Notification No.5/12/2007-CL-III dated February 8, 2011. Accordingly, your Company has presented in this Report, the consolidated financial statements of the holding company and all its subsidiaries, duly audited by the Statutory Auditors. The Company has also disclosed in the Consolidated Balance Sheet the information required to be provided as per the aforesaid Notification dated February 8, 2011. The Company will make available the audited annual accounts and related information of its subsidiaries, upon request by any of its shareholders. The annual accounts of the subsidiary companies will also be kept for inspection by any member at the Registered Offices of the Company and its subsidiary companies.

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

On behalf of the Board

KG Baalakrishnan Executive Chairman

Coimbatore 27.05.2011

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Mar 31, 2010

We have pleasure in presenting the Eighteenth Annual Report of the Company together with the Audited Statement of Accounts for the year ended 31st March 2010.

FINANCIAL RESULTS (Rs. in lakhs)

For the year ended For the year ended PARTICULARS 31st March 2010 31st March 2009

Gross Profit 3452 1872

Less: Interest 1965 1978

Loss due to exchange variation 101 277

Profit prior to Depreciation and write off 1386 -383

Less:Depreciation 1290 1306

Add : Prior Year Income/(Expenditure) (Net) 2 20 Net Profit / (Loss) 94 -1709

Current, Deferred, FBT Tax & earlier year tax 77 -493

Net Profit / (Loss) for the year 17 -1216

Balance Brought forward -315 901

Balance carried forward -298 -315

PERFORMANCE OF THE COMPANY

During the year ended 31.03.2010, the Company achieved an overall production of 229 lakh meters of fabrics against the previous years production of 215 lakh meters. The sales for the year ended 31.03.2010 was Rs.25851 lakhs as against sales of Rs.22054 lakhs during the previous year, representing an increase of 17 %.

The company has been able to stem the losses of earlier years and achieve positive results for the year.

INDUSTRY STRUCTURE & DEVELOPMENT

The Indian denim industry occupies an important position in the global denim fabric and garment manufacturing. After China, it has the strongest denim manufacturing base in Asia.

During 2009-10, the Indian denim industry witnessed a surge in demand, particularly, in the domestic market. The exports were partially affected by rise in the value of the rupee. In the processed fabric sector, especially the bed linen demand for US markets showed signs of improvement only towards the end of the year.

In the apparel segment, the preference by overseas customers for packaged ready made garments continued to increase.

OPPORTUNITIES AND THREATS

The domestic demand for denim is growing and the company is focussing on new product developments in this segment. The company is also concentrating on increase sale of its home textiles. Apparel exports is expected to grow significantly in the next year. The increase in cotton and yarn prices in the beginning of 2010-11, the higher interest rates and the volatality in exchange rates are the serious concerns facing the company. The company is taking steps to mitigate the effects of cost increases by suitable product mix changes and also by actively managing the exchange risk.

SEGMENT WISE PERFORMANCE

The segment wise results are presented in item 2.19 of the Notes on Accounts. Both fabric and Apparel division have done well during the year in terms of volume and profitability.

Sales of denim fabrics in domestic market increased in this year. The exports were maintained at previous year levels. The sales of processed fabrics, including home textiles were also maintained. However, the order position for home textiles improved in the last quarter of the year. The company also augmented its income by doing job work for processed fabrics for outsiders.

In the apparel segments, the sales nearly doubled with improved profitability aided by the customer preference for packaged garments.

The higher sales volume and lower cotton and yarn costs helped in posting positive results for the year, 2009-10.

FINANCE

Your Directors acknowledge with gratitude, the valuable assistance and support extended by our Bankers for term loans and working capital ie., Indian Bank, Bank of India, Allahabad Bank, State Bank of India, State Bank of Hyderabad, State Bank of Indore and Indian Overseas Bank.

PERSONNEL

The Directors wish to place on record their appreciation for the co-operation extended by all sections of the employees.

DIRECTORS RESPONSIBILITY STATEMENT

Your Directors confirm that:

a) In the preparation of the annual accounts, the applicable accounting standards had been followed.

b) The Directors had 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 Profit or Loss of the Company for that period.

c) The Directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the Company and for preventing and detecting fraud and irregularities.

d) The annual accounts have been prepared on a going concern basis.

CONSOLIDATED ACCOUNTS

In accordance with the requirements of Accounting Standard (AS-21) prescribed by The Institute of Chartered Accountants of India, the Consolidated Accounts of the Company and its subsidiaries are annexed to this report.

SUBSIDIARIES

The Annual report of the Subsidiaries of the Company Viz., Trigger Apparels Limited and KG Denim (USA) Inc., is annexed to this report. Trigger Apparels Limited is expected to consolidate its market position with improved sales and profitability during the next year. No activity has taken place at KG Denim (USA) Inc. during the year.

CEO/CFO CERTIFICATION

The Managing Directors and Director & Company Secretary of the Company have submitted a certificate to the Board as required under Clause 49 of the Listing Agreement for the year ended 31st March, 2010.

CORPORATE GOVERNANCE

A separate section on Corporate Governance and a Certificate from the Auditors of the Company regarding compliance of conditions of Corporate Governance as stipulated under Clause 49 of the Listing Agreement with the Stock Exchange, forms part of the Annual Report.

LISTING

The Companys shares are listed in the Bombay Stock Exchange Limited, Mumbai.

CAPITAL EXPENDITURE

The Company incurred a capital expenditure of Rs.132.63 lakhs during the year.

DIRECTORS

Shri Surinder Chhibber, Smt T Anandhi and Shri G P Muniappan retire by rotation and being eligible offer themselves for reappointment at the ensuing Annual General Meeting.

AUDITORS

The present Auditors M/s Gopalaiyer and Subramanian retire at the ensuing Annual General Meeting and are eligible for re-appointment. Cost Audit report for the financial year ending 31st March 2010 will be submitted to the Central Government in accordance with Cost Audit Report Rules, 2001.

INTERNAL CONTROL SYSTEMS & THEIR ADEQUACY

Company already holds Certification under ISO 9002 and ISO 14001 to ensure confirmation of its process procedures to strict quality standard. Company is also strengthening its review control system by appointing External Consultants as Auditors.

The Audit Committee also closely reviews with the internal and external auditors on the adequacy of internal control systems.

CAUTIONARY STATEMENT

The statement in this Directors Report & Management Discussion and Analysis contain forward looking statements regarding Companys projections & expectations and the actual results could differ materially from those expressed on account various factors like raw material prices, change in demand, government regulation etc., and the readers are cautioned against placing undue reliance on the same.

INFORMATION PURSUANT TO SECTION 217 OF THE COMPANIES ACT, 1956.

The information required as per Section 217 (1) (e) of the Companies Act, 1956 read with the Companies (Disclosure of Particulars in the Report of the Board of Directors) Rules, 1988 is enclosed. The particulars of employees covered under Section 217 (2A) of the Companies Act, 1956 during the period under review is enclosed.

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

On behalf of the Board Coimbatore KG Baalakrishnan 26.05.2010 Executive Chairman