Kitex Garments Limited (L 18101KL1 992PLC006528) P. B. No . 5, Kizhak kam balam - 683562, Alwaye, Kochi, Kerala Phone: 91 484 4142000, Fax: 91 484 2 680604 rme nts.com website: www.kitexgarments.com Email: kg l@kitexga KGL/26 th A GM/investor_presentations_2018 July 28, 2018 The Secretary The Secretary BSE Limited National Stoc k Exchange of India Ltd Corporate Relationship Dept, 1 st Floor, Exchange Plaza, C-1 Block G New Trading Ring, Rotunda Building, Bandra Kurla Compl ex, P.J. Towers, Dalal Street, Bandra East, Mumbai – 400051, Fo rt M umba i – 400001, Maharashtra Mahar ashtra Scrip Code: 521248 Scrip Code: KITEX ADE DURING THE 26 TH ANNUAL GENERA L MEETING Sub: PRESENTAT IONS M (‘AGM’) OF THE COMPANY HELD TODAY esentations made during the 26 th AGM of the Company held Please find enclosed the pr today for your infor mation and records. This will also be made available on the c ompany’s website viz., www .k itexgarment s.com Thanking you, Fo r Kitex Garments Limited Digitally signed by JACOB SABU JACOB SABU MECKAMKU MECKAMKUNNEL Date: 2018.07.28 NNEL 15:27:34 +05'30' Sabu M. Jacob Chairman and Managing D irector Enclosure: As abov e
26 th Annual General Meeting 28 th July 2018 Kitex Garments Limited Investor Presentation
Table of contents 03 Performance snapshot Our strengths 09 Roadmap 2025 q 15 M arket overview q Strategic roadmap q Project status Performance forecast 27 Disclaimer: Statements in this report that describes the company objective , projections, estimates, expectation or prediction of the future may be “ forward looking statements “ within the meaning of applicable securities laws and regulations. Company cautions that such statements involve risks and uncertainty and that actual result could differ 2 materially from those expressed or implied.
Performance Snapshot
Revenue & PBT – 10 year track record Revenue (in INR crores) 566 560 548 525 456 318 321 273 261 202 08-09 09-10 10-11 11-12 12-13 13-14 14-15 15-16 16-17 17-18 Profit Before Tax (%) 30.2% 26.9% 26.0% 19.4% 19.2% 13.7% 12.6% 12.0% 10.2% 7.9% 08-09 09-10 10-11 11-12 12-13 13-14 14-15 15-16 16-17 17-18 4
Returns to shareholders – 10 year track record 160% 150% 150% 150% 140% 125% 120% 100% 100% 80% 80% 60% 60% 40% 40% 30% 25% 20% 20% 0% 07-08 08-09 09-10 10-11 11-12 12-13 13-14 14-15 15-16 16-17 17-18 In FY 2017-18: Bonus shares issued @ 2:5 5
Major Events that Impacted FY 2016-17 & FY 2017-18 The J ockey M anagement decided to withdraw a product that was manufactured using technology of NASA USA due to lack of M arketing in 2016-17 Business with J ockey Toys R Us, a 61 year old company with Automation project was not over 1200 stores worldwide which was a successful as the U.S major client of Kitex, filed for liquidation Toys R Us manufacturer was unable to Automation in M arch 2018. deliver the Automation requirement GST During the year 2017-18 the roll out of Goods and Service tax resulted in reduction of export benefits 6
Key events impacting revenue from operations FY 2016-17 Automation of M anufacturing process Business with J ockey v v The Jockey M anagement decided to withdraw a product The automation of manufacturing process was placed that was manufactured using T echnology from NASA with the leading automation vendor from the USA this USA due to lack of M arketing in 2016-17 was not successfully delivered v v This has impacted the long term growth projections It was to contribute 15% increase in production made earlier capacity Shortfall from Planned capacity Total Impact on Revenue: INR 55 Crores Increase for Half year (7.5%) : INR 31 Crores M itigation plan But for the Impact, the Revenue (in INR crores) would have been Business with J ockey 700 634 v The capacities were allotted to other clients 566 600 525 Automation of M anufacturing process 456 500 400 v The Vendor has been able to successfully test the 321 318 automation to the extent of 25% and the delivery is 273 261 300 expected during the end of September 2018 202 200 v For the Balance 75%, the manufacturer is hopeful to 100 deliver the automation by M arch 2019. However the capacity addition on account of this is not considered 0 for the growth estimates 08-09 09-10 10-11 11-12 12-13 13-14 14-15 15-16 16-17 7
Key events impacting revenue from operations FY 2017-18 Bankruptcy of Toys R Us Goods and Services Tax v v Decrease in Duty Drawback from 7.60% to 1.90% T oys R Us, a 61 year old company with over 1200 stores impact of 5.70% on Revenue and profit worldwide filed for liquidation in M arch 2018 v v Refund of State Levies (ROSL) reduced from 3.20% to This lead to a drop 25 cr. for the year 1.40% Impact of 1.80% on Revenue and profit v The Provision made for receivable at 3.27Cr impacted v Service Tax Refund of 0.21% discontinued impact of profits 0.21% on Revenue and profit Total Impact on Revenue & Profits (7.71% ): INR 17.42 Crores Estimated impact on revenue: INR 25 Crores But for the Impact, the Revenue (in INR crores) would M itigation plan have been GST 800 v This is a national tax policy which has impacted the 676 700 entire textile industry. The management has taken 634 566 steps to increase the efficiency of plants to minimize 600 525 the impact 456 500 Bankruptcy of Toys R Us 400 321 318 273 v 261 The company has secured an agreement with T oys R 300 202 Us for direct sale of T oys R US branded M erchandise 200 in the USA on a royalty basis 100 v Attorney’s were engaged and the US Bankruptcy 0 court has already allocated interim relief of 22.50% 08-09 09-10 10-11 11-12 12-13 13-14 14-15 15-16 16-17 17-18 v The capacities were allotted to other clients 8
Our Strengths
Our team M r. Donnie Hodge - President & COO , Kitex USA LLC � M r. Donnie Hodge is an accomplished executive with 40 years experience in Apparel Industry. M r. Hodge’s Previous executive positions include COO of Gerber Childrenswear LLC, President and COO of Knights Apparel Inc., S r. VP- Strategic Planning and Executive member of JP Stevens and its successor West Point Stevens. With his understanding of business dimensions like operations, management, manufacturing, marketing and supply chain he has helped to orchestrate the advancement of these companies. He is also is a regular guest speaker at Business schools across USA M r. Christian Strahm - Vice President M anufacturing , Kitex Garments Limited � M r. Christian Strahm has been associated with Kitex since 2009 and bring to his position a well established background in technology, production, Quality and process engineering. A mechanical engineer by qualification with 45 years of global experience in Engineering, M r S trahm is the Founder of Santex AG and Strahm T extile S ystems AG in S witzerland. He is also dignified winner of Branco Weiss prize and S witzerland’s entrepreneur of the year award. New Chief Financial Officer (CFO) � New Chief Financial Officer (CFO) has been identified. He is an accomplished professional from one of the BIG 4 accounting firms with an experience of 13 years. The appointment will be considered in the next Board meeting. 10
Our partners KPM G has been engaged as the strategic consultants and knowledge partners designing our long term Growth Strategy and handholding during it’s implementation BDO shall be appointed as the Audit and Assurance service provider subject to shareholders’ approval 11
Kitex: the trusted brand Kitex has consistently taken part in audits/certifications to assure clients of the quality and safety of products and manufacturing process M anufacturing performance Chemical and Product safety: Certified benchmarking: Adoption of Supplier ‘Class I’ for compliance to ‘Oeko-Tex Standard 100’ standards Qualification Program standards Safe, Lawful, humane and Ethical Organic status of textiles: Compliance to manufacturing: Platinum level Global Organic Textile Standard (GOTS) certification by Worldwide Responsible Accredited Production (WRAP) Member of the Supplier Compliance M ember of Sedex Audit Network High standards of workplace Secure and E fficient supply chain: Rated conditions, in accordance with industry standards and best practices: ‘Low Risk’ (best possible rating) by Global Confirmation to requirements of Security Verification Workplace Conditions Assessment 12
Kitex USA LLC The U.S. M anagement team 13
Infrastructure- Kitex USA LLC Design Studio Office infrastructure Creative design team 14
Road map 2025
Market overview
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