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The Quotient is Trending is Trending Quotient Quotient is Trending ANNUAL REPORT 2017-2018 In this report Corporate Overview Statutory Reports 2 About KKCL 44 Management Discussion & Analysis 4 Our Footprint 52 Directors’ Report and Annexure 6 Our Product Portfolio 80 Report on Corporate Governance 8 Our Brands 100 Business Responsibility Report 10 Marketing Campaigns Standalone Financial Statements 12 From the Chairman’s Desk 114 Independent Auditors’ Report 14 Key Performance Indicators 120 Balance Sheet 16 Opportunities and Competitive Advantages 121 Statement of Profit & Loss 22 The Quotient of STYLE 122 Cash Flow Statement 24 The Quotient of VALUE 124 Statement of Change in Equity 26 The Quotient of GROWTH 125 Notes to Financial Statements 28 The Quotient of COMPETENCY Consolidated Financial Statements 30 Board of Directors 176 Independent Auditors’ Report 32 People Initiatives 180 Balance Sheet 35 Achievements 181 Statement of Profit & Loss 36 Corporate Information 182 Cash Flow Statement 184 Statement of Change in Equity 185 Notes to Financial Statements Our Brands Key highlights FY 2018 107,574 45,698 7,325 2,144 25 states MRP TURNOVER NET TURNOVER PROFIT AFTER TAX EMPLOYEES PRESENCE (J in lakhs) (J in lakhs) (J in lakhs) The K-quotient is trending India is a country driven by its youth. A nation led by its young and vibrant deserves a brand that resonates its character. KKCL’s trendsetting, niche and bold offerings symbolise the youth of India, making us one of the most popular and preferred clothiers in the country. Our brand proposition is essentially a multiple that adds style, value, growth and accessibility to fashion. This multiple, or the ‘K-quotient’, is what sets us apart and drives us. We have a strong resolve to democratise India’s fashion scenario and are characterised by a global outlook with a homegrown attitude. In everything we do, we ensure that the ultimate value offered by the K-quotient is reflected and delivered. KEWAL KIRAN CLOTHING LIMITED About KKCL The world of style. The world of KKCL. Kewal Kiran Clothing Limited (KKCL) was founded in 1992 with the goal of establishing a world-class house of fashion. Today, KKCL is one of the largest branded apparel manufacturers in India. We design, manufacture and market branded denim wear, in addition to a wide range of semiformal and casual wear. A proud owner of some iconic apparel brands in India, such as Killer, Easies, LawmanPg3 and Integriti, KKCL is constantly innovating and evolving to meet the sartorial requirements of individuals across all age groups. 2 Corporate Overview 1-36 Statutory Reports 44-107 Financial Statements 114-238 Vision Mission To be a world-class business We will become world-class business organisation by: organisation which enables • Driving excellence through its people, business partners and the value, best services and other stakeholders enhancement of net worth for all the stakeholders. • Focusing on consumer satisfaction and executing the customer-centric business module • Adopting international standards and best practices in every business operation • Executing the business based on the following three core growth principles: → Stability: We aim to maintain steadiness in performance, thereby enabling the ability to withstand a temporary problem. → Sustainability: We focus on diversity and productivity in all operations of the business which leads to minimum impact of adverse business environment on the Company’s business operations. → Scalability: Our focus is to build systems and process in such a manner that enables the Company to accommodate future business growth. Values Ethos We run the business within our Passion and Seamlessness set frameworks of operating long-term vision We work together across functional, principles which exhibit morality We strive hard with passion and geographical and hierarchical levels to and rightness. Ethical practices pain to meet and set the industry’s achieve our business objectives. We are the base of our business benchmarks in all systems and exhibit openness, teamwork, shared operations. processes and thereby to give responsibilities, and collaborative a delightful experience to our approach in our day-to-day functioning. stakeholders. Our aim is to cultivate the culture where every stakeholder shall have a long term vision and all shall work in cohesive team to achieve our shared long term vision. Respect and humility Every stakeholder including employees, Generous thoughts vendors, business partners is treated We are accountable towards with great respect and humbleness and stakeholders and society. We are liberal admits what they do not know, actively in giving back to the stakeholders to listen to idea/suggestion from people at whom we are always committed. We all levels. Let their work speak instead work with them for the upliftment of of talking about it. society. Annual Report 2017-18 3 KEWAL KIRAN CLOTHING LIMITED Our Footprint An indomitable brand presence 318 209 25 STORES CITIES AND TOWNS STATES PRESENCE KKCL has a strong sales and distribution network diversified across the nation, spanning over 209 cities and towns. The Company has also established its presence through more than 318 stores and through leading ecommerce platforms. Moreover, the Company has forayed into international markets, with a robust consumer base in Asia, Middle East and the Commonwealth of Independent States (CIS). 4 Corporate Overview 1-36 Statutory Reports 44-107 Financial Statements 114-238 Manufacturing Locations Mumbai (Maharashtra) Vapi (Gujarat) Daman 1 Number of stores within the state 2 1 1 3 1 53 10 1 11 70 1 15 15 17 12 14 Odisha 43 23 2 2 6 9 4 1 Annual Report 2017-18 5 KEWAL KIRAN CLOTHING LIMITED Our Product Portfolio Exquisite styles, reimagined KKCL caters to the continuously evolving demands of the youth of today through its plethora of apparel and accessories. The brand offers a wide range of comfortable and superior-quality clothing and chic accessories, tailor- made for a diverse consumer category. Our branded lifestyle products, ranging from daily casual wear to party and office wear, are made available at affordable price points, affirming our strong market position. Our product categories Denim Shirts Trousers 6 Corporate Overview 1-36 Statutory Reports 44-107 Financial Statements 114-238 T-Shirts Shoes Eyewear Watches Wallets and Belts Deodorants Annual Report 2017-18 7 KEWAL KIRAN CLOTHING LIMITED Our Brands Home-grown labels, Out-of-the-world value KKCL carved a niche for itself by creating an arena for its popular homegrown brands. This unconventional step has propelled the Company’s success, making it a nationally and globally recognised name in the branded apparel industry. Iconic brands from KKCL Killer Killer, the flagship brand of KKCL, imbibes in it the imagination of today’s youth with its international feel and a unique style quotient. The brand represents the rebellious nature of today’s youth through its innovative jeans designs and trendsetting denim collection. LawmanPg3 LawmanPg3 is the modish brand of KKCL that is marked with a rich glamour quotient. The brand specialises in trendy denim and party wear for the very young to the ageing adult. 8 Corporate Overview 1-36 Statutory Reports 44-107 Financial Statements 114-238 Integriti The Integriti brand represents the energetic youthful spirit. Its style and affordable pricing have made the brand a preferred choice of youth. The brand ensures a complete package of fine-quality casual, semiformal and formal wear. Easies Easies is changing the face of corporate fashion in India through its range of semiformal menswear made of high-end quality fabric. Jeans, trousers, chinos, T-shirts, shirts and jackets manufactured under this brand are trendy and comfortable. Addictions Addictions, the accessories wing of KKCL, makes lifestyle products such as deodorants, watches, wallets, belts and inner wear. This segment of the business has attracted a large audience in terms of its varied stylish offerings. K-Lounge K-Lounge stores showcase apparel and other accessories from KKCL’s brand stable. It is a one-stop-shop solution for fashion-concious consumers. Annual Report 2017-18 9 KEWAL KIRAN CLOTHING LIMITED Marketing Campaigns Partnering and featuring with the best To further our brand recognition and brand presence, we have partnered and featured with leading media platforms such as Bollywood movies, renowned magazines and large-scale event sponsorships. KKCL in media LawmanPg3 • LawmanPg3 was the Star Partner for the movie • The Exhibit magazine cover of 2017 showcased Rana ‘Munna Michael’ starring Tiger Shroff. Daggubatti sporting LawmanPg3 attire. • The CineBlitz Magazine featured the brand • LawmanPg3 was the title sponsor for the premier event – name on its cover of the 2017 issue. The cover Holi Reloaded 2017 – organised in Mumbai. presented Bollywood stars Kriti Sanon and • LawmanPg3 was an official sponsor of the Gujarat Lions Siddharth Malhotra posing in LawmanPg3 cricket team in the Indian Premier League (IPL) season for outfits. two consecutive years in 2016 and 2017. 10 Corporate Overview 1-36 Statutory Reports 44-107 Financial Statements 114-238 Killer Integriti • KKCL is the franchise owner of the team ‘Goa • The ‘Reckless’ collection was launched by Integriti in Killer’ in Box Cricket League (BCL), where Bhubaneswar at the Fashion Runway, a fashion show. celebrities compete in an indoor cricket game. • Integriti inaugurated Integriti Dance Music (IDM) with • Killer was the presenting sponsor of BCL Diego Miranda at the Bits Pilani Goa EDM Fest. Season 3, which was telecast on the television • Integriti and IDM together organised the world’s biggest channel MTV. guest list festival – Guestlist4good, an event with DJ Hardwell and his United We Are Foundation. Annual Report 2017-18 11 KEWAL KIRAN CLOTHING LIMITED From the Chairman’s Desk A year of sustained performance During the year, the Company achieved total revenue of ` 483.01 crores and Profit after Tax (PAT) of ` 73.25 crores on a consolidated basis.