Tanishk_Ojha DRHP Notes - Nov 2006 We are a forty five year old diversified company, headquartered at Gangaikondan in the Tirunelveli District of the southern Indian state of Tamil Nadu and engaged in the activities of Wheat Flour milling, production of Cotton Yarn and Sheet Metal Fabrication. We have a registered trademark "Kuthuvillaku" which is used for products marketed by our flour and textile divisions. The wheat flour products like maida, sooji and atta for human consumption and bran used as cattle feed are sold under the Kuthuvilakku brand both in bulk and retail packets. Our flour division manufactures wheat flour and markets it extensively in the South and Central regions of the states of Tamil Nadu and Kerala. Our textile division manufactures cotton yarn which it markets primarily to clothing units in Maharashtra and Tamil Nadu and exports to East Asian countries such as Korea, Malaysia and Singapore. We are proposing to expand the scope of our sheet metal operations through the acquisition of Eltex Super Castings Ltd. and restarting of Eltex's foundry units. We will cater to the demands of leading domestic automotive and engineering companies as well as revive the European business of Eltex. The Company has a sheet metal fabrication facility at Coimbatore to cater to the needs of OEMs like LMW, Elgi, etc. Presently the operations of this division are very small compared to the food and textile division. The company has proposed to strengthen this division by acquiring a substantial stake in Eltex Super Castings Ltd, which is a foundry unit located adjacent to our present engineering division The Company established an Engineering Division in the year 1978 for the manufacture of Sheet Metal products to cater to the requirements of textile machinery and other capital goods manufacturers. Since 2001, the Company ceased to operate the unit on its own and instead, the fabrication facilities had been leased out to Mr. R. Soundararaju who was conducting the fabrication activities and catering to the existing customers of KLRF. As per the agreement, KLRF earned Rs. 1,75,000/- per month as lease charges. This agreement has expired on 30/09/2006. From 01/10/2006, we have taken over the operations of this division and are running it ourselves. The flour milling division milled 42,190 tons of wheat in the year 2005-2006. This accounted for 51.18% of the turnover of the company. The textile division produced 48,16,383 kgs of cotton yarn valued at Rs. 46.13 crores which contributed to 48.82% of the turnover of the company in 2005-2006. An investment of Rs. 375.00 lakhs has been made to optimize spinning productivity and to achieve flexibility in processing capabilities during 2005-2006. Mr. V. Jagannathan, one of the directors of Eltex, is the father of Mr. Suresh Jagannathan, the present promoter of our Company. Mr. V. Jagannathan is not on the Board of KLRF nor is associated with KLRF in any other way except his shareholding in KLRF. KLRF had agreed to acquire the shareholding of Mr. V. Jagannathan in Eltex and had accordingly made the public announcement for the remaining shareholders of Eltex.
