Kakatiya Textiles Ltd.
|BSE: 521054||Sector: Industrials|
|NSE: N.A.||ISIN Code: INE092E01011|
|BSE LIVE 09:55 | 05 Jun||Stock Is Not Traded.|
|NSE 05:30 | 01 Jan||Stock Is Not Traded.|
|BSE: 521054||Sector: Industrials|
|NSE: N.A.||ISIN Code: INE092E01011|
|BSE LIVE 09:55 | 05 Jun||Stock Is Not Traded.|
|NSE 05:30 | 01 Jan||Stock Is Not Traded.|
Your Directors are delighted to present their 34th Annual Report of the Company for thefinancial year 2015-16 along with the audited accounts for the financial year ended March31 2016.
On account of the accumulated losses before exceptional & extra ordinary items andtax your Directors do not recommend any dividend for the year ended 31st March 2016.
TRANSFER TO RESERVES
Due to the accumulated losses before exceptional & extra ordinary items thecompany is unable to transfer any amount to its reserves.
During the financial year 2015-16 the present Promoters of the company have enteredinto a Share
Purchase Agreement with the erstwhile promoters on 4th May 2015 and have acquired50.47 % of the total Equity Share Capital and 50.70 % of the total voting power. In thisregard the promoters have provided an Open Offer to acquire shares as required under theSEBI (Substantial Acquisition of Shares and Takeovers) Regulations 2011 and have compliedwith the various applicable regulations.
TRANSFER OF UNCLAIMED DIVIDEND TO INVESTOR EDUCATION AND PROTECTION FUND
Since the Company has not declared any dividends there is no unclaimed dividend to betransferred to Investor Education and Protection Fund.
BOARD MEETINGS CONDUCTED DURING THE PERIOD UNDER REVIEW
The meetings of the board are scheduled at regular intervals to decided and discuss onbusiness performance policies strategies and other matters of significance.
In certain exigencies decisions of the board are also accorded through circulation.
The Company had conducted Five (5) Board meetings during the period under review. Theintervening gap between any consecutive board meetings was within the period prescribedunder the provisions of the Companies Act 2013.
DIRECTORS' RESPONSIBILITY STATEMENT
Pursuant to the requirement under Section 134 (3) (c) of the Companies Act 2013 withrespect to
Directors' Responsibility Statement it is hereby confirmed that:
(a) in the preparation of the annual accounts the applicable accounting standards hadbeen followed and there are no material departures from those standards;
(b) the directors had selected such accounting policies and applied them consistentlyand made judgments and estimates that are reasonable and prudent so as to give a true andfair view of the state of affairs of the company at the end of the financial year and ofthe loss of the company for that period;
(c) the directors had taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of this Act for safeguarding theassets of the company and for preventing and detecting fraud and other irregularities;
(d) the directors confirm that the annual accounts have been prepared on a goingconcern basis;
(e) the directors have laid down internal financial controls to be followed by theCompany and that such internal financial controls are adequate and operating effectivelyand
(f) the directors had devised proper systems to ensure compliance with the provisionsof all applicable laws and that such systems were adequate and operating effectively.
DECLARATION OF INDEPENDENT DIRECTORS
The Company has received declarations from all the Independent Directors of the Companyconfirming that they meet the criteria of independence as prescribed under the CompaniesAct 2013.
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's Policy relating to appointment of Directors payment of Managerialremuneration
Directors' qualifications positive attributes independence of Directors and otherrelated matters as provided under Section 178(3) of the Companies Act 2013 is furnishedon the Company's website www.kakatiyatextiles.in.
PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS MADE UNDER SECTION 186 OF
THE COMPANIES ACT 2013
The Company has not granted any loans or given any security or made any investmentspursuant to the provisions of Section 186 of the Companies Act 2013 during the year underreview.
PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES
All transactions entered into with related parties during the financial year 2015-16were in the ordinary course of business and on an arm's length basis. Since there are notransactions which are not on arm's length basis and material in nature the requirement ofdisclosure of such related party transactions in Form AOC-2 does not arise.
The policy on related party transactions as approved by the Board of Directors of theCompany has been uploaded on the company's website and may be accessed through the websiteat www.kakatiyatextiles. in
EXTRACT OF ANNUAL RETURN
The extract of Annual Return in the prescribed Form No.MGT-9 pursuant to Section 92(3)read with Rule 12 of the Companies (Management and Administration) Rules 2014 isfurnished as Annexure-I and is attached to this Report.
The Board of directors based on the recommendation of the audit committee has appointedM/s. Cherukuri & Co Chartered Accountants as the Internal Auditors of the company.The internal auditors are submitting their report on quarterly basis.
The erstwhile auditors of the company M/s. S. Murali Dharan & Co CharteredAccountants have expressed their unwillingness to continue as the Statutory Auditors atthe 33rd annual general meeting held on 29.09.2015. Subsequently based on therecommendation of the board the members have appointed M/s. Chevuturi AssociatesChartered Accountants (FR No. 000632S) as the Statutory auditors of the company vide 33rdAnnual General Meeting held on 29.09.2015 for a period of 5 years from the conclusion ofthe said general meeting till the conclusion of the 38th Annual General Meeting to be heldin the year 2020 subject to the ratification of the members annually.
The Statutory auditor's report does not contain any qualifications reservations oradverse remarks.
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 hasappointed M/s. P.S. Rao &
Associates Company Secretaries to undertake the Secretarial Audit of the Company. Thereport of the Secretarial Audit is annexed herewith as Annexure-II to this report.
NATURE OF BUSINESS
There were no changes in the nature of business of the company.
MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANCIAL POSITION OF THE COMPANY
There have been no material changes and commitments affecting the financial position ofthe Company which has occurred between the financial year ended 31st March 2016 and thedate of the report.
STATEMENT CONCERNING DEVELOPMENT AND IMPLEMENTATION OF RISK MANAGEMENT POLICY OF THECOMPANY
The Company has a structured risk management policy. The Risk management process isdesigned to safeguard the organization from various risks through adequate and timelyactions. It is designed to anticipate evaluate and mitigate risks in order to minimizeits impact on the business. The potential risks are inventoried and integrated with themanagement process such that they receive the necessary consideration during decisionmaking
WHISTLE BLOWER POLICY (VIGIL MECHANISM)
The Company has formulated a whistle blower policy in line with the provisions ofSection 177 of the Companies Act 2013 and Regulation 22 of the SEBI ((Listing Obligationsand Disclosure Requirements) Regulations 2015 to enable the directors and employees toreport concerns about unethical behavior actual or suspected fraud or violation of thecompany's code of conduct or ethics policy. The policy also provides for adequatesafeguards against victimization of director(s) / employee(s) who avail of the mechanismand also provides for direct access to the Chairman of the Audit Committee in exceptionalcases. The Whistle Blower policy has been uploaded on the company's website atwww.kakatiyatextiles. in.
ANNUAL EVALUATION OF THE BOARD ON ITS OWN PERFORMANCE AND OF THE INDIVIDUAL DIRECTORS
In accordance with the criteria suggested by the Nomination and Remuneration Committeethe Board of Directors evaluated the performance of the Board having regard to variouscriteria such as Board composition Board processes Board dynamics etc. The IndependentDirectors at their separate meetings also evaluated the performance of non-independentdirectors and the Board as a whole based on various criteria.
The performance of each Independent Director was evaluated by the entire board ofdirectors on various parameters like engagement leadership analysis decision makingcommunication governance etc. The Board and the Independent Directors were of theunanimous view that performance of the Board of Directors as a whole was satisfactory.
The performances of all the Committees were evaluated by the Board having regard tovarious criteria such as committee composition committee processes committee dynamicsetc. The Board was of the unanimous view that all the committees were performing theirfunctions satisfactorily.
DIRECTORS' & KEY MANAGERIAL PERSONNEL
During the financial year under review the Members at the Annual General Meeting heldon 29th
September 2015 have approved the appointment of Shri. G Venkata Subba Rao & Dr.Kudary Anand as the Independent Directors of the Company for a period of 5 years. At thesaid meeting the members have also approved the appointment of Shri. Vanka Ravindra Nathand Smt. Vanka Raja Kumari as Directors of the Company who were appointed as AdditionalDirectors by the board on 13th August 2015.
Further based on the recommendation of the Nomination and remuneration committee theBoard vide its meeting held on 26.05.2016 has appointed Shri. Mohammed Alisha Shaik asManager of the company in terms of Section 203 of the Companies Act 2013. In terms of theprovisions of Section 196 of the Companies Act 2013 the appointment of manager needs tobe approved by the shareholders. The Board recommends the approval of the appointment ofthe manager as mentioned above.
Shri. Vanka Ravindra Nath Director of the Company retires by rotation at the ensuingAnnual General Meeting and expressed his willingness to reappoint as the Director of theCompany.
Your Directors recommend his re-appointment.
During the year under review the following directors and key managerial personal haveresigned from the board:
1. Shri. Sumanth Ramamurthi who was liable to retire by rotation at the 33rd annualgeneral meeting has expressed his unwillingness to re-appoint and has ceased from theboard since 29.09.2015.
2. Smt. Hemalatha Ramamurthi who was appointed as the additional director was ceasedas director at the 33rd annual general meeting.
3. Shri. CSK Prabhu Shri. I Venkat Rao and Shri.S S R Koteswara Rao have tenderedtheir resignation and were ceased to be director's w.e.f 30.09.2015.
4. Shri. R Narayanan who was the chief financial officer of the company has tenderedhis resignation on 30.09.2015.
COMPOSITION OF BOARD COMMITTEES
We have in place of all the committees of the board which are required to beconstituted under the Companies Act 2013 and SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015.
The Composition of various committees of the Board is hereunder:
Since the Company has not accepted any fixed deposits covered under Chapter V of theCompanies
Act 2013 there are no deposits remaining unclaimed or unpaid as on 31st March 2016and accordingly the question of default in repayment of deposits or payment of interestthereon during the year does not arise.
EROSION OF NETWORTH
As at 31st March 2016 your Company had a negative net worth of Rs. 262.56 lakhs. YourDirectors believe that the Company's net worth could become positive if the favourablebusiness trend continues for some time. Therefore the sickness status has not beenreferred to BIFR.
DETAILS OF SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS ORTRIBUNALS IMPACTING THE GOING CONCERN STATUS AND COMPANY'S OPERATION IN FUTURE
There is no significant and material order passed by the regulators or courts ortribunals impacting the going concern status and company's operation in future.
INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY
The Company has adequate internal control systems to monitor internal business processfinancial reporting and compliance with applicable laws. The Company periodically reviewsthe adequacy and effectiveness of the control systems.
The Audit committee of the Board reviews internal control systems and their adequacysignificant risk areas observations made by the internal auditors on control mechanismand the operations of the company recommendations made for corrective action and theinternal audit reports. The committee reviews with the statutory auditors and themanagement key issues significant processes and accounting policies.
PARTICULARS OF EMPLOYEES
The information required pursuant to Section 197 read with Rule 5 (1) of the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 and as amended inrespect of our employees is attached herewith as Annexure-III.
Further we do not have any employee whose remuneration falls within the purview of thelimits prescribed under the provisions of Section 197 of the Companies Act 2013 read withRule 5 (2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules2014 and as amended i.e. 8.5 Lakhs per Month or Rs. 1.02 Crores per Annum.
Further details of top ten employees in terms of remuneration drawn during thefinancial year ended
31st march 2016 as required under Rule 5 (2) of the Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014 and as amended is attached herewith asAnnexure-III.
MANAGEMENT DISCUSSION AND ANALYSIS REPORT
Pursuant to the Regulation 34 (2) (e) of SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015 a report on Management Discussion and Analysis isherewith annexed as Annexure-IV
CORPORATE GOVERNANCE REPORT
Since the paid up equity share capital of the Company is less than Rs. 10 Crores andthe networth of the Company is less than Rs. 25 Crores the provisions of Regulations 1718 19 20 21 22 23 24 25 26 27 and clauses (b) to (i) of sub-regulation 2 ofRegulation 46 and para C D & E of Schedule V of the SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015 are not applicable to the Company.
CORPORATE SOCIAL RESPONSIBILITY
Since your Company does not fall within any of the parameters specified under theprovisions of the
Companies Act 2013 read with Rules made there under reporting pursuant to Section 134(3) (o) is not applicable.
CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION FOREIGN EXCHANGE EARNINGS AND OUTGO
The information pertaining to conservation of energy technology absorption ForeignExchange Earnings and outgo as required under section 134(3)(m) of the Companies Act 2013read with Rule 8(3) of the Companies (Accounts) Rules 2014 is attached herewith asAnnexure-V to this report.
DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION PROHIBITIONAND REDRESSAL) ACT 2013
The Company has in place a policy on Sexual Harassment of Women at workplace in linewith the requirements of the Sexual Harassment of Women at Workplace (PreventionProhibition and Redressal) Act 2013. The company has constituted an internal complaintscommittee to address the complaints regarding sexual harassment. All employees are coveredunder this policy. The company has not received any complaints during the year underreview.
Staff and Labour relations during the year at all units of the company continued to becordial.
Your Directors wish to thank the Company's Bankers Financial Institutions Customersand Suppliers for their unstinted support and co-operation.
Your Directors wish to place on record their appreciation of the confidence reposed bythe shareholders in the Company at all times.
The Board of Directors also wishes to thank the employees at all levels for theirexcellent support and contribution made by them.
Kakatiya Textiles Limited Hyderabad- 34.
Our report of even date is to be read along with this letter.
1. Maintenance of secretarial record is the responsibility of the management of thecompany. Our responsibility is to express an opinion on these secretarial records based onour audit.
2. We have followed the audit practices and processes as were appropriate to obtainreasonable assurance about the correctness of the contents of the Secretarial records. The
was done on test basis to ensure that correct facts are reflected in secretarialrecords. We believe that the processes and practices we followed provide a reasonablebasis for our opinion.
3. We have not verified the correctness and appropriateness of financial records andBooks of
Accounts of the company.
4. Where ever required we have obtained the Management representation about thecompliance of laws rules and regulations and happening of events etc.
5. The compliance of the provisions of Corporate and other applicable laws rulesregulations standards is the responsibility of management. Our examination was limited tothe verification of procedures on test basis.
6. The Secretarial Audit report is neither an assurance as to the future viability ofthe company nor of the efficacy or effectiveness with which the management has conductedthe affairs of the company.
Annexure III Report on Managerial Remuneration
As per Section 197 of the Companies Act 2013Read with Rule 5 of The Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014
A) Statement of Particulars as per Rule 5 of The Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014 :
i. The ratio of the remuneration of the each Director to the median remuneration of theemployees of the Company for the financial year :
* During the year under review no remuneration was paid to any of the directors of thecompany. ii. The percentage increase in remuneration of each Director Chief FinancialOfficer and Company Secretary during the financial year 2015-16:
iii. The percentage increase in the median remuneration of employees in thefinancialyear:
There was no increase in the median remuneration of the employees during the FinancialYear 2015-16. iv. The number of permanent employees on the rolls of Company as at March31 2016:
There were 137 permanent employees on the rolls of Company as on 31 March 2016.
v. Average percentile increase already made in the salaries of employees other than themanagerial personnel in the last financial year and its comparison with the percentileincrease in the managerial remuneration and justification thereof and point out if thereare any exceptional circumstances for increase in the managerial remuneration:
There was no increase in the salaries of employees other than the managerial personnelin the last financial year. Further the managerial personal are not drawing anyremuneration as on 31.03.2016
The Company affirms that remuneration to the Directors and Key Managerial Personnel isas per the remuneration policy of the Company.
B) Top 10 Employees in terms of remuneration :
C) Details of Employee's drawing remuneration of Rs 8.50 Lacs per month or Rs 102.00Lacsper annum:
There are no employees in the company who are drawing remuneration of more than Rs 8.50Lacs per month or Rs 102.00 Lacsper annum.
*Remuneration Includes Salary and Commission.
D) The are no other employees drawing Rs 8.50 Lacs per month or Rs 102.00 Lacs perannum whether employed throughout the year or part of the Financial year.
E) There are no employees in the service of the Company covered under Rule 5 (2) (iii)of the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014
PARTICULARS IN RESPECT OF CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION FOREIGNEXCHANGE EARNINGS AND OUTGO
Information as required under section 134 of the Companies Act 2013 read with the rule8(3) of Companies (Accounts) Rules 2014 is here under:
A) CONSERVATION OF ENERGY
(i) Steps taken for conservation of energy: Energy conservation signifies howeffectively and efficiently the company is managing its operations. The Company hasundertaken various energy efficient practices and strengthened the Company's commitmenttowards becoming an environment friendly organization. The Company cautiously utilizespower and fuel to reduce the cost of maintenance.
(ii) Steps taken by the company for utilizing alternate sources of energy: NA
(iii) Capital investment on energy conservation equipment's:
The company has invested about Rs.73.31 Lakhs on procurement and erection of 33 KVAElectrical sub station
B) TECHNOLOGY ABSORPTION
(i) The efforts made towards technology absorption: NA
(ii) The benefits derived like product improvement cost reduction product developmentor import substitution: NA
(iii) In case of imported technology (imported during the last three years reckonedfrom the beginning of the financial year)- NA
(a) The details of technology imported; (b) The year of import;
(c) Whether the technology been fully absorbed;
(d) If not fully absorbed areas where absorption has not taken place and the reasonsthereof:
(iv) The expenditure incurred on Research and Development: NA
C) FOREIGN EXCHANGE EARNINGS AND OUTGO
By Order of the Board of Directors
For Kakatiya Textiles Ltd
V Ravindra Nath
Date: 21st November 2016