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Kallam Spinning Mills Ltd.

BSE: 530201 Sector: Industrials
NSE: N.A. ISIN Code: INE629F01025
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VOLUME 22653
52-Week high 29.80
52-Week low 14.69
P/E 8.32
Mkt Cap.(Rs cr) 106
Buy Price 24.80
Buy Qty 1167.00
Sell Price 0.00
Sell Qty 0.00
OPEN 25.10
CLOSE 25.10
VOLUME 22653
52-Week high 29.80
52-Week low 14.69
P/E 8.32
Mkt Cap.(Rs cr) 106
Buy Price 24.80
Buy Qty 1167.00
Sell Price 0.00
Sell Qty 0.00

Kallam Spinning Mills Ltd. (KALLAMSPINNING) - Director Report

Company director report

TO THE MEMBERS OF THE KALLAM SPINNING MILLS LIMITED

Your directors have pleasure in presenting the Twenty-Third Annual Report of theCompany together with the Audited Statements of Accounts for the year ended 31st March2015.

I. FINANCIAL SUMMARY OF THE COMPANY :

The financial summary for the year ended 31st March 2015 are summarized below :

S.No. Particulars 2014-2015 (Rs.in lacs) 2013-2014 (Rs.in lacs)
01 Revenue from operations 24413.47 21464.04
02 Other income 713.34 472.95
03 Increase/(Decrease) in stock 7.57 396.53
04 Operating Expenditure 21020.90 17967.06
05 Profit before Interest Depreciation & Tax 4113.48 4366.45
06 Depreciation 993.05 780.62
07 Interest 2317.17 1474.25
08 Profit before tax 803.26 2111.58
09 Provision for income tax
i) Current year Tax 162.00 451.00
ii) Deferred Tax 304.13 193.67
10 Profit after tax 945.39 1466.90
11 Earning per share 13.80 21.41
TRANSFERS & APPROPRIATIONS FROM THE PROFIT ARE AS DETAILED BELOW :
12 Net Profit after tax 945.39 1466.90
13 Balance brought forward from previous year 5080.25 3746.53
14 Profit for appropriations 6025.65 5213.43
APPROPRIATIONS
15 Transfer to General Reserve 0 37.00
16 Proposed Equity Dividend 68.51 81.21
17 Tax on Proposed Equity Dividend 13.95 13.97
18 Balance carried forward 5943.18 5080.25

The Turnover of the company for the period under review increase to Rs.24413.47 Lakhsas compared to Rs. 21464.04 Lakhs registering a growth of 13.74 percent on annualizedbasis. The profit before interest and taxes of the company has increased by 12.98% onannualized basis from Rs 3585.83 lakhs in previous year to Rs.3120.43 lakhs in the periodunder review.

II. DIVIDEND :

In view of the company's profitable performance your directors are pleased torecommend for approval of Shareholders a Final Dividend of 10% on 6851100 Equity sharesof the company in respect of the financial year 2014-2015.

The paid up capital of the company remained unchanged at Rs 685.11 Lakhs. Earnings pershare was Rs 13.80.

III. EXTRACT OF THE ANNUAL RETURN AS PER MGT-9 :

The details forming part of the extract of the Annual Return in form MGT-9 as requiredunder Section 92 of the Companies Act 2013 is included in this Report as Annexure - I andforms an integral part of this Report.

IV. NUMBER OF MEETINGS HELD OF THE BOARD:

During the year Four Board Meetings were held with a gap between not exceeding theperiod of 120 days as prescribed under the Act. Details of the Board and Board Committeemeetings held during the year are given in the Corporate Governance Report.

V. DIRECTOR'S RESPONSIBILITY STATEMENT:

To the best of our knowledge and belief and according to the information andexplanations obtained by us your Directors make the following statements and terms ofSection 134(3)(c) of the Companies Act 2013:

• that in the preparation of the annual financial statements for the year endedMarch 312015 the applicable Accounting Standards had been followed along with properexplanation relating to material departures.

• for the financial year ended March 31 2015 such accounting policies asmentioned in the Notes to the financial statements have been applied consistently andjudgments and estimates that are reasonable and prudent have been made so as to give atrue and fair view of the state of affairs of the Company and of the Profit and Loss ofthe Company for the year ended March 312015.

• that proper and sufficient care has been taken for the maintenance of adequateaccounting records in accordance with the provisions of the Companies Act 2013 forsafeguarding the assets of the Company and for preventing and detecting fraud and otherirregularities.

• the annual financial statements have been prepared on a going concern basis.

• that the Directors had laid down internal financial controls to be followed bythe Company and that such internal financial controls are adequate and were operatingeffectively : and

• that the Directors had devised proper systems to ensure compliance with theprovisions of all applicable laws and that such systems were adequate and operatingeffectively

VI. A STATEMENT ON DECLARATION GIVEN BY INDEPENDENT DIRECTORS:

During the year under review one meeting of Independent Directors was held on 12thFebruary 2015 in compliance with the requirements of Schedule IV of the Companies Act2013.

All the Independent Directors of the Company have declared that they meet the criteriaof Independence in terms of Section 149(6) of the Companies Act 2013 and that there is nochange in status of Independence.

VII. DIRECTORS:

During the year Pursuant to the Provisions of Section 149(1) of the Companies Act2013 read with Rule 3 of the Companies (Appointment and Qualification of Directors) Rules2014 and also as per Clause 49(II)(A)(1) of the Listing Agreement with Bombay StockExchange the Company with the approval of shareholders at AGM has appointed SmtV.Bhargavi a Qualified Chartered Accountant as a woman director of the company on 27thSeptember 2014.

Pursuant to Section 269 and other applicable provisions of Companies Act 1956 readwith Schedule XIII to the said act the shareholders at their 20th Annual General Meetingheld on 22nd September 2012 appointed Sri P. Venkateswara Reddy as a Managing Directorand Sri G.V. Krishna Reddy as a Joint Managing Director of the Company for a period ofThree years with effect from 29th June 2012.The Term of their appointment would come toan end on 28th June 2015. It is necessary to Re-appointment them for another period ofThree years. Hence the Board at their meeting held on 30-05-2015 decides to Re-appoint SriP. Venkateswara Reddy as a Managing Director and Sri G.V.Krishna Reddy as a Joint ManagingDirector of the Company for another period of Three years on the recommendations of theNomination and Remuneration Committee.

Pursuant to Section 196 197 203 and other applicable provisions if any of CompaniesAct 2013 read with Schedule V to the said act and Subject to the approval of theshareholders in Annual General Meeting Sri P.Venkateswara Reddy and Sri G.V.Krishna Reddybe proposed to re-appoint as a Managing Director and Joint Managing Director of theCompany for a period of Three years with effect from and including 29th June 2015.

In accordance with the provisions of Section 152 of the Companies Act 2013 and theCompany's Articles of Association Sri P. Venkateswara Reddy Director retires by rotationat the forth coming Annual General Meeting and being eligible offers himself forre-appointment.

VIII. POLICY ON APPOINTMENT NOMINATION AND REMUNERATION OF DIRECTORS :

The Board has on the recommendation of the Nomination & Remuneration Committeeformulated criteria for determining Qualifications Positive Attributes and Independenceof a Director as also a Policy for remuneration of Directors Key managerial Personnel andsenior management. The details of criteria laid down and the Remuneration Policy are givenin the Corporate Governance Report (Annexure II to the Director's Report).

IX. EVALUATION OF BOARD COMMITTEES AND DIRECTORS:

Pursuant to the Provisions of the Companies Act 2013 and Clause 49 of the ListingAgreement the Board evaluated its own performance and the working of its Committees vizAudit Committee Nomination and Remuneration Committee finance Committee and StakeholdersRelationship Committee and Independent Directors (without participation of concernDirectors). Independent Directors at their meeting without the participation of theNon-independent Directors and Management evaluated the Board's performance and otherNon-independent Directors.

X. REPORT ON CORPORATE GOVERNANCE:

Your Directors are pleased to inform that your Company has implemented all thestipulations prescribed under clause 49 of listing agreement with the stock exchange(s).The Statutory Auditors of the Company have examined the requirements of the CorporateGovernance with reference to Clause 49 of the Listing Agreement and have certified thecompliance as required under Clause 49 of the Listing Agreement and the Certificate fromStatutory Auditors confirming compliance forms an integral part of this report as Annexure- II and Auditor's Certificate on Corporate Governance report also form part of thisreport as Annexure - III

XI. CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION FOREIGN EXCHANGE EARNINGS AND OUTGO:

The Information under Section 134(3)(m) of the Companies Act 2013 read with Rule 8 (3)of the Companies (Accounts) Rules 2014 for the year ended March 312015 is given herebelow and forms part of the Director's Report (Annexure - IV)

XII. RISK MANAGEMENT:

During the year According to the Clause 49(VI) of the Listing Agreement the companyhad laid down a framework for evaluating the elements of business risk. The riskmanagement framework defines the risk management approach of the Company and also includesthe periodical review of such risks. The board periodically discusses the significantbusiness risks identified by the management and the mitigation measures to address suchrisks.

Some of the risks that the Company is exposed to are :

(1) QUALITY RISK :

Quality of yarns and Fabric manufactured is the single most important factor that willtake a company forward in its success story. Your company has been aware of the saidimportance from its inception and the progress that it has made through the years wasmainly because of the strict adherence to the quality of its yarns and Fabric which hasresulted in the company reaping the best possible price for its yarns and Fabric both inthe internal and international markets.

(2) COMMODITY PRICE RISKS :

The Company is exposed to the risk of price fluctuation of raw materials as well asfinished goods. The Company proactively manages these risks through forward bookinginventory management and proactive vendor development practices. The Company's reputationfor quality product differentiation and service coupled with the existence of powerfulbrand image with robust marketing network mitigates the impact of price risk on finishedgoods and with the addition of weaving unit the value added chain had increased anddecreasing the influence of raw material.

(3) HUMAN RESOURCES RISKS :

Retaining the existing talent personnel and attracting new talent are major risks. TheCompany has initiated various measures including rolling out strategic talent managementsystem training and integration of learning and development activities.

(4) FINANCIAL RISK :

The Company's Policy is to actively manage its foreign exchange risk within theframework.

Given the Interest rate fluctuations the Company has adopted a prudent andconservative risk mitigation strategy to minimize interest risks.

(5) INDUSTRY RISK :

The main twin risks in this industry especially in the cotton yarn spinning sectorprocurement prices for cotton for its quality and the yarn realisation vis a vis thecotton cost. Raw material prices as is common with every industry are conditioned bytheir supply position in the market. The addition of weaving had contributed absorbingsome of the yarns produced in the spinning unit. Mainly the combed and combed compactyarns are absorbed by weaving unit.

In the case of marketing of yarn the price realization depends on the demand fromgarment manufacturers and power loom sector. In recent times the competition from theemerging economies in the neighbouring countries such as Sri Lanka China and Pakistanwith their comfortable status engendered by the preferential treatment in USA and EUmarkets poses a real challenge to the textile yarn spinning units in our country.

XIII. DEPOSITS:

During the year under review our Company did not accept any deposits within themeaning of provisions of Chapter V Acceptance of Deposits by Companies of the CompaniesAct 2013 read with the Companies (Acceptance of Deposits) Rules 2014. As per theprovisions of the Companies Act 2013 any amount received from relatives of Director(s) isnot an exempt deposit. So during the year unsecured loans took from relatives ofPromoter(s)/Director(s) were repaid on 30-03-2015.

XIV. INTERNAL CONTROL SYSTEM AND COMPLIANCE FRAMEWORK:

The Company has an Internal Control System commensurate with size scale andcomplexity of its operations. The internal financial controls are adequate and areoperating effectively so as to ensure orderly and efficient conduct of businessoperations.

The Internal Control System of the Company has been designed to provide for :

• Accurate recording of transactions with internal checks and prompt reporting.

• Adherence to applicable Accounting Standards and Policies.

• Compliance with applicable statutes policies and management policies andprocedures.

• Effective use of resources and safeguarding of assets.

The Company has appointed M/s. Mallikarjuna Rao & Co. as Internal Auditors of theCompany. The Audit Committee in consultation with the Internal Auditors formulates theScope functioning periodicity and methodology for conducting the internal audit. Theinternal auditors carryout audit covering inter alia monitoring and evaluating theefficacy and adequacy of internal control systems in the Company its compliance withoperating systems accounting procedures and policies at all locations and submit theirperiodical internal audit reports to the Audit Committee process owners undertakenecessary actions in their respective areas. The internal auditors have expressed that theinternal control system in the Company is effective. The Board has also put in placerequisite legal compliance framework to ensure compliance of all the applicable laws andthat such systems are adequate and operating effectively.

XV. FAMILIARISATION PROGRAMME FOR INDEPENDENT DIRECTORS :

According to the terms of Clause 49(I)(D)(3d) and Clause 49(N)(B)(7) of the ListingAgreement with the Stock Exchange :

a) The Company conducted the Familiarisation Program for Independent Directors abouttheir roles rights responsibilities in the company nature of the industry in which thecompany operates business model of the company etc. through various programmes.

b) All the independent directors are issued a formal letter of appointment throughwhich they are made aware of their role and duties at the time of appointment.

c) The details of such familiarisation programme/policy were disclosed on the Company'swebsite www.ksml.in

XVI. PERFORMANCE REVIEW:

Company financial performance during the year under review. Consolidated sales scaledup by 13.74% over the previous year. Profit before interest depreciation and tax (EBITDA)went down by 5.79% whereas Profit after tax was lower by 35.55% over the previous year.

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

There are no material changes and commitments affecting the financial position of theCompany which have occurred between the end of the financial year of the Company and thedate of this report.

No significant or material orders passed or have been passed against the Company by theregulators courts or tribunals which impacts the going concern status and Company'soperations in future.

XVII. WHISTLE MECHANISM:

The Company has set up vigil mechanism viz. Whistle Blower Policy to enable theemployees and Directors to report genuine concerns and irregularities if any in theCompany noticed by them. The Whistle Blower policy has been posted on the Website of theCompany (www.ksml.in)

XVIII. PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS UNDER SECTION 186 OF THECOMPANIES ACT 2013:

There were no Loans Guarantees Investments and securities given/made/provided by theCompany during the year.

XIX. AUDITORS:

M/s. Brahmayya & Co. Chartered Accountants (Firm Reg. No.: 000513S) were appointedas Statutory Auditors of your Company at the last Annual General Meeting held on 27thSeptember 2014 for a term of Three consecutive years. As per the provisions of Section139 of the Companies Act 2013 the appointment of Auditors is required to be ratified byMembers at every Annual General Meeting. The Report given by the Auditors on the financialstatements of the Company is part of the Annual Report. There has been no qualificationreservation adverse remark or disclaimer given by the Auditors in their Report.

XX. COST AUDITOR :

Pursuant to the Provisions of the Section 148 of the Companies Act 2013 The Board hadappointed Mr. P. Srinivas (M.No.: 21170) Cost Accountant as a Cost Auditor for thefinancial year 2014-15 to carry out the cost audit of Company's records in respect ofTextiles.

XXI. SECRETARIAL AUDIT :

Pursuant to provisions of Section 204 of the Companies Act 2013 read with Rule 9 ofthe Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014 yourCompany engaged the services of M/s. K. Srinivasa Rao & Co Company Secretaries inPractice Guntur to conduct the Secretarial Audit of the Company for the financial yearended March 312015. There was a qualification reservation or adverse remark given bySecretarial Auditors of the Company. The detailed reports on the Secretarial Standards andSecretarial Audit in Form MR- 3 are appended as an Annexure V to this Report.

XXII. RELATED PARTY TRANSACTIONS:

All related party transactions that were entered during the financial year were on anarm's length basis and were in the ordinary course of business. There were no materiallysignificant related party transactions made by the Company which may have a potentialconflict with the interest of the Company at large and thus disclosure in Form AOC-2 isnot required and the Details of Transactions with the Related parties were mentioned inpoint 31 of the Notes forming part of the Accounts.

In line with the requirements of the Companies Act 2013 and Equity Listing Agreementyour Company has formulated a Policy on Related Party Transactions which is also availableon Company's website at www.ksml.in. The Policy intendsto ensure that proper reporting approval and disclosure processes are in place for alltransactions between the Company and Related Parties.

XXIII. MANAGEMENT DISCUSSION AND ANALYSIS :

A detailed Management Discussion and Analysis forms part of this annual report whichis attached to this Report in Annexure- VI.

XXIV. SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALSIMPACTING THE GOING CONCERN STATUS OF THE COMPANY:

There were no significant and material orders passed by the Regulators or Courts orTribunals which would impact the going concern status of the Company.

XXV. PARTICULARS OF EMPLOYEES AND RELATED DISCLOSURES :

The information required under Section 197(12) of the Companies Act 2013 read withRule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules2014 forms part of this Report in Annexure -VII. The above information is not being sentalong with this Report to the Members of the Company as per the provision of Section 136of the Companies Act 2013. Members who are interested in obtaining these particulars maywrite to the Managing Director at the Registered Office of the Company. The aforesaidAnnexure is also available for inspection by Members at the Registered Office of theCompany 21 days before the 23rd Annual General Meeting and up to the date of the AnnualGeneral Meeting during the business hours on working days.

There were no employees in the Company as per Rule 5(2) of Chapter XIII the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014.

XXVI. RESIGNATION OF DIRECTOR:

The Chairman of the Board of Directors of the Company Sri K.Haranadha Reddy who isalso a Non Independent and Non - Executive Director of the Company was submitted hisresignation to the Board on the Board Meeting held on 12th February 2015.

The Board has accepted his resignation and relieved him as a Director of the Companywith effect from the Same Board Meeting where he submitted his resignation and Boardplaced on record its sincere appreciation of services rendered by him as a director andalso a chairman of Board of Directors of the company during his tenure.

Pursuant to Clause 30 of the Listing Agreement We informed the same to Bombay StockExchange where the shares of the company were listed and also as per Section 168 of theCompanies Act 2013 the Board of directors also took the note of his resignation andintimate to the Registrar of Companies.

XXVII. HUMAN RESOURCES:

Your Company firmly believes that employees are the most valuable assets and keyplayers of business success and sustained growth. Various employee benefits recreationaland team building programs are conducted to enhance employee skills motivation as also tofoster team spirit. Company also conducts in-house training programs to develop leadershipas well as technical/functional capabilities in order to meet future talent requirements.Industrial relations were cordial throughout the year.

XXVIII. CORPORATE SOCIAL RESPONSIBILITY (CSR):

Pursuant to the provisions of section 135 of the Act read with CSR Rules the Companyhas constituted CSR committee and formulated CSR policy. your Company at the Board Meetingheld on 27th May 2014 approved a Policy on CSR and the Policy was hosted on the websiteof the Company viz www.ksml.in

The Report on CSR activities as required under Companies (Corporate SocialResponsibility Policy) Rules 2014 is set out as Annexure VIII to this Report.

XXIX. PREVENTION OF SEXUAL HARASSMENT OF WOMEN AT WORKPLACE:

As per the requirement of The Sexual Harassment of Women at Workplace (PreventionProhibition & Redressal) Act 2013 ('Act') and Rules made there under your Companyhas constituted Internal Complaints Committees (ICC). The Company has designated theexternal independent member as a Chairperson for each of the Committees which was beyondthe requirements of law. No complaints were received in this regard during the year.

XXX. FUTURE OUTLOOK:

The Company is projecting Rs. 300 crores turnover during the financial year 2015-16.The Weaving and Dyeing units are expected to add bottomline to the Comapany.

XXXI. REGISTRAR'S AND SHARE TRANSFER AGENTS:

Your Registrar and Share Transfer Agents of the Company is M/s. Big Share ServicesPrivate Limited 306 3rd Floor Right Wing Amrutha Ville Opp. Yashodha Hospital RajBhavan Road Somajiguda Hyderabad - 500 082.

XXXII. TRANSFER OF UNPAID AND UNCLAIMED AMOUNT TO IEPF:

Pursuant to the provisions of section 124 of the companies Act 2013 the declareddividends which remained un paid or unclaimed for a period of seven years have beentransferred by the company to the Investor Education and Protection Fund (IEPF)established by the Central Government.

The following are the details of dividends paid by the Company and respective due datesfor transfer of unclaimed dividend to IEPF.

Year Date of Declaration of Dividend Due date for transfer to IEPF
2007-08 20-09-2008 25-10-2015
2008-09 19-09-2009 24-10-2016
2009-10 18-09-2010 23-10-2017
2010-11 27-08-2011 01-10-2018
2013-14 27-09-2014 01-11-2021

XXXIII. APPRECIATIONS AND ACKNOWLEDGEMENTS:

Your Directors place on record their earnest appreciation for the unstinted commitmentdedication hard work and significant contribution made by employees in ensuring sustainedgrowth of the Company. The Directors also take this opportunity to thank all InvestorsClients Vendors Banks Government and Regulatory Authorities and Stock Exchanges fortheir continued support.

For and on behalf of the Board of Directors
P. Venkateswara Reddy
Managing Director.

 

Place: Chowdavaram
Date: 14-08-2015.

ANNEXURE I TO THE DIRECTOR'S REPORT

FORM NO. MGT - 9 EXTRACT OF ANNUAL RETURN

as on financial year ended on 31.03.2015 Pursuant to Section 92 (3) of the CompaniesAct 2013 and rule 12(1) of the Company (Management & Administration ) Rules 2014.

I. REGISTRATION & OTHER DETAILS:
i CIN L18100AP1992PLC013860
ii Registration Date 18/02/1992
iii Name of the Company KALLAM SPINNING MILLS LIMITED
iv Category/Sub-category of the Company Company Limited by Shares/Indian Non Government Company
v "Address of the Registered office & contact details" NH-5 CHOWDAVARAM GUNTUR-522019 Ph.No. 0863-2344016
vi Whether listed company YES
vii Name Address & contact details of the Registrar & Transfer Agent if any. Big Share Services Pvt.Ltd. 306 3rd Floor Right wing Amrutha Ville Opp. Yashodha Hospital Raj Bhavan Road Somajiguda Hyderabad-500082. Ph No. 040-23374967

 

II. PRINCIPAL BUSINESS ACTIVITIES OF THE COMPANY
(All the business activities contributing 10% or more of the total turnover of the company shall be stated)
SL No Name & Description of main products/services "NIC Code of the Product /service" "% to total turnover of the company"
1 Manufacturing of Cotton Yarn 13111 68.39
2 Manufacturing of Cotton Fabric 13121 31.26

 

III. PARTICULARS OF HOLDING SUBSIDIARY & ASSOCIATE COMPANIES
SL No Name & Address of the Company CIN/GLN HOLDING/ SUBSIDIARY/ ASSOCIATE % OF SHARES HELD APPLICABLE SECTION
1 Nil
2 Nil
3
IV. SHAREHOLDING PATTERN (EQUITY SHARE CAPITAL BREAK UP AS % OF TOTAL EQUITY) (i) CATEGORY-WISE SHAREHOLDING
Category-wise Shareholding No. of Shares held at the beginning of the year No. of Shares held at the end of the year
Demat Physical Total % of Total Shares Demat Physical Total % of Total Shares % change during the year
A. Promoters
(1) Indian - - - - - - - - -
a) Individual/HUF 2434111 - 2434111 35.5288 2433884 - 2433884 35.5254 (0.0034)
" b) Central Govt.or - - - - - - - - -
State Govt. " - - - - - - - - -
c) Bodies Corporates 873982 873982 12.7568 874057 - 874057 12.7580 0.0012
d) Bank/FI - - - - - - - - -
e) Any other - - - - - - - - -
SUB TOTAL: (A) (1) 3308093 - 3308093 48.2856 3307941 - 3307941 48.2834 (0.0022)
(2) Foreign
a) NRI- Individuals - - - - - - - - -
b) Other Individuals - - - - - - - - -
c) Bodies Corp. - - - - - - - - -
d) Banks/FI - - - - - - - - -
e) Any other... - - - - - - - - -
SUB TOTAL (A) (2) - - - - - - - - -
" Total Shareholding of Promoter (A)= (A)(1)+(A)(2) " 3308093 - 3308093 48.2856 3307941 - 3307941 48.2834 (0.0022)
B. PUBLIC SHAREHOLDING
(1) Institutions
a) Mutual Funds - 10000 10000 0.146 - 10000 10000 0.146 -
b) Banks/FI - - - - - - - - -
C) Central govt - - - - - - - - -
d) State Govt. - - - - - - - - -
e) Venture Capital Fund - - - - - - - - -
f) Insurance Companies - - - - - - - - -
g) FIIS - - - - - - - - -
" h) Foreign Venture Capital Funds " - - - - - - - - -
i) Others (specify) - - - - - - - - -
SUB TOTAL (B)(1): - 10000 10000 0.146 - 10000 10000 0.146 -
(2) Non Institutions
a) Bodies corporates 130643 17900 148543 2.1682 69725 17900 87625 1.2790 (0.8892)
i) Indian - - - - - - - - -
ii) Overseas - - - - - - - - -
b) Individuals - - - - - - - - -
i) Individual shareholders holding nominal share capital upto Rs.1 lakhs 1118990 404030 1523020 22.2303 996170 393530 1389700 20.2843 (1.9460)
ii) Individuals shareholders holding nominal share capital in excess of Rs. 1 lakhs 1526612 167300 1693912 24.7247 1714898 167300 1882198 27.4729 2.7482
c) Others (specify) :
1. Clearing Members 1055 - 1055 0.0154 2745 - 2745 0.0401 0.0247
2.Non Resident Indians (NRI’s) 166477 - 166477 2.4299 170891 - 170891 2.4944 0.0645
SUB TOTAL (B)(2): 2943777 599230 3543007 51.7145 2954429 588730 3543159 51.7167 0.0022
" Total Public Shareholding (B)= (B)(1)+(B)(2) " 2943777 599230 3543007 51.7145 2954429 588730 3543159 51.7167 0.0022
" C. Shares held by Custodian for GDRs & ADRs " - - - - - - - - -
Grand Total (A+B+C) 6251870 599230 6851100 100 6262370 588730 6851100 100 0

 

(ii). SHARE HOLDING OF PROMOTERS

% change in shareholding during the year

SL. No. Shareholder's Name

Shareholding at the beginning of the year

Shareholding at the end of the year

No.of Shares % of the shares of the company % of shares pledged encumbered to total shares No.of Shares % of the shares of the company % of shares pledged encumbered to total shares
1 KALLAM AGRO PRODUCTS AND OILS LTD 873982 12.7568 Nil 874057 12.7579 Nil (0.0011)
2 GURRAM VENKATA KRISHNA REDDY 555065 8.10 Nil 555065 8.10 Nil 0
3 KALLAM HARINADHA REDDY 359300 5.24 Nil 359300 5.24 Nil 0
4 KALLAM MOHAN REDDY 311500 4.55 Nil 311500 4.55 Nil 0
5 PRATHYUSHA KALLAM 190100 2.77 Nil 190100 2.77 Nil 0
6 POLURI VENKATESHWARA REDDY 184200 2.69 Nil 184200 2.69 Nil 0
7 KALLAM VENKATA SUBBAYAMMA 133400 1.95 Nil 133400 1.95 Nil 0
8 NAGIREDDY KALLAM 117800 1.72 Nil 117800 1.72 Nil 0
9 UMASANKARA REDDY MOVVA 106824 1.56 Nil 106824 1.56 Nil 0
10 KALLAM ANNAPURNA 103000 1.50 Nil 103000 1.50 Nil 0
11 KALLAM HARINADHA REDDY 77900 1.14 Nil 77900 1.14 Nil 0
12 MOVVA VENKATA SUBBA REDDY 68500 1.00 Nil 68500 1.00 Nil 0
13 PRABHAKARA RAO NALLI 56000 0.82 Nil 54735 0.80 Nil 0.02
14 NALLI MANIKYAMMA 37500 0.55 Nil 37500 0.55 Nil 0
15 NALLI PRATHIBHA RANI 30000 0.44 Nil 30000 0.44 Nil 0
16 ANUMULA RANGA REDDY 20400 0.30 Nil 20400 0.30 Nil 0
17 N USHA 20000 0.29 Nil 20000 0.29 Nil 0
18 N RAJENDRA PRASAD 17400 0.25 Nil 17400 0.25 Nil 0
19 POLURI SIVANAGENDRAMMA 15000 0.22 Nil 15000 0.22 Nil 0
20 KALLAM SIVA KUMARI 11700 0.17 Nil 11700 0.17 Nil 0
21 MOVVA KAVITHA 10000 0.15 Nil 12400 0.18 Nil (0.03)
22 NAGENDRAMMA POLURI 4500 0.07 Nil 4500 0.07 Nil 0
23 NETHI PRASAD 2500 0.04 Nil 2500 0.04 Nil 0
24 SUBBAYAMMA POLURI 1448 0.0211 Nil 86 0.0013 Nil 0.0199
25 SUREDDY MALLESWARI 74 0.0011 Nil 74 0.00 Nil 0

 

(iii). CHANGE IN PROMOTER'S SHAREHOLDING (PLEASE SPECITY IF THERE IS NO CHANGE)
SL. No. Particulars

Shareholding at the beginning of the year

Cumulative Shareholding during the year

No.of Shares % of the shares of the company No.of Shares % of the shares of the company
1 KALLAM AGRO PRODUCTS AND OILS LTD
At the beginning of the year 873982 12.7568 873982 12.7568
Market Purchase on 30 September2014 75 0.0011 75 0.0011
At the end of the year 874057 12.758 874057 12.758
2 PRABHAKARA RAO NALLI
At the beginning of the year 56000 0.82 56000 0.82
Market Sale on 30 September2014 765 0.01 765 0.01
Market Sale on 23 January 2015 500 0.01 500 0.01
At the end of the year 54735 0.80 54735 0.80
3 MOVVA KAVITHA
At the beginning of the year 10000 0.15 10000 0.15
Market Purchase on 06 February2015 2400 0.03 2400 0.03
At the end of the year 12400 0.18 12400 0.18
4 SUBBAYAMMA POLURI
At the beginning of the year 1448 0.0211 1448 0.0211
Market Sale on 13 June2014 500 0.0073 500 0.0073
Market Sale on 30 June2014 362 0.0053 362 0.0053
Market Sale on 11 July2014 500 0.0073 500 0.0073
At the end of the year 86 0.0013 86 0.0013

 

(iv). SHAREHOLDING PATTERN OF TOP TEN SHAREHOLDERS (OTHER THAN DIRECTORS PROMOTERS & HOLDERS OF GDRS & ADRS)
SL. No.

Shareholding at the beginning of the year

Cumulative Shareholding during the year

For Each of the top 10 Shareholders No.of Shares % of total shares of the company No.of Shares % of total shares of the company
1 LAKSHMINARAYANAN. T
At the beginning of the year 399758 5.8349 399758 5.8349
Changes made during the year 2014-15
18-04-2014 Purchase 4620 0.067 404378 5.902
25-04-2014 Purchase 5586 0.082 409964 5.984
02-05-2014 Purchase 12795 0.187 422759 6.171
09-05-2014 Purchase 1400 0.020 424159 6.191
16-05-2014 Purchase 7438 0.109 431597 6.300
23-05-2014 Purchase 7900 0.115 439497 6.415
30-05-2014 Purchase 12496 0.182 451993 6.597
20-06-2014 Purchase 8100 0.118 460093 6.716
30-06-2014 Purchase 7000 0.102 467093 6.818
11-07-2014 Purchase 1953 0.029 469046 6.846
12-09-2014 Purchase 15000 0.219 484046 7.065
19-09-2014 Purchase 10038 0.147 494084 7.212
30-09-2014 Purchase 6463 0.094 500547 7.306
10-10-2014 Purchase 1000 0.015 501547 7.321
17-10-2014 Purchase 10580 0.154 512127 7.475
24-10-2014 Purchase 11706 0.171 523833 7.646
31-10-2014 Purchase 4300 0.063 528133 7.709
14-11-2014 Purchase 5085 0.074 533218 7.783
21-11-2014 Purchase 17825 0.260 551043 8.043
12-12-2014 Purchase 3450 0.050 554493 8.093
19-12-2014 Purchase 1000 0.015 555493 8.108
31-12-2014 Purchase 2748 0.040 558241 8.148
02-01-2015 Purchase 714 0.010 558955 8.159
09-01-2015 Purchase 4480 0.065 563435 8.224
16-01-2015 Purchase 8096 0.118 571531 8.342
30-01-2015 Purchase 10613 0.155 582144 8.497
06-02-2015 Purchase 750 0.011 582894 8.508
13-02-2015 Purchase 1300 0.019 584194 8.527
20-02-2015 Purchase 6575 0.096 590769 8.623
06-03-2015 Purchase 7812 0.114 598581 8.737
At the end of the year (or on the date of separation if separated during the year) 598581 8.74

 

SL. No.

Shareholding at the beginning of the year

Cumulative Shareholding during the year

For Each of the top 10 Shareholders No.of Shares % of total shares of the company No.of Shares % of total shares of the company
2 VECHA VISWESWARA RAO
At the beginning of the year 154140 2.2499 154140 2.2499
Changes made during the year 2014-15
30-06-2014 Purchase 6000 0.0876 160140 2.3375
21-11-2014 Purchase 55 0.0008 160195 2.3383
At the end of the year (or on the date of separation if separated during the year) 160195 2.34

 

SL. No.

Shareholding at the beginning of the year

Cumulative Shareholding during the year

For Each of the top 10 Shareholders No.of Shares % of total shares of the company No.of Shares % of total shares of the company
3 M.R. NAIK
At the beginning of the year 82189 1.1996 82189 1.1996
Changes made during the year 2014-15
05-09-2014 SALE -8920 -0.130 73269 1.0694
At the end of the year (or on the date of separation if separated during the year) 73269 1.0694

 

(v). SHAREHOLDING OF DIRECTORS & KEY MANAGERIAL PERSONNEL
SL. No. Shareholding of Each Director & Key Managerial personnel

Shareholding at the beginning of the year

Cumulative Shareholding during the year

For each of the Directors & KMP No. of Shares % of total shares of the company No. of Shares % of total shares of the company
1 P. VENKATESWARA REDDY
At the beginning of the year 184200 2.69 184200 2.69
Date wise increase/decrease in Promoters Share holding during the year specifying the reasons for increase/decrease (e.g. al- lotment/transfer/bonus/sweat equity etc) - - - -
At the end of the year 184200 2.69 184200 2.69

 

SL. No.

Shareholding at the beginning of the year

Cumulative Shareholding during the year

For each of the Directors & KMP No. of Shares % of total shares of the company No. of Shares % of total shares of the company
2 G.V. KRISHNA REDDY
At the beginning of the year 555065 8.10 555065 8.10
Date wise increase/decrease in Promoters Share holding during the year specifying the reasons for increase/decrease (e.g. al- lotment/transfer/bonus/sweat equity etc) - - - -
At the end of the year 555065 8.10 555065 8.10

 

SL. No.

Shareholding at the beginning of the year

Cumulative Shareholding during the year

For each of the Directors & KMP No. of Shares % of total shares of the company No. of Shares % of total shares of the company
3 M.V. SUBBA REDDY
At the beginning of the year 68500 1.00 68500 1.00
Date wise increase/decrease in Promoters Share holding during the year specifying the reasons for increase/decrease (e.g. al- lotment/transfer/bonus/sweat equity etc) - - - -
At the end of the year 68500 1.00 68500 1.00

 

V. INDEBTEDNESS (Rs.in Lakhs)
INDEBTEDNESS OF THE COMPANY INCLUDING INTEREST OUTSTANDING/ACCRUED BUT NOT DUE FOR PAYMENT
Secured Loans excluding deposits Unsecured Loans Deposits Total Indebtedness
Indebtedness at the beginning of the financial year
i) Principal Amount 27057.97 160.34 0 27218.31
ii) Interest due but not paid 224.34 0 0 224.34
iii) Interest accrued but not due 0 0 0 0
Total (i+ii+iii) 27282.31 160.34 0 27442.65
Change in Indebtedness during the financial year
Additions 2976.23 35.25 0 3011.48
Reduction 1676.5 47.54 0 1724.04
Net Change 1299.73 -12.29 0 1287.44
Indebtedness at the end of the financial year
i) Principal Amount 28367.97 148.05 0.00 28516.02
ii) Interest due but not paid 214.07 0 0 214.07
iii) Interest accrued but not due 0 0 0 0.00
Total : (i+ii+iii) 28582.04 148.05 0 28730.09

 

VI. REMUNERATION OF DIRECTORS AND KEY MANAGERIAL PERSONNEL (Rs.in Lakhs)
A. REMUNERATION TO MANAGING DIRECTOR WHOLE TIME DIRECTOR AND / OR MANAGER:
SL. No. Particulars of Remuneration

Name of the MD/WTD/Manager

P. Venkateswara Reddy Managing Director G.V. Krishna Reddy Joint Managing Director M.V. Subba Reddy Whole Time Director Total Amount
Gross Salary
1 (a) Salary as per provisions contained in section 17(1) of the Income Tax. 1961. 14.68 14.63 9.18 38.49
(b) Value of perquisites u/s 17(2) of the Income tax Act 1961
(c ) Profits in lieu of salary under section 17(3) of the Income Tax Act 1961
2 Stock option -
3 Sweat Equity -
4 Commission 8.61 8.61 - 17.22
as % of profit 1.00 % 1.00 % -
others (specify) - - -
5 Others please specify - - -
Total(A) 23.29 23.24 9.18 55.71
Ceiling as per the Act

 

B. REMUNERATION TO OTHER DIRECTORS: (in Rupees)
SL. No. Particulars of Remuneration Name of the Directors
Independent Directors S. Pulla Rao M.R. Naik A.Krishna Murthy V. Bhargavi Total Amount
1 Fee for attending Board/ Committee Meetings 45000 40000 25000 25000 135000
Total(1)

 

(in Rupees)

SL. No. Particulars of Remuneration Name of the Directors Total Amount
Nominee Director (IREDA) V.S.N. Murthy
1 Fee for attending Board/ Committee Meetings 45000 45000
Total(2)

 

VII. PENALTIES/PUNISHMENT/COMPOUNDING OF OFFENCES
Type Section of the Companies Act Brief Description Details of Penalty/Pun- ishment/Compound- ing fees imposed Authority (RD/ NCLT/Court) Appeal made if any (give details)
A. COMPANY
Penalty - - - - -
Punishment - - - - -
Compounding - - - - -
B. DIRECTORS
Penalty - - - - -
Punishment - - - - -
Compounding - - - - -
C. OTHER OFFICERS IN DEFAULT
Penalty - - - - -
Punishment - - - - -
Compounding - - - - -

ANNEXURE II TO THE DIRECTORS' REPORT

REPORT ON CORPORATE GOVERNANCE FOR THE PERIOD APRIL 1 2014 TO MARCH 31 2015.

The detailed report on Corporate Governance as per the format prescribed by SEBI andincorporated in Clause 49 of the Listing Agreement is set out below.

1. COMPANY'S PHILOSOPHY ON CORPORATE GOVERNANCE

Kallam's Philosophy on Corporate Governance envisages achieving the highest standard ofaccountability transparency integrity and equity in all its spheres and in all itsdealings with its stakeholders. The Company is committed to establish and diligentlyfollow the high standards of Corporate Governance practices in its pursuit of profitablegrowth and enhancement of shareholders value. Corporate Governance practices are driven bystrong board oversight timely disclosures transparent accounting polices and high levelof integrity in decision making. The company is in compliance with the requirement of theguidelines on corporate governance as stipulated under clause 49 of the listing agreementwith stock exchanges.

2. BOARD OF DIRECTORS:

(a) Composition of Board:

The Company has an optimum combination of executive and Non executive Directors inaccordance with the provision of clause 49 (II) (A) of the listing Agreement. As on31-03-2015 the Board consists of eight Directors after accepting the resignation of SriK.Haranadha Reddy who submitted his resignation on the Board Meeting held on 12thFebruary 2015. Out of total eight directors Four Directors are Non Executive andIndependent Directors One Director is a Nominee Director from IREDA and the remainingThree Directors of the Board are executive Directors. Now The Chairman of the Board ofDirectors of the Company is Mr. P.Venkateswara Reddy Managing Director. As per theListing Agreement The Company has requisite number of Independent Directors. The strengthof Independent Directors is fifty percent of the Board of Directors. The Non-Executive andIndependent Directors bring external and wider perspective in the Board's deliberationsand decisions. The composition of board is in conformity with clause 49 of listingagreement entered into with the stock exchanges.

None of the directors on the board is a member of more than 10 Board level committeesor chairman of more than 5 committees across all the listed and unlisted public companiesin which he/she is a director. Necessary disclosures regarding committee positions andother directorship held in public companies as on March 312015 have been made by thedirectors.

(b) No. of Board Meetings held during the year along with the dates of the Meetings:

During the financial year ended March 312015 Four Board Meetings were held on 27th May2014 11th August 2014 13th November 2014 and 12th February 2015.

(c) Attendance of each Director at the Board Meetings last Annual General Meeting(AGM) and the number of Companies and Committees where he /she is Director / Member(during the year)

Name of the Director Category of Directorship Category of Director ship

No of Board meetings

Attendance at last AGM No. of Directorships held in all public companies

No. of committees in position held in other ltd. Companies

Held Attended Chairman Member
Sri K. Haranadha Reddy * Chairman NINED 4 3 Yes Nil Nil Nil
Sri P. Venkateswara Reddy MD NIED 4 4 Yes Nil Nil Nil
Sri G.V. Krishna Reddy JMD NIED 4 4 Yes Nil Nil Nil
Sri M.V. Subba Reddy Whole Time Director NIED 4 4 Yes Nil Nil Nil
Sri M.R. Naik Director I&N.E.D 4 4 Yes Nil Nil Nil
Sri V.S.N. Murthy Director Nominee Director (IREDA) 4 4 No 3 1 1
Sri A. Krishna Murthy Director I&N.E.D 4 4 No Nil Nil Nil
Sri. S.Pulla Rao Director I&N.E.D 4 4 No Nil Nil Nil
Smt. V. Bhargavi ** Director I&N.E.D 4 2 Yes Nil Nil Nil

NINED- Non-Independent and Non Executive Director NIED- Non-Independent and ExecutiveDirector I & N.E.D - Independent and Non-Executive Director

* During the Year Pursuant to the provisions of Section 168 of Companies Act 2013 OurCompany's Non-Executive Chairman Sri K. Haranadha Reddy had submitted his resignation dueto Pre-occupation at the Board meeting held on 12th February 2015. The Board acceptedhis resignation and placed on record its sincere appreciation of services rendered by himas a director during his tenure

Pursuant to Clause 30 of the Listing Agreement We informed the same to Bombay StockExchange where the shares of the company were listed and also as per Section 168 of theCompanies Act 2013 the Board of directors also took the note of his resignation andintimate to the Registrar of Companies.

** Smt. V. Bhargavi became the Member of Board of Directors on 27th September 2014.So she attended for only two Board Meetings held during the year.

(d) Directors retiring by rotation and seeking reappointment:

The information is provided in the Notes appended to the Explanatory Statement underthe heading "Additional information on Directors recommended for appointment /seeking re-election at the ensuing Annual General Meeting".

During the financial year 2014-15 information as mentioned is Annexure-IA to clause 49of listing agreement such as annual operating plans budgets financial results of theCompany materiality important litigation if any has been placed before the Board for itsconsideration.

(e) . Independent Directors :

The Non-Executive independent directors have confirmed that they were fulfill thecriteria of independence specified in Section 149(6) of the Companies Act 2013 and rulesmade there under and also fulfill the requirements as stipulated in clause 49 (II) (B)ofthe listing agreement entered into with the Stock Exchange.

During the year under review one meeting of the Independent Director was held on 12thFebruary 2015 in compliance with the requirements of Schedule-IV of the Companies Act2013.

(f) Disclosure of transactions where Non Executive Directors have pecuniary interest:

None of the Non-executive Directors have any pecuniary relationship or transactionsvis-a-vis the Company. The directors periodically disclose their interest in differentcompanies and transactions/contracts of the Company with such companies are taken onrecord in the Board Meetings.

Non-Executive Directors Compensation and disclosures: Non Executive Directors are notbeing paid any remuneration except sitting fees for attending the Board and Committeemeetings.

(g) Code of Conduct for Business & Ethics :

The Company has framed a Code of Business Conduct & Ethics which is applicable tothe Board of Directors and Senior Management Team (one level below the Board) of theCompany. The Code requires Directors and the Employees to act honestly fairly ethicallyand with integrity conduct themselves in professional courteous and respectful manner.Pursuant to Clause 49 (II) (E) of the Listing Agreement the Managing Director of theCompany confirmed compliance with the code by all the members of the Board and SeniorManagement. Our company's Code of Conduct For Business & Ethics was placed on theofficial Website of the Company viz. www.ksml.in

(h) Code of Conduct for Prevention of insider trading:

The company has framed a code of conduct for prevention of insider trading based onSEBI (prohibition of insider Trading) Regulation 1992. This code is applicable to allDirector/officer/designated employees. Under this code they are prohibited to deal inshares of the company during the closure of Trading Window and other specified period(s).Our company's Code of Conduct For Prevention of Insider Trading was placed on the officialWebsite of the Company viz. www.ksml.in

(i) Whistle Blower Policy:

The Company has set up vigil mechanism viz. Whistle Blower Policy to enable theemployees and Directors to report genuine concerns and irregularities if any in theCompany noticed by them. The Whistle Blower policy has been posted on the Website of theCompany (www.ksml.in)

3. AUDIT COMMITTEE:

(a) Brief description of terms of reference:

The Terms of Reference of this committee cover the matters specified for AuditCommittees under Clause 49 of the Listing Agreement as well as in Section 177 of theCompanies Act 2013 and are as follows:

i. Oversight of the Company's financial reporting process and the disclosure of itsfinancial information to ensure that the financial statement is correct sufficient andcredible.

ii. Recommending the appointment and removal of external auditor fixation of audit feeand also approval for payment for any other services.

iii. Reviewing with management the annual financial statements before submission to theBoard focussing primarily on:

- Any changes in accounting policies and practices

- Major accounting entries based on exercise of judgment by management

- Qualifications in draft Auditors' Report

- Significant adjustments arising out of audit

- The going concern assumption

- Compliance with stock exchange and legal requirements concerning financial statements

- Any related party transactions i.e. transactions of the company of material naturewith promoters or the management their subsidiaries or relatives etc. that may havepotential conflict with the interests of the Company at large.

iv. Reviewing with the management external and internal auditors and the adequacy ofinternal control systems.

v. Reviewing the adequacy of internal audit function including the structure of theinternal audit department staffing and seniority of the official heading the departmentreporting structure coverage and frequency of internal audit.

vi. Discussion with internal auditors of any significant findings and follow up thereon.

vii. Reviewing the findings of any internal investigations by the internal auditorsinto matters where there is suspected fraud or irregularity or a failure of internalcontrol systems of a material nature and reporting the matter to the Board.

viii. Discussion with external auditors before the audit commences the nature andscope of audit as well as have post audit discussion to ascertain any area of concern.

ix. Reviewing the Company's financial and risk management policies.

x. Other matters as assigned/specified by the Board from time to time.

(b) Composition Meetings and Attendance during the year :

As on 31st March 2015 The Audit Committee comprises of Two Independent Non-ExecutiveDirectors and one Nominee Director (IREDA). They are Sri S.Pulla Rao Chairman SmtV.Bhargavi (Member) and Sri V.S.N Murthy (Member & Nominee Director).The Chairman ofAudit Committee is an Independent Director. During the financial year ended March 312015the committee met for Four times on 27th May 2014 11th August 2014 13th November 2014and 12th February 2015.

During the year the Chairman of Audit Committee was changed by replacing Mr V.S.N.Murthy who still continues as a member of Audit Committee with Mr. S. Pulla Rao who isan Independent and Non Executive Director and the Board approved the same during the Boardmeeting held on 27th May2014.

During the year the Audit Committee was reconstituted by taking Smt V.Bhargavi anewly appointed Independent Director and also a Chartered Accountant as a new member ofAudit Committee. The Board approved the same during the meeting held on 13th November2014 and from that Board meeting (13th November 2014) onwards she became the member ofAudit Committee.

During the Year the Audit Committee was reconstituted by removing Sri M.R.Naik anIndependent Director. The Board also approved the same during the meeting held on 12thFebruary 2015.

The attendance of the each member of the committee is given below:

Directors Chairman/Member Category No.of meetings attended
Sri S. Pulla Rao Chairman I & N.E.D. 4
Sri V.S.N. Murthy Member Nominee Director (IREDA) 4
Sri M.R. Naik * Member I & N.E.D. 3
Smt V. Bhargavi ** Member I & N.E.D. 2

* Mr M.R. Naik was attended for Three Audit Committee Meetings which were held on 27thMay 2014 11th August 2014 13th November 2014 then from he was not a member of AuditCommittee.

** Smt V. Bhargavi became the member of Audit Committee from 13th November 2014onwards so she attended for only two Audit committee meetings held during the year.

At the invitation of the Company internal auditors cost auditors and statutoryauditors also attended the Audit Committee meetings to respond to queries raised at theCommittee meetings.

4 NOMINATION AND REMUNERATION COMMITTEE:

(a) Terms of Reference:

The Company had constituted the Nomination and Remuneration Committee on 26th June2004. The broad terms of reference are to determine and recommend to Board Compensationpayable to Executive Directors appraisal of the performance of the Managing Directors /Wholetime Directors and to determine and advise the Board for the payment of annualcommission/compensation to the Non-Executive Director and to recommend to the Boardappointment/ reappointment and removal of Directors. To frame criteria for determiningqualifications positive attributes and Independence of Directors and to create anevaluation framework for Independent Directors and the Board.

(b) Composition Meetings and Attendance during the year :

The Nomination and Remuneration Committee comprises of total three Non-ExecutiveDirectors Out of which Two Directors were Independent Directors and other Director is aNominee Director (IREDA)

The committee comprises as follows:

Directors Chairman/Member Category
Sri A. Krishna Murthy Chairman I & N.E.D.
Sri M.R. Naik Member I & N.E.D.
Sri V.S.N. Murthy Member Nominee Director

(c) Selection and Evaluation of Directors :

The Board has based on recommendations of the Nomination and Remuneration Committeelaid down following policies:

1. Policy for Determining Qualifications Positive Attributes and Independence of aDirector

2. Policy for Board & Independent Directors' Evaluation

(d) Performance Evaluation of Board Committees and Directors:

Based on the criteria laid down in the Policy for evaluation of Board and IndependentDirectors the Board carried out the annual performance evaluation of Board Committees andthe Independent Directors whereas at a separate meeting Independent Directors evaluatedthe performance of Executive Directors Board as a whole and of the Chairman. Nominationand Remuneration Committee also evaluated individual directors' performance.

i) As per the said Policy evaluation criteria for evaluation Board inter alia covers:Composition in light of business complexities and statutory requirements; establishment ofvision mission objectives and values for the Company; laying down strategic road map forthe Company & annual plans; growth attained by the Company; providing leadership anddirections to the Company and employees; effectiveness in ensuring statutory compliancesand discharging its duties / responsibilities towards all stakeholders; Identificationmonitoring & mitigation of significant corporate risks; composition of variouscommittees laying down terms of reference and reviewing committee's working etc.

ii) Performance evaluation criteria for Executive Directors inter alia include: levelof skill

knowledge and core competence; performance and achievement vis-a-vis budget andoperating plans; Effectiveness towards ensuring statutory compliances; dischargingduties/responsibilities towards all stakeholders; reviewing/ monitoring Executivemanagement performance adherence to ethical standards of integrity & probity;employment of strategic perception and business acumen in critical matters etc.

iii) Performance of Independent Directors is evaluated based on: objectivity &constructivity while exercising duties; providing independent judgment on strategyperformance risk management and Board's deliberations; devotion of sufficient time forinformed decision making; exercising duties in bona fide manner; safeguarding interests ofall stakeholders particularly minority shareholders; upholding ethical standards ofintegrity & probity; updating knowledge of the Company & its external environmentetc

iv) Committees of the Board are evaluated for their performance based on: effectivenessin discharging duties and functions conferred; setting up and implementation of variouspolicies procedures and plans effective use of Committee's powers as per terms ofreference periodicity of meetings attendance and participation of committee members;providing strategic guidance to the Board on various matters coming under committee'spurview etc.

(e) Remuneration Policy for Directors:

The Committee has formulated Policy for Remuneration of Directors KMP & otheremployees. As per the Policy remuneration to Non-executive Independent Directors include:

a. Sitting Fees for attending meetings of the Board as well as Committees of the Boardas decided by the Board within the limits prescribed under the Companies Act.

b. Travelling and other expenses they incur for attending to the Company's affairsincluding attending Committee and Board Meetings of the Company.

• REMUNERATION TO EXECUTIVE DIRECTORS :

The appointment and remuneration of Executive Directors including Managing DirectorJoint Managing Director and Whole Time Director is governed by the recommendation of theRemuneration and Nomination Committee resolutions passed by the Board of Directors andShareholders of the Company. The remuneration package of Managing Director Joint ManagingDirector and Whole Time Director comprises of salary perquisites allowances and otherretirement benefits as approved by the shareholders at the General Meetings of theCompany.

Name of Directors Salary Benefits Commission Sitting Fees Total
Sri. P. Venkateswara Reddy 1200000 267898 860762 - 2328570
Sri. G.V. Krishna Reddy 1200000 262623 860762 - 2323385
Sri. M.V. Subba Reddy 522000 236272 159266 - 917538

• REMUNERATION TO NON-EXECUTIVE DIRECTORS :

The Non-Executive Directors are paid remuneration by way of Sitting Fees. The NonExecutive Directors are paid sitting fees for each meeting of the Board and Committee ofDirectors attended by them. During the Year Company paid the sitting fees to all theNon-Executive Directors at the rate of Rs. 5000/- for attending each meeting of theBoard and Rs.5000/- for attending each Audit committee meeting up to first three Boardmeetings i.e. (27.05.2014 11.08.2014 and 13.11.2014) but from 12th February 2015 Companypaid the sitting fees to all the Non-Executive Directors at the rate of Rs. 10000/- forattending each meeting of the Board and Rs.5000/- for attending each Audit committeemeeting.

Name of Directors Salary Benefits Commission Sitting Fees Total
Sri. M.R. Naik - - - 40000 40000
Sri. V.S.N. Murthy - - - 45000 45000
Sri. A. Krishna Murthy - - - 25000 25000
Sri S. Pulla Rao - - - 45000 45000
Smt. V. Bhargavi - - - 25000 25000

5. SHAREHOLDERS/INVESTOR GRIEVANCE COMMITTEE:

The terms of reference shall be as per Clause 49 of the Listing Agreement.

a) A Shareholders/Investor Grievance Committee" to specifically look into theredressal of Shareholders' / Investors' complaints and of investors such as transfer orcredit of shares to demat accounts on receipt of dividend /notices /annual returns etc.

b) The Committee functions under the Chairmanship of Mr. A. Krishna Murthy a Non-executive and independent Director. The other members of the Committee are Mr. G.V.KrishnaReddy and Mr.M.V.Subba Reddy.

c) The Company received a total of 17 complaints from its shareholders for the period01.04.2014 to 31.03.2015 all of which were resolved within 15 days to the satisfaction ofthe shareholders.

d) Name designation and address of the compliance officer Mr. P. Venkateswara ReddyManaging Director Kallam Spinning Mills Ltd NH-5 Chowdavaram GUNTUR A.P-522019.

6. SHARE TRANSFER COMMITTEE:

At present The Share Transfer Committee functions with Mr. G.V. Krishna Reddy asChairman and Mr.P.Venkateswara Reddy and Mr. M.V. Subba Reddy as other Members. TheCommittee meets frequently to approve the Memorandum of share transfers sub-division /consolidation of share certificates transmission of shares and issue of duplicate sharecertificates which are submitted by the Share Transfer Agents after completing theirformalities. The committee met 9 times during the year 2014-15. Share Transfers approvedby the Committee are placed at the Board Meeting from time to time. During the periodunder review 9200 Equity shares were transferred.

There are no pending Share Transfers as on date of this Report.

7. CORPORATE SOCIAL RESPONSIBILITY COMMITTEE :

Corporate Social Responsibility Committee Consists of Three Direcors out of which twodirectors are Executive Directors and the other director is a Independent Director.

The Committee functioning under the Chairmanship of Sri G.V.Krishna Reddy. Sri M.R.Naik Sri M.V.Subba Reddy are other members of the Committee.

The Committee met Three times During the Financial year 2014-15.

The role of CSR Committee is as follows:

• Formulating and Recommending the Board regarding the CSR Policy and activitiesto be undertaken by the Company.

• Specifying the amount of expenditure to be incurred on CSR activities of theCompany.

• Monitoring the policy of CSR of the Company from time to time.

• Reviewing the performance of the company in the area of CSR.

• Monitoring the implementation of CSR projects or activities undertaken by thecompany.

8. INDEPENDENT DIRECTORS MEETING :

During the year under review one meeting of Independent Directors was held on 12thFebruary 2015 in compliance with the requirements of Schedule IV of the Companies Act2013. Following items were considered at the said meeting.

• Review the performance of Non-independent directors Board as a whole andChairman of the Company.

• Assessed the Quality Quantity and timeliness of flow of information betweencompany management and the Board.

All the Independent Directors were present at the meeting.

9. ANNUAL GENERAL MEETINGS:

Details of location of the last three Annual General Meetings of the Company are givenbelow:

Date of AGM Time Place
22nd September 2012 3-00 P.M. Regd. Office at NH-5 Chowdavaram GUNTUR - 522 019
21st September 2013 3-00 P.M. Regd. Office at NH-5 Chowdavaram GUNTUR - 522 019
27th September 2014 3-00 P.M. Regd. Office at NH-5 Chowdavaram GUNTUR - 522 019

10. SUBSIDIARY COMPANIES: There were no subsidiary companies to the Company.

11. RISK MANAGEMENT :

During the year According to the Clause 49(VI) of the Listing Agreement the companyhad laid down a framework for evaluating the elements of business risk. The riskmanagement framework defines the risk management approach of the Company and also includesthe periodical review of such risks. The board periodically discusses the significantbusiness risks identified by the management and the mitigation measures to address suchrisks.

12. RELATED PARTY TRANSACTIONS:

In Pursuance with the provisions of Clause 49 (VII) of Listing Agreement your Companyhas formulated a Policy on Related Party Transactions The Policy intends to ensure thatproper reporting approval and disclosure processes are in place for all transactionsbetween the Company and Related Parties. The necessary disclosures regarding thetransactions with related parties are given in the Notes to the financial statements.During the year under review Your Company had not entered into any material transactionwith any of its related parties.

This Policy specifically deals with the review and approval of Material Related PartyTransactions keeping in mind the potential or actual conflicts of interest that may arisebecause of entering into these transactions. All Related Party Transactions are placedbefore the Audit Committee for review and approval. Prior omnibus approval is obtained forRelated Party Transactions on a quarterly basis for transactions which are of repetitivenature and / or entered in the Ordinary Course of Business and are at Arm's Length. AllRelated Party Transactions are subjected to independent review by a reputed accountingfirm to establish compliance with the requirements of Related Party Transactions under theCompanies Act 2013 and Equity Listing Agreement.

13. DISCLOSURES :

a) Disclosures of related party Transactions:

In line with the requirements of the Companies Act 2013 and Equity Listing Agreementyour Company has formulated a Policy on Related Party Transactions which is also availableon Company's website at www.ksml.in. The Policy intendsto ensure that proper reporting approval and disclosure processes are in place for alltransactions between the Company and Related Parties.

b) Disclosure of Accounting Treatment:

In the preparation of financial statements the company has followed the accountingstandards notified under section 133 of the Companies Act 2013 and the pronouncements ofthe Institute of Chartered Accountants of India. The significant accounting policies whichare consistently applied have been set out in the notes forming part of the financialstatements for the year ended March 312015.

c) Remuneration of Directors:

The Company pays remuneration to its Managing Directors / Whole time Directors by wayof salary perquisites and allowances (a fixed component) and commission (a variablecomponent). Salary is paid within the range approved by the shareholders. Commission iscalculated with the reference to the net profits of the Company in a particular financialyear and is determined by the Board of Directors at the end of the financial year based onthe recommendations of the Remuneration Committee subject to the overall ceiling asstipulated in Section 197 of the Companies Act 2013. During the Year Company paid thesitting fees to all the Non-Executive Directors at the rate of Rs. 5000/- for attendingeach meeting of the Board and Rs.5000/- for attending each Audit committee meeting up tofirst three Board meetings i.e. (27.05.2014 11.08.2014 and 13.11.2014) but from 12thFebruary 2015 Company paid the sitting fees to all the Non-Executive Directors at therate of Rs. 10000/- for attending each meeting of the Board and Rs.5000/- for attendingeach Audit committee meeting

d) Management :

Management Discussion and Analysis Report comprising of all information as prescribedunder Clause 49 (VIII)(D) of the Listing Agreement is attached as Annexure - VI to theDirectors' Report

e) Shareholders :

The details relating to appointment and re-appointment of Directors as required underClause 49(VIII)(E) of the Listing Agreement is provided in the Notice to the AnnualGeneral Meeting.

14. MEANS OF COMMUNICATION :

Quarterly results were taken on record by the Board of Directors and submitted to theStock Exchange where shares of the Company are listed in terms of the requirement ofClause 41 of the Listing Agreement.

The Audited and unaudited financial results of the Company were published within 48hours of conclusion of the Board or Committee meeting at which Financial results wereapproved in Deccan Chronicle (English newspaper) Andhra Bhoomi (vernacular newspaper)and are displayed on the website of the Company www.ksml.in.Half-yearly results were not sent to each of the shareholders.

The information required under the Companies Act and the Listing Agreement is sent toStock Exchanges where Company's equity shares are listed through facsimile and courier /post and by publication in national newspaper and vernacular newspaper wherever required.

15. GENERAL SHAREHOLDERS INFORMATION:

Ensuring Annual General Meeting : Saturday the 26th September 2015 at 3.00 P.M at the Registred office of the company
Financial Year : 01.04.2015 to 31.03.2016
a) First Quarterly Results : on or before 14th August 2015
b) Second Quarterly Results : on or before 14th November 2015
c) Third Quarterly Results : on or before 14th February 2016
d) Audited yearly Results : on or before 30th May 2016.
For the year ended 31st March 2016
Dates of Book Closure : 21st September 2015 to 26th September 2015 (both days Inclusive)
Dividend payment date : on or after 01st October 2015
Listing on Stock Exchange : The Company's shares are listed on the following stock exchange.

 

i) Bombay Stock Exchange Limited (Code : 530201)
Phiroze Jeejeeboy Towers Dalal Street
MUMBAI - 400 001.
Ph: 022 - 22721233/34

 

Listing fees for the year 2014-2015 have been paid.
Stock Code 530201(BSE)

 

DEPOSITORY PARTICIPATION :
i) National Securities Depository Ltd (NSDL)
Trade World 4th Floor Kamala Mills Compound
Senapati Bapat Marg Lower Parel Mumbai - 400 013.
Ph. No: 022 - 2497 2964
ii) Central Depository Services (India) Ltd (CDSL)
Phiroze Jeejeebhoy Towers 28th Floor Dalal Street
Mumbai- 400 023.
Ph. No: 022 - 2497 2964
ISIN Number for NSDL & CDSL : INE629F01017
Depository Fee Annual custody fee for the financial year 2014-15 paid to National Securities Depository Limited (NSDL) and Central Depository Services India Limited (CDSL).

MARKET PRICE DATA - BOMBAY STOCK EXCHANGE LIMITED

Month

Share Price (Rs.)

No of shares Traded

Sensex

High Low High Low
April 2014 47.70 33.40 89949 22939.31 22197.51
May 2014 47.75 35.60 162069 25375.63 22277.04
June 2014 52.95 51.15 107517 25725.12 21270.20
July 2014 63.70 47.30 691739 26300.17 24892.00
Aug 2014 59.80 46.15 153818 26674.38 25232.82
Sept 2014 70.90 52.45 263535 27354.99 26220.49
Oct 2014 63.85 57.60 71242 27894.32 25910.77
Nov 2014 64.35 49.45 112540 28822.37 27739.56
Dec 2014 55.95 47.00 43071 28809.64 26469.42
Jan 2015 57.50 46.30 45599 29844.32 26776.12
Feb 2015 56.95 43.00 33959 29560.32 28044.49
Mar 2015 56.95 40.55 38880 30024.74 27248.45

 

REGISTRARS & SHARE TRANSFER AGENTS Big share Services Pvt. Ltd. 306 3rd Floor Right Wing Amrutha Ville Opp. Yashodha Hospital Raj Bhavan Road Somajiguda
Hyderabad - 500082.

• There were no instances of non-compliance nor have any penalties/stricturesimposed by Stock Exchanges or SEBI or any other statutory authority on any matters relatedto capital market during last Three financial years

SHARE TRANSFER SYSTEM:

SEBI has notified the compulsory trading of equity shares of the Company indematerialisation form. However the equity shares of the Company are traded in demat aswell as in non-demat form. The Company has appointed M/s. Bigshare Services PrivateLimited as Registrars & Share Transfer Agents for both electronic and physicaltransfers.

For demat shares the Company is registered with NSDL and CDSL. The ISIN allotted toEquity Shares is INE629F01017.

For non-demat shares the transfers are processed and registered at M/S.BigshareServices Private Limited. Shares lodged for transfer are normally processed within 15 daysfrom the date of lodgment if the documents are clear in all respects. As per guidelinesof SEBI Option Letters for transfer-cum-demat are sent to the transferees giving them 30days period to inform their option. Physical Share Certificates are dispatched to thetransferees after 30 days who do not opt for the demat.

• DISTRIBUTION OF SHAREHOLDING AS ON 31ST MARCH 2015

Range (No.of Shares) No. of Shareholders No. of Shares % to Total
1 - 500 2653 451878 6.60
501 - 1000 250 206850 3.02
1001 - 2000 133 200707 2.92
2001 - 3000 68 166557 2.43
3001 - 4000 18 65005 0.95
4001 - 5000 25 116387 1.70
5001 - 10000 35 259092 3.78
10001 and above 53 5384624 78.60
Total 3235 6851100 100.00

• CATEGORIES OF SHARE HOLDERS AS ON 31ST MARCH 2015

Category No. of Shares held % of share holding
1. Promoters
- Indian 3307941 48.2833
- Foreign - -
2. Persons acting in concert - -
3. Institutional Investors
a. Mutual Funds & UTI 10000 0.1460
b. Banks Financial Institutions Insurance companies (Central & State Govt. Inst./Non.Govt.Institutions) 0.00 0.00
c. FIIs - -
4. Others
- Private Corporate Bodies 87626 1.2790
- Indian Public 3271898 47.7573
- NRI / OCBs 170891 2.4944
- Others (Clearing Members) 2745 0.040
6851100 100.00

• DIVIDEND HISTORY :

Financial Year % of Dividend
2004-05 7
2005-06 10
2006-07 12
2007-08 12
2008-09 9
2009-10 14
2010-11 18
2011-12 Nil
2012-13 Nil
2013-14 12
2014-15 10

DETAILS OF VOTING RESULTS AS PER CLAUSE 35A FOR THE YEAR 2013-14

Agenda-wise

IN CASE OF POLL/POSTAL BALLOT/E-VOTING :

The Mode of voting for all resolutions was E-voting and Poll (electronically) conductedat the Meeting.

RESOLUTION 1 : CONSIDER AND ADOPT AUDITED FINANCIAL STATEMENTS REPORTS OF THE BOARD OFDIRECTORS AND AUDITORS (ORDINARY RESOLUTION):

Promoters/ Public No.of shares held No.of votes polled % of votes polled on outstanding shares No.of Votes in favour No.of Votes against % of votes in favour on votes polled % of Votes against on votes polled
(1) (2) (3)=[{2}/{1}]* 100 (4) (5) (6)=[{4}/{2}]* 100 (7)=[{5}/{2}]* 100
Promoter and Promoter Group 3306731 3188531 96.43 3188531 - 100 -
Public Institutional Holders - - - - - - -
Public-Others 3544369 780900 22.03 780900 - 100 -
Total 6851100 3969431 57.94 3969431 - 100 -

RESOLUTION 2 : DECLARATION OF DIVIDEND ON EQUITY SHARES (ORDINARY RESOLUTION):

Promoters/ Public No.of shares held No.of votes polled % of votes polled on outstanding shares No.of Votes in favour No.of Votes- against % of votes in favour on votes polled % of Votes against on votes polled
(1) (2) (3)=[{2}/{1}]* 100 (4) (5) (6)=[{4}/{2}]* 100 (7)=[{5}/{2}]* 100
Promoter and Promoter Group 3306731 3188531 96.43 3188531 - 100 -
Public Institutional Holders - - - - - - -
Public-Others 3544369 780900 22.03 780900 - 100 -
Total 6851100 3969431 57.94 3969431 - 100 -

RESOLUTION 3 : RE-APPOINTMENT OF SRI M.V. SUBBA REDDY WHO RETIRES BY ROTATION (ORDINARYRESOLUTION):

Promoters/ Public No.of shares held No.of votes polled % of votes polled on outstanding shares No.of Votes in favour No.of Votes- against % of votes in favour on votes polled % of Votes against on votes polled
(1) (2) (3)=[{2}/{1}]* 100 (4) (5) (6)=[{4}/{2}]* 100 (7)=[{5}/{2}]* 100
Promoter and Promoter Group 3306731 3188531 96.43 3188531 - 100 -
Public Institutional Holders - - - -- - - -
Public-Others 3544369 780900 22.03 780600 300 99.96 0.04
Total 6851100 3969431 57.94 3969131 300 99.99 0.01

RESOLUTION 4 : APPOINTMENT OF AUDITORS AND FIXING THEIR REMUNERATION (ORDINARYRESOLUTION):

Promoters/ Public No.of shares held No.of votes polled % of votes polled on outstanding shares No.of Votes in favour No.of Votes against % of votes in favour on votes polled % of Votes against on votes polled
(1) (2) (3)=[{2}/{1}]* 100 (4) (5) (6)=[{4}/{2}]* 100 (7)=[{5}/{2}]* 100
Promoter and Promoter Group 3306731 3188531 96.43 3176831 11700 99.63 0.37
Public Institutional Holders - - - - - - -
Public-Others 3544369 607689 17.15 607633 56 99.99 0.01
Total 6851100 3796220 55.41 3784464 11756 99.69 0.31

RESOLUTION 5 : RE-APPOINTMENT OF SRI M.V.SUBBA REDDY AS A WHOLE-TIME DIRECTOR (ORDINARYRESOLUTION):

Promoters/ Public No.of shares held No.of votes polled % of votes polled on outstanding shares No.of Votes in favour No.of Votes- against % of votes in favour on votes polled % of Votes against on votes polled
(1) (2) (3)=[{2}/{1}]* 100 (4) (5) (6)=[{4}/{2}]* 100 (7)=[{5}/{2}]* 100
Promoter and Promoter Group 3306731 3188531 96.43 3188531 - 100 -
Public Institutional Holders - - - - - - -
Public-Others 3544369 780900 22.03 780800 100 99.99 0.01
Total 6851100 3969431 57.94 3969331 100 99.99 0.01

RESOLUTION 6 : APPOINTMENT OF SRI M.R.NAIK AS AN INDEPENDENT DIRECTOR (ORDINARYRESOLUTION):

Promoters/ Public No.of shares held No.of votes polled % of votes polled on outstanding shares No.of Votes in favour No.of Votes- against % of votes in favour on votes polled % of Votes against on votes polled
(1) (2) (3)=[{2}/{1}]* 100 (4) (5) (6)=[{4}/{2}]* 100 (7)=[{5}/{2}]* 100
Promoter and Promoter Group 3306731 3188531 96.43 3176831 11700 99.63 0.37
Public Institutional Holders - - - - - - -
Public-Others 3544369 780900 22.03 780800 - 100 -
Total 6851100 3969431 57.94 3957731 11700 99.71 0.29

RESOLUTION 7 : APPOINTMENT OF SRI S.PULLA RAO AS AN INDEPENDENT DIRECTOR (ORDINARYRESOLUTION):

Promoters/ Public No.of shares held No.of votes polled % of votes polled on outstanding shares No.of Votes in favour No.of Votes against % of votes in favour on votes polled % of Votes against on votes polled
(1) (2) (3)=[{2}/{1}]* 100 (4) (5) (6)=[{4}/{2}]* 100 (7)=[{5}/{2}]* 100
Promoter and Promoter Group 3306731 3188531 96.43 3188531 - 100 -
Public Institutional Holders - - - - - - -
Public-Others 3544369 779600 21.99 776700 2900 99.63 0.37
Total 6851100 3968131 57.92 3965231 2900 99.93 0.07

RESOLUTION 8 : APPOINTMENT OF SRI A.KRISHNA MURTHY AS AN INDEPENDENT DIRECTOR (ORDINARYRESOLUTION):

Promoters/ Public No.of shares held No.of votes polled % of votes polled on outstanding shares No. of Votes in favour No.of Votes against % of votes in favour on votes polled % of Votes against on votes polled
(1) (2) (3)=[{2}/{1}]* 100 (4) (5) (6)=[{4}/{2}]* 100 (7)=[{5}/{2}]* 100
Promoter and Promoter Group 3306731 2314549 70.00 2124449 190100 91.79 8.21
Public Institutional Holders - - - - - - -
Public-Others 3544369 779600 22.00 776844 2756 99.65 0.35
Total 6851100 3094149 45.16 2901293 192856 93.77 6.23

RESOLUTION 9 : APPOINTMENT OF SMT V.BHARGAVI AS AN INDEPENDENT DIRECTOR (ORDINARYRESOLUTION):

Promoters/ Public No.of shares held No.of votes polled % of votes polled on outstanding shares No. of Votes in favour No.of Votes against % of votes in favour on votes polled % of Votes against on votes polled
(1) (2) (3)=[{2}/{1}]* 100 (4) (5) (6)=[{4}/{2}]* 100 (7)=[{5}/{2}]* 100
Promoter and Promoter Group 3306731 2314549 70.00 2112749 201800 91.28 8.72
Public Institutional Holders
Public-Others 3544369 608189 17.16 592433 15756 97.4 2.6
Total 6851100 2922738 42.66 2705182 217556 92.56 7.44

Note : All the aforesaid resolutions were passed with requisite majority.

16. RECONCILIATION OF SHARE CAPITAL AUDIT REPORT AND CLAUSE 47(C) OF THE LISTINGAGREEMENT:

As per the Provisions of SEBI M/s. K. Srinivasa Rao &Co. Company Secretaries inPractice carries out Secretarial Audit to reconcile the total admitted capital withNational Securities Depository Limited (NSDL) and Central Depository Services (India)Limited (CDSL) and the total issued and Listed Capital. The audit is carried out everyquarter and the report thereon is submitted to the Stock Exchange(s) where the Shares ofthe Company are listed. The audit confirms that the total Listed and Issued capital is inagreement with the aggregate of the total number of shares in dematerialized form (heldwith NSDL and CDSL) and the total number of shares in physical form.

During the year 2014-15 In accordance with the provisions of Clause 47(C) of theListing Agreement M/s K.Srinivasa Rao & Co. Company Secretaries in Practice afterexamined the all the share transfer deeds Memorandum of Transfers Registers files andother documents related to Company gave a certificate under the Clause 47 (C) of theListing Agreement For each Half year. i.e. for the Half years 01.04.2014 to 30.09.2014 and01.10.2014 to 31.03.2015.Both the above certificates are submitted to the StockExchange(s) where the Shares of the Company are Listed within 24 hours of receipt of theCertificate by the Company.

17. TRANSFER OF UNPAID AND UNCLAIMED DIVIDEND AMOUNT TO IEPF:

Pursuant to the provisions of section 124 of the companies Act 2013 the declareddividends which remained un paid or unclaimed for a period of seven years have beentransferred by the company to the Investor Education and Protection Fund (IEPF)established by the Central Government.

The following are the details of dividends paid by the Company and respective due datesfor transfer of unclaimed dividend to IEPF.

Dividend Year Date of Declaration of Dividend Due date for transfer to IEPF
2007-08 20-09-2008 25-10-2015
2008-09 19-09-2009 24-10-2016
2009-10 18-09-2010 23-10-2017
2010-11 27-08-2011 01-10-2018
2013-14 27-09-2014 01-11-2021

 

18. PLANT LOCATIONS :
a) Spinning Division NH-5 Chowdavaram Guntur Andhra Pradesh
b) Weaving and Dyeing Divisions Kunkupadu Village Addanki Mandal Prakasam Dist. Andhra Pradesh.
c) Power Division Kotha Kothur Village Nelakondapalli Mandal Khammam Dt. Andhra Pradesh.
• No. of Employees as on 31st March 2015 280
• Address for Correspondence : a) Company Kallam Spinning Mills Limited NH-5 Chowdavaram Guntur A P - 522 019.
b) Registrars & Share Transfer Agents Big share Services Pvt. Ltd. 306 3rd Floor Right Wing Amrutha Ville Opp. Yashodha Hospital Raj Bhavan Road Somajiguda Hyderabad - 500 082.
c) Official Website of the Company www.ksml.in
d) Investor's E-mail ID corp@ksml.in

Complaince Certificate of the Auditors :

The company has complied with the mandatory requirements of the code of corporateGovernance as stipulated in clause 49 of the Listing Agreement with the Stock Exchanges.The company has submitted the compliance report in the prescribed format to the stockexchanges for the quarters ended June 30 2014 September 30 2014 December 312014 andMarch 312015. The statutory Auditors have certified that the company has complied withthe condition of corporate governance as stipulated in clause 49 of the listing agreementswith the stock exchanges. The said certificate is annexed to the director's report andwill be forwarded to the stock exchanges along with the Annual report.

DECLARATION BY MANAGING DIRECTOR /CEO

I P.Venkateswara Reddy Managing Director of Kallam Spinning Mills Ltd hereby confirmthat all the board members and senior managerial personnel have affirmed for the yearended 31st March 2015 the compliance with the code of conduct of the company laid down forthem.

P. Venkateswara Reddy
Managing Director

 

Place Guntur
Date 14-08-2015.

ANNEXURE III TO THE DIRECTORS' REPORT

AUDITORS' CERTIFICATE ON COMPLIANCE WITH THE CONDITIONS OF CORPORATE GOVERNANCE UNDERCLAUSE 49 OF THE LISTING AGREMENTS

To

The Members of Kallam Spinning Mills Limited

We have examined the compliance of conditions of corporate governance by KallamSpinning Mills Limited ("the Company") for the year ended on 31st March 2015 asstipulated in clause 49 of the Listing Agreement of the said Company with Stock Exchangesin India with the relevant records and documents maintained by the Company and furnishedto us and the Report on Corporate Governance as approved by the Board of Directors.

The compliance of conditions of corporate governance is the responsibility of themanagement. Our examinations has been limited to a review of the procedure andimplementations thereof adopted by the Company for ensuring the compliance of theconditions of Corporate Governance as stipulated in the said clause. It is neither anaudit nor an expression of the opinion on the financial statements of the Company.

In our opinion and to the best of our information and according to the explanationsgiven to us and based on the representations made by the Directors and the Management wecertify that the Company has complied with the conditions of Corporate Governance asstipulated in the clause 49 of the above mentioned Listing Agreements.

We state that as per the records maintained and certified by the Registrars of theCompany there were no investor's grievance remaining unattended as at 31st March 2015.

We further state that such compliance is neither an assurance as to the futureviability of the Company nor the efficiency or effectiveness with which the management hasconducted the affairs of the Company.

For Brahmayya & Co.
Chartered Accountants
Firm Reg. No- 000513S
KARUMANCHI RAJAJ
Partner
Membership No. 202309

ANNEXURE-IV TO THE DIRECTOR'S REPORT

A. CONSERVATION OF ENERGY:

1. ENERGY CONSERVATION MEASURES TAKEN DURING THE YEAR:

In line with the company's commitment towards conservation of energy all unitscontinue with their endeavor to make more efficient use of energy through improvedoperational and maintenance practices. The measures taken in this direction at the unitsare as under:

a) Conservation of energy continues to be accorded high priority.

b) Our R&D team continuously reviews ongoing processes.

c) All manufacturing plants continue their efforts in conserving energy in variousforms like energy conservation projects use of alternate sources & resourcescontinuous monitoring etc. Continuous monitoring of energy consumption throughout allplants and curtailing wastages.

d) Saving in diesel consumption for steam generation boiler operation.

e) Eliminated steam leakages in steam generation boiler operation.

f) Employees have been trained in energy conservation measures;

2. IMPACT OF ENERGY CONSERVATION MEASURES:

The Energy Conservation Measures which were undertaken in the Company have resulted inreduction in power consumption fuel consumption and improves the overall productionperformance.

3. TOTAL ENERGY CONSUMPTION AND ENERGY CONSUMPTION PER UNIT OF PRODUCTION :

Form A

(FORM FOR DISCLOSURE OF PARTICULARS WITH RESPECT TO CONSERVATION OF ENERGY)

a) POWER AND FUEL CONSUMPTION:

S.No. Particulars 2014-15 2013-14
1. Electricity
a) Purchased Units (KWH) 48543582 31846505
Total amount in Rs. 287789100 194963353
Rate per unit Rs. 5.93 6012
b) Own Generation
i) Through Diesel Generator
Units Generated (KWH) 0 1500
Total Amount Rs. 0 25000
Cost per unit Rs. 0 16.67
ii) Through Steam Generation - -
iii) Through Hydel Generation
Units generated - KWH 8859059 11521954
Units consumed - KWH 1049710 7393642
Total Cost Rs. 5563463 39186277
Cost per KWH Rs. 5.30 5.30
2. Coal - -
3. Furnace Oil - -
4. Other Internal Generation - -
b) CONSUMPTION PER UNIT OF PRODUCTION (NO.OF UNITS/KG.)
1. Electricity 1.68 1.49
2. Coal - -
3. Furnace Oil - -
4. Hydel - -

4. STEPS TAKEN BY THE COMPANY FOR UTILISING ALTERNATE SOURCES OF ENERGY: NONE

5. CAPITAL INVESTMENT ON ENERGY CONSERVATION EQUIPMENT: NONE

B. TECHNOLOGY ABSORPTION ADAPTION AND INNOVATION:

Efforts in brief made towards technology absorption adaptation and innovationContinuous efforts are being made towards technology absorption adaptation andinnovation. Quality being the thrust area the company has taken effective steps tocontinue to improve quality to compete with international quality standards.LED lights areinstalled in place of regular tube lights in plant to reduce energy consumption.Installation of Energy Monitoring System for greater accuracy of energy consumption

1. Benefits derived as a result of the above efforts:

Improved capability and productivity to meet the customer requirements.

2. Efforts in brief made towards Technology absorption adaptation and innovation:

The Company is continuously taking steps to improve the product and process technologyin an effort to provide superior quality and cost effective products to consumers

3. Imported Technology:

--- Nil ---

C. FOREIGN EXCHANGE EARNINGS AND OUTGOINGS:

Foreign exchange earnings during the year under review amounted to Rs 4109.75 lakhs.The foreign exchange utilized during the year amounted to Rs 41.07 lakhs.

ANNEXURE-V

FORM NO. MR-3 SECRETARIAL AUDIT REPORT FOR THE FINANCIAL YEAR ENDED ON 31ST March 2015[Pursuant to section 204(1) of the Companies Act 2013 and Rule No. 9 of the Companies(Appointment and Remuneration Personnel) Rules 2014]

To

The Members

M/s. Kallam Spinning Mills Ltd

Chowdavaram Guntur.

We have conducted the secretarial audit of the compliance of applicable statutoryprovisions and the adherence to good corporate practices by M/s. Kallam Spinning Mills Ltd(hereinafter called the Company). Secretarial Audit was conducted in a manner thatprovided us a reasonable basis for evaluating the corporate conducts/ statutorycompliances and expressing our opinion thereon.

Based on our verification of the Company's books papers minute books forms andreturns filed and other records maintained by the Company and also the informationprovided by the Company its officers agents and authorized representatives during theconduct of secretarial audit We hereby report that in our opinion the company hasduring the audit period covering the financial year ended on 31st March 2015 compliedwith the statutory provisions listed hereunder and also that the Company has properBoard-processes and compliance- mechanism in place to the extent in the manner andsubject to the reporting made hereinafter:

We have examined the books papers minute books forms and returns filed and otherrecords maintained by the Company for the financial year ended on 31st March 2015according to the provisions of:

(i) . The Companies Act 2013 (the Act) and the rules made thereunder;

(ii) . The Securities Contracts (Regulation) Act 1956 ('SCRA') and the rules madethereunder;

(iii) . The Depositories Act 1996 and the Regulations and Bye-laws framed thereunder;

(iv) . Foreign Exchange Management Act 1999 and the rules and regulations madethereunder to the extent of Foreign Direct

Investment Overseas Direct Investment and External Commercial Borrowings;

(v) . The Following Regulations and Guidelines prescribed under the Securities andExchange Board of India Act 1992 ('SEBI Act') viz.:-

(a) The Securities and Exchange Board of India (Substantial Acquisition of Shares andTakeovers) Regulations 2011;

(b) The Securities and Exchange Board of India (Prohibition of Insider Trading)Regulations 1992;

(c) The Securities and Exchange Board of India (Issue of Capital and DisclosureRequirements) Regulations 2009 (Not applicable to the Company during the Audit Period);

(d) The Securities and Exchange Board of India (Employee Stock Option Scheme andEmployee Stock Purchase Scheme) Guidelines

1999/ The Securities and Exchange Board of India (Share Based Employee Benefits)Regulations 2014 - (Not applicable to the Company during the Audit Period);

(e) The Securities and Exchange Board of India (Issue and Listing of Debt Securities)Regulations 2008 (Not applicable to the Company during the Audit Period);

(f) The Securities and Exchange Board of India (Registrars to an Issue and ShareTransfer Agents) Regulations 1993 regarding the

Companies Act and dealing with client;

(g) The Securities and Exchange Board of India (Delisting of Equity Shares)Regulations 2009; (Not applicable to the Company during the Audit Period) and

(h) The Securities and Exchange Board of India (Buyback of Securities) Regulations1998 (Not applicable to the Company during the Audit Period);

(vi) . The Company has identified the following laws as specifically applicable to theCompany:

1. The Textiles Committee Act 1963 and the rules made thereunder;

2. The Textiles (Development and Regulation) Order 2001

3. The Textiles (Consumer Protection) Regulations 1988

We have also examined compliance with the applicable clauses of the following:

(i) Secretarial Standards issued by The Institute of Company Secretaries of India (Notnotified hence not applicable to the Company during the audit period).

(ii) The Listing Agreements entered into by the Company with the Stock Exchanges inIndia.

During the period under review the Company has complied with the provisions of the ActRules Regulations Guidelines Standards etc. mentioned above except that The Companyhas not appointed a Company Secretary as Key Managerial Person (KMP). This is anoncompliance of section 203 of the Companies Act 2013 and clause 47 (a) of the ListingAgreement.

We further report that

The Board of Directors of the Company is duly constituted with proper balance ofExecutive Directors Non-Executive Directors and Independent Directors. The changes in thecomposition of the Board of Directors that took place during the period under review werecarried out in compliance with the provisions of the Act.

Adequate notice is given to all directors to schedule the Board Meetings agenda anddetailed notes on agenda were sent at least seven days in advance and a system exists forseeking and obtaining further information and clarifications on the agenda items beforethe meeting and for meaningful participation at the meeting.

Majority decision is carried through while the dissenting members' views are capturedand recorded as part of the minutes.

We further report that there are adequate systems and processes in the companycommensurate with the size and operations of the company to monitor and ensure compliancewith applicable laws rules regulations and guidelines.

We further report that during the audit period there are no specific events/ actionshaving a major bearing on the Company's affairs in pursuance of the laws rulesregulations guidelines standards etc referred to above.

For K. Srinivasa Rao & Co.
Company Secretaries.
Sd/-
K. Srinivasa Rao Partner
FCS. No. 5599/ C. P. No: 5178

 

Place: Guntur
Date: 14th August 2015

'ANNEXURE A'

To

The Members

M/s. Kallam Spinning Mills Ltd

Chowdavaram Guntur.

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. Theverification was done on test basis to ensure that correct facts are reflected insecretarial records. We believe that the processes and practices we followed provide areasonable basis 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.

For K. Srinivasa Rao & Co.
Company Secretaries.
Sd/-
K. Srinivasa Rao Partner
FCS. No. 5599/ C. P. No: 5178

 

Place : Guntur
Date : 14th August 2015

ANNEXURE - VI

TO THE DIRECTOR'S REPORT MANAGEMENT DISCUSSION AND ANALYSIS

• TEXTILE INDUSTRY OVERVIEW IN INDIA

India is the second largest producer of textiles and garments in the world. The Indiantextiles and apparel industry is expected to grow to a size of US223 billion by 2021according to a report by Technopak Advisors. This industry accounts for almost 24% of theworld's spindle capacity and 8% of global rotor capacity. Abundant availability of rawmaterials such as cotton wool silk and jute as well as skilled workforce have made thecountry a sourcing hub.

The textiles industry has made a major contribution to the national economy in terms ofdirect and indirect employment generation and net foreign exchange earnings. The sectorcontributes about 14 per cent to industrial production 4 per cent to the gross domesticproduct (GDP) and 27 per cent to the country's foreign exchange infows. It providesdirect employment to over 45 million people. The textiles sector is the second largestprovider of employment after agriculture. Thus growth and all round development of thisindustry has a direct bearing on the improvement of the India's economy.

• GROWTH:

The Indian textiles industry is set for strong growth buoyed by strong domesticconsumption as well as export demand. The most significant change in the Indian textilesindustry has been the advent of manmade Fibres (MMF). India has successfully placed itsinnovative range of MMF textiles in almost all the countries across the globe. India hasthe second largest textile manufacturing infrastructure in world after China. India is oneof the few countries in world which has production at each level of textile manufacturingviz. fibre manufacturing spinning weaving knitting processing and garmenting.

• GOVERNMENT INITIATIVES :

The Indian government has come up with a number of export promotion policies for thetextiles sector. It has also allowed 100% FDI in the Indian textiles sector under theautomatic route.

Some of initiatives taken by the government to further promote the industry are asunder:

• The government has taken a number of initiatives for the welfare and developmentof the weavers and the handloom sector.

• The Cabinet Committee on Economic Affairs (CCEA) has approved an IntegratedProcessing Development Scheme (IPDS) to make textiles processing units moreenvironment-friendly and globally competitive.

? INDUSTRY PERFORMANCE

India's share of the global textile industry is predictable to grow from 4.5% to 8% by2012-13 and the share of in the export basket is to reach US80 billion by 2020. A Vision2010 for textile formulated by the government after exhaustive interaction with theindustry and export promotion councils to capitalize on the positive atmosphere aims toincrease India's share in the world's textile trade from the current 4.5% to 8% by 2013and to achieve export value of US 80 billion in 2020. Formation of 12 million new jobs inthe textile sector and modernization and consolidation for creating a globally forcompetitive textile industry.

The Technology Upgradation Fund Scheme (TUFS) by Government of India was commissionedin the year 1999 with a view to facilitate the modernization and upgradation of thetextiles industry by providing credit at reduced rates to the entrepreneurs both in theorganized and the unorganized sector. TUFS has helped in the transition from aquantitatively restricted textiles trade to market driven global merchandise. The modifiedtechno-financial parameters of the scheme will infuse capital investment into the textilessector and help it capitalize on the vibrant and expanding global and domestic marketsthrough technology upgradation cost effectiveness quality production efficiency andglobal competitiveness. It is estimated that this will ensure a growth rate of 16% in thesector.

• MAJOR PROBLEMS FACED BY COTTON INDUSTRIES:

Cotton textile industry is obsessed with many problems. The main factor which havewrecked die industry is the growth of the power loom sector. The result was that manycotton mills became inefficient and uneconomic-one- dirt of the cotton mills became sickand was closed down. By 1992 as many as 130 cotton mills were closed down. Following aresome of the problems faced by the industry.

(a) Shortage of raw materials.

(b) Obsolete machinery.

(c) Power shortage

(d) Low productivity of labour.

(e) Competition in foreign market

(f) Competition from the decentralized sector

(g) Government controls and heavy excise duties

(h) Sick mills

The cotton textile industry of the country is thus facing both short term and long termproblems. Former includes problems of high prices shortage of raw materials liquidityproblems due to poor sales and accumulation of huge stocks due to poor demand in themarket.

The long term problems of the industry include the slow pace of modernization outdatedtechnology resulting into low productivity high cost of production low profitability andincreasing sickness of mills.

1. COMPANY'S PERFORMANCE

The core business of the company is manufacturing and sale of cotton yarn and cottonfabrics. The management discussion and analysis given below discusses the key issues ofthe cotton yarn spinning weaving and dyeing sectors.

The turnover of the Company for the year under review increased to Rs. 244.14 Crores ascompared to Rs. 214.64 Crores in the previous financial year registering a growth of13.74%. The profit before interest and tax of the company has decreased by 12.98% onannualized basis from Rs 35.86 Crores to Rs 31.20 Crores in the current financial year.The net profit for the year under report was affected and decreased to Rs. 8.04 Croresfrom Rs. 14.67 Crores.

Your company's Hydel power project generated power of the value of Rs 141.66 lakhs asagainst Rs. 488.92 lakhs in the previous year.

2. STRATEGIES AND FUTURE PLANS

The Company's spindle age capacity was 56400 spindles Open End Plant and GinningDivision is added considerable revenue to the Company. The global fabric sourcing isshifting to India The encouragement given by Ministry of Textile with TUF and One timeCapital Subsidy the future shifting in fabric sourcing. The Company also expand it'sBusiness activities by entering into Weaving and Dyeing segments and During the yearweaving unit of the company has started its commercial production.

3. DIVISION WISE REVIEW AND ANALYSIS:

A. KSML GINNING DIVISION:

NIPHA GINNINGS :

KSML started its Ginning Division in March 2011 with 24 ginning machines. These ginningmachines are increased to 28 nos. It has most modernized Automatic bale pressing unit andauto seed booster compressor to seed storage tank. This is one of the best and most modernTMC units in entire Guntur district.

MACHINERY INFRASTRUCTURE:

Roller Ginning Nipha
Auto Seed Boosting & Collection Auditya Quality
Automatic Bale Press Karunanand
Online Cody Cleaner Global Engineers Pvt Ltd
Lint Pre Cleaner Govind & Sons
Raw Cotton Storage hot box Rank one company
The Ginning Division has capacity to press 200 bales /day and 50000 bales in a year.

B. KSML SPINNING DIVISION:

During the year your company has operated at 56400 spindles full capacity. The OE plantand new Automatic Ginning and Pressing Unit had commenced its operation during thefinancial year 2010-11. Your Company has made balanced approach towards export anddomestic market. In domestic market most of the buyers are corporate entities and they inturn export fabric ornaments. We see that maximum product value is accrued to the Company.The company relies on consistent supply of international standard quality yarn. Thecompany had clear vision and mission well placed systems team comprises with expertiseprofessionals and strategic management expertise to diversify its qualitative products.

i) RING SPINNING DIVISION:

Kallam Spinning Mills Limited started its production on 22 March 1995 with 12096spindles. KSML is an ISO 9001-2000 Certified Company by TUV since 2000. The unit islocated on Golden Quadrilateral NH-5 connecting Chennai and Calcutta. KSML today operates56400 spindles of Ring Spinning out of which 31488 spindles are compact.

We mainly focus on production of Premium quality yarn.The premium quality yarn isexported to number of customers across the world. The company relies on consistent supplyof international standard quality yarn. Having clear vision well placed systems guidedby a team of professionals & steered by an enterprising management KSML continuous todiversify its products and extend its customers reach.

PRODUCT RANGE:

Ring Spinning Yarn Ne.30s to Ne.80s combed warp / compact.
TFO Yarn Ne.30/2 to Ne.80/2 combed warp / compact.
Production per Month Ring Spinning Yarn 420 tons.

ii) MAINTENANCE OF MACHINES:

The company strictly follows all scheduled activities which are routine and preventiveactivities are followed as per its documented plans in quality manual. On regular basisinternal system audits as well as machine audits are carried out to ensure theeffectiveness of the preventive maintenance. The mill follows machines maintenance as perSITRA recommendation and as per its own experience. The maintenance activity is given atmost priority. All the spares are replaced as per machine manufacturer's suggestion andare purchased directly from the Machine manufacturers to get quality parts. The millreplaces capital machines on regular basis with the latest technology.

iii) QUALITY CONTROL MEASURES:

Raw material inspection will be carried out on Uster HVI Spectrum and Uster Afis Pro -2for 2.5% SL uniformity MIC Strength Short fiber content % and neps /grm. Balemanagement system is followed for consistent superior yarn quality and for this cottonstock required for minimum 5 - 6 months is maintained. Carding and combing processoptimized for NRE of 75% to 85% and 65% to 70% respectively. RIETER D35 /D40 draw framesare maintained for a% less than 0.50. During the year another RIETER D45 draw framemachine was installed for a % less than 0.50. In ring frame breakages are maintained below5 to 6 breaks per 100 spindle hour. In auto coner utmost care is taken for achieving 85%splice strength with defect-free packages. Apart from in process inspection system millhas adopted very stringent final inspection procedure before dispatching yarn to itscustomers.

We maintain regional quality test center do extensive testing of cotton yarn for millsin and around Guntur. The quality testing dept is a profit center on its own.

iv) CARDING MACHINE:

High production card designed to deliver superior performance with a comprehensivecarding concept - available in two variants TC 51 and TC 53.

Technical Details:

Power consumption: 14.63 kW Production: Upto 120 kg/ hr

Key Features:

Precision knife setting system PMS Multi web clean Direct feed

C. KSML OPEN END DIVISION:

KSML established its Open End unit in the year 2009-10 with an initial capacity of 1248Rotors. The total Rotors capacity of Open End Unit was increased to 2912.

KSML have proved its OE yarn quality in the international market and have continuousdemand in the market. Repeated orders are getting continuously. The premium quality yarnis exported to number of customers across the world. The company relies on consistentsupply of international standard quality. Having clear vision well place systems guidedby a team of professionals and steered by an enterprising management. KSML continuous todiversity its products and extend its customer reach.

PRODUCT RANGE:
OE Yarn Ne10s to Ne20s
TFO Yarn Ne OE 20s/2
Production Capacity 16450 kg / day.

Consistent commitment to high quality standards and innovations has been the secret ofsuccess. Superior open end unit ensure the supply of consistent quality yarn tomanufacture the cloth.

D. KSML WEAVING DIVISION:

During the current year 2014-15 your company has started the Commercial Production atWeaving Division.

The company has commenced the commercial production on 01st September 2014.

Our plant capacity of production is one Lakh meter per day of woven fabric including70% yarn dyed shirting and 30% of bottom weight fabric. We have the state of artmachineries in weaving preparatory weaving loom shed and sophisticated testing equipmentand instruments aimed at continuing to be a market leader in quality during the futureyears.

We Kallam Spinning Mills Limited are one of the leading textile manufacturers. Ourpossibilities of fabrics are boundless such as Dobby yarn dyed shirting fabrics withcotton 100% and blended with lycra stretch polyester nylon Linen and viscose fabrics.It does not which fabric or design is concerned. Our name guarantees perfect workmanshipat all time. The weaving industry is professionally managed with techno-commercialprofessionals at the helm of affairs.

We have the state of art machines from various leaders of manufacturers around theworld. We are procuring from with the countries of Belgium Japan Swiss Spain GermanChina and Italy.

i) AIRJET LOOM :

Technical specifications :

Equipped as standard for symmetrical width reduction

• Newly designed relay nozzles and valves for highest performance

• Equipped as standard for fitting a superstructure - one of the many modularfeatures

• Split frame for style change in less than 30 minutes

• Optimised insertion preparation for up to eight colours or yarn types

• Fast simple width changes

• Ultimate flexibility with the same standard design for cam dobby and jacquardmotions

• Warp beam and cloth roll can be changed quickly without tools

• Sumo main motor with direct drive

ii) REED CLEANING MACHINE :

During weaving operation a lot of fly fluff wax dust dirt oil etc. accumulate onthe surface or in the dents of the Reed which may result in frequent warp threadbreakages. Present manual Reed cleaning practice is very ineffective. Hence for efficientoperation of a weaving machine it is necessary to clean the Reed.

ULTRASONIC REED CLEANING

Ultrasonic waves are transmitted through the cleaning liquid and exerts a force called"Cavitation" on the surface or dents of the Reed to make it free ofcontamination.

This force penetrates into the smallest crevices which are normally inaccessible toother cleaning methods and thereby ensures maximum cleaning efficiency.

TECHNICAL SPECIFICATIONS :

Models Models available for the reed of length up to 4000 mm
Works on 240 VAC 50Hz.
Ultrasonic Power 300 - 2400 watts
Cleaning time 5 - 25 min./reed (depending upon length)

FEATURES PLUS :

• New and Improved Technology.

• Easy to Use and operate.

• Less consumption.

• Less manpower.

• Improves weaving machine maintenance.

• Offer more production with better quality.

iii) BEAM TO BEAM ROLLING MACHINE :

Features:

• Very much ideal for preparing small lots of same pattern fabrics with severalcolours in warp sheet

• To enhance the weavers beam quality

• Reduction in yarn wastage for small lot sizing

• Increased loom efficiency

• Operator friendly operations.

• Pneumatic press rollers system.

• Hydraulic beam loading & doffing System.

• Movable expandable comb.

• Taping device.

• Beam arbour is motor driven.

• Working width 1200 to 5000mm.

• Flange diameter upto 1400mm.

• Speed upto 120 MPM.

• Separate winder available for large flange diameter for terrytowel jute etc.

General :

• Ultimate technology & designs give highest quality sized warp beams.

• Fully auto control of all parameters

• Uniform required size pick up.

• Low hairiness with uniform moisture.

• Low stretch.

• Easy reproducibility due to recipe data stored.

• Less Operator interference.

• Full safety during operation.

Easy Supervision & operation due to graphics display & data save of actual& set process parameters.

iv. CENTRI FUGAL COMPRESSOR :

Features of Centri Fugal Compressors :

1. Prevents contamination of your system

2. Removes the potential for compressed air pipeline fires caused by oil carryover

3. Thrust loads absorbed at low speed

4. High reliability

5. Non-contact air and oil seals

6. Eliminates the expense and maintenance of oil removal filters

7. No wearing parts requiring regular replacement

8. Pulsation free and require no dampers

v. SECTIONAL WARPING MACHINE :

Features:

• Robust separate warping and beaming structure

• Yarn build up through laser sensor

• Three servo system with section tension control

• Kick Back type feeler roller for compact beam

• Extremely effective air cooled type hydraulic disc brakes

• Ball screw for high precision warping Application :

• Ideal sectional warper for all type of count

• Suitable for Yarn dyed shirting Terry towel Home Furnishing fabric SilkLabel Industrial fabric

• Suiting and shirting Technical textile dress material shawl and specialfabrics

vi. SIZING MACHINE :

TECHNICAL SPECIFICATIONS

Width 1800-4000 mm
Flange Dia 800-1250mm
Speed up to 150 m/min

FEATURES:

• Unwinding tension controls through advance control system

• 2 different type of size box - horizontal and Vertical Pull Out

• Individual drives for size boxes with digital data exchange ensures minimum wetstretch between the sections

• Innovative design of drying cylinders for improved drying efficiency

• 2 different type of beamer as per the application

• Extremely robust construction

• Constant and uniform winding tension across the width

• Complete operation controls in closed loop with advance servo system

vii) FABRIC INSPECTION MACHINE :

Inspection - Rolling Machine is mainly used in weaving mills and dyeing plant for theinspection of various types of fabrics for full-width rolling and metre counting.

TECHNICAL SPECIFICATION

Max dia of fabric rolls 500mm
Working Width available upto 150cms-400cm.
Speed of rolling 0-50m/min

The machine is driven by imported gear box with electric motor Inverter Drive forcontrolling rolling Speed Electronic length Counter Tension of cloth by rollsAnticurling Device for uniform fabric rolling and Inside and Outside lighting for fabricinspection

FEATURES :

• Efficient inspection of fabric defects in grey and finish fabrics.

• Suitable for woven Knits and lycra fabrics.

• Tensionless movement of fabric on inspection table.

• Full forward & reserve run of fabric.

• Speed variable from 0 - 50 mtrs/ min.

• Operator friendly improves productivity reduces labour.

The machine is for inspection and Rolling of finished as well as grey fabrics forwidths ranging from 60'' to 150". The supply fabrics can be either in loose form orroll form or roll form. The fabric Rolling speed is controlled by push buttons viainvertor control.

Fabric Tension can be adjusted by means of several bar pensioners. Anti curler devicedigital counter meter 1 hp motor coupled with Suitable Gear box is provided with themachine. The inspection board consists of a combination of black board and glass withbacklight. Top Light is also provided.

E. KSML DYEING DIVISION:

The Company had taken up dying of cotton Yarn 5000 kgs per day production. The projectis being implemented at cost of Rs. 12.5crores and Bank of Baroda is financing Rs.9.90crores by means of term loan.

i. YARN DYEING CASA ATMOSPHERIC FLAX ROVING BLEACHING AND SCOURING MACHINE

Type of Fibres : Flax / Linen
Type Fabrics : Flax / Linen roving
Capacity : No. of spindles: 54-257 for single kier machine 276-514 for twin kier machine Capacity depends on the weight of processed material per spool
Applications : For the bleaching and scouring of flax roving wound on spool

ii. YARN DYEING LABWIN LABORATORY PACKAGE DYEING MACHINE (LABORATORY EQUIPMENT)

Type of Fibres : Cotton polyester poly/cotton acrylic polyamide (nylon) woolramie/cotton

Type of Yarns :

• Yarn winded on all kinds of dye tubes

• Loose fibre such as cotton wool artificial silk etc.

• Muffs tops tapes etc.

Capacity : 1- 6 packages per single kier; up to 24 packages in multi-kier machine.Capacity depends on the weight of processed material.

Applications : For the pretreatment dyeing and after treatment of packages bobbinsloose fibres muffs tops tapes etc.

iii. YARN DYEING FTDW RADIO FREQUENCY DRYER (FINISHING) :

APPLICATIONS :

Radio Frequency Dryer allows the drying of natural and manmade fibers in staple hankcone package and top form normally immediately after hydroextraction. The result is gooduniformity and better final handling.

ADVANTAGES :

• Uniform drying at low temperature

• Selective heating that only the humid parts are heated

• Energy saving (1.2 kg water per kW/hr high frequency power)

• Power consumption directly proportional to humidity contents

• Improved fiber quality and softness

• Residual humidity controlled within 1%

• Constant and repeatable drying level

• Space saving and possibilities of automation

• Time saving

• Instant controls and adjustments

iv. YARN DYEING RD LOW NOISE RAPID DRYER (FINISHING)

APPLICATION :

RD low noise rapid dryer is a perfect companion to Fong's package dyeing machine

and is also compatible to major module of carriers available in the market. It provides

an energy efficiency time saving and even drying of yarn after the dyeing phase.

ADVANTAGES:

• Short process time

• No dead time is incurred during circulation of air when in reversing directionthus shortens the process time required

• Even drying and minimum harm to most delicate yarn

• Twin direction circulation without dead time increases number of circulationthus improves drying quality throughout the process material

• Quiet operation

• Specially selected radial blower keeping noise level down to the minimum (88 dBAat 1 m distance)

v. DYED CONE REWINDING

Subsequent to the R.F. Drying the yarn cones are unloaded weighed checked forevenness of dyeing are rewound as soft packages on Schlafhorst auto-coners so that it isready for warping or for weft insertion in weaving section. We need around 5 machines of60 spindles each for our capacity and need segregation of each machine to avoid fluffcontamination of one shade onto the other. It is helpful if humidification air changes areprovided so that fluff is going into the return trench and not flying around in thewinding area.

F. KSML HYDEL POWER DIVISION:

Keeping in view the outstanding performance of the Hydel project for the past fiveyears the company 3rd power plant had commenced its commercial operation during theyear-2010-11.

During the year under review with the plenty of water available in Krishna Basin theHydel power generation had Increased from 11521954 units to 8859059 units. Most of thepower generation was for the captive consumption of the spinning division.

HYDRO ELECTRIC DIVISION:

Our company has three hydro electric plants with 4.0 MW capacity at NelakondapallyMandal Khammam District of Andhra Pradesh. These plants are on 16th & 17th branchcanal of Nagarjuna Sagar project left main canal. The canal flows for 7 to 8 months in ayear. Typically the canal is opened in Aug/Sep and closed by end April. The first twoprojects of 0.8 MW and 1.6 MW were commissioned in Jan 2002 and third hydro electric plantof 1.6 MW was commissioned in March 2011. All the generators produce electricity at 6.6 KVvoltage level. The generated voltage is enhanced to 33 KV by a power transformer and fedto the state electricity grid. The hydel power generation solely dependent on the canalwater flow. The 0.8 MW hydro electric project is financed by IREDA New Delhi andremaining two Nos. of 1.6 MW hydro electric projects are financed by Andhra Bank. We havegood electrical and mechanical engineering team at the hydro electric plants. They ensurethe availability of plant by more than 98% when water is flowing in the canal. During thefinancial year 2014-15 we have generated 8859059 Units. Out of the generation 70% of theunits are wheeled and consumed in Spinning Mill and Sagar Cements Ltd and 30% of the unitsare sold to TSNPDCL.

CAUTIONARY STATEMENT:

Statements in the Management Discussion and Analysis describing the Companiesobjectives projections estimates expectations may be "forward lookingstatements" within the meaning of applicable security laws and regulations. Actualresults could differ materially from those expressed or implied. Important factors thatcould make difference to the company's operations include among others economicconditions effecting demand / supply and price conditions in the domestic and overseasmarkets in which the Company operates changes in the Government regulations tax laws andother statutes and incidental factors.

Annexure - VII TO THE DIRECTORS' REPORT

DETAILS PERTAINING TO REMUNERATION AS REQUIRED UNDER SECTION 197(12) OF THE COMPANIESACT 2013 READ WITH RULE 5(1) OF THE COMPANIES (APPOINTMENT AND REMUNERATION OF MANAGERIALPERSONNEL) RULES 2014

(i) The ratio of the remuneration of each Director to the median remuneration of theemployees of the Company for the financial year 2014-15 and the comparison of remunerationof each Key Managerial Personnel (KMP)

against the performance of the Company are as under:

Sl. No. Name of the Director/ KMP and Designation Remuneration of Director During the F.Y 2014-15 (Amount In Rs) Ratio of remuneration of each Director/ to median remuneration of employees % Increase/ (Decrease) in Remuneration in the Financial Year 2014-15 Comparison of the Remuneration of the KMP against the Company
1 P. Venkateswara Reddy Managing Director 2328570 22.792 (34.61)

Profit before Tax decreased by 61.96% and Profit After Tax decreased by 35.55% in financial Year 2014-15

2 G.V.Krishna Reddy Joint Managing Director 2323385 22.74 (34.72)
3 M.V.Subba Reddy Whole Time Director 917538 8.981 68.75
4 S.Pulla Rao Non Executive Director 45000 0.440 0.00
5 M.R. Naik Non Executive Director 40000 0.392 60.00
6 V.S.N Murthy Non Executive Director 45000 0.440 0.00
7 A. Krishna Murthy Non Executive Director 25000 0.245 0.00
8 V. Bhargavi Non Executive Director 25000 0.245 #

i) # Details was not given as Smt V. Bhargavi was not a Director in the financial year2013-14. She was appointed on 27th September 2014

ii) The Median Remuneration of Employees of the Company during the Financial Year wasRs. 102165 .

iii) There were 280 permanent employees on the rolls of the Company as on 31st March2015.

iv) Comparison of Remuneration of the Key Managerial Personnel(s) against theperformance of the Company: The total remuneration of Key Managerial Personnel declined by39.23% from 76.64 Lakhs in 2013-14 to 46.57 Lakhs in 2014-15 whereas the Profit before Taxdecreased by 61.96% to 803.26 Lakhs in 2014-15 from 2111.58 Lakhs in 2013-14.

v) There were no employees in the Company as per Rule 5(2) of Chapter XIII theCompanies(Appointment and Remuneration of Managerial Personnel) Rules 2014.

vii) The ratio of the remuneration of the highest paid director to that of theemployees who are not directors but receive remuneration in excess of the highest paiddirector during the year - Not Applicable; and

viii) The key parameters for the variable component of remuneration availed by thedirectors are considered by the Board of Directors based on the recommendations of theHuman Resources Nomination and Remuneration Committee as per the Remuneration Policy forDirectors Key Managerial Personnel and other Employees.

ix) It is hereby affirmed that the remuneration paid is as per the as per theRemuneration Policy for Directors Key Managerial Personnel and other Employees.

ANNEXURE - VIII TO THE DIRECTORS' REPORT REPORT ON CORPORATE SOCIAL RESPONSIBILITY(CSR) :

1. CSR policy of the Company is posted on the website of the Company at www.ksml.in.

2. Composition of CSR Committee:

Mr. G.V. Krishna Reddy - Chairman

Mr. M.R. Naik - Member

Mr. M.V. Subba Reddy - Member

3. Average net profit of the Company for last three financial years: 11.16 Crores

4. Prescribed CSR Expenditure (two per cent of the amount as in item 3 above): TheCompany is required to spend '22.30 Lakhs towards CSR.

5. Details of CSR spent during the financial year 2014-15 :

(a) Total amount to be spent for the financial year: ' 22.40 Lakhs

(b) Amount unspent if any: None

(c) Manner in which the amount spent during the financial year is detailed below:

Sl. No. CSR Activity Sector Location Amount Spent
1 DISTRIBUTION OF MEDICINES Promoting preventive health care Addanki Andhra Pradesh 34126
2 CLEARING OF BUSHES Ensuring Environmental Sustainability Addanki Andhra Pradesh 292143
3 FOOD DISTRIBUTION Promoting preventive health care Addanki Andhra Pradesh 427425
4 IMPROVEMENT OF ROADS Social Business projects Addanki Andhra Pradesh 1486953
TOTAL: 2240647

6. The Corporate Social Responsibility Committee of the Company hereby confirms thatthe implementation & monitoring of CSR policy is in compliance with CSR objectives& policy of the Company.

On behalf of the Corporate Social Responsibility Committee of
Kallam Spinning Mills Limited
Mr. G.V. KRISHNA REDDY
Chairman of the Corporate Social Responsibility Committee

 

P. Venkateswara Reddy
Managing Director