To The Members
Your Directors are delighted to present their 38th Annual Report of theCompany for the financial year 2019-20 along with the audited accounts for the financialyear ended March 31 2020
( . In Lakhs)
|Particulars ||31.03.2020 ||31.03.2019 |
|Total Income ||2426 ||4068 |
|Profit before Depreciation Interest & Tax for the year ||(198) ||9 |
|Depreciation for the year ||54 ||55 |
|Finance Cost ||0 ||1 |
|Net Profit / (Loss) ||(252) ||(47) |
On account of the accumulated losses your Directors do not recommend any dividend forthe year ended 31st March 2020.
TRANSFER TO RESERVES:
The Directors of the company didn't transfer any amount to its reserves.
TRANSFER OF UNCLAIMED DIVIDEND TO INVESTOR EDUCATION AND PROTECTION FUND:
Since the Company has not declared any dividends there is no unclaimed dividend to betransferred to Investor Education and Protection Fund.
BOARD MEETINGS CONDUCTED DURING THE PERIOD UNDER REVIEW:
The meetings of the board are scheduled at regular intervals to decided and discuss onbusiness performance policies strategies and other matters of significance.
The Company had conducted 5 (Five) Board meetings during the period under review. (i.e:30.05.2019 14.08.2019 14.11.2019 13.02.2020 and 27.02.2020) The intervening gap betweenany consecutive board meetings was within the period prescribed under the provisions ofthe Companies Act 2013.
DIRECTORS' RESPONSIBILITY STATEMENT:
Pursuant to the requirement under Section 134(3)(c) of the Companies Act 2013 withrespect to Directors' Responsibility Statement it is hereby confirmed that:
(a) in the preparation of the annual accounts the applicable accounting standards hadbeen followed and there are no material departures from those standards;
(b) the directors had selected such accounting policies and applied them consistentlyand made judgments and estimates that are reasonable and prudent so as to give a true andfair view of the state of affairs of the company at the end of the financial year and ofthe loss of the company for that period;
(c) the directors had taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of this Act for safeguarding theassets of the company and for preventing and detecting fraud and other irregularities;
(d) the directors confirm that the annual accounts have been prepared on a goingconcern basis;
(e) the directors have laid down internal financial controls to be followed by theCompany and that such internal financial controls are adequate and operating effectivelyand
(f) the directors had devised proper systems to ensure compliance with the provisionsof all applicable laws and that such systems were adequate and operating effectively.
DECLARATION BY INDEPENDENT DIRECTORS:
The Company has received declarations from all the Independent Directors of the Companyconfirming that they meet the criteria of independence as prescribed under the CompaniesAct 2013.
COMPANY'S POLICY RELATING TO DIRECTORS APPOINTMENT PAYMENT OF REMUNERATION AND OTHERMATTERS PROVIDED UNDER SECTION 178(3) OF THE COMPANIES ACT 2013:
The Company's Policy relating to appointment of Directors payment of Managerialremuneration Directors' qualifications positive attributes independence of Directorsand other related matters as provided under Section 178(3) of the Companies Act 2013 isfurnished on the Company's website www.kakatiyatextiles.in.
PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS MADE UNDER SECTION 186 OF THE COMPANIESACT 2013:
The Company has not granted any loans or given any security or made any investmentspursuant to the provisions of Section 186 of the Companies Act 2013 during the year underreview.
PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES:
All transactions entered into with related parties during the financial year 2019-20were in the ordinary course of business and on an arm's length basis. Since there are notransactions which are not on arm's length basis and material in nature the requirement ofdisclosure of such related party transactions in Form AOC-2 does not arise.
The policy on related party transactions as approved by the Board of Directors of theCompany has been uploaded on the company's website and may be accessed through the websiteat www.kakatiyatextiles.in
EXTRACT OF ANNUAL RETURN:
The extract of Annual Return in the prescribed Form No.MGT-9 pursuant to Section 92(3)read with Rule 12 of the Companies (Management and Administration) Rules 2014 is annexedas Annexure-1. The annual return is placed on the company's website onwww.kakatiyatextiles.in
The Board of directors based on the recommendation of the audit committee has appointedM/s. Cherukuri & Co Chartered Accountants as the Internal Auditors of the company.The internal auditors are submitting their report on quarterly basis.
M/s. Chevuturi Associates Chartered Accountants who were appointed as the statutoryauditors of the company at the 38thAnnual General Meeting (AGM) held onSeptember 29 2020 to hold office as such till the conclusion of the ensuing 43rdAGM.The term of the said Statutory Auditors shall expire at the ensuing 43rdAnnualGeneral Meeting of the company. Further pursuant to Section 139 of the Companies Act2013 read with the Companies (Audit and Auditors) Rules 2014 M/s. Chevuturi AssociatesChartered Accountants being eligible offer themselves for re-appointment for a term of 5(Five) years in accordance with the provisions of Sec. 139 of the Companies Act 2013 andthe rules made there under. The Company has also received written consent from theAuditors and a confirmation to the effect that their re-appointment if made would bewithin the limits prescribed under the Section 141 of the Companies Act 2013 and therules made there under.
Accordingly the appointment of M/s. Chevuturi Associates Chartered Accountants asthe statutory auditors of the Company at a remuneration of Rs. 275000/- per annum plusout of pocket expenses and taxes at the applicable rates is hereby placed before theshareholders for their approval.
The Statutory auditor's report does not contain any qualifications reservations oradverse remarks.
Pursuant to the provisions of Section 204 of the Companies Act 2013 and the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 the Company hasappointed M/s. PSRao& Associates Company Secretaries to undertake the SecretarialAudit of the Company. The report of the Secretarial Audit is annexed herewith as Annexure-IItothis report.
CHANGE IN NATURE OF BUSINESS:
There were no changes in the nature of business of the company.
MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANCIAL POSITION OF THE COMPANY:
There have been no material changes and commitments affecting the financial position ofthe Company which has occurred between the financial year ended 31st March2020 and the date of the report.
STATEMENT CONCERNING DEVELOPMENT AND IMPLEMENTATION OF RISK MANAGEMENT POLICY OF THECOMPANY:
The Company has a structured risk management policy. The Risk management process isdesigned to safeguard the organization from various risks through adequate and timelyactions. It is designed to anticipate evaluate and mitigate risks in order to minimizeits impact on the business. The potential risks are inventoried and integrated with themanagement process such that they receive the necessary consideration during decisionmaking.
WHISTLE BLOWER POLICY (VIGIL MECHANISM):
The Company has formulated a whistle blower policy in line with the provisions ofSection 177 of the Companies Act 2013 and Regulation 22 of the SEBI ((Listing Obligationsand Disclosure Requirements) Regulations 2015to enable the directors and employees toreport concerns about unethical behavior actual or suspected fraud or violation of thecompany's code of conduct or ethics policy. The policy also provides for adequatesafeguards against victimization of director(s) / employee(s) who avail of the mechanismand also provides for direct access to the Chairman of the Audit Committee in exceptionalcases. The Whistle Blower policy has been uploaded on the company's website atwww.kakatiyatextiles.in.
ANNUAL EVALUATION OF THE BOARD ON ITS OWN PERFORMANCE AND OF THE INDIVIDUAL DIRECTORS:
In accordance with the criteria suggested by the Nomination and Remuneration Committeethe Board of Directors evaluated the performance of the Board having regard to variouscriteria such as Board composition Board processes Board dynamics etc. The IndependentDirectors at their separate meetings also evaluated the performance of non-independentdirectors and the Board as a whole based on various criteria.
The performance of each Independent Director was evaluated by the entire board ofdirectors on various parameters like engagement leadership analysis decision makingcommunication governance etc. The Board and the Independent Directors were of theunanimous view that performance of the Board of Directors as a whole was satisfactory.
The performances of all the Committees were evaluated by the Board having regard tovarious criteria such as committee composition committee processes committee dynamicsetc. The Board was of the unanimous view that all the committees were performing theirfunctions satisfactorily.
DIRECTORS'& KEY MANAGERIAL PERSONNEL:
During the period under review there were no changes in the Board of Directors of theCompany.
Shri. Vanka Ravindranath Director of the Company retires by rotation at the ensuingAnnual General Meeting and expressed his willingness to be reappointed as the Director ofthe Company. The necessary resolution for the appointment of Shri. Vanka Ravindranath isset out in the notice for approval of members in the ensuing Annual General Meeting of theCompany.
Further the term of Shri Gamini Venkata Subba Rao and Dr. Kuday Anand term willexpires on conclusion of this Annual General Meeting. The Nomination and RemunerationCommittee and Board of Directors of the Company have recommended the appointment of ShriGamini Venkata Subba Rao and Dr. Kuday Anand as Independent Directors for another term offive years till the conclusion of 43rd Annual General Meeting. The necessaryresolution is set out in the notice for approval of members in the ensuing Annual GeneralMeeting of the Company.
Further also the term of Shri. A Ranga Rao Manager of the Company expired on 29thJune 2020. The Nomination and Remuneration Committee and Board of Directors of the Companyhave re-appointed him as a Manager for another term of three years with effect from 29thJune 2020. The necessary resolution is set out in the notice for approval of members inthe ensuing Annual General Meeting of the Company.
COMPOSITION OF BOARD COMMITTEES:
We have in place of all the committees of the board which are required to beconstituted under the Companies Act 2013 and SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015.
The Composition of various committees of the Board is hereunder:
|AUDIT COMMITTEE: || |
|Shri. Kudary Anand ||- Chairman |
|Shri. Vanka Ravindranath ||- Member |
|Shri. Venkata Subbarao Gamini ||- Member |
|NOMINATION AND REMUNERATION COMMITTEE: || |
|Shri. Venkata Subbarao Gamini ||- Chairman |
|Shri. Kudary Anand ||- Member |
|Smt. Vanka Raja Kumari ||- Member |
|STAKEHOLDERS RELATIONSHIP COMMITTEE: || |
|Shri. Venkata Subbarao Gamini ||- Chairman |
|Shri. Kudary Anand ||- Member |
|Smt. Vanka Raja Kumari ||- Member |
Since the Company has not accepted any fixed deposits covered under Chapter V of theCompanies Act 2013 and accordingly the question of default in repayment of deposits orpayment of interest thereon during the year does not arise.
EROSION OF NETWORTH:
As at 31st March 2020 your Company had a net worth of Rs. (1103) lakhs. Your Directorsbelieve that the Company's net worth could become positive if the favorable business trendcontinues for some time. Therefore the sickness status has not been referred to BIFR.
DETAILS OF SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS ORTRIBUNALS IMPACTING THE GOING CONCERN STATUS AND COMPANY'S OPERATION IN FUTURE:
There is no significant and material order passed by the regulators or courts ortribunals impacting the going concern status and company's operation in future.
INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY:
The Company has adequate internal control systems to monitor internal business processfinancial reporting and compliance with applicable laws. The Company periodically reviewsthe adequacy and effectiveness of the control systems.
The Audit committee of the Board reviews internal control systems and their adequacysignificant risk areas observations made by the internal auditors on control mechanismand the operations of the company recommendations made for corrective action and theinternal audit reports. The committee reviews with the statutory auditors and themanagement key issues significant processes and accounting policies.
PARTICULARS OF EMPLOYEES:
The information required pursuant to Section 197 read with Rule 5 (1) of the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 and as amended inrespect of our employees is attached herewith as Annexure-III.
Further we do not have any employee whose remuneration falls within the purview of thelimits prescribed under the provisions of Section 197 of the Companies Act 2013 read withRule 5 (2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules2014 and as amended i.e. 8.50 Lakhs per Month or Rs. 1.02Crores per Annum.
Further details of top ten employees in terms of remuneration drawn during thefinancial year ended 31stMarch 2020 as required under Rule 5 (2) of theCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014 and asamended is attached herewith as Annexure-III.
MANAGEMENT DISCUSSION AND ANALYSIS REPORT:
Pursuant to the Regulation 34 (2) (e) of SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015 a report on Management Discussion and Analysis isherewith annexed as Annexure-IV.
CORPORATE GOVERNANCE REPORT:
Since the paid up capital of the Company is less than Rs.10 Crores and the networth ofthe Company is less than Rs. 25 Crores the provisions of Regulations 17 18 19 20 2122 23 24 25 26 27 and clauses (b) to (i) of sub-regulation 2 of Regulation 46 andpara C D & E of Schedule V of the SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015 are not applicable to the Company.
CORPORATE SOCIAL RESPONSIBILITY:
Since your Company does not fall within any of the parameters specified under theprovisions of Section 135 of the Companies Act 2013 read with Rules made there underreporting pursuant to Section 134 (3) (o) is not applicable.
CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION FOREIGN EXCHANGE EARNINGS AND OUTGO:
The information pertaining to conservation of energy technology absorption ForeignExchange Earnings and outgo as required under section 134(3)(m) of the Companies Act 2013read with Rule 8(3) of the Companies (Accounts) Rules 2014 is attached herewith as Annexure-Vto this report.
DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION PROHIBITIONAND REDRESSAL) ACT 2013:
The Company has in place a policy on Sexual Harassment of Women at workplace in linewith the requirements of the Sexual Harassment of Women at Workplace (PreventionProhibition and Redressal) Act 2013. The company has constituted an internal complaintscommittee to address the complaints regarding sexual harassment. All employees are coveredunder this policy. The company has not received any complaints during the year underreview.
Staff and Labour relations during the year at all units of the company continued to becordial.
Your Directors wish to thank the Company's Bankers Financial Institutions Customersand Suppliers for their unstinted support and co-operation.
Your Directors wish to place on record their appreciation of the confidence reposed bythe shareholders in the Company at all times.
The Board of Directors also wishes to thank the employees at all levels for theirexcellent support and contribution made by them.
| ||By Order of the Board of Directors |
| ||For Kakatiya Textiles Ltd |
| ||Sd/- |
| ||V Ravindranath |
|Place: Tanuku ||Chairman & Director |
|Date: 03.09.2020 ||DIN: 0480295 |