Kakatiya Cement Sugar & Industries Ltd Directors Report.

To

The Members

Your Directors have pleasure in presenting the 41st Annual Report together with the Audited Financial statements for the year ended 31st March, 2020.

Financial Results

The Financial Results for the year ended 31st March, 2020 are summarized below:

Particulars 2019-20 2018-19
Income (Sales and other Income) 16797.73 12344.71
Profit before Depreciation, Interest & Taxes 1189.33 1438.11
Depreciation 242.94 242.26
Interest 312.65 565.08
doubtful debts 0 260.57
Provision for wheeling charges 650.00 0
Taxation 157.70 97.33
Deferred Taxation (101.36) (242.87)
TOTAL 1261.93 922.37
Profit after Tax (72.60) 515.74
Other Comprehensive Income 150.00 (92.38)
Total Comprehensive Income 77.40 423.36
Share Capital (No. of shares) 7773858 7773858
EPS (Rs.) (0.93) 6.63

Dividend

Your Directors are pleased to recommend for your consideration a Dividend at Rs. 3.00 per equity share for the year ended 31.03.2020 which aggregates to Rs. 233.22 lacs. Your directors feel that it shall be appropriate to recommend dividend at Rs. 3.00 per equity share at par with the dividend declared in the past years despite the fact that the financial performance of the company in the year under review has suffered a setback on account of multifarious factors.

Transfer of Profits to Reserves

The company has decided not to transfer any sum to reserves from out of the current years profits. sum was transferred to reserves from out of the profits of the preceding year.

Transfer to Investor Education and Protection Fund (IEPF)

Pursuant to the provisions of section 124 and 125 of the Companies Act, 2013 and in terms of Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) Rules, 2016, all shares on which dividend has not been claimed for seven consecutive years or more shall be transferred to the Investor Education and Protection Fund (IEPF).

Accordingly, the company has transferred 1,50,585 equity shares to the IEPF Authority during the year ended 31st March, 2020. To claim the equity shares and dividend which were transferred to the IEPF, the shareholders are requested to visit the website of the company www.kakatiyacements.com to know the procedure to claim the shares and dividend transferred to IEPF.

According to Section 205C of the Companies Act, 2013 read with Investor Education and Protection Fund (Awareness and Protection of Investors) Rules, 2001, the company has transferred unclaimed dividend amounting to Rs. 8,77,735 to the IEPF during the year under review. The said transfer is in respect of the unclaimed dividend for the financial year 2011-2012.

Material Changes and Commitments

In terms of Section 134 (3) (l), of the Companies Act, 2013, there are no material changes and commitments affecting the financial position of the company which have occurred between the end of the financial year of the company to which the financial relate and the date of the Report.

Covid -19

Consequent to lockdown declared by the state and central governments resulting from the global epidemic, the company has shut down its operations in April and May, 2020. However the company has adopted ‘work from home policy whereever it is feasible. In view of the uncertainty as to the quick turnaround to normalcy, the company has carried out a comprehensive assessment of possible impact on its business operations, financial assets, contractual obligations and its overall liquidity position based on internal and external sources of information and application of reasonable estimates.

We anticipate that covid-19 could have a material impact on the companys performance in the current year. The company shall endeavour its best to mitigate the fixed overheads to the possible extent and there by combat the critical challenges and move forward with a committed sprit.

Further special focus is laid on health and safety of the workforce and requisite steps are being taken to ensure that the entire workforce sincerely adheres to the prescribed safety norms and health measures.

Public Deposits

The company has not accepted any deposits during the year under review and there were no outstanding deposits as at the end of the year falling within the ambit of Section 73 of the Companies Act, 2013 and the companies (Acceptance of Deposits) Rules, 2014.

Significant and Material orders passed by the Regulators / Courts / Tribunals material orders passed by the Regulators or courts or tribunals in the year under review impacting the Therearenosignificant going concern status and companys operations in future.

Directors retiring by rotation

In accordance with the provisions of the Companies Act, 2013, Shri J S Rao, Director retires by rotation at the ensuing Annual General Meeting and being eligible, offers himself for re-appointment.

The brief profile of Shri J S Rao, director who is seeking re-appointment at the ensuingAnnual General Meeting is presented elsewhere in this Annual Report.

Dematerialisation

As on 31st March, 2020, 75,72,056 shares were dematerialised with National Securities Depository Limited and Central Depository Services Limited which constitutes 97.40% of the shares of the company. Members may please note that it is a mandatory requirement that the company shall endeavour to ensure that at least 50% of the shareholding of the public shareholders is in the dematerialised mode.

The company, therefore once again requests such of the public shareholders who have not yet dematerialised their shares to initiate immediate steps to complete the process of dematerialisation.

Statement of Affairs of the company

The Statement of affairs of the company is presented as part of Management discussion and analysis (MAD) Report forming part of this Report.

PERFORMANCE OF THE YEAR UNDER REVIEW Cement Division:

During the year under review, the Cement Division has produced 2,67,423 MT as against 2,00,779 MT in the year ago period thereby registering an increase of 33.19%. The cement Division has clocked a turnover of Rs. 87.49 crores as against the turnover of Rs. 65.28 crores recorded in the previous year and this works out to a rise of 34.02%. The Cement Division has earned Profit Before Tax (PBT) ofRs. 11.68 crores in the year under review as against Rs. 7.22 crores earned in the previous year. This works out to an increase of 61.77% over the previous year.

Sugar Division:

The Sugar cane crushed in the sugar division in the year under review is 1,08,478 MT as against 1,66,932 MT in the previous year thereby recording a decrease of 35.01%. The company could not procure the mandals and villages of its choice even in the year under review and the inadequate availability of water sources has also impacted the cane production and by extension even the production of sugar recent Government Regulation restricting the sale of the sugar has also impacted the quantum of sales during toasignificant the year under review. The sugar division has clocked a turnover of Rs. 66.00 cores in 2019-2020 in comparison with Rs. 39.40 crores in the preceding year and thereby registering an inrease of 67.51% over the year ago period. The sugar division recorded profit Rs. (9.74) crores in the year under review as against profit before tax (PBT) ofRs. (12.54) crores in the preceding year.

Power Division:

The Power Division has generated 1,68,65,510 KWH in 2019-2020 as against 2,61,17,257 KWH of power in the preceding year thereby recording a decrease of 35.42%. Members are aware that the company has not been able to generate power during off-season period in the sugar division since the Government of Telangana has not been conceding to the request of the power entities to generate power using coal as an alternative fuel to the bagasse.

The Power division has clocked a turnover of Rs.10.15 crores in the year under review as against the turnover Rs. 20.59 crores made in the year-ago period and this works out to a decrease of 50.70% over the previous year.

The power division could earn a Profit before tax (PBT) of Rs.(2.01) crores as against a profit of Rs. 9.17 crores in the previous year thus recording a decrease of 122.90% in the year under review.

CURRENT YEAR OUTLOOK: Cement Division:

Taking into account the market conditions and other factors, the company has set a target of its cement production at 3,00,000 MT for the current year.

Sugar Division:

The sugar division was impacted by various issues during the year under review. The scarcity of water sources, loss of productive areas in the zonal allocation made by the government in 2017 and poor cane development are some of the critical factors, and in view of these constrains, your company has set a target for cane crushing at 80,000 MT only in the current year.

Power Division:

The performance of power division is directly linked to the operational level of the sugar division. A favorable government policy with regard to utilization of coal as an alternative fuel to bagasse during off-season of the sugar division is yet to crystallize since the government has not been permitting the power generating companies to utilize the coal as an alternative fuel to bagasse. In view of this, the performance of the power division will continue to be low and added to this factor, any serious impediments to the sugar division will further impact the performance of the power division.

Insurance:

All the properties of the Company including its buildings, Plant and Machinery and Stocks wherever required have been adequately insured.

Disclosures under the Companies Act, 2013

I) Extract of the Annual Return:

The extract of the Annual Return as per provisions of section 92 of the Companies Act, 2013 and Rule 12 of Companies

(Management and Administration) Rules, 2014 in form MGT-9 is enclosed to this Report (Annexure – 1). The same is posted on the website of the company at www.kakatiyacements.com.

II) Board Meetings:

During the year under review, 4 (Four) Board Meetings were held. The details of the Board Meetings and the attendance of the Directors are furnished elsewhere in the Corporate Governance Report.

III) Changes in Share Capital

There is no change in the Share Capital during the year under review.

IV) Changes in the nature of business, if any

There is no change in the nature of business of the company during the year under review.

V) Audit Committee:

The terms of reference of the Audit Committee encompasses the requirements of Section 177 of Companies Act, 2013 and

Regulation 18 of the Listing Regulations and, inter alia includes:

a. To hold periodic discussions with the Statutory Auditors and Internal Auditors of the Company concerning the financial reports of the company and internal control systems. Examination of scope of audit and observations of the Auditors / Internal Auditors and overseeing the Companys financial reporting process and the disclosure of its financial information to ensure that the financial statements are correct, sufficient and credible.;

b. To call for the comments of the auditors about internal control systems, scope of audit, including the observations of the auditors and review of financial statements before their submission to the Board and also to discuss any related issues with the internal and statutory auditors and the management of the company;

c. To evaluate internal financial controls and risk management systems;

d. To, inter-alia, review Management Discussion and Analysis of financial conditions, results of operations and Statement of Significant Related Party transactions submitted by the management before submission to the Board;

e. To investigate into any matter in relation to the items referred to it by the Board and for this purpose obtain professional advice from external sources if required;

f. To make recommendations to the Board on any matter relating to the financial management of the company including the Audit Report;

g. To approve Related Party Transactions. h. Reviewing the functioning of the Whistle Blower mechanism;

i. Recommending the appointment, re-appointment, and if required, the replacement or removal of the statutory auditors and fixation of audit fee and approval for payment for any other services.

More details of the Audit Committee are furnished in the Corporate Governance Report.

VI) Remuneration Policy:

The Company follows a policy on remuneration of Directors and Senior Management personnel. The Policy is approved by the Nomination and Remuneration Committee and the Board. More details on the same are given elsewhere in the Corporate Governance Report.

Nomination and Remuneration Committee: Scope

The main scope of the Nomination and Remuneration Committee is to determine and recommend to the Board the persons to be appointed / re-appointed as Executive Directors / Non-Executive Directors.

The committee also determines and recommends to the Board the financial component. The compensation of the Executive Directors comprises of fixed components and may also include commission based on the profits earned by the company.

The compensation is determined based on the levels of responsibility and the parameters prevailing in the industry. The Executive Directors are not paid any sitting fee for Board / Committee meetings attended by them. The Non-Executive Directors are paid sitting fee for Board / Committee Meetings attended by them and no other payment is made to them.

The Nomination and Remuneration Committee examines and devises a policy on Board diversity and to formulate criteria for determining qualifications, experience, positive attributes and independence. It also recommends to the Board the factors to be reckoned with in determining the remuneration payable to the Directors. More details of the Nomination and Remuneration Committee are furnished elsewhere in the Corporate Governance Report.

VII) Related Party Transactions

Particulars of contracts / arrangements entered into by the company with Related Parties referred to in Section 188 (1) of the Companies Act, 2013 for the year ending 31st March, 2020 have been provided in Form No.AOC-2 pursuant to clause (b) of sub Section (3) of Section 134 of the Act and Rule 8(2) of the Companies (Accounts) Rules, 2014 and the same are annexed to this Report. (Annexure-2).

VIII) Statement of particulars of Appointment and Remuneration of the Managerial Personnel:

The statement of particulars of Appointment and Remuneration of Managerial Personnel as per Section 197(12) of the

Companies Act, 2013 read with Rule 5 of Companies (Appointment and Remuneration of Managerial Personnel) Rules,

2014 for the year ending 31st March, 2020 is annexed to this Report. (Annexure–3).

IX) Independent Directors Data Bank

All the Independent Directors of the company have been registered and are members of Independent Directors Data Bank maintained by Indian Institute of Corporate Affairs.

X) Statement of declaration furnished by Independent Directors under Section 149(6) of the Companies Act, 2013:

The independent Directors have submitted the declaration of independence as required pursuant to section 149(7) of the

Companies Act, 2013 stating that they meet the criteria of independence as provided in section 149(6) of the Companies Act, 2013.

XI) Confirmation by the Board

Independent Directors have also confirmed that they are not aware of any circumstances or situations which exist or may be reasonably anticipated that could impair or impact their ability to discharge their duty with an objective independent judgment and without any external influence.

Further the Board after taking these declarations / disclosures on record and acknowledging the veracity of the same, concluded that the Independent Directors are persons of integrity and possess the relevant experience to qualify as independent directors of the company and are independent of the management.

XII) Opinion of the Board

Independent Directors of the company strictly adhere to corporate integrity, possess requisite expertise, experience, qualifications to discharge the assigned duties and responsibilities as mandated by the Companies Act, 2013 and Listing

Regulations diligently.

XIII) Conservation of energy, technology absorption and foreign exchange earnings and outgo

The information relating to conservation of energy, technology absorption and foreign exchange outgo stipulated under Section 134(3)(m) of the Companies Act, 2013 read with Rule 8 of the Companies (Accounts) Rules 2014 is annexed to this Report.

XIV) Committee Meetings:

The Composition and other details of the Nomination and Remuneration Committee, Stakeholders Relationship Committee and Risk Management Committee are furnished in the Corporate Governance Report. The other details in respect of Audit Committee and Corporate Social Responsibility Committee are also furnished in the Corporate Governance Report.

Directors Responsibility Statement:

Pursuant to the requirement under section 134 (3) (c) and 134 (5) of the Companies Act, 2013 with respect to the Directors Responsibility statement, the Board of Directors of the Company hereby confirm:

a. That in the preparation of annual accounts, the applicable accounting standards have been followed and that there were no material departures therefrom.

b. That the Directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as on 31st March, 2020 and of Profit / loss of the Company for that period.

c. That the Directors have taken proper and sufficientcare for maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities.

d. That the Directors have prepared the Annual Accounts for the Financial Year ended 31st March, 2020 on a going concern basis.

e. That the Directors have laid down internal financial controls to be followed by the company and that such internal financial controls are adequate and were operating effectively.

f. That the Directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

Evaluation of the Boards Performance:

Evaluation of all Board members will be done on an annual basis. The evaluation is done by the Independent Directors with specific focus on the performance of the Board and individual Directors. The observations of the evaluation made in the previous year, if any, will be considered. At the end of the current year, a comprehensive review will also be done.

The Board evaluation embraces several aspects such as development of suitable strategies and business plans at an appropriate time and its effectiveness, implementation of robust policies, procedures, size and structure and expertise of the Board.

As regards evaluation of whole time Directors, aspects such as achievement of financial

Board, developing and executing business plans, Operational Plans, Risk Management and financial affairs of the organization and Development of policies and strategic plans aligned with the vision and mission of the Company were considered. With regard to evaluation of non-executive directors, aspects such as participation at the Board / Committee Meetings, effective deployment of knowledge and expertise, independence of behavior and judgment were considered.

The Board is of the opinion that the performance of the directors is satisfactory and that they are recommended for confirmation as directors.

No adverse observations were noticed in the evaluation of the Board done in the previous year. While the Boards current evaluation is devoid of any adverse observation it is opined that the Board as a whole shall constantly improve the core skills and diversify its knowledge base for attaining superior parameters.

As regards evaluation of performance in respect of Committee Meetings, aspects such as discharge of functions and duties as per scope of the Committee, processes and procedures followed in discharging such functions were considered.

In respect of evaluation of the Chairperson, aspects such as managing relationship with the members of the Board and Management, providing ease of raising of issues, positive reception to the concerns by the members of the Board and promoting constructive debate and effective decision making at the Board were taken into account.

Auditors:

M/s. Ramanatham & Rao, Chartered Accountants, (Regn. No.S-2934) Secunderabad have been appointed as Statutory Auditors of the company at the 38th Annual General Meeting held on September 25, 2017 in accordance with the provisions of Section 139 and Section 142(1) of the Companies Act, 2013 read with the companies (Audit and Auditors) Rules, 2014 and other applicable rules, if any (including any statutory modifications or re-enactment thereof for the time being in force). The appointment as Statutory Auditors was for a period of five years from the conclusion of the 38 th Annual General Meeting till the conclusion of the 43rd Annual General Meeting to be held in the year 2022. Consequently M/s. Ramanatham & Rao, Chartered Accountants (Regn. No.S-2934) continues to be the Statutory Auditors of the company till the conclusion of 43rd Annual General Meeting as approved by the shareholders at the 38th Annual General Meeting held on September 25, 2017.

As per section 148 of the Companies Act, 2013 read with the Companies (Cost Records and Audit) Rules, Cost records are required to be audited. Based on the recommendation of Audit Committee, your Board has appointed M/s. Narasimha Murthy, Cost Accountants, Hyderabad as Cost Auditors for the current year and necessary Resolution for ratification of their remuneration is being placed before the shareholders for their approval in terms of Rule 14 (a) (ii) of the Companies (Audit and Auditors) Rules, 2014.

The Board has appointed Smt. Manjula Aleti, Company Secretary in whole-time Practice to carry out Secretarial Audit under the provisions of Section 204 of the Companies Act, 2013 read with the Companies (Appointment and Remuneration of the Managerial Personnel) Rules, 2014 for the financial year 2019-2020.

The Secretarial Audit Report issued by Smt. Manjula Aleti practicing Company Secretary in Form-MR 3 for the financial year ending

31st March, 2020 is annexed to this Report. (Annexure -4).

The certificate issued by Smt. Manjula Aleti practicing Company Secretary under Disclosure Requirements) Regulations, 2015 stating that none of the directors of the company have been debarred or disqualified from being appointed are continuing as directors of the company by the SEBI/ Ministry of Corporate Affairs or such statutory authority as on

31st March, 2020 is annexed to this Report. (Annexure -5).

SEBI has made it mandatory on the part of the Listed Companies to secure an Annual Secretarial Compliance Report from a practicing Company Secretary on compliance of all applicable SEBI Regulations and Circulars / guidelines issued there under.

The Company has obtained the Annual Secretarial Compliance Report from Smt. Manjula Aleti practicing Company Secretary for the year ending 31st March, 2020 and the same is annexed to this Report.(Annexure -6).

The Auditors Report and the Secretarial Audit Report do not contain any qualification, reservation or adverse remark.

Vigil Mechanism and Whistle Blower Policy:

The whistle blower policy aims at conduct of the affairs in a fair and transparent manner by adopting highest standards of professionalism, honesty, integrity and ethical behavior. The policy on vigil mechanism and whistle blower policy may be accessed on the companys website:www.kakatiyacements.com.

Risk Management Committee:

The objective behind constitution of the Risk Management Committee is to identify risk, develop appropriate risk mitigation strategies and to monitor activities of the organization and also to highlight the systematic study safeguards against threats, loss and damages of brand, reputation and assets of the company. Improvement of level of awareness and appreciating and managing material business risks are also the objectives of the Risk Management Committee. The Committee, besides identifying the risk factors, is also expected to manage and monitor risk and ensure that proper internal systems and processes are in place. More details of the committee are furnished in the Corporate Governance Report.

Environmental Protection:

The Company has been making endeavors to protect the environment from the evil effects of pollution from time to time.

Planting of saplings and seedlings in and around the factories and colonies is being done on a continuous basis so as to develop green belt around the plant to improve the environment.

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

a) Statement of Affairs of the company

During the year under review, the company has clocked a turnover of Rs. 156.46 crores compared to Rs. 110.61 crores recorded in the year-ago period. Though the segmental revenue in the cement and sugar divisions has shown an increase over the previous years revenue, the profit before tax (PBT) for the company as a whole turned negative with a loss ofRs. 0.16 crores for the year under review. This is because the company had to make provisions amounting to Rs. 9.50 crores in respect of matters connected with the power division in the year under review. The provisions were made for differential wheeling charges at Rs. 6.50 crores and for electricity duty on sale of power to TRANSCO at Rs. 3.00 crores based on consultation with the statutory Auditors and upon seeking legal advice.

Consequently the power division recorded an operating loss of Rs. 2.10 crores during the year under review while it clocked an operating profit ofRs. 9.17 crores in the previous fiscal.

b) Industry Structure and Development:

The company has a well developed net work of dealers for its cement division located in the states of Telangana and Andhra Pradesh and the company therefore is in a reasonably comfortable position in securing orders from its clients. It is heartening to note that some of the dealers have been patronizing the company since inception and the strong bondage that is developed between the company and dealers is one of the prominent features of this mutually beneficial relationship. While the company has a well established structure and dealer net work, the company anticipates that it could have a material impact on its performance in the current year because of covid-19 global epidemic. The company shall endeavour its best to mitigate the fixed overheads to the possible extent and there by combat the critical with a committed sprit.

Further special focus is laid on health and safety of the workforce and requisite steps are being taken to ensure that the entire workforce sincerely adheres to the prescribed safety norms and adopt prescribed health measures.

The sugar industry is essentially seasonal in its nature. The availability of cane, good rainfall and proper irrigation facilities are primary issues that determine the fortunes of the industry. The allocation of zonal area to the sugar units by the department is also an important factor as allotment of villages having growth potential for cultivation of cane will facilitate higher cane production leading to production of higher volumes in the sugar industry.

However the covid-19 global epidemic is a factor to be reckoned with and the corporates need to encounter this huge challenge and adopt multifarious measures to minimize the impact of Covid-19 global epidemic.

c) Opportunities and Threats:

of its well positioned dealer net work across the states of Telengana and Thecompanyisdesirious ofreapingthebenefits

Andhra Pradesh in respect of its cement plant and will make every effort to overcome the bottlenecks in achieving the targeted operations in its cement plant .

The Government of Telangana has not been permitting power generators to use coal as an alternative fuel during the off season of the sugar industry as a matter of policy which was not the situation a few years ago.

Unless the Government revisits the entire issue keeping in view the interest of entrepreneurs as well as all other stakeholders, it would be difficultfor the power generators to survive in the long run as sub-optimal generation of power will seriously impact the viability of the industry.

In the sugar industry, fetching remunerative price for its product, adequate availability of sugar cane with close proximity to the sugar plant and industry-friendly governmental regulations are the key areas of concern.

The company will make its best endeavors in resolving the complicated issues in the sugar and power divisions through negotiations with governmental authorities and will also liaison with the legal advisers in respect of pending litigations concerning the power division.

d) Segment or product-wise performance:

Segment-wise and product-wise performance has been furnished elsewhere in this Report.

e) Medium and long term strategy

The range of market operations in respect of cement product is restricted to the Telangana and Andhra Pradesh. The existing production capacity can be optimally utilized by catering to the requirements of the two Telugu states. In the circumstances no medium and long term strategy is being envisaged by the company in the absence of any immediate plans for expansion.

f) Outlook:

Division-wise outlook has been furnished elsewhere in this Report.

g) Risks and concerns:

The Cement, Sugar and Power industries being core industries, there is no risk of product obsolescence or steep fall in demand by way of product substitution or otherwise and, therefore, your Directors do not foresee any major risks and concerns in the near future except as discussed elsewhere in this Report.

The company endeavors its best to effect necessary changes, modifications to the machinery and equipment and also to carry out necessary maintenance works to position the machinery in all the divisions in robust conditions so as to keep the bottlenecks at bay.

Consequent to covid-19 global epidemic, the company shall put its best by adopting measures that ensure safety and health of workers. All suitable measures and steps that are within the control of the management shall be put in place to counter the challenges posed by the global epidemic.

h) Internal control systems and their adequacy:

As stated elsewhere in this Report, the Company has adequate internal control systems and the Chief Financial Officer will monitor the Internal audit Reports and brief the Audit Committee in case any deficiency in the system is noticed and corrective measures are adopted to strengthen the system.

i) Financial Performance with respect to operational performance:

This has been discussed elsewhere in this Report.

j) Human Resource Development and Industrial Relations:

The company believes that the quality of its employees is the key to success and is therefore committed to provide necessary human resource development and training opportunities to equip employees with additional skills to enable them to adapt to contemporary technological advancements.

Industrial Relations during the year continued to be cordial through effective communication, meetings and negotiations with the work force.

The Companys strength consists of 536 permanent employees as on 31st March, 2020. k) The details of significant changes (change of 25% or more) as ratios are provided herein below :-

Sl. No. Particulars Variation % Reasons
1. Debtors Turnover Ratio * *Variation is below 25% and need not be reported
2. Inventory Turnover Ratio 50.97% Decrease in inventory & increase in turnover
3. Interest Coverage Ratio 42.72% Decrease in borrowings and decrease in profits
4. Net Profit Margin ( % ) 109.95% Negative PAT(Profit after tax)
5. Return on Net worth 114.21% Negative PAT(Profit after tax)
6. Operating Profit Margin Ratio 77.60% Low earnings due to provisioning made for wheeling charges and electricity duty

l) Corporate Social Responsibility:

In compliance with Section 134(3) (a) of the Companies Act, 2013 read with the Companies Corporate Social Responsibility (CSR) policy Rules 2014, the company has established CSR Committee comprising of Shri K Venkat Rao as Chairperson, Shri P Veeraiah and Shri J S Rao as members. The committee is responsible for formulating and monitoring the CSR policy of the Company. The annual report on CSR activities forms part of this Report.(Annexure -7).

Particulars of Loans, Guarantees or Investments under Section 186 of the Companies Act, 2013.

There are no loans, guarantees or investments made or given under Section 186 of the Companies Act, 2013.

Cautionary Statement

Statements in this "Management Discussion and Analysis" may be considered to be "forward looking statements" within the meaning of applicable securities Laws or Regulations. Actual results could differ materially from those expressed or implied. Important factors that could make a difference to the Companys operations include demand-supply conditions, finished goods prices, raw material availability and prices, cyclical demand and pricing in the Companys markets, changes in Government Regulations, tax regimes besides other factors such as litigations and labour negotiations and health and safety related issues concerning all the stakeholders.

Acknowledgement

Your Directors take this opportunity to place on record their sincere thanks to the Banks, the Transco Authorities of Telangana and

Andhra Pradesh States and to various departments of the Central Government and the State Governments of Telangana and Andhra Pradesh for their support to the Industry.

The Directors thank the entire net work of dealers who have enabled the Company to achieve the volumes and kept up the rapport and friendly association with the company. The Directors record their appreciation for committed support to the Company by all the employees at all levels throughout the year under reference.

The Directors record their gratitude to all the Shareholders who have been reposing confidence in the Company and its Management.

By order of the Board

for Kakatiya Cement Sugar and Industries Limited

P Veeraiah

Chairman and Managing Director

DIN : 00276769

Place : Hyderabad

Date : 24th June, 2020

ANNEXURE TO DIRECTORS REPORT: Particulars required under the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988.

CONSERVATION OF ENERGY

a) Energy Conservation Measures adopted NIL
b) Additional Investments and Proposal for reduction of Consumption of energy NIL
c) Impact of the above measures NIL
d) Total Energy Consumption and Energy Consumption per unit of production FORM "A" Enclosed

TECHNOLOGY ABSORPTION

Efforts made in Technology Absorption : FORM "B" Enclosed

FOREIGN EXCHANGE EARNINGS AND OUTGO

Activities relating to exports, initiatives taken to increase exports, development of new export market for product & services and export plans. Exports are not contemplated at present
Total foreign exchange used Nil
Total foreign exchange earned Nil

FORM-A

Form for Disclosure of particulars with respect to Conservation of Energy

CURRENT YEAR 2019-20

PREVIOUS YEAR 2018-19

CEMENT SUGAR POWER CEMENT SUGAR POWER
A. POWER & FUEL
CONSUMPTION
1 ELECTRICITY
(a) Purchased (KWH) 27942950 3777797 -- 20316223 5804201 --
Total Amount (Rs.) 179478625 3901623 -- 155067286 70164271 --
Rate per Unit (Rs.) 6.42 10.56 -- 7.63 12.08 --
(b) OWN GENERATION s
Through Diesel
Generators (Units) 2050 -- -- 12750 -- --
Total Amount (Rs.) 71544 -- -- 396079 -- --
Cost per Unit (Rs.) 34.90 -- -- 31.07 -- --

CURRENT YEAR 2019-20

PREVIOUS YEAR 2018-19
CEMENT SUGAR POWER CEMENT SUGAR POWER
2 FUEL
(a) COAL
Quantity (MT) 54630 -- -- 21344 -- --
Total Cost (Rs.) 299904987 -- -- 115489064 -- --
Average Rate (Rs.) 5489.75 -- -- 5410.84 -- --
(b) Bagasse/Steam --
Quantity (MT) -- 42804 35695 -- 69786 48304
Total Cost (Rs.) -- 41819518 6742770 -- 32729634 71250769
Average Rate (Rs.) -- 977.02 1889 -- 469 1475.05
B. CONSUMPTION PER
UNIT OF PRODUCTION
1. Electricity (KWH)
Cement (MT) 94.03 -- -- 97.74 -- --
Sugar (MT) 40.97 -- 42.08 --
Power (KWH) -- -- -- --
2. Coal (MT) 0.197 0.174
(Per tone of clinker)

FORM NO. MGT - 9

EXTRACT OF ANNUAL RETURN

as on the financial year ended on 31.03.2020

[Pursuant to section 92(3) of the companies act, 2013 and rule 12(1) of the Companies (Management and Administration) Rules, 2014]

I. REGISTRATION AND OTHER DETAILS:

i) CIN L26942TG1979PLC002485
ii) Registration Date 07-07-1979
iii) Name of the Company KAKATIYA CEMENT SUGAR & INDUSTRIES LIMITED
iv) Category / sub-Category of the Company Company Limited by Shares / Public Company
v) Address of the Registered office 1-10-140/1, GURUKRUPA, ASHOK NAGAR, HYDERABAD - 500020
vi) Whether Listed Company YES
vii) Name, Address and Contact XL SOFTECH SYSTEMS LIMITED, 3, SAGAR SOCIETY,
details of Registrar and Transfer ROAD NO.2, BANJARA HILLS, HYDERABAD - 500034
Agent. Phone No.040-23545914/915

II. PRINCIPAL BUSINESS ACTIVITIES OF THE COMPANY:

All the business activities contributing 10% or more of the total turnover of the company:-

Sl. No Name and Description of main products/ services NIC Code of the Product/ service % to total turnover of the company
1 CEMENT 3242 56%
2 SUGAR 2060 42%
3 POWER 4390 2%

III PARTICULARS OF HOLDING, SUBSIDIARY AND ASSOCIATE COMPANIES

SI. No NAME AND ADDRESS OF THE COMPANY CIN / GLN HOLDING / SUBSIDIARY / ASSOCIATE % OF SHARES HELD APPLICABLE SECTION
Not Applicable

IV. SHARE HOLDING PATTERN as on 31st March, 2020(Equity Share Capital Breakup as percentage of Total Equity) i) Category-wise Share Holding

Category of Shareholders

No. of shares held at the beginning of the year

No. of shares held at the end of the year

% change during the year
Demat Physical Total % of total shares Demat Physical Total % of total shares
A. Promoters
(1) Indian
(a) Individuals/ HUF 4131535 0 4131535 53.15 4205770 0 4205770 54.10 0.95
(b) Central Government - - - - - - - - -
(c) State Government(s) - - - - - - - - -
(d) Bodies Corporate - - - - - - - - -
Banks / FI - - - - - - - - -
(e) Any Other - - - - - - - - -
Sub-Total (A)(1) 4131535 0 4131535 53.15 4205770 0 4205770 54.10 0.95
2. Foreign
(a) NRIs-Individuals - - - - - - - - -
Other Individuals - - - - - - - - -
(b) Bodies Corporate - - - - - - - - -
(c) Banks / FI - - - - - - - - -
(d) Any Other - - - - - - - - -
Sub-Total (A)(2) 0 0 0 0 0 0 0 0 0
Total Shareholding of 4131535 0 4131535 53.15 4205770 0 4205770 54.10 0.95
Promoter
(A)= (A)(1)+(A)(2)
B. Public shareholding
1. Institutions
a) Mutual Funds 200 0 200 0.00 200 0 200 0.00 0.00
b) Banks / FI 13358 172 13530 0.17 22449 72 22521 0.29 0.12
c) Central Government - - - - - - - -
d) State Government - - - - - - - -
e) Venture Capital Funds - - - - - - - -
f) Insurance Companies - - - - - - - -
g) FIIs 0 0 0 0.00 0 0 0 0.00 0.00
h) Foreign Venture Capital - - - - - - - -
Funds - - - - - - - -
h) Others (specify) - - - - - - - -
Sub-Total (B)(1) 13558 172 13730 0.18 22649 72 22721 0.29 0.12
(2) 2. Non-institutions
(a) Bodies Corporate 298629 12698 311327 4.00 152010 7634 159644 2.05
(b) Individuals - 2951331 345720 3297051 42.41 3173474 194096 3367570 43.32
i. Individual shareholders holding nominal share capital up to Rs. 1 lakh. 3060489 345720 3406209 43.82 3010110 194096 3204206 41.22
ii. Individual shareholders holding nominal share capital in excess of Rs. 1 lakh. 236562 0 236562 3.04 357460 0 357460 4.60
(c) Other (specify) N R I 19715 500 20215 0.26 18153 0 18153 0.23
Sub-Total (B)(2) 3269675 358918 3628593 46.68 3343637 201730 3545367 45.61
Total Public Shareholding
Shareholding (B) =
(B)(1)+(B)(2) 3283233 359090 3642323 46.85 3366286 201802 3568088 45.90
(C) Shares held by
Custodian for 0 0 0 0 0 0 0 0
GDRs & ADRs
GRAND TOTAL
(A)+(B)+(C) 7414768 359090 7773858 100 7572056 201802 7773858 100

(ii) Shareholding of Promoters

Sl. No Shareholders Name

Shareholding at the beginning of the year

Shareholding at the end of the year % change in shareholdi ng during the year
No. of shares % of total shares of the company % of shares pledged / encumbere d total shares No. of shares % of total shares of the company % of shares pledged / encumber ed total shares
1 P. VEERAIAH 3493638 44.94 3567873 45.90 0.95
2 SAMRAJYAM PALLEMPATI 323277 4.16 323277 4.16 0.00
3 TRIVENI JASTI 69500 0.89 69500 0.89 0.00
4 SHANTI JETTY 57880 0.74 0.74 57880 0.74 0.00 0.00
5 SHALINI JETTY 38000 0.49 0.49 38000 0.49 0.00 0.00
6 RAGINI JETTY 36400 0.47 0.47 36400 0.47 0.00 0.00
7 JUTLA CHANDRA SEKHAR GOUD 31450 0.40 0.40 31450 0.40 0.00 0.00
8 JASTI LAKSHMI NALINI 28520 0.37 28520 0.37 0.00
9 J SIVA RAMA PRASAD 19350 0.25 0.25 19350 0.25 0.00 0.00
10 SUKUMARI KONERU 12000 0.15 12000 0.15 0.00
11 SESHAGIRI RAO JASTI 10000 0.13 10000 0.13 0.00
12 SAARIKA KONERU 5720 0.07 5720 0.07 0.00
13 J VENKATA KRISHNA 3000 0.04 3000 0.04 0.00
14 MUSUNURI RAMAKRISHNA PRASAD 2000 0.03 2000 0.03 0.00
15 RAAJITHA KONERU 700 0.01 700 0.01 0.00
16 JASTI CHELAMESWAR (HUF) 100 0.00 100 0.00 0.00
TOTAL 4131535 53.15 2.35 4205770 54.10 0.00

(iii) CHANGE IN PROMOTERS SHAREHOLDING

SL. NO.

shareholding at the beginning of the year

shareholding at the end of the year

No.of shares % of total shares of the company No.of shares % of total shares of the company
4131535 53.15 4205770 54.10

other promoters. iv) Shareholding Pattern of Top Ten Shareholders (Other than Directors, Promoters and Holders of GDRs and ADRs)

Shareholding at the beginning of the year

Shareholding at the end of the year
No. of Shares % of total shares of the Company No. of Shares % of total shares of the Company
1 ANIL ZAWAR 29824 0.38 29824 0.38
2 BACHH RAJ NAHAR 31110 0.40 28110 0.36
3 M HARATHI 25565 0.33 25565 0.33
4 M SEETHAMMA 25000 0.32 25000 0.32
5PRAKASH S 24000 0.31 24000 0.31
6 BYNA MURALI 0.00 0.00 24000 0.31
7 KAVITHA V 21895 0.28 21969 0.28
8 SUNIL PANALAL ZAWAR 0.00 0.00 13824 0.18
9 RANGAPPA N 21300 0.27 12800 0.16
10 PADMA PRIYA 0.00 0.00 11821 0.15

(v) Shareholding of Directors and Key Managerial Personnel:

SL. NO DIRECTORS/ AND KMP

shareholding at the beginning of the year

shareholding at the end of the year

No.of shares % of total shares of the company No.of shares % of total shares of the company
1 P. VEERAIAH 3493638 44.94 3567873 45.90
2 SESHAGIRI RAO JASTI KMP 10000 0.13 10000 0.13
1 B KAMESWARA PRASAD 800 0.01 800 0.01

V. INDEBTEDNESS

Indebtedness of the Company including interest outstanding / accrued but not due for payment

(Rs..in lakhs)
Secured Loans excluding deposits Unsecured Loans Deposits Total Indebtedness
Indebtedness at the beginning of the
Financial year
i) Princial Amount 7959.42 0.00 0 7959.42
ii) Interest due but not paid 0 0 0 0.00
iii) Interest accrued but not due 0 0 0 0.00
Total (i+ii+iii) 7959.42 0 0 7959.42
Change in Indebtedness during the financial year
* addition 0 0.00 0 0.00
* Reduction 2942.00 0 0 2942.00
Net Change (2942.00) 0.00 0 (2942.00)
Indebtedness at the end of the financial year
i) Princial Amount 5017.42 0 0 5017.42
ii) Interest due but not paid 0 0 0 0
iii) Interest accrued but not due 0 0 0 0
Total (i+ii+iii) 5017.42 0 0 5017.42

VI. REMUNERATION OF DIRECTORS AND KEY MANAGERIAL PERSONNEL: A. Remuneration to Managing Director

Sl. No. Particulars of Remuneration Managing Director Total
1 Gross Salary 84.00 84.00
(a) Salary as per provisions contained in section 17(1) of the Income-Tax Act, 1961.
(b) Value of perquisites u/s 17(2) Income-Tax Act, 1961. 46.08 46.08
(c) Profits in lieu of salary under section 17(3) Income-Tax Act, 1961
2 Stock Option 0 0
3 Sweat Equity 0 0
4 Commission
- as % of Profit 0.00 0.00
- others, specify
5 Others, please specify 0 0
Total (A) 130.08 130.08

B. REMUNERATION TO OTHER DIRECTORS:

Sl. No. Particulars of Remuneration

Name of Directors

T R C Bose B V Subbaiah K Venkat Rao J S Rao M Varalakshmi Total Amount
1 Independent Directors
* Fee for attending Board committee meetings 3500 3750 2000 9250
* Commission 0 0 0 0
* Others, please specify 0 0 0 0
Total (1) 3500 3750 2000 9250
2 Other Non-Executive Directors
* Fee for attending Board committee meetings 2250 1250 3500
* Commission 0 0 0
* Others, please specify 0 0 0
Total (2) 2250 1250 3500
Total (B) = (1+2) 3500 3750 2000 2250 1250 12750
Total Managerial Remuneration
Overall celling as per the Act -

Note : No Remuneration is paid to non-executive directors except sitting fee.

C REMUNERATION TO KEY MANAGERIAL PERSONNEL

Sl. No. Particulars of Remuneration Particulars of Remuneration
Managing Director Chief Executive Officer Company Secretary Chief Financial Officer Total Amount
1 Gross Salary 84.00 28.98 10.91 9.87 133.76
(a) Salary as per provisions contained in section 17(1) of the Income-Tax Act, 1961.
(b) Value of perquisites u/s 17(2) Income-Tax Act, 1961. 46.08 0 0 0 46.08
(c) Profits in lieu of salary under section 17(3) Income-Tax Act, 1961 0 0 0 0 0.00
2 Stock Option 0 0 0 0 0.00
3 Sweat Equity 0 0 0 0 0.00
4 Commission
- as % of Profit 0 0 0 0 0.00
- others, specify
5 Others, please specify 0 0 0 0 0
Total 130.08 28.98 10.91 9.87 179.84

VII. PENALTIES / PUNISHMENT / COMPOUNDING OF OFFENCES:

There were no penalties punishment or compounding of offences during the year ended 31st March, 2020.