Kakatiya Textiles Ltd Directors Report

To

The Members

Your Directors are delighted to present their 42^nd Annual Report of the Company for the financial year 2023-24 along with the audited accounts for the financial year ended March 31, 2024

DIVIDEND:

On account of the accumulated losses, your Directors do not recommend any dividend for the year ended 31^st March, 2024.

TRANSFER TO RESERVES:

The Directors of the company didnt 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 be transferred to Investor Education and Protection Fund.

LISTING OF EQUITY SHARES

Your Companys equity shares are listed on Bombay Stock Exchange (BSE Limited), Phirozee Jeejeebhoy Towers, Dalal Street, Mumbai-400001, Maharashtra, India.

BOARD MEETINGS CONDUCTED DURING THE PERIOD UNDER REVIEW:

The meetings of the board are scheduled at regular intervals to decided and discuss on business performance, policies, strategies and other matters of significance.

The Company had conducted 4 (Four) Board meetings during the period under review. (i.e: 30.05.2023, 14.08.2023, 14.11.2023, 14.02.2024) The intervening gap between any consecutive board meetings was within the period prescribed under the provisions of the Companies Act, 2013 read with the circulars and notifications given by the statutory authorities.

DIRECTORS RESPONSIBILITY STATEMENT:

Pursuant to the requirement under Section 134(3)(c) of the Companies Act, 2013, with respect to Directors Responsibility Statement, it is hereby confirmed that:

(a) in the preparation of the annual accounts, the applicable accounting standards had been followed and there are no material departures from those standards;

(b) the directors had 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 at the end of the financial year and of the loss of the company for that period;

(c) the directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets 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 going concern basis;

(e) the directors have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and operating effectively and

(f) the directors had devised proper systems to ensure compliance with the provisions of 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 Company confirming that they meet the criteria of independence as prescribed under the Companies Act, 2013.

In terms of Section 150 of the Act read with Rule 6 of the Companies (Appointment and Qualification of Directors) Rules, 2014, as amended, Independent Directors of the Company have enrolled their names in the data bank of Independent Directors maintained with the Indian Institute of Corporate Affairs.

COMPANYS POLICY RELATING TO DIRECTORS APPOINTMENT, PAYMENT OF REMUNERATION AND OTHER MATTERS PROVIDED UNDER SECTION 178(3) OF THE COMPANIES ACT, 2013:

The Companys Policy relating to appointment of Directors, payment of Managerial remuneration, Directors qualifications, positive attributes, independence of Directors and other related matters as provided under Section 178(3) of the Companies Act, 2013 is furnished on the Companys website www. kakatiyatextiles.in.

PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS MADE UNDER SECTION 186 OF THE COMPANIES ACT, 2013:

The Company has not granted any loans or given any security or made any investments pursuant to the provisions of Section 186 of the Companies Act, 2013 during the year under review.

PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES:

All party transactions entered during the financial year under review are disclosed in Note No.31 of the Financial Statements of the Company for the financial year ended 31st March, 2024. These transactions entered were at an arms length basis and in the ordinary course of business. There were no materially significant related party transactions with the Companys Promoters, Directors, Management or their relatives, which could have had a potential conflict with the interests of the Company. Form AOC-2, containing the note on the aforesaid related party transactions is enclosed herewith as Annexure - I.

The policy on related party transactions as approved by the Board of Directors of the Company has been uploaded on the companys website and may be accessed through the website at www. kakatiyatextiles.in

ANNUAL RETURN:

The annual return is placed on the companys website on www.kakatiyatextiles.in INTERNAL AUDITORS:

The Board of directors based on the recommendation of the audit committee has appointed M/s. Cherukuri & Co, Chartered Accountants as the Internal Auditors of the company. The internal auditors are submitting their report on quarterly basis.

STATUTORY AUDITORS:

Pursuant to the provisions of Section 139 of the Companies Act, 2013, the Shareholders at their meeting held on 29^th September 2020 (38^th AGM) approved the appointment of M/s. Chevuturi Associates, Chartered Accountants, as the Statutory Auditors of the Company, to hold office for period of 5 years till the conclusion of 43^rd Annual General Meeting.

Further, the Statutory Auditors report does not contain any qualifications, reservations, adverse remarks or disclaimers.

DETAILS IN RESPECT OF FRAUDS REPORTED BY AUDITORS UNDER SUB-SECTION (12) OF SECTION 143 OTHER THAN THOSE WHICH ARE REPORTABLE TO THE CENTRAL GOVERNMENT:

During the year under review, there was no instance of fraud, which required the Statutory Auditors to report to the Audit Committee and/or Board under Section 143 (12) of the Companies Act, 2013 and Rules framed thereunder.

SECRETARIAL AUDITORS:

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 has appointed M/s. P S Rao & Associates, Company Secretaries to undertake the Secretarial Audit of the Company. The report of the Secretarial Audit is annexed herewith as Annexure-II to this report.

COMPLIANCE WITH SECRETARIAL STANDARDDS

Your Company has devised proper systems to ensure compliance with the provisions of all the applicable Secretarial Standards issued by the Institute of Company Secretaries of India and that such systems are adequate and operating effectively. During the year under review, your Company has complied with the Secretarial Standards issued by the Institute of Company Secretaries of India.

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 of the Company which has occurred between the financial year ended 31^st March, 2024 and the date of the report.

STATEMENT CONCERNING DEVELOPMENT AND IMPLEMENTATION OF RISK MANAGEMENT POLICY OF THE COMPANY:

The Company has a structured risk management policy. The Risk management process is designed to safeguard the organization from various risks through adequate and timely actions. It is designed to anticipate, evaluate and mitigate risks in order to minimize its impact on the business. The potential risks are inventoried and integrated with the management process such that they receive the necessary consideration during decision making.

WHISTLE BLOWER POLICY (VIGIL MECHANISM):

The Company has formulated a whistle blower policy in line with the provisions of Section 177 of the Companies Act, 2013 and Regulation 22 of the SEBI ((Listing Obligations and Disclosure Requirements) Regulations, 2015 to enable the directors and employees to report concerns about unethical behavior, actual or suspected fraud or violation of the companys code of conduct or ethics policy The policy also provides for adequate safeguards against victimization of director(s) / employee(s) who avail of the mechanism and also provides for direct access to the Chairman of the Audit Committee in exceptional cases. The Whistle Blower policy has been uploaded on the companys website at www. 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 Committee, the Board of Directors evaluated the performance of the Board, having regard to various criteria such as Board composition, Board processes, Board dynamics etc. The Independent Directors, at their separate meetings, also evaluated the performance of non-independent directors and the Board as a whole based on various criteria.

The performance of each Independent Director was evaluated by the entire board of directors on various parameters like engagement, leadership, analysis, decision making, communication, governance etc. The Board and the Independent Directors were of the unanimous 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 to various criteria such as committee composition, committee, processes, committee dynamics etc. The Board was of the unanimous view that all the committees were performing their functions satisfactorily.

DIRECTORS& KEY MANAGERIAL PERSONNEL:

Shri. Vanka Ravindranath, Director of the Company, retires by rotation at the ensuing Annual General Meeting and expressed her willingness to be reappointed as the Director of the Company. The necessary resolution for the appointment of Shri. Vanka Ravindranath is set out in the notice for approval of members in the ensuing Annual General Meeting of the Company.

Further, there is no change in the Directors and Key Managerial Personnel.

COMPOSITION OF BOARD COMMITTEES:

We have in place of all the committees of the board which are required to be constituted under the Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

The Composition of various committees of the Board is hereunder:

Audit Committee

Nomination and Remuneration Committee

Stakeholders Relationship Committee

FIXED DEPOSITS:

Since the Company has not accepted any deposits covered under Chapter V of the Companies Act, 2013, and accordingly, the question of default in repayment of deposits or payment of interest thereon, during the year, does not arise.

EROSION OF NETWORTH:

As at 31^st March 2024, your Company had a net worth of Rs. (1421) lakhs. Your Directors believe that the Companys net worth could become positive if the favorable business trend continues 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 OR TRIBUNALS IMPACTING THE GOING CONCERN STATUS AND COMPANYS OPERATION IN FUTURE:

There is no significant and material order passed by the regulators or courts or tribunals impacting the going concern status and companys operation in future.

INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY:

The Company has adequate internal control systems to monitor internal business process, financial reporting and compliance with applicable laws. The Company periodically reviews the adequacy and effectiveness of the control systems.

The Audit committee of the Board reviews internal control systems and their adequacy, significant risk areas, observations made by the internal auditors on control mechanism and the operations of the company, recommendations made for corrective action and the internal audit reports. The committee reviews with the statutory auditors and the management, 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 in respect of our employees, is attached herewith as Annexure-III.

Further, we do not have any employee whose remuneration falls within the purview of the limits prescribed under the provisions of Section 197 of the Companies Act, 2013 read with Rule 5 (2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 and as amended i.e. 8.50 Lakhs per Month or Rs. 1.02 Crores per Annum.

Further, details of top ten employees in terms of remuneration drawn during the financial year ended 31st March 2024 as required under Rule 5 (2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 and as amended is attached herewith as Annexure-III.

MANAGEMENT DISCUSSION AND ANALYSIS REPORT:

Pursuant to the Regulation 34 (2) (e) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, a report on Management Discussion and Analysis is herewith annexed as Annexure- IV.

CORPORATE GOVERNANCE REPORT:

Since the paid up capital of the Company is less than Rs.10 Crores and the net worth of the Company is less than Rs. 25 Crores, the provisions of Regulations 17, 18, 19, 20, 21, 22, 23, 24, 25, 26, 27 and clauses (b) to (i) of sub-regulation 2 of Regulation 46 and para C, D & E of Schedule V of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, are not applicable to the Company.

CORPORATE SOCIAL RESPONSIBILITY:

Since your Company does not fall within any of the parameters specified under the provisions of Section 135 of the Companies Act, 2013 read with Rules made there under, reporting pursuant to Section 134 (3) (o) is not applicable.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO:

The information pertaining to conservation of energy, technology absorption, Foreign Exchange Earnings and outgo as required under section 134(3)(m) of the Companies Act, 2013 read with Rule 8(3) of the Companies (Accounts) Rules, 2014 is attached herewith as Annexure-V to this report.

DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013:

The Company has in place a policy on Sexual Harassment of Women at workplace in line with the requirements of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. The company has constituted an internal complaints committee to address the complaints regarding sexual harassment. All employees are covered under this policy. The company has not received any complaints during the year under review.

PERSONNEL RELATIONS:

Staff and Labour relations during the year at all units of the company continued to be cordial. ACKNOWLEDGEMENTS:

Your Directors wish to thank the Companys Bankers, Financial Institutions, Customers and Suppliers for their unstinted support and co-operation.

Your Directors wish to place on record their appreciation of the confidence reposed by the shareholders in the Company at all times.

The Board of Directors also wishes to thank the employees at all levels for their excellent support and contribution made by them.

By Order of the Board of Directors For Kakatiya Textiles Ltd