Kallam Textiles Ltd Directors Report

TO

THE MEMBERS OF THE KALLAM TEXTILES LTD,

Your Directors take pleasure in presenting the 33rdAnnual Report covering the highlights of the finance, business, and operations of your Companytogether withStandalone Audited Financial Statements prepared in compliance with Ind AS accounting standards, for the financial year ended March 31, 2025.

1. FINANCIAL RESULTS :

The financial results for the year ended 31st March 2025 are summarized below

Particulars	2024-25	2023-24
	(in Lakhs)	(in Lakhs)
Net Sale / Revenue from operation	25670.85	36738.19
Other income	139.50	108.87
Total	25810.36	36847.06
Operating Expenditure	30,736.65	40859.72
Profit before Depreciation and amortization expense	(4926.29)	(4012.66)
Depreciation and amortization expense	1498.78	1598.95
Profit before Exceptional Items and tax		(5611.61)
Exceptional items	757.58
Profit / (Loss) before tax	7182.65	(5611.61)
Provision for income tax
i) Current year Tax	4.97	-
ii) Deferred Tax	(2450.68)	(1866.81)
Profit / (Loss) after tax	(4736.94)	(3744.79)
Earnings per share ( 2/-)	(8.97)	(7.09)

2. FINANCIAL PERFORMANCE STATE OF COMPANYS AFFAIRS AND FUTURE OUTLOOK

For the period under review (FY 2024-25),the turnover of the company was Rs.256.70Crores as againstRs.368.47 Crores in the previous Financial Year.The Net loss after tax was Rs. 47.36Crores as against net Loss Rs.37.44Crores in the previous financial year.

During the year the company made defaults in repayment of term loan instalments. The banks classified these loans asNPA and issued notices for recovery of these dues u/s 13(2) r.w.s 13(3) of SARFAESI Act, 2002. The banks also takenpossession of the properties offered as security u/s 13(4) of the Act. The company applied for restructure of these loanswhich is pending.

More details are available in Management Discussion & analysis report placed at Annexure – I to this report

MANAGEMENT DISCUSSION AND ANALYSIS:

Management Discussion & Analysis Report in line with Regulation 34(3) read with Schedule-V of the SEBI (LODR) Regulations, 2015 is placed at Annexure-I to this report.

DIVIDEND

During the year company has not recommended any dividend due to losses incurred by the company

AMOUNTS TRANSFERRED TO RESERVES

There is no transfer amount to the reserves for the period under review.

ANNUAL RETURN:

Annual Return of the Company pursuant to Section 92 of the Companies Act, 2013 read with Companies (Management and Administration) Rules, 2014, in the prescribed Form MGT-7, is available at the weblink http://ksml.in/wp-content/ uploads/2025/08/MGT-9-2024-25.pdf as Pursuant to Section 92(3) read with Section 134(3)(a) of the Act, the Annual Return as on March 31, 2025.

3. NUMBER OF MEETINGS HELD OF THE BOARD:

The Board of Directors met 6 (six) times during the year 2024-25.The details of the Board Meetings and the attendance of the Directors are provided in the Report on Corporate Governance

4. DIRECTORS AND KEY MANAGERIAL PERSONNEL

(i) During the year the shareholders has confirmed the re-appointment of Sri P.Ventkateswara Reddy (Din: 0018677) as a Managing director for period of three years ,SriG.V.Krishna Reddy (Din: 00018713) as Joint Managing director for period of three years and Sri.

Mr.M.V.SubbaReddy (Din: 0018719) as a Whole Time Director of the company for a period of one year.

(ii) Re-appointmentof Director under retire by rotation:

During the year the shareholders at the 32ndAGM held on 29.08.2024 has approved the re-appointment of Sri.Mr.M.V.SubbaReddy as a Director of the Company under the retire by rotation as per the provisions of the Companies Act,2013.

(iii) Appointment of Independent Directorduring the Financial Year 2024-25 Smt. V.L. Sandhyarani(DIN: 10627130)appointed as independent Director of the company for a period offive years w.e.f 29.05.2024 as per the recommendation of the Nomination and Remuneration Committee. Sri V. Raghavendra Reddy(DIN:10704660)appointed as independent Director of the company for a period of five years w.e.f 01.08.2024 as per the recommendation of the Nomination and Remuneration Committee. Sri. V.S.N. Murthy (DIN 00021952) Non -Executive Independent Director has retired with effect from the closing hours of 20th September 2024 after cessation of tenure from being Non Executive Independent Director Smt. Vangala Bhargavi (DIN 06950741) Non -Executive Independent Director has retired with effect from the closing hours of 25th September 2024 after cessation of tenure from being Non Executive Independent Director

(iv) Directors seeking re-appointment under Retirement by rotation:

Mr.G.V.KrishnaReddy, Director of the Companywho is liable to retire by rotation at the ensuing AGM pursuant to the provisions of Section 152 of the Companies Act, 2013 read with the Companies (Appointment and

Qualification of Directors) Rules, 2014 and the Articles of Association of your Company and being eligible has offered himself for reappointment. Appropriate resolution for his re-appointment is being placed for your approval at the ensuing AGM.

(v) Statement on Declaration by the Independent Directors of the Company.

All the Independent Directors of the Company have given declarations under Section 149(7) of the Companies Act, 2013 that they meet the criteria of independence as laid down under Section 149(6) of the Companies Act, 2013 and Regulation 25 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. The terms and conditions of appointment of the Independent Directors are posted on the website of the Company www.ksml.in.

(viii) Performance Evaluation of the Board, itsCommittees and Separate meeting ofIndependent Directors:

In compliance with the provisions of the Companies Act, 2013 and Regulation 17(10) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the performance evaluation of the Board was carried out during the year under review. More details are available in the Corporate Governance Report which forms part of this report.

(ix) Companys policy on directors appointment and remuneration including criteria for determining qualifications, positive attributes, independence of a director and other matters provided under sub-section (3) of section 178;

Your Company has formulated the Nomination and Remuneration Committee in accordance with Section 178 of the Companies Act, 2013 and Regulation 19 of the LODR Regulations, 2015.The salient aspects covered in the Nomination and Remuneration Policy has been outlined in the Corporate Governance Report which forms part of this report.

(x) Managerial Remuneration

The information required under Section 197 of the Companies Act, 2013 read with Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 in respect of Directors/ employees of your Company is set out in Annexure –IIto this report.

5. TRANSFER TO INVESTOR EDUCATION AND PROTECTION FUND:

Pursuant to the provisions of section 124 of the companies Act, 2013,the declared dividends which remained un paid or unclaimed for a period of seven years, have been transferred by the Company to the Investor Education and Protection Fund (IEPF) established by the Central Government.The details of dividends paid by the Company and respective due dates for transfer of unclaimed dividend to IEPFis available in Corporate Governance report which forms part of this report.

During the year the company has transferred unclaimed dividend of Rs.2,39,128/-and to IEPF authority with respect to the dividend year 2016-17.

DisclosurewithrespecttoDematSuspenseAccount / unclaimed suspense account: Your Company does not have any UnclaimedShares

6. COMMITTEES OF THE BOARD:

The Board of Directors has the following Committees:

A. Audit Committee

B. Nomination and Remuneration Committee C. Stakeholders Relationship Committee D. Corporate Social Responsibility Committee. E. Share Transfer Committee The details of the Committees along with their composition, number of meetings and attendance at the meetings are provided in the Corporate Governance Report.

7. RISK MANAGEMENT :

The Company has implemented an integrated risk management framework, through which the Board and Audit Committee periodically reviews and assesses significant risks on a regular basis to help ensure that there is a robust system of internal controls in place. Your Company believes that managing risks helps in maximizing returns. The Companys approach to addressing business risks is comprehensive and includes periodic review of such risks and a framework for mitigating controls and reporting mechanism of such risks. More details on the same are given in the Report on Corporate Governance

8. DETAILS OF ADEQUACY INTERNAL FINANCIAL CONTROLS RELATED TO FINANCIAL STATEMENTS

Your Company has put in place adequate internal financial controls with reference to the financial statements and the Company has effective risk-mitigation system keeping in view the size and nature of the business. Your company has adopted accounting policies which are in line with the Accounting Standards prescribed in the Companies (Accounting Standards) Rules, 2006 and other applicable provisions, if any, of the Companies Act, 2013 read with Rule 7 of the Companies (Accounts) Rules, 2014. These are in accordance with generally accepted accounting principles in India. Changes in policies, if any, are timely approved by the Audit Committee in consultation with the Statutory Auditors.

The main objective of internal control system and process is to test and review controls, appraisal of risks inbusiness processes, and benchmarking controls with best practices in the industry. The Internal Audit function is entrusted to M/s Mastanaiah& Co., Chartered Accountants, Guntur, who submit their reports to the Joint Managing Director & CEO and has direct access to the Audit Committee and they participated in the meetings of the Audit Committee of the Board of Directors of your Company.

The Audit Committee of the Board of Directors actively reviews the adequacy and effectiveness of the internal control systems and suggests improvements to strengthen the same. The Audit Committee of the Board of Directors and Statutory Auditors are periodically apprised of the internal audit findings and corrective actions taken. The Internal Audit plays a key role in providing assurance to the Board of Directors. Significant audit observations and corrective actions taken by the management are presented to the Audit Committee of the Board. To maintain its objectivity and independence of the Internal Audit functions.

9. VIGIL MECHANISM / WHISTLE BLOWER POLICY: In accordance with the provisions of Section 177(9) of the Companies Act, 2013 and the Rules made there under and also SEBI (LODR) Regulations, 2015, your Company has in place a vigil mechanism termed as Whistle Blower Policy, for directors and employees to report concerns about unethical behavior, actual or suspected fraud or violation of the Companys Code of Conduct or Ethics Policy, which also provides for adequate safeguards against victimization of director(s)/employee(s) who avail the mechanism and also provide for direct access to the Corporate Governance Officer/Chairman of the Audit Committee. The Whistle Blower Policy is also available on your Companys website (www.ksml.in). We confirmed that no person has been denied access to the audit committee.

10. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS BY THE COMPANY

The Company has duly complied with the provision of Section 186 of the Companies Act, 2013 and Rules made there under. Details on loans or investment are provided in financial statements section of this Annual Report. The company has not given any Loans or Guarantees and securities covered under the provisions under section 186 of the companies Act, 2013.

11. PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES

During the year under review, no transaction of material nature has been entered into by the Company with its Promoters, the Directors or relatives, etc, that may have a potential conflict with the interests of the Company. All related party transactions are placed before the Audit Committee and also for approval of Board on quarterly basis. Prior omnibus approval of the Audit Committee is obtained on a yearly basis for the transactions which are of repetitive nature and entered in the ordinary course of business and are on arms length basis.

A Statement giving details of the transactions entered into with the related parties, pursuant to the omnibus approval so granted, is placed before the Audit Committee and the Board of Directors for their approval/ratification on a quarterly basis.

The Register of Contracts containing transactions, in which directors are interested, if any, is placed before the Audit Committee/Board regularly. The Board of Directors of the Company, on the recommendation of the Audit Committee, adopted a policy on Related Party Transactions, to regulate the transactions between the Company and its Related Parties, in compliance with the applicable provisions of the Companies Act, 2013 and the SEBI (LODR) Regulations, 2015.

The Policy as approved by the Board is uploaded on the Companys website at www.ksml.in.

The details of the related party transactions as per Accounting Standard- 18 are set out in Notes to Accounts (Note No: -35)of the Financial Statements, forming part of this report The details of the Related Party Transactions in prescribed Form AOC-2 pursuant to Section 134(3)(h) of the Companies Act, 2013 read with Rule 8(2) of the Companies (Accounts) Rules, 2014 are annexed as Annexure -III to this Report.

12. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

The information on conservation of energy, technology absorption and foreign exchange earnings and outgo as stipulated under Section 134 of the Companies Act,

2013 read with Rule 8 (3) of the Companies (Accounts) Rules, 2014, is set out herewith as Annexure -IV to this report.

13. CORPORATE SOCIAL RESPONSIBILITY (CSR)

As per the provisions of Section 135 of the Companies Act, 2013 and the Rules made thereunder, your Company has put in place a Corporate Social Responsibility Committee which comprises of Mr. G.V. Krishna Reddy as Chairman and Mr. SrinivasPetluri, Mr. M.V. Subba Reddy as members.The provisions of section 135 of the Act, read with Companies (Corporate Social Responsibility Policy) Rules, 2014 are not applicable to the Company during the year The Annual Report under CSR Activities is annexed to this report as Annexure –Vto this Report.

The details relating to the meetings convened, etc. are furnished in the Report on Corporate Governance.

14. AUDITORS

(i) Statutory Auditors And Their Report:

M/s.Brahmayya& Co., Chartered Accountants (ICAI Registration No. 000513S)were appointed as statutory auditors at the AGM Held on 27th September,2022 for term of five years till the conclusion of the 35thAGM to be held in the year 2027.

Auditors Report

The Auditors Report to the Members for the year under review is unmodified/ clean. The Notes to the Accounts referred to in the Auditors Report are self-explanatory and therefore do not call for any further clarifications under Section 134(3) (f) of the Act. There has been no qualification, reservation, adverse remark or disclaimer given by the Auditors in their Report.

(ii) Cost Auditor:

As per the requirement of Central Government and pursuant to Section 148 of the Companies Act, 2013 read with the Companies (Cost Records and Audit) Rules, 2014 as amended from time to time, your Company has been carrying out audit of cost records relating to Textile and Power Divisions every year.

There is no adverse remark, qualification, reservation or disclaimer in the Cost Audit Report submitted by M/s.Sairam& Associates,Cost Accountant for the financial year ended 31.03.2025.

The Board of Directors of your Company, on the recommendations made by the Audit Committee at its meeting held on 30th May, 2025 had appointed M/s. Sairam&Associates,Cost Accountant, (Membership No. 41948) as the Cost Auditor of your Company to carry out audit of cost records relating to Textile and

19 -2018 REPORT ANNUAL 27th

Power Divisions as required under the Companies Act, 2013for the financial year 2025-26at a remuneration of Rs 30,000/-, plus applicable taxes and out of pocket expenses, if any.

Your Company has received consent from M/s.

SAIRAM& ASSOCIATES, Cost Accountant, to act as the Cost Auditor to carry out the audit of the cost records for the financial year 2025-26a resolution seeking members approval for the remuneration payable to the Cost Auditor forms part of the Notice convening the Annual General Meeting for their ratification.

MAINTENANCE OF COST RECORDS:

Cost Audit is applicable to the Company. The Company is required to maintain cost records as specified by the Central Government under subsection (1) of Section 148 of the Act and the rules framed thereunder, and accordingly, the Company has made and maintained such cost accounts and records.

EXPLANATIONS OR COMMENTS BY THE BOARD ON EVERY QUALIFICATION, RESERVATION OR ADVERSE REMARK OR DISCLAIMER MADE BY THE COST AUDITOR IN HIS REPORT:

The Cost Auditors report for the year ended 31.03.2025 does not contain any qualification, reservation or adverse remark or disclaimer in his report

(iii) Secretarial Auditors:

Pursuant to the provisions of Section 204 of the Act, the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 and Regulation 24A of the SEBI Listing Regulations, the Company had appointed K.Srinivasa Rao & Co, Company Secretaries, GunturSecretarial Auditors on a remuneration mutually agreed by the Board of Directors and the Secretarial Auditors for a term of five consecutive years (subject to the approval of Members at the ensuing Annual General Meeting) from the conclusion of the 33rdAnnual General Meeting until the conclusion of the 37th Annual General Meeting of the Company to be held in the year 2030. The auditors have confirmed that they hold valid certificate issued by the Peer Review Board of the Institute of Company Secretaries of India and the consent letter and certificate of eligibility was received from M/s K.Srinivasa Rao & Co, Company Secretaries.,confirming their eligibility for the appointment. Further, in terms of the provisions of the Circular No. CIR/CFD/CMD1/27/2019 dated February

8, 2019 issued by SEBI, M/s. K.Srinivasa Rao & Co, Company Secretaries, Guntur has issued the Annual Secretarial Compliance Report, confirming compliance by the Company of the applicable SEBI Regulations and circulars / guidelines issued there under. The Secretarial Audit Report & Annual Secretarial Compliance report areappended as "Annexure -VI" to this Report. There is no adverse remark, qualification, reservation or disclaimer in the Secretarial Audit Report.

EXPLANATIONS OR COMMENTS BY THE BOARD ON EVERY QUALIFICATION, RESERVATION OR ADVERSE REMARK OR DISCLAIMER MADE BY THE SECRETARIAL AUDITORS IN HIS REPORT:

The Auditors report for the year ended 31.03.2023 does not contain any qualification, reservation or adverse remark or disclaimer in his report (iv) Reporting of Frauds by Auditors

During the year under review, the Statutory Auditors, Cost Auditors and Secretarial Auditors have not reported any instances of frauds committed by the Company or by its Officers or Employees, to the Audit Committee under Section 143(12) of the Companies Act, 2013..

15. MATERIAL EVENT RECORDED SUBSEQUENT TO THE DATE OF FINANCIAL STATEMENTS There are no material changes and commitments affecting the financial position of the Company, which has occurred between the end of the financial year of the Company i.e. March 31,2025 and the date of the Directors Report

CASES FILED/DISPOSED PENDING UNDER IBC:

Proceedings under IBC against the company pending if any: Nil

CHANGES IN SHARE CAPITAL

During the current year, there has been no change occurred in the capital structure of the company.

CORPORATE GOVERNANCE:

A report on Corporate Governance in line with Regulation 34 read with Schedule-V of SEBI (LODR) Regulations, 2015 is appended and annexedas a separate section to this report.

The Statutory Auditors of the Company have issued a certificate on Corporate Governance which is appended to the Corporate Governance Report.

16. DETAILS OF SUBSIDIARY, JOINT VENTURE OR ASSOCIATES

Our Company does not have any material Subsidiary Company in terms of Regulation 16(1)(c) of SEBI (LODR) Regulations, 2015. Accordingly, the financial statements of our Company are not required to be consolidated in accordance with the applicable Indian Accounting Standards.

Company has neither any Associates nor any Joint Ventures as on March 31, 2025

17. PUBLIC DEPOSITS:

During the year under review, your Company has not accepted any deposit within the meaning of Sections 73 and 74 of the Companies Act, 2013 read with the Companies (Acceptance of Deposits) Rules, 2014 (including any statutory modification(s) or re-enactment(s) for the time being in force).

The Company has not invited or accepted any deposits from the public or its members; i. No amount has been received by the Company that would be classified as a ‘deposit under the said provisions; ii. There were no outstanding deposits as on the date of the Balance Sheet; iii. There has been no default in repayment of deposits or in payment of interest thereon; iv. The Company has not accepted any deposit in contravention of the provisions of the Companies Act, 2013 and the Rules made thereunder.

Accordingly, the disclosure requirements under Rule 8 of the Companies (Accounts) Rules, 2014 are not applicable to the Company for the year under review.

18. SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS

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

19. ENVIRONMENT AND SAFETY:

The Company is conscious of the importance of environmentally clean and safe operations. The Companys policy requires conduct of operations in such a manner, so as to ensure the compliances of environmental regulations and preservation of natural resources for future Generations.

20. DISCLOSURES PERTAINING TO THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013 : Your directors confirm that the Company has adopted a policy for prevention of Sexual Harassment of Women at workplace and has set up Committee for implementation of said policy. Your directors confirmed that the Company has complied with provisions relating to the constitution of Internal Complaints Committee under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. During the year Company has not received any complaint of harassment.

	The Company has
A statement that the com-
	constituted an In-
pany has complied with
	ternal Complaints
provisions relating to the
	Committee. Regular
constitution of Internal
	monitoring is ensured
(a) Complaints Committee un-
	by the committee.
der the Sexual Harassment
	During the year under
of Women at Workplace
	review, no complaint
(Prevention, Prohibition and
	was _led under the
Redressal) Act, 2013
	aforesaid Act.
Number of Sexual Harass-	NIL - since no cases
(i)
ment Complaints received	during the year
Number of Sexual Harass-
	NIL - since no cases
(ii) ment Complaints disposed
	during the year
off
Number of Sexual Harass-
	NIL - since no cases
(iii) ment Complaints pending
	during the year
beyond 90 days

(j) Number of employees as on the closure of _nancial year:

Female	53
Male	213
Transgender	0

21. AFFIRMATION ON COMPLIANCE WITH THE MATERNITY BENEFIT ACT, 1961 In accordance with the provisions introduced under the Companies (Accounts) Second Amendment Rules, 2025, the Board of Directors hereby affirms that the Company has duly complied with all applicable requirements under the Maternity Benefit Act, 1961, as amended.

The Company remains steadfast in its commitment to fostering an equitable, inclusive, and legally compliant workplace. In furtherance of this, all benefits mandated under the Act—such as paid maternity leave, medical bonus, prescribed nursing breaks, and provision of cr?che facilities in eligible establishments—have been implemented in both letter and spirit.

19 -2018 REPORT ANNUAL 27th

The Board recognizes that adherence to the Maternity Benefit Act is not merely a statutory obligation, but also a reflection of the Companys broader ethos of safeguarding employee welfare, promoting work-life balance, and supporting women in the workforce through all stages of maternity and motherhood.

22. DIRECTORS RESPONSIBILITY STATEMENT: Pursuant to Section 134(3)(c) of the Companies Act, 2013 (including any statutory modification(s) or re-enactment(s) for the time being in force), your Directors hereby confirm that: (a) In the preparation of the annual accounts for the financial year ended 31st March, 2024, the applicable Accounting Standards and Schedule III of the Companies Act, 2013 (including any statutory modification(s) or re-enactment(s) for the time being in force), have been followed and there are no material departures from the same; (b) For the financial year ended 31st March, 2025, 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 your Company as at 31st March, 2025 and of the profit and loss of the Company for the financial year ended 31st March, 2025; (c) Proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 (including any statutory modification(s) or re-enactment(s) for the time being in force) for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities;

(d) Financial statements have been prepared on a "going concern" basis; (e) Proper internal financial controls laid down by the Directors were followed by your Company and that such internal financial controls are adequate and operating effectively; and (f) Proper systems to ensure compliance with the provisions of all applicable laws were in place and that such systems were adequate and operating effectively.

23. APPRECIATIONS ANDACKNOWLEDGEMENTS: Your Directors sincerely convey their appreciation for the unbelievable commitment, support, dedication, hard work, enthusiasm and significant contribution made by employees in ensuring sustained growth of the Company. Your Directors also take this opportunity to thank all shareholders,Clients, Vendors, Bankers, Government and Regulatory Authoritiesand Stock Exchanges for their continued co-operation.

	For and on behalf of Board of Directors
Date : 13-08-2025	Sd/-	Sd/-
	G.V. Krishna Reddy	P. Venkateswara Reddy
Place : Chowdavaram, Guntur
	Joint Managing Director	Managing Director
	DIN: 00018713	DIN : 00018677