KALLAM TEXTILES LIMITED (Formerly Known as “Kallam Spinning Mills Limited”) CIN -L18100AP1992PL0013860
Chowdavaram, GUNTUR - 522 019. AR, INDIA. Ph: 0863-2344016 : Fax20863-2344000 E—mail: [email protected] GSTIN: 37AAACK9363M1ZY
REF2KTL/ (15/ AR—2017—18 Dt : 24-09-2018
Bombay Stock Exchange Limited, Corporate Relationship Division, Floor 25, Phiroze Jeejeebhoy Towers, Dalal Street,
Mumbai - 400 001.
Scrip Code: 530201
Dear Sir/ Madam,
Sub: Annual Report 2017-18
Pursuant to Regulation 34(1) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, we enclosed herewith Annual Report 2017-18 of Kallam Textiles Limited (”Company”) duly approved and adopted by the members of the Company at the 26th Annual General Meeting of the Company held on 22nd September, 2018.
Kindly take on the record and acknowledge the same.
Thanking You,
Yours Truly,
For Kallam Textiles Limited,
‘\ l 1% | , M.V.Subba Redd Whole Time Directr DIN: 00018719
Encl : Annual Report 2017-18 KALLAM TEXTILES LIMITED 26th ANNUAL REPORT 2017-18
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GINNING SPINNING OPEN END DYEING WEAVING HYDEL KALLAM TEXTILES LIMITEDRESIDENTIAL TOWNSHIPS 26th ANNUAL REPORT 2017-18 RESIDENTIAL HOUSES
CORPORATE OFFICE GINNING DIVISION
4 0 2 K M S
C H E N N A I
N A T I O N A L
H I G H W
A Y
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N H - 5
K O L K A T A
1 2 7 1
K
M
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GINNING SPINNING OPEN END DYEING WEAVING HYDEL RVR & JC ENGINEERING COLLEGE KALLAM TEXTILES LIMITED 26th ANNUAL REPORT 2017-18
KHIT ENGINEERING COLLEGE
SPINNING DIVISION
OPEN END DIVISION KALLAM TOWNSHIPS
TEMPLE
WAY TO TOWN SHIP
CONTAINERS
OPEN YARD ROAD ENTRANCE
SECURITY CLEARENCE
PLAY GROUND VISITORS STAY
RAIN WATER HARVESTING 3
GINNING SPINNING OPEN END DYEING WEAVING HYDEL KALLAM TEXTILES LIMITED 26th ANNUAL REPORT 2017-18
Mr.K.Haranadha Reddy, Chairman, Mr.G.V.K. Reddy, JMD, Mr.SV Govindraj, VP of our Company Exchaning Memorandum of Understanding (MoU) with Sri N.Kiran Kumar Reddy, Hon'ble Chief Minister of Andhra Pradesh, December 2012.
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GINNING SPINNING OPEN END DYEING WEAVING HYDEL KALLAM TEXTILES LIMITED 26th ANNUAL REPORT 2017-18
Mr. GVK Reddy, JMD & CEO of our Company exchanging Memorandum of Understanding (MoU) with Sri N.Chandrababu Naidu, Hon’ble Chief Minister of Andhra Pradesh on 25th February, 2018
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GINNING SPINNING OPEN END DYEING WEAVING HYDEL KALLAM TEXTILES LIMITED 26th ANNUAL REPORT 2017-18
→ About the Founder - 7 → Letter from JMD & CEO - 8 → Financial Highlights - 10 → Journey of the Company - 19 → Ex-Independent Directors - 37 → Loan History - 38 Contents → Corporate Presentation - 39 → Directors Profile - 54 → Directors Report & Annexures - 58 → Report on Corporate Governance - 92 → Independent Auditors' Report - 108 → Financial Statements - 112
COMPANY INFORMATION
LISTING : Bombay Stock Exchange Ltd EXECUTIVE DIRECTORS Scrip Code - 530201 Sri P.Venkateswara Reddy Scrip ID - KALLAM Managing Director REGISTRARS AND : 306, 3rd Floor, Right Wing, Sri G.V. Krishna Reddy SHARE TRANSFER AGENT Amrutha Ville, Joint Managing Director Opp. Yashodha Hospital, Raj Bhavan Road, Somajiguda, Sri M.V. Subba Reddy Hyderabad – 500 082. Whole Time Director Ph No.040-23374967 E-mail : [email protected] STATUTORY AUDITORS : M/s Chevuturi Associates, Chartered Accountants NON EXECUTIVE DIRECTORS INTERNAL AUDITORS : M/s Mastanaiah & Co., Sri Ajeya Kallam (IAS)* Chartered Accountants, Chief Secretary of A.P. (Rtd.) COST AUDITORS : P.Srinivas, Cost Accountant Sri M.R.Naik# SECRETARIAL AUDITORS : K.Srinivasa Rao & Co., Rtd. IAS Officer Company Secretaries # Sri A.Krishna Murthy BANKERS : Andhra Bank, Indian Bank, Rtd. Joint Commissioner of Labour Bank of Baroda Sri S. Pulla Rao AUDIT COMMITTEE : Sri S.Pulla Rao, Chairman JC of Income Tax (Rtd.) Sri VSN Murthy, Smt. V.Bhargavi Sri V.Ramgopal* Chairman ED in Indian Bank (Rtd.) SHARE TRANSFER : Mr. GVK Reddy, COMMITTEE Mr. P.Venkateswara Reddy, Sri VSN Murthy Mr. MV Subba Reddy CGM APIDC (Rtd.) NOMINATION AND : Mr.V.Ramgopal, Chairman Smt. V.Bhargavi REMUNERATION COMMITTEE Sri VSN Murthy, Chartered Accountant Mr. Ajeya Kallam CSR COMMITTEE : Mr. GVK Reddy, Chairman Mr.V.Ramgopal, Mr. MV Subba Reddy th * Appointed in the Board w.e.f. 26 August, 2017. Chairman # th STAKEHOLDERS' : Mr. Ajeya Kallam, Resigned from the Board w.e.f. 29 September, 2017. RELATIONSHIP COMMITTEE Mr. GVK Reddy, Mr. MV Subba Reddy
Registered Office and Corporate Office : Chowdavaram, Guntur-522019, A.P., India. Phones : 0863-2344010, 16, E-mail : [email protected] Ginning, Spinning, Open End Plants : Chowdavaram, Guntur-522019, A.P., India. Weaving and Dyeing Plants : Kunkupadu - 523265, Addanki, Prakasam (Dist.), A.P., India. Hydel Plants : Nelakondapalli (M) - 507160, Khammam (Dist.), Telangana, India
Contents 6
GINNING SPINNING OPEN END DYEING WEAVING HYDEL KALLAM TEXTILES LIMITED 26th ANNUAL REPORT 2017-18
About the founder
Sri Kallam Haranadha Reddy Chairman Emeritus
Sri K. Haranadha Reddy is the founder and promoter of Kallam Textiles Ltd. (Formerly Kallam Spinning Mills Ltd.) and presently he is acting as Chairman Emeritus of our Company. He is aged about 82 years, holds a Masters Degree in Arts and graduate in Law. He has about 60 years of rich experience in cotton and spinning business. Further he got good experience in the Ginning, Pressing, Oil Mills, Chillies and Rice Business. He has associated with the company since its inception. Sri K. Haranadha Reddy is also a Philanthropist. He started Kallam Academy of Educational Society, in the name of “Kallam Haranadha Reddy Institute of Technology” in Chowdavaram. Every year he gives education scholarships to poor students.
About the Founder 7
GINNING SPINNING OPEN END DYEING WEAVING HYDEL KALLAM TEXTILES LIMITED 26th ANNUAL REPORT 2017-18
LETTER TO SHAREHOLDERS
“We have evolved from Kallam Group with hard work, consistent and stood for our moral values”. Cotton is one of the most important elements in the spinning industry, our focus has been to develop competencies in this area. We directly source cotton (kappas) from the farmers and have created long-standing relationship with our suppliers. Our international relationships give us the leeway to export if so desirable.
Dear Fellow Share holders, Name Change We are happy to announce excellent performance results Your company christened as “Kallam Textiles Ltd”, in line of your company for the financial year ended 2017-18 with with the change in Business profile. The company started a record annual turnover of Rs 3107 million growth of 8.3% with spinning and since the last 25 Years, Your company y-o-y , and exports of Rs 911.57 million and record profit has moved to value added activities such as Ginning, after tax of Rs 156 million growth of 23.4% y-o-y. Spinning, Open End, Weaving, Yarn Dyeing and Hydel Power Projects. We also have fabric processing, fabric About KTL dyeing and printing in our future pipeline. Keeping in view of Your company is celebrating silver jubilee of 25 years in all the above activities the new name to be broad-based operation. Your company is diversified with vertical value representing all the activities. addition and steered by visionary independent directors Achievement and guiding your company since inception. They also have an excellent track record and in their own fields. They were Your company had been listed on the Bombay Stock questioning each and every move of the company and Exchange from 1995 with 100% compliance. The CAPEX going through balance sheet with minute details. All the of the company crossed to Rs 4200 million from Rs 120 working directors are dedicated and contribute at least million within 23 years. The CAPEX also has grown year twelve hours every day and six days a week. The company after year without any setbacks. had encouraged all the employees to be hardworking and Recognition of Excellence loyal to the company. More than 25% of the employees have been working since the inception of each of its divisions. Your company is committed to quality and certified ISO 9000 since 1999. In addition, your company is certified for Your company had grown many folds from 12,096 to 59280 BCI, 5S, OCS, Oeko- tex etc. Your company has best ring spindles. Your company had its core values taken from quality testing laboratories with a wide range of testing its founder Mr. Kallam Haranadha Reddy who is a mentor, equipment. We test not only internally but also for various philosopher, guide, and philanthropist. He stood for his spinning mills around us. moral values even during tough times. Subsidies Your company believes in core competency in textiles and focuses on value addition path. Govt of India, Ministry of Textiles had introduced Technology Upgradation Fund since 1999. All the loans taken by your
Letter from JMD & CEO 8
GINNING SPINNING OPEN END DYEING WEAVING HYDEL KALLAM TEXTILES LIMITED 26th ANNUAL REPORT 2017-18 company are backed by Technology Upgradation Fund growth of the company the board of directors in its meeting held incentives. The weaving and yarn dyeing had Technology on 28th May 2018 have approved and proposed for the approval Upgradation Fund subsidy of 10 % capital subsidy and 5% of the shareholders for the issue of stock options as per which interest subsidy. In addition, Govt of Andhra Pradesh is employees, who comply with certain eligibility criteria would be providing power subsidy of Rs 1.50 / unit for the first five granted stock option to subscribe a specified number of equity years of operation and Rs 2.00 / unit from sixth to the tenth shares of the company offered to them at a price to be year of operation. In addition, there is further interest determined. The proposed plan would be subject to and in subsidy of 8% for weaving and dyeing units. Conformity with the SEBI guidelines. Zero bad debt Employee Welfare Your company has a very strict policy for collection of Your company also has townships both at Chowdavaram, receivables. The company has no bad debts since the Guntur, and kunkupadu (weaving plant). Each Employee inception of the company. This is possible due to repeat provided with 500 sqft single BHK apartment. The provisions order customers, payment against cash, Letter of Credit are provided by Employees departmental stores which etc, and Post Dated Cheques from a customer with a operates on no profit & no loss policy. The groceries are guarantee from the sales agent. We have credit limits to around 10% cheaper than market prices due to mass every customer and agent. procurement. Employee townships are provide with facilities such as Doctor, Tailor, Barber, Bank ATM, mineral water Maintenance plant, vegetable shops, Fast food restaurant, cloth shop etc, We have been consistently upgrading our machinery. The so that they are self-sufficient and employees need not go machinery is replaced every ten to fifteen years depending out for their daily needs. Each township is also served by at on the type of machinery, to keep us competitive with lower least six different school buses so that each and every child power cost, lower labour cost, and high-quality product. has a decent education. There are parks, playgrounds and Your company also follows the best plant preventive cruche for the children. Every year we plant at least 20,000 maintenance programs to keep the machinery fit to operate saplings. The quarters are provided with a green 24/7. Your company also buys the best lubricants, original environment. The employees and their families can take spare parts from OEMs. walk in the morning or evening in the parks. In addition we also provide scholarships to employees children in order to Exports encourage them for university education. Your company is a star export house. This year we crossed The Journey Continues Rs 91.57 Cr in exports. The fabric exports attract 3% subvention on the packing credit and 1.2% duty drawback We see an unprecedented amount of opportunity in our and a further 2.0% under MEIS. future. Although we still have a lot of hard work ahead, our products are generating excitement among our customers. Leadership And when I pause to reflect on how far we've come over the Mr P. Venkateswara Reddy, Managing director has more past few years and how much further we'll go in the next than 40 years experience in procurement of kappas & cotton. one, I couldn't be more excited and optimistic. The quality of each bale of kappas and cotton carefully is We believe this solid performance will be the result of our tested and approved by him. various management approaches. Above all, we are Mr GVK Reddy, JMD & CEO is a technocrat takes care of resolved to making unrelenting efforts to raise corporate selection of machinery, operations, marketing, liasoning, value by refocusing on the basics of manufacturing; strategy etc. strengthening our corporate constitution and providing products that ensure the satisfaction of customers Mr MV Subba Reddy, whole time director look after finance worldwide. and accounts. Dividend / Bonus Road ahead We have been rewarding our shareholders for the last 12 years Your company has many plans towards future expansion. The by paying dividends. Further shareholders also rewarded by Looms are to be increased from 248 to 310nos. The yarn dyeing issuing one bonus share for every four shares held. to be increased from 5 tons to 10 tons/day. The process house to dye cloth and printing to one Lakh meters/day to be set up. Invitation to Shareholders Andhra Pradesh state also has good potential to install I want to thank you for your trust and companionship. We windmills in Rayalaseema region. The Govt of AP also is will continue to play the long game. We invite you to Kallam giving a number of incentives. Your company also intends Textiles Ltd-AGM 2018 and meet Team of Kallam Textiles to increase captive power by windmills. and look forward for your attendance. Reward Good Work As always, thank you for your support. In order to create a sense of ownership and participation among Warm Regards, employees, to reward long-term employee’s loyalty towards the company, to motivate the employees with incentives to inspire loyalty and reward opportunities, to provide means to enable the company to attract and retain appropriate human talent in G.V Krishna Reddy the employment of the company and to achieve sustained JMD & CEO Date: 09-08-2018
Letter from JMD & CEO 9
GINNING SPINNING OPEN END DYEING WEAVING HYDEL KALLAM TEXTILES LIMITED 26th ANNUAL REPORT 2017-18
FINANCIAL HIGHLIGHTS Our Operations are vertical integrated Consistent Revenue Growth
GROSS REVENUE Lakhs : INR
60000
62
0000 72
1 7 0000
87
0000 278 6
2180 20000 OMPOUND ANNUAL GROWTH RATE AGR 2 1762 1 6 6
10000 8717 6 12 7071 10 68
0 FY 2005-06 FY 2006-07 FY 2007-08 FY 2008-09 FY 2009-10 FY 2010-11 FY 2011-12 FY 2012-13 FY 2013-14 FY 2014-15 FY 2015-16 FY 2016-17 FY 2017-18
CAGR from FY 1995 - 96 to FY 2017-18 20.49%
NET REVENUE Lakhs : INR
35000 31377 29724 30000 27611
25127
25000 21937
18654 20000 15592 14188 15000 OMPOUND ANNUAL GROWTH RATE 18
10000 8165 6837 6233 5131 3477 5000
0 FY 2005-06 FY 2006-07 FY 2007-08 FY 2008-09 FY 2009-10 FY 2010-11 FY 2011-12 FY 2012-13 FY 2013-14 FY 2014-15 FY 2015-16 FY 2016-17 FY 2017-18
CAGR from FY 1995 - 96 to FY 2017-18 17.64%
Financial Highlights 10
GINNING SPINNING OPEN END DYEING WEAVING HYDEL KALLAM TEXTILES LIMITED 26th ANNUAL REPORT 2017-18
Ring Ginning Capacity Open End Spindles 200 bales / Day 59280 Rotors 2912
Yarn Dyeing Weaving 5000 80,000 Kgs / Day Hydel Power meters / Day Generation 4.0 MW
EBITDA (Rs in Millions) 571 283 Finance Cost (Rs in Millions) 567 232
519 220 411 218
FY 15 FY 16 FY 17 FY 18 FY 15 FY 16 FY 17 FY 18
Profit Before Tax (PBT) (Rs in Millions) Net Assets (Rs in Millions) 4387 211 211 3317
106 1621 80 899
FY 15 FY 16 FY 17 FY 18 FY 09 FY 12 FY 15 FY 18
157 Net Profit (Rs in Millions) Consistent Growth 128
59
FY 16 FY 17 FY 18
Financial Highlights 11
GINNING SPINNING OPEN END DYEING WEAVING HYDEL KALLAM TEXTILES LIMITED 26th ANNUAL REPORT 2017-18 ------576 331 6,050 6,957 Value in Value Lakhs (Rs.) ------2008-09 Qty (kgs.) 97,50,551 13,91,024 43,98,272 ------22 564 788 263 6,974 8,611 8,611 Value in Value Lakhs (Rs.) ------2009-10 Qty (kgs.) 8,73,174 1,74,443 16,42,137 46,35,347 77,21,881 - - 2 - - 22 73 264 270 1,145 3,941 9,305 Value in Value 15,020 Lakhs (Rs.) - - - - 2010-11 90,498 Qty 16,513 (kgs.) 1,80,175 4,48,699 19,79,591 30,21,473 44,15,128 83,97,614 - - - - 88 35 642 271 322 9,804 1,209 4,859 Value in Value 17,230 Lakhs (Rs.) - - - - - 2011-12 Qty (kgs.) 4,03,840 5,71,304 21,15,844 20,43,541 41,25,488 50,91,191 1,07,97,342 - - - - 1 33 456 809 195 2,215 6,382 11,363 11,363 21,454 Value in Value Lakhs (Rs.) - - - 2012-13 Qty 13,648 (kgs.) 4,92,724 22,67,672 32,34,429 16,68,605 39,42,927 54,13,448 52,09,465 - - - - - 42 489 4,529 1,214 1,063 6,970 13,067 27,373 Value in Value Lakhs (Rs.) - - - - - 2013-14 Qty (kgs.) 6,45,941 40,88,816 77,13,313 19,88,743 54,63,433 53,62,379 1,08,50,229 - - - 6 71 142 4,195 1,307 1,047 7,626 6,631 13,136 Value in Value 34,159 Lakhs (Rs.)
- - - 2014-15 22,460 Qty (kgs.) 8,34,880 39,63,851 82,66,166 21,83,647 59,44,719 57,78,314 38,20,961 1,21,67,760 - 98 45 13 231 991 251 3,371 1,320 6,152 Value Addition Statement of 10 years Financials Value 15,356 13,036 Value in Value 40,863 Lakhs (Rs.) - 2015-16 4,709 Qty (kgs.) 2,53,136 8,76,910 1,83,921 22,43,608 34,18,355 68,33,480 62,08,544 58,62,984 58,77,925 2,58,18,404 5 43 74 143 785 3,908 1,513 2,678 1,356 6,537 13,885 15,264 Value in Value 46,192 Lakhs (Rs.) 2016-17 - Qty (kgs.) 9,25,247 2,32,310 1,56,601 22,61,114 22,61,114 33,43,138 64,90,059 29,78,595 59,53,917 56,70,818 15,71,728 2,53,84,238 59 117 117 175 1,797 5,150 1,604 3,173 1,551 2,080 7,843 15,109 15,400 Value in Value 54,056 Lakhs (Rs.) 2017-18 Qty 7,86,438 (kgs.) 5,59,820 1,68,248 45,19,922 92,91,664 10,80,815 64,29,493 33,41,032 23,96,344 60,26,546 24,53,066 2,46,12,847 - - - Particulars Sale of Gray Fab Cotton Lint Cotton Seed OE Waste OE Waste Cotton Yarn ric (Mtrs) ric (Mtrs) neous Sales Cotton Waste Sale of Dyed Yarn (Kgs) Total Total Sale of Dyed Fab Miscella Sale of Fabric Waste OE Yarn OE Yarn Sale of Power (KWH) SALE OF PRODUCTS
Financial Highlights 12
GINNING SPINNING OPEN END DYEING WEAVING HYDEL KALLAM TEXTILES LIMITED 26th ANNUAL REPORT 2017-18
Share Price Moment
Year Open Price High Price Low Price Close Price
2005 11.50 44.90 8.59 29.20
2006 30.00 37.20 13.10 19.25
2007 20.85 29.00 14.70 25.85
2008 27.40 34.85 10.55 12.00
2009 11.03 29.80 9.06 25.70
2010 25.00 72.75 21.20 56.85
2011 58.25 71.85 22.05 24.50
2012 23.55 40.00 23.05 36.20
2013 36.25 42.50 18.45 33.00
2014 31.80 70.90 29.70 52.55
2015 52.55 100.00 40.55 89.90
2016 83.00 139.90 51.00 115.05
2017* 115.00 135.40 19.55 23.15
2018** 23.00 33.25 19.40 30.70
2017* : The Equity Shares of Rs.10/- each were Sub division into 5 Equity Shares of Rs.2/-and issue of Bonus shares in the proportion of 1 (one) equity share for every 4 (Four) existing equity shares. 2018** : During the year, Company has issued Bonus Shares. Price movement as taken up to 02-05-2018. Source : bseindia.com
Dividend (%)
18 18
16 14 14 12 12 12 12 10 10 10 10 10 10 9
8 7
6
4
2 0 0 0 FY 2004-05 FY 2005-06 FY 2006-07 FY 2007-08 FY 2008-09 FY 2009-10 FY 2010-11 FY 2011-12* FY 2012-13* FY 2013-14 FY 2014-15 FY 2015-16 FY 2016-17 FY 2017-18
*2011-12 and 2012-13 we did not pay dividend due to major capital expenditure expansion.
Financial Highlights 13
GINNING SPINNING OPEN END DYEING WEAVING HYDEL KALLAM TEXTILES LIMITED 26th ANNUAL REPORT 2017-18
BOOK VALUE
160
140
120
100
80 147
125 60 102 106
PER SHARE INR 89 40 69 57 58 38.98 20 31.76 23.79 27.77
0 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017* 2018*
FINANCIAL YEAR * In 2017 & 2018 Book Value is Calculated on the Face Value of Rs 10 /- per share
NET WORTH
12000 10112
10000 8567 7298 8000 6788 6102
6000 4732 3925 3985
in Lakhs 2670 ` 4000 2176 1630 1903 2000
0 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
Year
Financial Highlights 14
GINNING SPINNING OPEN END DYEING WEAVING HYDEL KALLAM TEXTILES LIMITED 26th ANNUAL REPORT 2017-18
FIXED ASSETS
42159 45000 36063 40000
35000 29723 30028 27947 30000
25000
in Lakhs 14815 ` 20000 13121 11422 9872 15000 8300 5807 6551 10000
5000
0 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
Year
RESERVES AND SURPLUS
10000 9256
9000 8029 8000 6759 7000 6333
6000 5417
5000 4047
in Lakhs 4000 3238 3299 ` 3000 1983 1488 2000 1215 941 1000
0 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
Year
Financial Highlights 15
GINNING SPINNING OPEN END DYEING WEAVING HYDEL KALLAM TEXTILES LIMITED 26th ANNUAL REPORT 2017-18
Segment wise Gross Sales Including Internal Transfers 2017-18 2016-17
Cotton Yarn & Others Cotton Yarn & Others
Quantity - Revenue - Quantity - Revenue - 2,26,90,323 2,34,16,02,525 1,80,48,228 2,06,62,23,298
OE Yarn OE Yarn
Quantity - Revenue - Quantity - Revenue - 71,07,361 80,17,53,385 65,96,065 66,80,48,152
Gray and Dyed Fabric Gray and Dyed Fabric
Quantity - Revenue - Quantity - Revenue - 2,94,15,485 2,25,06,10,171 2,87,51,744 1,87,75,38,356
Sale of Power (KWH) Sale of Power (KWH)
Units - Revenue - Units - Revenue - 24,53,066 1,16,57,377 15,71,728 73,95,506
Quantity – Kgs / Mtrs, Revenue - Rs
"MANY OF OUR TERM LOANS ARE COVERED BY INTEREST SUBSIDY FROM TUF, GOVERNMENT OF INDIA AND ANDHRA PRADESH GOVERNMENT"
Lakhs/INR Lakhs/INR Lakhs/INR Lakhs/INR Out Standing as on Indian Bank Sanctioned Out Standing as Andhra Bank Sanctioned 30.06.2018 on 30.06.2018 Interest subsidy loans 2650 2502 Interest subsidy loans 995 301
No interest subsidy loans 3780 3095 No interest subsidy loans 1350 1215 OPEN END & GINNING DIVISIONS SPINNING DIVISION Lakhs/INR Lakhs/INR
Indian Bank Sanctioned Out Standing as WEAVING on 30.06.2018 DIVISION Interest subsidy loans 12642 10236 No interest subsidy loans 600 510
DYEING DIVISION
POWER DIVISION
Lakhs/INR Lakhs/INR Lakhs/INR Lakhs/INR
Out Standing as Andhra Bank Sanctioned Out Standing as Bank of Baroda Sanctioned on 30.06.2018 on 30.06.2018 Interest subsidy loans 990 835 Interest subsidy loans 406 44 No interest subsidy loans 893 534
Financial Highlights 16
GINNING SPINNING OPEN END DYEING WEAVING HYDEL KALLAM TEXTILES LIMITED 26th ANNUAL REPORT 2017-18
Exports Destinations and their Share Fiscal 2018 Product wise split export Fiscal 2018
7% Bangladesh
27% Korea Yarn 46% 46% Fabric China 54% Thailand 20%
FY 2015 - 16 FY 2016 - 17 FY 2017 - 18
Total Total Total Revenue Revenue Revenue (Rs. in Lakhs) (Rs. in Lakhs) (Rs. in Lakhs) 27611 29724 31378
India Rest of the world India Rest of the world India Rest of the world
2017-18 Exports - Lakhs in INR
10000 11 7
9000
8000
7000
6000
5000
0 4000
3000
2000
1000
0 Y 201 -16 Y 2016-17 Y 2017-18
Financial Highlights 17
GINNING SPINNING OPEN END DYEING WEAVING HYDEL KALLAM TEXTILES LIMITED 26th ANNUAL REPORT 2017-18
Thrust on Exports
Your company is recognized by the Government of India as Star Rated of Export House.The company has good export records both for yarn and fabric. We export Yarn to Bangladesh, China, Japan, Korea, Bangkok, Srilanka, Vietnam etc., We export Fabric to Korea, Bangkok, Bangladesh, Srilanka, china etc.,
Government provide following export incentives 1) Duty draw back on yarn and fabric 2) MEIS for Fabric 3) 3% interest subvention on the packing credit for export of fabric. The exports rendered since inception are enclosed.
Millions - INR
Year 1996 - 97 1997 - 98 1998 - 99 1999 - 00 2000 - 01 2002 - 03 2003 - 04
Exports 9.19 56.93 71.32 119.16 41.27 11.36 118.57
Year 2004 - 05 2005 - 06 2006 - 07 2007 - 08 2008 - 09 2009 - 10 2010 - 11
Exports 45.01 13.36 99.45 162.05 177.04 91.90 234.50
Year 2011 - 12 2012 - 13 2013 - 14 2014 - 15 2015 - 16 2016 - 17 2017 - 18
Exports 142.27 333.82 390.53 410.98 350.95 445.90 911.57
Financial Highlights 18
GINNING SPINNING OPEN END DYEING WEAVING HYDEL KALLAM TEXTILES LIMITED 26th ANNUAL REPORT 2017-18
JOURNEY OF THE COMPANY
Inauguration Day 22nd March 1995 : Mr Haranadha Reddy Kallam, First MD & Founder (Left) with First Chairman Mr.T R Dinakaran (Right) Smt. Indira Gandhi Prime Minister of India In 1967 inaugurated Nagarjuna Sagar dam and released water to the left and right bank canals. Guntur district in Andhra Pradesh is one of the key beneficiaries of this project. Nagarjuna Sagar right Canal feeds Guntur district which has mostly black cotton soil. Black cotton soils are suitable for growing crops like cotton, chillies, tobacco. Irrigation system improved cotton production in this area, which was earlier dependent on rains.
In 1969 MCU5 long stable cotton with 32mm length was introduced to Guntur area, with improved cotton yield. There were also no ginning mills in Guntur area prior to 1969. Mr. Kallam Haranadha Reddy envisaged this opportunity of cotton ginning in this area and started Chandra Sekhara Ginning Mill in January 1973. The best quality long stable cotton was ginned and supplied to best Spinning Mills in India namely M/s Century Textiles Mr. P Venkateswara Reddy joined Mr.Kallam Haranadha Ltd., M/s Mafatlal Industries Ltd., M/s Bombay Dyeing, M/s Reddy in the Ginning business and helped him to expand Vardhaman Textiles Ltd., M/s Super Spinning Mills Ltd., M/s the business. It started with 4 Gins in 1973 in one location. Precot Mills Ltd., M/s. Thyagaraja Mills Ltd., M/s GTN By 1986 the company grew from operating 4 Gins in one Textiles Ltd., M/s Premier Textiles Ltd., M/s Ramalinga Mills location to operating 52 Gins at six locations. By 1986 they Ltd., M/s Shanmuga Spinning Mills Ltd. etc. By 1986 Andhra were processing 40,000 Bales/annum. Subsequently, the Pradesh has become one of the biggest cotton Ginners in Ginning activity was extended to Bellary, Karnataka State. India. Chandra Sekhara Ginning Mill was very profitable The demand for quality cotton in Guntur started attracting during 1986-1992 and Mr.Kallam Haranadha reddy had traders from Maharashtra, Gujarat and Tamil Nadu. strong desire to start forwarding integration by constructing To cater for this growing Ginning activity more companies a spinning mill. His friends from spinning mills strongly were incorporated in Kallam group namely M/s Ramakrishna recommended Mr.Kallam Haranadha Reddy to start a Ginning Mill, M/s Siddartha Cotton Press, M/s Kallam Agro Spinning Mill with the availability of quality cotton in Guntur Products and Oils Pvt.Ltd., M/s Kallam Brothers Cottons in comparison to Tamilnadu having many Mills without any Pvt.Ltd. Cotton crop.
Journey of the Company 19
GINNING SPINNING OPEN END DYEING WEAVING HYDEL KALLAM TEXTILES LIMITED 26th ANNUAL REPORT 2017-18
1992 - 1993 ICICI started for verification of the land documents for the previous period of 33 Years. The company was started to mobilize promoter’s equity. ______ ______ICICI Securities (I-SEC) had been appointed as lead managers to the public issue in September 1994. The ICICI security was impressed by the progress of the project and invested in the promoters stake to an extent of 7,00,000 shares. Road shows of IPO were conducted by WTD & CFO across Pan India. ______ ______SRG financial (SRGFMCPL) had been appointed as registrar of the issue in October 1994 And underwriter of the Kallam Agros ltd. was incorporated on 18th feb 1992. During issue ICICI Ltd., SCICI Ltd., Andhra Bank, Enam Securities, the same time Mr.Kallam Haranadha Reddy asked his son- Sushil N.Shah, K.Ravindra Babu, Marg Securities etc. in-law Mr. GVK Reddy, lieutenant commander in India navy to join the family business. Mr.Kallam Haranadha Reddy ______ ______and GVK Reddy visited various spinning mills in south india. The Andhra Bank sanctioned Rs 3 Cr towards working 1993 - 1994 capital. The name of the company was changed to Kallam Spinning Mills Ltd 22 Sep 1994. On 22nd March 1995 Mr. Kallam Haranadha Reddy was appointed as Managing Spinning Mill was inaugurated by Sri. Narayanan, CMD, Director of Kallam Agros Ltd on 25th May 1993. Andhra Bank.
Mr.GVK Reddy joined as Whole Time Director on 21st June 1993. ______ ______
______ ______In March 1995 - 3024 Spindles were commissioned. The Company issued 3.1 Million Equity Shares of Rs 10/- each, Mr. Ramoji, Charted Accountant joined as CFO. accrued to be Rs 31 Million for the Public Issue on Kallam Haranadha Reddy and GVK Reddy visited various 02.03.1995 and the issue was oversubscribed by 4.7 times. spinning mills in South India to have first-hand information on the running of spinning mills. ______ ______ ______The company started functioning from office at Sangadigunta Guntur. Teak plantation division formed and started operations from November 1993 and collected Rs10.86 Lakhs. ______ ______Land procurement started in 26th Feb 1994. (Total Ac 18.01). Mr.TR Dhinakaran was appointed as Chairman of the Board who had long experience in Textile Industry from South India. ICICI team had come for a site inspection in Feb 1994. ______ ______ICICI sanctioned Term Loan for Rs 375 Lakhs and SCSCI sanctioned Term Loan for Rs 325 Lakhs in March 1994 for the setting of the Spinning Unit. In addition, they have also underwritten to take 7,50,000 equity shares. ICICI sanctioned a bridge loan of 340 Lakhs to fund the share capital prior to the public issue. ______ ______1994 - 1995 The foundation stone for Spinning unit was laid on 22nd April 1994 by Mr.Kallam Haranadha Reddy. The company started mobilizing promoters equity in May 1994. Orders were placed for plant and machinery and necessary advances were paid. ______ ______
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GINNING SPINNING OPEN END DYEING WEAVING HYDEL KALLAM TEXTILES LIMITED 26th ANNUAL REPORT 2017-18
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GINNING SPINNING OPEN END DYEING WEAVING HYDEL KALLAM TEXTILES LIMITED 26th ANNUAL REPORT 2017-18
1994 - 1995 Industry Veteran Mr.Dinakar was appointed as a chairman of Kallam Spinning Mills Ltd. The first Township was started by taking a loan of Rs 25 Lakhs from Chaitanya Gramin Bank. ______ ______The Turnover of your Company during the year : Rs 74.72 Millions. ______ ______
1995 - 1996 On 28th April 1995, Your Company was listed in Hyderabad, Coimbatore, and Bombay Stock Exchanges. On October 1995- Total 12,096 Spindles commenced the Commercial operation. ______ ______Mr. GVK Reddy, Whole Time Director participated in ITMA, Milan (Italy) October 17th – 26th in 1995. ______ ______
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GINNING SPINNING OPEN END DYEING WEAVING HYDEL KALLAM TEXTILES LIMITED 26th ANNUAL REPORT 2017-18
1996 - 1997 The production capacity increased to 3500 kgs/day. The company believes in quality in each of its activity. At most importance is given for quality of product & quality system. ______ ______Mr.GVK Reddy visited Mauritius, Singapore, Taiwan and Korea for export of yarn. The ICICI Sanctioned Rs 74 Lakhs foreign currency loan for the purchase of auto cone winder. The Andhra bank sanctioned Rs 100 Lakhs for the purchase of machinery. ______ ______
Board of Directors: Mr. TR. Dinakaran – Chairman 1998 - 1999 Mr. Kallam Haranadha Reddy- MD Mr. MR Naik a retired I.A.S. Officer was appointed as Director. Mr. GVK Reddy – WTD ______ ______Mr. L.S. Manivannan – Director Mr. T.Venkateswarlu, a practicing Charted Accountant and Mr. K.Nagi Reddy – Director having experience in the field of Sales Tax and Income tax Mr. Y. Ravindranadh – Director appointed as an additional director. Mr. Ch. Radha Krishna Murthy – Director ______ ______Mr. TV. Ratnam – Director IRDEA sanctioned Rs 3.63 Cr loan for 0.8 MW Hydel project.
______ ______Your company entered into agreement for setting up the Mini Hydel power project. Added 2 Cards, 1 Auto leveler Draw Frame, 1 LF 1400 and 1
Murata Auto Cone Winder and Second Blow room line . Your ______ ______Company Exported Rs 9.19 Million to Bangladesh, Taiwan and The turnover of your company during the year: Rs 241.71 Korea. Turnover of your Company grew to Rs 165.82 Million. Million. Yarn export reached 29.50% of the turnover ______ ______ ______Your Company started Exports to Bangladesh in May 1996 Hydro power plants of 4.0 MW sanctioned by the Government which is the first Export Business. Mr. T.V Ratnam Ex- of Andhra Pradesh. Director, SITRA was appointed as a Director of the Company. ______ ______ ______Spindle Capex increased to 18,144 spindles with the help of 12,096 spindles increased to 13,104 Spindles and UT-3 evenness Andhra Bank by sanction of FCTL USD 1.12 Million. testing Machine added, production capacity is increased. ______ ______ ______Mr MV Subba Reddy, M.Com was appointed as Whole Time 1997 - 1998 Director. Mr L Sreerama Murthy, a retired Regional Manager Mr.N.Prabhakarao – Superintendent Engineer of Electrical of Andhra Bank appointed as Director. (Rtd) & GVK Reddy - Whole Time Director conducted survey ______ ______on Nagarjuna Sagar Right and Left Canals for exploring feasibility of the hydroelectric project. ______ ______Applied to Govt of Andhra Pradesh for Hydroelectric power project of 4 MW Capacity on first come first basis. ______ ______SBI caps appraised for expansion of Spinning unit. The production capacity increased to 3500 kgs/day. ______ ______The turnover of your Company During the year was Rs 224.58 Million. Yarn Export reached 25.35% of the turnover. ______ ______
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GINNING SPINNING OPEN END DYEING WEAVING HYDEL KALLAM TEXTILES LIMITED 26th ANNUAL REPORT 2017-18
1999 - 2000 2001 - 2002 The turnover of your company during the year was Rs 286.69 Million. Yarn export reached 40.60% of the turnover. ______ ______Mr.N.Prabhakarao, Superintending Engineer (retired), Andhra Pradesh State Electricity Board was appointed as Director of the company. ______ ______
Board of Directors: Mr. TR. Dinakaran – Chairman Power plants were commissioned on 29th Jan 2002 and Mr. Kallam Haranadha Reddy- MD above 24 Lakh Units of Power Generated Successfully and Mr. GVK Reddy – WTD this gave a lot of support given to spinning division. Mr. K.Nagi Reddy – Director ______ ______Mr. L.Sreerama Murthy - Director Mr. M.Ramchand Naik - Director Mr. V.S.N. Murthy appointed as a Nominee Director from IREDA. ______Mr. MV.Subba Reddy - Director Mr.N.Prabhakarao- Director The turnover of the company during the year: Rs 249.41 Million ______ ______ ______Ministry of Textiles Govt of India introduced Technology Your company commenced civil works for Hydel plants and Upgradation Fund (TUF) Scheme for the first time. ICICI started receiving plant and machinery. sanctioned Rs 17 Million under TUF for Spinning. ______ ______ ______Mr. GVK Reddy, Whole Time Director visited Finland and Italy for witnessing testing of Hydroelectric plant machinery. The Spinning Division was awarded ISO 9002 by TUV Germany. ______ ______ Both the Hydro Power plants were constructed in a record All regulatory permissions were obtained for Hydel Project. time of 9 months, 15 days. ______Land for all 3 projects was acquired with the help of Kallam Ranga Reddy who is the brother of Kallam Haranadha Reddy. ______ ______2000 - 2001 The turnover of your company during the year was Rs 262.04 Million. Yarn exports Rs 41.27 Millions due to the domestic market price opportunity. ______ ______M/s. BFL Ltd. was finalised as Electrical and Mechanical (E&M) Supplier and advances for Hydro Power Projects were paid. ______ ______
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GINNING SPINNING OPEN END DYEING WEAVING HYDEL KALLAM TEXTILES LIMITED 26th ANNUAL REPORT 2017-18
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GINNING SPINNING OPEN END DYEING WEAVING HYDEL KALLAM TEXTILES LIMITED 26th ANNUAL REPORT 2017-18
Board of Directors: Mr. Kallam Haranadha Reddy - Chairman Mr. P. Venkateswara Reddy - MD Mr. GVK Reddy – JMD Mr. L.Sreerama Murthy - Director Mr. M.Ramchand Naik - Director Mr. MV.Subba Reddy - Director Mr.N.Prabhakarao- Director Mr. V.S.N. Murthy - Nominee Director of IREDA ______ ______The Andhra Bank has sanctioned Rs.140 Lakhs under TUF Loan to our Company for adding 5 Ring frames and 1 Carding Machine. ______ ______The Turnover of the Company During the year: Rs 373.80 Millions. Yarn exports Rs 118.57 Millions of the turnover. ______ ______2002 - 2003 2004 - 2005 Mr P.Venkateswara Reddy was appointed as Managing Director w.e.f 28th September 2002. Prior to Joining M/s. Andhra Bank sanctioned Rs 14.40 Cr under TUF for further Kallam Spinning Mills Limited, he was Managing Director of increasing the spindle to 33,648 Spindles. M/s. Kallam Agro Products & Oils Pvt. Ltd. He has in-depth ______ ______knowledge in selection of Kappas and Cotton Lint. He is very conservative by nature. After Joining in M/s.Kallam Board of Directors: Spinning Mills Limited, he was actively involved in civil Mr. P. Venkateswara Reddy - MD construction works. He is highly dedicated, hardworking Mr. GVK Reddy – JMD and a much-disciplined personality. Mr. MV.Subba Reddy – WTD ______ ______Mr.N.Prabhakarao - Director Mr. V.S.N. Murthy - Nominee Director of IREDA Mr GVK Reddy appointed as Joint Managing Director w.e.f Mr. M.Ramchand Naik - Director 28th September 2002. Mr. A.Krishna Murthy – Director
______ ______ ______Mr. Kallam Haranadha Reddy resigned as Managing The company has declared first maiden Dividend of 7%. Director and continued to be chairman of the board. ______ ______ ______Mr. A.Krishna Murthy – Deputy Commissioner of Labour (Retired) appointed as Director of the Company. Your company has utilized TUF scheme for replacement of ______Textool ringframe with LMW ringframes and procurement of Auto Cone winder. Yarn exports Rs 45.01 Millions of the turnover. ______ ______The Turnover of the Company During the year: Rs 319.40 Million The turnover of your company during the year: Rs 253.50 ______ ______Million. Yarn exports just Rs 11.36 Millions of the turnover due to the domestic market support. 2005 - 2006
______ ______The Turnover of the Company during the year : Rs 340.95 Millions. Yarn exports Rs 13.36 Millions of the turnover. Your company successfully completed its "value addition " ______ ______program during the year by adding 4 Ring frames, 1 Comber, 1 Autoconer Machinery with the assistance of M/s. Big Share services Pvt Ltd appointed as R&T agents. ______Andhra Bank by getting Rs. 184 Lakhs Loan facility and TUF scheme. The Spindleage increased from 18,114 to Board of Directors: 20,040. Your company had manufactured finer counts, Mr. K. Haranadha Reddy – Chairman thereby increasing the value addition. Mr. P. Venkateswara Reddy - MD ______ ______Mr. GVK Reddy – JMD Mr. MV.Subba Reddy – WTD 2003 - 2004 Mr.N.Prabhakarao - Director Mr. V.S.N. Murthy - Nominee Director of IREDA Spindle Capex increased to 22,608 Spindles. Mr. M.Ramchand Naik - Director ______ ______Mr. A.Krishna Murthy – Director
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GINNING SPINNING OPEN END DYEING WEAVING HYDEL KALLAM TEXTILES LIMITED 26th ANNUAL REPORT 2017-18
______ ______2006 - 2007 Andhra Bank sanctioned Rs 17.80 Cr under TUF for further To increase the value addition, your company was planned to spindle increased to 44160. The company has Declared a construct Open End Unit for utilizing Spinning Unit’s byproducts. Dividend of 10%. ______ ______ ______Indian Bank sanctioned Rs 198 Millions under TUF for Mr. K. Haranadha Reddy resigned as Managing Director from establishment of Open End Unit. the Board on 31st Jan 2004 for the purpose of enrolling in Bar ______ ______Council as an advocate. ______ ______The total spindles running in the Plant are 38,640. The turnover of your company during the year: Rs 513 Millions. The Bar Council has, vide letter dated 03rd March 2005 given Yarn exports Rs 99.45 Millions of the turnover. their approval to Mr K. Haranadha Reddy to act as a Non- ______ ______executive Director of the Company for the period of three years. ______ ______The company has declared a Dividend of 12%. 6,624 spindles of compact were added. ______ ______5 No’s TFO and one Autoconer winder added. ______ ______
2007 - 2008 The Open End Unit building is under construction. The total spindleage increased to 44,712 of which 6,624 spindles are compact. ______ ______
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GINNING SPINNING OPEN END DYEING WEAVING HYDEL KALLAM TEXTILES LIMITED 26th ANNUAL REPORT 2017-18
The Machinery orders for Open End Unit is being finalized and 2008 - 2009 LC’s are being established, your Company indents to put up latest Machinery for the Open End Unit in the first phase 3 Nos The turnover of your company during the year: Rs 683.67 Million. Open End Machines with 416 Routers each will be installed. Yarn exports Rs 177.04 Millions of the turnover. ______ ______ ______
Mr. A. Rajendra Prasad (Retired DGM, Andhra Bank) Board of Directors: appointed as Director of Board. Mr. K. Haranadha Reddy – Chairman Mr. P. Venkateswara Reddy - MD Mr. GVK Reddy – JMD Mr. M.V.Subba Reddy – WTD Mr.N.Prabhakarao - Director Mr. V.S.N. Murthy - Nominee Director of IREDA Mr. M.Ramchand Naik - Director Mr. A.Krishna Murthy – Director Mr. S. Pulla Rao – Director Mr. A. Rajendra Prasad - Director ______ ______Your Company has declared a Dividend of 9%. The total spindleage increased to 50,256 of which 15,456 spindles of compact. ______ ______ ______Yarn exports Rs 162.05 Millions of the turnover. Mr. S. Pulla Rao – (Retired Joint Commissioner of Income ______ ______Tax) appointed as Director. ______ ______Your Company is in process of commencing Open End Unit with 1248 Routers. All Machineries are state of art technology. The Company imported the Open End Machinery from ORLIKON. The addition of routers will increase the turnover of the Company. ______ ______Your Company also in the process of installing modern automatic TMC Ginning Unit. The Ginning Unit will have 24 Gins with automatic Kappas suction and Pneumatic cotton lint suction system and automatic bale press. ______ ______The Ginning Unit upgradation effects to reduce the transportation cost, Contamination level is bringing to Zero. The Ginning Unit located within Spinning Unit premises. Your Company is installing dedicated feeder 33KV Line. This will give uninterrupted power supply to chowdavaram unit. ______ ______
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GINNING SPINNING OPEN END DYEING WEAVING HYDEL KALLAM TEXTILES LIMITED 26th ANNUAL REPORT 2017-18
BD416, Longest Machine available with added features. ______ ______Company has declared a Dividend of 14%. The spindleage increased to 52,000 out of which compact spindles are 22,080 spindles. TFO capacity has increased to 8 Machines. ______ ______The turnover of your company during the year: Rs 830.59 Millions. Yarn exports Rs 91.90 Millions of the turnover. ______ ______We are in Process of installing One more waste cleaning line which will enable us to consume all the wastes producing Spinning and Open End to convert into Salable Yarn. ______ ______
2009 - 2010 Open End unit commenced with 1,248 rotors we have received 832 additional rotors. A new TMC Ginning unit with 24 High Production Nipha Ginning Machines were commissioned with a capacity of 200 bales per day. Civil works for Third 1.6 MW Mini Hydel power plants at Biravunipalli were started. ______ ______We are using our own waste produced in Ring Spinning and converting into Yarn. ______ ______We have purchased Open End Machine from Schlafhorst
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GINNING SPINNING OPEN END DYEING WEAVING HYDEL KALLAM TEXTILES LIMITED 26th ANNUAL REPORT 2017-18
______ ______Your Company had identified suitable land for further expansion and implanting a Mega Project in near future at Kunkupadu Village, Addanki Mandal, Praksam Dist. This land is near to NH 16.. The Land is gravel soil and having very high load bearing Capacity. It is 3KM from Gundlakamma River, with a possibility of drawing water from the river. ______ ______Your Company is registered land admeasuring Ac. 70 in the name of the Company and also negotiations going purchase of Ac 50 in one bit. ______ ______
2010 - 2011 2011 - 2012 The Open End Unit Capacity increased to 832 rotors. The Turnover of your Company During the year: Rs 1559.21 ______ ______Millions of which Exports are Rs 142.27 Million. Third Mini Hydel Power Plant of 1.6 MW was commissioned ______ ______on 27th March, 2011 and taking up the total Hydro power project installed capacity to 4.0 MW. The turnover of your Your Company had commenced the civil work for the 248 company during the year: Rs 1418.78 Million. Yarn exports Rs looms project at Kunkupadu Village, Addanki Mandal, Andhra 234.50 Millions of the turnover. Pradesh State.
______ ______ ______
Board of Directors: Total 120 Acres of Land Purchased for Weaving & Dyeing Unit at Kunkupadu. Mr. P. Venkateswara Reddy - MD ______ ______Mr. GVK Reddy – JMD Mr. M.V.Subba Reddy – WTD The Spindle age has increased to 56,400 and out of which 31,488 are Compact. Mr. V.S.N. Murthy - Nominee Director of IREDA Open End Unit Capacity increased to 2,912 Mr. M.Ramchand Naik - Director ______ ______Mr. A.Krishna Murthy – Director Mr. S. Pulla Rao – Director We maintain regional quality test center, do extensive testing of Cotton Yarn for mills in and around Guntur. ______ ______ ______Your company has declared a highest Dividend of 18%. Your company had a record profit of PBT Rs 201.5 Million. The Quality testing department is a profit center of own. ______The Spindleage has increased to 54,550.
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2012 - 2013
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GINNING SPINNING OPEN END DYEING WEAVING HYDEL KALLAM TEXTILES LIMITED 26th ANNUAL REPORT 2017-18
Rs 9.90 Cr sanctioned by Bank of Baroda for installing Yarn Dyeing plant of 5 Tons/day. This will help for manufacturing of Grey fabric and dyed shirting fabric. ______ ______Our Weaving Unit capacity of Production is 80000 Meters / Day of Woven Fabric including 70% yarn dyed shirting and 30% of bottom weight fabric. ______ ______Your Company had taken up Dyeing of Cotton Yarn. The Project is being implemented at cost of Rs.12.5 Crores and Rs 9.90 Cr sanctioned by Bank of Baroda for installing Yarn Dyeing plant of 5 Tons/day. This will help for manufacturing of Grey fabric and dyed shirting fabric. ______ ______Ginning Machines increased from 24 to 28 Machines. Indian Bank sanctioned Rs 106.92 Cr for Weaving Project for installing 248 Looms. 2014 - 2015 ______ ______The Turnover of your Company During the year: Rs 2512.68 Million of which Exports are Rs 410.98 Million. We have the state of art machinery in Weaving preparatory, ______ ______Weaving Loom shed and sophisticated testing equipment and instruments aimed at Continuing to be a Market leader Board of Directors: in Quality during the future years for our Greenfield Weaving and Dyeing Unit. Mr. P. Venkateswara Reddy - MD Mr. GVK Reddy – JMD ______ ______Mr. M.V.Subba Reddy – WTD The Turnover of your Company During the year: Rs 1865.32 Mr. V.S.N. Murthy - Nominee Director of IREDA Millions of which Exports are Rs 333.82 Million. Mr. M.Ramchand Naik - Director ______ ______Mr. A.Krishna Murthy – Director 2013 - 2014 Mr. S. Pulla Rao – Director The Turnover of your Company During the year : Rs 2193.69 Smt. V. Bhargavi - Director Millions of which Exports are Rs 390.53 Millions. ______ ______ The Company has declared a Dividend of 10%. We are conducting frequently Medical camps for our ______ ______employees and their families. conducting employees Get- together functions. Govt of AP issued for drawing 500 CuM Appointment of Smt. V. Bhargavi, FCA as a woman director of per day of water from Gundlakamma River. the Company. ______ ______The Weaving Unit was commissioned on 1st September, 2014. Your Company has declared a Dividend of 12%. The Project work at Weaving Unit is under progress. ______ ______We are giving the awards/ gifts to the employees on the occasion of 26th Jan ( Republicday) & 15th Aug ( Independence day) Every Year since the company incorporation. ______ ______Your Company had completed the Civil work at Weaving & Dyeing Unit. Machines are put into Trail. Quality production is yet to be established. ______ ______
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2016 - 2017 The Equity Shares of Rs.10/- each were Sub division into 5 Equity Shares of Rs.2/- ______ ______The Weaving & Dyeing Units carried Greenery plantation in nearly Ac.70 and Hydel Power plants carried Greenery plantation 2015 - 2016 in Ac.20 and Spinning Unit Carried Greenery plantation. ______Your Company has been awarded BCI Certification ( Known as Better Cotton Initiative) certified in Dec-2015 for procuring The Company is conscious of the importance of Cotton form the farmers with better cotton practices who have environmentally clean and safe operations since the Company been certified by the BCI as a Registered farmers. incorporation. ______ ______ ______Tecnorama, Italy Sample dyeing Machine is specially designed Your Company has declared a Dividend of 10%. for developing samples of Fibers / Yarns was installed. Sample ______Dyeing Machine are controlled by programmable controller known as Semi Auto Matic Controls. The Spindle age has been increased from 56,400 Spindles to ______ ______59,280 Spindles. The Turnover of your Company During the year: Rs 2972.40 Millions of which Exports are Rs 445.90 Million. Your Company has declared a Dividend of 10%. Dyeing Unit ______was commissioned on 23rd September, 2015. ______ ______The Company’s policy requires conduct of operations in such a manner, so as to ensure safety of all concerned, compliances The Turnover of your Company during the year: Rs 2761.05 of environmental regulations and preservation of natural Millions of which Exports are Rs 350.95 Million. resources for future Generations. ______ ______ ______
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GINNING SPINNING OPEN END DYEING WEAVING HYDEL KALLAM TEXTILES LIMITED 26th ANNUAL REPORT 2017-18
2017 - 2018 Your company obtained ISO 9001 – 2017 Accreditation for Weaving & Dyeing Unit. Your company certified for OKS (Organic Cotton Certified). Confidence in Textiles certified by OEKO Tex Standard. ______ ______Mr Ajeya Kallam, (IAS, Retired as Chief Secretary to the Govt of Andhra Pradesh) appointed as Director of the Company. ______ ______Mr.Ramgopal Retired Executive Director of Indian Bank appointed as Director of the Company. ______ ______
Board of Directors: Mr. P. Venkateswara Reddy - MD Mr. GVK Reddy – JMD Mr. M.V.Subba Reddy – WTD Mr. V.S.N. Murthy - Nominee Director of IREDA Mr. S. Pulla Rao – Director Smt. V. Bhargavi – Director Mr. Ajeya Kallam – Director Mr. Varanasi Ram Gopal – Director ______ ______The Company has declared a Dividend of 10% .i.e Rs 0.20 Per Equity Share of Face Value of Rs 2. Bonus shares given in the ratio of 1 Equity share for Every 4 Equity Shares. ______ ______The Turnover of your Company During the year:Rs 3138 Millions. Your company reached exports of Rs 911.57 Millions. ______ ______
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GINNING SPINNING OPEN END DYEING WEAVING HYDEL KALLAM TEXTILES LIMITED 26th ANNUAL REPORT 2017-18
EX- INDEPENDENT DIRECTORS OF THE COMPANY
Mr T.R.Dinakaran Mr L.S. Manivannan Mr Y.Ravindranath Mr Ch. Radhakrishna Murthy Duration of Duration of Rtd. Deputy Commissioner Rtd Chief Manager, Directorship :1994-2001 Directorship:1994-1999 of Income Tax Andhra Bank Duration of Duration of Directorship:1994-1998 Directorship:1994-1998
Mr T.V.Ratnam Mr T.Venkateswarlu Mr L.Sree Rama Murthy Rtd. Director SITRA Chartered Accountant in Practice Rtd Regional Manager of Andhra Bank Duration of Directorship:1996-1997 Duration of Directorship:1998-1999 Duration of Directorship:1998-2004
Mr M.R.Naik Mr N.Prabhakara Rao Mr A.Krishna Murthy Mr A.Rajendra Prasad Rtd IAS Officer Rtd Superintendent Rtd Joint Commissioner Rtd Deputy General Manager, Duration of Engineer of APSEB of Labour Andhra Bank Directorship:1998-2017 Duration of Duration of Duration of Directorship:1999-2010 Directorship:2004-2017 Directorship:2008-2010
Ex- Independent Directors 37
GINNING SPINNING OPEN END DYEING WEAVING HYDEL KALLAM TEXTILES LIMITED 26th ANNUAL REPORT 2017-18
TERM LOAN HISTORY OF THE COMPANY S. Loan Amount Year of Loan Outstanding as on 31st March 2018 Institution / Bank No. Rs. in Lakhs Sanction Rs. in Lakhs
1 375 ICICI 1994 Nil
2 325 SCICI 1994 Nil
3 74 ICICI 1996 Nil
4 100 Andhra Bank 1996 Nil
5 USD 1.12 Mil. Andhra Bank 1998 Nil
6 170 ICICI 1999 Nil
7 320 ICICI 1999 Nil
8 363 IREDA 1999 Nil
9 706 ICICI 2000 Nil
10 100 Andhra Bank 2003 Nil
11 184 Andhra Bank 2003 Nil
12 150 Andhra Bank 2003 Nil
13 140 Andhra Bank 2004 Nil
14 1440 Andhra Bank 2005 Nil
15 1780 Andhra Bank 2006 Nil
16 960 Andhra Bank 2006 Nil
17 1980 Indian Bank 2007 Nil
18 995 INDIAN BANK 2008 402
19 893 ANDHRA BANK 2009 583
20 480 ANDHRA BANK 2009 400
21 1350 INDIAN BANK 2010 1245
22 10692 INDIAN BANK 2011 8672
23 1350 ANDHRA BANK 2011 1270
24 600 ANDHRA BANK 2011 570
25 990 BANK OF BARODA 2012 850
26 960 INDIAN BANK 2013 905
27 1300 ANDHRA BANK 2014 1248
28 990 INDIAN BANK 2015 970
29 980 ANDHRA BANK 2016 936
30 1000 ANDHRA BANK 2016 880
31 600 INDIAN BANK 2016 540
32 720 ANDHRA BANK 2017 302
Loan History 38
GINNING SPINNING OPEN END DYEING WEAVING HYDEL KALLAM TEXTILES LIMITED 26th ANNUAL REPORT 2017-18
Corporate Presentation
25 Years of Commitment to the Excellence in Quality
Your company started commercial operations in 1995 with few or nil subsidies from Indian Govt. The TUF was introduced by Ministry of Textiles, Govt of India in 1999. The company availed TUF for all its term loans. Further to give momentum Govt of Andhra Pradesh sanctioned power subsidy in 2005. This helped Spinning, Open-End and Ginning divisions.
Grants / Govt of India for the first time introduced 10% capital subsidy in 2012 Subsidies for Airjet looms in addition to 5% TUF interest subsidy.
In 2015 Govt of AP introduced Interest subsidy of 8% for weaving and power subsidy of Rs 1.50 / unit for the first 5 years and Rs 2.00 / unit from 6th to 10th year.
The Weaving and Dyeing projects could avail the above facilities. This has helped to reduce the finance and power cost.
The Company had chosen vertically integrated value addition so that the raw material fluctuation will have least impact on the finished product and margins of the company. Long Term Vision Vertical integration is not only helping meeting the raw material fluctuations but also engineering the down stream products suiting exactly the up stream process with minimum cost of manufacturing.
The Company is conservative enough and never took risks Zero Bad on sale of finished products and there are no bad debits Debit Policy for the company during the last 25 years.
Kallam Textiles Ltd evolved from Kallam Group with Our Values Hard work, Integrity, Discipline and Consistency.
Kallam Textiles Ltd has been listed in BSE since 1995 and Listing has 100% compliance from inception to till date.
The Company made a humble beginning in 1995 with commissioning of 12096 ring spinning spindles.
Capex The company grew in capex turnover year on year without set backs.
Over a period of time, it had grown from 12 Cr capex to 500 Cr capex within 23 years.
Corporate Presentation 39
GINNING SPINNING OPEN END DYEING WEAVING HYDEL KALLAM TEXTILES LIMITED 26th ANNUAL REPORT 2017-18
Corporate Presentation
25 Years of Commitment to the Excellence in Quality
The company always had independent directors who are visionaries and ensured that company is steered in the right direction. Corporate Governance The Company whole time directors are well known for their hard work and integrity.
Quality The company is committed to continuously improve the quality of its products and services so that it can met or exceeded customer Commitment expectations. Spinning is ISO 9000 certified since 1999.
The Company has loyal and committed customer base who keep buying company products month on month and year on year basis. Customer simply company had repeat order loyal customers. Loyalty Directors of the company, visit customers on regular basis both in India and abroad.
The Company employed committed professionals in manufacturing, technical, marketing, financial departments. The company believed in unmatched and best services to its customers. HR POLICY The Company was accredited this year under "Pradhan Mantri Kaushal Vikas Yojana " where in we can train all the workers for their skill development under this programme.
Kallam Group has been doing business with Andhra Bank for the last six decades.
Kallam Textiles Ltd, had never changed its bankers and kept cordial relationship at all times. This give advantage to negotiated better Interest rates Bankers Loyalty The Company since inception had paid all its loan commitments in time and never defaulted on interest and principal repayments.
The bankers had always competing with lower interest rates and extend financial assistance at all times.
The Company invested in latest state of art technology with a view to manufacture best quality products with least man power, least power cost etc. Constant Technological The Company always invested in new machinery and Up gradation never resorted in buying second hand machinery.
The average life of the machinery is less than seven years.
Strict Plant Preventive The Company follows scheduled preventive maintenance programme Maintenance for all its equipment with highly skilled Technicians. Program
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GINNING SPINNING OPEN END DYEING WEAVING HYDEL KALLAM TEXTILES LIMITED 26th ANNUAL REPORT 2017-18
Corporate Presentation
25 Years of Commitment to the Excellence in Quality
The Company is a star export house recognized by the Ministry of Commerce, Govt of India.
The Company had exported Rs 91 Cr worth of yarn and fabric during the FY 2017 - 18. During the current financial year the exports expects to cross Rs 100 Cr. Exports There is a 3 % interest subvention on packing credit on export of fabric. Company utilizes the packing credit there by reducing interest cost to the company.
Currently yarn fetches 1.2 % duty draw back and fabric export fetches 1.3 % duty draw back of 2.0 % under MEIS scheme.
Key Strengths
1. The management team is well experienced with hands on experience in all areas of operations and key members of the team are able to access to trend forecasts and strategic planning at macro and micro levels. 2. Since cotton sourcing is the single most important element in the spinning industry, our focus has been to develop competencies in this area. We source directly from the farmers and have created long-standing relationship with our suppliers. Our international relationships give us the leeway to source instantly from global markets if so desirable. 3. We use the latest machines and equipment, scientifically monitor our labor productivity and have adopted a policy of constant improvement. In addition, we also use MIS tools for operating at optimal efficiency. We have provided adequate attention to many other related areas, like shipping and logistics, spare parts sourcing and financial planning to increase our overall efficiency. 4. Most of our customers are repeat customers. This is testimony to our product quality and standardization. Our aim has been to always lead in the area of product development. 5. Our fair policies and consistent quality have earned us significant goodwill in the markets we operate in, giving us an advantage against competition. 6. By following a proactive labor policy, we have been able to develop a workforce that identifies themselves as a part of a family rather than as mere employees. Our units have enjoyed the distinction of never having suffered any labor unrest from inception. 7. With our quality yarn we can weave fabric at a competitive price and higher production levels. We also benefited by reducing packing cost and taxes. 8. There is an ample availability of land for future plans.
Corporate Presentation 41
GINNING SPINNING OPEN END DYEING WEAVING HYDEL KALLAM TEXTILES LIMITED 26th ANNUAL REPORT 2017-18
CAPEX RING SPINNING 28 0 6 0 0 6 0 0 6 0 0 6 0 0 6 0 0 0 200 0 02 6 71 2 1 7 6 2 81 6 2260 8 212 0 200 0 181 181 181 181 120 120 120 02
1 9 9 4 1 995 199 6 199 7 1 9 9 8 1 999 200 0 2 0 0 1 2 0 0 2 2 003 200 4 2 0 0 5 2 006 2 007 2008 200 9 2 0 1 0 2 011 2012 201 3 2 0 1 4 2 015 201 6
COMPACT SPINNING 35000 31485 30000 27849 25000 22080 20000 15456 15000
10000 8832 6624 5000
0 2006 2007 2008 2009 2010 2011
OPEN END SPINNING GINNING 29 3500 28 2912 28 3000 27 2500 2080 2000 26 1500 1248 25 24 1000 24 500 23 0 22 2009 2010 2011 2010 2012
KALLAM TEXTILES LIMITED
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GINNING SPINNING OPEN END DYEING WEAVING HYDEL KALLAM TEXTILES LIMITED 26th ANNUAL REPORT 2017-18
Corporate Presentation
25 Years of Commitment to the Excellence in Quality
CAPEX
2014 - 15 Weaving Commissioned 248 looms
2015 - 16 Dyeing of Cotton Yarn Dyeing 5000 kgs per day production
2001 - 02 Hydro Power Generating Capacity of 2.4 MW Hydro Electric Power Plant 2010 - 11 Hydro Power Generating Capacity increased to 4.0 MW
Energy Audit by SITRA on regular basis.
Reduction of compressed air pressure in looms from 6 bar to 4 bar there by reducing power cost by 7.5 lakhs / month.
Use of LED lamps where ever possible.
Frequent testing and tuning of equipment by OEM manufactures.
Proper regular preventive maintenance of Machinery. Energy Conservation Measures Use of correct grade of lubricating oils and greases.
Use of IE3 motors in all places.
Correct use of belts and transmission equipment
All employees are trained in energy conservative measures.
Optimizing performance of steam boilers
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GINNING SPINNING OPEN END DYEING WEAVING HYDEL KALLAM TEXTILES LIMITED 26th ANNUAL REPORT 2017-18
Corporate Presentation 44
GINNING SPINNING OPEN END DYEING WEAVING HYDEL KALLAM TEXTILES LIMITED 26th ANNUAL REPORT 2017-18
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GINNING SPINNING OPEN END DYEING WEAVING HYDEL KALLAM TEXTILES LIMITED 26th ANNUAL REPORT 2017-18
STRATEGIC PLANT LOCATIONS
Our Company : We are one of biggest texile Our Vision Our Mission mills in andhra pradesh with To become india's Improve profitablity ginning, spinning, weaving most profitable and through value and hydel power plans. sustainable textile addition. company.
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GINNING SPINNING OPEN END DYEING WEAVING HYDEL KALLAM TEXTILES LIMITED 26th ANNUAL REPORT 2017-18 QUALITY - ACCREDITATIONS
Spinning Certified Since - 1999
Weaving & Dyeing unit since - 2017
Spinning and Weaving units are certified since - 2016
Certified since - 2017
Certified since 2018
Apart from in process inspection system, mill has adopted very stringent final inspection procedure before dispatching yarn to its customers. We maintain regional quality test center, do extensive testing of cotton yarn for mills in and around Guntur. The quality testing department is a profit center on its own.
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GINNING SPINNING OPEN END DYEING WEAVING HYDEL KALLAM TEXTILES LIMITED 26th ANNUAL REPORT 2017-18
Company had spend 2% of the profit in CSR activity as per the Govt of India policy. Following activities are taken 1) Giving scholarships to poor children in the neighbourhood villages of weaving plant. 2) Providing bituminous roads in the villages 3) Provide RCC benches in village for gathering and relaxing of villagers. 4) Construct bus shelter for waiting for persons from sun and rain. 5) Educating villagers on cleanliness. 6) Conducting Medical camps in the village. 7) Helping villagers in plantation activities. SWACHH BHARAT
Before
After
Before
After
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GINNING SPINNING OPEN END DYEING WEAVING HYDEL KALLAM TEXTILES LIMITED 26th ANNUAL REPORT 2017-18
TOWN SHIPS HAVING FAMILIES ACCOMMODATION ENRICHING HUMAN CAPITAL The Company's beautiful, self-contained and cosmopolitan Employees are your company’s most valuable resource. township provides residential facilities for our employees Your Company continues to create a favorable environment and their families. Along with its lush green environment at work place. Your Company has various welfare measures and lush green parks, employee cooperative society, ATM both government sponsored and privately envisaged. The facility, Kindegarden School, Bus facility for school children. Company is providing good accommodation facilitates by constructing new quarters / apartments. The Spinning town ship is accommodating appx 300 families by no. of apartments and quarters at Chowdavaram.
The Weaving town ship is accommodating appx 300 families by no.of apartments. The Hydel Town ship is accommodating 10 families.
The company also recognizes the importance of training and consequently deputes its work force in various work related courses/seminars including important issues like Total Quality Management (TQM). Because of these, your company is able to attract and retain well trained and dedicated workforce. The fact that the relationship with the employees continued to be cordial is testimony to the company’s ability to retain high quality workforce. In view of the aforesaid relationship no man days were lost during the year under report.
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GINNING SPINNING OPEN END DYEING WEAVING HYDEL KALLAM TEXTILES LIMITED 26th ANNUAL REPORT 2017-18
"A HEALTHY EMPLOYEE IS A PRODUCTIVE EMPLOYEE" "SAFETY TRAINING AWARENESS PROGRAMME"
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GINNING SPINNING OPEN END DYEING WEAVING HYDEL KALLAM TEXTILES LIMITED 26th ANNUAL REPORT 2017-18
"FUN GAMES AT TOWNSHIP" "TALENT WINS GAMES BUT TEAMWORK AND INTELLIGENCE WINS CHAMPIONSHIP"
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GINNING SPINNING OPEN END DYEING WEAVING HYDEL KALLAM TEXTILES LIMITED 26th ANNUAL REPORT 2017-18
AWARDING CEREMONY OF SCHOLARSHIPS TO EMPLOYEES CHILDREN OF KALLAM TEXTILES LTD.
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GINNING SPINNING OPEN END DYEING WEAVING HYDEL KALLAM TEXTILES LIMITED 26th ANNUAL REPORT 2017-18
Land For Future Expansion In order to Improve operational efficiencies We have been investing in infrastructure at our manufacturing facilities and over the years. We have been able to maintain a high level of quality. Enhancing existing capacities and improving operational efficiencies, we have continuously invested in infrastructure at our manufacturing facilities so that high level of quality can be maintained over the years and increased the level of backward integration. We have large land bank in Kunkupadu to accommodate our future expansion.
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“We are committed to meet customer expectation by involved in civil construction works. He is highly providing consistent yarn quality, through training, dedicated, hard working and a much disciplined technology up gradation, timely delivery, team work personality. and ensuring continual improvement of quality v Mr. PV Reddy handles purchase of Raw cotton, Ginning, management system and applicable requirements.” Civil Construction, Administration of Spinning Unit at Chowdavaram.
Mr. P Venkateswara Reddy Mr GVK Reddy Managing Director (DIN: 00018677) Joint Managing Director & CEO (DIN: 00018713) v Mr. P Venkateswara Reddy aged 67 years and he was v Mr GVK Reddy is the Joint Managing Director of Kallam appointed as Managing Director with effect from 28th Spinning Mills Limited and aged 60 Years. He is a September, 2002. Mr.PV Reddy hails from Agricultural graduate in Mechanical Engineering with Distinction family from Ramanayapalem, Prakasam Dist., A.P. and 1st Rank holder from Andhra University, Visakhapatnam. He did his M.Sc (Engg) (Marine v Mr. PV Reddy is Brother-In-Law of Mr.K.Haranadha Reddy, Engineering) from Royal Naval Engineering College, Chairman Emeritus and he joined Ginning Business in the Plymouth, UK. He is also 1st Rank holder in UK and year 1973. He had been instrumental in developing Ginning awarded Medal by Her Majesty the “Queen of England”. Business from the scratch. He was partner in Chandra Sekhara Ginning Mill and Siddhardha Cotton Pressing Unit. v He was commissioned in Indian Navy in 1977. He served in various Indian Naval Ships namely INS v Prior to Joining M/s. Kallam Textiles Limited, he was Udaygiri, INS Kiltan, INS Kavarathi and INS Rana. He Managing Director of M/s.Kallam Agro Products & Oils served in shore establishments like INS Shivaji and IAT Ltd. He has in depth knowledge in selection of Kappas Pune. He served in Gas Turbine Research and Cotton Lint. He is very conservative by nature. After establishment, Bangalore from 1990 to 1993 and Joining in M/s Kallam Textiles Limited, he was actively instrumental in conceptualizing Kaveri Gas Turbine
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Engine for Marine applications. He took premature v Mr. MV Subba Reddy, age 60 years is the Whole Time retirement as commander to start the Spinning Mill in Director of Kallam Textiles Limited. He hails from 1993. In the same year he extensively toured in India Agricultural family and native of Modukuru Village, with Mr. Kallam Haranadha Reddy to select suitable Guntur Dist. Machinery for Spinning Unit. v He is associated with the Company since 1996. He is v He took the lead role in design, construction of Spinning Post Graduate in Commerce from Andhra University, Unit and erection of machinery in a record time of 9 months. Visakhapatnam. He assists Managing Director in He organized Public Issue of the Company in 1995. purchase of cotton. He gained excellent knowledge in procurement of Raw material and sale of Cotton Waste. v He is actively involved in day to day running of the Company, Financial Management, Liasioning with v He is also having experience in accounts and looking Financial Institutions, Banks, Government Departments, after day to day administration at Spinning Unit at Selection of Machinery and Marketing of Finished Chowdavaram. Products. v He also looks after Accounts Department and Ginning v In 1999, He had surveyed extensively with Mr Unit. He is also Chief Financial Officer (CFO) of the N.Prabhakara Rao, Ex Director of the Company, for Company. locating Hydel Plants. AP Govt that time had allowed Hydro electric plants under Private Management. Three Hydro Electric plants were constructed under his leadership from selection of Plant and Machinery, Erection to Commissioning. v He is a long term and strategic visionary. At Spinning Unit all the Land of 22 acres was filled up by 2010. It was envisaged to have at least 100 acres at one place to meet all the future requirements. Suitably 120 acres of Land was purchased at Kunkupadu near Addanki and Weaving and Dyeing Units were Commissioned. v Mr GVK Reddy looks after day to day administration of Weaving and Dyeing Units. In addition to the above, he also looks after the Marketing and Finance Management of entire company. v Being a Highly Qualified Engineer, he goes minutely in selection of Machinery. He is Fellow Institute of Engineers and Fellow Institute of Marine Engineers.
Mr.V Ramgopal Non-Executive & Independent Director (DIN: 02889497) v Mr. V Ramgopal is aged 65 years. He has a Masters Degree in Bio-Chemistry. He joined as Probationary Officer in Indian bank in 1973, before moving to Andhra Bank in 1976. v In senior positions he served as Zonal Manager (DGM) in Zonal Office, Kolkata and Guntur besides other assignments in Andhra Bank. On promotion to General Manager, he was General Manager in- charge of Investments and International Banking Division in Andhra Bank. He also served as General Manager in Head office, Andhra Bank. v Mr.Ramgopal was appointed as Executive Director of Indian Bank and served from December 7, 2009 to December 31, 2011. He was Nominated as Chairman and Director of Indian Bank Housing Ltd., and Indian Bank Merchant Banking Services Ltd., subsidiaries of Mr. MV Subba Reddy Indian Bank during his tenure as ED in the years 2010 Whole Time Director & CFO (DIN: 00018719) and 2011.
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GINNING SPINNING OPEN END DYEING WEAVING HYDEL KALLAM TEXTILES LIMITED 26th ANNUAL REPORT 2017-18 v During 2011, he was Nominee Director by Indian Bank v He was promoted as General Manager (Finance & on the Board of Reliance Asset Management Company Accounts) in 1992. Ltd. Mr.Ramgopal was nominated as member of Risk v He was promoted as Head of Financial Services Management Committee of Indian Banks Association Division in 1994. He actively associated in various during 2010 and 2011. diversification programmes of APIDC such as Bill Discounting, Merchant Banking etc. In November 1997, He retired as Chief General Manager (Finance & Accounts). v He is Nominated as Director by IREDA on the Boards of Kallam Spinning Mills Limited and Janapadu Hydro Power Project Limited.
Mr. VSN Murthy Nominee Director, IREDA (DIN: 00021952) v Mr. VSN Murthy, 79 Years is a Nominee Director by IREDA. He is a Post Graduate in Commerce with distinction from Andhra University, Visakhapatnam. v He joined Singareni Collieries Limited in the year 1963 as Junior Officer and worked for seven years in various Mr. S Pulla Rao departments like Internal Audit, Main Accounts and Non- Executive & Independent Director (DIN: 02360239) Compilation. v S Pulla Rao, 73 Years is a graduate in B.Com from v In the Year 1970, He joined APIDC Ltd as Accountant Andhra University and B.L. from Nagarjuna University. and was promoted as Deputy Manager in 1976 in He joined in income tax Department in 1966. Finance and Accounts Department. Categorizing his performance as “outstanding” he was promoted from the post of Income tax Inspector to v He was promoted as Senior Deputy Manager in 1978 income tax Officer overlooking 75 seniors in 1984. and as Manager (Accounts) in 1980. v He worked in various places in Andhra Pradesh. During v He was shifted to Refinance & Monitoring Division in his tenure as Income Tax Officer his performance was 1983 where he performed various activities like rated as “outstanding” and conferred IRS in 1993 and Disbursement of Term Loans under IDBI Refinance was promoted as Assistant Commissioner Of Income Scheme and Monitoring the units under implementation. Tax. He worked as Assistant Commissioner Of Income Apart from disbursements, he was also responsible for in Chennai, Vijayawada and Rajahmundry. He got obtaining refinance sanctions to Term Loans and drawl of promotion as Deputy Commissioner Of Income Tax in refinance from IDBI, preparation of Business Plan and 1998 and worked as Deputy Commissioner Of Income Resource Forecast (BPRF) and relevant correspondence Tax in Guntur and Khammam. with IDBI and the review of BIFR on a periodical basis. v He got promotion as Joint Commissioner Of Income v He was designated as Manager (Finance) in 1986 and Tax in 2003 and retired as Joint Commissioner Of in the same year, While continuing in the Finance Income Tax in June 2005 on super annuation because Department, he was promoted as Deputy General of his sincerity and dedication in work, his service in Manager (Finance), he was transferred to the Monitoring Income Tax Department. He was rated all through as & Recoveries Division in the 1989. He was also involved “outstanding”. He has got very good knowledge in in drawing up relevant measures for reviewing Income Tax laws and allied laws. potentially viable sick units.
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GINNING SPINNING OPEN END DYEING WEAVING HYDEL KALLAM TEXTILES LIMITED 26th ANNUAL REPORT 2017-18 v After retirement S. Pulla Rao registered himself as an first HOD. He gave a new direction to Agriculture advocate in the composite Andhra Pradesh High Court. extension with farming situation specific strategies. He As an advocate he is rendering legal services to the was also Vice-chancellor of the Agriculture university. Income tax assessees. This also he has taken up more v He was Commissioner of Endowments and later posted as social service. Seeing the plight of handloom as Executive Officer, Tirumala Tirupathi Devastanam weavers he promoted the idea of starting a ‘Non Board. During his tenure in TTD, he brought significant Governmental Organization (NGO)’ and became the reforms. In the Infrastructural sector, he worked as founder of “Padmasali International Welfare CMD, Transco as well as Chairman, Vizag Port Trust. Association”. v He was principal secretary to the then Chief Minister. v Till now, this NGO has got a Corpus Fund of Rs. 120 Subsequently, he handled the State's Finance and lakhs and the NGO did help to the extent of Rs.150 Revenue departments as Special Chief Secretary. On lakhs by way of giving scholarships, books, medical 31st March, 2017, He retired as Chief Secretary to help and monetary help to the poor weavers who are in Government of AP during 2017. distress. S. Pulla Rao is the President of this organization. v He was also elected as president of “Taxation Bar Association”, Vijayawada twice and worked as president for 9 years. He participated in many seminars on taxation.
Mrs. Bhargavi Vangala Non- Executive & Independent Director (DIN: 06950741) v Mrs. Bhargavi Vangala, B.Com, F.C.A, DISA is a Independent and Woman Director of Kallam Spinning Mills Limited and aged 31 years. She is a practicing Chartered Accountant . Mrs. Bhargavi qualified as a CA Mr.Ajeya Kallam in the year 2011 and started practicing in Guntur, in the Non- Executive & Independent Director (DIN: 00278595) intricate areas of Taxation, Auditing & Banking. v Mr Ajeya Kallam, IAS, Retired as Chief Secretary to the v She is a Gold Medalist and awarded as a “ Best Out Govt of Andhra Pradesh. He is a 1983 batch IAS officer Going Student” at her College Level. She is a faculty and a post graduate in Agriculture with a Masters in with various CA institutions for Both Direct and Indirect Business Administration from Australia had put in 34 Taxes and has guided many students in tackling the years in Indian Administrative Service. subject of taxation. v Mr Kallam had handled many important assignments in v Her Area of Specialization is Indirect Taxes and She is his career both in State and Central governments. He one amongst the best advisors in Guntur for the GST. worked as Sub collector and PO, ITDA in Nalgonda and She addresses in many trade and professional Khammam Districts. associations , including Government Organizations v He was District Collector & Magistrate for West Godavari regarding tax issues and latest GST matters. She is a and Vizag Districts. Managing Committee member for the Guntur Branch of SIRC of ICAI. v He spent nearly 7 years in Agriculture sector as Head of the departments of Horticulture and Agriculture besides v She is the member of Audit Committee in M/s KTL. She working as principal secretary, Agriculture. He was gives suggestion during the Board Meetings in the instrumental in building horticulture department as its areas related to both Direct and Indirect Taxes.
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KALLAM TEXTILES LIMITED DIRECTORS’ REPORT To the members of the Kallam Textiles Ltd., Your directors 3. FINANCIAL PERFORMANCE: are pleased to present their Twenty-Sixth Annual Report of Your Company recorded net revenue from operations of the Company together with the Audited Financial ` st 31,071.21 Lakhs with a increase of 8.33% over Statements for the year ended 31 March 2018. `28,681.13 Lakhs of the last financial year. The 1. CORPORATE OVERVIEW : Company recorded a net profit after tax of `1567.30 W.e.f 09th April, 2018, your company name has been Lakhs, with a increase of 22.54% over net profit of ` changed from “KALLAM SPINNING MILLS LIMITED” 1278.99 Lakhs of the last financial year. To “KALLAM TEXTILES LIMITED (“Your Company”). 4. DIVIDEND AND RESERVES: Your company is a leading Textile Company and has its Considering the profits for the year under review and corporate office at Chowdavaram, Guntur - 522019 also the capital expenditure requirements of the Andhra Pradesh. Company, Your Directors are pleased to recommend a 2. REVIEW OF OPERATIONS: dividend of 10% i.e. `0.20 per equity share of face value ` ` The financial results for the year ended 31st March 2018 of 2/- each aggregating to 85.64 Lakhs for the financial are summarized below : year ended March 31, 2018. During the year under review, no amount from profit was S. 2017-18 2016-17 Particulars transferred to General Reserve. No. (`in Lakhs) (`in Lakhs) The amount lying in the Unpaid Dividend Account of the 01 Revenue from operations 31,264.27 28,863.17 company in respect of the last five years as on March 31, 2018 is as follows : 02 Other income 113.23 101.23 Date of Due date for Profit before Interest, Dividend Amount 03 5,714.63 5,681.57 Declaration transfer to Depreciation & Tax Year in ` of Dividend IEPF 04 Depreciation (1,419.46) (1,364.89) 2010-11 27-08-2011 01-10-2018 3,17,865 05 Interest (2,188.33) (2,198.67) 2013-14 27-09-2014 01-11-2021 3,13,099 06 Profit before tax 2,106.84 2,118.01 2014-15 26-09-2015 31-10-2022 2,39,365 07 Provision for income tax 2015-16 28-09-2016 02-11-2023 2,53,374 i) Current year Tax 460.26 500 2016-17 29-09-2017 03-11-2024 2,63,827 ii) Deferred Tax 79.27 339.01 During the year 2017-18, Unclaimed Dividend of 08 Profit after tax 1,567.30 1,278.99 Rs.3,32,125/- for the year 2009-10 was transferred to 09 Earnings per share (`2/-) 3.66 2.99 Investor Education and Protection Fund (IEPF). Pursuant to the provision of rule 3 of the Investor Education and Transfers & appropriations from Protection Fund (Awareness and Protection of Investor) the profit are as detailed below: Rules, 2001, necessary e-form (Form 1 INV) which contains the Statement of amounts credited to IEPF was 10 Net Profit after tax 1,567.30 1,278.99 filed to Registrar of Companies (ROC). 5. MANAGEMENT DISCUSSION AND ANALYSIS: Balance brought forward 11 from previous year The Management Discussion and Analysis forms an integral part of Annexure [I] to this report and gives 12 Profit for appropriations 1,567.30 1,278.99 details of the overall industry structure, economic developments, performance and state of affairs of your APPROPRIATIONS Company’s various businesses viz., Textiles and power business, internal controls and their adequacy, risk Transfer to General 13 0 0 management systems and other material developments Reserve during the financial year 2017-18. Proposed Equity 14 85.63 68.51 6. BONUS ISSUE OF SHARES : Dividend During the year under review, the company has issued Tax on Proposed Equity and allotted 85,63,875 fully paid new equity shares of ` 15 17.43 13.95 Dividend 2/- each to the shareholders of the Company in the ratio of 1:4 (i.e One Bonus Share for every Four (4) existing 16 Balance carried forward 0 0 equity shares held.) Consequently, the issued,
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subscribed and paid up equity share capital of the of the shareholders in Annual General Meeting, Sri Company after bonus issue of Equity Shares has P.Venkateswara Reddy and Sri G.V.Krishna Reddy be increased from `6,85,11,000 to `8,56,38,750 and proposed to re-appoint as a Managing Director and number of shares increased from 3,42,55,500 to Joint Managing Director & CEO of the Company for a 4,28,19,375 of ` 2/- each. period of Three years with effect from and including 29th June, 2018. 7. EXTRAORDINARY GENERAL MEETING (EGM) : Sri M.V.Subba Reddy, Whole Time Director retire by The Board of Directors had sought approval of the rotation at the ensuing AGM pursuant to the provisions Shareholders of the Company by process of of Section 152 of the Companies Act, 2013 read with the Extraordinary General Meeting (EGM) in respect of the Companies (Appointment and Qualification of Directors) Special Resolutions set out in the EGM Notice dated on Rules, 2014 and the Articles of Association of your 12th February, 2018. The detailed voting results are Company and being eligible has offered himself for given in the “Report on Corporate Governance” forming reappointment. Appropriate resolution for his re- part of this Annual Report. appointment is being placed for your approval at the 8. CORPORATE GOVERNANCE: ensuing AGM. As per Regulation 34 (3) read with Schedule V of the Mr M.Prasanna Kumar (ACS: 49713) has appointed as a SEBI (Listing Obligations and Disclosure Requirements) Company Secretary w.e.f 01st April, 2017 and he has Regulations, 2015, a separate section on corporate resigned from the post of Company Secretary as well as governance practices followed by the Company, Compliance Officer w.e.f 31st May, 2017. together with a certificate from the Company’s Statutory The Independent Directors Mr. S.Pulla Rao and Smt Auditors confirming compliance forms an integral part of V.Bhargavi of your Company hold office upto 26th this Report. September, 2019 and Mr Ajeya Kallam and V.Ramgopal 9. NUMBER OF MEETINGS HELD OF THE BOARD: of your Company hold office upto 28th September, 2022 and they are not liable to retire by rotation. During the year, Seven Board Meetings were held, with a gap between not exceeding the period of 120 days as All Independent Directors have given declarations that prescribed under the Act. Details of the Board and they meet the criteria of independence as laid down Board Committee meetings held during the year are under Section 149(6) of the Companies Act, 2013 and given in the Corporate Governance Report. Regulation 16 (b) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. 10. PUBLIC DEPOSITS : During the year, Pursuant to the Provisions of Section During the year under review, your Company has not 149(1) of the Companies Act, 2013 read with Rule 3 of accepted any deposit within the meaning of Sections 73 the Companies (Appointment and Qualification of and 74 of the Companies Act, 2013 read with the Directors) Rules, 2014 and also as per Regulation 16(1) Companies (Acceptance of Deposits) Rules, 2014 (b) of the SEBI (LODR) Regulations, 2015, the Company, (including any statutory modification(s) or re- with the approval of shareholders at AGM, has appointed enactment(s) for the time being in force). Mr. Ajeya Kallam and V.Ramgopal, as Independent Directors of the company on 29th September, 2017. 11. DIRECTORS AND KEY MANAGERIAL PERSONNEL Retirement by rotation and subsequent re-appointment : During the year, Non-Executive and Independent Directors of the Company, Mr M.R.Naik and Mr A.Krishna Pursuant to Section 196, 197, 203 and other applicable Murthy have submitted their resignations to the Board on provisions of Companies Act, 2013 read with Schedule the Board Meeting held on 29th September, 2017. V to the said act, the shareholders at their 23rd Annual The Board has accepted their resignations and relieved General Meeting held on 26th September, 2015 them as Directors of the Company with effect from the appointed Sri P. Venkateswara Reddy as a Managing same Board Meeting where they submitted their Director and Sri G.V. Krishna Reddy as a Joint Managing resignations and Board placed on record its sincere Director of the Company for a period of Three years with appreciation of services rendered by them as Directors effect from 29th June, 2015.The Term of their of the Company during their tenure. appointment would come to an end on 28th June, 2018. It is necessary to Re-appointment them for another Pursuant to Regulation 30 of SEBI (LODR) Regulations, period of Three years. Hence the Board at their meeting 2015 of the Listing Agreement, We informed the same held on 28th May, 2018 decides to Re-appoint Sri P. to Bombay Stock Exchange, where the shares of the Venkateswara Reddy as a Managing Director and Sri company were listed and also as per Section 168 of the G.V.Krishna Reddy as a Joint Managing Director & CEO Companies Act, 2013 the Board of Directors also took the note of their resignations and intimate to the of the Company for another period of Three years on Registrar of Companies, Hyderabad for the States of the recommendations of the Nomination and Andhra Pradesh and Telangana. Remuneration Committee. Disclosure Relating to Remuneration of Directors, Key Pursuant to Section 196, 197, 203 and other applicable Managerial Personnel and particulars of Employees: provisions, if any, of Companies Act, 2013 read with Schedule V to the said act and Subject to the approval The remuneration paid to the Directors is in accordance
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with the Nomination and Remuneration Policy 13. A STATEMENT ON DECLARATION GIVEN BY formulated in accordance with Section 178 of the INDEPENDENT DIRECTORS: Companies Act, 2013 and Regulation 19 of the Listing During the year under review, one meeting of Regulations (including any statutory modification(s) or Independent Directors was held on 12th February, 2018 re-enactment(s) for the time being in force). The salient in compliance with the requirements of Schedule IV of aspects covered in the Nomination and Remuneration the Companies Act, 2013. Policy has been outlined in the Corporate Governance Report which forms part of this report. All the Independent Directors of the Company have declared that they meet the criteria of Independence in The information required under Section 197 of the terms of Section 149(6) of the Companies Act, 2013 and Companies Act, 2013 read with Companies (Appointment and Remuneration of Managerial Personnel) Rules, that there is no change in the status of Independence. 2014 in respect of Directors/ employees of your Company 14. EVALUATION OF BOARD’S PERFORMANCE: is set out in to this report. Annexure [II] Pursuant to the provisions of the Companies Act, 2013 Directors Responsibility Statement: read with the Rules issued thereunder and the SEBI Pursuant to Section 134(3)(c) of the Companies Act, (Listing Obligations and Disclosure Requirements) 2013 (including any statutory modification(s) or re- Regulations, 2015, (including any statutory modification(s) enactment(s) for the time being in force), the Directors or re-enactment(s) for the time being in force), the process of your Company confirm that: for evaluation of the annual performance of the Directors/ Board/ Committees was carried out. The criteria applied (a) in the preparation of the annual accounts for the in the evaluation process are detailed in the Corporate financial year ended 31st March, 2018, the Governance Report which forms part of this report. applicable Accounting Standards and Schedule III of the Companies Act, 2013 (including any statutory i. Observations of board evaluation carried out for the year - NIL modification(s) or re-enactment(s) for the time being ii. Previous year’s observations and actions taken - NIL in force), have been followed and there are no material departures from the same; iii. Proposed actions based on current year observations- NIL (b) for the financial year ended 31st March, 2018, the 15. COMMITTEES OF THE BOARD: Directors have selected such accounting policies The Board of Directors has the following Committees: and applied them consistently and made judgments 1. Audit Committee and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs 2. Nomination and Remuneration Committee of your Company as at 31st March, 2018 and of the 3. Stakeholders’ Relationship Committee profit and loss of the Company for the financial year 4. Corporate Social Responsibility Committee. ended 31st March, 2018; 5. Share Transfer Committee (c) proper and sufficient care has been taken for the The details of the Committees along with their composition, maintenance of adequate accounting records in number of meetings and attendance at the meetings are accordance with the provisions of the Companies Act, provided in the Corporate Governance Report. 2013 (including any statutory modification(s) or re- 16. DISCLOSURE UNDER SECRETARIAL STANDARDS enactment(s) for the time being in force) for ON MEETING OF BOARD OF DIRECTORS (SS-1): safeguarding the assets of the company and for preventing and detecting fraud and other irregularities; During the year under review, the company has complied with all the applicable Secretarial Standards. (d) financial statements have been prepared ona “going concern” basis; 17. STATUTORY AUDITORS AND AUDITORS’ REPORT: (e) proper internal financial controls laid down by the M/s. Chevuturi Associates., Chartered Accountants Directors were followed by your Company and that (Firm Reg No : 000632S), were appointed as the such internal financial controls are adequate and statutory auditors at the Annual General Meeting held operating effectively; and on September 29, 2017 for a term of five (5) years from the conclusion of the 25th annual general meeting till (f) proper systems to ensure compliance with the the conclusion of 30th annual general meeting. As per provisions of all applicable laws were in place and the provisions of Section 139 of the Companies Act, that such systems were adequate and operating 2013, the appointment of Auditors is required to be effectively. ratified by Members at every Annual General Meeting. 12. EXTRACT OF THE ANNUAL RETURN: But, in accordance with the Companies Amendment Act, The details forming part of the extract of the Annual 2017, enforced on 7th May, 2018 by the Ministry of Return as on 31st March, 2018 in Form MGT - 9 in Corporate Affairs, the appointment of Statutory Auditors is accordance with Section 92(3) of the Companies Act, not required to be ratified at every Annual General Meeting. 2013 read with Companies (Management and The Statutory Auditors of the Company have not Administration) Rules, 2014, are set out herewith as reported any fraud as specified under the second Annexure [III] to this report. This Annexure is also proviso of Section 143(12) of the Companies Act, 2013 posted on the website of the Company (www.ksml.in).
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(including any statutory modification(s) or re- Committee as also to the Board for approval. Prior enactment(s) for the time being in force). The Auditors’ omnibus approvals are granted by the Audit Committee for Report for the financial year ended 31st March, 2018, related party transactions which are of repetitive does not contain any qualification, reservation or nature, entered in the ordinary course of business and adverse remark. are on arm’s length basis in accordance with the provisions of Companies Act, 2013 read with the Rules 18. COST AUDITOR: issued thereunder and the Listing Regulations. The The Board of Directors of your Company, on the policy on Related Party Transactions as approved by recommendations made by the Audit Committee at its the Board of Directors has been uploaded on the meeting held on 28th May, 2018 has approved the website of the Company. The web-link of the same has appointment of Mr. P.Srinivas, Cost Accountant, been provided in the Corporate Governance Report. (Membership No. 21170) as the Cost Auditor of your The details of the related party transactions as per Company for FY 2018-19 and recommends ratification Accounting Standard 18 are set out in point 35 of the of his remuneration by the Members at the ensuing Notes on Accounts to the Financial Statements forming Annual General Meeting. The Company has maintained part of this report. The Form AOC - 2 pursuant to Section the cost records and there are no qualifications in the 134(3)(h) of the Companies Act, 2013 read with Rule report of the cost auditor for the financial year 2017-18. 8(2) of the Companies (Accounts) Rules, 2014 is set out 19. SECRETARIAL AUDITORS: as Annexure [V]. The Company has appointed M/s. K. Srinivasa Rao & 23. VIGIL MECHANISM / WHISTLE BLOWER POLICY: Co, a firm of Company Secretaries in Practice, Guntur The Company has adopted Vigil Mechanism / Whistle to conduct the Secretarial Audit for the financial year Blower Policy as per the provisions of Section 177 of the ended March 31, 2019, as required by Section 204 of Companies Act, 2013 and Regulation 22 of the Listing the Companies Act, 2013 and rules made thereunder. Regulations. Employees can raise concerns regarding The Secretarial Audit Report furnished by M/s. K. any discrimination, harassment, victimization, any other Srinivasa Rao & Co, for the financial year ended March unfair practice being adopted against them or any 31, 2018 is annexed to this report as Annexure [IV]. instances of fraud by or against your Company. Any Board reply on the Qualification of Secretarial Auditor : incidents that are reported are investigated and the The Board has made an utmost effort for the appointment suitable action taken in line with the whistle blower of the Company Secretary as KMP but unable to appoint policy. The details of the Vigil Mechanism is explained in a Company Secretary due to lack of suitability of the the Report on Corporate Governance and also posted Candidate to the profile of the Company in terms of on the website of the Company (www.ksml.in). work location, job profile and remuneration. 24. SIGNIFICANT AND MATERIAL ORDERS PASSED BY 20. INTERNAL AUDITORS: THE REGULATORS OR COURTS The Board of Directors has appointed M/s Mastanaiah There are no significant and material orders passed by & Co.,(Firm Reg No: 002039S) Chartered Accountants, the Regulators/Courts that would impact the going Guntur, as Internal Auditors for the period of 1 (one) concern status of the Company and its future operations. year up to 31st March, 2019 under Section 138 of the 25. CONSERVATION OF ENERGY, TECHNOLOGY Companies Act, 2013 and they have completed the ABSORPTION AND FOREIGN EXCHANGE internal audit as per the scope defined by the Audit Committee. EARNINGS AND OUTGO: The information on the conservation of energy, 21. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS BY THE COMPANY technology absorption and foreign exchange earnings and outgo as stipulated under Section 134 of the During the year, there were no Loans, Guarantees, Companies Act, 2013 read with Rule 8 (3) of the Investments and securities given/made/provided by the Companies (Accounts) Rules, 2014, is set out herewith Company under the provisions of Section 186 of the as Annexure [VI] to this report. Companies Act, 2013. 26. UNSECURED LOANS RECEIVED FROM DIRECTORS 22. RELATED PARTY TRANSACTIONS: DURING THE YEAR 2017-18: During the financial year 2017-18, your Company has During the year 2017-18, The Company has received entered into transactions with related parties as defined Loans from Three Executive Directors. under Section 2(76) of the Companies Act, 2013 read with Companies (Specification of Definitions Details) Rules, S. Amount Received 2014, all of which were in the ordinary course of Name of the Director No During the year (in `) business and on arm’s length basis and in accordance with the provisions of Section 188 of the Companies 1) Sri.P.Venkateswara Reddy 83,50,000 Act, 2013, read with the Rules issued thereunder and the Listing Regulations. Further, there were no 2) Sri G.V.Krishna Reddy 20,00,000 transactions with related parties which qualify as material transactions under the Listing Regulations. All 3) Sri M.V.Subba Reddy 2,00,000 Related Party Transactions are placed before the Audit
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All the Directors were, at the time of giving the money, of the Board of Directors of your Company. furnished their declaration in writing to the effect that the The Audit Committee of the Board of Directors actively amount is not being given out of funds acquired by them reviews the adequacy and effectiveness of the internal by borrowing or accepting loans or deposits from others. control systems and suggests improvements to 27. RISK MANAGEMENT: strengthen the same. The Audit Committee of the Board The Company has implemented an integrated risk of Directors and Statutory Auditors are periodically management approach through which it reviews and apprised of the internal audit findings and corrective assesses significant risks on a regular basis to help actions taken. Audit plays a key role in providing ensure that there is a robust system of internal controls assurance to the Board of Directors. Significant audit in place. Your Company believes that managing risks observations and corrective actions taken by the helps in maximizing returns. The Company’s approach management are presented to the Audit Committee of to addressing business risks is comprehensive and the Board. To maintain its objectivity and independence, includes periodic review of such risks and a framework the Internal Audit function reports to the Chairman of the for mitigating controls and reporting mechanism of such Audit Committee. risks. The risk management framework is reviewed 30. ENVIRONMENT AND SAFETY: periodically by the Board and the Audit Committee. The The Company is conscious of the importance of company has put in place response mechanisms that environmentally clean and safe operations. The mitigate environmental, operational and business risks Company’s policy requires the conduct of operations in and minimise the impact on business. such a manner, so as to ensure the safety of all concerned, 28. CORPORATE SOCIAL RESPONSIBILITY (CSR) compliances of environmental regulations and preservation The CSR expenditure incurred by your Company during of natural resources for future Generations. the financial year 2017-18 was ` 29.36 Lakhs which 31. PREVENTION OF SEXUAL HARASSMENT OF was higher than the statutory requirement of 2% of the WOMEN AT WORKPLACE : average net profits for the last three financial years. As per the requirement of The Sexual Harassment of ` (Which amounted to 28.18 Lakhs) Women at Workplace (Prevention, Prohibition & The CSR initiative of your Company was under the area(s) Redressal) Act, 2013 (‘Act’) and Rules made there Development of rural areas / Social Business Projects. under, the Company has formulated and implemented a Your Company’s CSR Policy statement and annual policy on prevention of sexual harassment at workplace report on the CSR activities undertaken during the with a mechanism of lodging complaints. For that financial year ended 31st March, 2018, in accordance purpose, Company has constituted Internal Complaints with Section 135 of the Companies Act, 2013 and Committees (ICC). During the year under review, no Companies (Corporate Social Responsibility Policy) complaints were received in this regard. Rules, 2014 is annexed to this report as Annexure [VII]. 32. REGISTRARS AND SHARE TRANSFER AGENTS: 29. DETAILS ON INTERNAL FINANCIAL CONTROLS Your Registrar and Share Transfer Agents of the Company RELATED TO FINANCIAL STATEMENTS M/s Big share Services Private Limited, 306, 3rd Floor, Your Company has put in place adequate internal Right Wing, Amrutha Ville, Opp. Yashodha Hospital, Raj financial controls with reference to the financial Bhavan Road, Somajiguda, Hyderabad - 500 082. statements and the Company has effective risk- 33. APPRECIATIONS AND ACKNOWLEDGEMENTS: mitigation system. Your Company has adopted Your Directors sincerely convey their appreciation for accounting policies which are in line with the Accounting the unbelievable commitment, support, dedication, hard Standards prescribed in the Companies (Accounting work, enthusiasm and significant contribution made by Standards) Rules, 2006 that continue to apply under employees in ensuring sustained growth of the Section 133 and other applicable provisions, if any, of Company. The Directors also take this opportunity to the Companies Act, 2013 read with Rule 7 of the thank all shareholders, Clients, Vendors, Bankers, Companies (Accounts) Rules, 2014 and relevant Government and Regulatory Authorities and Stock provisions of the Companies Act, 1956, to the extent Exchanges for their continued support. applicable. These are in accordance with generally accepted accounting principles in India. Changes in For and on behalf of Board of Directors policies, if any, are approved by the Audit Committee in P.Venkateswara Reddy consultation with the Statutory Auditors. Managing Director DIN : 00018677 The main thrust of internal audit is to test and review controls, appraisal of risks and business processes, G.V. Krishna Reddy besides benchmarking controls with best practices in Joint Managing Director the industry. The Internal Audit is entrusted to M/s DIN : 00018713 Mastanaiah & Co., Chartered Accountants, Guntur, who submit their reports to the Joint Managing Director & Place : Chowdavaram, Guntur CEO and has direct access to the Audit Committee and Date : 09-08-2018 they participated in the meetings of the Audit Committee
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ANNEXURE-I MANAGEMENT DISCUSSION AND ANALYSIS 1. FORWARD LOOKING STATEMENT l Bargaining power of suppliers Certain statements made in this report may not be based Because of oversupply in the unorganized market like on historical information or facts and may be "forward- that of denim, suppliers have little bargaining power. looking statements" based on the currently held beliefs and However, premium products and branded players assumptions of the management of the Company, which continue to garner higher margins. are expressed in good faith and in their opinion reasonable, l Bargaining power of customers including those relating to the Company's general business Domestic customers - Low for premium and branded plans and strategy, its future financial condition and growth product segments. Global customers- High due to prospects and future developments in its industry and its presence of alternate low cost sourcing destinations. competitive and regulatory environment. l Competition The Company disclaims any obligation to update these forward looking statements, except as may be required by law. Very high fragmented industry. Competition from other low cost producing nations is likely to intensify. workforce over the next 3 years. 2. TEXTILES SECTOR OVERVIEW 4. FINANCIAL YEAR '17 The Indian textile sector had all the tailwinds the businesses needed, over the last two to three years, to grow and become Operating profit margins of textiles exporters were under more profitable. Right from higher export demand to lower pressure on account of lower export realizations. A shift in cotton prices to falling interest rates to favorable exchange the dynamics of US retail, and a reduction in incentives rates, the companies had everything going in their favor. after the implementation of the Goods and Services Tax (GST) led to the pricing pressure. The industry employs about 40 million workers directly and 60 million indirectly. India's targeted textile exports for In FY18, the textile export sector was undergoing a sea- financial year 2017-18 is US$ 45 billion. However, this change. Many brick & mortal retailers in the US have target is unlikely to be achieved. pruned inventories and downsized stores to offset profitability pressures caused by the e-retail boom. To As per the Ministry of Textiles, the Indian textile industry cushion the consequent fall in utilization levels, Indian contributed about 14% to industrial production, 4% to the exporters have been enhancing their share of the business country's GDP and 13% to the country's export earnings in 2017. with US e-retailers, but at lower realizations. Domestic According to the Ministry of Textiles, the domestic textile home textile firms have had a good run since FY12, with and apparel industry in India is estimated to reach US$ 223 India's share of US imports of cotton bed sheets and terry bn by 2021 from US$ 108 bn in 2015. towels increasing from 34% to about 40% in FY17 because India enjoys a significant lead in terms of labor cost per hour of cost competitiveness compared with peers in China and over developed countries like US and newly industrialized Pakistan. US accounts for a third of global home textiles economies like Hong Kong, Taiwan, South Korea and China. market worth US$ 16 billion. As per data from National Bureau of Statistics, due to steep Almost 47% of India's home textile exports of US$ 5.3 wage inflation, the average monthly wage cost in China stood billion last fiscal was to the US. Additionally, competitiveness at US$ 230 per month in 2013 as against US$ 80 per month continues to be impacted in Europe - an equally large in India. Also, India is rich in traditional workers adept at value- consumer of home textiles as the US – with levies up to adding tasks, which could give Indian companies significant 10% duty on Indian products compared with free access to margin advantage. However, India's inflexible labor laws have Bangladesh and Pakistan firms. been a hindrance to investments in this segment. Unlike in 5. PROSPECTS: home textiles, garment capacities are highly fragmented and leading Indian textile companies have been slow to ramp up Debt being raised for capacity expansion (net of repayments) their apparel capacities, despite strong order flows from and lower operating margins (due to higher raw material overseas buyers who are trying to diversify out of China.The costs) are expected to result in lower profitability for the textile industry aims to double its workforce over the next 3 sector in the near term. years. As a thumb rule, for every Rs 1 lac invested in the The demand for Indian home textiles will continue to grow at industry, an average of 7 additional jobs is created. 8% seen in the recent past, helped by exports to traditional markets and better penetration in non-traditional markets 3. THE TEXTILES SECTOR (KEY POINTS) such as Asia, Australia, South America and Canada. l Supply The Trans-Pacific-Partnership (TPP) a duty-free trade Despite some pick-up in demand from both global and agreement between 12 nations may impact the Indian textile domestic markets, most new capacities in the apparel and and garment export sector negatively and put Indian textile home textile segments are not operating at full capacities. exports of around US$ 40 bn at risk over the medium term. l Demand The TPP member nations led by the US account for 40% of High for premium and branded products due to increasing world trade and the deal gives them duty free access to each per capita disposable income. other, and makes imports from other countries uncompetitive. l Barriers to entry Source : https://www.equitymaster.com/research-it/sector- Superior technology, skilled and unskilled labour, info/textiles/Textiles-Sector-Analysis-Report.asp#top distribution network, access to global customers.
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6. DIVISION WISE ANALYSIS COTTON PROCUREMENT The company had perfected cotton procurement over the years and it helped us producing best and consistent quality yarn. it also contributed to bottom line of the company. KALLAM TEXTILES LTD - GINNING DIVISION
Kallam Textile Ltd is situated in Guntur, Which is one of the best quality cotton growing areas in India. Guntur district produces MCU5 which is long staple cotton and is suited for fine counts. Kallam group is in cotton Business for more than four decades. Mr P.V Reddy Managing director was instrumental in development of M/S Chandra Sekhara Ginning Mill In late 70's and 80‘s. Mr PV.Reddy used to purchase cotton on day by day basis. The farmers bring kapas by tractors to chowdavaram spinning cum ginning plant. The best quality kappas is procured from farmers. Farmers prefer on the spot payment. which yields reduction on market price. In spot payment process the kapas quality is checked and weighment is done immediately. Once truck is unloaded farmer gets payment on the same day by evening hours. on the spot The Ginning Division has 28 high production Ginning payment not only helps in cost reduction but also gets best Machines. The Division has modernized Automatic bale quality kapas to ginning unit. pressing unit. This is one of the modern TMC units in Andhra Pradesh. In near future, we are going to expand the Ginning cotton cultivation is started in July every year with on set of Division by improving the storage capacity of Raw Cotton. monsoon. Cotton packing from the fields start in November and continues till February. Best quality kapas is procured Machinery Infrastructure: in the months of Nov - March only. 80% of the entire cotton Roller Ginning : Nipha Auto procurement completes by march every year. Since there is Seed Boosting & Collection : Auditya Quality pressure on the farmers and ginners to sell the products due to heavy arrivals the cotton lint is at lowest in these Automatic Bale Press : Karunanand cotton procurement months. Online Cody Cleaner : Global Engineers Pvt Ltd Lint Pre Cleaner : Govind & sons Raw Cotton Storage hot box : Rank one company Plant Capacity The Ginning Division has capacity to press 200 bales / day. BCI (Better Cotton Initiative) Our Company has been BCI (Known as “Better Cotton Initiative”) certified in December, 2015 for procuring of Better Cotton from the farmers who have been certified by the BCI as a Registered Farmers. The Better Cotton Initiative exists to make global cotton production better for the people who produce it, better for the environment it
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GINNING SPINNING OPEN END DYEING WEAVING HYDEL KALLAM TEXTILES LIMITED 26th ANNUAL REPORT 2017-18 grows in and better for the sector’s future. BCI aims to transform Product Range : cotton production worldwide by developing Better Cotton as a sustainable mainstream commodity. BCI brings together farmers, ginners, spinners, weavers, processors, garments, cut & sew, manufacturers, retailers, brands and grassroots organizations in a unique global community committed to developing Better Cotton as a sustainable mainstream commodity. The farmers are educated to grow cotton by conserving water and soil. The farmers are then BCI certified. We procure these kappa's from them and gin in our ginning unit and then spin the yarn from the kappas in our spinning unit. We also weave the fabric and then it is sold as fabric. Advantages of procuring of BCI Cotton : v Yarn produced from BCI Cotton has high market demand when compare to yarn produced from other cotton. v By 2018, most of the brands preferring to buy BCI fabric v Our company trying to be on Higgs international v Our company is preparing for organic cotton certification Ring Spinning Yarn : Ne.30s to Ne.80s combed warp / KALLAM TEXTILES LTD - SPINNING DIVISION compact. TFO Yarn : Ne.30/2 to Ne.80/2 combed warp/ compact. Production : Ring Spinning Yarn, 420 tons per Month 59,280 KALLAM TEXTILES LTD - OPEN END DIVISION Spindles Kallam Textile Ltd. established its Open End unit in the year 2009-10 with an initial capacity of 1248 Rotors. The total Rotors capacity of Open End Unit was increased to 2912 by 2011 - 12.
Spinning is a major part of the textile industry. In simple words, spinning is a process in which we convert fibers by passing through certain processes like Blow room, Carding, Drawing, Combing, Simplex, Ring Frame and finally winding into yarns. These yarns are then wound onto the cones. Our Company started its Commercial production on 22nd March 1995 with 12096 spindles. Our Company is an ISO 9001-2008 Certified Company by TUV NORD since 2010. The Company today operates 59,280 spindles of Ring Spinning out of which 34,416 compact & 24,864 Non- Kallam Textile Ltd. has proved its OE yarn quality in the Compact. We are mainly focused on production of Premium international market and has continuous demand in the quality of cotton and dyed yarn. The premium quality yarn is market. Repeated orders are getting continuously. The exported to number of customers across the world. The premium quality yarn is exported to number of customers company relies on consistent supply of international across the world. The company relies on consistent supply standard quality yarn. Having clear vision, well placed of international standard quality. Having clear vision, well systems, guided by a team of professionals & steered by an placed systems, it is guided by a team of professionals and enterprising management, your company always tries to steered by an enterprising management. diversify its range of products in order to reach the large Kallam Textile Ltd. continues to diversity its products and number of customers across the globe. extends its customer reach.
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Product Range : OE Yarn Ne10s to Ne20s TFO Yarn Ne OE 20s/2 Production Capacity 500 Tons / Month.
2,912 Rotors
v Weaving preparatory, - Karlmayer v Weaving machines - Picanol, Air-Jet & Rapier looms, Toyota airjet looms v Full equipped testing and research laboratory Consistent commitment to high quality standards and v Yarn dyeing – Fongs innovations has been the secret of success. Superior open v Automatic dye dispensing system - Tecnorama end unit ensure the supply of consistent quality yarn to v Zero discharge effluent treatment plant. manufacture the cloth. v Confident KALLAM TEXTILES LTD - WEAVING DIVISION v Humidification system – LUWA. Our plant capacity of production is Eighty thousand meters per day of woven fabric including 70% yarn dyed shirting and 30% of bottom weight fabric. We have the state of art machineries in weaving preparatory, weaving loom shed and sophisticated testing equipment and instruments aimed at continuing to be a market leader in quality during the future years. We, Kallam Textile Limited is one of the leading textile manufacturers. Our possibilities of fabrics are boundless, such as Dobby yarn dyed shirting, fabrics with cotton 100% and blended with lycra stretch, polyester, nylon, Linen and viscose fabrics. Our name guarantees perfect workmanship at all time. The weaving industry is professionally managed with technical Managers at the helm of affairs. We have the state of art machinery from various leaders of manufacturers around the world. We are procuring from Switzerland, Belgium, Japan, Spain, Germany, Italy and KALLAM TEXTILES LTD - DYEING DIVISION China. The Company has commenced the Commercial Production of Yarn Dyeing unit on 23rd September, 2015 with a capacity of 5000 kgs per day.
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Our Products Range : KALLAM TEXTILES LTD - HYDEL POWER DIVISION Yarn Dyed Shirting 4.0 MW 3 Plants Count range - Ring spun Ne 20’s to 80’s Ring spun Blends 2/40’s to 2/120’s Our company has three hydro electric plants with a total capacity of 4.0 MW capacity at Nelakondapally Mandal, Open end – 20’s Khammam District of Telangana. These plants are on 16th & Blends - 100% Cotton, Polyester Cotton, Organic Cotton 17th branch canal of Nagarjuna Sagar project left main Cotton Stretch DowXLA, Cotton Tencel, Cotton canal. The canal flows for 7 to 8 months in a year. Typically Modal Cotton Bamboo, Linen. the canal is opened in Aug/Sep and closed by end April. The first two projects of 0.8 MW and 1.6 MW were commissioned Dyed Cone Rewinding in Jan 2002 and third hydro electric plant of 1.6 MW was After to the R.F.(Radiofrequency) Dyeing, the yarn cones commissioned in March 2011. We have installed Hydro are bundled, weighed and checked for evenness of dyeing Electrical equipments from Boving Fouress, France. on Schlafhorst auto-coners, so that it is ready for warping or for weft insertion in weaving section. All the generators produce electricity at 6.6 KV voltage level. The generated voltage is enhanced to 33 KV by a We have 5 machines of 60 spindles each for our capacity power transformer and fed to the state electricity grid. The and segregate each machine in order to avoid fluff hydel power generation solely dependent on the canal contamination from one shade onto the other. It is helpful if water flow. The 0.8 MW hydro electric project is financed by humidification air changes are provided, so that fluffis IREDA, New Delhi and remaining two Nos. of 1.6 MW hydro going into the return trench and not flying around in the electric projects are financed by Andhra Bank. winding area. We have good electrical and mechanical engineering team at the hydro electric plants. They ensure the availability of plant by more than 98% when water is flowing in the canal. During the financial year 2017-18, due to short fall of rains and water flow, we have generated 25,27,700 Units only. Out of the generation, 70% of the units are sold to Sagar Cements Ltd. and 30% of the units are sold to TSNPDCL.
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MAINTENANCE OF MACHINES We follow machine maintenance based on SITRA norms and our experience. We buy spare parts directly from machine manufacturers in order to ensure our quality requirements. We also follow life cycle management for our machines in order to achieve best possible combination between price and technology advancements.
QUALITY CONTROL Quality of our Yarn and Fabric is one of the most important factor in our manufacturing process. We believe this will be one of the most success factor of our organisation in the future. We have always placed emphasis on quality since our inception. Our customers are willing to pay a higher price for our products due to our product quality. EFFLUENT TREATMENT PLANT (ETP) – TECHNICAL FACTS Towards Excellence in Spinning, Yarn Dyeing and Weaving Yarn Dyeing Production: Quality is of prime importance in any aspect of business. As the quality product depends on the raw material quality, so Dyed Yarn 2.5 Ton/ Day we must be provided with the best quality raw material with Bleached Yarn 2.5 Ton/Day an economical consideration. We carry raw material inspection on Uster HVI Spectrum and Uster Afis Pro -2 for Based on the above Dyeing production effluent generation 2.5% SL, uniformity, MIC, Strength, Short fiber content % 178Kl/Day LTDS and neps /grm. 2.5 Ton/Day Bale management system is followed for consistent superior 90 Kl/Day HTDS yarn quality, and for this, cotton stock is maintained for 5 – 6 months. Carding and combing process optimized for NRE of 2 Kl/Day 75% to 85% and 65% to 70% respectively. RIETER D35 / Total 270 Kl/Day D40 / D45 draw frames are maintained for less than 0.50%. In ring frame breakages are maintained below 5 to 6 breaks LTDS effluent process : Through trench, Bar screen, collection per 100 spindle hour. In auto coner utmost care is taken for tank, Biological aeration, clarifier, sand filter and final clear achieving 85% splice strength with defect-free packages. water used of on land for our own gardening as per APCB Norms. PRESERVING THE NATURE HTDS effluent process : Through trench, Bar screen, collection tank, Selected Zero discharge effluent treatment plant to maintain Biological aeration, clarifier Electro coagulation, HRSSC, Sand filter, ecological balance and reduce pollution. UF, RO three stages including Nano filtration, Multistage evaporator Effluent Treatment Plant consists biological system, ultra and centrifuge and will get three out put using as follows : filtration, reverse osmosis in 2 stages, nano filtration. The + Out put of permeate water reused for dyeing process above process ensures 90% water recovery for reuse and + RO reject water used in dyeing as salt water so that saves water which is precious resource. Received pollution fresh salt consumption less daily control clearances from Government authorities. + MEE salts disposing to TSDF as per APCB norms
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QUALITY CONTROL QUALITY CONTROL - SPINNING & OE In bale management system average microniere is maintained throughout the year. Due to the bale management system yarn produced in the Mill throughout the year is uniform. The dyeability of the fabric is maintained consistent. The bale management system is consist of taking min of 10 lots of 100 bales each at any given time. Only two bale from each lot issued. When one bale lot is exhausted a fresh lot of 100 bales is introduced. Tenso jet Tenso Rapid
Cascade TPI Tester
Trash analyzer Bursting Strength Tester
Cartoon & Cone collapsing tester
QUALITY CONTROL - GINNING DIVISION USTER AFIS Fiber Testing Kallam has HVI instrument from Uster Inc, Switzerland. Every bale is checked for the following. QUALITY - DYEING DIVISION + 2.5% Span Length l Tecnorama Sample Dyeing l Data Color + Uniformity Ratio l Washing Fastness Tester l Rubbing Fastness Tester + Microniere l Sax Knitting l Perspiration tester + Color Grade l Color Matching Cabinet l Infrared Color Machine + G Tex l Water Bath l Woven The above properties recorded for each and every bale.
Uster HVI specimen cotton testing
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Fabric Inspection Machine
QUALITY - WEAVING DIVISION l Sampling Cutter l GSM Tester l TPI Tester l Warp Reel l Washing Tester l Micro woven USTER TENSOJET - 4 For Yarn Testing
Computerized CSP Testing Machine
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7. OPPORTUNITIES AND THREATS : 9. DISCLOSURE OF ACCOUNTING TREATMENT : i) OPPORTUNITIES : Disclosure of Accounting Treatment in the preparation of the financial statements, the Company has followed the The textile sector plays a key role in the Indian economy by Accounting Standards referred to in Section 133 of the way of significant contribution to GDP, manufacturing Companies Act, 2013. The significant accounting policies output, employment generation and export earnings. Its which are consistently applied are set out in the Notes to share in the nation’s GDP is 6% and in exports, 13%. In the Financial Statements. India, the sector is the second-largest employer after agriculture. India has most liberal and transparent policies 10. FUTURE OUTLOOK OF THE COMPANY : in Foreign Direct Investment (FDI) amongst emerging The Company is projecting gross sales from ` 540 Crores countries. India is a promising destination for FDI in the to ` 600 Crores during the year 2018-19. The Weaving, textile sector. 100% FDI is allowed in the textile sector Dyeing and Power divisions are expected to add bottom under the automatic route. The fundamental strength of line to the financial performance of the Company. Indian textile industry is its strong production base with wide range of fibers/yarns. Indian Textile and Apparel 11. STRENGTHS : Industry will continue to grow rapidly. India can achieve v Abundant raw material availability helps control costs higher growth rates of finished products such as apparel, and reduces lead-times across operations. home furnishing, and technical textiles. An important v There is easy availability of low cost and proficient development in the global textile trade is the fall in China’s manpower that contributes extensively in the growth of predominance, which presents an opportunity for Indian the industry. textiles sector to grab the market share of China in the developed world. v The industry has an added advantage of having numerous segments which help in the provision of a ii) THREATS : huge variety of products. The Cotton textile industry in India is suffering from many v India is one of the largest exporters of yarn in serious problems. Following are some of the problems international market. faced by the industry. v The cultural diversity and rich heritage of the country v India deals in cotton based textiles. So, high volatility in offers good inspiration base for designers. cotton prices has an adverse impact on complete supply 12. WEAKNESSES : chain. v The textile industry of India is one of the highly v Manufacturing is a labour intensive process, whereas in disintegrated industries. the inflation ridden economy of India, there is a constant v Fabric Processing is the weakest link in the Indian demand for rising wages for workers. So, increasing textile value chain, adversely affecting its ability to labour cost is also a major challenge before the industry. compete in exports. v Shortage of Power is another major problem faced by v There is a huge dependency of the industry on cotton. Textile Industry. v Productivity levels for manufacturing various apparel v There has been an increase in seasons per year which items are far lower in India in comparison with its has resulted in shortening of the fashion cycle. competitors. 8. RISKS & CONCERNS : 13. CAUTIONARY STATEMENT : The Key factor in determining a company’s performance is Statements in the Directors’ Report and Management the company’s ability to manage the risks in it business/ Discussion and Analysis describing the Companies environment effectively. Many risks exist in a company’s objectives, projections, estimates, expectations may be operating environment and they emerge on a regular basis,. “forward looking statements” within the meaning of Viz Currency Risk, Commodity price Risk and Human applicable security laws and regulations. Actual results Resource Risk. Risk management is embedded in operating could differ materially from those expressed or implied. framework of your Company. The risk management Important factors that could make difference to the framework defines the risk management approach of the company’s operations include, among others, economic Company and also includes the periodical review of such conditions effecting demand / supply and price conditions in risks. Your Company believes that managing risks helps in the domestic and overseas markets in which the Company maximizing returns. The risk management framework is operates, changes in the Government regulations, tax laws reviewed periodically by the Board and the Audit Committee. and other statutes and incidental factors.
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ANNEXURE-II DETAILS PERTAINING TO REMUNERATION AS REQUIRED UNDER SECTION 197(12) OF THE COMPANIES ACT, 2013 READ WITH RULE 5(1) OF THE COMPANIES (APPOINTMENT AND REMUNERATION OF MANAGERIAL PERSONNEL) RULES, 2014
I) The ratio of the remuneration of each Director to the median remuneration of the employees of the Company for the financial year 2017-18 and the comparison of remuneration of each Key Managerial Personnel (KMP) againstthe performance of the Company are as under : Remuneration of Director Ratio of remuneration of each Name of the Director S.No. During the F.Y 2017-18 Director/to median remunera- / KMP and Designation (Amount In `) tion of employees 1 P. Venkateswara Reddy, Managing Director 47,21,131 34.191 2 G.V.Krishna Reddy, Joint Managing Director 47,17,140 34.162 3 M.V.Subba Reddy, Whole Time Director 9,86,852 7.147 S.Pulla Rao, Non Executive and 4 1,00,000 0.724 Independent Director 5 M.R. Naik*, Non Executive and Independent Director 30,000 0.217 6 V.S.N Murthy, Non Executive and Nominee Director 1,00,000 0.724 A. Krishna Murthy**, Non Executive and 7 30,000 0.217 Independent Director Ajeya Kallam#, Non Executive and 8 60,000 0.435 Independent Director V.Ramgopal##, Non Executive and 9 30,000 0.217 Independent Director 10 V. Bhargavi, Non Executive and Independent Director 1,00,000 0.724 11 M.Prasanna Kumar, Company Secretary$ 42,000 0.304 *&** They were resigned from the board w.e.f. 29th September, 2017. #&## They became the members of the boards w.e.f. 26th August, 2017 $ Mr. M.Prasanna Kumar has resigned w.e.f 31-05-2017
II) Details of percentage increase in the Remuneration of each Director in the Financial Year 2017-18 are as follows Remuneration of Remuneration of % Increase /(Decrease) S. Name of the Director Director During the F.Y Director During the F.Y in Remuneration in the No. / KMP and Designation 2017-18 (Amount In `) 2016-17 (Amount In `) Financial Year 2017-18 1 P. Venkateswara Reddy, Managing Director 47,21,131 48,21,068 -2.07 2 G.V.Krishna Reddy, Joint Managing Director 47,17,140 48,15,593 -2.04 3 M.V.Subba Reddy, Whole Time Director 9,86,852 8,77,403 12.47 S.Pulla Rao, Non Executive and 4 1,00,000 80,000 25.00 Independent Director M.R. Naik*, Non Executive and 5 30,000 60,000 -50.00 Independent Director V.S.N Murthy, Non Executive and 6 1,00,000 80,000 25.00 Nominee Director A. Krishna Murthy**, Non Executive and 7 30,000 50,000 -40.00 Independent Director Ajeya Kallam#, Non Executive and 8 60,000 0 - Independent Director V.Ramgopal##, Non Executive and 9 30,000 0 - Independent Director V. Bhargavi, Non Executive and 10 1,00,000 80,000 25.00 Independent Director 11 M.Prasanna Kumar, Company Secretary$ 42,000 0 -
*&** They were resigned from the board w.e.f. 29th September, 2017. #&## They became the members of the boards w.e.f. 26th August, 2017 $ Mr. M.Prasanna Kumar has resigned w.e.f 31-05-2017
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III) Percentage increase in the median remuneration of all employees in the financial year 2017-18 % Increase/(Decrease) in the Particulars 2017-18 2016-17 Financial Year 2017-18 Median Remuneration of all the Employees 1,38,082 1,40,271 -1.56 IV) There were 662 permanent employees on the rolls of the Company as on 31st March, 2018. V) Comparison of Remuneration of the Key Managerial Personnel(s) against the performance of the Company: The total remuneration of Key Managerial Personnel increased by 0.488% from 108.64 Lakhs in 2016-17 to 109.17 Lakhs in 2017-18 whereas the Profit before Tax decreased by 0.5273% from 2118.01 Lakhs in 2016-17 to 2106.84 Lakhs in 2017-18. VI) Details of Share price and market capitalization : The details of variation in the market capitalization and price earnings ratio as at the closing date of the current and previous financial years are as follows: Particulars 31-03-2018 31-03-2017 Increase/(Decrease) (%) 1. P.E Ratio 8.21 6.09 34.81 2. Market Captialisation (` in Cr) 128.67 77.42 66.20 VII) There were no employees in the Company as per Rule 5(2) of Chapter XIII, the Companies (Appointment and Remu- neration of Managerial Personnel) Rules, VIII) The ratio of the remuneration of the highest paid director to that of the employees who are not directors but receive remuneration in excess of the highest paid director during the year - Not Applicable : and IX) The key parameters for the variable component of remuneration availed by the directors are considered by the Board of Directors based on the recommendations of the Human Resources, Nomination and Remuneration Committee as per the Remuneration Policy for Directors, Key Managerial Personnel and other Employees. X) It is hereby affirmed that the remuneration paid is as per the as per the Remuneration Policy for Directors, Key Man- agerial Personnel and other Employees.
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ANNEXURE III TO THE DIRECTORS' REPORT FORM NO. MGT-9 EXTRACT OF ANNUAL RETURN as on financial year ended on 31-03-2018 Pursuant to Section 92 (3) of the Companies Act, 2013 and rule 12(1) of the Company (Management & Administration) Rules, 2014.
I. REGISTRATION & OTHER DETAILS :
i CIN L18100AP1992PLC013860
ii Registration Date 18-02-1992
iii Name of the Company KALLAM TEXTILES LIMITED
Company Limited by Shares / iv Category/Sub-category of the Company Indian Non Government Company
Address of the Registered office CHOWDAVARAM, GUNTUR-522019 v & contact details PH No : 0863-2344016
vi Whether listed company YES
Big Share Services Pvt.Ltd., Name, Address & contact details of 306, 3rd Floor, Right wing, Amrutha Ville, vii the Registrar & Transfer Agent, if any. Opp.Yashodha Hospital, Raj Bhavan Road, Somajiguda, Hyderabad-500082. Ph No. 040-23374967
II. PRINCIPAL BUSINESS ACTIVITIES OF THE COMPANY : (All the business activities contributing 10% or more of the total turnover of the company shall be stated)
"NIC Code of the "% to total turnover SL.No Name & Description of main products/services Product /service" of the company"
1 Manufacturing of Cotton and Dyed Yarn 13111 39.63
2 Manufacturing of Cotton and Dyed Fabric 13121 59.99
III. PARTICULARS OF HOLDING , SUBSIDIARY & ASSOCIATE COMPANIES :
HOLDING / % OF SL. Name & Address APPLICABLE CIN / GLN SUBSIDIARY / SHARES No of the Company SECTION ASSOCIATE HELD
1 Nil
2 Nil
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IV. SHAREHOLDING PATTERN : (Equity Share capital Break up as % to total Equity) (i) Category-Wise Shareholding
Category of No. of Shares held at No. of Shares held at Shareholders the beginning of the year* the end of the year # % change % of % of Total during Demat Physical Total Demat Physical Total Total Shares the year Shares A. Promoters (1) Indian ------a) Individual / HUF 1,20,47,660 - 1,20,47,660 35.17 1,49,73,765 - 1,49,73,765 34.97 (0.20) b) Central Govt. or ------State Govt. c) Bodies 43,72,035 - 43,72,035 12.76 54,65,043 - 54,65,043 12.76 - Corporates d) Bank/FI ------e) Any other ------SUB TOTAL : (A) (1) 1,64,19,695 - 1,64,19,695 47.93 2,04,38,808 - 2,04,38,808 47.73 (0.20) (2) Foreign a) NRI- Individuals ------b) Other Individuals ------c) Bodies Corp. ------d) Banks/FI ------e) Any other… ------SUB TOTAL (A) (2) ------Total Shareholding of Promoter 1,64,19,695 - 1,64,19,695 47.93 2,04,38,808 - 2,04,38,808 47.73 (0.20) (A) = (A)(1) +(A)(2) B. Public shareholding (1) Institutions a) Mutual Funds - 50,000 50,000 0.15 - 62,500 62,500 0.15 - b) Banks/FI ------C) Cenntral govt ------d) State Govt. ------e) Venture ------Capital Fund f) Insurance ------Companies g) FIIS ------
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Category of No. of Shares held at No. of Shares held at Shareholders the beginning of the year* the end of the year # % change % of % of Total during Demat Physical Total Demat Physical Total Total Shares the year Shares h) Foreign Venture ------Capital Funds i) Others (specify) ------SUB TOTAL (B)(1): - 50,000 50,000 0.15 - 62,500 62,500 0.15 - (2) Non Institutions - a) Bodies 4,95,836 89,500 5,85,336 1.71 5,59,520 1,11,875 6,71,395 1.57 (0.14) corporates i) Indian ------ii) Overseas ------b) Individuals ------i) Individual shareholders holding nominal share 60,00,399 18,17,200 78,17,599 22.82 83,18,935 20,21,997 1,03,40,932 24.25 1.43 capital upto ` 1 lakhs ii) Individuals shareholders holding nominal 82,99,573 8,36,500 91,36,073 26.67 96,83,851 10,26,875 1,07,10,726 25.01 (1.66) share capital in excess of ` 1 lakhs c) Others (specify) : 1. Clearing 1,88,987 - 1,88,987 0.55 2,42,958 - 2,42,958 0.57 0.02 Members 2. Non Resident 57,810 - 57,810 0.17 2,34,648 - 2,34,648 0.55 0.38 Indians (NRI's) Foreign Portfolio - - - - 1,17,408 - 1,17,408 0.27 0.27 Investor
SUB TOTAL (B)(2): 1,50,42,605 27,43,200 1,77,85,805 51.92 1,91,57,320 31,60,747 2,23,18,067 52.22 0.02 Total Public Shareholding 1,50,42,605 27,93,200 1,78,35,805 52 1,91,57,320 32,23,247 2,23,80,567 52.37 0.02 (B) = (B)(1)+(B)(2)
" C. Shares held by Custodian for ------GDRs & ADRs " Grand Total 3,14,62,300 27,93,200 3,42,55,500 100 3,95,96,128 32,23,247 4,28,19,375 100 (0.18) (A+B+C)
NOTE : During the Year 2017-18, Bonus Shares were issued in the ratio of 1:4 (i.e For every 4 shares held, One (1) Bonus Share was issued. * No. of shares before the bonus issue # No. of shares after the bonus issue
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(ii) SHARE HOLDING OF PROMOTERS Sale : '+' Purchase : '-' % change Sl. Shareholding at the Shareholding at the in share Shareholder's Name No. begginning of the year * end of the year # holding during the year " % of shares % of shares "% of total " % of total pledged pledged No of shares No of shares encumbered encumbered shares of the shares of the to total to total company" company" shares " shares 1 KALLAM AGRO PRODUCTS AND OILS LTD 43,72,035 12.7631 Nil 54,65,043 12.7631 Nil -
2 GURRAM VENKATA KRISHNA REDDY ^ 27,75,325 8.1018 Nil 35,13,723 8.2000 Nil (0.0982)
3 KALLAM HARINADHA REDDY 17,96,500 5.2444 Nil 22,45,625 5.2444 Nil
4 KALLAM MOHAN REDDY 15,57,500 4.5467 Nil 19,46,875 4.5467 Nil
5 PRATHYUSHA KALLAM 9,50,500 2.7747 Nil 11,88,125 2.7747 Nil
6 POLURI VENKATESHWARA REDDY 9,21,000 2.6886 Nil 11,51,250 2.6886 Nil
7 KALLAM VENKATA SUBBAYAMMA 6,67,000 1.9471 Nil 7,32,750 1.7113 Nil 0.2358
8 NAGIREDDY KALLAM 5,89,000 1.7194 Nil 7,36,250 1.7194 Nil
9 UMASANKARA REDDY MOVVA ^ 5,34,120 1.5592 Nil 6,70,651 1.5592 Nil
10 KALLAM ANNAPURNA 5,15,000 1.5034 Nil 6,43,750 1.5034 Nil
11 KALLAM HARINADHA REDDY (HUF) 3,89,500 1.1370 Nil 4,86,875 1.1370 Nil
12 MOVVA VENKATA SUBBA REDDY 3,42,500 0.9998 Nil 4,28,125 0.9998 Nil
13 PRABHAKARA RAO NALLI 1,38,415 0.4041 Nil 1,73,018 0.4041 Nil
15 NALLI PRATHIBHA RANI 1,50,000 0.4379 Nil 1,87,500 0.4379 Nil
16 ANUMULA RANGA REDDY 1,02,000 0.2978 Nil 1,27,500 0.2978 Nil
17 N USHA 1,00,000 0.2919 Nil - - Nil 0.2919
18 N RAJENDRA PRASAD 2,74,500 0.8013 Nil 4,78,750 1.1181 Nil (0.3168)
19 POLURI SIVANAGENDRAMMA ^ 1,50,000 0.4379 Nil 2,44,631 0.4379 Nil
20 MOVVA KAVITHA 62,000 0.1810 Nil 77,500 0.1810 Nil
22 NAGENDRAMMA POLURI 32,000 0.0935 Nil - - Nil 0.0935
24 SUBBAYAMMA POLURI 430 0.0013 Nil 537 0.0013 Nil
25 SUREDDY MALLESWARI 370 0.0011 Nil 462 0.0011 Nil
Note : The Company has allotted bonus shares on 14th October, 2017 in the ratio of 1 (One) new equity share of Rs 2/- each for every 4 (Four) existing equity shares of Rs 2/- each. * No. of shares before the Bonus Issue. # No. of shares after the Bonus Issue. ^ Shareholding is consolidated based on Permanent Account Number (PAN) of the Promoter
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(iii) Change in Promoter's Shareholding (Please Specify, if there is no change) Share holding at the Cumulative Share Sl. beginning of the Year holding during the year Particulars No. No. of % of total shares % of total shares No of shares Shares of the company of the company 1 GURRAM VENKATA KRISHNA REDDY At the beginning of the year 27,75,325 8.1018 27,75,325 8.1018
14th July, 2017 - Bonus Shares (1:4) 6,93,831 - 34,69,156 8.1018
Market Purchase on 02nd February, 2018 41,567 0.097 35,10,723 8.1988
Market Purchase on 09th February, 2018 3,000 0.0012 35,13,723 8.2000
At the end of the year 35,13,723 8.2000
2 KALLAM VENKATA SUBBAYAMMA At the beginning of the year 6,67,000 1.9471 6,67,000 1.9471
14th July, 2017 - Bonus Shares (1:4) 1,66,750 0.00001 8,33,750 1.9471
Market Sale on 12th January, 2018 (1,000) 0.00230 8,32,750 1.9494
Market Sale on 02nd February, 2018 (1,00,000) (0.2335) 7,32,750 1.7159
At the end of the year - - 7,32,750 1.7159
3 N.USHA At the beginning of the year 1,00,000 0.2919 1,00,000 0.2919
Interse Transfer to N.Rajendra Prasad on 05-05-2017 (1,00,000) (0.2919) - -
At the end of the year - -
4 N.RAJENDRA PRASAD At the beginning of the year 2,74,500 0.8013 2,74,500 0.8013
Market Purchase on 04th April, 2017 8,500 0.0248 2,83,000 0.8261
Inter-se Transfer from N.Usha on 05-05-2017 1,00,000 0.2919 3,83,000 1.1180
14th July, 2017 - Bonus Shares (1:4) - - 95,750 0.0001
At the end of the year - - 4,78,750 1.1181
5 NAGENDRAMMA POLURI At the beginning of the year 32,000 0.0935 32,000 0.0935
14th July, 2017 - Bonus Shares (1:4) 8,000 0.0001 40,000 0.0936
Market Sale on 16th February, 2018 (5,500) (0.0128) 34,500 0.0808
Market Sale on 23rd February, 2018 (13,000) (0.0304) 21,500 0.0504
Market Sale on 02nd March, 2018 (21,500) (0.0504) - -
At the end of the year - - - -
Note 2) : Since the shares of the Company are traded on daily basis, the dates of above sale / purchase have been derived from the Beneficiary Position Statements received from Depositories.
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(iv) Shareholding Pattern of top ten Shareholders (other than Direcors, Promoters & Holders of GDRs & ADRs) LIST OF SHARE HOLDING OF TOP 10 SHAREHOLDERS
Shareholding at the Shareholding at the begginning of the year * end of the year # Sl. Shareholder's Name No. No. of % of total shares of % of total shares No of shares Shares the company of the company
1 LAKSHMINARAYANAN T $ 26,56,873 7.75 19,65,819 4.59
2 POLURI GOVARDHAN REDDY $ 8,74,765 2.55 10,93,455 2.55
3 VECHA SAI NAGA PADMASREE 8,00,975 2.34 10,01,218 2.34
4 VENUGOPALA REDDY POLURI $ 7,80,260 2.32 9,71,183 2.27
5 GURRAM NITIN $ 5,49,000 1.61 7,39,645 1.72
6 KALLAM HARA MOHAN MADHUR $ 4,17,500 1.22 6,22,875 1.45
7 P KINNERA 4,54,575 1.33 5,68,218 1.33
8 DEVIKA ANAND $ & $$ - 0.00 4,40,250 1.03
9 JYOTHI BHUKYA 3,56,415 1.04 4,40,081 1.02
10 MAHENDRA GIRDHARILAL 2,26,745 0.66 2,83,431 0.66
Note : The Company has allotted bonus shares on 14th October, 2017 in the ratio of 1 (One) new equity share of Rs 2/- each for every 4 (Four) existing equity shares of Rs 2/- each. * No. of shares before the Bonus Issue. # No. of shares after the Bonus Issue. $ Shareholding is consolidated based on Permanent Account Number(PAN) of the shareholder $$ Not in the list of Top 10 Shareholders as on 01st April, 2017 but were one of the Top 10 shareholders as on 31st March, 2018 (v) Shareholding of Directors & KMP
No.of Shares at Changes Made No.of Shares Sl. Name of the Director(s) Directorship the Beginning of during the Year held at the end of No. the Year * 2017-18 the Year #
1 P.Venkateswara Reddy Managing Director 9,21,000 - 11,51,250
2 G.V.Krishna Reddy Joint Managing Director 27,75,325 44,567 35,13,723
3 M.V.Subba Reddy Whole Time Director & CFO 3,42,500 - 4,28,125
4 V.S.N.Murthy Nominee Director - - -
5 M.R.Naik Independent Director - - -
6 S.Pulla Rao Independent Director - - -
7 A.Krishna Murthy Independent Director - - -
8 V.Bhargavi Independent Director - - -
Note : The Company has allotted bonus shares on 14th October, 2017 in the ratio of 1 (One) new equity share of Rs 2/- each for every 4 (Four) existing equity shares of Rs 2/- each. * No. of shares before the Bonus Issue. # No. of shares after the Bonus Issue.
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(vi) Shareholding Pattern of top ten Shareholders (other than Direcors, Promoters & Holders of GDRs & ADRs) Share holding at the Cumulative Share Sl. beginning of the Year holding during the year For Each of the Top 10 Shareholders No. No. of % of total shares No of % of total shares Shares of the company shares of the company 1 LAKSHMINARAYANAN T* At the beginning of the year 26,56,873 7.7560 26,56,873 7.7560 Changes Made during the Year 2017-18 07-04-2017 Sale (16,250) (0.0474) 26,40,623 7.709 14-04-2017 Sale (11,756) (0.0343) 26,28,867 7.674 21-04-2017 Sale (19,915) (0.0581) 26,08,952 7.616 28-04-2017 Sale (15,614) (0.0456) 25,93,338 7.571 05-05-2017 Sale (19,945) (0.0582) 25,73,393 7.512 12-05-2017 Sale (54,064) (0.1578) 25,19,329 7.355 19-05-2017 Sale (31,090) (0.0908) 24,88,239 7.264 26-05-2017 Sale (30,003) (0.0876) 24,58,236 7.176 02-06-2017 Sale (59,213) (0.1729) 23,99,023 7.003 09-06-2017 Sale (47,922) (0.1399) 23,51,101 6.863 16-06-2017 Sale (69,200) (0.2020) 22,81,901 6.661 23-06-2017 Sale (30,941) (0.0903) 22,50,960 6.571 30-06-2017 Sale (84,750) (0.2474) 21,66,210 6.324 07-07-2017 Sale (36,978) (0.1079) 21,29,232 6.216 14-07-2017 Sale (30,178) (0.0881) 20,99,054 6.128 21-07-2017 Sale (41,307) (0.1206) 20,57,747 6.007 28-07-2017 Sale (25,498) (0.0744) 20,32,249 5.933 04-08-2017 Sale (7,910) (0.0231) 20,24,339 5.910 11-08-2017 Sale (18,404) (0.0537) 20,05,935 5.856 18-08-2017 Sale (11,640) (0.0340) 19,94,295 5.822 25-08-2017 Sale (79,782) (0.2329) 19,14,513 5.589 01-09-2017 Sale (20,000) (0.0584) 18,94,513 5.531 08-09-2017 Sale (20,806) (0.0607) 18,73,707 5.470 15-09-2017 Sale (1,08,800) (0.3176) 17,64,907 5.152 22-09-2017 Sale (13,575) (0.0396) 17,51,332 5.113 29-09-2017 Sale (60,689) (0.1772) 16,90,643 4.935 06-10-2017 Sale (87,000) (0.2540) 16,03,643 4.681 13-10-2017 Sale (38,000) (0.1109) 15,65,643 4.570 20-10-2017 Sale (8,110) (0.0237) 15,57,533 4.547 14-10-2017 Bonus Shares Allotted (1:4) 3,90,410 0.000 19,47,943 4.547 03-11-2017 Sale (552) (0.001) 19,47,391 4.546 19-01-2018 Sale (631) (0.001) 19,46,760 4.544
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Share holding at the Cumulative Share Sl. beginning of the Year holding during the year For Each of the Top 10 Shareholders No. No. of % of total shares No of % of total shares Shares of the company shares of the company 26-01-2018 Sale (30,726) (0.072) 19,16,034 4.472 09-02-2018 Purchase 24,838 0.058 19,40,872 4.530 16-02-2018 Purchase 11,200 0.026 19,52,072 4.556 23-02-2018 Purchase 18,747 0.044 19,70,819 4.600 23-03-2018 Sale (5,000) (0.012) 19,65,819 4.589 At the end of the year (or on the date of 19,65,819 4.589 separation, if separated during the year) * Shareholding is consolidated based on Permanent Account Number(PAN) of the shareholder Share holding at the Cumulative Share Sl. beginning of the Year holding during the year For Each of the Top 10 Shareholders No. No. of % of total shares No of % of total shares Shares of the company shares of the company 2 POLURI GOVARDHAN REDDY At the beginning of the year 8,74,765 2.55 8,74,765 2.55 Changes Made during the Year 2017-18 Bonus Shares Allotted on 14-10-2017 (1:4) 2,18,690 0.00 10,93,455 2.55 At the end of the year (or on the date of 10,93,455 2.55 separation, if separated during the year) Share holding at the Cumulative Share Sl. beginning of the Year holding during the year For Each of the Top 10 Shareholders No. No. of % of total shares No of % of total shares Shares of the company shares of the company 3 VECHA SAI NAGA PADMASREE At the beginning of the year 8,00,975 2.34 8,00,975 2.34 Changes Made during the Year 2017-18 Bonus Shares Allotted on 14-10-2017 (1:4) 2,00,244 0 10,01,218 0.00 At the end of the year (or on the date of 10,01,218 2.34 separation, if separated during the year) Share holding at the Cumulative Share Sl. beginning of the Year holding during the year For Each of the Top 10 Shareholders No. No. of % of total shares No of % of total shares Shares of the company shares of the company 4 VENUGOPALA REDDY POLURI At the beginning of the year 7,80,260 2.32 7,80,260 2.32 Changes Made during the Year 2017-18 Bonus Shares Allotted on 14-10-2017 1,95,065 9,75,325
Market Purchase on 16,250 9,91,575
Market Sale on 09-03-2018 (15,001) 0.035 9,76,574 At the end of the year (or on the date of 7,80,260 2.32 separation, if separated during the year) 5 GURRAM NITIN At the beginning of the year 5,49,000 1.61 5,49,000 1.61 Changes Made during the Year 2017-18 Bonus Shares Allotted on 14-10-2017 (1:4) 1,37,250 0.000 6,86,250 1.61
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Share holding at the Cumulative Share Sl. beginning of the Year holding during the year For Each of the Top 10 Shareholders No. No. of % of total shares No of % of total shares Shares of the company shares of the company Market Purchase on 02-02-2018 1,427 0.003 6,87,677 1.61 Market Purchase on 09-02-2018 8,042 0.018 6,95,719 1.63 Market Purchase on 16-02-2018 43,926 0.102 7,39,645 1.73 At the end of the year (or on the date of 7,39,645 1.73 separation, if separated during the year) Share holding at the Cumulative Share Sl. beginning of the Year holding during the year For Each of the Top 10 Shareholders No. No. of % of total shares No of % of total shares Shares of the company shares of the company 6 P KINNERA At the beginning of the year 4,54,575 1.33 4,54,575 1.33 Changes Made during the Year 2017-18 Bonus Shares Allotted on 14-10-2017 (1:4) 1,13,643 0.0000 5,68,218 1.33 At the end of the year (or on the date of 5,68,218 1.33 separation, if separated during the year) Share holding at the Cumulative Share Sl. beginning of the Year holding during the year For Each of the Top 10 Shareholders No. No. of % of total shares No of % of total shares Shares of the company shares of the company 7 KALLAM HARA MOHAN MADHUR At the beginning of the year 4,17,500 1.22 4,17,500 1.22 Changes Made during the Year 2017-18 Bonus Shares Allotted on 14-10-2017 (1:4) 1,04,375 0.00 5,21,875 1.22 Market Purchase on 12-01-2018 1,000 0.0023 5,22,875 1.221 Market Purchase on 02-02-2018 1,00,000 0.23 6,22,875 1.45 At the end of the year (or on the date of 6,22,875 1.45 separation, if separated during the year) Share holding at the Cumulative Share Sl. beginning of the Year holding during the year For Each of the Top 10 Shareholders No. No. of % of total shares No of % of total shares Shares of the company shares of the company 8 DEVIKA ANAND At the beginning of the year - 0.00 - 0.00 Changes Made during the Year 2017-18 Market Purchase on 09-02-2018 21,553 0.05 21,553 0.05 Market Purchase on 16-02-2018 611 0.0014 22,164 0.051 Market Purchase on 23-02-2018 93,972 0.22 1,16,136 0.27 Market Purchase on 02-03-2018 11,741 0.027 1,27,877 0.30 Market Purchase on 09-03-2018 82,933 0.19 2,10,810 0.49 Market Purchase on 16-03-2018 1,79,440 0.42 3,90,250 0.91 Market Purchase on 16-03-2018 50,000 0.12 4,40,250 1.03 At the end of the year (or on the date of 4,40,250 1.03 separation, if separated during the year)
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Share holding at the Cumulative Share Sl. beginning of the Year holding during the year For Each of the Top 10 Shareholders No. No. of % of total shares No of % of total shares Shares of the company shares of the company 9 JYOTHI BHUKYA At the beginning of the year 3,56,415 1.04 3,56,415 1.04 Changes Made during the Year 2017-18 Market Sale on 21-04-2017 -800 -0.0023 3,55,615 1.038
Market Sale on 22-09-2017 -500 -0.0014 3,55,915 1.039
Market Sale on 29-09-2017 -250 -0.0007 3,55,665 1.038
Bonus Shares Allotted on 14-10-2017 (1:4) 88,916 0.00 4,44,581 1.038
Market Purchase on 09-03-2018 3500 0.008 4,48,081 1.046 At the end of the year (or on the date of 4,48,081 1.046 separation, if separated during the year) Share holding at the Cumulative Share Sl. beginning of the Year holding during the year For Each of the Top 10 Shareholders No. No. of % of total shares No of % of total shares Shares of the company shares of the company 10 MAHENDRA GIRDHARILAL At the beginning of the year 2,26,745 0.66 2,26,745 0.66 Changes Made during the Year 2017-18 Bonus Shares Allotted on 14-10-2017 (1:4) 56,686 0.00 2,83,431 0.66 At the end of the year (or on the date of 2,83,431 0.66 separation, if separated during the year) (V) INDEBTEDNESS ` in Lakhs Indebtedness of the Company including interest outstanding/accrued but not due for payment Secured Loans Unsecured Total excluding Deposits Loans Indebtedness deposits Indebtedness at the beginning of the financial year i) Principal Amount 32,687.95 203.05 0.00 32,891.00 ii) Interest due but not paid 152.59 0.00 0.00 152.59 iii) Interest accrued but not due 0.00 0.00 0.00 0.00
Total (i+ii+iii) 32,840.54 203.05 0.00 33,043.59
Change in Indebtedness during the financial year Additions 768.68 139.50 0 908.18
Reduction 2,122.18 0 0 2,122.18
Net Change -1,353.50 139.5 0 -1,214
Indebtedness at the end of the financial year i) Principal Amount 31,357.53 342.55 0 31,700.08 ii) Interest due but not paid 129.51 0 0 129.51 iii) Interest accrued but not due 0 0 0 0.00
Total (i+ii+iii) 31,487.04 342.55 0 31,829.59
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(VI) REMUNERATION OF DIRECTORS AND KEY MANAGERIAL PERSONNEL A. Remuneration to Managing Directors, Whole time director and/or Manager: ` in Lakhs Name of the MD/WTD/Manager S. Total Particulars of Remuneration No. P.Venkateswara Reddy G.V.Krishna Reddy M.V.Subba Reddy Amount Managing Director Joint Managing Director Whole Time Director 1 Gross salary (a) Salary as per provisions contained in section 17(1) 25.04 25.00 8.53 58.57 of the Income Tax. 1961. (b) Value of perquisites u/s 17(2) of the Income tax Act, 1961 (c ) Profits in lieu of salary under section 17(3) of the Income Tax Act, 1961 2 Stock option - - - 3 Sweat Equity - - - 4 Commission 22.17 22.17 - 44.34 as % of profit 1.00 1.00 - others - Incentive - - 1.330 1.330 5 Others, please specify - - - Total (A) 47.21 47.17 9.86 104.24 Ceiling as per the Act B. Remuneration to Other Directors : in ` Particulars of Remuneration Name of the Directors S. Total Sri Sri Sri Sri Sri Smt No. Independent Directors Amount S.Pulla Rao M.R. Naik A.Krishna Murthy Ajeya Kallam V.Ramgopal V.Bhargavi Fee for attending Board 1 1,00,000 30,000 30,000 60,000 30,000 1,00,000 3,50,000 / Committee Meetings in ` Particulars of Remuneration Name of the Director S. No. Total Amount Nominee Director (IREDA) Sri V.S.N. Murthy 2 Fee for attending Board / Committee Meetings 1,00,000 1,00,000 C. Remuneration to Company Secretary (KMP) : in ` Company Secretary Mr. M.Prasanna Kumar* Rs.42,000/- *Mr. M.Prasanna Kumar has resigned w.e.f 31-05-2017 (VII) PENALTIES/PUNISHMENT/COMPOUNDING OF OFFENCES : Details of Penalty Appeal Section of the Authority Brief / Punishment / made Type Companies (RD/NCLT/ Description Compounding if any Act Court) fees imposed (give details) A. COMPANY Penalty Punishment Compounding B. DIRECTORS Penalty Punishment NIL Compounding C. OTHER OFFICERS IN DEFAULT Penalty Punishment Compounding
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ANNEXURE IV FORM NO. MR-3 SECRETARIAL AUDIT REPORT FOR THE FINANCIAL YEAR ENDED ON 31st MARCH, 2018 [Pursuant to section 204(1) of the Companies Act, 2013 and Rule No. 9 of the Companies (Appointment and Remuneration Personnel) Rules, 2014] To The Members, M/s. Kallam Textiles Limited, (Formerly known as Kallam Spinning Mills Ltd) Chowdavaram, Guntur We have conducted the secretarial audit of the compliance of applicable statutory provisions and the adherence to good corporate practices by M/s. Kallam Textiles Limited(Formerly known as Kallam Spinning Mills Ltd) (hereinafter called the Company). Secretarial Audit was conducted in a manner that provided us a reasonable basis for evaluating the corporate conducts/ statutory compliances and expressing our opinion thereon. Based on our verification of the Company’s books, papers, minute books, forms and returns filed and other records maintained by the Company and also the information provided by the Company, its officers, agents and authorized representatives during the conduct of secretarial audit, We hereby report that in our opinion, the company has, during the audit period covering the financial year ended on 31st March, 2018 complied with the statutory provisions listed hereunder and also that the Company has proper Board-processes and compliance- mechanism in place to the extent, in the manner and subject to the reporting made hereinafter: We have examined the books, papers, minute books, forms and returns filed and other records maintained by the Company for the financial year ended on 31st March, 2018 according to the provisions of : (i). The Companies Act, 2013 (the Act) and the rules made thereunder; (ii). The Securities Contracts (Regulation) Act, 1956 (‘SCRA’) and the rules made thereunder; (iii). The Depositories Act, 1996 and the Regulations and Bye-laws framed thereunder; (iv). Foreign Exchange Management Act, 1999 and the rules and regulations made thereunder to the extent of Foreign Direct Investment, Overseas Direct Investment and External Commercial Borrowings; (v). The Following Regulations and Guidelines prescribed under the Securities and Exchange Board of India Act, 1992 (‘SEBI Act’) viz.:- (a) The Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 2011; (b) The Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations, 2015; (c) The Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2009 (d) The Securities and Exchange Board of India (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999/ The Securities and Exchange Board of India (Share Based Employee Benefits) Regulations, 2014 – (Not applicable to the Company during the Audit Period); (e) The Securities and Exchange Board of India (Issue and Listing of Debt Securities) Regulations, 2008 (Not applicable to the Company during the Audit Period); (f) The Securities and Exchange Board of India (Registrars to an Issue and Share Transfer Agents) Regulations, 1993 regarding the Companies Act and dealing with client; (g) The Securities and Exchange Board of India (Delisting of Equity Shares) Regulations, 2009; (Not applicable to the Company during the Audit Period) and (h) The Securities and Exchange Board of India (Buyback of Securities) Regulations, 1998 (Not applicable to the Company during the Audit Period); (vi). The Company has identified the following laws as specifically applicable to the Company : 1. The Textiles Committee Act, 1963 and the rules made thereunder; 2. The Textiles (Development and Regulation) Order, 2001 3. The Textiles (Consumer Protection) Regulations, 1988
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We have also examined compliance with the applicable clauses of the following : (i) Secretarial Standards issued by the Institute of Company Secretaries of India. (ii) The Listing Agreement entered into by the Company with Bombay Stock Exchange Limited and the Uniform Listing Agreement entered with the said stock exchange pursuant to the provisions of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (applicable with effect from 01st December, 2015). During the period under review the Company has complied with the provisions of the Act, Rules, Regulations, Guidelines, Standards, etc. mentioned above except to the extent as mentioned below : 1. Whereas in terms of the provisions of Section 203 of the Companies Act, 2013, the Company was required to have certain Key Managerial Personnel (KMP). Whereas in terms of the provisions of Regulation 6. (1) A of the SEBI (Listing Obligations And Disclosure Requirements) Regulations, 2015 listed entity shall appoint a qualified company secretary as the compliance officer. The Company has not appointed a Company Secretary in terms of the provisions of Section 204 of the Companies Act, 2013 and Regulation 6. (1) A of the SEBI (Listing Obligations And Disclosure Requirements) Regulations, 2015 2. Whereas in terms of the provisions of Section 203 (4) of the Companies Act, 2013, if the office of any whole-time key managerial personnel is vacated, the resulting vacancy shall be filled up by the Board at a meeting of the Board within a period of six months from the date of such vacancy. During the year the Company Secretary has submitted his resignation and the board has approved the said resignation w.e.f 1st June 2017 but the resulting vacancy shall not be filled up by the Board at a meeting of the Board within a period of six months from the date of such vacancy We further report that The Board of Directors of the Company is duly constituted with proper balance of Executive Directors, Non-Executive Directors and Independent Directors. The changes in the composition of the Board of Directors that took place during the period under review were carried out in compliance with the provisions of the Act. Adequate notice is given to all directors to schedule the Board Meetings, agenda and detailed notes on agenda were sent at least seven days in advance and a system exists for seeking and obtaining further information and clarifications on the agenda items before the meeting and for meaningful participation at the meeting. Majority decision is carried through while the dissenting members’ views are captured and recorded as part of the minutes. We further report that there are adequate systems and processes in the company commensurate with the size and operations of the company to monitor and ensure compliance with applicable laws, rules, regulations and guidelines. We further report that during the audit period, except the following there are no specific events/ actions having a major bearing on the Company’s affairs in pursuance of the laws, rules, regulations, guidelines, standards, etc, referred to above. 1. The members of the Company in its Annual General Meeting for the financial year 2016-17 held on September 29, 2017 have approved issue and allotment of Equity Shares not exceeding 85,63,875 Equity Shares of Rs.2/- each, as Bonus shares in the ratio of 1:4 (i.e One Bonus Share for every Four (4) existing equity shares held.) credited as fully Paid-up, to members of the company and allotted by the Board at their Meeting held on 14th October, 2017. Consequently, the issued, subscribed and paid up equity share capital of the Company after bonus issue of Equity Shares has increased from Rs.6,85,11,000/- to Rs.8,56,38,750/- and number of shares increased from 3,42,55,500 to 4,28,19,375 of Rs.2/- each. 2. The members of the Company in its Extra-Ordinary General Meeting held on March 13, 2018 have given their consent by way of special resolution for Change of Name of the company from “Kallam Spinning Mills Limited” to “Kallam Textiles Limited” and the Company filed e-form INC-24 on 23.03.2018
This report is to be read with our letter of even date which is annexed as Annexure A and forms an integral part of this report.
For K. Srinivasa Rao & Co., Company Secretaries., Place : Guntur Date : 09-08-2018 K. Srinivasa Rao, Partner FCS. No. 5599/ C. P. No: 5178
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‘Annexure A’
To The Members, M/s. Kallam Textiles Limited, (Formerly known as Kallam Spinning Mills Ltd) Chowdavaram, Guntur
Our report of even date is to be read along with this letter. 1. Maintenance of secretarial record is the responsibility of the management of the company. Our responsibility is to express an opinion on these secretarial records based on our audit. 2. We have followed the audit practices and processes as were appropriate to obtain reasonable assurance about the correctness of the contents of the Secretarial records. The verification was done on test basis to ensure that correct facts are reflected in secretarial records. We believe that the processes and practices, we followed provide a reasonable basis for our opinion. 3. We have not verified the correctness and appropriateness of financial records and Books of Accounts of the company. 4. Where ever required, we have obtained the Management representation about the compliance of laws, rules and regulations and happening of events etc. 5. The compliance of the provisions of Corporate and other applicable laws, rules, regulations, standards is the responsibility of management. Our examination was limited to the verification of procedures on test basis. 6. The Secretarial Audit report is neither an assurance as to the future viability of the company nor of the efficacy or effectiveness with which the management has conducted the affairs of the company.
For K. Srinivasa Rao & Co., Company Secretaries., Place : Guntur Date : 09-08-2018 K. Srinivasa Rao, Partner FCS. No. 5599/ C. P. No: 5178
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ANNEXURE V FORM AOC - 2 (Pursuant to Section 134(3)(h) of the Companies Act, 2013 and Rule 8(2) of the Companies (Accounts) Rules, 2014)
Form for disclosure of particulars of contracts/arrangements entered into by the Company with related parties referred to in Section 188(1) of the Companies Act, 2013 including certain arm’s length transactions under the third proviso thereto 1) There are no contracts/arrangements entered into by the Company with related parties which are not at arms length basis. 2) There are no material contracts/arrangements entered into by the Company with related parties referred to in sub- section (1) of Section 188 of the Companies Act, 2013 which are at arms length basis. 3) There were no materially pecuniary relationships or transactions of the non-executive directors' vis-à-vis the Company. 4) Details of non-material contracts/arrangements at arm length basis with related parties for the year ended 31st March, 2018 are as follow :-
Nature of Duration of Salient terms of the Date of Justification S. Contracts the contracts / contracts or arrangements approval by For entering Name of the related party No / arrangements arrangements / or transactions including the Board, into Contract / / transactions transactions the value ; if any if any Arrangement 10% of Total Turnover of Rendering of Rs 2,45,777/- 1 Kallam Brothers Cottons Pvt Ltd 5 Years the Company or 100 13-08-2016 services : Per Annum Crores Which ever is lower 10% of Total Turnover of Kallam Agro Products and Oils Sale of Goods Rs 10,32,54,114/- 2 5 Years the Company or 100 13-08-2016 Pvt. Ltd and Services Per Annum Crores Which ever is lower 10% of Total Turnover of Services Rs 1,42,728/- 3 Kallam Brothers Cottons Pvt Ltd 5 Years the Company or 100 13-08-2016 Received : Per Annum Crores Which ever is lower 10% of Total Turnover of Sale of Goods Rs 20,619/- 4 Kallam Brothers Cottons Pvt Ltd 5 Years the Company or 100 13-08-2016 and Services Per Annum Crores Which ever is lower Commensurate Appointed on a Monthly with qualification Appointment to P.Govardhan Reddy Son of remuneration not and experience an 5 office or place Managing Director exceeding Rs 2,50,000/- amount of Rs of profit: Per Month 42,000 Per Month is being paid Commensurate Appointed on a Monthly with qualification Appointment to M.Srinivasa Nagarjuna Reddy remuneration not and experience an 6 office or place Son of Whole Time Director exceeding Rs 2,50,000/- amount of Rs of profit: Per Month 21,500 Per Month is being paid
For and on behalf of Board Place : Chowdavaram, Guntur P.Venkateswara Reddy Date : 09-08-2018 Managing Director
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ANNEXURE VI Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo The information under Section 134 (3) (m) of the Companies Act, 2013 read with Rule 8 (3) of the Companies (Accounts) Rules, 2014 for the year ended 31st March, 2018 is given below and forms part of the Directors’ Report. A. CONSERVATION OF ENERGY: 1. ENERGY CONSERVATION MEASURES TAKEN DURING THE YEAR: Company continues its efforts to reduce and optimise the energy consumption at all manufacturing facilities, including corporate office at Chowdavaram, Guntur -522019. All the manufacturing units continued their efforts to reduce the specific energy consumption. Specific and total energy consumption is tracked on a daily basis at individual factory / block level and also at consolidated manufacturing level. Energy conservation initiatives are being planned and implemented across manufacturing locations Apart from regular practices and measures for energy conservation, many new initiatives were driven across the units. The measures taken in all the manufacturing units of your Company have been briefly enumerated as below: i) Electricity Consumption reduction by daily monitoring and control ii) Efforts have been put consistently year on year to optimize energy consumption in production processes and operation of utilities. iii) Implemented changes in processing methods which reduced cycle time resulting in lower power consumption. iv) Installation of energy efficient lighting fixtures such as Compact Fluorescent Light Bulbs (CFLs) and Battery Charging Systems at all Manufacturing Divisions.. v) Eliminating the steam leakages in steam generation boiler operation. vi) Optimised usage of Captive compressors. vii) Saving in diesel consumption for steam generation boiler operation. viii) Optimising Plant Power load to match the demand. ix) Employees have been trained in energy conservation measures. x) Implemented RO plant for Recycling & reuse of Water. 2. IMPACT OF ENERGY CONSERVATION MEASURES: The Energy Conservation Measures which were undertaken in the Company have resulted in Quality consistency and product improvement, cost reduction, product development, reduction in power consumption, fuel consumption and improves the overall production performance of the Company. 3. TECHNOLOGY ABSORPTION: Continuous efforts are being made by the Company towards technology absorption. The revision in Standard Operating Procedures resulted in improved yields. The Company has taken effective technical measures to enhance the quality of the products in order to compete with the international quality standards. Aligning the Company’s processes with International Quality & Safety requirements. 4. BENEFITS DERIVED AS A RESULT OF THE ABOVE EFFORTS: Improved quality of the product. Productivity also has been increased. Products are available at more competitive price. 5. PARTICULARS OF IMPORTED TECHNOLOGY IN THE LAST 3 YEARS : a) Technology Imported : Nil b) the year of import; Not Applicable c) whether the technology been fully absorbed; Not Applicable d) if not fully absorbed, areas where absorption has not taken place, and the reasons thereof; Not Applicable. 6. FUTURE PLAN OF ACTION: 1. Development of more specialized grades for specific applications in conjunction with customers. 2. Improved processes for higher yield. 3. More focus on customized grade development aligning strategic business partner's manufacturing and product requirements. 4. Enhancement of innovative facilities for customer development. 5. Improving the process operation, equipment and quality related issues. 6. Increased technical expertise to support customers and market development.
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7. TOTAL ENERGY CONSUMPTION AND ENERGY CONSUMPTION PER UNIT OF PRODUCTION : Form A (Form For Disclosure Of Particulars With Respect To Conservation Of Energy) a) POWER AND FUEL CONSUMPTION : S. No Particulars 2017-18 2016-17 1 Electricity a) Purchased units (KWH) 6,55,10,929 6,96,35,948 Total amount in ` 37,07,29,880 40,21,27,841 Rate per unit in ` 5.66 5.77 b) Own Generation i) Through Diesel Generator Units generated – KWH 0 0 Total Amount in ` 0 0 Cost per unit in ` 0 0 ii) Through Steam Generation iii)Through Hydel Generation Units generated – KWH 25,27,700 16,25,900 Units consumed – KWH 0 0 Total Cost in ` - - Cost per KWH in ` - - 2 Coal - - 3 Furnace Oil - - 4 Other Internal Generation - - b) CONSUMPTION PER UNIT OF PRODUCTION (NO.OF UNITS/KG.) 1 Electricity - 2 Coal - - 3 Furnace oil - - 4 Hydel - - 8. STEPS TAKEN BY THE COMPANY FOR UTILISING ALTERNATE SOURCES OF ENERGY : None 9. CAPITAL INVESTMENT ON ENERGY CONSERVATION EQUIPMENT : None B. TECHNOLOGY ABSORPTION, ADAPTAION AND INNOVATION : Efforts, in brief made towards technology absorption, adaptation and innovation Continuous efforts are being made towards technology absorption, adaptation and innovation. Quality being the thrust area, the company has taken effective steps to continue to improve quality to compete with international quality standards.LED lights are installed in place of regular tube lights in plant to reduce energy consumption. Installation of Energy Monitoring System for greater accuracy of energy consumption 1. Efforts in brief, made towards Technology absorption, adaptation and innovation : The Company is continuously taking steps to improve the product and process technology in an effort to provide superior quality and cost effective products to consumers 2. Imported Technology: --- Nil --- 3. Expenditure incurred on Research and Development: NIL C. FOREIGN EXCHANGE EARNINGS AND OUTGOINGS: Foreign exchange earnings during the year under review amounted to ` 91.157 Crores. The foreign exchange utilized during the year amounted to ` 47.03 Lakhs.
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ANNEXURE - VII Report on Corporate Social Responsibility (CSR) :
1. CSR policy of the Company is posted on the website of the Company at www.ksml.in.
2. Composition of CSR Committee: Mr. G.V. Krishna Reddy - Chairman Mr. Mr. M.R. Naik* - Member Mr. V.Ramgopal** - Member Mr. M.V. Subba Reddy - Member During the Year under review, Due to Resignation of Mr M.R.Naik, Non-Executive and Independent Director, the Committee was reconstituted with Mr V.Ramgopal, who is newly appointed as Non-Executive and Independent Director. * Mr M.R.Naik resigned from the Board from 29th September, 2017 ** Mr V.Ramgopal appointed as Independent Director from 26th August, 2017
3. Average net profit of the Company for last three financial years: ` 14.09 Crore
4. Prescribed CSR Expenditure (two per cent of the amount as in item 3 above): The Company is required to spend ` 28.18 Lakhs towards CSR.
5. Details of CSR spent during the financial year 2017-18 : (a) Total amount spent during the financial year: ` 29.36 Lakhs (b) Amount unspent, if any: None (c) Manner in which the amount spent during the financial year is detailed below :
Amount Amount Spent S. CSR Activity Sector Location Spent Direct / through No. in Rs. implementing agency
Social Business projects Addanki, 1 IMPROVEMENT OF ROADS 29,36,681 Direct & Rural Development Andhra Pradesh
29,36,681
6. The Corporate Social Responsibility Committee of the Company hereby confirms that the implementation & monitoring of CSR policy, is in compliance with CSR objectives & policy of the Company.
P.Venkateswara Reddy For and on behalf Managing Director of the Corporate Social Responsibility Committee DIN : 00018677 of Kallam Textiles Limited
G.V. Krishna Reddy G.V.Krishna Reddy Joint Managing Director DIN : 00018713 Chairman of the Corporate Social Responsibility Committee
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REPORT ON CORPORATE GOVERNANCE CORPORATE GOVERNANCE REPORT FOR THE PERIOD 01-04-2017 TO 31-03-2018. The Corporate Governance Report, for the FY 2017-18, which forms a part of Board’s Report, is prepared pursuant to Regulation 34(3) read with Schedule V of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (“the Listing Regulations”). A report on Corporate Governance is as under :
1. COMPANY’S PHILOSOPHY ON CORPORATE GOVERNANCE: Your Company is committed to the highest standards of Integrity, ethical values, transparency, fairness, professionalism and accountability across all levels of the Organisation in the conduct of its business. Your Company believes in adopting and adhering to the best standards of corporate governance to all the stakeholders. Your Company keeps its corporate governance policies under constant review to conform with best practices and principles.
GOVERNANCE STRUCTURE The Corporate Governance structure at Kallam Textiles Ltd is as follows: 1. Board of Directors : The Board is entrusted with an ultimate responsibility of the management, directions and performance of the Company. As its primary role is fiduciary in nature, the Board provides leadership, strategic guidance, objective and independent view to the Company’s management while discharging its responsibilities, thus ensuring that the management adheres to ethics, transparency and disclosures. 2. Committees of the Board: The Board has constituted the following Committees viz, Audit Committee, Nomination and Remuneration Committee, Corporate Social Responsibility (CSR) Committee, Stakeholders’ Relationship Committee) and Share Transfer Committee. Each of the said Committee has been mandated to operate within a given framework.
2. BOARD OF DIRECTORS : a) Composition and Category of Directors : The Company has an optimum combination of executive and Non executive Directors in accordance with the provision of Regulation 17(1) of SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015. As on 31-03-2018 the Board consists of Eight Directors out of which 3 Directors are Executive Directors and 4 Directors are Non – Executive and Independent Directors including a Woman Director and the Remaining one director is a Nominee Director from IREDA. All Directors are competent and experienced personalities in their respective fields. During the year under review, there was a change in the composition of the Board. During the year, Pursuant to Sections 160 & 161 of the Companies Act,2013 and any other applicable provisions if any, Mr. Ajeya Kallam (DIN : 00278595) and V.Ramgopal (DIN : 02889497) were appointed as an Additional Directors of the Company by the Board of Directors at its meeting held on 26th August, 2017 to hold office for a term of five years w.e.f 29th September, 2017. During the year, Pursuant to the provisions of Section 168 of Companies Act, 2013, Non-Executive and Independent Directors of the Company, Mr M.R.Naik (DIN:01628537) and Mr A.Krishna Murthy(DIN:00018725) have submitted their resignations, due to Pre-occupation, at the Board Meeting held on 29th September, 2017. The Board has accepted their resignations and relieved them as a Directors of the Company with effect from the same Board Meeting where they submitted their resignations and Board placed on record its sincere appreciation of services rendered by them as Directors of the Company during their tenure. Pursuant to Regulation 30 of SEBI (LODR) Regulations, 2015, We informed the same to Bombay Stock Exchange, where the shares of the Company were listed and also as per section 168 of the Companies Act, 2013, the Board of Directors took the note of their resignations and intimate to the Registrar of Companies, Hyderabad. All the Directors have periodically and regularly informed the Company about their Directorship and Membership on the Board/Committees of the Board of other companies. As per the disclosure received, none of the directors on the board is a member of more than 10 Board level committees or chairperson of more than 5 committees across all the listed and unlisted public companies in which he/she is a director.
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GINNING SPINNING OPEN END DYEING WEAVING HYDEL KALLAM TEXTILES LIMITED 26th ANNUAL REPORT 2017-18 b) The composition of the Board, details of other directorships, committee positions as on 31st March, 2018 and attendance of Directors at the Board Meetings are given in the table below :
The composition of the Board, details of other directorships, committee positions as on 31st March, 2018 and attendance of Directors at the Board Meetings are given in the table below : Annual Number of Gener- Committees in Board Meetings held During al Position held the year 2017-18 Meet- in other ing Limited (AGM) S. Name of the Category of Companies No Director Directorship (##) companies (#) 01-04-2017 27-05-2017 26-08-2017 29-09-2017 14-10-2017 14-12-2017 12-02-2018 29-09-2017 Number of Directorships held in other Member Chairman
Executive 1 P.Venkateswara Reddy Nil Nil Nil Director
Executive 2 G.V.Krishna Reddy Nil Nil Nil Director
Executive 3 M.V.Subba Reddy Nil Nil Nil Director
Nominee 4 V.S.N. Murthy 2 Nil 2 Director, IREDA
Independent 5 S.Pulla Rao Nil Nil Nil Director
Independent 6 M.R.Naik* - Nil Nil Nil Director
Independent 7 A.Krishna Murthy* - Nil Nil Nil Director
Independent 8 Ajeya Kallam$ - - - 5 Nil Nil Director
Independent 9 V.Ramgopal$ - - - - - Nil Nil Nil Director
Independent 10 V.Bhargavi Nil Nil Nil Director
- Attended - Leave of Absence (#) In pursuance with the Regulation 26(1)(a) of SEBI (LODR) Regulations, 2015, While considering the Limit of Directorships, Directorship in Kallam Textiles Limited was Excluded and also excludes directorship in Private Companies, Foreign Companies, Companies incorporated under Section 8 of the Companies Act, 2013 and alternate directorships. (##) In pursuance with the Regulation 26(1)(b) of SEBI (LODR) Regulations, 2015, While considering the limit of Committee Memberships and Chairmanships of a Director, Audit Committee and Stakeholders Relationship Committee of Public Companies have been considered and also excludes the Memberships & Chairmanships in Kallam Spinning Mills Limited. *During the Year, Pursuant to the provisions of Section 168 of Companies Act, 2013 our companys' Independent and Non Executive Directors, Sri M.R.Naik and Sri A.Krishna Murthy have submitted their resignations, due to pre-occupation, at the Board Meeting held on 29th September, 2017. The Board accepted their resignations and placed on record its sincere appreciation of services rendered by them as a Directors during their tenure. $ Sri Ajeya Kallam and V.Ramgopal, became the Members of Board of Directors on 26th August, 2017.
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GINNING SPINNING OPEN END DYEING WEAVING HYDEL KALLAM TEXTILES LIMITED 26th ANNUAL REPORT 2017-18 c) Number of meetings of the Board of Directors held and 3) AUDIT COMMITTEE: dates on which held: a) Brief Description of Terms of Reference: During the financial year 2017-18, 7 (Seven) meetings of the The Main objectives of the Audit Committee are monitoring Board of Directors were held and the maximum time gap and effective supervision of the financial reporting, audit between two meetings did not exceed one hundred and twenty process, determining the adequacy of internal controls, (120) days. The Board meets at least once in every quarter to evaluating and approving the transactions with related parties, review the quarterly financial results and other items on the ensuring of accurate and timely disclosures of financial Agenda. reporting with high level of integrity, quality and transparency and recommendation of the appointment of Statutory Auditors. Dates on which Board Meetings Were held : 1) 01-04-2017 The composition of the Audit Committee is in compliance with provisions of Section 177 of the Companies Act, 2013 and 2) 27-05-2017 3) 26-08-2017 4) 29-09-2017 Regulation 18 of SEBI (LODR) Regulations, 2015. The members of the Audit Committee are financially literate and 5) 14-10-2017 6) 14-12-2017 7) 12-02-2018 have experience in financial management. The Committee invites the Managing Director, Joint Managing Director, CFO, d) Inter-se relationship among directors: Statutory Auditor and Chief Internal Auditor to attend the As on 31st March, 2018, there is no inter-se relationship meetings of the Committee. The Audit Committee met the among the Directors. Statutory Auditors and the Chief Internal Auditor independently without the management in all the Audit Committee meetings e) Number of Shares and convertible instruments held by which were held during the year 2016-17. Non-Executive Directors: b) The composition of the Audit Committee of the Company: Non-Executive Directors does not have any Shares and convertible instruments of the Company. A t f) Independent directors : tt The Independent Directors Mr. S.Pulla Rao and Smt V. Bhargavi have been appointed for a tenure of 5 (five) years S P R V S N M th V h upto 26th September, 2019. Their appointment was approved by the shareholders of your Company at their AGM held on h M M 27th September, 2014. Mr Ajeya Kallam and V.Ramgopal hold N -E t N N -E t office upto 28th September, 2022. Their appointment was I t I t approved by the shareholders of your Company at their AGM D t D t D t held on 29th September, 2017. The Independent Directors c) Details of the Audit Committee Meetings held and attended have submitted declarations that they meet the criteria of during the financial year 2017-18 is detailed below: Independence laid down under Section 149 of the Companies Act, 2013 and Regulation 16(1)(b) of the SEBI (LODR) Audit Committee Meetings held S. Name of the during the year 2017-18 Regulations, 2015. They have also confirmed that they do not No Member hold directorship in more than seven listed entities as per 27-05-2017 26-08-2017 14-12-2017 12-02-2018 Regulation 25 (1) of SEBI Listing Obligations and Disclosure 1 S.Pulla Rao Requirements (LODR) Regulations, 2015. Independent Directors’ Meeting : 2 V.S.N. Murthy As per the Regulation 25 (3) of SEBI Listing Obligations and Disclosure Requirements (LODR) Regulations, 2015, during 3 V.Bhargavi the year under review, the Meeting of the Independent Directors was held on 12th February, 2018, without the attendance of Non-Independent Directors and members of the - Attended management, inter alia, to discuss on the following: The Audit Committee is empowered, pursuant to its terms of v To review the performance of the Non-Independent reference and its role, inter alia, includes the following: Directors and the Board as a whole; 1. Reviewing with the management quarterly, half-yearly, v Review the performance of the Chairperson of your nine months and annual financial statements, standalone Company, taking into account views of Executive / Non- as well as consolidated before submission to the Board for Executive Directors; and approval; v Assess the quality, quantity and timeliness of flow of 2. Oversight of the Company’s financial reporting process information between your Company’s management and and the disclosure of its information to ensure that the the Board that was necessary for the Board to effectively financial statements are correct, sufficient and credible; and reasonably perform their duties. 3. Reviewing the Management Discussion and Analysis of The Details of Familiarization Programme for Independent the financial condition and results of operations; Directors were disclosed on the Company’s website www.ksml.in
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4. Reviewing, with the management, the annual financial 16. Approval or subsequent modification of transactions of the statements and auditor’s report thereon before submission Company with related parties including appointment and to the Board for approval, with particular reference to: revision in remuneration of related parties to an office or place of profit in the Company, its subsidiary company or a. Matters required to be included in the Directors’ associate company; Responsibility Statement to be included in the Board’s Report as per Sec 134(3)(c) of the Companies Act, 2013; 17. Reviewing the statements of significant related party transactions submitted by the management; b. Changes in the accounting policies and practices and the reasons for the same; 18. Review of the Whistle Blower mechanism of the Company as per the Whistle Blower Policy. Overseeing the c. Compliance with the Listing Regulations and other functioning of the same; legal requirements relating to financial statements; 19. Approval of appointment of Chief Financial Officer after d. Disclosure of any related party transactions. assessing the qualifications, experience and background, e. Qualifications in the draft audit report, if any; etc. of the candidate; 5. Reviewing and considering the following with respect to 20. Approving the auditors (appointed under the Companies appointment of auditors before recommending to the Board: Act 2013) to render any service other than consulting and specialised services; a. qualifications and experience of the individual/ firm proposed to be considered for appointment as auditor; 21. Recommending to the Board of Directors, the appointment, remuneration and terms of appointment of Cost Auditor for b. whether such qualifications and experience are the Company; commensurate with the size and requirements of the company. 22. Review the cost audit report submitted by the cost auditor on audit of cost records, before submission to the Board for 6. Recommending to the Board, the appointment, approval; reappointment and, if required, the replacement or removal of the statutory auditor, fixing of audit fees and approving 23. Reviewing, with the management, the statement of uses / payments for any other service; application of funds raised through an issue (public issue, rights issue, preferential issue, etc.), the statement of funds 7. Discussion with the statutory auditors before the audit utilized for purposes other than those stated in the offer commences, about the nature and scope of audit as well document / prospectus / notice and the report submitted by as post-audit discussion to ascertain any area of concern; the monitoring agency monitoring the utilization of proceeds 8. Reviewing and monitoring the auditor’s independence and of a public or rights issue, and making appropriate performance, and effectiveness of audit process; recommendations to the Board to take up steps in this matter; 9. Reviewing the adequacy of internal audit function, if any, including the structure of the internal audit department, 24. Any other matter specified by the Board of Directors from staffing and seniority of the official heading the department, time to time. The Audit Committee, during the financial year reporting structure coverage and frequency of internal 2016-17, has approved related party transactions along audit; with granting omnibus approval in line with the Policy of dealing with Related Party Transactions and the applicable 10. Reviewing the appointment, removal and terms of provisions of Section 188 of the Companies Act, 2013 and remuneration of the Chief Internal Auditor of the Company; the Listing Regulations (including any statutory 11. Formulating in consultation with the Internal Auditor, the modification(s) or re-enactment(s) thereof for the time scope, functioning, periodicity and methodology for being in force). conducting the internal audit; 4) Nomination and Remuneration Committee : 12. Evaluating the internal financial controls and risk a) Brief Description of Terms of Reference : management policies system of the Company; The Nomination and Remuneration Committee is 13. Discussion with the internal auditors on internal audit empowered with the following terms of reference and reports relating to internal control weaknesses and any responsibilities in accordance with the provisions of law other significant findings and follow-up thereon; and the Nomination and Remuneration Policy: 14. Reviewing the internal investigations by the internal The terms of reference of the Nomination and auditors into matters where there is a suspected fraud or Remuneration Committee interalia, includes: irregularity or failure of internal control systems of a material nature and reporting the matter to the Board; 1. Formulate a criteria for determining qualifications, positive attributes and independence of a director and 15. Review and comment upon the report made by the recommend to the Board of Directors a policy, relating statutory auditors (before submission to the Central to, the remuneration of the directors, key managerial Government) with regard to any offence involving fraud personnel and other employees; committed against the company by its officers/employees; 2. Formulate a criteria for evaluation of performance of
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independent directors and the board of directors and including determination of qualifications, positive attributes, review the term of appointment of Independent Directors independence of Directors and other matters as provided on the basis of the report of performance evaluation of under sub-section (3) of Section 178 of the Companies Act, Independent Directors; 2013. The remuneration paid to the Directors is as per the terms laid out in the Nomination and Remuneration Policy of 3. To recommend to the Board, appointment, removal of your Company. Directors, Senior Management Personnel and KMP in accordance with the criteria laid down. v Remuneration to the Managing Director & Joint Managing Director: 4. Recommendation to the Board on remuneration of The shareholders of your Company at the 23rd AGM held on Managing Director/Executive Directors/KMP and also 26th September, 2015 approved the re-appointment of Sri revision in remuneration. P.Venkateswara Reddy as Managing Director and Sri G.V.Krishna Reddy as Joint Managing Director of your 5. Devise a policy on Diversity of Board of Directors; Company for a period of three (3) years commencing from 6. Undertake any other matters as the Board may decide 29th June, 2015 to 28th June, 2018. The terms and conditions from time to time. of their appointment including remuneration payable to them was approved which was in accordance with the provisions of b) Composition, Name of members and Chairperson : Section 197, 203, Schedule V and other applicable provisions, The composition of Nomination and Remuneration if any, of the Companies Act, 2013 read with Companies Committee is in compliance with the provisions of (Appointment and Remuneration of Managerial Personnel) Section 178 of the Companies Act, 2013 and Regulation Rules, 2014 (including any statutory modification(s) or re- 19 of the SEBI (LODR) Regulations, 2015. enactments thereof, for the time being in force). The details of the Remuneration paid to Managing Directors & Joint The Composition of Committee is as follows: Managing Director are stated in the Form MGT- 9 – Extract of During FY 2017-18, Due to Resignations of Mr A.Krishna the Annual Return which forms part of the Board’s Report in Murthy and Mr M.R.Naik, the Nomination and Remuneration this report. Committee was Reconstituted with the New members of the v Remuneration to Whole Time Director: Board viz,. Mr V.Ramgopal and Mr Ajeya Kallam. The shareholders of your Company at the 25th AGM held on 29th September, 2017 approved the re-appointment of Sri N t R t tt M.V.Subba Reddy as a Whole Time Director of your Company for a period of Five (5) years commencing from 01st June, 2017 to 31st May, 2022. The terms and conditions of his V R V S N M th A K appointment including remuneration payable to him was approved which was in accordance with the provisions of h M M Section 197, 203, Schedule V and other applicable provisions, if any, of the Companies Act, 2013 read with Companies N -E t N N -E t I t I t (Appointment and Remuneration of Managerial Personnel) D t D t D t Rules, 2014 (including any statutory modification(s) or re- enactments thereof, for the time being in force). The details of c) Meeting and Attendance during the year : the Remuneration paid to Whole Time Director are stated in During FY 2017-18, the Nomination and Remuneration the Form MGT- 9 – Extract of the Annual Return which forms Committee met one (1) time i.e. on 12th February, 2018. part of the Board’s Report in this report. v Remuneration to Non-Executive and Independent Directors : S. Name of the Meeting held during the year 2017-18 No Director 12-02-2018 The Committee has formulated Policy for Remuneration payable to Non Executive and Independent Directors. As per 1 V.Ramgopal the Policy, remuneration to Non-executive Independent Directors includes: 2 V.S.N.Murthy i) Sitting Fees for attending meetings of the Board as well as Committees of the Board has decided by the Board within 3 Ajeya Kallam the limits prescribed under the Companies Act. ii) Travelling and other expenses they incur for attending to the Company’s affairs, including attending Committee and - Attended Board Meetings of the Company 5) Remuneration of Directors: The Non-Executive Directors are paid remuneration by way v Policy on Director’s appointment and remuneration: of Sitting Fees. Company paid the sitting fees to all the The Nomination and Remuneration Policy provides for Non-Executive Directors at the rate of ` 10,000/- for appropriate composition of Executive, Non-Executive and attending each meeting of the Board and ` 5,000/- for Independent Directors on the Board of Directors of your attending each Audit Committee meeting upto first three Company along with criteria for appointment and remuneration Board meetings i.e (01-04-2017, 27-05-2017 and 26-08- 2017) and from 29th September, 2017, Company paid the
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GINNING SPINNING OPEN END DYEING WEAVING HYDEL KALLAM TEXTILES LIMITED 26th ANNUAL REPORT 2017-18 sitting fees to all the Non-Executive Directors at the rate of Name, Designation and address of the Compliance officer: ` 15,000/- for attending each meeting of the Board and Mr. P. Venkateswara Reddy, Managing Director, Kallam Textiles other Committees. Ltd, Chowdavaram, GUNTUR, Andhra Pradesh-522019 Review of Performance and Compensation to Senior Management : 7) SHARE TRANSFER COMMITTEE: The Nomination and Remuneration Committee reviews the v Composition of Share Transfer Committee: performance of the senior management of your Company. The Sri G.V.Krishna Reddy - Chairman Committee ensures that the remuneration to the Key Sri P.Venkateswara Reddy - Member Managerial Personnel and Senior Management involves a Sri M.V.Subba Reddy - Member balance between fixed and incentive pay reflecting short and long term performance objectives appropriate to the working of v The terms of reference of the Shareholders’ Committee your Company and its goals. are as follows: Mr M.Prasanna Kumar (ACS: 49713) has appointed as a • To issue duplicate share certificates as and when the Company Secretary w.e.f 01st April, 2017 and he has resigned requests are received by the Company; from the post of Company Secretary as well as Compliance • To approve the register of members as on the record Officer w.e.f 31st May, 2017. date(s) and/or book closure date(s) for receiving dividends Details of remuneration paid to Directors during the year and other corporate benefits; 2017-18 as follows : • To review correspondence with the shareholders vis-a-vis legal cases and take appropriate decisions in that regard; and Name of Sitting Salary Benefits Commis- Total Directors sion Fees • To authorise affixing of the Common seal of the Company Sri.P.Venkateswra Reddy 24,00,000 1,03,688 22,17,443 - 47,21,131 from time to time on any deed or other instrument requiring Sri.G.V.Krishna Reddy 24,00,000 99,697 22,17,443 - 47,17,140 authentication by or on behalf of the Company. Sri.M.V.Subba Reddy 9,86,852 - - - 9,86,852 Further, Share Transfers approved by the Committee were Sri.MR.Naik - - - 30,000 30,000 placed before the Board of Directors at their meetings from Sri.V.S.N.Murthy - - - 1,00,000 1,00,000 time to time. During the period under review 50,750 shares were transferred. Sri.A.Krishna Murthy - - - 30,000 30,000 Sri.S.Pulla Rao - - - 1,00,000 1,00,000 There were no pending Share Transfers as on date of this report. Sri.Ajeya Kallam - - - 60,000 60,000 8) CORPORATE SOCIAL RESPONSIBILITY COMMITTEE: Sri.V.Ramgopal - - - 30,000 30,000 The composition of the CSR Committee is in compliance with Smt.V.Bhargavi - - - 1,00,000 1,00,000 the provisions of Section 135 of the Companies Act, 2013. Your Company has not granted any stock options to any of its • Composition of Corporate Social Responsibility Committee: Directors. Sri G.V.Krishna Reddy - Chairman 6) STAKEHOLDERS’ RELATIONSHIP COMMITTEE: Sri V.Ramgopal - Member The composition of the Stakeholder Relationship Committee is in compliance with the provisions of Section 178 of the Sri M.V.Subba Reddy - Member Companies Act, 2013 and Regulation 20 of SEBI (LODR) The Committee met one time During the Financial year 2017-18. Regulations, 2015. During the Year, Due to Resignation of Mr M.R.Naik, a Non- The terms of reference of the Committee includes enquiring executive and Independent Director, the Committee was into and redressing complaints of shareholders and to resolve reconstituted with Mr.V.Ramgopal, who is also a Non- the grievances of the Investors of your Company. executive and Independent Director. During the year, The Committee was Reconstituted The CSR Committee is empowered, pursuant to its terms of functioning under the Chairmanship of Mr. Ajeya Kallam, a reference, inter alia, to: Non-executive and Independent Director. The other members of the Committee are Mr. G.V.Krishna Reddy and 1. Specifying the amount of expenditure to be incurred on the Mr.M.V.Subba Reddy. CSR activities; Details pertaining to the number of complaints received and 2. Monitoring the CSR Policy of the Company from time to time; responded and the status thereof during the financial year 3. Prepare a transparent monitoring mechanism for ensuring 2017-18 are given below : implementation of the projects/programmes/activities proposed to be undertaken by the Company; and No. of complaints received during the year 38 4. Such other activities as the Board of Directors may No. of complaints resolved during the year 38 determine from time to time. No. of complaints pending at the end of the year Nil 9) RELATED PARTY TRANSACTIONS: During the Year, Due to Resignation of Mr A.Krishna Murthy, a Non-executive and Independent Director, the Committee was All transaction entered into by your Company with related reconstituted with Mr.Ajeya Kallam, who is also a Non- parties, during the Financial Year 2017–18, were in ordinary executive and Independent Director. course of business and on arm’s length basis. The details of
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GINNING SPINNING OPEN END DYEING WEAVING HYDEL KALLAM TEXTILES LIMITED 26th ANNUAL REPORT 2017-18 the related party transactions are set out in the Notes to During the year under review, On 13th March, 2018, One Financial Statements forming part of this Annual Report. Extraordinary General Meeting was conducted and the Also, the Related Party Transactions undertaken by your following Resolutions were duly passed by the Shareholders Company were in compliance with the provisions of Section with requisite majority : 188 of the Companies Act, 2013 and Regulation 23 of SEBI 1) Change in Name of the Company (Special Resolution) (LODR) Regulations, 2015. 2) Adoption of New Articles of Association (Special Resolution) The policy on related party transactions has been placed on Details of EGM Voting results were annexed to this report. the Company’s website and can be accessed through the following link: www.ksml.in The Board of Directors of the Company has appointed M/s K. Srinivasa Rao & Co., Company Secretaries in Practice, as Scrutinizer Details of Employee(s), who are relatives of the Directors, for conducting the meeting in a fair and transparent manner. holding an office or place of profit in the Company pursuant to Section 188 of the Companies Act, 2013 : 12) MEANS OF COMMUNICATION: During the Financial Year 2017-18, Mr. P.Govardhan Reddy, a) Quarterly, Half Yearly and Annual results: Son of P.Venkateswara Reddy (Managing Director), Received Pursuant to the Provisions of Regulation 33 of SEBI a total Remuneration of ` 5,04,000/- (LODR) Regulations, 2015, quarterly, half-yearly and During the Financial Year 2017-18, Mr. M.Srinivasa Nagarjuna annual financial results of the Company were taken on Reddy, Son of M.V.Subba Reddy (Whole Time Director), record by the Board of Directors and submitted to the Received a total Remuneration of ` 2,58,000/- Bombay Stock Exchange, where shares of the Company are listed. Your Company makes timely disclosures of In terms, of Section 177, 188 and other applicable provisions, necessary information to BSE Limited in terms of the if any, of the Companies Act, 2013 read with the Rules issued Listing Regulations and other rules and regulations thereunder (including any statutory modification(s) or issued by the SEBI. reenactment (s) thereof for the time being in force) the appointment and remuneration payable to the aforesaid is b) Publication of Results: approved by the Audit Committee and noted by the Board of Pursuant to the Provisions of Regulation 47 of SEBI Directors of the Company and are at arm’s length and in (LODR) Regulations, 2015, Quarterly, half-yearly and ordinary course of business of your Company. annual financial results of the Company were published Directors with materially significant, pecuniary or in national English newspaper viz., Business Standard business relationship with your Company: (Hyderabad Edition) and vernacular language news paper, viz., Andhra Bhoomi (Guntur District Edition), There is no pecuniary or business relationship between the within forty-eight hours of approval thereof. Presently the Non-Executive/Independent Directors and your Company, same are not sent to the shareholders separately. except for the sitting fees payable to them for attending the Board meetings and Committee meetings which are in c) Website and News Releases: accordance with the applicable laws and with the approval of In compliance with Regulation 46 of the SEBI (LODR) the shareholders. A declaration to this effect is also submitted Regulations, 2015 All the Details regarding the status of by all the Directors at the beginning of each financial year. unclaimed dividend, Annual Reports, Quarterly/Half 10) SUBSIDIARY COMPANIES yearly/Nine-months and Annual financial results along with the applicable policies of the Company and also Your Company does not have any material subsidiary Company’s official news releases and presentations companies in terms of Regulation 16 (1) (c) of SEBI (LODR) made to the institutional investors are available on the Regulations, 2015. Company’s website viz., www.ksml.in 11) GENERAL BODY MEETINGS: d) Management Discussion and Analysis forms part of the a) Details of Last Three Annual General Meetings held: Annual Report, which is sent to the shareholders of the Company. Date of AGM Time Place e) The quarterly results, shareholding pattern for every quarter, Regd. Office at quarterly compliances and all other corporate communication 26th September, 2015 3.00 P.M Chowdavaram, are filed to the Bombay Stock Exchange Limited electronically. GUNTUR – 522 019 The Company has complied with filing submissions through Regd. Office at Bombay Stock Exchange Listing Centre. 28th September, 2016 3.00 P.M Chowdavaram, 13) GENERAL SHAREHOLDER INFORMATION : GUNTUR – 522 019 v Annual General Meeting for the Financial Year 2017-18: Regd. Office at nd 29th September, 2017 3.00 P.M Chowdavaram, Date : 22 September, 2018 GUNTUR – 522 019 Time : 03:00 P.M b) No Special Resolutions were passed during the Venue : Registered Office of the Company, previous Three (3) Annual General Meetings. Chowdavaram, Guntur - 522019. c) Extraordinary General Meeting (EGM): v Financial Year : 01-04-2017 to 31-03-2018
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Tentative Schedule for declaration of results during the v Performance in Comparison to broad-based indices : financial year 2018-19 The Chart below shows the comparison of Company’s First Quarter - On or before 14th August, 2018 share price movement on BSE vis-à-vis the movement of the BSE Sensex for the year 2017-18 (based on Second Quarter and Half Yearly - On or before 14th November, 2018 month end closing) :
Third Quarter and Nine Months - On or before 14th February, 2019 KTL V/S BSE SENSEX Fourth Quarter and Annual - On or before 30th May, 2019 40000 40 35000 35 v Dividend Payment Date : Within 30 days from the Date of
X 30000 30
Declaration (Subject to approval of Shareholders) E S 25000 25 N E L
DIVIDEND HISTORY : L S
20000 20 T E K S Financial Year % of Dividend Amount Paid (`) B 15000 15 10000 10 2004-05 7 47,95,770 5000 5 2005-06 10 68,51,100 0 0 2006-07 12 82,21,320 Apr- May- Jun- Jul- Aug- Sep- Oct- Nov- Dec- Jan- Feb- Mar- 17 17 17 17 17 17 17 17 17 18 18 18 2007-08 12 82,21,320 MONTH 2008-09 9 61,65,990 Depository Participation: 2009-10 14 95,91,540 i) National Securities Depository Ltd, (NSDL) 2010-11 18 1,23,31,980 Trade World, 4th Floor, Kamala Mills Compound, 2011-12 Nil Nil Senapati Bapat Marg, Lower Parel, 2012-13 Nil Nil Mumbai – 400 013. 2013-14 12 82,21,320 Ph. No: 022 - 2499 4200 2014-15 10 68,51,100 ii) Central Depository Services (India) Ltd, (CDSL) 2015-16 10 68,51,100 Phiroze Jeejeebhoy Towers, 17th Floor, Dalal Street, 2016-17 10 68,51,100 Mumbai- 400 001. v The Shares of the Company are Listed on following Ph. No: 022 - 2272 3333 Stock Exchange ISIN Number for NSDL & CDSL : INE629F01025 Bombay Stock Exchange Limited Phiroze Jeejeebhoy Towers, Dalal Street, Depository Fee : Mumbai – 400 001. Annual custody fee for the financial year 2017-18 paid to Ph No : 022- 22721233/34 National Securities Depository Limited (NSDL) and Central v Annual Listing Fees for the Year 2017-18 have been paid to Depository Services India Limited (CDSL). BSE Limited v Registrars & Share Transfer Agents: v BSE Stock Code : 530201 Big share Services Pvt. Ltd., MARKET PRICE DATA: 306, 3rd Floor, Rigt Wing, Amrutha Ville, No.of Shares Month High (`) Low (`) Traded Opp. Yashodha Hospital, Raj Bhavan Road, Somajiguda, April 2017 29.85 22.55 773357 Hyderabad – 500082 May2017 33.5 24.4 1201918 Ph No : 040-23374967 June2017 32.4 25.45 1068629 Website : www.bigshareonline.com July2017 30.85 26.25 742588 v Share Transfer System: Aug.2017 37.25 25.1 2234664 The Company has appointed M/s. Bigshare Services Sept.2017 33.95 27.6 856172 Private Limited as Registrars & Share Transfer Agents for both electronic and physical transfers. The shares lodged Oct 2017 31.8 23 999032 for transfer are processed and share certificates duly Nov 2017 24.9 20.35 522210 endorsed are returned within 15 days from the date of Dec 2017 24.75 19.55 769752 lodgment, subject to documents being valid and complete in all respects. The Board of Directors of your Company Jan 2018 27.85 21 930347 have delegated the authority to approve the transfer of Feb 2018 31.6 19.4 1601344 shares, transmission of shares or requests for deletion of Mar 2018 33.25 30.1 548654 name of the shareholder, etc., to the designated officials of
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your Company. The transactions requiring issuance of new v Reconciliation of Share Capital Audit Report and share certificates are approved by the Shareholder’s Regulation 40(9) of SEBI(LODR) Regulations, 2015: Committee of the Board of directors of your Company. A As per the Provisions of Regulation 55A of SEBI (LODR) summary of approved transfers, transmissions, deletion Regulations, 2015, M/s. K.Srinivasa Rao & Co., Company requests, etc., are placed before the Board of Directors Secretaries in Practice carries out the Secretarial Audit to from time to time as per Listing Regulations. reconcile the total admitted capital with National Securities v Distribution of Shareholding as on 31st March 2018 Depository Limited (NSDL) and Central Depository Services (India) Limited (CDSL) and the total issued and Shareholders Shareholding Listed Capital. The audit is carried out every quarter and the report thereon is submitted to the Stock Exchange, Range (No. of No.of % to No.of Share % to where the Shares of the Company are listed. The audit Shares) Share Total holders Total confirms that the total Listed and Issued capital isin holders agreement with the aggregate of the total number of shares 1 - 500 1741 33.37 3,13,527 0.73 in dematerialized form (held with NSDL and CDSL) and the total number of shares in physical form. 501 - 1000 1275 24.44 8,72,151 2.04 During the year 2017-18, In accordance with the Regulation 1001 - 2000 1056 20.24 14,77,821 3.45 40(9) of the SEBI (LODR) Regulations,2015, M/s K. 2001 - 3000 246 4.72 6,20,683 1.45 Srinivasa Rao & Co., Company Secretaries in Practice, 3001 - 4000 253 4.85 8,49,639 1.98 after examined all the share transfer deeds, Memorandum of Transfers, Registers, files and other documents related 4001 - 5000 84 1.61 3,90,375 0.91 to Company, gave certificates under Regulation 40(9) of 5001 - 10000 264 5.06 18,40,190 4.30 the SEBI (LODR) Regulations,2015,for the Half year 01- 04-2017 to 30-09-2017 and For the Half year 01-10-2017 10001- 50000000 298 5.71 3,64,54,989 85.14 to 31-03-2018.Both the above certificates were submitted 5217 100.00 4,28,19,375 100.00 to the Bombay Stock Exchange Limited, where the Shares v Categories of Share Holders as on 31st March 2018 of the Company are Listed, within 24 hours of receipt of the Certificate by the Company. % of No.of Share v Details of your Company’s dematerialized shares as Category share holders on 31st March, 2018: holding Shareholding of Promoters Physical Demat Record A Particulars Total / Promoters Group Record NSDL CDSL (a) Individuals/HUFs 1,49,73,765 34.97 Number of 32,23,247 3,31,60,682 64,35,446 4,28,19,375 (b) Bodies Corporate 54,65,043 12.76 Shares Total Shareholding of Promoter 2,04,38,808 47.73 % of and Promoter Group (A) 7.53 77.44 15.03 100.00 Shares B Public shareholding v 1. Institutions - - Dematerialization of shares : a) Mutual Funds\UTI 62,500 0.15 Shareholders who continue to hold shares in physical form are requested to dematerialize their shares at the b) Banks\Financial Institutions - - earliest and avail of the various benefits of dealing in c) Insurance companies - - securities in electronic/dematerialized form. For any d) FIIs - - clarification, assistance or information, please contact Sub Total B(1) 62,500 0.15 Big Share Services Pvt. Ltd., Somajiguda, Hyderabad - 2. Non-Institutions 500082 Ph No: 040-233 74 967. a) Bodies Corporate 6,71,395 1.57 v Outstanding GDRs / ADRs / Warrants / Convertible b) Individuals Instruments and their impact on equity: (i) Individual shareholders holding Your Company does not have any outstanding GDRs / 1,12,55,181 26.29 nominal share capital up to ` 2 lakh ADRs / Warrants / Convertible Instruments as on (ii) Individual shareholders 31st March, 2018. holding nominal share capital 97,96,477 22.88 v Transfer of Unpaid and Unclaimed Amount to IEPF: in excess of ` 2 lakh Pursuant to the provisions of section 124 of the c) Individual (NRI) 3,52,056 0.82 companies Act, 2013, the declared dividends which f) Others (Clearing members) 2,42,958 0.57 remained un paid or unclaimed for a period of seven Sub Total B(2) years from the date of transfer to the unpaid dividend account, have been transferred by the company to the Total Public Shareholding B= B(1)+B(2) Investor Education and Protection Fund (IEPF) Total Shareholding = A+B 4,28,19,375 100.00
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established by the Central Government. Shareholders • Address for are requested to ensure that they claim the dividend Correspondence Company : Kallam Textiles Ltd from your Company before transfer of the said amounts to the IEPF. Chowdavaram, During the year 2017-18, Unclaimed Dividend For the Guntur, year 2009-10 was transferred to Investor Education and A.P - 522019. Protection Fund (IEPF). Pursuant to the provision of rule 3 of the Investor Education and Protection Fund RTA : Big share services Pvt. Ltd., (Awareness and Protection of Investor) Rules, 2001, 306, 3rd Floor, necessary e-form (Form 1 INV) which contains the Right Wing, Statement of amounts credited to IEPF was filed to Registrar of Companies (ROC). Amrutha Ville, The following are the details of dividends paid by the Opp. Yashodha Hospital, Company and respective due dates for transfer of Raj Bhavan Road, unclaimed dividend to IEPF. Somajiguda, Dividend Date of Declaration of Due date for Transfer Hyderabad – 500 082 Declared Dividend to IEPF Year Official Website 2010-11 27th August,2011 01st October,2018 of the Company : www.ksml.in 2013-14 27th September,2014 01st November,2021 Investors’ E-mail Id : [email protected] 2014-15 26th September,2015 31st October,2022 14) OTHER DISCLOSURES: 2015-16 28th September,2016 02nd November, 2023 1. Disclosure of Related Party Transactions: 2016-17 29th September, 2017 03rd November, 2024 There are no materially significant related party transactions of your Company which have potential v National Electronic Clearing System (NECS) for conflict with the interests of the Company at large. dividend : 2. Disclosure of Compliance by the Listed Entity: The Securities and Exchange Board of India (SEBI) has made it mandatory for all companies to use the bank Your Company has complied with all the requirements account details furnished by the Depositories for of the Stock Exchange(s) and the SEBI on matters depositing dividends. Dividend will be credited to the related to Capital Markets. There were no penalties Members’ bank account through NECS wherever imposed or strictures passed against your Company by complete core banking details are available with the the statutory authorities in this regard. Company. In case where the core banking details are 3. Vigil Mechanism and Whistle Blower Policy: not available, dividend warrants will be issued to the In accordance with Regulation 22 of the SEBI (LODR) Members with bank details printed thereon as available Regulations, 2015, your Company has adopted a in the Company’s records. This ensures that the Whistle Blower Policy which has been posted on the dividend warrants, even if lost or stolen, cannot be used Website of the Company (www.ksml.in). The Objective for any purpose other than for depositing the money in of framing a policy is to provide its employees and the accounts specified on the dividend warrants and Business Associates a framework and to establish a ensures safety for the investors. The Company complies formal mechanism or process whereby concerns can be with the SEBI requirement. raised in line with your Company’s commitment to v Plant Locations: highest standards of ethical, moral and legal business a) Spinning Division : Chowdavaram, conduct and its commitment to open communication. Guntur -522019 The Company believes in conducting its business and Andhra Pradesh working with all its stakeholders, including employees, customers, suppliers, shareholders and business b) Weaving and Dyeing : Kunkupadu Village, associates in an ethical and lawful manner by adopting Divisions Addanki Mandal, highest standards of professionalism, honesty, integrity Prakasam Dist. and ethical behaviour; The Company prohibits any kind Andhra Pradesh. of discrimination, harassment, victimization or any other c) Power Division : Kotha Kothur Village, unfair practice being adopted against an employee and/ Nelakondapalli Mandal, or a business associate. In Appropriate or exceptional Khammam Dt. cases like the matters are of grave nature, all the Andhra Pradesh. employees, without any detention, can make Protected Disclosures directly to the Chairperson of the Audit Committee of the Board of Directors of the Company; v No. of Employees as on 31st March, 2018: 662
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4. Disclosure of Accounting Treatment: Regulations, 2015 (“The PIT Regulations”). The PIT The financial statements have been prepared in Regulations has come into effect from 15th May, 2015 accordance with Ind ASs notified under the Companies and replaced the earlier Regulations. The object of the (Indian Accounting Standards) Rules, 2015. PIT Regulations is to curb the practice of insider trading in the securities of a listed company. The Company has 5. Risk Management: adopted an ‘Internal Code of Conduct for Regulating, Business risk evaluation and management is an ongoing Monitoring and Reporting of Trades by Insiders’ (“the process within the Company. The assessment is Code”) in accordance with the requirements of the PIT periodically examined by the Board. Regulations. The Code is applicable to Promoters and Promoter’s Group, all Directors and such Designated
6. Commodity price risks and Commodity hedging activities: Employees who are expected to have access to The Company is exposed to the risk of price fluctuation unpublished price sensitive information relating to the of raw materials as well as finished goods. The Company Company. The Managing Director is the Compliance proactively manages these risks through forward Officer for monitoring adherence to the said Regulations. booking Inventory management and proactive vendor The Company has also formulated ‘The Code of development practices. The Company’s reputation for Practices and Procedures for Fair Disclosure of quality, products differentiation and service, coupled Unpublished Price Sensitive Information (UPSI)’ in with existence of powerful brand image with robust compliance with SEBI (Prohibition of Insider Trading) marketing network mitigates the impact of price risk on Regulations, 2015. This Code is displayed on the Official finished goods. website of the Company viz. http://ksml.in/wp-content/ 7. Non-mandatory requirements: uploads/2016/10/Prevention-of-insider-trading.pdf Adoption of non-mandatory requirements of Listing Regulation CEO/CFO CERTIFICATION: is being reviewed by the Board from time-to time. As required under Regulation 17(8) of SEBI (LODR) 8. Code of Conduct for Business & Ethics: Regulations, 2015 the CEO/CFO certificate for the financial year 2017 - 18 signed by Sri P.Venkateswara In accordance with the Provisions of Regulation 17 (5) Reddy, Managing Director and Sri M.V.Subba Reddy, of SEBI (LODR) Regulations, 2015, Your Company has CFO was placed before the Board of Directors of your framed a Code of Business Conduct & Ethics which is Company at their meeting held on 28th May, 2018. applicable to the Board of Directors and Senior Management Team (one level below the Board) of the Compliance Certificate of the Auditors: Company. The Code requires Directors and the The company has complied with the mandatory Employees to act honestly, fairly, ethically and with requirements of the code of corporate Governance as integrity conduct themselves in professional, courteous stipulated in Regulation 17 to 27 and clauses (b) to (i) of and respectful manner. The Code of Conduct has been sub-regulation (2) of Regulation 46 of SEBI (LODR) posted on the website of your Company. All the Board Regulations, 2015.The company has submitted the Members and the Senior Management Personnel have compliance report in the prescribed format to the stock affirmed their compliance with the said Code of Conduct exchanges for the quarters ended June 30, 2017, for the financial year 2017-18. The declaration to this September 30, 2017, December 31, 2017, and March effect signed by Sri P.Venkateswara Reddy, Managing 31, 2018 (XBRL Filings as per Regulation 27(2) of SEBI Director & CEO of the Company forms part of the (LODR) Regulations,2015). The statutory Auditors have Report. certified that the company has complied with the 9. Audit qualifications: condition of corporate governance as stipulated in Regulaton 27(2) of SEBI (LODR) Regulaions,2015. The During the year under review, there was no audit said certificate is annexed to the director’s report and qualification on your Company’s financial statements. will be forwarded to the stock exchanges along with the 10. Reporting of Internal Auditor: Annual report. The Internal Auditors M/s Mastanaiah & Co., (Firm Reg DECLARATION No: 002039S) Chartered Accountants, Guntur had Compliance with the Code of Business Conduct submitted their reports to the Managing Director & CEO and Ethics and has direct access to the Audit Committee and they participated in the meetings of the Audit Committee of As provided under Regulation 26 (3) of the SEBI (Listing the Board of Directors of your Company and presents Obligations and Disclosure Requirements) Regulations, their internal audit observations to the Audit Committee. 2015, all Board Members and Senior Management Personnel have affirmed compliance with Kallam 11. Code of Conduct for Prevention of Insider Trading: Textiles Ltd Code of Conduct of board of directors and The Securities and Exchange Board of India (SEBI) has senior management for the year ended 31st March, promulgated the SEBI (Prohibition of Insider Trading) 2018. Place : Chowdavaram, Guntur P.Venkateswara Reddy Date : 09-08-2018 Managing Director (DIN: 00018677)
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DETAILS OF VOTING RESULTS AS PER REGULATION 44 FOR THE YEAR 2016-17 Agenda-Wise IN CASE OF POLL / POSTAL BALLOT / E-VOTING: The Mode of voting for all resolutions was E-voting and poll (Electronically) conducted at the Meeting. Resolution 1: Consider and Adopt Audited Financial Statements, Reports of the Board of Directors and Auditors (Ordinary Resolution)
% of votes No.of No.of No.of No.of % of votes in % of Votes polled on shares votes Votes - in Votes - favour on votes against on votes outstanding Promoters / held polled favour against polled polled Public shares (3)=[{2}/{1}]* (1) (2) (4) (5) (6)=[{4}/{2}]* 100 (7)=[{5}/{2}]* 100 100 Promoter and 1,64,28,195 76,62,170 46.64 76,62,170 ---- 100 ---- Promoter Group Public Institutional 10,25,912 ------Holders Public - Others 1,68,01,393 10,12,015 6.02 10,12,015 ---- 100 ----
Total 3,42,55,500 86,74,185 25.32 86,74,185 ---- 100 ----
Resolution 2: Declaration of Dividend on Equity Shares (Ordinary Resolution)
% of votes No.of No.of No.of No.of % of votes in % of Votes polled on shares votes Votes - in Votes - favour on votes against on votes outstanding Promoters / held polled favour against polled polled Public shares (3)=[{2}/{1}]* (1) (2) (4) (5) (6)=[{4}/{2}]* 100 (7)=[{5}/{2}]* 100 100 Promoter and 1,64,28,195 76,62,170 46.64 76,62,170 ---- 100 ---- Promoter Group Public Institutional 10,25,912 ------Holders Public - Others 1,68,01,393 10,12,015 6.02 10,12,015 ---- 100 ----
Total 3,42,55,500 86,74,185 25.32 86,74,185 ---- 100 ----
Resolution 3: Re-appointment of Sri. P.Venkateswara Reddy (DIN : 00018677) who retires by rotation and being eligible, offers himself for re-appointment (Ordinary Resolution) % of votes No.of No.of No.of No.of % of votes in % of Votes polled on shares votes Votes - in Votes - favour on votes against on votes outstanding Promoters / held polled favour against polled polled Public shares (3)=[{2}/{1}]* (1) (2) (4) (5) (6)=[{4}/{2}]* 100 (7)=[{5}/{2}]* 100 100 Promoter and 1,64,28,195 76,62,170 46.64 76,62,170 ---- 100 ---- Promoter Group
Public Institutional 10,25,912 ------Holders
Public - Others 1,68,01,393 10,12,015 6.02 10,12,015 ---- 100 ----
Total 3,42,55,500 86,74,185 25.32 86,74,185 ---- 100 ----
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Resolution 4: Appointment of M/s Chevuturi Associates, Chartered Accountants (F.Reg No : 000632S) as Statutory Auditors and fix their Remuneration (Ordinary Resolution)
% of votes No.of No.of No.of No.of % of votes in % of Votes polled on shares votes Votes - in Votes - favour on votes against on votes outstanding Promoters / held polled favour against polled polled Public shares (3)=[{2}/{1}]* (1) (2) (4) (5) (6)=[{4}/{2}]* 100 (7)=[{5}/{2}]* 100 100 Promoter and 1,64,28,195 76,62,170 46.64 76,62,170 ---- 100 ---- Promoter Group
Public Institutional 10,25,912 ------Holders
Public - Others 1,68,01,393 10,12,015 6.02 10,12,015 ---- 100 ----
Total 3,42,55,500 86,74,185 25.32 86,74,185 ---- 100 ----
Resolution 5: Re-appointment of Sri M.V.Subba Reddy as a Whole Time Director of the Company (Ordinary Resolution)
% of votes No.of No.of No.of No.of % of votes in % of Votes polled on shares votes Votes - in Votes - favour on votes against on votes outstanding Promoters / held polled favour against polled polled Public shares (3)=[{2}/{1}]* (1) (2) (4) (5) (6)=[{4}/{2}]* 100 (7)=[{5}/{2}]* 100 100 Promoter and 1,64,28,195 76,62,170 46.64 76,62,170 ---- 100 ---- Promoter Group
Public Institutional 10,25,912 ------Holders
Public - Others 1,68,01,393 10,12,015 6.02 10,12,015 ---- 100 ----
Total 3,42,55,500 86,74,185 25.32 86,74,185 ---- 100 ----
Resolution 6: Ratification of the Remuneration of Mr. P.Srinivas, Cost Accountant for the Financial year ending 31st March, 2018 (Ordinary Resolution)
% of votes No.of No.of No.of No.of % of votes in % of Votes polled on shares votes Votes - in Votes - favour on votes against on votes outstanding Promoters / held polled favour against polled polled Public shares (3)=[{2}/{1}]* (1) (2) (4) (5) (6)=[{4}/{2}]* 100 (7)=[{5}/{2}]* 100 100 Promoter and 1,64,28,195 76,62,170 46.64 76,62,170 ---- 100 ---- Promoter Group
Public Institutional 10,25,912 ------Holders
Public - Others 1,68,01,393 10,12,015 6.02 10,12,015 500 99.95 0.05
Total 3,42,55,500 86,74,185 25.32 86,74,185 500 99.99 0.01
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Resolution 7: Issue of Bonus Shares (Ordinary Resolution)
% of votes No.of No.of No.of No.of % of votes in % of Votes polled on shares votes Votes - in Votes - favour on votes against on votes outstanding Promoters / held polled favour against polled polled Public shares (3)=[{2}/{1}]* (1) (2) (4) (5) (6)=[{4}/{2}]* 100 (7)=[{5}/{2}]* 100 100
Promoter and 1,64,28,195 76,62,170 46.64 76,62,170 ---- 100 ---- Promoter Group
Public Institutional 10,25,912 ------Holders
Public - Others 1,68,01,393 10,12,015 6.02 10,12,015 ---- 100 ----
Total 3,42,55,500 86,74,185 25.32 86,74,185 ---- 100 ----
Resolution 8: Determination of Fees for Delivery of Documents through a particular mode (Ordinary Resolution)
% of votes No.of No.of No.of No.of % of votes in % of Votes polled on shares votes Votes - in Votes - favour on votes against on votes outstanding Promoters / held polled favour against polled polled Public shares (3)=[{2}/{1}]* (1) (2) (4) (5) (6)=[{4}/{2}]* 100 (7)=[{5}/{2}]* 100 100
Promoter and 1,64,28,195 76,62,170 46.64 76,62,170 ---- 100 ---- Promoter Group
Public Institutional 10,25,912 ------Holders
Public - Others 1,68,01,393 10,12,015 6.02 10,12,015 ---- 100 ----
Total 3,42,55,500 86,74,185 25.32 86,74,185 ---- 100 ----
Resolution 9: Appointment of Sri.Ajeya Kallam (DIN : 00278595) as an Independent Director (Ordinary Resolution)
% of votes No.of No.of No.of No.of % of votes in % of Votes polled on shares votes Votes - in Votes - favour on votes against on votes outstanding Promoters / held polled favour against polled polled Public shares (3)=[{2}/{1}]* (1) (2) (4) (5) (6)=[{4}/{2}]* 100 (7)=[{5}/{2}]* 100 100 Promoter and 1,64,28,195 76,62,170 46.64 76,62,170 ---- 100 ---- Promoter Group
Public Institutional 10,25,912 ------Holders
Public - Others 1,68,01,393 10,12,015 6.02 10,12,015 ---- 100 ----
Total 3,42,55,500 86,74,185 25.32 86,74,185 ---- 100 ----
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Resolution 10: Appointment of Sri. V.Ramgopal (DIN : 02889497) as an Independent Director (Ordinary Resolution) % of votes No.of No.of No.of No.of % of votes in % of Votes polled on shares votes Votes - in Votes - favour on votes against on votes outstanding Promoters / held polled favour against polled polled Public shares (3)=[{2}/{1}]* (1) (2) (4) (5) (6)=[{4}/{2}]* 100 (7)=[{5}/{2}]* 100 100 Promoter and 1,64,28,195 76,62,170 46.64 76,62,170 ---- 100 ---- Promoter Group
Public Institutional 10,25,912 ------Holders
Public - Others 1,68,01,393 10,12,015 6.02 10,12,015 ---- 100 ----
Total 3,42,55,500 86,74,185 25.32 86,74,185 ---- 100 ---- Note : All the aforesaid Resolutions were passed with requisite majority. KALLAM TEXTILES LTD – EGM - VOTING RESULTS Disclosure as Per Regulation 44 SEBI (LODR) Regulations, 2015 Agenda-Wise IN CASE OF POLL/POSTAL BALLOT/E-VOTING: The Mode of voting for all resolutions was E-voting and poll (Electronically) conducted at the Extraordinary General Meeting. Resolution 1: CHANGE IN THE NAME OF THE COMPANY (Special Resolution) % of votes No.of No.of No.of No.of % of votes in % of Votes polled on shares votes Votes - in Votes - favour on votes against on votes outstanding Promoters / held polled favour against polled polled Public shares (3)=[{2}/{1}]* (1) (2) (4) (5) (6)=[{4}/{2}]* 100 (7)=[{5}/{2}]* 100 100 Promoter and 2,03,94,241 97,34,673 47.73 97,34,673 ---- 100 ---- Promoter Group Public Institutional 10,09,802 ------Holders Public - Others 2,14,15,332 20,94,184 9.78 20,94,184 ---- 100 ----
Total 4,28,19,3751,18,28,857 27.61 1,18,28,857 ---- 100 ----
Resolution 2 : ALTERATION OF ARTICLES OF ASSOCIATION (Special Resolution) % of votes No.of No.of No.of No.of % of votes in % of Votes polled on shares votes Votes - in Votes - favour on votes against on votes outstanding Promoters / held polled favour against polled polled Public shares (3)=[{2}/{1}]* (1) (2) (4) (5) (6)=[{4}/{2}]* 100 (7)=[{5}/{2}]* 100 100 Promoter and 2,03,94,241 97,34,673 47.73 97,34,673 ---- 100 ---- Promoter Group Public Institutional 10,09,802 ------Holders Public - Others 2,14,15,332 20,94,184 9.78 20,94,184 ---- 100 ----
Total 4,28,19,3751,18,28,857 27.61 1,18,28,857 ---- 100 ----
Note : All the aforesaid Resolutions were passed with requisite majority.
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AUDITORS’ CERTIFICATE REGARDING COMPLIANCE OF CONDITIONS OF CORPORATE GOVERNANCE To the Members of Kallam Textiles Limited (Formerly Kallam Spinning Mills Ltd)
We have examined the compliance of conditions of Corporate Governance by Kallam Textiles Limited (‘the Company’), for the year ended 31st March, 2018, as per the Regulations 17-27, Clauses (b) to (i) of Regulation 46(2) and paragraphs C, D and E of Schedule V of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations 2015, (‘Listing Regulations’)
The compliance of conditions of Corporate Governance is the responsibility of the Company’s management. Our examination was carried out in accordance with the Guidance Note on Certification of Corporate Governance, issued by the Institute of Chartered Accountants of India and was limited to procedures and implementation thereof, adopted by the Company for ensuring the compliance of the conditions of Corporate Governance. It is neither an audit nor an expression of opinion on the financial statements of the Company.
In our opinion and to the best of our information and according to the explanations given to us, we certify that the Company has complied with the conditions of Corporate Governance as stipulated in the SEBI Listing Regulations, 2015.
We further state that such compliance is neither an assurance as to the future viability of the Company nor the efficiency or effectiveness with which the management has conducted the affairs of the Company.
For CHEVUTURI ASSOCIATES Chartered Accountants Firm Regn.no.000632S
(RAGHUNADHA RAO BALINENI) Partner ICAI Membership No.028105 CEO & CFO CERTIFICATION The Board of Directors Kallam Textiles Limited (Formerly Known as “Kallam Spinning Mills Limited”) We hereby certify that on the basis of the review of the financial statements and the cash flow statement for the financial year ended 31st March, 2018 and that to the best of our knowledge and belief: 1. these statements do not contain any materially untrue statement or omit any material fact or contain statements that might be misleading; 2. these statements together present a true and fair view of the Company’s affairs and are in compliance with existing accounting standards, applicable laws and regulations; We hereby certify that, to the best of our knowledge and belief, no transactions entered into during the year by the Company are fraudulent, illegal or violative of the Company’s Code of Conduct. We accept responsibility for establishing and maintaining internal controls for financial reporting and have evaluated the effectiveness of internal control systems pertaining to financial reporting and have disclosed to the auditors and the Audit Committee, deficiencies in the design or operation of such internal controls, if any, of which they are aware and the steps they have taken or propose to take to rectify these deficiencies.
We have indicated to the Auditors and the Audit Committee 1. significant changes in internal control over financial reporting during the year; 2. significant changes in accounting policies during the year and that the same have been disclosed in the notes to the financial statements; and 3. instances of significant fraud of which they have become aware and the involvement therein, if any, ofthe management or an employee having a significant role in the internal control system over financial reporting.
Place : Chowdavarm For Kallam Textiles Ltd For Kallam Textiles Ltd Date : 09-08-2018 P.Venkateswara Reddy M.V.Subba Reddy Managing Director Chief Financial Officer
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INDEPENDENT AUDITORS' REPORT To the Members of AS financial statements. The procedures selected depend KALLAM TEXTILES LIMITED on the auditor’s judgement, including the assessment of the (Formerly known as Kallam Spinning Mills Limited) risks of material misstatement of the Ind AS financial Report on the Ind AS financial statements statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial We have audited the accompanying Ind AS financial control relevant to the Company’s preparation of the Ind AS statements of KALLAM TEXTILES LIMITED (Formerly financial statements that give a true and fair view in order to known as Kallam Spinning Mills Limited) (‘the Company’) design audit procedures that are appropriate in the which comprise the Balance Sheet as at March 31, 2018, circumstances. An audit also includes evaluating the the Statement of Profit and Loss (including other appropriateness of the accounting policies used and the comprehensive income), the Statement of changes in reasonableness of the accounting estimates made by the Equity and the Statement of Cash Flows for the year then Company’s board of directors, as well as evaluating the ended and a summary of significant accounting policies overall presentation of the Ind AS financial statements. and other explanatory information. We believe that the audit evidence we have obtained is Management’s Responsibility for the Ind AS Financial sufficient and appropriate to provide a basis for our audit Statements opinion on the Ind AS financial statements.
The Company’s Board of Directors is responsible for the Opinion matters stated in Section 134(5) of the Companies Act, 2013 (‘the Act’) with respect to the preparation and In our opinion and to the best of our information and presentation of these Ind AS financial statements that give according to the explanations given to us, the aforesaid Ind a true and fair view of the financial position, financial AS financial statements give the information required by the performance including other comprehensive income, Act in the manner so required and give a true and fair view changes in equity and cash flows of the Company in in conformity with the accounting principles generally accordance with the accounting principles generally accepted in India, of the state of affairs of the Company as accepted in India, including the Indian Accounting Standards at March 31, 2018, its profit, total comprehensive income, (Ind AS) specified under Section 133 of the Act. the changes in equity and its cash flows for the year ended on that date. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Report on other legal and regulatory requirements Act for safeguarding the assets of the Company and for preventing and detecting of frauds and other irregularities; 1. As required by the Companies (Auditor’s Report) selection and application of appropriate accounting policies; Order, 2016 (‘the Order’), issued by the Central making judgements and estimates that are reasonable and Government of India in terms of sub-section (11) of prudent; design, implementation and maintenance of section 143 of the Act, we give in the Annexure-A, a adequate internal financial controls, that are operating statement on the matters specified in paragraphs 3 and effectively for ensuring the accuracy and completeness of 4 of the Order. the accounting records, relevant to the preparation and 2. As required by section 143(3) of the Act, we report that: presentation of the Ind AS financial statements that give a true and fair view and are free from material misstatement, a) We have sought and obtained all the information whether due to fraud or error. and explanations which, to the best of our knowledge and belief were necessary for the Auditors’ Responsibility purposes of our audit; Our responsibility is to express an opinion on these Ind AS b) In our opinion, proper books of account as required financial statements based on our audit. In conducting our by law have been kept by the Company so far as audit, we have taken into account the provisions of the Act, appears from our examination of those books; the accounting and auditing standards and matters which are required to be included in the audit report under the c) The Balance Sheet, Statement of Profit and Loss provisions of the Act and Rules made thereunder. including other comprehensive income, the Statement of changes in equity and the Statement We conducted our audit of the Ind AS financial statements of Cash Flow dealt with by this report are in in accordance with the Standards on Auditing specified agreement with the books of account; under Section 143(10) of the Act. Those Standards require that we comply with ethical requirements and plan and d) In our opinion, the aforesaid Ind AS financial perform the audit to obtain reasonable assurance about statements comply with the accounting standards whether the Ind AS financial statements are free from specified under section 133 of the Act. material misstatement. e) On the basis of written representations received An audit involves performing procedures to obtain audit from the directors as on March 31, 2018 and taken evidence about the amounts and the disclosures in the Ind on record by the Board of Directors, none of the
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directors is disqualified as on March 31, 2018 from ii) The company did not have any long term contracts being appointed as a director in terms of sub- including derivative contracts for which there were section (2) of section 164 of the Act; any material foreseeable losses. f) With respect to the adequacy of the internal financial iii) There were no amounts which were required to be controls over financial reporting of the Company transferred to the Investor Education Protection and the operating effectiveness of such controls, Fund by the company. refer to our separate report in Annexure-B. Our report expresses an unmodified opinion on the For Chevuturi Associates adequacy and operating effectiveness of the Chartered Accountants company’s internal financial controls over financial Firm Registration No.000632S reporting.
g) With respect to the other matters to be included in (Raghunadha Rao Balineni) the Auditor’s Report in accordance with the Rule 11 Partner of the Companies (Audit and Auditors) Rules, 2014, in our opinion and to the basis of our information (Membership No: 028105) and according to the explanations given to us: Place:Camp: Guntur i) The company does not have any pending litigations Date : 28.05.2018 which would impact its financial position.
ANNEXURE-A TO THE INDEPENDENT AUDITORS’ REPORT The Annexure referred to in paragraph 1 under “Report on other legal and regulatory requirements” section of our report to the members of KALLAM TEXTILES LIMITED (Formerly known as Kallam Spinning Mills Limited) for the year ended March 31, 2018. We report that : clause (iv) of paragraph 3 of the Order regarding 1. In respect of its fixed assets: reporting on compliance with the provisions of section 185 and 186 of the Act with respect to the loans, a) The Company has maintained proper records investments and guarantees does not arise. showing full particulars including quantitative details and situation of fixed assets. 5. The company has borrowed interest free loans from directors and their relatives in pursuance of the b) According to the information and explanations stipulation imposed by Andhra Bank at the time of furnished to us, the Company has not physically lending and the amount outstanding against such verified its fixed assets during the year. However, borrowings on 31st March, 2018 was Rs.320.55 lakhs. the Company has adopted a phased programme Apart from the said amounts, the company has not of verification which, in our opinion, is reasonable accepted any deposits from the public or members. having regard to the size of the Company and the Hence the question of compliance with the directives nature of its assets. issued by Reserve Bank of India and the provisions of c) According to the information and explanations sections 73 to 76 or any other relevant provisions of given to us and on the basis of our examination of the Act and the rules framed there under does not the records of the company, the title deeds of apply. According to the information furnished to us, no immovable properties are held in the name of the order has been passed on the Company by the company. Company Law Board or National Company Law Tribunal or Reserve Bank of India or any Court or any 2. In respect of its inventories: other Tribunal for non-compliance with the provisions a) According to the information and explanations of sections 73 to 76 of the Act. furnished to us, the Company has physically 6. We have broadly reviewed the books of account and verified its inventories during the year and no records maintained by the Company pursuant to the material discrepancies were noticed on such rules made by the Central Government for the verification. In our opinion, the frequency of maintenance of cost records under section 148(1) of verification is reasonable. the Act and we are of the opinion that prima facie the 3. The Company has not granted any loans, secured or prescribed accounts and records have been made and unsecured to companies, firms or other parties covered maintained. However, we have not carried out a in the register maintained under section 189 of the Act. detailed audit of the same. Consequently, clauses (iii)(a),(b) and (c) of paragraph 7. a) According to the information furnished to us, the 3 of the Order are not applicable. Company is regular in depositing with appropriate 4. The company has not advanced any loans or made authorities, the undisputed statutory dues any investments or provided any guarantees during including Provident Fund, Employees’ State the year. Hence the reporting requirements in terms of Insurance, Income-tax, Value added tax, Service
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tax, Customs duty, Excise duty, Cess, GST and 12. The company is not a nidhi company. Accordingly any other statutory dues applicable to it. There reporting under provisions of para 3(xii) of the Order is were no undisputed statutory dues in arrears as at not applicable. the date of the Balance Sheet under report, for a 13. According to the information and explanations given to period of more than six months from the date they us and based on examination of records of the became payable. company, transactions with the related parties are in b) According to the information furnished to us and compliance with the provisions of section 177 and 188 records of the company examined by us, there of the Act where applicable and details of such were no amounts of Income tax, Value added tax, transactions have been disclosed in the financial Customs duty, Excise duty, GST and Service tax statements as required by the applicable accounting etc., have been disputed by the Company, and standards. hence were not remitted to the authorities 14. According to the information and explanations given to concerned at the date of the Balance Sheet under us and based on our examination of the records of the report. company, the company has not made any preferential 8. In our opinion and according to the information and allotment or private placement of shares or fully or explanations furnished to us by the Company, there partly convertible debentures of the company. were no defaults in repayment of dues to banks or 15. According to the information and explanations given to government. However, the company has not borrowed us and based on our examination of the records of the any loans from financial institutions, or raised any company, the company has not entered into non-cash funds by way of issue of debentures. transactions with directors or persons connected with 9. The company did not raise any money by way of initial them. Accordingly paragraph 3(xv) of the Order is not public offer or further public offer (including debt applicable. instruments) during the year. In respect of term loans 16. The company is not required to be registered under borrowed during the year from banks, the proceeds section 45-IA of the Reserve Bank of India Act, 1934. were applied for the purpose for which the said loans were raised. For Chevuturi Associates 10. According to the information and explanations given to Chartered Accountants us, no fraud by the company or any fraud on the Firm Registration No.000632S company by its officers or employees has been noticed or reported during the year. (Raghunadha Rao Balineni) 11. According to the information and explanation given to Partner us and based on examination of the records of the company, the company has provided remuneration for (Membership No: 028105) managerial personnel in accordance with the requisite Place:Camp: Guntur approvals mandated by the provisions of section 197 Date : 28.05.2018 read with schedule V of the Act.
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Annexure “B” to the Independent Auditors’ Report Report on the Internal Financial Controls over Financial Reporting under Clause (i) of Sub-section 3 of Section 143 of the Companies Act, 2013 ("the Act") We have audited the internal financial controls over financial Meaning of Internal Financial Controls over Financial Reporting reporting of KALLAM TEXTILES LIMITED (Formerly known A company's internal financial control over financial as Kallam Spinning Mills Limited ("the Company") as of reporting is a process designed to provide reasonable 31st March 2018 in conjunction with our audit of the Ind AS assurance regarding the reliability of financial reporting and financial statements of the Company for the year ended on the preparation of Ind AS financial statements for external that date. purposes in accordance with generally accepted accounting Management's Responsibility for Internal Financial Controls principles. A company's internal financial control over The Board of directors of the company is responsible for financial reporting includes those policies and procedures establishing and maintaining internal financial controls that (1) pertain to the maintenance of records that, in based on the internal control over financial reporting criteria reasonable detail, accurately and fairly reflect the established by the Company considering the essential transactions and dispositions of the assets of the company; components of internal control stated in the Guidance Note (2) provide reasonable assurance that transactions are on Audit of Internal Financial Controls over Financial recorded as necessary to permit preparation of Ind AS Reporting issued by the Institute of Chartered Accountants financial statements in accordance with generally accepted of India ('ICAI'). These responsibilities include the design, accounting principles, and that receipts and expenditures of implementation and maintenance of adequate internal the company are being made only in accordance with financial controls that were operating effectively for ensuring authorisations of management and directors of the the orderly and efficient conduct of its business, including company; and (3) provide reasonable assurance regarding adherence to company's policies, the safeguarding of its prevention or timely detection of unauthorised acquisition, assets, the prevention and detection of frauds and errors, use, or disposition of the company's assets that could have the accuracy and completeness of the accounting records, a material effect on the financial statements. and the timely preparation of reliable financial information, Limitations of Internal Financial Controls Over Financial Reporting as required under the Companies Act, 2013. Because of the inherent limitations of internal financial Auditor’s Responsibility controls over financial reporting, including the possibility of Our responsibility is to express an opinion on the internal collusion or improper management override of controls, financial controls over financial reporting of the company material misstatements due to error or fraud may occur and based on our audit. We conducted our audit in accordance not be detected. Also, projections of any evaluation of the with the Guidance Note on Audit of Internal Financial internal financial controls over financial reporting to future Controls over Financial Reporting (the "Guidance Note") periods are subject to the risk that the internal financial issued by ICAI and the Standards on Auditing prescribed control over financial reporting may become inadequate under section 143(10) of the Companies Act, 2013, to the because of changes in conditions, or that the degree of extent applicable to an audit of internal financial controls. compliance with the policies or procedures may deteriorate. Those Standards and the Guidance Note require that we Opinion comply with ethical requirements and plan and perform the In our opinion, to the best of our information and according audit to obtain reasonable assurance about whether to the explanations given to us, the Company has, in all adequate internal financial controls over financial reporting material respects, an adequate internal financial controls was established and maintained and if such controls system over financial reporting and such internal financial operated effectively in all material respects. controls over financial reporting were operating effectively Our audit involves performing procedures to obtain audit as at 31 March 2018, based on the internal control over evidence about the adequacy of the internal financial financial reporting criteria established by the Company controls system over financial reporting and their operating considering the essential components of internal control effectiveness. Our audit of internal financial controls over stated in the Guidance Note on Audit of Internal Financial financial reporting included obtaining an understanding of Controls Over Financial Reporting issued by the Institute of internal financial controls over financial reporting, assessing Chartered Accountants of India. the risk that a material weakness exists, and testing and For Chevuturi Associates evaluating the design and operating effectiveness of Chartered Accountants internal control based on the assessed risk. The procedures selected depend on the auditor's judgment, including the Firm Registration No.000632S assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. (Raghunadha Rao Balineni) We believe that the audit evidence we have obtained is Partner sufficient and appropriate to provide a basis for our audit opinion on the Company's internal financial controls system (Membership No: 028105) over financial reporting. Place:Camp: Guntur Date : 28.05.2018
Independent Auditors Report 111
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KALLAM TEXTILES LIMITED (Formerly known as Kallam Spinning Mills Limited) ST BALANCE SHEET AS AT 31 MARCH, 2018 (Amount in Rs.) As at As at As at Particulars Note No. 31st March, 2018 31st March, 2017 1st April, 2016 ASSETS 1 Non-Current Assets (a) Property, Plant and Equipment 4 4,15,68,45,036 3,57,37,55,113 3,56,49,33,448 (b) Capital Work-in-progress 4 5,90,36,453 4,48,31,391 4,60,36,613 (c) Financial Assets (i) Loans 5 6,45,05,945 6,25,02,865 4,91,18,983 (ii)Other financial assets 6 - - - (d) Other Non-current Assets 7 14,64,073 2,24,60,945 8,02,296 Total Non-Current assets 4,28,18,51,507 3,70,35,50,314 3,66,08,91,340 2 Current Assets (a) Inventories 8 92,87,11,656 87,21,84,599 75,70,79,176 (b) Financial Assets (i) Trade Receivables 9 22,77,96,003 31,06,24,716 24,34,57,242 (ii) Cash and cash equivalents 10 75,99,878 78,14,521 17,89,545 (iii) Other Bank balances 10 54,01,676 55,29,125 29,61,514 (iv) Loans 5 5,12,161 19,03,078 22,73,994 (v) Other financial assets 6 4,500 17,390 17,390 (c) Other Current assets 7 45,64,26,590 29,56,40,549 16,11,92,349 Total Current assets 1,62,64,52,464 1,49,37,13,978 1,16,87,71,210 Total Assets 5,90,83,03,971 5,19,72,64,292 4,82,96,62,550 EQUITY AND LIABILITIES 1 Equity (a) Equity Share Capital 11 8,56,38,750 6,85,11,000 6,85,11,000 (b) Other Equity 12 2,03,76,16,494 1,40,15,12,462 1,28,20,96,483 2,12,32,55,244 1,47,00,23,462 1,35,06,07,483 Liabilities 2 Non-current liabilities (a) Financial Liabilities (i) Long-term borrowings 13 1,75,60,68,613 1,94,30,40,847 1,84,14,49,995 (ii) Other financial liabilities 14 - - - (b) Provisions 15 1,24,81,130 1,03,49,650 71,41,210 (c ) Deferred Tax Liabilities (Net) 16 28,38,06,725 15,80,40,824 12,41,39,662 (d) Other non-current liabilities 17 8,74,37,870 9,80,86,333 9,00,49,460 Total Non-current liabilities 2,13,97,94,338 2,20,95,17,654 2,06,27,80,327 3 Current liabilities (a) Financial Liabilities (i) Short-term borrowings 18 1,16,05,40,476 1,15,28,17,033 1,06,25,27,641 (ii) Trade payables 19 8,38,55,898 2,80,45,069 5,60,91,310 (iii) Other financial liabilities 14 35,08,37,434 28,50,43,044 26,92,36,305 (b) Other current liabilities 17 1,81,56,070 1,06,79,980 97,82,392 (c ) Provisions 15 6,32,691 41,322 31,027 (d) Current tax Liabilities (Net) 20 3,12,31,820 4,10,96,728 1,86,06,065 Total Current liabilities 1,64,52,54,388 1,51,77,23,176 1,41,62,74,740 Total Liabilities 3,78,50,48,728 3,72,72,40,830 3,47,90,55,067 Total Equity and Liabilities 5,90,83,03,971 5,19,72,64,292 4,82,96,62,550 Corporate Information 1 Significant accounting policies 2 Note on Adoption of IND AS 3
As per our report of even date For and on behalf of Board of Directors For CHEVUTURI ASSOCIATES., Chartered Accountants P.VENKATESWARA REDDY Firm Regn no.000632S Managing Director
G.V. KRISHNA REDDY RAGHUNADHA RAO BALINENI Joint Managing Director Partner Membership No: 028105 M.V.SUBBA REDDY Chief Financial Officer Place : Guntur Date : 28-05-2018 Place : Chowdavaram, Guntur Date : 28-05-2018
Balance Sheet 112
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KALLAM TEXTILES LIMITED (Formerly known as Kallam Spinning Mills Limited) STATEMENT OF PROFIT AND LOSS FOR THE YEAR ENDED 31ST MARCH, 2018 (Amount in Rs.) Note Year ended Year ended Particulars No. 31st March, 2018 31st March, 2017 I Revenue from Operations 21 3,12,64,26,542 2,88,63,17,329 II Other Income 22 1,13,22,728 1,01,23,693 III Total Income (I+II) 3,13,77,49,270 2,89,64,41,022 IV Expenses Cost of Material Consumed 23 1,70,28,44,603 1,58,01,38,922 Purchases of Stock-in-Trade 24 - - Changes in inventories of Finished goods and work-in-progress 25 (3,84,98,189) (11,81,21,634) Employee benefits expense 26 20,86,36,897 18,04,95,661 Finance costs 27 21,88,33,106 21,98,66,793 Depreciation and Amortization expense 28 14,19,46,320 13,64,89,377 Other expenses 29 69,33,02,560 68,57,71,056 Total Expenses (IV) 2,92,70,65,297 2,68,46,40,175 V Profit before exceptional items and tax (III-IV) 21,06,83,973 21,18,00,847 VI Exceptional Items - - VII Profit before tax (V-VI) 21,06,83,973 21,18,00,847 VIII Tax expense: 20 Current tax 4,60,26,739 5,00,00,000 Deferred tax (Net of MAT Credit Entitlement) 79,27,680 3,39,01,162 IX Profit for the year (VII-VIII) 15,67,29,554 12,78,99,685 X Other Comprehensive Income A. Items that will not be re-classified to statement of Profit and loss (Net of tax) a) Remeasurement of land at fair value 28,44,38,715 - b) Revaluation surplus on measurement of buildings at fair value 33,72,20,182 - c) Remeasurement of defined employee benefit plans 9,27,375 (2,37,883) d) Deferred Tax charge on above (11,78,38,220) - Total Other comprehensive income 50,47,48,052 (2,37,883) XI Total Comprehensive Income for the year (IX+X) 66,14,77,606 12,76,61,802 XII Earnings per Share - Basic and Diluted 43 3.66 2.99 (Profit after tax and before OCI/Wt. average number of shares)
As per our report of even date For and on behalf of Board of Directors For CHEVUTURI ASSOCIATES., Chartered Accountants P.VENKATESWARA REDDY Firm Regn no.000632S Managing Director
G.V. KRISHNA REDDY RAGHUNADHA RAO BALINENI Joint Managing Director Partner Membership No: 028105 M.V.SUBBA REDDY Chief Financial Officer Place : Guntur Date : 28-05-2018 Place : Chowdavaram, Guntur Date : 28-05-2018
Statement of Profit & Loss 113
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KALLAM TEXTILES LIMITED (Formerly known as Kallam Spinning Mills Limited) CASH FLOW STATEMENT FOR THE YEAR ENDED 31st MARCH 2018 2017-18 2016-17 PARTICULARS Rs. Rs. CASH FLOW FROM OPERATING ACTIVITIES Net Profit before tax 21,06,83,973 21,18,00,847 Add/Less: Adjustments for Depreciation 14,19,46,320 13,64,89,377 Interest expense 21,88,33,106 21,98,66,793 Interest income (42,73,465) (32,24,480) Amortisation of Govt. grants (45,91,242) (44,05,796) Remeasurement of employee defined benefit plans 9,27,375 (2,37,883) Profit on sale of assets - (1,43,785) Loss on sale of assets 4,64,465 3,42,081 Operating profit before working capital changes 56,39,90,532 56,04,87,154 Add/Less: Adjustments for working capital Inventories (5,65,27,057) (11,51,05,423) Trade and other receivables (5,75,59,729) (23,62,87,289) Trade and other payables 6,24,22,697 (3,99,71,955) Cash generated from operations 51,23,26,443 16,91,22,487 Less: Direct taxes paid 5,98,64,908 2,75,09,337 Net cash from operating activities 45,24,61,535 14,16,13,150
CASH FLOW FROM INVESTING ACTIVITIES Purchase of fixed assets and Capital WIP (Net of subsidy) (11,61,28,193) (13,91,92,436) Proceeds from sale of fixed assets 26,26,683 76,17,770 Margin Money deposit with banks and other balances 1,27,449 (25,67,611) Interest received 42,73,465 32,24,480 Net cash used in Investing activities (10,91,00,596) (13,09,17,797)
CASH FLOW FROM FINANCING ACTIVITIES Proceeds from/(Repayment of) borrowings (12,04,96,653) 22,34,42,238 Dividend and tax paid (82,45,823) (82,45,823) Interest and finance charges (21,48,33,106) (21,98,66,793) Net cash from/(Used in) financing activities (34,35,75,582) (46,70,378)
Net Increase/(Decrease) in cash and cash equivalents (2,14,643) 60,24,975
Cash and cash equivalents at the beginning of the Year 78,14,521 17,89,545 Cash and cash equivalents at the end of the Year (Refer Note.10) 75,99,878 78,14,521 Net increase in cash and cash equivalents (2,14,643) 60,24,975 Changes in Liability arising from Financing activities Opening balance as on Non-Cash Closing balance as on PARTICULARS Cash inflow /(Out flow) 1st April 2017 changes (forex) 31st March 2018 Long term borrowings (Refer Note 13) 2,13,79,55,659 (12,82,20,096) - 2,00,97,35,563 Short term borrowings (Refer Note 18) 1,15,28,17,033 77,23,443 - 1,16,05,40,476
As per our report of even date For and on behalf of Board of Directors For CHEVUTURI ASSOCIATES., Chartered Accountants P.VENKATESWARA REDDY Firm Regn no.000632S Managing Director
G.V. KRISHNA REDDY RAGHUNADHA RAO BALINENI Joint Managing Director Partner Membership No: 028105 M.V.SUBBA REDDY Chief Financial Officer Place : Guntur Date : 28-05-2018 Place : Chowdavaram, Guntur Date : 28-05-2018
Cash Flow Statement 114
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KALLAM TEXTILES LIMITED (Formerly known as Kallam Spinning Mills Limited) STATEMENT OF CHANGES IN EQUITY AS AT 31ST MARCH, 2018 A. Equity share capital Particulars No’s INR As at 1st April, 2016 68,51,100 6,85,11,000 Changes in equity during the year:- Sub-division of 1 equity of Rs.10/ each into 5 equity of Rs.2/- each 3,42,55,500 - As at 31st March, 2017 3,42,55,500 6,85,11,000 Changes in equity during the year:- Bonus shares issued during the year 85,63,875 1,71,27,750 As at 31st March, 2018 4,28,19,375 8,56,38,750
Statement of Changes in Equity 115
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B. Other Equity Items of Other Reserves and Surplus Comprehensive Income Particulars Actuarial Total Investment General Retained Revaluation Revaluation Gains/ Subsidy Reserve Earnings surplus surplus (Losses) Balance at the beginning of reporting period - 1st April, 1,47,00,000 1,60,36,486 64,52,08,955 - - - 67,59,45,441 2016 - as per IGAAP Ind AS adjustments as per Ind AS 101:- Investment subsidy treated as -1,47,00,000 - 44,18,617 - -1,02,81,383 Government grant - Proposed Dividend and - - 82,45,823 - - 82,45,823 Dividend tax Increase in carrying value of land on adoption of revaluation - - - 60,81,86,602 - - 60,81,86,602 model on transition date transfered to retained earnings Balance at the beginning of reporting period - 1st April, - 1,60,36,486 65,78,73,395 60,81,86,602 - - 1,28,20,96,483 2016 - As per Ind AS Add: Profit for the year 16-17 - - 12,78,99,685 - - 12,78,99,685 Other Comprehensive Income - - - - -2,37,883 -2,37,883 Total Comprehensive Income 12,78,99,685 - - -2,37,883 12,76,61,802 for the year Less: Appropriations: Final Dividend for the year 68,51,100 - 68,51,100 2015-16 Dividend Distribution tax 13,94,723 - 13,94,723 Balance at the end of reporting - 1,60,36,486 77,75,27,257 60,81,86,602 - -2,37,883 1,40,15,12,462 period - 31st March, 2017 Add: Profit for the year 17-18 - - 15,67,29,554 0 15,67,29,554 Other Comprehensive Income - 62,16,58,897 9,27,375 62,25,86,272 Less: Deferred tax on OCI -11,78,38,220 -11,78,38,220 Total Comprehensive Income 15,67,29,554 50,38,20,677 9,27,375 66,14,77,606 for the year
Less: Appropriations Utilised for issue of bonus 1,71,27,751 1,71,27,751 shares Proposed Dividend and Dividend tax for the year 82,45,823 82,45,823 2016-17 Transfer to General Reserve - - - 0 - Balance at the end of reporting - 1,60,36,486 90,88,83,237 60,81,86,602 50,38,20,677 6,89,492 2,03,76,16,494 period - 31st March, 2018
Statement of Changes in Equity 116
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COMPANY OVERVIEW AND SIGNIFICANT conformity with Ind AS requires management of the ACCOUNTING POLICIES Company to make judgments, estimates and assumptions that affect the reported amounts of assets Note no.1 and liabilities, revenues and expenses and disclosures
I. CORPORATE INFORMATION relating to the contingent liabilities and commitments. Kallam Textiles Limited (Formerly known as "Kallam The management believes that the estimates used in Spinning Mills Limited") incorporated on 18th February, preparation of the financial statements are prudent and 1992. It is a leading textile company engaged in the reasonable. Uncertainty about these assumptions and business of Manufactuirng of Cotton Yarn, Dyed Yarn, Grey Fabric and Dyed Fabric. The Company has its Corporate estimates could result in outcomes that require a office at Chowdavaram, Guntur. material adjustment to the carrying amount of assets or liabilities affected in future periods. Note No : 2 II. BASIS OF PREPARATION AND SIGNIFICANT The following are the critical judgements and estimates ACCOUNTING POLICIES that have been made in the process of applying the i) Basis of preparation company’s accounting policies that have the most a) Statement of compliance significant effect on the amounts recognized in the financial statements. In accordance with the notification issued by the Ministry of Corporate affairs, the company has adopted i) Depreciation and useful lives of property, plant and Indian Accounting Standards (referred to as “Ind AS”) equipment and intangible assets: notified under the Companies (Indian Accounting Property, Plant and Equipment represent a significant Standards) Rules, 2015 and Companies (Indian Accounting proportion of the asset base of the Company. The Standards) Amendment Rules, 2016 w.e.f 1st April, charge in respect of periodic depreciation is derived 2017. Previous periods financial statements have after determining an estimate of an asset’s expected been restated to Ind AS. In accordance with Ind AS useful life and the expected residual value at the end of 101 “First time adoption of Indian Accounting its life. The useful lives and residual values of Standards”, the company has presented a reconciliation from the presentation of financial statements under Company’s assets are determined by the management Accounting standards notified under the Companies at the time the asset is acquired and reviewed (Accounting Standards) Rules, 2006 (“Previous periodically, including at each financial year end. The GAAP”) to Ind AS of Shareholders’ equity as at 1st lives are based on historical experience with similar April, 2016 and 31st March, 2017 and Statement of assets as well as anticipation of future events, which Profit and loss account for the year ended 31st March, may impact their life, such as changes in technical or 2017. These financial statements have been prepared commercial obsolescence arising from changes or in accordance with Ind AS as notified by Ministry of improvements in production or from a change in market Corporate Affairs pursuant to section 133 of the demand of the product or service output of the asset. Companies Act, 2013 read with Rule 3 of the Companies The Company also engages third party qualified (Indian Accounting Standards) Rules, 2015 and valuers to ascertain the fair value of the Property, plant Companies (Indian Accounting Standards) Amendment and equipment which requires estimation and judgment Rules, 2016. in determining the fair values which can be subject to b) Basis of measurement change. These financial statements are prepared in accordance ii) Recoverability of trade receivable: with the Indian Accounting Standards (Ind AS) under Judgements are required in assessing the recoverability historical cost convention on accrual basis of accounting of overdue trade receivables and determining whether except for certain financial instruments which are a provision against those receivables is required. measured at fair values, the provisions of the Factors considered include the credit rating of the Companies Act, 2013 (‘the Act’) and guidelines issued counterparty, past history of receivables, the amount by the Securities and Exchange Board of India (SEBI). and timing of anticipated future payments and any Historical cost is generally based on the fair value of possible actions that can be taken to mitigate the risk of the consideration given in exchange for goods and non-payment. services. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly iii) Fair value measurement of financial instruments: transaction between market participants at the Some of the Company's assets and liabilities are measurement date. measured at fair value for financial reporting purposes. Accounting policies have been consistently applied In estimating the fair value of an asset or liability, the except a newly issued accounting standard is initially Company uses market-observable data to the extent adopted or a revision to an existing accounting standard available. Where Level 1 inputs are not available, the requires a change in the accounting policy hitherto in fair value is measured using valuation techniques, use. including the discounted cash flow model, which c) Use of estimates involves various judgments and assumptions. The Company also engages third party qualified valuers to The preparation of the financial statements in perform the valuation in certain cases. The
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appropriateness of valuation techniques and inputs to reported amount of revenues and expenses for the the valuation model are reviewed by the Management. reporting period. Specifically, the Company estimates the probability of collection of accounts receivable by iv) Provisions: analysing historical payment patterns, customer Provisions and liabilities are recognized in the period concentrations, customer credit-worthiness and current when it becomes probable that there will be a future economic trends. If the financial condition of a customer outflow of funds resulting from past operations or deteriorates, additional allowances may be required. events and the amount of cash outflow can be reliably The judgments, estimates and underlying assumptions estimated. The timing of recognition and quantification are made with the management's best knowledge of of the liability require the application of judgement to the business environment and are reviewed on an on existing facts and circumstances, which can be subject going basis. Accounting estimates could change from to change. The carrying amounts of provisions and period to period. Actual results could differ from these liabilities are reviewed regularly and revised to take estimates. Changes in estimates are reflected in the account of changing facts and circumstances. financial statements in the period in which changes are v) Impairment of non-financial assets: made and, if material, their effects are disclosed in the The Company assesses at each reporting date whether notes to the financial statements. there is an indication that an asset may be impaired. If ii) Significant accounting policies any indication exists, the Company estimates the asset’s recoverable amount. An asset’s recoverable a) PROPERTY, PLANT AND EQUIPMENT amount is the higher of an asset’s or Cash Generating An item of Property, Plant and Equipment that qualified Units (CGU’s) fair value less costs of disposal and its as an asset is measured at initial recognition at Cost. value in use. It is determined for an individual asset, Property, plant and equipment are stated at cost/fair unless the asset does not generate cash inflows that values less accumulated depreciation and impairment, are largely independent of those from other assets or a if any. Costs directly attributable to acquisition are groups of assets. Where the carrying amount of an capitalized until the property, plant and equipment are asset or CGU exceeds its recoverable amount, the ready for use, as intended by the management. asset is considered impaired and is written down to its The company, as per the option given under Ind AS-101 recoverable amount. In assessing value in use, the “First time adoption of Indian Accounting Standards” estimated future cash flows are discounted to their elected to continue with the carrying value of all its fixed present value using pre-tax discount rate that reflects assets arrived under previous GAAP as on 1st April, current market assessments of the time value of money 2016 as deemed cost at the date of transition for all the and the risks specific to the asset. In determining fair items of Property, plant and equipment except in case of value less costs of disposal, recent market transaction land where the company opted for fair value are taken into account, if no such transactions can be measurement. The excess amount of fair value over its identified, an appropriate valuation model is used. carrying value as per books of account amounting to vi) Impairment of financial assets: Rs.60.82 crores is credited to revaluation surplus and shown under reserves and surplus. The impairment provisions for financial assets are based on assumptions about risk of default and The residual values of the assets as estimated by the expected cash loss rates. The Company uses management at the time of capitalization continues be judgement in making these assumptions and selecting the same as on 1st April, 2016. the inputs to the impairment calculation, based on Subsequent to the measurement of assets at deemed Company’s past history, existing market conditions as cost on date of transition, the company, based on well as forward looking estimates at the end of each Independent technical valuers report, revalued its reporting period. assets of Land and buildings on 31.3.2018 and excess vii) Income Taxes: of carrying value of land Rs.28.45 crores and of buildings Rs.33.72 crores is recognized in Other The Company’s tax jurisdiction is India. Significant comprehensive income and accumulated under equity judgments are involved in estimating budgeted profits under the head Revaluation surplus. The fair values of for the purpose of paying advance tax, determining the land has been arrived out by technical valuer based on provision for income taxes, including amount expected prevailing market rates by considering the existing to be paid/ recovered for uncertain tax positions. market conditions and in case of buildings under viii) Defined benefit obligations: replacement model. The Company uses actuarial assumptions viz., The company identifies and determines cost of each discount rate, mortality rates, salary escalation rate part of PPE separately, if the part has a cost which is etc., to determine such employee benefit obligations. significant to the total cost of that items of PPE and has ix) Other estimates: useful life that is materially different from that of the remaining items. The preparation of financial statements involves estimates and assumptions that affect the reported Advances paid for acquisition of Property, plant and amount of assets, liabilities, disclosure of contingent equipment outstanding at each balance sheet date is liabilities at the date of financial statements and the classified as capital advances under other non-current
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assets. Cost of the assets not put to use before such ii) Non financial assets date are disclosed under ‘Capital Work-in-progress’. Property, plant and equipment and intangible assets Any subsequent expenditure relates to property, plant with finite life are evaluated for recoverability whenever and equipment is capitalized only when it is probable there is any indication that their carrying amount may that future economic benefits associated with these will not be recoverable. If any such indication exists, the flow to the company and the cost of the item can be recoverable amount (i.e higher of the fair value less cost measured reliably. Repairs and maintenance costs are of sale and value in use) is determined on an individual recognized in the statement of profit and loss when asset basis unless the asset does not generates cash incurred. Items of spare parts are recognized as flows that are largely independent of those from other Property, plant and equipment when they meet the assets. In such cases, the recoverable amount is definition of Property, plant and equipment. The cost determined for the cash generating unit (CGU) to which and related depreciation are eliminated from the the asset belongs. If the recoverable amount of an property, plant and equipment upon sale or retirement asset or CGU is estimated to be less than its carrying of the asset and the resultant gain or losses are amount, the carrying amount of the asset or CGU is recognized in statement of profit and loss. reduced to its recoverable amount. An impairment loss b) BORROWING COSTS is recognized in the statement of profit and loss. Borrowing Costs, that are directly attributable to the An impairment loss is reversed in the statement of acquisition or construction of assets, that necessarily profit and loss if there has been a change inthe take a substantial period of time to get ready for its estimates used to determine the recoverable amount intended use, are capitalised as part of the cost of and the carrying amount of the asset is increased to its qualifying asset when it is possible that they will result revised recoverable amount subject to maximum of in future economic benefits and the cost can be carrying amount. measured reliably. f) INVENTORIES c) DEPRECIATION i. Textile division : The company has computed depreciation on fixed assets Finished stocks are valued at cost or net realizable based on the useful lives as specified in Schedule II of value which ever is lower. Companies Act, 2013 under straight line method. Cotton Waste is valued at Net realizable Value. Depreciation methods, useful lives and residual values are reviewed periodically at the end of each financial Work-in-progress, Raw materials, stores and spares year with the effect of any change in estimate accounted are valued at cost except where net realizable value of for on a prospective basis. the finished goods they are used in is less than the cost of finished goods and in such an event, if the d) GOVERNMENT GRANTS replacement cost of such materials etc., is less than Government grants are not recognized until there is their book values, they are valued at replacement cost. reasonable assurance that the company will comply ii. Power Division : with the conditions attaching to them and that the grants will be received. a) Stock of power (Banked with APTRANSCO) is valued at cost or net realizable value whichever is Government grants related to revenue are recognized lower. on a systematic basis in the Statement of Profit and Loss over the periods necessary to match them with g) REVENUE RECOGNITION the related costs which they are intended to Revenue is recognized to the extent that it is probable compensate. When the grant relates to an asset, it is that the economic benefits will flow to the company and recognized as deferred revenue in the Balance sheet the revenue can be reliably measured. and transferred to the statement of Profit and Loss on a systematic and rational basis over the useful lives of i)Revenue from sale of products is recognised when the related assets. the goods are delivered and titles have passed i.e time when the risks and rewards of ownership are transferred e) IMPAIRMENT OF ASSETS to the buyer under the terms of the contract and the i) Financial assets (other than at fair value) company retains no effective control over the goods sold. Revenue is measured at the fair value of the The company assesses at each balance sheet date consideration taking into account contractually defined whether a financial asset or a group of financial assets terms of payment. Revenue is reduced for discounts, is impaired. Ind AS 109 requires expected credit losses rebates and other similar allowances. to be measured through a loss allowance. The company recognizes lifetime expected losses for all trade When there is any uncertainty as to the measurement receivables that do not constitute a financing transaction. or collectability of consideration, revenue recognition to For all other financial assets, expected credit losses are the extent of amount of uncertainty is postponed until measured at an amount equal to the 12 month expected such uncertainty is resolved. credit losses or at an amount equal to the life time ii) GST and other taxes is not received by the company expected credit losses if the credit risk on the financial on its own account as it is collected on behalf of asset has increased significantly since initial recognition. government. Accordingly it is excluded from revenue.
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iii) Inter unit transfer of goods is accounted at market expenses which relate to the enterprise as a whole and price at which the similar goods are purchased from are not allocable to segments on a reasonable basis, external party. have been included under “Unallocated expenses”. iv) Interest income is recognized using effective interest j) RETIREMENT BENEFITS method. The company provides retirement benefit in the form of h) TAXES ON INCOME provident fund and group gratuity. Contributions to the Income tax expense comprises the sum of tax currently Provident Fund, a defined contribution scheme, is payable and deferred tax. Income tax expense is made at the prescribed rates to the provident fund recognized in net profit in the statement of profit and commissioner and is charged to the Profit and Loss loss except to the extent that it relates to items account. There is no other obligation other than the recognized directly in equity, in which case it is contribution payable. recognized in other comprehensive income. The Liability for group gratuity, which is unfunded, is Current tax is determined at the amount expected to be provided based on actuarial valuation as per the Projected paid to or recovered from the tax authorities, using the Unit Credit Method at the end of the each year. tax rates and tax laws that have been enacted or The Liability for Leave encashment being short term substantively enacted by the balance sheet date. benefits, is accounted on accrual of said liability. Deferred income tax assets and liabilities are recognized k) FOREIGN EXCHANGE TRANSACTIONS for all temporary differences arising between the tax The functional currency of the company is the Indian bases of assets and liabilities and their carrying amounts rupee and the financial statements are presented in in the financial statements. The carrying amount of Indian rupee. deferred tax assets is reviewed at the end of each year and reduced to the extent that it is no longer probable Transactions in foreign currency are initially accounted that sufficient taxable profits will be available to allow all at the exchange rate prevailing on the date of the or part of the assets to be recovered. transaction, and adjusted appropriately, with the difference in the rate of exchange arising on actual Deferred income tax assets and liabilities are measured receipt/payment during the year. using tax rates and tax laws that have been enacted or subsequently enacted by the balance sheet date and At each Balance Sheet date are expected to apply to taxable income in the years in i) Foreign currency denominated monetary items are which those temporary differences are expected to be translated into the relevant functional currency at recovered or settled. The effect of changes in tax rates exchange rate at the balance sheet date. The gains on deferred income tax assets and liabilities are and losses resulting from such translations are included recognized as income or expense in the year of in net profit in the statement of profit and loss. enactment. A deferred income tax asset is recognized to the extent that it is probable that future taxable profit ii) Foreign currency denominated non-monetary items will be available against which the deductible temporary are reported using the exchange rate at which they differences and tax losses can be utilized. were initially recognized. Minimum Alternate Tax (MAT) paid in accordance with Transaction gains or losses realized upon settlement of the tax laws, which gives future economic benefits in foreign currency transactions are included in statement the form of adjustment to future income tax liability, is of profit and loss. considered as deferred tax asset if there is convincing l) PROVISIONS, CONTINGENT LIABILITIES AND evidence that the company will pay normal Income Tax. CONTINGENT ASSETS Accordingly, MAT is recognized as an asset in the Provisions are recognised when there is a present balance sheet when it is probable that future economic obligation as a result of past event, it is probable that benefits associated with it will flow to the Company. the company will be required to settle the obligation i) SEGMENT REPORTING and a reliable estimate of the amount of obligation can The operating segments of the entity are identified based be made. Where the effect of time value of money is on the revenues earned and expenses incurred whose material, the amount of provision is the present value of operating results are regularly reviewed by the entity’s the expenditure to be required to settle the obligation. decision maker to make decisions about resources to be These estimates are reviewed at each reporting date allocated to the segment and assess its performance for and adjusted to reflect the current best estimates. which discrete financial information is available. Contingent liability is disclosed for (i) Possible obligation The accounting policies adopted for segment reporting which will be confirmed only by future events not wholly are in line with the accounting policies of the Company. within the control of the Company or (ii) Present obligations arising from past events where it is not Inter segment revenue has been accounted for based probable that an outflow of resources will be required to on the market related prices. settle the obligation or a reliable estimate of the amount Revenue and expenses have been identified to of the obligation cannot be made. The company does segments on the basis of their relationship to the not recognise contingent liabilities but the same are operating activities of the segment. Revenue and disclosed in the notes.
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Contingent assets are not recognized in the financial interest is the rate that exactly discounts estimated statements since this may result in the recognition of future cash payments through the expected life of the income that may never be realized. financial liability to the net carrying amount on initial recognition. m) FINANCIAL INSTRUMENTS De-recognition of financial liability Initial recognition: The company recognizes financial assets and liabilities The company de-recognises financial liabilities when when it becomes a party to the contractual provisions of the company’s obligations are discharged, cancelled or the instruments. All financial assets and liabilities are expired. The difference between the initial carrying recognized at fair value on initial recognition. Transaction amount of the financial liabilities and their redemption costs that are directly attributable to the acquisition or value is recognized in the statement of profit and loss issue of financial assets and liabilities (other than the over the contractual terms using the effective interest financial assets and liabilities at fair value through profit method. and loss) are added to or deducted from the fair value of n) EARNING PER EQUITY SHARE financial assets and liabilities, as appropriate, on initial Basic earning per equity share is computed by dividing the recognition. Transaction costs that are directly net profit attributable to the equity shareholders of the attributable to the acquisition or issue of financial assets company by the weighted average number of equity and liabilities at fair value through profit or loss are shares during the period. The company did not have any recognized immediately in profit or loss. potentially dilutive securities in any of the years presented. Subsequent measurement: The number of equity shares are adjusted retrospectively i) Financial assets carried at amortized cost: for all periods presented for any share splits and bonus A financial asset is subsequently measured at shares issues including for changes effected prior to the amortized cost if it is held within a business model approval of financial statements by the board of directors. whose objective is to hold the asset in order to collect o) CASH FLOW STATEMENT contractual cash flows, and the contractual terms of the Cash flows are reported using indirect method whereby financial asset give rise on specified dates tocash the profit for the period is adjusted for the effects of flows that are solely payments of principal and interest transactions of a non-cash nature, any deferrals or on the principal amount outstanding. accruals of past or future operating cash receipts or (ii) Financial assets at fair value through other payments and items of income or expenses associated comprehensive income. with investing or financing cash flows. The cash flows A financial asset is subsequently measured at fair value from operating, investing and financial activities of the through other comprehensive income if it is held within a company are segregated. business model whose objective is achieved by both p) DIVIDENDS collecting contractual cash flows and selling financial Final dividends on shares are recorded as a liability on assets and the contractual terms of the financial asset the date of approval by the shareholders i.e the year in give rise on specified dates to cash flows that are solely which the dividends are approved and interim dividends payments of principal and interest on the principal are recorded as a liability on the date of declaration by amount outstanding. Further, in cases where the the company’s board of directors. Company has made an irrevocable election based on its business model, for its investments which are classified III. Standards Issued but not effective as equity instruments, the subsequent changes in fair On March 28, 2018, the Ministry of Corporate Affairs value are recognized in other comprehensive income. (MCA) has notified Ind AS 115 – Revenue from Contract (iii) Financial assets at fair value through profit or loss with Customers and certain amendments to existing Ind AS. These amendments shall be applicable to the A financial asset which is not classified in any of the company from April 01, 2018. above categories is subsequently fair valued through profit or loss. a) Issue of Ind AS 115 – Revenue from Contracts with Customers De-recognition of financial asset Ind AS 115 will supersede the current revenue recognition The company de-recognises financial assets when the standard Ind AS-18 Revenue, Ind AS-11 Construction contractual right to the cash flows from the asset Contracts and the related interpretations. Ind AS-115 expires or when it transfers the financial asset and provides a single model of accounting for revenue arising substantially all the risks and rewards of ownership of from contracts with customers based on the identification the asset to another party. and satisfaction of performance obligations. (iv) Financial liabilities b) Amendment to Existing Ind AS Financial liabilities are subsequently carried at The MCA has also carried out amendments in some of amortized cost using the effective interest method. The the existing standards but application of said standards effective interest method is a method of calculating the are not expected to have any significant impact on the amortization cost of a financial liability and of allocating Company’s Financial Statements. interest expense over the relevant period. The effective
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KALLAM TEXTILES LIMITED (Formerly known as Kallam Spinning Mills Limited) Note no:3 FIRST TIME ADOPTION OF IND AS:
The company has adopted Indian Accounting Standards (Ind AS) as notified by the Ministry of Corporate Affairs with effected from 1st April, 2017 with transition date of 1st April, 2016. These financial statements for the year ended 31st March, 2018 are the first Ind As financial statements. For all periods upto and including the year ended 31st March, 2017, the company prepared its financial statements in accordance with the accounting standards notified under section 133 of the Companies Act, 2013 read together with paragraph 7 of the Companies (Accounts) Rules, 2014 (Previous GAAP).
The adoption of Ind AS has been carried out in accordance with Ind AS 101, First time adoption of Indian Accounting Standards requires that all Ind AS standards and interpretations that are issued and effective for the first Ind AS financial statements be applied retrospectively and consistently for all financial years presented. Accordingly, the company has prepared financial statements which comply with Ind AS for the year ended 31st March, 2018 together with the comparative information as at and for the year ended 31st March, 2017 and the opening Ind AS balance sheet as at 1st April, 2016, the date of transition to Ind AS.
In preparing these Ind AS financial statements, the company has availed certain exemptions and exceptions in accordance with Ind AS 101. The resulting difference between the carrying values of the assets and the liabilities in the financial statements as at the transition date under Ind AS and previous GAAP have been recognized directly in equity.
A. Exceptions from retrospective application.
(i) Estimates exception: Upon an assessment of the estimates made under Previous GAAP, the Company has concluded that there was no necessity to revise such estimates under Ind AS except where estimates were required by Ind AS and not required by Previous GAAP.
(ii) Classification and measurement of financial assets: The Company has determined the classification of financial assets in terms of whether the meet the amortised cost creteria or the fair value through other comprehensive income creteria based on the facts and circumstances that existed as of the transition date.
(iii) Deemed cost for property, plant and equipment and intangible assets: The Company has elected to continue with carrying value of all its property plant and equipment, and intangible asets recognised as of April 1, 2016 (transition date) measured as per the previous GAAP and use that carrying value as its deemed cost as of the transition date except in case of land where fair value was adopted. The excess amount of fair value over its carrying amount was transfered to revaluaton surplus and grouped under Reserves and Surplus.
(iv) Interest free loans from Government: The requirements of Ind AS 20- Accounting for Government Grants and Disclosure of Government Assistance and Ind AS 109- Financial Instruments, in respect of recognition and measurement of interest free loans from government authorities is opted to be applied prospectively to all grants received after the date of transition to Ind AS. Consequently, the carrying amount of such interest free loans as per the financial statements of the Company prepared under Previous GAAP is considered for recognition in the opening Ind AS Balance Sheet.
B. Transition to Ind AS - Reconciliations.
The following reconciliations provide a quantification of the effect of significant differences arising from the transition from Previous GAAP to Ind AS in accordance with Ind AS 101:
(i) Adjustments made by the company in restating the financial statements prepared under previous GAAP, including the balance sheet as at 1st April, 2016 and the financial statements as at and for the year ended 31st March, 2017.
(ii) Reconciliation of Equity as at 1st April, 2016 and 31st March, 2017
(iii) Reconciliation of Total Comprehensive Income for the year ended 31st March, 2017
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RECONCILIATION OF EQUITY AS PREVIOUSLY REPORTED UNDER IGAAP TO IND AS IGAAP as at Ind AS Ind AS as at IGAAP as at Ind AS Ind AS as at Particulars 31st March, adjustments 31st March, 2017 1st April, 2016 adjustments 1st April, 2016 2017 Assets 1 Non-Current Assets (a) Property, Plant and Equipment 3,56,14,24,713 1,23,30,400 3,57,37,55,113 2,95,67,46,846 60,81,86,602 3,56,49,33,448 (b) Capital Work-in-progress 4,48,31,391 - 4,48,31,391 4,60,36,613 - 4,60,36,613 (c) Financial Assets (i) Loans 6,25,02,865 - 6,25,02,865 4,91,18,983 - 4,91,18,983 (ii) Other financial assets ------(d) Other Non-current Assets 2,24,60,945 - 2,24,60,945 8,02,296 - 8,02,296 3,69,12,19,914 1,23,30,400 3,70,35,50,314 3,05,27,04,738 60,81,86,602 3,66,08,91,340 2 Current Assets (a) Inventories 87,21,84,599 - 87,21,84,599 75,70,79,176 - 75,70,79,176 (b) Financial Assets (i) Trade Receivables 31,06,24,716 - 31,06,24,716 24,34,57,242 - 24,34,57,242 (ii) Cash and cash equivalents 78,14,521 - 78,14,521 17,89,545 - 17,89,545 (iii) Other Bank balances 55,29,125 - 55,29,125 29,61,514 - 29,61,514 (iv) Loans 19,03,078 - 19,03,078 22,73,994 - 22,73,994 (v) Other financial assets 17,390 - 17,390 17,390 - 17,390 (c) Other Current assets 39,72,18,101 -10,15,77,552 29,56,40,549 22,37,57,058 -6,25,64,709 16,11,92,349 1,59,52,91,530 -10,15,77,552 1,49,37,13,978 1,23,13,35,919 -6,25,64,709 1,16,87,71,210 Total Assets 5,28,65,11,444 -8,92,47,152 5,19,72,64,292 4,28,40,40,657 54,56,21,893 4,82,96,62,550 EQUITY AND LIABILITIES Equity (a) Equity Share Capital 6,85,11,000 - 6,85,11,000 6,85,11,000 - 6,85,11,000 (b) Other Equity 1,41,11,11,114 -95,98,652 1,40,15,12,462 67,59,45,441 60,61,51,042 1,28,20,96,483 1,47,96,22,114 -95,98,652 1,47,00,23,462 74,44,56,441 60,61,51,042 1,35,06,07,483 Liabilities 1 Non-current liabilities (a) Financial Liabilities (i) Long-term Borrowings 1,94,30,40,847 - 1,94,30,40,847 1,84,14,49,995 - 1,84,14,49,995 (ii) Other financial liabilities ------(b) Provisions 1,03,49,650 - 1,03,49,650 71,41,210 - 71,41,210 (c ) Deferred Tax Liabilities (Net) 25,96,18,376 -10,15,77,552 15,80,40,824 18,67,04,371 -6,25,64,709 12,41,39,662 (d) Other non-current liabilities 9,80,86,333 - 9,80,86,333 9,00,49,460 - 9,00,49,460 2,31,10,95,206 -10,15,77,552 2,20,95,17,654 2,12,53,45,036 -6,25,64,709 2,06,27,80,327 2 Current liabilities (a) Financial Liabilities (i) Short-term Borrowings 1,15,28,17,033 - 1,15,28,17,033 1,06,25,27,641 - 1,06,25,27,641 (ii) Trade payables 2,80,45,069 - 2,80,45,069 5,60,91,310 - 5,60,91,310 (iii) Other financial liabilities 28,50,43,044 - 28,50,43,044 26,92,36,305 - 26,92,36,305 (b) Other current liabilities -1,12,49,072 2,19,29,052 1,06,79,980 -4,98,991 1,02,81,383 97,82,392 (c ) Provisions 41,322 - 41,322 82,76,850 -82,45,823 31,027 (d) Current tax Liabilities (Net) 4,10,96,728 - 4,10,96,728 1,86,06,065 - 1,86,06,065 1,49,57,94,124 2,19,29,052 1,51,77,23,176 1,41,42,39,180 20,35,560 1,41,62,74,740 Total Liabilities 3,80,68,89,330 -7,96,48,500 3,72,72,40,830 3,53,95,84,216 -6,05,29,149 3,47,90,55,067 Total Equity and Liabilities 5,28,65,11,444 -8,92,47,152 5,19,72,64,292 4,28,40,40,657 54,56,21,893 4,82,96,62,550
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RECONCILIATION OF STATEMENT OF PROFIT AND LOSS REPORTED UNDER IGAAP TO IND AS IGAAP for the Ind AS for the year ending Ind AS adjust- year ending Particulars 31st March, ments 31st March, 2017 2017 I Revenue from Operations 2,88,63,17,329 2,88,63,17,329
II Other Income 90,41,912 10,81,781 1,01,23,693
III Total Income (I+II) 2,89,53,59,241 10,81,781 2,89,64,41,022
IV Expenses
Cost of Material Consumed 1,58,01,38,922 1,58,01,38,922
Purchase of Stock in Trade - -
(Increase)/Decrease in Inventories of Finished goods, -11,81,21,634 -11,81,21,634 Stock-in-Trade and Work-in-progress
Employee benefits expense 18,07,33,544 -2,37,883 18,04,95,661
Finance costs 21,98,66,793 21,98,66,793
Depreciation and Amortization expense 13,60,90,327 3,99,050 13,64,89,377
Other expenses 68,57,71,056 68,57,71,056
Total Expenses (IV) 2,68,44,79,008 1,61,167 2,68,46,40,175
V Profit before exceptional items and tax (III-IV) 21,08,80,233 9,20,614 21,18,00,847
VI Exceptional Items - -
VII Profit before tax (VII-VIII) 21,08,80,233 9,20,614 21,18,00,847
VIII Tax expense:
Current tax 5,00,00,000 - 5,00,00,000
Deferred tax charge ( Net of MAT Credit ) 3,39,01,162 - 3,39,01,162
IX Profit for the year (VII-VIII) 12,69,79,071 9,20,614 12,78,99,685
X Other Comprehensive Income *
A. Items that will not be re-classified to
statement of Profit and loss (net of tax)
a) Acturial Loss on remeasurement - -2,37,883 -2,37,883 of defined employee benefit plans
Total Other comprehensive income - -2,37,883 -2,37,883
XI Total Comprehensive Income for the year (IX+X) 12,69,79,071 6,82,731 12,76,61,802
* Under the previous GAAP, there was no concept of Other Comprehensive Income . Under Ind As, specified items of Income, expense, gains or losses are required to be presented in Other Comprehensive Income .
Notes on Accounts 124
GINNING SPINNING OPEN END DYEING WEAVING HYDEL KALLAM TEXTILES LIMITED 26th ANNUAL REPORT 2017-18
RECONCILIATION BETWEEN PREVIOUS GAAP AND IND AS Note No.3 (i) Reconciliation of Equity As at As at Particulars Note 31st March, 1st April, 2016 2017
Total Equity as per Previous GAAP (A) 1,47,96,22,114 74,44,56,441
a) Treatment of Investment subsidy as per Ind AS 20 1 -1,02,81,383 -1,02,81,383
b) Amortisation of Deferred government grant over the useful life of the 10,81,781 - asset to which such grant is sanctioned
c) Depreciation on assets for which grant is treated as per Ind AS 20 -3,99,050 -
d) Proposed Dividend and tax 2 - 82,45,823
e) Revaluation of Land on adoption of fair value model on first time 4 - 60,81,86,602 adoption of Ind AS transition provisions under Ind AS-101
Total adjustment to Equity (B) -95,98,652 60,61,51,042
Total Equity as per Ind AS (C=A+B) 1,47,00,23,462 1,35,06,07,483
(ii) Reconciliation for Total Comprehensive Income Year ended Particulars Note 31st March, 2017
Net Profit after tax under Previous GAAP 12,69,79,071
a) Amortisation of Deferred government grant over the useful life of the asset. 1 10,81,781
b) Depreciation on assets for which grant is treated as per Ind AS 20 -3,99,050
c) Remeasurement benefits on defined benefit obligations 3 2,37,883
Net Profit after tax before OCI as per Ind AS 12,78,99,685
Other Comprehensive Income
a) Remeasurement benefits on defined benefit obligations 3 -2,37,883
Total Comprehensive Income for the year as reported under Ind AS 12,76,61,802
Notes on Accounts 125
GINNING SPINNING OPEN END DYEING WEAVING HYDEL KALLAM TEXTILES LIMITED 26th ANNUAL REPORT 2017-18
Notes to Reconciliation between previous GAAP and Ind AS was transferred to revaluation surplus and grouped under Reserves and Surplus . 1. Deferred Government grants Under previous GAAP, government grants received in the 5. Interest free sales tax loan nature of EPCG and other subsidies are deducted in the In the financial statements prepared under Previous GAAP, value of the asset and the net amount is capitalised in the the carrying value of Interest free loan was recognised at the books of accounts. Under Ind AS, government grants principal amounts payable by the company. Under Ind AS, received have been recognised separately in the financial Interest free borrowing being a financial liability is required to statements with the name Deferred Government grants be recognised initially at fair value and subsequently under Other current liabilities. The deferred grant is measured at amortised cost using the effective interest recognised in the Statement of Profit and Loss in proportion method. The difference between such fair value and the of depreciation charged on such assets. carrying value is recognised as deferred income disclosed under Other liabilities. 2. Dividend and Tax on Dividend Under previous GAAP, dividend payable is recorded as a On the date of transition, there is no change in the amount of liability in the period to which it relates and under Ind AS Interest free loan since the Company has opted for exemption dividend is recognised as a liability in the period in which from retrospective application for fair valuation of such the obligation to pay is established. financial instruments. However, the company has not received any such loans subsequent to the date of transition. 3.Remeasurement of net defined benefit plans : 6. Deferred Tax : Under previous GAAP, actuarial gains and losses were recognised in the statement of profit and loss. Under Ind Under previous GAAP, deferred tax was accounted using the AS, the actuarial gains and losses form part of re- income statement approach, on the timing differences measurement of net defined benefit liability which is between the taxable profit and accounting profits for the recognised in other comprehensive income in respective period. Under IND AS, deferred tax is recognized following years. However, such a change does not have any effect balance sheet approach on the temporary differences on total comprehensive income or total equity. between the carrying amount of asset or liability in the balance sheet and its tax base. In addition, various transitional 4. Cost of Property, plant and equipment adjustments has also lead to recognition of deferred taxes on The company has elected to measure all its property, plant new temporary differences.Minimum Alternate Tax (MAT) paid and equipment and intangible assets at the previous GAAP in accordance with the tax laws, which gives future economic carrying amount as its deemed cost at the date of transition to benefits in the form of adjustment to future income tax liability, Ind AS except in case of land where fair value was adopted. is considered as deferred tax asset if there is convincing evidence that the company will pay normal Income Tax. The excess amount of fair value over its carrying amount
Notes on Accounts 126
GINNING SPINNING OPEN END DYEING WEAVING HYDEL KALLAM TEXTILES LIMITED 26th ANNUAL REPORT 2017-18
KALLAM TEXTILES LIMITED (Formerly known as Kallam Spinning Mills Limited) Notes to the Financial Statements PROPERTY, PLANT AND EQUIPMENT AND CAPITAL WORK-IN-PROGRESS Note No.4 As at As at As at Particulars 31st March, 2018 31st March, 2017 1st April, 2016 Carrying Amounts of:
Land 925,640,141 641,092,626 639,930,301
Factory Buildings 700,853,553 492,989,030 512,916,558
Office Buildings 510,784,199 378,964,721 375,555,619
Plant and Equipment 1,924,731,015 1,949,412,810 1,916,655,561
Electrical and Electronic Equipment 80,110,877 93,922,887 105,841,659
Borewells and Water pumps 1,055,801 1,490,831 1,576,153
Office and Other equipment 4,954,778 6,327,334 5,836,537
Furniture and Fixtures 811,207 982,571 1,153,935
Vehicles 7,903,465 8,572,303 5,467,125
4,156,845,036 3,573,755,113 3,564,933,448
Capital Work-in-progress 59,036,453 44,831,391 46,036,613
Notes on Accounts 127
GINNING SPINNING OPEN END DYEING WEAVING HYDEL KALLAM TEXTILES LIMITED 26th ANNUAL REPORT 2017-18 - 89,407 9,13,703 11,17,049 11,17,049 Total Total 4,71,24,645 4,74,23,226 10,41,95,814 14,61,35,338 28,44,38,715 33,72,20,182 13,64,89,377 14,19,46,320 13,63,99,970 23,09,23,064 60,81,86,602 4,15,68,45,036 3,71,01,55,083 4,38,77,68,100 3,56,49,33,448 3,56,49,33,448 2,95,67,46,846 3,57,37,55,113 3,57,37,55,113 - - - - - 83,528 2,00,018 6,35,565 7,36,275 13,66,985 49,79,191 13,21,976 14,99,566 79,03,465 98,10,751 12,38,448 25,37,996 85,72,303 54,67,125 54,67,125 54,67,125 Vehicles Vehicles 1,04,41,461 ------and 8,11,207 8,11,207 1,71,364 1,71,364 1,71,364 3,42,728 9,82,571 Fixtures 11,53,935 11,53,935 11,53,935 11,53,935 11,53,935 11,53,935 11,53,935 11,53,935 Furniture ------Other 11,19,586 11,19,586 Office & 30,35,322 25,44,525 24,92,142 88,71,859 99,91,445 25,44,525 50,36,667 49,54,778 63,27,334 58,36,537 58,36,537 58,36,537 Equipment ------pumps 4,42,906 5,28,228 4,35,030 5,28,228 9,63,258 20,19,059 20,19,059 10,55,801 14,90,831 15,76,153 15,76,153 15,76,153 and Water and Water Borewells ------8,16,366 33,01,363 2,98,48,511 2,98,48,511 1,52,20,135 1,46,28,376 8,01,10,877 9,39,22,887 1,52,20,135 Electronic Equipment 10,91,43,022 10,99,59,388 10,58,41,659 10,58,41,659 10,58,41,659 Electrical and - - - - - 5,879 98,563 2,78,138 3,80,774 7,02,43,780 8,90,54,223 9,46,43,364 8,90,48,344 Plant and Equipment 12,20,83,731 18,35,93,145 2,03,84,61,154 2,10,83,24,160 1,92,47,31,015 1,94,94,12,810 1,91,66,55,561 1,91,66,55,561 1,91,66,55,561
------Non- 77,21,398 77,21,398 19,24,263 Factory Buildings 1,11,30,500 1,11,30,500 1,58,86,722 1,00,89,587 1,58,86,722 2,13,40,297 38,66,86,119 38,66,86,119 12,05,68,768 51,27,08,462 51,07,84,199 37,89,64,721 37,55,55,619 37,55,55,619 37,55,55,619
------66,76,496 92,00,000 Factory Buildings 3,12,37,923 1,99,27,528 1,79,86,891 3,12,37,923 1,99,27,528 21,66,51,414 51,29,16,558 70,75,30,049 70,08,53,553 49,29,89,030 51,29,16,558 51,29,16,558 51,29,16,558 ------1,08,800 Land 11,62,325 11,62,325 3,17,43,699 60,81,86,602 28,44,38,715 64,10,92,626 92,56,40,141 92,56,40,141 64,10,92,626 63,99,30,301 63,99,30,301
Particulars March, 2017 March, 2018 March, 2017 March, 2018 March, 2018 March, 2017 1) Terms Loans taken by the Company from IREDA, Andhra Bank, Indian Bank and Bank of Baroda are secured by way of first charge on fixed assets of the company. Andhra Bank, Indian Bank and of Baroda are secured by way first charge on fixed assets the company. Loans taken by the Company from IREDA, Terms 1) st st st st st st April, 2016 as per IGAAP AS April, 2016 under Ind April, 2016 April, 2016 st st st st PROPERTY, PLANT AND EQUIPMENT AND PLANT PROPERTY, As at 31 Additions Disposals - At Deemed Cost/ Fair value - As at 1 AS adjustments Add: Opening Ind Surplus on revaluation of Land at fair value Additions during the year Remeasurement of land at fair value Surplus on revaluation of buildings at fair value Adjustment of acc. Depreciation on revaluation Accumulated Depreciation As at 1 Depreciation charge for the year Depreciation charge for the year On disposals/Withdrawal on revaluation Net carrying amount As at 31 Notes : 2) Refer Significant Accounting Policies under the head Property, Plant and Equipment . Accounting Policies under the head Property, 2) Refer Significant As at 31 On disposals As at 31 As at 1 As at 31 Disposals Gross Carrying value As at 1 As at 31
Notes on Accounts 128
GINNING SPINNING OPEN END DYEING WEAVING HYDEL KALLAM TEXTILES LIMITED 26th ANNUAL REPORT 2017-18
Capital Work-in-Progress Particulars Amount Carrying value - At Cost/Deemed Cost
As at 1st April, 2016 4,60,36,613
Additions 14,03,97,658
Capitalised during the year 14,16,02,880
As at 31st March, 2017 4,48,31,391
Additions 10,87,60,647
Capitalised during the year 9,45,55,585
As at 31st March, 2018 5,90,36,453
Unallocated Capital Expenditure * Interest on Nature of Expenditure Bank Charges Total Borrowings As at 1st April, 2016 42,411 15,15,700 15,58,111
Additions 57,184 - 57,184
Capitalised during the year - 15,15,700 15,15,700
As at 31st March, 2017 99,595 - 99,595
Additions - - -
Capitalised during the year 99,595 - 99,595
As at 31st March, 2018 - - -
*Note : The above expenditure was included under capital work in progress in respective years.
LOANS Note No.5 Non-Current Current Particulars As at As at As at As at As at As at 31st March, 31st March, 1st April, 31st March, 31st March, 1st April, 2018 2017 2016 2018 2017 2016 Unsecured, Considered Good
a) Security deposits with 6,45,05,945 6,25,02,865 4,91,18,983 - - - Govt. authorities and others
b) Employee related advances - - 4,80,965 8,24,637 19,76,945
c) Other advances - - 31,196 10,78,441 2,97,049
Total 6,45,05,945 6,25,02,865 4,91,18,983 5,12,161 19,03,078 22,73,994
Note: 1) No loans are due from directors or other officers of the company either severally or jointly with any other person nor any other loans are due from firms in which any director is a partner, a director or a member.
Notes on Accounts 129
GINNING SPINNING OPEN END DYEING WEAVING HYDEL KALLAM TEXTILES LIMITED 26th ANNUAL REPORT 2017-18
KALLAM TEXTILES LIMITED (Formerly known as Kallam Spinning Mills Limited) Notes to the Financial Statements OTHER FINANCIAL ASSETS Note No.6 Non-Current Current Particulars As at As at As at As at As at As at 31st March, 31st March, 1st April, 31st March, 31st March, 1st April, 2018 2017 2016 2018 2017 2016 a) Deposits Recoverable - - - 17,390 17,390
b) Other receivables 4,500 - -
Total - - - 4,500 17,390 17,390
OTHER ASSETS Note No.7 Non-Current Current Particulars As at As at As at As at As at As at 31st March, 31st March, 1st April, 31st March, 31st March, 1st April, 2018 2017 2016 2018 2017 2016 Unsecured, Considered Good
a) Advances for Capital goods 14,64,073 2,24,60,945 8,02,296 - - -
b) Advances to creditors - - 1,23,53,859 1,40,20,430 87,28,087 against supplies
c) Prepaid expenses - - 33,74,830 24,74,026 10,11,539
d) Balances with Statutory Authorities:
Excise Duty receivable (Tran-1) 24,43,758 - -
IGST receivable 16,00,352 - -
CGST Receivable 69,58,444 - -
SGST receivable 1,59,54,700 - -
VAT Credit - - - - 1,21,759
e) EPCG Terminal Excise Duty - - 87,38,420 95,26,129 67,34,554 refund receivable
f) Duty draw back refund - - 37,47,661 38,90,645 29,11,727 receivable
g) Interest rebate receivable - - 3,63,29,591 4,18,01,799 7,52,15,617 under TUFscheme
h) Interest subsidy receivable - - 16,91,77,796 8,65,41,396 - from AP government
i) Power Subsidy receivable - - 19,11,24,397 13,44,58,665 6,32,06,459
j) Accrued Interest - - 46,22,782 29,27,459 32,62,607
Total 14,64,073 2,24,60,945 8,02,296 45,64,26,590 29,56,40,549 16,11,92,349
Notes on Accounts 130
GINNING SPINNING OPEN END DYEING WEAVING HYDEL KALLAM TEXTILES LIMITED 26th ANNUAL REPORT 2017-18
INVENTORIES Note No.8 As at As at As at Particulars 31st March, 2018 31st March, 2017 1st April, 2016 Spinning/Power:
Raw materials 41,43,20,340 39,71,75,447 41,55,09,427
Work-in-progress 8,78,10,939 8,08,05,273 5,13,88,693
Finished goods 6,54,19,600 10,26,39,629 7,25,09,156
Stores and spares 3,75,69,590 3,23,12,043 2,69,29,333
Weaving/Dyeing unit:
Raw materials 99,93,202 1,33,50,974 96,92,750
Work-in-progress 20,79,69,574 16,77,73,412 8,71,25,590
Finished goods 8,57,75,191 6,00,19,583 7,93,32,042
Stores and spares 1,98,53,220 1,81,08,238 1,45,92,185
Total 92,87,11,656 87,21,84,599 75,70,79,176 Note : (i) The mode of valuation of inventories has been stated in significant accounting Policies. (ii) The cost of inventories recognised as an expense for the year ended 31st March, 2018 was Rs. 1,88,20,92,825/- (for the year ended 31st March, 2017: Rs. 1,77,27,93,287/-) (iii) All the above inventories are offered as security in respect of working capital loans availed by the company from all the banks. (iv) There are no inventories expected to be recovered after more than twelve months.
TRADE RECEIVABLES Note No.9 As at As at As at Particulars 31st March, 2018 31st March, 2017 1st April, 2016 Unsecured, Considered Good
Outstanding for a period exceeding six months 10,248 8,69,867 3,52,97,819
Others 22,77,85,755 30,97,54,849 20,81,59,423
22,77,96,003 31,06,24,716 24,34,57,242
Unsecured, Considered Doubtful Outstanding for a period exceeding six months - 1,33,519 1,33,519 Less: Provision for expected Credit Losses - 1,33,519 1,33,519
Total 22,77,96,003 31,06,24,716 24,34,57,242
Note : a) The average credit period of trade receivables varies from 15-45 days. b) The above does not include any amount due from related parties. c) The company has used practical expedient by computing the expected credit loss for doubtful trade receivables based on the ageing of receivables, history of recoverability from the customers, credit worthiness of the customers etc., d) During the year, the company has recognised loss allowance of Rs.Nil under 12 months expected credit loss model.
Notes on Accounts 131
GINNING SPINNING OPEN END DYEING WEAVING HYDEL KALLAM TEXTILES LIMITED 26th ANNUAL REPORT 2017-18
CASH AND CASH EQUIVALENTS Note No.10 As at As at As at Particulars 31st March, 2018 31st March, 2017 1st April, 2016 i) Balances with banks in Current accounts a. In Current accounts 23,75,637 48,27,326 3,52,255 ii) Cash on hand 52,24,241 29,87,195 14,37,290 Total 75,99,878 78,14,521 17,89,545
OTHER BANK BALANCES Note No.10 As at As at As at Particulars 31st March, 2018 31st March, 2017 1st April, 2016 a. Earmarked balances with banks held as margin money against LC and guarantees 40,00,881 40,70,196 14,83,462 falls due for maturity within 12 months from the date of Balance sheet. b. Earmarked balances with banks towards 14,00,795 14,58,929 14,78,052 unclaimed dividends Total 54,01,676 55,29,125 29,61,514
AUTHORISED SHARE CAPITAL Note No.11 Equity Particulars No’s INR As at 1st April, 2016 1,00,00,000 10,00,00,000
Changes during the year (Refer note) - -
As at 31st March, 2017 5,00,00,000 10,00,00,000
Changes during the year - -
As at 31st March, 2018 5,00,00,000 10,00,00,000 Note: During the year 2016-17, the company has sub divided one equity share of Rs.10/- each into 5 equity shares of Rs.2/- each.
ISSUED SHARE CAPITAL Particulars No’s INR As at 1st April, 2016 68,51,100 6,85,11,000
Sub-division of one Equity shares of ` 10/- each into 5 Equity shares of ` 2/- each 2,74,04,400 -
As at 31st March, 2017 3,42,55,500 6,85,11,000
Bonus shares issued during the year 85,63,875 1,71,27,750
As at 31st March, 2018 4,28,19,375 8,56,38,750
Note: During the year 2016-17, the company has sub divided one equity share of Rs.10/- each into 5 equity shares of Rs.2/- each. During the year 2017-18, the company has issued and alloted Nos.85,63,875 of Equity shares as fully paid up bonus shares in the ratio of 1:4 one (1) equity share for every four (4) equity shares held by capitalizing retained earnings. Rights, Preferences and restrictions attached to Equity shares The Company has only one class of Equity shares having a face value of Rs.2/- each. Each holder of equity share is entitled to one vote per share on poll and have one vote on show of hands. In the event of liquidation of Company, the equity share holders are eligible to receive the remaining assets of the company in proportion to their shareholding after distribution of payments to preferential creditors.
Notes on Accounts 132
GINNING SPINNING OPEN END DYEING WEAVING HYDEL KALLAM TEXTILES LIMITED 26th ANNUAL REPORT 2017-18
SHARE CAPITAL Details of share holders holding more than 5% of total number of shares As at 31st March, 2018 As at 31st March, 2017 As at 1st April, 2016 % out of % out of % out of total number No of total number No of total number Name of the Share Holder No of of shares Shares of shares Shares of shares Shares held of the held of the held of the Company Company Company
Kallam Haranadha Reddy 22,45,625 5.24% 17,96,500 5.24% 3,59,300 5.24%
Gurram Venkata Krishna Reddy 35,13,723 8.21% 27,75,325 8.10% 5,55,065 8.10%
Kallam Agro products and Oils Pvt. Ltd 54,65,043 12.76% 43,72,035 12.76% 8,74,057 12.76%
T. Lakshminarayanan 19,65,819 4.59% 26,56,873 7.76% 7,80,125 11.39%
1,31,90,210 30.80% 1,16,00,733 33.87% 25,68,547 37.49%
Out of last five financial years, during the financial year 2017-18, the company has issued bonus shares Nos.85,63,875 in ratio of 1:4 i.e one equity share for every four shares held by capitalizing part of retained earnings. None of the shares were alloted in pursuant to contract without payment being received in cash.
OTHER EQUITY Note No.12 INVESTMENT SUBSIDY Particulars Amount
As at 1st April, 2016 as per IGAAP 1,47,00,000
Add/(Less): Ind AS adjustments
Investment subsidy received on fixed assets transferred to Deferred Govt. grant as per IndAS 20 -1,47,00,000
As at 1st April, 2016 as per Ind AS -
Changes during the year -
As at 31st March, 2017 -
Changes during the year -
As at 31st March, 2018 -
GENERAL RESERVE Particulars Amount
As at 1st April, 2016 1,60,36,486
Transfers during the year -
As at 31st March, 2017 1,60,36,486
Transfers during the year -
As at 31st March, 2018 1,60,36,486
Notes on Accounts 133
GINNING SPINNING OPEN END DYEING WEAVING HYDEL KALLAM TEXTILES LIMITED 26th ANNUAL REPORT 2017-18
REVALUATION RESERVE Particulars Amount As at 1st April, 2016 as per IGAAP - Add/(Less): Ind AS adjustments Measurement of land at fair value on 1st time adoption of Ind AS 60,81,86,602
As at 1st April, 2016 as per Ind AS 60,81,86,602 Changes during the year -
As at 31st March, 2017 60,81,86,602 Changes during the year - Remeasurement of land at fair value 28,44,38,715 - Measurement of buildings at fair value 33,72,20,182 - Deferred tax on above -11,78,38,220
As at 31st March, 2018 1,11,20,07,279 Note : a) The above amount includes Rs. 60,81,86,602/- being measurement of Land at fair value and the value represents excess of fair value over its carrying amount. The fair value model was adopted for land on 1st time adoption of Ind AS on 1.4.2016 and the difference amount was adjusted against Reserves and surplus. b) The company subsequent to the adoption of Ind AS, remeasured its land and revalued its buildings on 31.3.2018 and the difference amount of Rs. 503,820,677/- (Net of deferred tax) was recognised under Other comprehensive Income.
RETAINED EARNINGS Particulars Amount As at 1st April, 2016 - As per IGAAP 64,52,08,955 Adjustments made as per Ind AS 101 Add: Amortisation of Deferred grant to the extent of useful life of assets already completed 44,18,617 Add: Dividend proposed for the FY 2014-15 to be accounted in the year of payment 82,45,823 As at 1st April, 2016 after making necessary Ind AS adjustments 65,78,73,395 Add: Total comprehensive income for the year transferred from statement of profit and loss 12,76,61,802 Less: Final Dividend for the Financial year 2015-16 proposed & paid during the year 68,51,100 Dividend Distribution tax on Dividend paid during the year 13,94,723 As at 31st March, 2017 77,72,89,374 Add: Total comprehensive income for the period transferred from statement of profit and loss 15,76,56,929 Less: Utilised for issue of bonus shares 1,71,27,751 Final dividend and dividend distribution tax for the year 2016-17 82,45,823 As at 31st March, 2018 90,95,72,729
SUMMARY OF OTHER EQUITY As at As at As at Particulars 31st March, 2018 31st March, 2017 1st April, 2016 Revaluation surplus 1,11,20,07,279 60,81,86,602 60,81,86,602 General Reserve 1,60,36,486 1,60,36,486 1,60,36,486 Retained Earnings 90,95,72,729 77,72,89,374 65,78,73,395 2,03,76,16,494 1,40,15,12,462 1,28,20,96,483
Notes on Accounts 134
GINNING SPINNING OPEN END DYEING WEAVING HYDEL KALLAM TEXTILES LIMITED 26th ANNUAL REPORT 2017-18
Nature of reserves: revaluation model for its buildings and consequent to that decision, valued its buildings at their fair value. The a) Revaluation surplus resultant increase over its carrying value was transferred to The revaluation surplus represents revaluation of land by Revaluation surplus through other comprehensive income. the company as at 1st April, 2016 at its fair market value and the resultant excess amount over its book value was b) General reserve transferred to other equity as Revaluation Surplus. The general reserve is created by way of tranfer of part of the During the year ended on 31.3.2018, the company keeping profits before declaring dividend pursuant to the provisions of in view of changes in fair value of land, remeasured the Companies Act, 1956. Mandatory transfer to general reserve land at fair value and differential amount was transferred to is not required under the Companies Act, 2013. revaluation surplus through other comprehensive income. c) Retained Earnings During the year ended on 31.3.2018, subsequent to Retained earnings are the profits that the company has recognition of buildings at deemed cost on 1st April, 2016, earned till date less transfers to general reserves and being the date of transition to Ind AS, the company adopted dividends paid to share holders.
LONG TERM BORROWINGS Note No.13 Non-Current Current Particulars As at As at As at As at st st As at st st As at 31 March, 31 March, st 31 March, 31 March, st 2018 2017 1 April, 2016 2018 2017 1 April, 2016
A. Secured i. Term loans a) From Financial Institutions : i) IREDA 32,39,670 48,59,178 53,00,534 16,19,252 16,19,252 23,55,792 b) From banks : i) Andhra Bank 55,60,78,043 58,18,65,959 42,33,21,663 5,80,00,000 3,24,45,000 3,48,38,595 ii) Indian Bank 1,08,56,95,900 1,24,97,32,899 1,30,34,38,718 18,77,43,798 15,54,19,291 12,08,20,000 iii) Bank of Baroda 7,90,00,000 8,60,00,000 9,10,00,000 60,00,000 40,00,000 30,00,000
Total (a) 1,72,40,13,613 1,92,24,58,036 1,82,30,60,915 25,33,63,050 19,34,83,543 16,10,14,387
B. Unsecured a) Deferred payment liabilities i) Interest free Sales tax - 2,77,811 17,09,080 3,03,900 14,31,269 23,38,431 Deferrment b) Other Loans i) Loans from Promoters 25,10,000 13,10,000 13,10,000 - - - and their relatives ii) Loans from Directors 2,95,45,000 1,89,95,000 1,53,70,000 - - -
Total (b) 3,20,55,000 2,05,82,811 1,83,89,080 3,03,900 14,31,269 23,38,431
Total (a+b) 1,75,60,68,613 1,94,30,40,847 1,84,14,49,995 25,36,66,950 19,49,14,812 16,33,52,818
Notes on Accounts 135
GINNING SPINNING OPEN END DYEING WEAVING HYDEL KALLAM TEXTILES LIMITED 26th ANNUAL REPORT 2017-18
I) HYDEL POWER PLANT : immovable assets of spinning division (all units at Chowdavaram, Guntur Dist.) of the company. Further i) IREDA : guaranteed by two directors in their personal capacities. a) Term loan from IREDA is secured by first charge on all b) The above loans carry interest @ 12.70% and 10%. the movable and immovable assets of the company’s c) The above loans are repayable in following manner. power division of 0.8 MW small hydro project at 16th & 2019-20 ` 5,00,00,000/- ; 2020-21: ` 6,25,00,000/- 17th branch canal at mile # 3, Nela kondapalli Village & d) There are no defaults in repayment of above loans. Mandal, Khammam Dist., Telangana. Further guaranteed by six promoter directors of the company III. WEAVING UNIT : and corporate guarantee of two companies. i) INDIAN BANK : b) The above loan carry interest @10%. a) Term loans from Indian Bank are secured by exclusive charge on all the movable and immovable assets of c) The above loan is repayable in following manner. weaving division at Kunkupadu Village, Addanki 2019-20 ` 16,19,252/- ; 2020-21: ` 16,20,418/- Mandal, Prakasam Dist. of the company. Further d) There are no defaults in repayment of above loan. guaranteed by two directors in their personal capacities. b) The above loans carry interest @10.00%, 10.00%, ii) ANDHRA BANK : 10.00% and 11.10%. a) Term loan from Andhra Bank is secured by way of c) The above loans are repayable in following manner. charge on movable and immovable assets of power 2019-20 : ` 16,80,00,000/-; 2020-21: ` 21,00,00,000/-; plant at Nelakondapalli and Bhairavanipalli of 2021-22 ` 14,90,00,000/- ; 2022-23 : `18,00,00,000/-; Khammam Dist., Telangana., excluding those assets 2023-24: ` 20,31,95,900/- and 2024-25: ` 6,30,00,000/- specifically charged to IREDA which are exclusively d) There are no defaults in repayment of above loans. created out of said loan. The said loan is further guaranteed by two directors in their personal IV. DYEING UNIT : capacities. i) BANK OF BARODA : b) The above loan carry interest @ 12.25% a) Term loan from Bank of Baroda is secured by way of c) The above loan is repayable in following manner. first charge on fixed assets of Company’s Dyeing Unit at Kunkupadu Village, Addanki Mandal, Prakasam Dist. 2019-20: ` 3,11,00,000/- of the company. Further guaranteed by two directors in d) There are no defaults in repayment of above loan. their personal capacities. b) The above loan carry interest @11.80%. (II) SPINNING UNIT : i) ANDHRA BANK : c) The above loan is repayable in following manner. a) Term loans from Andhra Bank are secured on pari 2019-20: ` 2,00,00,000/- ; 2020-21: ` 2,75,00,000/- passu basis by way of first charge on all the movable and 2021-22 ` 3,15,00,000/- and immovable assets of spinning division (all units at d) There are no defaults in repayment of above loan. Chowdavaram, Guntur Dist.) of the company. Further guaranteed by two directors in their personal capacities. V. INTEREST FREE SALES TAX LOAN : a) The Company availed interest free sales tax loan for b) The above loans carry interest @ 12.25%, 11.50%, the period from 1995-96 to 2008-09 aggregating to ` 11.00%, 11.50%, 11.25%, 12.25% and 10.4%. 2,54,75,992/-. The said loan is repayable within a c) The above loans are repayable in following manner. period of 10/14 years from each year of availment. The 2019-20 ` 4,98,00,000/- ; 2020-21: ` 9,93,00,000/- ; Company has to pay an amount of ` 3,03,900/- as on 2021-22: ` 10,82,67,030/- ; 2022-23: ` 7,89,65,500/- ; 31-03-2018 and entire amount is due for payment 2023-24: ` 9,28,19,805 ; 2024-25 : ` 2,01,86,589/- ; during financial year 2018-19. 2025-26 : ` 7,56,39,119/- VI. Loans accepted from promoters, directors and their d) There are no defaults in repayment of above loans. relatives are interest free and are accepted as per the conditions of sanction of term loans from banks and ii) INDIAN BANK : shall not be repayable during the currency of term a) Term loans from Indian Bank are secured on pari passu loans. basis by way of first charge on all the movable and
Notes on Accounts 136
GINNING SPINNING OPEN END DYEING WEAVING HYDEL KALLAM TEXTILES LIMITED 26th ANNUAL REPORT 2017-18
OTHER FINANCIAL LIABILITIES Note No.14 Non-Current Current Particulars As at As at As at As at As at st st st st st As at 31 March, 31 March, 1 April, 31 March, 31 March, st 2018 2017 2016 2018 2017 1 April, 2016
a) Current maturities of long-term debt - - - 25,36,66,950 19,49,14,812 16,33,52,818 (Refer note no.13) b) Creditors for capital goods - - - 27,58,617 40,59,245 1,03,21,977 c) Interest accrued and due - - - 1,29,51,142 1,52,58,972 2,05,80,580 d) Unclaimed dividend - - - 14,01,425 14,58,929 14,78,252 e) Employee related payments - - - 2,57,71,830 2,10,00,447 1,97,88,806 f) Other Liabilities - - - 5,42,87,470 4,83,50,639 5,37,13,872
Total - - - 35,08,37,434 28,50,43,044 26,92,36,305
PROVISIONS Note No.15 Non-Current Current Particulars As at As at As at As at As at As at 31st March, 31st March, 1st April, 31st March, 31st March, 1st April, 2018 2017 2016 2018 2017 2016 a) Provision for employee benefits
- Group gratuity (Unfunded) 1,24,81,130 1,03,49,650 71,41,210 5,92,967 - -
- Leave Encashment (Unfunded) - - - 39,724 41,322 31,027
Total 1,24,81,130 1,03,49,650 71,41,210 6,32,691 41,322 31,027
EMPLOYEE BENEFITS a. Defined contribution plans : The Company makes Provident Fund and Employees’ State Insurance Scheme contributions which are defined contribution plans, for qualifying employees. The Company recognised Rs.41,53,321/- (Year ended March 31, 2017: Rs.29,56,720/- ) for provident fund contributions, and Rs. 7,00,980/- (Year ended March 31, 2017: Rs. 5,37,453/-) towards Employees’ State Insurance Scheme contributions in the Statement of Profit and Loss. b. Defined benefit plans : The Company provides to the eligible employees defined benefit plans in the form of gratuity. The gratuity plan provides for a lump sum payment to vested employees at retirement, death while in employment or on termination of employment of an amount equivalent to 15 days’ salary payable for each completed year of service. Vesting occurs upon completion of five continuous years of service. The measurement date used for determining retirement benefits for gratuity is March 31. (i) Balance Sheet : The assets, liabilities and surplus / (deficit) position of the defined benefit plans at the Balance Sheet date were :
As at As at As at Particulars 31st March, 2018 31st March, 2017 1st April, 2016 Present value of obligation 1,30,74,097 1,03,49,650 71,41,210
Fair Value of plan assets - - -
(Asset)/Liability recognised in the Balance Sheet 1,30,74,097 1,03,49,650 71,41,210
Notes on Accounts 137
GINNING SPINNING OPEN END DYEING WEAVING HYDEL KALLAM TEXTILES LIMITED 26th ANNUAL REPORT 2017-18
(ii) Movements in Present Value of Obligation and Fair Value of Plan Assets Particulars Plan Obligation As at 1st April, 2016 71,41,210 Current service cost 24,02,571 Interest cost 5,67,986 Interest Income - Actuarial (gain)/loss arising from experience adjustment 2,37,883 Contributions by employer - Benefit payments - Return on plan assets, excluding interest income - As at March 31, 2017 1,03,49,650 Current service cost 28,23,850 Interest cost 8,27,972 Interest Income - Actuarial (gain)/loss arising from experience adjustment -9,27,375 Contributions by employer - Benefit payments - Return on plan assets, excluding interest income - As at March 31, 2018 1,30,74,097
(III) Statement of Profit and Loss The charge to the Statement of Profit and Loss comprises: Year ended Year ended Particulars 31st March, 2018 31st March, 2017 Employee Benefit Expenses Current service cost 28,23,850 24,02,571 Past Service cost - Interest cost 8,27,972 5,67,986 Interest Income - Net impact on profit before tax 36,51,822 29,70,557 Remeasurement of the net defined benefit plans: Actuarial (gain)/loss arising due to experience adjustments (9,27,375) 2,37,883 Return on plan assets, excluding interest income - - Net impact on other comprehensive income before tax (9,27,375) 2,37,883
(IV) Assets The major categories of plan assets as a % of the total plan assets As at As at Particulars 31st March, 2018 31st March, 2017 Unfunded 0% 0%
(V) Assumptions With the objective of presenting the plan assets and plan obligations of the defined benefits plans at their fair value on the Balance Sheet, assumptions under Ind AS 19 are set by reference to market conditions at the valuation date. As at As at As at Particulars 31st March, 2018 31st March, 2017 31st March, 2016 Discount rate 8.00% 8.00% 7.90% Salary escalation rate 12.00% 12.00% 10.00%
Notes on Accounts 138
GINNING SPINNING OPEN END DYEING WEAVING HYDEL KALLAM TEXTILES LIMITED 26th ANNUAL REPORT 2017-18
(VI) Sensitivity Analysis : Discount Rate, Salary Escalation Rate and Withdrawal Rate are significant actuarial assumptions. The change in the Present Value of Defined Benefit Obligation for a change of 100 Basis Points from the assumed assumption is given below : Scenario DBO % Change Under Base Scenario 1,30,74,097 0.00% Salary Escalation - Up by 1% 1,44,12,220 10.23% Salary Escalation - Down by 1% 1,19,10,539 -8.90% Withdrawal Rates - Up by 1% 1,27,25,924 -2.66% Withdrawal Rates - Down by 1% 1,34,67,920 3.01% Discount Rates - Up by 1% 1,19,46,891 -8.62% Discount Rates - Down by 1% 1,43,99,134 10.13% Actuarial (gain)/loss arising due to experience adjustments (9,27,375) 2,37,883 Return on plan assets, excluding interest income - - Net impact on other comprehensive income before tax (9,27,375) 2,37,883
(VII) Discontinuance Liability Amount payable upon discontinuance of all employment is Rs.79,62,547/- (VIII) Best Estimate of Contribution During the Next Year The Best Estimate Contribution for the Company during the next year would be Rs. Nil , Since the company is not contributing to any fund. (IX) Expected Cash Flow for Following Years Maturity Profile of Defined Benefit Obligations Year Amount (Rs.) 1 24,15,122 2 5,21,556 3 5,89,269 4 6,47,144 5 6,99,348 6 10,56,595 7 6,93,481 8 8,40,015 9 6,91,500 10 9,21,269
DEFERRED TAX Note No.16 The following is the analysis of deferred tax (assets)/liabilities presented in the Balance Sheet Components Particulars As at As at As at 31st March, 2018 31st March, 2017 1st April, 2016 Liability: Towards depreciation 58,29,97,323 42,55,90,487 38,84,47,126 Asset: On allowances under Income-tax (3,96,11,612) (36,28,015) (25,21,239) Unabsorbed losses as per Income tax Act (11,82,84,899) (16,23,44,096) (19,92,21,516) MAT Credit Entitlement (14,12,94,087) (10,15,77,552) (6,25,64,709)
Total 28,38,06,725 15,80,40,824 12,41,39,662
Notes on Accounts 139
GINNING SPINNING OPEN END DYEING WEAVING HYDEL KALLAM TEXTILES LIMITED 26th ANNUAL REPORT 2017-18
Movement in Deferred Tax Assets/Liabilities Charge/ Charge/ As at (Credit) in As at (Credit) in As at Component 1st April, Statement of 31st March, Statement of 31st March, 2016 P&L 2017 P&L 2018 Deferred tax liabilities/(assets) in relation to: Depreciation 38,84,47,126 3,71,43,361 42,55,90,487 15,74,06,836 58,29,97,323 Expenses allowable under Income tax when paid (25,21,239) (11,06,776) (36,28,015) (3,59,83,597) (3,96,11,612) Unabsorbed Depreciation as per Income Tax Act (19,92,21,516) 3,68,77,420 (16,23,44,096) 4,40,59,197 (11,82,84,899) MAT Credit Entitlement (6,25,64,709) (3,90,12,843) (10,15,77,552) (3,97,16,535) (14,12,94,087)
TOTAL 12,41,39,662 3,39,01,162 15,80,40,824 12,57,65,901 28,38,06,725
OTHER LIABILITIES Note No.17 Non-Current Current
Particulars As at As at As at As at As at As at 31st March, 31st March, 1st April, 31st March, 31st March, 1st April, 2018 2017 2016 2018 2017 2016 a) Advances received from 10,21,800 19,60,786 18,25,246 customers against supplies
b) Statutory Liabilities 42,30,329 41,45,154 36,69,887
c) Teak Plantation Deposits 58,500 58,500 58,500
d) Deferred government 8,74,37,869 9,80,86,333 9,00,49,460 1,28,45,441 45,15,540 42,28,759 grants (Refer note)
Total 8,74,37,869 9,80,86,333 9,00,49,460 1,81,56,070 1,06,79,980 97,82,392 Note : The company received government grants in the nature of export incentives. During the year, the company re- ceived incentives under EPCG Schemes and same is utilised against import of capital goods and capitalised to Property, plant and equipment. The deferred government grant will be recognised in statement of profit and loss over the period in proportion in which depreciation expense on the assets is recognised.
SHORT TERM BORROWINGS Note No.18 As at As at As at Particulars 31st March, 2018 31st March, 2017 1st April, 2016 A. Secured Loans repayable on demand : Working Capital Loans : a) Cash Credit from banks i) From Andhra Bank 59,69,13,211 59,93,83,064 59,37,67,924 ii) From Indian Bank 51,19,98,903 52,08,30,478 46,87,59,717 III) From Bank of Baroda 4,94,28,362 - - b) Buyers Credit Facilites: i) From Andhra Bank - 1,74,19,468 - ii) From Indian Bank - 1,51,84,023 - B. Unsecured: Loans repayble on demand: From a Director 22,00,000 - - Total 1,16,05,40,476 1,15,28,17,033 1,06,25,27,641
Notes on Accounts 140
GINNING SPINNING OPEN END DYEING WEAVING HYDEL KALLAM TEXTILES LIMITED 26th ANNUAL REPORT 2017-18
Note : A.Secured a) Working Capital Loan from Andhra Bank is secured by way of exclusive charge on current assets of spinning division of all units at Chowdavaram Village , Guntur Dt. This loan carries interest @ 9.5%. b) Working Capital loan from Indian Bank is secured by way of Hypothecation of stocks of cotton, stock in process, Finished Goods, Stores and Spares , Book Debts , Goods in Transit .This loan is also secured by way of Extension of EM/ Secondand exclusive charge by way of EM of Land admeasuring AC 25.72 at Weaving Division of the Company at kunkupadu and Hypothecation of Plant&Machinery, Spares and Other assets Acquired ( Existing and Future).This Loan carries interest @ 9%. c) Working Capital Loan from Bank of Baroda is secured by way of Hypothecation of Stocks and Book debts and further secured by way of personal guarantee of 2 Directors .This Loan carries interest @ 11.80%. B. Unsecured a) Loan from Directors is Interest free and no specific terms of repayment were defined for the same , hence categorised as short term.
TRADE PAYABLES Note No.19
As at As at As at Particulars 31st March, 2018 31st March, 2017 1st April, 2016
Dues to : Small and Micro Enterprises - 1,46,363 -
: Other than Small and Micro Enterprises 8,38,55,898 2,78,98,706 5,60,91,310
Total 8,38,55,898 2,80,45,069 5,60,91,310
Disclosure required under the Micro, Small and Medium Enterprises Development Act, 2006. Based on and to the extent of information obtained and available with the Company, with regard to the status of their suppliers under Micro, Small and Medium Enterprises Development Act, 2006 (MSMED ACT), on which the auditors have relied, the disclosure requirement with regard to the payment made/ due to Micro, Small and Medium Enterprises are given below :
As at As at As at Particulars 31st March, 2018 31st March, 2017 1st April, 2016
1. Amount remaining unpaid, beyond the appointed - - - / agreed day at the end of the year
(a) Principal amount of bills to be paid - - -
(b) Interest due there on - - -
2. (a) Payment made to suppliers, during the year, - - - but beyond appointed / agreed date Interest there on in terms of Sec 16 of the Act
(b) Interest paid along with such payments during - - - the year
3. Amount of Interest for the year u/s 16 of the Act - - - accrued and remaining un-paid at the end of the year
4. Total amount of interest u/s 16 of the Act including - - - that arising in earlier years, accrued and remaining unpaid at end of the year.
Notes on Accounts 141
GINNING SPINNING OPEN END DYEING WEAVING HYDEL KALLAM TEXTILES LIMITED 26th ANNUAL REPORT 2017-18
CURRENT INCOME-TAX LIABILITIES (NET) Note No.20 Particulars As at 31st March, 2018 As at 31st March, 2017 As at 1st April, 2016
Provision for Income-tax 18,81,60,000 13,81,60,000 8,81,60,000
Less: Advance Income-tax and TDS 15,69,28,180 9,70,63,272 6,95,53,935
Total 3,12,31,820 4,10,96,728 1,86,06,065
The current income- tax expense for the year can be reconciled to the accounting profit as follows : As at As at Particulars 31st March, 2018 31st March, 2017 Profit before tax 21,06,83,973 21,18,00,847
Enacted Tax Rates in India ( Under MAT) 21.3416% 21.3416%
Computed Tax expense 4,49,63,331 4,52,01,690
Add: Tax effects of expenses which are not deductible in determining taxable profit
- Depreciation difference - -
- Expenses(net of Income) not deductible for tax purposes - -
- Interest on Income Tax 10,36,669 49,94,784
Tax on Ind AS adjustments - -1,96,474
Excess provision of income tax relating to earlier years 26,739 -
Current Tax Provision (A) 4,60,26,739 5,00,00,000
Increase of Deferred tax liability on account of Fixed Assets 15,74,06,836 3,71,43,361
Increase of Deferred tax Asset on account of expenses and losses 80,75,600 3,57,70,644
MAT Credit Entitlement -3,97,16,535 -3,90,12,843
Deferred Tax Charge ( Including Charge to OCI) (B) 12,57,65,901 3,39,01,162
Total Tax Expense (A+B) 17,17,92,640 8,39,01,162
REVENUE FROM OPERATIONS Note No.21 Year ended Year ended PARTICULARS 31st March, 2018 31st March, 2017
Revenue from Operations
Sale of goods 3,10,71,21,015 2,86,81,12,822
Other Operating Revenue
Job work charges 3,19,000 1,64,973
Export Incentive 1,89,86,527 1,80,39,534
3,12,64,26,542 2,88,63,17,329
Notes on Accounts 142
GINNING SPINNING OPEN END DYEING WEAVING HYDEL KALLAM TEXTILES LIMITED 26th ANNUAL REPORT 2017-18
REVENUE FROM OPERATIONS INCLUDE:
Year ended 31st March, 2018 Year ended 31st March, 2017 PARTICULARS Qty(kgs.) Revenue Qty(kgs.) Revenue
i) Cotton Yarn 64,29,493 1,51,08,97,417 59,53,917 1,38,84,78,419
ii) OE Yarn 60,26,546 78,42,55,542 56,70,818 65,37,29,286
iii) Cotton Waste 2,396,344 155,107,247 2,261,114 135,639,075
iv) OE Waste 10,80,815 1,74,97,843 9,25,247 1,43,18,866
v) Cotton Seed 92,91,664 16,03,54,101 64,90,059 15,13,05,433
vi) Cotton Lint 45,19,922 51,50,25,547 33,43,138 39,08,00,371
vii) Damaged Kappas 52,900 2,18,213 - -
viii) Sale of Gray Fabric (Mtrs) 2,46,12,847 1,53,99,60,020 2,53,84,238 1,52,64,34,706
ix) Sale of Fabric Waste 1,68,248 59,03,630 1,56,601 42,53,183
x) Sale of Dyed Fabric (Mtrs) 33,41,032 31,73,05,733 29,78,595 26,77,59,165
xi) Sale of Dyed Yarn (Kgs) 5,59,820 20,79,95,581 2,32,310 7,85,45,173
xii) Sale of cut pieces cloth and shirts - 7,68,299 - 5,46,129
xiii) Gray Yarn 7,33,538 17,86,76,908 - -
xiv) Sale of Power (KWH) 24,53,066 1,16,57,377 15,71,728 73,95,506
5,40,56,23,458 4,61,92,05,312
Less: Inter divisional transfers
Cotton Yarn 42,42,926 1,10,95,57,267 43,32,211 1,09,07,40,136
OE yarn 10,53,411 14,31,56,005 6,10,460 7,69,20,191
Dyed yarn 5,54,920 20,37,82,928 2,30,561 7,80,75,413
Gray Yarn 7,33,538 17,86,76,908 - -
Cotton Waste 21,60,973 14,83,03,788 19,14,779 12,57,97,659
Cotton Lint 45,19,922 51,50,25,547 32,59,444 37,95,59,091
2,29,85,02,443 1,75,10,92,490
TOTAL 3,10,71,21,015 2,86,81,12,822
Notes on Accounts 143
GINNING SPINNING OPEN END DYEING WEAVING HYDEL KALLAM TEXTILES LIMITED 26th ANNUAL REPORT 2017-18
OTHER INCOME Note No.22 PARTICULARS Year ended 31st March, 2018 Year ended 31st March, 2017 Interest from banks and others 42,73,465 32,24,480 Deferred Govt. grants credited back 45,91,242 44,05,796 Credit Balances Written back 52,633 23,847 Profit on sale of assets - 1,43,785 Gain on exchange fluctuations 5,57,577 - Miscellaneous receipts 18,47,811 23,25,785 Total 1,13,22,728 1,01,23,693
COST OF MATERIALS CONSUMED Note No.23 PARTICULARS Year ended 31st March, 2018 Year ended 31st March, 2017 Opening Stock 41,05,26,421 42,52,02,177 Add: Purchase of Raw Material 1,71,66,31,724 1,56,54,63,166 2,12,71,58,145 1,99,06,65,343 Less : Closing Stock 42,43,13,542 41,05,26,421 TOTAL 1,70,28,44,603 1,58,01,38,922
PURCHASE OF STOCK-IN-TRADE Note No.24 Year ended 31st March, 2018 Year ended 31st March, 2017 PARTICULARS Qty(Kgs) Amount Qty(Kgs) Amount OE yarn - - - - TOTAL - - - -
CHANGES IN INVENTORIES OF WORK -IN- PROGRESS Note No.25 PARTICULARS Year ended 31st March, 2018 Year ended 31st March, 2017 Opening work-in-progress 24,48,99,557 13,85,14,283 Opening Finished goods 16,35,77,558 15,18,41,198 40,84,77,115 29,03,55,481 Closing work-in-progress 29,57,80,513 24,48,99,557 Closing Finished goods 15,11,94,791 16,35,77,558 44,69,75,304 40,84,77,115 Increase in inventories 3,84,98,189 11,81,21,634 EMPLOYEE BENEFIT EXPENSES Note No.26 PARTICULARS Year ended 31st March, 2018 Year ended 31st March, 2017 Salaries and Wages 19,91,80,914 16,93,06,371 Contribution to provident and other funds 48,54,301 34,94,173 Staff welfare expenses 13,38,824 49,49,929 Contribution towards group gratuity 32,62,858 27,45,188 TOTAL 20,86,36,897 18,04,95,661
FINANCE COSTS Note No.27 PARTICULARS Year ended 31st March, 2018 Year ended 31st March, 2017 Interest paid to banks and others 36,51,45,966 36,90,17,259 Other Borrowing Costs 59,64,533 83,89,168 Total Interest Cost 37,11,10,499 37,74,06,427 Less: Subsidy under TUF Scheme 6,96,40,993 7,42,35,008 Interest subsidy from AP Government 8,26,36,400 8,33,04,626 TOTAL 21,88,33,106 21,98,66,793
Notes on Accounts 144
GINNING SPINNING OPEN END DYEING WEAVING HYDEL KALLAM TEXTILES LIMITED 26th ANNUAL REPORT 2017-18
DEPRECIATION AND AMORTISATION Note No.28 Year ended Year ended PARTICULARS 31st March, 2018 31st March, 2017
Depreciation and Amortization 14,19,46,320 13,64,89,377
TOTAL 14,19,46,320 13,64,89,377
OTHER EXPENSES Note No.29 Year ended Year ended PARTICULARS 31st March, 2018 31st March, 2017
Consumption of Stores and Spares 17,92,48,222 19,26,54,365
Processing charges paid 26,55,720 2,71,555
Power and Fuel (Net of power subsidy) 34,47,29,085 32,82,27,082
Repairs and Maintenance: Buildings 13,58,036 22,01,499
Machinery 5,50,02,614 6,83,96,636
Others 10,70,606 41,080
Insurance 40,23,651 39,64,786
Loading and Unloading charges 3,34,77,707 2,69,18,797
Commission on Sales 3,07,38,838 2,54,69,693
Rents - Office 1,33,910 47,800
Rates and taxes 76,56,767 47,44,620
Payments to auditors towards
- Statutory audit 2,75,000 2,58,750
- Tax audit and taxation matters 50,000 64,500
- Cost audit 30,000 34,500
Directors Sitting Fee 4,50,000 7,05,198
Donations 35,000 26,116
CSR expenses 29,36,681 32,74,929
Miscellaneous expenses 2,89,58,078 2,81,16,203
Loss on sale of assets 4,64,465 3,42,081
Debit Balances writtenoff 8,180 10,866
TOTAL 69,33,02,560 68,57,71,056
Notes on Accounts 145
GINNING SPINNING OPEN END DYEING WEAVING HYDEL KALLAM TEXTILES LIMITED 26th ANNUAL REPORT 2017-18
NOTES FORMING PART OF THE ACCOUNTS 30. CIF VALUE OF IMPORTS MADE DURING THE YEAR: (Amount in Rs.) Year ended Year ended 31-03-2018 31-03-2017 i) Stores & Spares 2,64,06,803 3,21,10,180 ii) Capital goods 1,27,92,938 33,32,545
31. COMPARISION BETWEEN CONSUMPTION OF IMPORTED AND INDIGENOUS RAW MATERIALS SPARES AND COMPONENTS DURING THE YEAR: Year ended Year ended % % 31-03-2018 31-03-2017 a) Raw material: Imported 2,32,19,631 1.36 5,73,54,121 3.63 Indigenous 167,96,24,972 98.64 152,27,84,801 96.37 Total 170,28,44,603 100 158,01,38,922 100 b) Spares & Components: Imported 2,03,07,805 11.33 2,75,13,168 14.28 Indigenous 15,89,40,417 88.67 16,51,41,197 85.72 Total 17,92,48,222 100 19,26,54,365 100
32. EXPENDITURE INCURRED IN FOREIGN CURRENCY DURING THE YEAR: Year ended Year ended 31-03-2018 31-03-2017 a) Commission On Yarn & Fabric Sales 39,64,067 55,53,580 b) Foreign Travel 7,38,687 4,84,590
33. CONTINGENT LIABILITIES NOT PROVIDED FOR: As at As at 31-03-2018 31-03-2017 a) Estimated amounts of contracts remaining to be Executed on 6,45,300 0.00 Capital accounts, and not provided for b) State Levies on Electricity 37,20,543 99,67,810 c) Income-tax 0.00 15,21,758 34. Balances in personal accounts of various parties are subject to confirmation by and reconciliation with the said parties. 35. RELATED PARTY DISCLOSURES: A) List of Related Parties: 1) Key Managerial Personnel: 1. P.Venkateswara Reddy, Managing Director 2. G.V.Krishna Reddy, Joint Managing Director 3. M.V.Subba Reddy, Whole Time Director 2) Relatives of Key managerial Personnel: 1. Kallam Venkata Subbayamma Sister of P.Venkateswara Reddy 2. Poluri Siva Nagendramma Wife of P.Venkateswara Reddy 3. Movva Uma Sankara Reddy Brother of M.V.Subba Reddy 4. Poluri Govardhana Reddy Son of P.Venkateswara Reddy 5. Poluri Venugopal Reddy Son of P.Venkateswara Reddy 6. Gurram Nitin Son of G.V.Krishna Reddy 7. Movva Kavitha Wife of M.V.Subba Reddy 8. M.Srinvivasa Nagarjuna Reddy Son of M.V.Subba Reddy 9. M.Murali Sairam Krishna Reddy Son of M.V.Subba Reddy
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3) Companies controlled by Key managerial personnel/Relative of Key Managerial Personnel: 1. Kallam Agro products & Oils Private Limited, Guntur 2. Kallam Brothers Cottons Pvt Ltd, Guntur B) Transactions with the related parties: Relative Relative Companies controlled Companies controlled Key Key of Key of Key by key Managerial by key Managerial Managerial Managerial Nature of Transaction Managerial Managerial personnel / Relative of personnel / Relative of Personnel Personnel personnel personnel Key Managerial personnel Key Managerial personnel 2017-18 2016-17 2017-18 2016-17 2017-18 2016-17 I. Details of Transaction : a. Remuneration Paid: 1. P.Venkateswara Reddy, MD 49,33,911 (48,21,068) 2. G.V.Krishna Reddy, JMD 49,29,920 (48,15,593) 3. M.V.Subba Reddy,WTD 10,35,417 (8,77,403) Total 1,08,99,248 (1,05,14,064) b. Remuneration Paid: P. Govardhan Reddy 4,99,845 (4,86,000) M. Srinivas Nagarjuna Reddy 1,91,132 (1,20,000) c. Sale of Goods and Services: 1. Kallam Brothers Cottons Pvt Ltd- Testing & Sale of Fabric 2,66,396 (3,78,298) 2. Kallam Agro products and Oils Pvt. Ltd Seed 10,32,54,115 (9,28,95,055) d. Purchases of Goods and Services: 1. Kallam Brothers Cottons Pvt Ltd- Lint & Waste purchase 44,35,895 (-) II. Balance as at 31-03-2018: a) Share Capital of the Company held by: 1. P.Venkateswara Reddy, MD 23,02,500 (18,42,000) 2. G.V.Krishna Reddy, JMD 70,27,446 (55,50 650) 3. M.V.Subba Reddy,WTD 8,56,250 (6,85,000) Total 1,01,86,196 (80,77,650) 1. K.Venkata Subbayamma Sister of P.Venkateswara Reddy 14,65,500 (13,34,000) 2. P.Siva Nagendramma, W/o. P.Venkateswara Reddy 3,75,000 (3,00,000) 3. P.Govardhan Reddy, S/o. P.Venkateswara Reddy 21,86,910 (17,49,530) 4. M.Uma Sankar Reddy, Brother of M.V.Subba Reddy 13,35,300 (10,68,240) 5. P.Venugopal Reddy, S/o. P.Venkateswara Reddy 19,42,366 (15,86,520) 6. G.Nitin, S/o. G.V.Krishna Reddy 14,79,290 (10,98,000) 7. Movva Kavitha, W/o. M.V.Subba Reddy 1,55,000 (1,24,000) 8. M.Srinvivasa Nagarjuna Reddy S/o. M.V.Subba Reddy 2,18,750 (1,75,000) 9. M.Murali Sairam Krishna Reddy S/o. M.V.Subba Reddy 1,25,000 (1,00,000) Total 92,83,116 (73,35,290) 1. Kallam Agro Products and Oils Pvt Ltd Guntur 1,09,30,086 (87,44,070) b) Unsecured loans from: 1. P.Venkateswara Reddy, MD 1,71,55,000 (88,05,000) 2. G.V.Krishna Reddy, JMD 85,40,000 (65,40,000) 3. M.V.Subba Reddy,WTD 38,50,000 (36,50,000) Total 2,95,45,000 (1,89,95,000) 1. P.Siva Nagendramma 10,000 (10,000) Total 10,000 (10,000)
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Relative Relative Companies controlled Companies controlled Key Key of Key of Key by key Managerial by key Managerial Managerial Managerial Nature of Transaction Managerial Managerial personnel / Relative of personnel / Relative of Personnel Personnel personnel personnel Key Managerial personnel Key Managerial personnel 2017-18 2016-17 2017-18 2016-17 2017-18 2016-17 c) Amount Due to: 1. P.Venkateswara Reddy, MD 22,61,107 (22,26,621) 2. G.V.Krishna Reddy, JMD 22,61,107 (22,67,498) 3. M.V.Subba Reddy,WTD 1,85,440 (1,45,635) Total 47,07,654 (46,39,754) d)Trade dues from: 1. Kallam Brothers cottons pvt Ltd., Guntur 36,992 (52,478) 2. Kallam Agro Products and Oils pvt Ltd., Guntur 83,37,109 (1,00,15,569)
36. Segment Information: (Amount in Rs.) Particulars Year 2017-18 Year 2016-17 Segment Revenue: 1. Spinning 24,782.25 22,266.72 2. Weaving 18654.10 18,010.71 3. Dyeing 3869.91 1092.83 4. Power 116.67 73.95 47,423.03 41,444.21 Less: Inter segment Revenue 16351.72 12,763.08 Net Revenue from Operation 31071.21 28,681.13 Segment Results (Profit before Tax and Interest) 1. Spinning 2655.36 2861.23 2. Weaving 1618.51 1498.99 3. Dyeing 33.84 17.87 4. Power -12.55 -61.41 4,295.16 4,316.68 Less: Interest (net) 2,188.33 2,198.67 Net Profit Before Tax 2,106.83 2,118.01 Capital Employed : (Segment Assets-Segment Liabilities) 1. Spinning 25460.89 22,986.86 2. Weaving 15883.63 12324.79 3. Dyeing 1270.65 852.04 4. Power 1432.32 1,647.31 Total 44047.49 37,811.00 Capital Expenditure: 1. Spinning 611.10 661.07 2. Weaving 425.83 738.73 3. Power 0.00 2.46 4. Dyeing 3.86 1.71 Depreciation: 1. Spinning 618.47 587.34 2. Weaving 663.77 640.46 3. Dyeing 63.34 61.97 4. Power 73.87 75.12
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37. Dividend: The Board of directors at its meeting held on 28.05.2018 have recommended a dividend Rs. 0.20/ share of face value of Rs. 2/- each (ie 10% dividend) for the financial year ended 31.03.2018. The above is subject to approval at the ensuing Annual general meeting of the company and hence not recognised as a liability. 38. Corporate Social Responsibilities: 31.03.18 31.03.2017 Amount required to spent during the year 28,18,112 28,28,957 Amount actually spent 29,36,681 32,74,929 Short Fall NIL NIL 39. Foreign exchange earnings on exports during the year calculated on FOB basis Rs.89,04,12,531/- (Previous year Rs.41,79,26,429/-
40. Categories of Financial Instruments The Carrying amounts and fair value of financial instruments by categories as at 31st March, 2018 ,31st March, 2017 and 1st April, 2016 are as follows :
Carrying value Fair value
PARTICULARS As at As at As at As at As at As at 31st March, 31st March, 1st April, 31st March, 31st March, 1st April, 2018 2017 2016 2018 2017 2016
Financial assets
Measured at Amortised cost
(i) Other financial assets 4,500 17,390 17,390 4,500 17,390 17,390
(ii) Loans and advances 6,50,18,106 6,44,05,943 5,13,92,977 6,50,18,106 6,44,05,943 5,13,92,977
Total assets 6,50,22,606 6,44,23,333 5,14,10,367 6,50,22,606 6,44,23,333 5,14,10,367
Financial liabilities
Measured at amortised cost
(i) Borrowings (including current 2,00,97,35,563 2,13,79,55,659 2,00,48,02,813 2,00,97,35,563 2,13,79,55,659 2,00,48,02,813 maturities of Long term borrowings)
(ii) Other financial liabilities 9,71,70,484 9,01,28,232 10,58,83,487 9,71,70,484 9,01,28,232 10,58,83,487
Total liabilities 2,10,69,06,047 2,22,80,83,891 2,11,06,86,300 2,10,69,06,047 2,22,80,83,891 2,11,06,86,300
41. FAIR VALUE HIERARCHY The fair value of financial instruments as referred to above note have been classified into three categories depending on the inputs used in the valuation technique. The hierarchy gives the highest priority to quoted prices in active markets for identified assets or liabilities [Level 1 measurements] and lowest priority to unobservable inputs [Level 3 measurements] The categories used are as follows: Level 1 : Quoted prices for identified instruments in an active market. Level 2 : Directly or indirectly observable market inputs, other than Level 1 inputs; and Level 3 : Inputs which are not based on observable market data. This note provides information about how the Company determines fair values of various financial assets and financial liabilities. Fair value of the Company's financial assets and financial liabilities that are measured at fair value on a recurring basis. Some of the Company's financial assets are measured at the fair value at the end of each reporting period. The Company has disclosed financial instruments such as cash and cash equivalents, other bank balances, trade receivables, trade payables and Short Term Borrowings at carrying value because their carrying amounts approximate the fair value because of their short term nature. Difference between carrying amounts and fair values of bank borrowings, other financial assets and financial liabilities subsequently measured at amortised cost is not significant in each of the years presented.
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42. FINANCIAL RISK MANAGEMENT The Company financial liabilities comprise mainly of borrowings, trade payables and other payables. The Company financial assets comprise mainly of cash and cash equivalents, trade and other receivables. The Company's business activities are exposed to a variety of financial risks namely credit risk, liquidity risk and foreign currency risk. The Company's senior management has the overall responsibility for establishing and governing the Company's risk management framework. The Company's risk management policies are established to identify and analyse the risks faced by the Company, to set and monitor appropriate risk limits and controls, periodically review the changes in market conditions and reflect the changes in the policy accordingly. The key risks and mitigating actions are also placed before the Board of Directors of the Company. A. Credit Risk Credit risk is the risk of financial loss to the Company if a customer fails to meet its contractual obligation. To manage this, the company periodically assesses the financial reliability of customers, taking into account the financial condition, current economic trends and analysis of historical bad debts and ageing of the account receivables. Individual risk limits are set accordingly. Receivables from customers Concentration of credit risk with respect to trade receivables are limited, due to Company's customer base being large and diverse. All trade receivables are reviewed and assessed for default on a monthly basis. On historical experience of collecting receivables is that credit risk is low. Hence, trade receivables are considered to be a single class of financial assets. Other financial assets The Company maintains exposure in cash and cash equivalents and margin money deposits with banks. The Company's maximum exposure of credit risk as at March 31, 2018, March 31, 2017 and April 1, 2016 is the carrying value of each class of financial assets. B. Foreign currency risk management Foreign currency risk is the risk that the Fair value or Future cashflows of an exposure will fluctuate due to changes in foreign currency rates. Exposures can arise on account of various assets and liabilities which are denominated in currencies other than indian rupee. The Company has not entered into any forward exchange contract to hedge against currency risk. The Company manages currency exposures within prescribed limits. The aim of the Company's approach to management of currency risk is to leave the Company with no material residual risk.
The carrying amounts of the company's foreign currency denominated monetary items are as follows : (Amounts in Rs.)
As on As on 31.03.2017 As on 01.04.2016 31.03.2018 PARTICULARS $ $ CHF $ CHF €
Assets :
Trade Receivables 7,70,16,192 1,15,12,278 - 2,23,84,197 - -
Cash and Cash Equivalents ------
Total assets 6,50,22,606 6,44,23,333 5,14,10,367 6,50,22,606 6,44,23,333 5,14,10,367
Liabilities :
Trade and Other Payables 6,92,656 3,40,09,239 41,25,689 10,03,972 1,98,111 25,71,631
Net Assets / (Liabilities) 7,63,23,536 -2,24,96,961 -41,25,689 2,13,80,225 -1,98,111 -25,71,631
Foreign currency sensitivity analysis A 5% strengthening of the INR against key currencies to which the Company is exposed would have led to approximately an additional Rs. 38,09,998/- gain in the Statement of Profit and Loss (2016-17: Rs.19,23,043/- Loss ). A 5% weakening of the INR against these currencies would have led to an equal but opposite effect.
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C. Liquidity risk Liquidity risk is the risk that the Company will not be able to meet its financial obligations as they become due. The objective of liquidity risk management is to maintain sufficient liquidity and ensure that funds are available for use as per requirements. The Company manages its liquidity risk by ensuring, as far as possible, that it will always have sufficient liquidity to meet its liabilities when due. Also, the Company has availed credit limits with banks. The Company maintained a cautious liquidity strategy, with a positive cash balance throughout the year ended March 31, 2018 , March 31, 2017 and on 01st April 2016 . Cash flow from operating activities provides the funds to service the financial liabilities on a day to day basis. The Company regularly maintains the rolling forecasts to ensure it has sufficient cash on an on-going basis to meet operational needs. Any short-term surplus cash generated, over and above the amount required for working capital management and other operational requirements, is retained as cash and cash equivalents (to the extent required) and any excess if any, is invested in interest bearing term deposits. The company is repaying its borrowings as per the schedule of repayment and no amount was pending for remittance beyond its due date. All the amounts due to trade payables falls due within one year and the company is able to meet its obligations within the due dates. In case of borrowings from banks, the maturity pattern has been given under Note no. 13. D. Capital Management Equity share capital and other equity are considered for the purpose of Company’s capital management. The Company manages its capital so as to safeguard its ability to continue as a going concern and to optimise returns to shareholders. The capital structure of the Company is based on Management’s judgment of its strategic day-to-day needs with a focus on total equity so as to maintain investor, creditors and market confidence. The Management and the Board of Directors monitors the return on capital as well as the level of dividends to shareholders. The Company may take appropriate steps in order to maintain, or is necessary, adjust its capital structure. 43. Calculation of Earnings per Share : Sl.No 2017-18 2016-17 1) Basic and Diluted Earning per share a No. of shares at the beginning of the year 3,42,55,500 68,51,100 b New shares upon conversion of Shares of Rs. 10/- each to Rs.2/-each - 2,74,04,400 c Increase on account of Bonus Issue 85,63,875 - d Change in equity during the year - - e Total Weighted average number of shares at the end of the Year 4,28,19,375 3,42,55,500 f Total Weighted average number of shares used as denominator for calculat- 4,28,19,375 4,28,19,375 ing Basic and Diluted EPS ( Post Bonus Issue in last Year) g Net Profit after tax before OCI as per Statement of Profit and Loss 15,67,29,554 12,78,99,685 h Basic and diluted Earning per share 3.66 2.99
44. General: Previous year figures have been regrouped where ever necessary. 45. Paise have been rounded off to the nearest rupee.
As per our report of even date For and on behalf of Board of Directors For CHEVUTURI ASSOCIATES., Chartered Accountants P.VENKATESWARA REDDY Firm Regn no.000632S Managing Director
G.V. KRISHNA REDDY RAGHUNADHA RAO BALINENI Joint Managing Director Partner Membership No: 028105 M.V.SUBBA REDDY Chief Financial Officer Place : Guntur Date : 28-05-2018 Place : Chowdavaram, Guntur Date : 28-05-2018
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