Directors Report of Katare Spinning Mills Ltd.

Mar 31, 2024

Your directors have pleasure in presenting the Forty Fourth (44^th) Directors’ Report of your Company along with the financial statements for the Financial Year ended 31^st March 2024.

1. FINANCIAL HIGHLIGHTS:

Certain key aspects of your Company’s performance during the Financial Year ended 31^st March 2024 as compared to the previous Financial Year are summarized below:

(Rs. In Thousand)

Particulars	2023-24	2022-23
Turnover	40,047.01	70,739.28
Profit Before Interest & Depreciation	(4,531.53)	1,665.27
Less : Interest	(3,068.71)	(1,341.20)
Profit before depreciation	(7,600.24)	324.07
Less : Depreciation	(13,004.90)	(13,748.62)
Loss after depreciation & before taxation	(20,605.14)	(13,424.55)
Add : Excess provision in the last year	0.00	0.00
Less: Tax expenses relating to previous	0.00	0.00
year
Add/Less: Deferred Tax Liability/Assets	(1 ,875.00)	1,694.00
Profit / loss for the period	(18,730.14)	(15,118.55)
Profit/ Loss for the period
Add : Balance carried from previous	28,058.92	16,028.76
Year
Add: Revaluation Reserve W/o on Sold Assets	0.00	0.00
Add: Mat Credit Written off	0.00	27,148.72
Profit/Loss carried forward	9,328.78	28,058.92

2. OVERVIEW OF OPERATIONS:

During the year under review, your Company recorded a total income of Rs. 40,047.01 (in thousand) as compared to last year’s income of Rs. 70,739.28 (in thousand) and net Loss of Rs. 18,730.14 (in thousand) as compared to last year’s net loss of Rs. 15,118.55 (in thousand). For further information, kindly refer to Management Discussion and Analysis Report, forming a part of this Annual Report.

The Board of Directors have taken measures to adopt new technologies and industry standards to cope up with competition in the industry and advance towards achieving its goal.

3. DIVIDEND AND RESERVE:

Your directors do not recommend any dividend for the year under review. The details of reserves and surplus are provided in Note No. 15 of the notes to the standalone financial statement.

4. STATE OF AFFAIRS OF THE COMPANY/BUSINESS OVERVIEW:

SPINNING MILL INDUSTRY:

The performance of the spinning industry in India during the financial year 2023-24 was mixed. On the one hand, there was strong export demand for cotton yarn, the domestic market was sluggish due to high cotton prices.

The Company has generated a revenue of Rs. 40,047.01 (in thousand) during the reporting year from spinning segment as compared to Rs. 70,739.28 (in thousand) for the previous financial year. The reason for decline in revenue is the average cotton price in India during the 2023-24 season was around INR 58,000 per candy (356 kg), which was significantly higher than the previous season. This led to a decline in cotton yarn production and consumption in the domestic market.

SOLAR POWER PROJECT:

Considering the involvement of power part in the cost of finished goods, The Company had installed 1MW solar plant for captive consumption under net metering system. The generation of energy is consuming for day to day working and exports to grid. On modernization of the plant, Company will get good returns on consumption of selfpower consumption. This is the first net metering installation in the Maharashtra. During the financial year total 13,11,265 electricity units have been generated and it helps the Company to reduce the cost of productions and move ahead towards goal of sustainable growth.

5. ANNUAL RETURN:

Pursuant to the provisions of the Companies Act, 2013 (“the Act”), an extract of the Annual Return as on March 31, 2023, in prescribed Form No. MGT-9 is given to this Report.

6. BOARD MEETINGS:

Five Meetings of the Board of Directors were held during the financial year 2023-24 and the gap between two consecutive board meetings was in accordance with the statutory limit. The details of the number of meetings held and attended by each Director are provided in the Corporate Governance Report, which forms part of this Report.

7. BOARD EFFECTIVENESS:

The Company has adopted the Governance guidelines which, inter alia, cover aspects related to composition and role of the Board, Chairman and Directors, Board diversity, definition of independence, Director’s term, retirement age and Committees of the Board. It also covers aspects relating to nomination, appointment, induction and development of Directors, Director’s Remuneration, Code of Conduct, Board Effectiveness Review and mandates of Board Committees.

A. BOARD EVALUATION:

The Board of Directors has carried out an annual evaluation of its own performance, Board Committees and individual Directors pursuant to the provisions of the Act and the corporate governance requirement as prescribed by SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 [“SEBI (LODR), 2015”].

The performance of the Board was evaluated by the Board after seeking inputs from the Directors on the basis of the criteria such as the Board Composition and structures, effectiveness of board processes, information and functioning, etc. The performance of the committees was evaluated by the Board after seeking inputs from the committee members on the basis of the criteria such as the composition of committees, effectiveness of committee meetings, etc.

The Board and the Nomination and Remuneration Committee (NRC) reviewed the performance of the individual Directors on the basis of the criteria such as the contribution of the individual Director to the Board and Committee meetings like preparedness on the issues to be discussed, meaningful and constructive contribution and inputs in meetings, etc. In addition, the Chairman was also evaluated on the key aspect of his role.

B. APPOINTMENT OF DIRECTORS AND CRITERIA FOR DETERMINING QUALIFICATIONS, POSITIVE ATTRIBUTES, INDEPENDENCE OF A DIRECTOR:

The Nomination and Remuneration Committee (NRC) is responsible for developing competency requirements for the Board based on the industry and strategy of the Company. The NRC reviews and meets potential candidates, prior to recommending their nomination to the Board. At the time of appointment, specific requirements for the position, including expert knowledge expected, is communicated to the appointee.

The NRC has formulated the criteria for determining qualifications, positive attributes and independence of Directors in terms of provisions of Section 178 (3) of the Act and SEBI (LODR), 2015:

Independence: A Director will be considered as an ‘Independent Director’ if he/ she meets with the criteria for ‘Independence’ as laid down in the Act and SEBI (LODR), 2015.

Competency: A transparent Board nomination process is in place that encourages diversity of thought, experience, knowledge, perspective, age and gender. It is ensured that the Board has a mix of members with different educational qualifications, knowledge and with adequate experience in banking and finance, accounting and taxation, legal and regulatory matters, hospitality sector and other disciplines related to the Company’s businesses.

Additional Positive Attributes:

> The Directors should not have any other pecuniary relationship with the Company and the Company’s promoters, except as provided under law.

> The Directors should maintain an arm’s length relationship between themselves and the employees of the Company, as also with the Directors and promoters, stakeholders for whom the relationship with these entities is material.

> The Directors should not be the subject of proved allegations of illegal or unethical behavior, in their private or professional lives.

> The Directors should have the ability to devote sufficient time to the affairs of the Company.

C. REMUNERATION POLICY:

The Company had adopted a Remuneration Policy for the Directors, KMP and other employees, pursuant to the provisions of the Act and SEBI (LODR), 2015.

The key principles governing the Company’s Remuneration Policy are as follows:

> Independent Directors (ID) may be paid sitting fees for attending the meetings of the Board and of Committees of which they may be members, and receive commission within regulatory limits, as recommended by the NRC and approved by the Board.

> Overall remuneration should be reasonable and sufficient to attract, retain and motivate Directors aligned to the requirements of the Company, taking into consideration the challenges faced by the Company and its future growth imperatives.

> Remuneration paid should be reflective of the size of the Company, complexity of the sector/ industry/Company’s operations and the Company’s capacity to pay the remuneration and be consistent with recognized best practices.

Remuneration for Managing Director (MD)/ Executive Directors (ED)/ rest of the Employees

The extent of overall remuneration should be sufficient to attract and retain talented and qualified individuals suitable for every role. Hence remuneration should be market competitive, driven by the role played by the individual, reflective of the size of the Company, complexity of the sector/ industry/ Company’s operations and the Company’s capacity to pay, consistent with recognized best practices and aligned to any regulatory requirements.

Basic/ fixed salary is provided to all employees to ensure that there is a steady income in line with their skills and experience. In addition, the Company provides employees with certain perquisites, allowances and benefits to enable a certain level of lifestyle and to offer scope for savings.

In addition to the basic / fixed salary, benefits, perquisites and allowances as provided above, the Company provides EDs such remuneration by way of commission, calculated with reference to the net profits of the Company in a particular financial year, as may be determined by the Board, subject to the overall ceilings stipulated in Section 197 of the Act. The specific amount payable to the EDs would be based on performance as evaluated by the NRC and approved by the Board and the Managing Director (MD) was appointed on non-remuneration basis in the Company.

It is affirmed that the remuneration paid to Directors and all other employees is as per the Remuneration Policy of the Company.

8. SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS:

During the Financial year under review, no significant material orders were passed by the regulators or courts or tribunals impacting the going concern status and the Company’s operations.

9. AUDIT COMMITTEE:

Details pertaining to the composition of Audit Committee are included in the Corporate Governance Report, which forms part of the Annual Report.

10. DIRECTORS AND KMP:

As per the provisions of Section 152 of the Act, Mr. Umakant Mahindrakar (DIN 01233305), is liable to retires by rotation at the ensuing annual general meeting and being eligible offered himself for re-appointment, the matter will be placed before member of the Company for approval.

The Company has received declarations from all the Independent Directors confirming that they meet the criteria of independence as prescribed both under Section 149 (6) of the Act and SEBI (LODR), 2015.

11. CORPORATE GOVERNANCE:

The members please note that the provisions relating to Corporate Governance i.e. Regulation 27 of SEBI (LODR), 2015 are not applicable to the Company and accordingly, the Company is not required to submit the Corporate Governance Report with this Annual Report. However, keeping in view the objective of encouraging the use of better practices through voluntary adoption, the Company has decided to adopt and disseminate voluntary disclosure of Corporate Governance which not only serve as a benchmark for the corporate sector but also help the Company in achieving the highest standard of corporate governance.

Accordingly, a voluntary disclosure i.e. the report on Corporate Governance as stipulated under regulation 34(3) read with Schedule V of the SEBI (LODR), 2015 is annexed herewith and forms a part of this report.

As such the Members may note that any omission of any corporate governance provisions shall not be construed as non-compliance of the above-mentioned regulations.

12. AUDITORS & THEIR REPORTS:

Pursuant to the provisions of section 139, 142 and other applicable provisions, if any, of Companies Act, 2013, read with Rule 6 of Companies (Audit and Auditors) Rules, 2014 and pursuant to the recommendation of the Audit Committee, M/s. G M Pawle and Associates, Chartered Accountant, Solapur (M.No.032561), was appointed as a Statutory Auditors of the Company and the Board have conveyed his consent to be appointed as the Statutory Auditors of the Company along with a confirmation that, his appointment is within the limits prescribed under the Companies Act, 2013.

The report of the Statutory Auditors along with the notes to Schedules is enclosed to this report and also the report contains qualification, reservation or adverse remark or disclaimer for the financial year under review.

13. RESPONSE TO AUDITORS QUALIFICATION:

The Board of the Company has discussed the points as mentioned in the Auditors report for period under review, in respect to this management is taking the necessary steps towards it.

Comments of the Board of Directors on the observations pointed out in the Independent Audit Report;

Sr. No.	Observations by Statutory Auditor	Comments by the Board
1	During the year under review; The Company has incurred net cash loss during the year under review. The Spinning division is not operation from last three years or so. There is no concrete proposal in evidence for resuming the operations.	Government of India has increased the MSP price for cotton hence the cotton prices are abnormal and also yarn market is very dull there is no demand for the yarn in local market and export hence company is waiting for favorable market to avoid huge losses The Company is making concerted efforts to restart operations. However, the recommencement has been delayed due to challenging market conditions. These adverse conditions are affecting our ability to resume operations as planned. We are continuously assessing the market situation and exploring feasible solutions to address these challenges and move forward with the recommencement of the division.

14. SECRETARIAL AUDIT:

Pursuant to the provisions of the Section 204 of the Act and The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company had appointed M/s. Nikhil Sawant & Co. Company Secretaries, Pune, as Secretarial Auditor to undertake the Secretarial Audit of the Company for the financial year 202324. The report is self-explanatory annexed herewith; however, the Company has initiated necessary steps to comply with queries and/or non-compliances mentioned under the Secretarial Audit Report as per the provisions of the Act and the SEBI (LODR), 2015.

15. INTERNAL FINANCIAL CONTROL:

The Company has in place internal financial control systems, commensurate with the size and complexity of its operations to ensure proper recording of financial and operational information and compliance of various internal controls and other regulatory and statutory compliances. The internal auditor monitors and evaluates the efficacy and adequacy of internal control systems in the Company. Based on the report of the internal auditor, respective departments undertake corrective action in their respective areas and thereby strengthen the controls. Significant audit observations and corrective actions there on are presented to the Audit Committee of the Board.

16. ENERGY CONSERVATION, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO:

The information on conservation of energy, technology absorption and foreign exchange earnings and outgo stipulated under Section 134(3) (m) of the Act read with Rule 8(3) of The Companies (Accounts) Rules, 2014, is annexed herewith separately.

17. DEPOSITS:

The Company has not accepted or renewed any deposits from the public during the year under review in terms of the Companies (Acceptance of Deposits) Rule, 2014.

18. RELATED PARTY TRANSACTIONS:

All Related Party Transactions (RPTs) that were entered into during the financial year were on an arm’s length basis and in the ordinary course of business. Accordingly, detailed information given in Form AOC-2 which is annexed herewith separately.

There were no materially significant RPTs entered into by the Company during the year.

19. RISK MANAGEMENT:

The Company has adopted a Risk Management Policy, pursuant to the provisions of Section 134 of the Act, which has a robust Risk Management framework to identify and evaluate business risks and opportunities. This framework seeks to create transparency, minimize adverse impact on business objectives and enhance the Company’s competitive advantage.

The risk framework defines, the risk management approach across the enterprise at various levels including documentation and reporting.

The framework enables risks to be appropriately rated and graded in accordance with their potential impact and likelihood. The two key components of risks are the probability (likelihood) of occurrence and the impact (consequence) of occurrence, if the risk occurs. Risk is analyzed by combining estimates of probability and impact in the context of existing control measures.

20. LOANS, GUARANTEES AND INVESTMENTS:

During the year, the Company has not made any investments or given any loans or guarantees or provided any security in connection with a loan to any person or body corporate, covered under Section 186 of the Act.

21. CORPORATE SOCIAL RESPONSIBILITY INITIATIVE:

As the net worth of the Company is less than Rs. Five hundred crores, further the turnover of the Company is less than Rs. One thousand crores and net profit of the Company does not exceed Rs. Five crore or more at any point during the financial year, therefore the Company is not obliged to form Corporate Social Responsibility committee as per terms of section 135 (1) of the Act.

22. PARTICULARS OF EMPLOYEES:

There are no employee drawing remuneration exceeding the limits prescribed under Section 134(3) (q) of the Act read with Rule 5 of Rules 2014 and hence no details are required to be annexed to this report.

23. VIGIL MECHANISMS/WHISTLE BLOWER POLICY:

The Company has established a vigil mechanism named as ‘Whistle Blower Policy’ within the Company in compliance with the provisions of Section 177(10) of the Act and Regulation 22 of the SEBI (LODR), 2015.

The policy of such mechanism has been circulated to all employees within the Company, which provides a framework to the employees for guided & proper utilization of the mechanism.

24. SEPARATE MEETING OF INDEPENDENT DIRECTORS:

The Independent Directors were fully kept informed of the Company’s activities in all its spheres. During the year under review, a separate meeting of Independent Directors was held on 18^th December, 2023 and the Independent Directors reviewed the performance of (i) non-Independent directors and (ii) the board as whole.

They also assessed the quality, quantity and timelines of flow of information between the Company’s Management and the Board that are necessary for the Board to effectively and reasonably perform their duties. All the Independent Directors were present at the meeting.

25. SAFETY MEASURES:

i. Insurance:

Your Company continued to cover all assets mainly, plant & machinery, building, materials, stock, furniture & fixtures against possible risks like fire, flood, terrorism and earthquake.

ii. Industrial Relations:

The industrial relations at the plants of the Company during the year under review continued to be cordial throughout the year.

26. MANAGEMENT’S DISCUSSION AND ANALYSIS REPORT:

Management’s Discussion and Analysis Report for the year under review, as stipulated under Regulation 34 read with Schedule V to the SEBI (LODR), 2015, is presented in a separate section forming part of the Annual Report.

27. DISQUALIFICATION OF DIRECTORS:

None of Director on the Board of the Company has incurred any disqualification on account of non-compliance with any of the provisions of the Act.

28. DIRECTOR’S RESPOSIBILITY STATEMENT:

The Board of Directors acknowledge the responsibility for ensuring compliance with the provisions of Section 134(3)(c) read with Section 134(5) of the Act in the preparation of annual accounts for the year ended on 31^st March, 2024 and state that:

i. In the preparation of the annual accounts for Financial Year ended 31st March, 2024, the applicable accounting standards have been followed along with proper explanation relating to material departures;

ii. The Directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a

true and fair view of the state of affairs of the Company at the end of the financial year and of the profit of the Company for that period.

iii. The Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities.

iv. The Directors have prepared the annual accounts for Financial Year ended 31st March, 2024 on a ‘going concern’ basis.

v. The Directors have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and have been operating efficiently, and

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

29. DETAILS OF SUBSIDIARIES, JOINT VENTURES OR ASSOCIATE COMPANIES:

The Company does not have any subsidiary or joint venture within the meaning of this clause and hence no details are required to be given.

30. DISCLOSURES AS PER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013:

The Company has zero tolerance for sexual harassment at its workplace and has adopted a Policy on prevention, prohibition and redressal of sexual harassment at the workplace in line with the provisions of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and the Rules thereunder for prevention and redressal of complaints of sexual harassment at workplace.

31. DETAILS OF APPLICATION MADE OR ANY PROCEEDING PENDING UNDER THE INSOLVENCY AND BANKRUPTCY CODE, 2016 (31 OF 2016)

Your Company neither made any application nor any proceeding is pending under the Insolvency and Bankruptcy Code, 2016 during the year.

32. THE DETAILS OF DIFFERENCE BETWEEN AMOUNT OF THE VALUATION DONE AT THE TIME OF ONE TIME SETTLEMENT AND THE VALUATION DONE WHILE TAKING LOAN FROM THE BANKS OR FINANCIAL INSTITUTIONS ALONG WITH THE REASONS THEREOF

Your Company has not obtained any one-time settlement of loan from the Banks or Financial Institutions during the year.

33. APPRECIATION:

Your Directors would like to place on record their appreciation for the co-operation and assistance received from the banks, for the utmost confidence reposed in the management by the shareholders and customers during the year under review. Your Directors wish to thank for the services of the executive, staff and workers of the Company at all levels for their dedication, devotion, determination and discipline. The Directors express their profound thanks to the shareholders for their continued support and goodwill and they look forward to the future with confidence.

By Order of the Board of Directors KATARE SPINNING MILLS LIMITED

SD/-

KISHORE KATARE MANAGING DIRECTOR (DIN- 00645013)

Add: 14/30 Ground Floor, B Wing, Katare complex,

Gandhinagar, Bl. No. 10 Solapur 413006

Place: Solapur

Date: 09^th August, 2024

---

Mar 31, 2023

Your directors have pleasure in presenting the Forty third (43^rd) Directors’ Report of your Company along with the financial statements for the Financial Year ended 31^st March 2023.

1. FINANCIAL HIGHLIGHTS:

Certain key aspects of your Company’s performance during the Financial Year ended 31^st March 2023 as compared to the previous Financial Year are summarized below:

(Rs. In Thousand)

	2022-23	2021-22
Turnover	83,370	279,510
Profit Before Interest & Depreciation	1,665	172,858
Less : Interest	1,341	9,740
Profit before depreciation	324	163,118
Less : Depreciation	13,749	13,574
Loss after depreciation & before taxation	-13,425	149,544
Add : Excess provision in the last year		0
Less: Tax expenses relating to previous		27,600
year
Add/Less: Deferred Tax Liability/Assets	1 , 6 9 4	42,739
Profit / loss for the period
Profit/ Loss for the period	-15,119	79,204
Add : Balance carried from previous
Year	16,029	-78,571
Add: Revaluation Reserve W/o on Sold		15,395
Assets
Add: Mat Credit Written off	27,149	0
Profit/Loss carried forward	28,059	16,029

2. OVERVIEW OF OPERATIONS:

During the year under review, your Company recorded a total income of Rs. 83,370 (in thousand) as compared to last year’s income of Rs.279,510 (in thousand) and net Loss of Rs. 15,119 (in thousand) as compared to last year’s net Profit of Rs.79,204 (in thousand). For further information, kindly refer to Management Discussion and Analysis Report, forming a part of this Annual Report.

The Board of Directors have taken measures to adopt new technologies and industry standards to cope up with competition in the industry and advance towards achieving its goal.

3. DIVIDEND AND RESERVE:

Your directors do not recommend any dividend for the year under review. The details of reserves and surplus are provided in Note No. 15 of the notes to the standalone financial statement.

4. STATE OF AFFAIRS OF THE COMPANY/BUSINESS OVERVIEW: SPINNING MILL INDUSTRY:

The performance of the spinning industry in India during the financial year 2022-23 was mixed. On the one hand, there was strong export demand for cotton yarn, leading to an overall growth of 35% in exports. On the other hand, the domestic market was sluggish due to high cotton prices.

The Company has generated a revenue of Rs. 8.33 Cr during the reporting year from spinning segment as compared to Rs.27.95 Cr for the previous financial year. The reason for decline in revenue is the average cotton price in India during the 2022-23 season was around INR 60,000 per candy (356 kg), which was significantly higher than the previous season. This led to a decline in cotton yarn production and consumption in the domestic market.

SOLAR POWER PROJECT:

Considering the involvement of power part in the cost of finished goods, The Company had installed 1MW solar plant for captive consumption under net metering system. The generation of energy is consuming for day to day working and exports to grid. On modernization of the plant, company will get good returns on consumption of self-power consumption. This is the first net metering installation in the Maharashtra. During the financial year total 13,66,653 electricity units have been generated and it helps the Company to reduce the cost of productions and move ahead towards goal of sustainable growth.

5. ANNUAL RETURN:

Pursuant to the provisions of the Companies Act, 2013 (“the Act”), an extract of the Annual Return as on March 31, 2023, in prescribed Form No. MGT-9 is given to this Report.

6. BOARD MEETINGS:

Four Meetings of the Board of Directors were held during the financial year 2022-23 and the gap between two consecutive board meetings was in accordance with the statutory limit. The details of the number of meetings held and attended by each Director are provided in the Corporate Governance Report, which forms part of this Report.

7. BOARD EFFECTIVENESS:

The Company has adopted the Governance guidelines which, inter alia, cover aspects related to composition and role of the Board, Chairman and Directors, Board diversity, definition of independence, Director’s term, retirement age and Committees of the Board. It also covers aspects relating to nomination, appointment, induction and development of Directors, Director’s Remuneration, Code of Conduct, Board Effectiveness Review and mandates of Board Committees.

A. BOARD EVALUATION:

The Board of Directors has carried out an annual evaluation of its own performance, Board Committees and individual Directors pursuant to the provisions of the Act and the corporate governance requirement as prescribed by SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 [“SEBI (LODR), 2015”].

The performance of the Board was evaluated by the Board after seeking inputs from the Directors on the basis of the criteria such as the Board Composition and structures, effectiveness of board processes, information and functioning, etc. The performance of the committees was evaluated by the Board after seeking inputs from the committee members on the basis of the criteria such as the composition of committees, effectiveness of committee meetings, etc.

The Board and the Nomination and Remuneration Committee (NRC) reviewed the performance of the individual Directors on the basis of the criteria such as the contribution of the individual Director to the Board and Committee meetings like preparedness on the issues to be discussed, meaningful and constructive contribution and inputs in meetings, etc. In addition, the Chairman was also evaluated on the key aspect of his role.

B. APPOINTMENT OF DIRECTORS AND CRITERIA FOR DETERMINING QUALIFICATIONS, POSITIVE ATTRIBUTES, INDEPENDENCE OF A DIRECTOR:

The Nomination and Remuneration Committee (NRC) is responsible for developing competency requirements for the Board based on the industry and strategy of the Company. The NRC reviews and meets potential candidates, prior to recommending their nomination to the Board. At the time of appointment, specific requirements for the position, including expert knowledge expected, is communicated to the appointee.

The NRC has formulated the criteria for determining qualifications, positive attributes and independence of Directors in terms of provisions of Section 178 (3) of the Act and SEBI (LODR), 2015:

Independence: A Director will be considered as an ‘Independent Director’ if he/ she meets with the criteria for ‘Independence’ as laid down in the Act and SEBI (LODR), 2015.

Competency: A transparent Board nomination process is in place that encourages diversity of thought, experience, knowledge, perspective, age and gender. It is ensured that the Board has a mix of members with different educational qualifications, knowledge and with adequate experience in banking and finance, accounting and taxation, legal and regulatory matters, hospitality sector and other disciplines related to the Company’s businesses.

Additional Positive Attributes:

> The Directors should not have any other pecuniary relationship with the Company and the Company’s promoters, except as provided under law.

> The Directors should maintain an arm’s length relationship between themselves and the employees of the Company, as also with the Directors and promoters, stakeholders for whom the relationship with these entities is material.

> The Directors should not be the subject of proved allegations of illegal or unethical behavior, in their private or professional lives.

> The Directors should have the ability to devote sufficient time to the affairs of the Company.

C. REMUNERATION POLICY:

The Company had adopted a Remuneration Policy for the Directors, KMP and other employees, pursuant to the provisions of the Act and SEBI (LODR), 2015.

The key principles governing the Company’s Remuneration Policy are as follows:

> Independent Directors (ID) may be paid sitting fees for attending the meetings of the Board and of Committees of which they may be members, and receive commission within regulatory limits, as recommended by the NRC and approved by the Board.

> Overall remuneration should be reasonable and sufficient to attract, retain and motivate Directors aligned to the requirements of the Company, taking into consideration the challenges faced by the Company and its future growth imperatives.

> Remuneration paid should be reflective of the size of the Company, complexity of the sector/ industry/Company’s operations and the Company’s capacity to pay the remuneration and be consistent with recognized best practices.

Remuneration for Managing Director (MD)/ Executive Directors (ED)/ rest of the Employees

The extent of overall remuneration should be sufficient to attract and retain talented and qualified individuals suitable for every role. Hence remuneration should be market competitive, driven by the role played by the individual, reflective of the size of the Company, complexity of the sector/ industry/ Company’s operations and the Company’s capacity to pay, consistent with recognized best practices and aligned to any regulatory requirements.

Basic/ fixed salary is provided to all employees to ensure that there is a steady income in line with their skills and experience. In addition, the Company provides employees with certain perquisites, allowances and benefits to enable a certain level of lifestyle and to offer scope for savings.

In addition to the basic / fixed salary, benefits, perquisites and allowances as provided above, the Company provides EDs such remuneration by way of commission, calculated with reference to the net profits of the Company in a particular financial year, as may be determined by the Board, subject to the overall ceilings stipulated in Section 197 of the Act. The specific amount payable to the EDs would be based on performance as evaluated by the NRC

and approved by the Board and the Managing Director (MD) was appointed on non-remuneration basis in the Company.

It is affirmed that the remuneration paid to Directors and all other employees is as per the Remuneration Policy of the Company.

8. SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS:

During the Financial year under review, no significant material orders were passed by the regulators or courts or tribunals impacting the going concern status and the Company’s operations.

9. AUDIT COMMITTEE:

Details pertaining to the composition of Audit Committee are included in the Corporate Governance Report, which forms part of the Annual Report.

10. DIRECTORS AND KMP:

As per the provisions of Section 152 of the Act, Mrs. Vidyavati K Katare (DIN 01443784), is liable to retires by rotation at the ensuing annual general meeting and being eligible offered herself for re-appointment, the matter will be placed before member of the Company for approval.

The Company has appointed Key managerial personnel i.e. Mrs. Bhagyashree Rawani as a Company Secretary cum Compliance officer in the Company with effect from 10^th November, 2022.

We regret to inform you the sudden and sad demise of Mr. Subhash T. Katare, Director and Promoter of the Company on dated 28^th July, 2022.

Mr. Subhash T. Katare was the director and Promoter since inception of the Company and the Company immensely benefitted from his vision and leadership during his tenure. His sudden passing away will be irreparable loss to the Company and all the directors and employees of the Company convey deep sympathy, sorrow, and condolence to his family.

The Company has received declarations from all the Independent Directors confirming that they meet the criteria of independence as prescribed both under Section 149 (6) of the Act and SEBI (LODR), 2015.

11. CORPORATE GOVERNANCE:

The members please note that the provisions relating to Corporate Governance i.e. Regulation 27 of SEBI (LODR), 2015 are not applicable to the Company and accordingly, the Company is not required to submit the Corporate Governance Report with this Annual Report. However, keeping in view the objective of encouraging the use of better practices through voluntary adoption, the Company has decided to adopt and disseminate voluntary disclosure of Corporate Governance which not only serve as a benchmark for the corporate sector but also help the Company in achieving the highest standard of corporate governance.

Accordingly, a voluntary disclosure i.e. the report on Corporate Governance as stipulated under regulation 34(3) read with Schedule V of the SEBI (LODR), 2015 is annexed herewith and forms a part of this report.

As such the Members may note that any omission of any corporate governance provisions shall not be construed as non-compliance of the above-mentioned regulations.

12. AUDITORS & THEIR REPORTS:

Pursuant to the provisions of section 139, 142 and other applicable provisions, if any, of Companies Act, 2013, read with Rule 6 of Companies (Audit and Auditors) Rules, 2014 and pursuant to the recommendation of the Audit Committee, Mr. G. M. Pawale, Chartered Accountant, Solapur (M.No.032561), was appointed as a Statutory Auditors of the Company and the Board have conveyed his consent to be appointed as the Statutory Auditors of the Company along with a confirmation that, his appointment is within the limits prescribed under the Companies Act, 2013.

The report of the Statutory Auditors along with the notes to Schedules is enclosed to this report and also the report contains qualification, reservation or adverse remark or disclaimer for the financial year under review.

13. RESPONSE TO AUDITORS QUALIFICATION:

The Board of the Company has discussed the points as mentioned in the Auditors report for period under review, in respect to this management is taking the necessary steps towards it.

Comments of the Board of Directors on the observations pointed out in the Independent Audit Report;

Sr. No	Observations by Statutory Auditor	Comments by the Board
1	During the year under review, the Company’s spinning division was not in operation. The company has incurred net cash losses in the previous financial years. These conditions indicate that a material uncertainty exists that may cast significant doubt on the Company’s ability to continue as a going concern. However, the Ind AS financial statements of the Company are prepared on a going concern.	Company is starring hard to recommence the spinning activity. However adverse market conditions exist for which recommencement is delayed.
2	Emphasis of the Matter The company has sold its part of the land, for a consideration of Rs. 121.00 lakh. Profit from sale of land Rs. 120.55 lakh is credited to other income. However, the sale deed in respect thereof is notarized and registered sale deed is not yet executed which is reported to be pending for procedural matter of stamp duty exemption granted by District Industries Centre but not implemented by the sub-registrar.	Stamp duty exemption is technically granted by DIC & the same is under process with appropriate authority. Same will be executed in near future. However sale transaction is final & irrevocable.
3	Deferred Tax Asset/liability There is a complexity relating to the treatment and recognition of current and deferred taxation, arising from significant or unusual transactions may be ambiguous and thereby require legal opinion. In addition, the determination of whether to recognize deferred taxation assets is dependent on the directors’ assessment of the utilization of the historical taxation losses and the timing of realizing temporary differences, which requires significant judgment. With respect to uncertain taxation Positions, the directors make provision for taxation based on the most probable outcome. As a result, taxation is considered a key audit matter due to the complexities and judgment	Auditors observations are self explanatory.

	arising from the considerations relating to the calculation, recognition, and classification of current and deferred tax balances. The disclosures relating to taxation and deferred taxation are contained in note No.8 of the financial statements.
4	Payment of Gratuity Ascertainment and its Provision for payment of gratuity liable under the respective asset	There is no pending liability of gratuity

14. SECRETARIAL AUDIT:

Pursuant to the provisions of the Section 204 of the Act and The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company had appointed M/S. Nikhil Sawant & Co. Company Secretaries, Pune, as Secretarial Auditor to undertake the Secretarial Audit of the Company for the financial year 2022-23. The Report is self-explanatory annexed herewith; however, the Company has initiated necessary steps to comply with queries and/or non-compliances mentioned under the Secretarial Audit Report as per the provisions of the Act and the SEBI (LODR), 2015.

15. INTERNAL FINANCIAL CONTROL:

The Company has in place internal financial control systems, commensurate with the size and complexity of its operations to ensure proper recording of financial and operational information and compliance of various internal controls and other regulatory and statutory compliances. The internal auditor monitors and evaluates the efficacy and adequacy of internal control systems in the Company. Based on the report of the internal auditor, respective departments undertake corrective action in their respective areas and thereby strengthen the controls. Significant audit observations and corrective actions there on are presented to the Audit Committee of the Board.

16. ENERGY CONSERVATION, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO:

The information on conservation of energy, technology absorption and foreign exchange earnings and outgo stipulated under Section 134(3) (m) of the Act read with Rule 8(3) of The Companies (Accounts) Rules, 2014, is annexed herewith separately.

17. DEPOSITS:

The Company has not accepted or renewed any deposits from the public during the year under review in terms of the Companies (Acceptance of Deposits) Rule, 2014.

18. RELATED PARTY TRANSACTIONS:

All Related Party Transactions (RPTs) that were entered into during the financial year were on an arm’s length basis and in the ordinary course of business. Accordingly, detailed information given in Form AOC-2 which is annexed herewith separately.

There were no materially significant RPTs entered into by the Company during the year.

19. RISK MANAGEMENT:

The Company has adopted a Risk Management Policy, pursuant to the provisions of Section 134 of the Act, which has a robust Risk Management framework to identify and evaluate business risks and opportunities. This framework seeks to create transparency, minimize adverse impact on business objectives and enhance the Company’s competitive advantage.

The risk framework defines, the risk management approach across the enterprise at various levels including documentation and reporting.

The framework enables risks to be appropriately rated and graded in accordance with their potential impact and likelihood. The two key components of risks are the probability (likelihood) of occurrence and the impact (consequence) of occurrence, if the risk occurs. Risk is analyzed by combining estimates of probability and impact in the context of existing control measures.

20. LOANS, GUARANTEES AND INVESTMENTS:

During the year, the Company has not made any investments or given any loans or guarantees or provided any security in connection with a loan to any person or body corporate, covered under Section 186 of the Act.

21. CORPORATE SOCIAL RESPONSIBILITY INITIATIVE:

As the net worth of the Company is less than Rs. Five hundred crores, further the turnover of the Company is less than Rs. One thousand crores and net profit of the Company does not exceed Rs. Five crore or more at any point during the financial year, therefore the Company is not obliged to form Corporate Social Responsibility committee as per terms of section 135 (1) of the Act.

22. PARTICULARS OF EMPLOYEES:

There are no employee drawing remuneration exceeding the limits prescribed under Section 134(3) (q) of the Act read with Rule 5 of Rules 2014 and hence no details are required to be annexed to this report.

23. VIGIL MECHANISMS/WHISTLE BLOWER POLICY:

The Company has established a vigil mechanism named as ‘Whistle Blower Policy’ within the Company in compliance with the provisions of Section 177(10) of the Act and Regulation 22 of the SEBI (LODR), 2015.

The policy of such mechanism has been circulated to all employees within the Company, which provides a framework to the employees for guided & proper utilization of the mechanism.

24. SEPARATE MEETING OF INDEPENDENT DIRECTORS:

The Independent Directors were fully kept informed of the Company’s activities in all its spheres. During the year under review, a separate meeting of Independent Directors was held on 16^th December, 2022 and the Independent Directors reviewed the performance of (i) non-Independent directors and (ii) the board as whole.

They also assessed the quality, quantity and timelines of flow of information between the Company’s Management and the Board that are necessary for the Board to effectively and reasonably perform their duties. All the Independent Directors were present at the meeting.

25. SAFETY MEASURES:

i. Insurance:

Your Company continued to cover all assets mainly, plant & machinery, building, materials, stock, furniture & fixtures against possible risks like fire, flood, terrorism and earthquake.

ii. Industrial Relations:

The industrial relations at the plants of the Company during the year under review continued to be cordial throughout the year.

26. MANAGEMENT’S DISCUSSION AND ANALYSIS REPORT:

Management’s Discussion and Analysis Report for the year under review, as stipulated under Regulation 34 read with Schedule V to the SEBI (LODR), 2015, is presented in a separate section forming part of the Annual Report.

27. DISQUALIFICATION OF DIRECTORS:

None of Director on the Board of the Company has incurred any disqualification on account of non-compliance with any of the provisions of the Act.

28. DIRECTOR’S RESPOSIBILITY STATEMENT:

The Board of Directors acknowledge the responsibility for ensuring compliance with the provisions of Section 134(3)(c) read with Section 134(5) of the Act in the preparation of annual accounts for the year ended on 31^st March, 2023 and state that:

1. In the preparation of the annual accounts for Financial Year ended 31st March, 2023, the applicable accounting standards have been followed along with proper explanation relating to material departures;

2. The Directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit of the Company for that period.

3. The Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities.

4. The Directors have prepared the annual accounts for Financial Year ended 31st March, 20233 on a ‘going concern’ basis.

5. The Directors have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and have been operating efficiently, and

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

29. DETAILS OF SUBSIDIARIES, JOINT VENTURES OR ASSOCIATE COMPANIES:

The Company does not have any subsidiary or joint venture within the meaning of this clause and hence no details are required to be given.

30. DISCLOSURES AS PER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013:

The Company has zero tolerance for sexual harassment at its workplace and has adopted a Policy on prevention, prohibition and redressal of sexual harassment at the workplace in line with the provisions of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and the Rules thereunder for prevention and redressal of complaints of sexual harassment at workplace.

31. DETAILS OF APPLICATION MADE OR ANY PROCEEDING PENDING UNDER THE INSOLVENCY AND BANKRUPTCY CODE, 2016 (31 OF 2016)

Your Company neither made any application nor any proceeding is pending under the Insolvency and Bankruptcy Code, 2016 during the year.

32. THE DETAILS OF DIFFERENCE BETWEEN AMOUNT OF THE VALUATION DONE AT THE TIME OF ONE TIME SETTLEMENT AND THE VALUATION DONE WHILE TAKING LOAN FROM THE BANKS OR FINANCIAL INSTITUTIONS ALONG WITH THE REASONS THEREOF

Your Company has not obtained any one-time settlement of loan from the Banks or Financial Institutions.

33. APPRECIATION:

Your Directors would like to place on record their appreciation for the cooperation and assistance received from the banks, for the utmost confidence reposed in the management by the shareholders and customers during the year under review. Your Directors wish to thank for the services of the executive, staff and workers of the Company at all levels for their dedication, devotion, determination and discipline. The Directors express their profound thanks to the shareholders for their continued support and goodwill and they look forward to the future with confidence.

By Order of the Board of Directors KATARE SPINNING MILLS LIMITED

SD/-

KISHORE KATARE MANAGING DIRECTOR (DIN- 00645013)

Place: Solapur

Date: 14^th August, 2023

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Mar 31, 2015

Dear Members,

Your Directors have pleaser in presenting their THIRTY FIFTH Annual Report on the business and operations of the Company together with the Audited Statement of Accounts for the year ended 31st March,2015.

1. Financial Highlights:

(Rs. in Lacs)

Particulars 2014-2015 2013-2014

Turnover 3661.69 3770.13

Profit Before Interest & Depreciation 71.92 324.41

Less : Interest 168.45 247.16

Profit before depreciation -96.53 77.25

Less : Depreciation 62.72 79.88

Add : Transfer from Revaluation Reserve 0 20.71

Profit after depreciation & before taxation -159.24 18.08

Add : Excess provision in the last year 1.34 0.39

Less: Tax expenses relating to previous year 26.50 20.83

Add/Less: Deferred Tax Liability/Assets 202.94 -15.11

Profit / loss for the period 18.53 -17.47

Add : Balance carried from previous year 322.84 321.78

Amount available for appropriation 332.07 304.31

Less : Transitional effect on revision 175.92 0 of depreciation on useful life of assets in accordance with schedule II

Profit carried forward 146.92 304.31

2. OPERATIONS

Solar Power Project

The Company has already Commissioned Rooftop Solar Power Project at hotel and has getting good benefit by way of reduction in monthly electricity bills.

Considering the involvement of power part in the cost of finished goods, the Company has decided to set up 1 MW power project for captive consumption and accordingly pleased to inform you that the Company has successfully commissioned 1 MW solar plant for captive consumption in the month of 22nd April 2015. This is the first net metering installation in the Maharashtra so the Company will save the cost of Rs.8.10 per unit and we expect about19 lacs units will be generated per annum so that the Company will save electricity bill substantially during the current year.

3. DIVIDEND

Your Directors do not recommend any dividend for the year under report.

4. DIRECTORS

(a) The Directors express their profound sorrow at the sad demise of Vijay T Katare,who was being an ardent, philanthropist, hardworking and place on record their deep sense of appreciation for the valuable services rendered by him during association as a founder Director and later on a Chairman and Executive Director of the Company prior to his demise.

(b) Miss. Vidhyawati K.Katare has been appointed as an Additional Director of the Company w.e.f. 28.02.2015 pursuant to the provisions of Article 110 of the Articles of Association of the Company. Miss. Vidhyawati has been associated for a long period with the industrial family of Katare and already on the Board of other sister companies and trusty of the Charitable institution and thus has vast experience in the industrial and also social field which will be beneficial to the Company. This will also fulfill the requirement of having a woman Director on the Board of Directors under the Companies Act, 2013. She will hold office upto the date of the forthcoming Annual General Meeting and being eligible, offers herself for being appointed as a Director of the Company, liable to retire by rotation.

(c) Under Article 130 of Articles of Association of the Company,Mr. S.T. Katare and Mr Y N Konda, both Directors of the company retire by rotation and being eligible offers them self for reappointment.

5. RESERVES

No amount out of current year's profit was transferred to the General Reserves.

6. CORPORATE GOVERNANCE

Your Company believes that Corporate Governance is a code of self discipline. In the line with this policy, the Board of Directors strongly believes that it is very important that the Company follows healthy Corporate Governance practices and reports to the shareholders the progress made on the various measures undertaken. The Corporate Governance Certificate from Statutory Auditor regarding compliance of conditions of corporate governance as stipulated in Clause 49 of the Listing agreement is annexed with this report.

7. AUDITORS

G. M. Pawale, chartered accountants, Solapur hold office until the conclusion of the ensuing Annual General Meeting and are eligible for reappointment. The members are requested to re-appoint them as Auditors of the Company.

8. INTERNAL FINANCIAL CONTROL:

The Company has in place internal financial control systems, commensurate with the size and complexity of its operations to ensure proper recording of financial and operational information and compliance of various internal controls and other regulatory and statutory compliances. The internal auditor monitors and evaluates the efficacy and adequacy of internal control systems in the Company. Based on the report of the internal auditor, respective departments undertake corrective action in their respective areas and thereby strengthen the controls. Significant audit observations and corrective actions there are presented to the Audit Committee of the Board.

9. ENERGY CONSERVATION, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO:

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

10. Secretarial Audit Report:

In terms of Section 204 of the Companies Act, 2013 and Rules made there under, M/s. Upasani and Co., Practicing Company Secretary, Dombivli (E) has been appointed Secretarial Auditor of the Company. The report of the Secretarial Auditor is enclosed herewith. The report is self-explanatory however; the Company has initiated necessary steps to comply with queries mentioned under the Secretarial Audit Report as per the provisions of the Companies Act, 2013 and the Listing Agreement.

11. FIXED DEPOSITS

The Company has not accepted or renewed any deposits from the public during the year under review in terms of the Companies (acceptance of deposits) Rule,2014.

12. PARTICULARS OF EMPLOYEES

There are no employee drawing remuneration exceeding the limits prescribed under Section 134(3) (q) read with Rule 5 of Rules 2014 and hence no details are required to be annexed to this report.

13. SAFETY MEASURES

i. INSURANCE.

Your Company continued to cover all assets mainly; plant & machinery, building, materials, stock, furniture & fixtures against possible risks like fire, flood, terrorism and earthquake.

ii. INDUSTRIAL RELATIONS

The industrial relations at the plants of the Company during the year under review continued to be cordial throughout the year.

14. LISTING OF SHARES & SECURITIES

The Company's Shares are listed on the BOMBAY STOCK EXCHANGE LIMITED

15. DIRECTORS RESPONSIBILITY STATEMENT

The Board of Directors acknowledge the responsibility for ensuring compliance with the provision of Section 134(3)(c) read with Section 134(5) of the Companies Act, 2016 in the preparation of annual accounts for the year ended on 31st March,2015 and state that

1. In the preparation of the annual accounts, the applicable accounting standard had been followed along with proper explanation relating to material departures;

2. The directors had selected such accounting policies and applied them consistently and made judgment and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year covered under this report and of the profit and loss of the Company for that period.

3. The Directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities.

4. The Directors had prepared the annual accounts on a going concern basis.

5. The Directors had laid down internal financial control to be followed by the Company and that such internal financial control are adequate and were operating effectively: and

6. The Directors had devised proper systems to ensure compliance with the provision of all applicable laws and that such systems were adequate and operative effectively.

16. APPRECIATION

Your Directors would like to place on record their appreciation for the co-operation and assistance received from the banks, for the utmost confidence reposed in the management by the shareholders and customers during the year under review. Your Directors wish to thank for the services of the executive, staff and workers of the Company at all levels for their dedication, devotion, determination and discipline. The Directors express their profound thanks to the shareholders for their continued support and goodwill and they look forward to the future with confidence.

By order of the Board of Directors

Solapur K .T. KATARE August 31, 2015 Managing Director (DIN No.-00645013)

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Mar 31, 2014

Dear Members,

The Directors are pleased to present their THIRTY FOURTH Annual Report 01 the Business and Operations or your company :ogether with the Audited Statement ot Accounts ror the year ended31st March, 2014

Financial Results :

(rs in Lacs)

Particulars 2013-2014 2012-2013

Turnover 3770.13 4145.05

Profit Eiefone nterest & Depreciation 324.41 290.75

less : Interest 247.16 214.15

Profit Before Depreciation 77.25 76.59

Less : Depreciation 79.88 139-84

Arid : Transfer frrm Rpvaliinthn Reserve 20.71 76.92

Profit After Depreciation & before Taxation 18.08 21.67

Add : Excess provision in the last year 0.39 4.53

Less : Provision fcr Income Tax (MAT) 0.00 1.73

Less i Tax Expenses relating to previous year 20.83 4.G2

Add/Less : Deferred Tax Liability 15.11 24.89

Profit / Loss for the period 17-47 44.77

Add : Balance brought forward 321.78 305.51

Less : Provision for dividend 0.00 28.53

Profit Carried to Balance Sheet 304.31 321.73

SOLAR POWER PROJECT

me company has already started Rooftoo Solar Rower Project a: hotel, the company has getting goad benefit by way of reduction in monthly eiectriclty bille.

Also the company has decider! to setuo a Sola- Power Project of 1 MW at mill site for captive ccnsu Tipton and already tne Insta laticm of thepro;ect has been completed and expected to be commissioned by September 2014. The reason to set behind setting up this project is to save in the cost of production and improve the financial strength of the company as well as production of spirninq division on commissioning of this project of the company.

DIVIDEND

Your Directors do rot recommend any divicendfor the year tinder report,

DIRECTORS

Mi U.*4. Mahindrakar & Mr S E Ingmdar, both Directors of the company retire by rotation and being eligible tiffei s them self for i eappointiTent,

CORPORATE GOVERNANCE

Pursuant to Clause 49 or the Listing Agreement, the Management discussion ana Araiysis, tie Corporate Governance Report, together with the Auditor's Certificate on compliance with the ccnditions of Corporate Governance as aiddowu, forms part of the Annual Report-

AUDHOR5

G. M. Pawale, chartered accountants, Solapur hold office until the conclusion of the ensuing Aunual general Meeting arg are eligible for reappointment, i he members are requested to re- appoint them as Auditors of the Company till the- conclusion of the next Annual General Meeting.

FIXED DEPOSITS

The Company has not accepted or -eneweti any deposits from the public during the vear under review within me meaning ot section 5RAot the companies Act, mo and rules made there u ndor.

PARTICULARS OF EMP.OYEES

There are no employee drawing remuneration exceeding the limits prescribed under Section 217(2A) cf the Companies Act, 1556 read with Companies (particulars of employees) Rules, iy75(asamend ed) a nd hence no deta i is are rec u i red to be a n nexed to th s report.

SATETY MEASURES

i. INSURANCE

Ym.ir Company ernrinupd ho rover all as-iors mainly; plant machinery , building, materials, stock, furniture & fixtures against possible risks like fire, flood, terrorism and earthquake,

ii. INDUSTRIAL RELATIONS

The iudusLiidl relctiujib dL the pidits uT the Curripdriy during .lie year Linder :eview continued to be cordial throughout che year.

PARTICU LARS REGARDING CONS ER VAT ION ENERGY ETC ,

Information in accordance with the provi sic ns cf section 217(l)[e) of the Companies Act, 1956 read with Companies (Disclosure of Particulars in the Report of the Directors) Rules, 1938 regarding conservation uT energy teclirioluyy absorption trid foreign exchange and outgo is given .nthe statement annexed hereto forming partofthe Report.

LISTING OF SHARES & SECURITIES

The Company's Shares are Iisted or the BOMBAY STDCK EXCHANGE LIMiTED.

DIRECTORS RESPONSIBILITY STATEMENT AS REQUIRED UNDER SECT!ON 217(2AA) CF THE COMPANIES ACT, 1956.

The Directors State that

1, Ir the preparation of the annual accounts, the applicable accounting standard have been followed along with proper explanation relating to material departures:

2. The directors had selected such accounting policies and applied them consistently and made de judgment and estimates that are reason able and prudent so ss to give a true aid fair view o F the state of7 affai rsof the Company at the end of the fi na ncral year cove red underthis report aid of the profit of the Company for the year

3. The Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with me provisions or this Act fer safeguarding the assets the company and tor preventing and detecting maud and other irregularities

4. The Diredors nave prepared the a annual accounts on a no no concern basis.

APPRECIATION

Your Directors would like to piece on recort their appreciation for the co-operation and assistance received trom the banks, tor the utmost con'ideoce reposed in tre management by the shareholders and customers during the year under review. vOur Directors wrsh to thank for the services of the executive, staff and workers of the Company at all levels for their dedication, devotion, determination and discipline. The Directors express their profound thanks to tie shareholders fur their continued support and goodwill and they look forward to the future with ronfiripncp.

By enter of the Board of Directors

Sclapur August 31, 2014

V.T. KATARE Chairman & Executive Director

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Mar 31, 2013

TO THE MEMBERS OF KATARE SPINNING MILLS LTD.

The Directors are pleased to present their Thirty Third Annual Report on the Business and Operations of your Company together with the Audited Statement of Accounts for the year ended 31st March, 2013.

FINANCIAL RESULTS

(Rs. in Lacs

Particulars 2012-2013 2011-2012

Turnover 4145.06 4257.66

Profit Before Interest & Depreciation 290.75 103.79

less: Interest 214.16 136.76

Profit / Loss Before Depreciation 76.59 -32.97

Less: Depreciation 139.84 178.41

Add : Transfer from Revaluation Reserve 84.92 124.87

Profit / Loss After Depreciation & Before Taxation 21.67 -86.51

Less : Excess provision in last year 4.53 0.00

Less : Provision for Income Tax (MAT) 1.70 0.00

Less : dividend Distribution Tax 4.62 0.00

Less : Deferred Tax Liability 24.89 2.41

Profit / Loss for the period 44.77 -84.10

Add : Balance brought forward 305.51 389.61

Less: Provision for dividend 28.50 0.00

Profit Carried to Balance Sheet 321.78 305.51

DIVIDEND

For the year under review, the Directors recommend a dividend ofRs. 1/- per share on the 28,50,000 Equity shares amounting to X 28,50,000/

DIRECTORS

Mr. Y.N. Konda, Director of the company is liable to retire by rotation and being eligible, offers himself for reappointment.

CORPORATE GOVERNANCE

Pursuant to Clause 49 of the Listing Agreement, the Management Discussion and Analysis, the Corporate Governance Report, together with the Auditor''s Certificate on compliance with the conditions of Corporate Governance as laid down, forms part of the Annual Report.

AUDITORS

G-M. Pawale, Chartered Accountants, Solapur hold office until the conclusion of the ensuing Annual General Meeting and are eligible for reappointment. The members are requested to re-appoint them as Auditors of the Company till the-conclusion of the next Annual General Meeting.

COST AUDITORS

Pursuant to the directives of the Central Government under the provisions of section 233B of the Companies Act, 1956, qualified Cost Auditor Shriniwas Diddi & Co., Cost Accountants has been appointed to conduct cost audits relation to products manufactured by the company.

FIXED DEPOSITS

The Company has not accepted or renewed any deposits from the public during the year under review within the meaning of Section 58Aof the Companies Act, 1956 and rules made there under.

PARTICULARS OF EMPLOYEES

There are no employee drawing remuneration exceeding the limits prescribed under Section 217(2A) of the Companies Act, 1 956 read with Companies (particulars of employees) Rules, 1975 (as amended) and hence no details are required to be annexed to this report.

SAFETY MEASURES

i) INSURANCE

Your Company continued to cover ail assets mainly; plant & machinery, building, materials, stocks, furniture & fixtures against possible risks like fire, flood, terrorism and earthquake.

ii) INDUSTRIAL RELATIONS

The industrial relations at the plants of the Company during the year under review continued to be cordial throughout the year.

PARTICULARS REGARDING CONSERVATION OF ENERGY ETC.

Information in accordance with the provisions of section 21 7(1 )(e) of the Companies Act, 1956 read with Companies (Disclosure of Particulars in the Report of the Directors) Rules, 1988 regarding conservation of energy technology absorption and foreign exchange earnings and outgo is given in the statement annexed hereto forming part of the Report.

LISTING OF SHARES & SECURITIES

The Company''s Shares are listed on the BOMBAY STOCK EXCHANGE LIMITED,

DIRECTORS RESPONSIBILITY STATEMENT AS REQUIRED UNDER SECTION 21 7(2AA) OF THE COMPANIES ACT, 1956.

The Directors state that

(i) In the preparation of the annual accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures;

(ii) The directors had selected such accounting policies and applied them consistently and made judgment and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year covered under this report and of the profit of the Company forth year.

(iii) The directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities.

(iv) The directors have prepared the annual accounts on a going concern basis.

APPRECIATION :

Your Directors would like to place on record their appreciation for the co-operation and assistance received from the banks, for the utmost confidence reposed in the management by the shareholders and customers during the year under review. Your Directors wish to thank for the services of the executive, staff and workers of the Company at all levels for their dedication, devotion, determination and discipline. The Directors express their profound thanks to the shareholders for their continued support and goodwill and they look forward to the future with confidence.

# By order of the Board of Directors

Solapur May 31, 2013

V.T. KATARE

Chairman & Executive Director

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Mar 31, 2010

The Directors are pleased to present the THIRTYTEN Annual Report of the Company together with Audited Statement of accounts for the year ended 31st March, 2010

Summarised Financial Results:

(Rs. in lacs)

2009-10 2008-09 (Rs.) (Rs.)

Turnover 3644.42 3058.13

Profit Before Interest & Depreciation 302.13 191.84

Less: Interest 98.43 82.84

Profit Before Depreciation 203.70 109.00

Less: Depreciation 156.75 165.05

Add : Transfer from Revaluation Reserve 124.87 124.87

Profit After Depreciation 171.82 68.82

Less: Bad debts written off 0.00 1.05

Profit Before Taxation 171.82 67.77

Less: Fringe Benefit Tax 0.00 0.45

Less: Income Tax of earlier year 0.33 4.38

Less: Provision for Taxation 6.52 0.0

Deferred Tax Liability: Debit / (Credit) (_) 55.66 20.65

Net Profit 109.54 83.59

Add balance brought forward 119.54 35.94

Profit Carried to Balance Sheet 228.85 119.54

Opertation :

The Company achieved satisfactory performance during the year under review. Its turnover increased from Rs. 3058.13 lacs to Rs. 3644.42 lacs. The Gross Profit before Depreciation is Rs. 203.70 lacks from Rs. 109.00 lacs. Both the divisions of the Company, i.e. Textile and Hotel Division, contributed to the overall performance of the company.

Expansion & Modernisation:

a) Textile Division:

In order to improve the yarn production, reduce costs/wastages the company has alreadv commenced technological upgradation programme of the plant at Unit No. 1. to maintair competitiveness and achieve better quality. Stringent cost control measures continue to be implemented in all possible areas.

b) Hotel Division:

Because of developments in tourism in & around Solapur as well as the industrial development the hotel occupancy has increased through out the year. The expansion & refurnishing work of hotel has been completed during the year, which will further improve the acceptability.

Capital:

For the purpose of financing up gradation of Spinning Division and expansion of capacity of total division the company with the approval of Members, the company had made issue of 21,50,000 convertible share warrants. However the committed amount payable on the warrants was not fully received in time from the allottees within the time to convert the same to issue equity shares before 29.11.2009. The Board then thought it fit to postpone the issue because of inability to complay the conditions of approval. Advances received against warrant price were partly refunded.

The Board still wishes to complete the future plans with increase in capital for which resolutions have been proposed.

Dividend:

Your Directors are unable to recommend any dividend at this stage.

Dis-investment from The Rayalseema Mills Ltd.:

As per the decision taken earlier the phase wise disinvestment is still under negotiations.

Insurance:

All the properties of the Company have been adequately insured against fire and all other risks.

Conservation of Energy Etc :

Information pursuant to section 217 (1)(e) and (2A) of the Companies Act, 1956, read with Rule 2 of the Companies ( Disclosure of Particular in the Report of Board of Directors ) Rules, 1988 is annexed and forms parts of the Report.

Auditors Report:

The qualifications / observations / adverse remarks in Auditors report read with related notes to accounts are self explanatory.

Auditors:

The retiring auditors, Mr. G. M. Pawle, Chartered Accountants, are eligible for re-appointment and have indicated their willingness to accept re-appointment; In terms of section 224A of the companies act 1956, their re-appointment needs to be approved by the members and their remuneration has to be fixed.

Cost Auditors:

Pursuant to the directives of the central Government under the provisions of section 233B of the Companies Act, 1956, qualified Cost Auditors have been appointed to conduct cost audits relating to products manufactured by the company.

Directors:

Under Article 160 of the Articles of Association of the Company Shri. S. T. Katare & Shri. U. M. Mahindrakar, directors are retiring by rotation and being eligible offer themselves for re- appointment.

Directors Responsibility Statement :

Pursuant to Section 217(2AA) of the Companies Act, 1956, the Directors confirm that:

1. In the preparation of Annual accounts the applicable accounting standard had been followed. There is no material departure from the standards and the remarks stated by Auditors in his report under point No. 4 read with related notes to accounts are self explanatory to the extent of deviations from standards.

2. The Directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of this financial year and profit /Loss of the Company for that period;

3. The Directors have taken proper and sufficient care to ensure the maintenance of adequate accounting records in accordance with the provision of the company Act for safeguarding the assets of the company and for preventing and detecting any fraud and other irregularities; if any;

4. The Directors have prepared the annual accounts on a going concern basis.

Corporate Governance :

Secretarial compliance certificate has been obtained by the company which is attached to this Report.

Particulars of Employees:

There is no employee drawing such remuneration requiring disclosure u/s 217 (2A) of the companies Act 1956 and rules made there under.

Cash Flow Statement:

In conformity with the provisions of clause 32 of the Listing Agreement, the cash flow statement for the year ended on 31st March, 2010 is annexed hereto.

Appreciation:

The company places on record its deep appreciation of the devoted services of the loyal workers, executives and other staff of the Company who have contributed in no small measures to the performance and the companies inherent strength. Grateful thanks are also due to State Governments, the investors, the Banking circles, and district level authorities for their continued support extended to the Company from time to time. Shareholders appreciation of the managements efforts expressed at the General Meeting of the Company and otherwise, is a great fillip to strive for better performance year after year.

For and on Behalf of the Board of Directors

Solapur (V.T. KATARE)

August 31, 2010 Chairman & Executive Director