Directors Report of Katare Spinning Mills Ltd.

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