Kakatiya Cement Sugar & Industries has received warning letters from both the National Stock Exchange (NSE) and BSE Limited dated January 6, 2026, for violating SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. The company disseminated these warning letters on January 7, 2026, as required by regulatory provisions.

Nature of Non-Compliance

The violation relates to Regulation 18(2)(b) of SEBI LODR Regulations, which governs audit committee quorum requirements. According to this regulation, the quorum for audit committee meetings must be either two members or one-third of the committee members, whichever is greater, with at least two independent directors present.

Exchange Communications

Both stock exchanges issued separate warning letters highlighting the seriousness of the non-compliance. The NSE letter, referenced as NSE/LIST/COMP/KAKATCEM/01/2025-2026, was signed by Rakhi Makhloga, Manager – Listing Compliance. The BSE communication, numbered LIST/COMP/SD/653/2025-26, was issued by Shilpa Saboo, Deputy Vice President, and Sagar Darra, Deputy Manager of Listing Compliance & Operations.

The exchanges emphasized that the audit committee meeting held on February 7, 2025, did not meet the prescribed quorum requirements as only one independent director attended instead of the mandatory minimum of two independent directors.

Regulatory Warnings and Future Implications

Both exchanges have warned the company to exercise greater diligence and implement immediate corrective measures to prevent recurrence of such lapses. The regulatory bodies stressed the importance of strict adherence to all applicable exchange circulars, guidance notes, and communications.

Company Response and Corrective Measures

Kakatiya Cement Sugar & Industries has acknowledged the regulatory communications and confirmed that corrective measures have already been implemented. The company secretary, Venkata Rama Linga Subrahmanyeswarao Mallapragada, who also serves as the compliance officer, signed the dissemination letter on January 7, 2026.

The company has committed to placing the warning letters before the ensuing Board meeting as mandated by both exchanges. This board presentation will include discussion of the corrective measures taken to ensure future compliance with SEBI LODR regulations and prevent similar violations.

Regulatory Compliance Framework

The incident highlights the critical importance of maintaining proper corporate governance standards, particularly regarding audit committee composition and meeting procedures. The SEBI LODR Regulations mandate specific quorum requirements to ensure adequate independent oversight of company operations and financial reporting processes.

Both exchanges have made it clear that any future deviations from regulatory requirements will be viewed with utmost seriousness and may attract appropriate regulatory action as deemed necessary by the respective authorities.

Kakatiya Cement Sugar & Industries Limited has reported a significant net loss of Rs 414.86 crore for the quarter ended September 30, marking a sharp decline from the profit of Rs 6.91 crore in the same quarter last year. The company's financial performance has been impacted by various factors, including a settlement with TG TRANSCO and decreased revenues across its business segments.

Financial Highlights

• Revenue: Total income from operations declined to Rs 254.06 crore from Rs 220.40 crore in the previous year quarter.
• Net Loss: The company reported a net loss of Rs 414.86 crore, compared to a profit of Rs 6.91 crore in Q2 of the previous fiscal year.
• Half-Year Performance: For the first half of the current fiscal year, the company's net loss widened to Rs 147.09 crore, compared to a loss of Rs 8.49 crore in the corresponding period last year.
• Earnings Per Share (EPS): The EPS stood at negative Rs 14.78 for the quarter.

Segment-wise Performance

The company operates in three segments, with the following revenue breakdown:

All three segments reported losses before tax and interest.

Exceptional Item

A significant factor contributing to the loss was the settlement of a transmission charges dispute with TG TRANSCO. The company paid Rs 73.73 crore as the principal amount, which was shown as an exceptional item in the financial results.

Board Approval

The Board of Directors approved these results in a meeting held on November 3.

Operational Overview

The company's performance reflects challenges across its business segments. The cement segment, which is the largest revenue contributor, along with the sugar segment, faced operational headwinds. The power segment did not report any revenue for the quarter.

Balance Sheet and Cash Flow

As of September 30, Kakatiya Cement Sugar & Industries Limited reported:

• Total Assets: Rs 22,938.99 crore
• Equity Share Capital: Rs 777.39 crore
• Other Equity: Rs 18,411.49 crore

The company's cash and cash equivalents decreased significantly from Rs 3,772.73 crore at the beginning of the year to Rs 18.63 crore at the end of the half-year.

Conclusion

Kakatiya Cement Sugar & Industries Limited faces significant challenges as reflected in its Q2 results. The substantial net loss, declining revenues, and the impact of the exceptional item related to the TG TRANSCO settlement have put pressure on the company's financial position. Stakeholders will be closely watching the company's strategies to navigate these challenges and improve its performance in the coming quarters.