Kothari industrial corporation Limited has announced a key board appointment, strengthening its governance structure with the addition of an experienced independent director. The company's board meeting on February 14, 2026, approved significant changes to its leadership composition.

Board Meeting Details and Appointment

The board of directors, based on the recommendation of the Nomination and Remuneration Committee, approved the appointment of Ms. Priya Rao as Additional Non-Executive Women Independent Director. The appointment details are outlined below:

Professional Background and Qualifications

Ms. Priya Rao brings substantial expertise to the board with over 21 years of experience across multiple sectors. Her professional background encompasses:

• Current Role: Vice President of Portfolio Operations at NSEW Properties
• Core Expertise: Process governance, property management, and clinical management
• Industry Experience: Manufacturing, real estate, education, and healthcare sectors
• Certification: Certified Independent Director from Indian Institute of Corporate Affairs (IICA)
• Education: Post Graduate Diploma in Business Administration and Management from Narsee Monjee Institute of Management Studies (NMIMS), Mumbai

In her current position, she spearheads strategic management and optimization of diverse property portfolios, focusing on operational excellence and long-term value creation.

Independence and Compliance

The appointment adheres to regulatory requirements and governance standards:

Ms. Rao is not related to any existing directors of the company as defined under Section 2(77) of the Companies Act, 2013, ensuring her independent status.

Strategic Impact

The appointment reflects the company's commitment to enhancing board diversity and bringing specialized expertise in portfolio management and operational excellence. Ms. Rao's extensive experience across multiple industries and her focus on fostering creativity, inclusivity, and continuous improvement align with modern corporate governance practices.

The five-year term, subject to shareholder approval, provides stability for long-term strategic planning and governance oversight. Her certification as an Independent Director from IICA demonstrates her commitment to professional governance standards.

Kothari Industrial Corporation Limited's independent auditor's limited review report for the third quarter of FY26 has raised multiple concerns regarding the company's financial reporting and compliance matters. The review, conducted by Ray & Ray Chartered Accountants for the quarter and nine months ended December 31, 2025, identifies several areas where sufficient audit evidence could not be obtained.

Revenue Recognition Challenges

The auditors highlighted significant concerns regarding revenue recognition, stating they were unable to obtain sufficient appropriate audit evidence for revenue of Rs 118.66 lakhs. Additionally, income and expenditure pertaining to one division have not been accrued, with the amount being presently indeterminable. These issues prevent the auditors from commenting on the consequential impact on the Profit and Loss Statement for the quarter ended December 31, 2025.

Pending Asset Sale Assessment

A significant matter from the previous year remains unresolved. The company had sold its land and plant and machinery located in its Ennore factory to Coromandel International Limited, but the final assessment outcome is still pending.

Compliance and Legal Issues

The review report identifies several compliance-related concerns that could impact the company's financial position. TDS defaults totaling Rs 0.77 lakhs remain outstanding across multiple financial years, including FY 2022-23, FY 2024-25, and FY 2025-26 up to Q3.

The company is also facing legal proceedings initiated by the Collector of Nilgiris for repossession of certain land plots in Coonoor earmarked for public use. The company has challenged this through a Write Petition filed before the Madras High Court, with the matter still pending adjudication.

Consolidated Results Impact

The consolidated financial results include significant losses from associate companies. The group's share of net loss after tax from associate Phoenix Kothari Footwear Limited and its subsidiaries amounts to Rs 2257.01 lakhs for the quarter ended December 31, 2025, and Rs 2309.07 lakhs for the nine months ended December 31, 2025.

Labour Code Implementation

The auditors noted that while the Government of India's four new Labour codes became effective from November 21, 2025, the supporting final rules are yet to be notified. The company has not considered the potential impact of increased employee benefit obligations in its interim financial results for Q3FY26 and is currently evaluating the potential impact for recognition in the financial results for the quarter and year ending March 31, 2026.

The review report, signed by Partner Swetha Srinivasan of Ray & Ray Chartered Accountants on February 14, 2026, emphasizes that these matters do not modify the auditor's overall conclusion but highlight areas requiring management attention and resolution.