Salona Cotspin Ltd Directors Report

TO THE SHAREHOLDERS

To

The Members

Your directors have great pleasure in presenting their Thirtieth Annual Report together with Audited financial

statements of the Company for the financial year ended 31 March 2024.

Financial Highlights

Details	(Rupees in Lakh)
	31.03.2024	31.03.2023
INCOME
Revenue from operations	72,225.79	48,691.15
Other Income	25.29	29.16
Total Income	72,251.08	48,720.31
Profit before Depreciation, Finance Costs,
Exceptional Items and Tax Expense	3,047.88	3,512.59
Less: Depreciation/Amortization/Impairment	686.21	546.68
Profit before Finance Costs, Exceptional Items and Tax Expense	2,361.67	2965.91
Less: Finance Costs	1,521.39	940.14
Profit before Exceptional Items and Tax Expense	840.28	2025.77
Exceptional Items	Nil	Nil
Profit before Tax Expense	840.28	2,025.77
Less: Taxes Expense (Current & Deferred)	227.54	268.83
Profit for the Year	612.74	1,756.94
Add: Other Comprehensive Income	9.23	0.22
Balance of Profit for Earlier Years	6,870.08	5,176.07
Less: Transfer to Reserves	Nil	Nil
Less: Dividend paid on Equity Shares	63.15	63.15
Balance carried over to Balance sheet	7,428.90	6,870.08

DIVIDEND:

Your directors are pleased to recommend a dividend of Rs. 1.00 per share for the financial year ended 31 March 2024 subject to the approval of Members. The total outgo in the form of Dividend will be to the extent of Rs.52.62 Lakh.

REVIEW OF OPERATIONS:

During the year under review, the production of cotton yarn was 43.60 Lakh Kilograms as against 36.46 Lakh Kilograms in the preceding year. The Turnover increased to Rs.67,439.58 Lakh as against Rs. 44,174.55 Lakhs in the previous period. The Sales Turnover includes Total Export Sales of Rs. 56,217.99 Lakh as against Rs. 33,669.27 Lakh in the previous year showing an increase of 66.97%.. During the year, the Export Turnover of traded goods increased to Rs. 46,697.38 Lakh from Rs. 23,346.89 Lakh.

During the year under report your Company added 18000 Spindles to its existing capacity at Kannampalayam Village, Sulur Taluk, Coimbatore District. The additional machinery is under refurbishment and the production of Yarn is yet to commence. The said additional capacity will be adding to turnover in the years to come which would result in profitability enhancement.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND

OUTGOINGS:

Pursuant to Section 134(3) (m) of the Companies Act, 2013 read with Rule 8(3) of the Companies (Accounts) Rules, 2014, Details on Conservation of energy, Technology Absorption, Foreign Exchange Earnings and Outgoings has been attached as a separate Annexure to the Report.

During the year the green energy generated increased to 69.87 Lakh units (net) of wind electricity from 65.84 Lakh units in the previous year and 36.01 Lakh Units (Previous Year 34.34 Lakh Units) was generated through Solar Power Plant (Ground Mounting) at Thaligai Village, Velagoundampatti, Namakkal District, Tamil Nadu for Captive Consumption. Further the Company has installed one number Wind Electric Generator to the capacity of 2.10 MW at Deri Village, Jamnagar District, Gujarat and the energy generated 39.01 Lakh Units(net) from July 2023 to March 2024. The energy generated through WEG was sold to third parties at Gujarat State.

By captive consumption, the Wind Electricity & Solar power contributed to reduction in power cost and contributed to the profits of the textile mill.

OUTLOOK FOR THE IMMEDIATE FUTURE:

The Spinning segment of the textile industry continues to witness the paradox of mismatch of prices of cotton (raw material) and prices of yarn (finished goods).

CHANGES IN NATURE OF BUSINESS:

There is no change in the nature of business of the company during the period under review.

MATERIAL CHANGES AND COMMITMENT OCCURRED DURING PERIOD AFFECTING FINANCIAL

POSITION OF COMPANY:

There are no material changes or commitments affecting the financial position of the Company, subsequent to the end of the financial year.

PUBLIC DEPOSITS:

The Company has neither accepted nor holds any public deposits as per Section 73, Section 75 and Section 76 of the Companies Act, 2013 read with the Companies (Acceptance of Deposits) Rules 2014 during the year under review.

The total amount of unsecured loans received from other Companies as Intercorporate Loan as on 31/03/2024 is Rs. 64.77 Lakhs which is not included in Deposits as it is exempted under Rule 2(1)(c)(viii) of Companies (Acceptance of Deposits) Rules, 2014.

CORPORATE GOVERNANCE:

Corporate Governance, Management Discussion and Analysis and a Certificate from the Auditors of the Company regarding compliance of conditions of Corporate Governance is annexed hereto.

EXTRACT OF ANNUAL RETURN:

The Annual Return as per Section 92(3) of the Companies Act, 2013 in Form MGT-7 is made available on the Website of the Company and can be accessed at www.salonacotspin.com.

DIRECTORS:

During the period under report there was no change in the composition of the Board of Directors. Details of Directors, their attendance at Board and Committee meetings are furnished in the Corporate Governance Report.

The Company has received disclosures from all the Directors and none of the directors has been disqualified as per Section 164 of the Companies Act, 2013 and the Companies (Appointment and Qualification of Directors) Rules, 2014.

Mr. Raghav Agarwal (DIN: 06981525), Non-Executive Non-Independent Director retires by rotation at this Annual General Meeting and being eligible offers himself for re-appointment. Brief resume of the Director is given in the Notice of the Annual General Meeting.

KEY MANAGERIAL PERSONNEL:

Key Managerial Personnel of the Company are listed below.

Name of the Person	Designation
Sri. Shyamlal Agarwala	Managing Director
Sri. Manoj Kumar Jhajharia	Joint Managing Director
Sri. M.S. Selvaraj	Chief Financial Officer
Ms. Archana R Jha (till 31st May 2024)	Company Secretary and Compliance Officer
Sri. P.S. Ravishankar (From 12th August 2024)	Company Secretary and Compliance Officer

COMMITTEES:

Details of Composition and Meetings of various Committees, i.e., Audit Committee, Nomination and Remuneration Committee, Stakeholders Relationship Committee and Corporate Social Responsibility Committee form part of the Report on Corporate Governance.

POLICIES:

In pursuance of the Act and Listing Regulations, the following policies have been framed and disclosed on the Companys website www.salonacotspin.com

1. Related Party Transactions

2. Whistle Blower Policy & Vigil Mechanism

3. Policy for Preservation of Documents

EVALUATION OF BOARD OF DIRECTORS:

Pursuant to Companies Act 2013 and Regulation 17 (10) Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations 2015, the Board has carried out an evaluation of its own performance based on the specific duties, obligation and the execution of the same, the directors individually as well as the evaluation of the working of its Audit, Nomination and Remuneration, Stakeholders Relationship Committee and Corporate Social Responsibility Committee, the performance evaluation of the Independent Directors, Chairman and Managing Director.

The Independent Directors have also conducted a separate meeting held on 12 February 2024 and conducted evaluation process in respect of the performances of the Non-Independent Directors, Chairperson taking into account the views of Executive director and other non-Executive directors. The meeting also assessed the Board processes with reference to quality, quantity and timelines of flow of information between the company management and the Board as required under the rules.

BOARD MEETINGS:

The Board of Directors met Six (6) Times during the Financial Year on 18 April 2023, 26 May 2023, 11 August

2023, 9 November 2023, 6 January 2024 and 12 February 2024, through Physical Mode at the Corporate Office of the Company situated at Coimbatore. The Composition of Board and Other Details form Part of the Report on Corporate Governance.

PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS:

The Company has not given any loans or guarantees as per Section 186 of the Companies Act, 2013. The details of the Investments made by the Company are given in the Notes to Financial Statements.

PARTICULARS OF SUBSIDIARIES, JOINT VENTURES AND ASSOCIATE COMPANIES:

The Company does not have any Subsidiary, Joint venture or Associate Company.

RELATED PARTY TRANSACTIONS:

All related party transactions that were entered into during the financial year were on arms length basis and in the ordinary course of business. The transactions were within the permitted/approved limits only. Further, there were no materially significant related party transactions made by the Company with Promoters, Key Managerial Personnel or other designated persons which may have potential conflict with interest of the Company at large.

Reporting in Form AOC-2 is attached as Annexure-I. Approval of Audit Committee was obtained for transactions of repetitive nature on an annual basis. All related party transactions are placed before the Audit Committee and Board of Directors for their review. The policy on Related Party transactions is available on the Website of the

Company at www.salonacotspin.com.

SIGNIFICANT / MATERIAL ORDERS PASSED BY THE REGULATORS / COURTS:

There were no significant and material orders passed by the Regulators / Courts that would impact the going concern status and the Companys operations in future.

DIRECTORS RESPONSIBILITY STATEMENT:

Pursuant to Section 134(3) (c) of the Companies Act, 2013, your Directors confirm:

a) that in the preparation of annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures.

b) that your directors had selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent to give a true and fair view of the state of affairs of the Company as at the end of the financial year and of the Profit of the Company for that period.

c) that your directors had taken proper and sufficient care for the maintenance of adequate accounting records as per the Companies Act, 2013 for safeguarding the Assets of the Company and for preventing and detecting frauds and other irregularities.

d) that your directors had prepared the annual accounts on a going concern basis.

e) that your directors, had laid down internal financial controls to be followed by the company and that such internal financial controls are adequate and were operating effectively, and

f) that your directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

AUDITORS:

M/s. Gopalaiyer and Subramanian, Chartered Accountants, Coimbatore were re-appointed as the Auditors of the Company for the next term of five years pursuant to the resolution passed by the Members at the Annual General

th rd

Meeting held on 28 September 2022 and they will hold office up to the date of 33 Annual General Meeting of the Company.

M/s. Gopalaiyer and Subramanian, Chartered Accountants, have confirmed their eligibility and desire to continue as Statutory Auditors of the company.

EXPLANATION OR COMMENTS BY THE BOARD ON QUALIFICATION, RESERVATION OR ADVERSE

REMARK OR DISCLAIMER MADE BY THE AUDITORS IN THEIR REPORT:

There was no qualification, reservation or adverse remark or disclaimer made by the Auditors in their report on the Financial Statements.

SECRETARIAL AUDIT:

Pursuant to Section 204 of the Companies Act, 2013, read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, and other applicable provisions, if any (including any statutory amendments, modifications or re-enactments thereof, from time-to-time), and the recommendation of the Audit

Committee, the Board has appointed Sri. Ramanathan Kannan, Practicing Company Secretary, Chennai, to

conduct the Secretarial Audit of the Company. The Report is enclosed herewith as Annexure -II.

COMPLIANCE WITH SECRETARIAL STANDARDS:

The Directors have devised proper systems and processes for complying with the requirements of applicable Secretarial Standards issued by the Institute of Company Secretaries of India on Board Meetings (SS-I) and General Meetings (SS-II) and such systems were adequate and operating effectively.

COST AUDITOR:

Pursuant to Section 148 of the Companies Act, 2013 read with the Companies (Cost Records and Audit) Rules 2014, and other applicable provisions, if any (including any statutory amendments, modifications or re-enactments thereof, from time-to-time), and the recommendation of the Audit Committee, the Board has appointed Sri B. Venkateswar, Cost Accountant, Coimbatore as the Cost Auditor to conduct the Cost Audit of the Company for the financial year 2024-2025.

INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY:

The Company has an Internal Control System, commensurate with the size, scale, and complexity of its operations. The Company has Internal Audits which monitor and evaluate the efficiency and adequacy of internal control systems in the Company, its compliance with operating systems, accounting procedures and policies at all locations of the Company. The scope and authority of the Internal Audit function is defined in the Internal Audit Manual.

To maintain its objectivity and independence, the Internal Audit function reports to the Chairman of the Audit Committee and to the Chairman and Managing Director of the Company.

Based on the report of Internal Audit function, corrective actions are taken in the respective areas which thereby strengthens the controls. Significant audit observations and recommendations along with corrective actions thereon are presented to the Audit Committee.

RISK MANAGEMENT:

Pursuant to Section 134(3) (n) of the Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Company has developed a Risk Management Policy and implemented the same. The Company has not identified any element of risk which may be a threat for the existence of the Company.

CORPORATE SOCIAL RESPONSIBILITY COMMITTEE:

The Company has constituted Corporate Social Responsibility (CSR) Committee which shall recommend to the Board, the activities to be undertaken by the Company as specified in Schedule VII, recommend the amount of expenditure to be incurred on such activities and monitor the CSR Policy of the Company. The details of the

Corporate Social Responsibility activities / expenditure are given as Annexure III.

STATUTORY DISCLOSURES:

The particulars required to be included pursuant to Section 134(3)(m) of the Companies Act, 2013 read with Rule

8(3) of the Companies (Accounts) Rules 2014 on Conservation of Energy, etc., is enclosed as Annexure IV.

No employee of the Company was in receipt of remuneration of Rs. 60.00 Lakh per annum or more and no

employee of the Company employed for a part of the financial year ended 31 March 2024 was in receipt of remuneration of Rs. 5.00 Lakhs per month or more.

The information required pursuant to Section 197(12) of the Companies Act 2013 read with Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014 and forming part of the Directors Report

for the financial year ended 31 March 2024 is enclosed as Annexure V.

None of the employees listed in the said Annexure is a relative of any Director of the Company. None of the employees hold (by himself or along with his spouse and dependent children) more than two percent of the equity shares of the Company.

INDUSTRIAL RELATIONS:

Industrial relations continued to remain cordial during the period and the Board places its appreciation for the services rendered by the employees of the Company.

FINANCES:

During the year under review, the Reserves and Surplus, stood at Rs. 7443.90 Lakhs (Rs. 6885.08 Lakhs credit balance in the previous year). The Company met all financial commitments to the Bankers on account of Term Loan and Working Capital Credit.

DETAILS REGARDING ISSUE OF SHARES

During the year under review the Company has not issued any shares.

ESTABLISHMENT OF VIGIL MECHANISM / WHISTLE BLOWER POLICY:

The Company has established a Vigil Mechanism for Directors and Employees to report concerns about unethical behavior, actual or suspected fraud or violation of the Companys Code of Conduct or Ethics. The Policy has been posted on the Website of the Company at www.salonacotspin.com.

DISCLOSURE PERTAINING TO THE SEXUAL HARASSMENT OF WOMEN:

The Company has constituted Internal Compliance Committee under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. The Company has zero tolerance for sexual harassment at workplace and has put in place an adequate system for safeguarding the dignity of women employees on complaints if any received are redressed to provide justice to the affected employees without any delay. During the year 2023-2024, no complaints were received by the Company related to sexual harassment.

TRANSFER TO INVESTOR EDUCATION AND PROTECTION FUND:

The Company sends periodical letters to all shareholders whose dividends are unclaimed to ensure that they receive their rightful dues. Efforts are also made in co-ordination with the Registrar to locate the shareholders who have not claimed their dues. The amount due to be transferred to the IEPF have been remitted to the IEPF authority during the year under report.

OTHER DISCLOSURE:

During the year, there were no transactions requiring disclosure or reporting in respect of matters relating to: i) Pendency of any proceeding under the Insolvency and Bankruptcy Code, 2016 and ii) Instance of one-time settlement with any bank or financial institution.

Disclosures under sub rule 5 (xi) and (xii) of rule 8 of Companies (Accounts) Rules, 2014 are not applicable to the Company.

ACKNOWLEDGEMENT:

The Directors wish to place on record their gratitude to State Bank of India, Union Bank of India, CSB Bank Ltd., ICICI Bank Limited and HDFC Bank Limited for their financial assistance. Your directors also take this opportunity to express their appreciation of the co-operation extended by the Employees and the Shareholders for their appreciation of the Managements efforts expressed at the Annual General Meeting of the Company.

The Board dedicates its prayers to invoke the blessing of Lord Vishnu, Goddess Lakshmi, Lord Shiva, and Goddess Shakthi for the continued prosperity of the Company and all its stakeholders.

ANNEXURE - I

FORM NO. AOC -2

(Pursuant to clause (h) of sub-section (3) of section 134 of the Companies Act, 2013 read with Rule 8(2) of the Companies (Accounts) Rules, 2014)

Form for Disclosure of Particulars of Contracts / Arrangements entered into by the Company with Related Parties referred to in sub section (1) of section 188 of the Companies Act, 2013 including certain arms length transactions under third proviso thereto

1. Details of Contract(s) or Arrangement(s) or Transaction(s) not at Arms Length

SL. No. Particulars	Details
a) Name(s) of the Related party(ies) and Nature of Relationship	NA
b) Nature of the Contract(s) / Arrangement(s) / Transaction(s)	NA
c) Duration of the Contract(s) / Arrangement(s) / Transaction(s)	NA
d) Salient Terms of the Contract(s) / Arrangement(s) / Transaction(s) including the Value, if any	NA
e) Justification for entering into such Contract(s) / Arrangement(s) / Transaction(s)	NA
f) Date of Approval by the Board	NA
g) Amount paid as Advances, if any	NA
h) Date on which the Special Resolution was passed in General Meeting as required under first proviso to Section 188	NA

2. Details of Contract(s) or Arrangement(s) or Transaction(s) at Arms Length

SL. No. Particulars	Details
a) Name(s) of the Related party(ies) and Nature of Relationship	Shristi Cotspinn Private Limited, Sri Sadhyaa Exports Private Limited - Entities in which Key Managerial Personnel have significant influence.
b) Nature of the Contract(s) / Arrangement(s) / Transaction(s)	Sale, Purchase and Supply of Goods
c) Duration of the Contract(s) / Arrangement(s) / Transaction(s)	One Year
d) Salient Terms of the Contract(s) / Arrangement(s) / Transaction(s) including the Value if any	Shristi Cotspinn Private Limited : Purchase of Goods for the value of Rs. 41,71,96,638/= and Sale of goods for the value of Rs. 22,20,99,795/= Sri Sadhyaa Exports Private Limited : Sale of Goods for the Value of Rs. 1,74,433/= in the ordinary course of business. 26th May 2023, 11th August 2023, 9th November 2023 and
e) Date of Approval by the Board	12th February 2024
f) Amount paid as Advances if any	NIL

ANNEXURE - II

FORM NO. MR-3

ST

SECRETARIAL AUDIT REPORT FOR THE FINANCIAL YEAR ENDED 31 MARCH, 2024 [Pursuant to Sec 204 (1) of the Companies Act, 2013 and Rule 9 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014]

To

The Members,

M/s. SALONA COTSPIN LIMITED, CIN: L17111TZ1994PLC004797 SF.No.74/12 & 75/3, Sathy Road, Pungampalli Village, Sathyamangalam Tamilnadu - 638402

I have conducted the Secretarial Audit of the compliance of applicable statutory provisions and the adherence to good corporate practices by M/s SALONA COTSPIN LIMITED (hereinafter called the Company). Secretarial Audit was conducted in a manner that provided me a reasonable basis for evaluating the corporate conducts / statutory compliances and expressing my opinion thereon.

Based on my verification of the Companys books, papers, minute books, forms and returns filed and other records maintained by the company and also the information provided by the Company, its officers, agents and authorized representatives during the conduct of secretarial audit, I hereby report that in my opinion, subject to the Annual Report, the Company has, during the audit period covering the financial year ended on 31st March 2024 complied with the statutory provisions listed hereunder and also that the Company has proper Board processes and compliance mechanism in place to the extent, in the manner and subject to the reporting made hereinafter.

I have examined the books, papers, minute books, forms and returns filed and other records maintained by the

Company for the financial year ended on 31st March 2024 according to the provisions of:

I. The Companies Act, 2013 (‘the Act) and the rules made thereunder;

II. The Securities Contracts (Regulation) Act, 1956 (‘SCRA) and the Rules made thereunder;

III. The Depositories Act, 1996 and the Regulations and Bye-laws framed thereunder;

IV. Foreign Exchange Management Act, 1999 and the rules and regulations made thereunder to the extent of Foreign Direct Investment, Overseas Direct Investment and External Commercial Borrowings;- Not applicable to the company during the review period.

V. The following Regulations and Guidelines prescribed under the Securities and Exchange Board of India

Act, 1992 (‘SEBI Act) viz:

(a) The Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers)

Regulations, 2011;

(b) The Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations, 2015;

(c) The Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulation, 2018; - Not applicable to the company as there was no issue of securities during the review period.

(d) The Securities and Exchange Board of India (Share Based Employee Benefits and Sweat Equity)

Regulations, 2021:- Not applicable to the Company during the review period.

(e) The Securities and Exchange Board of India (Issue and Listing of Debt Securities) Regulations,

2008;- Not applicable to the company during the review period.

(f) The Securities and Exchange Board of India (Registrars to an issue and Share Transfer Agents)

Regulations, 1993 regarding the Companies Act and dealing with client;

(g) The Securities and Exchange Board of India (Delisting of Equity Shares) Regulations, 2009- Not

applicable to the Company during the review period.

(h) The Securities and Exchange Board of India (Buyback of Securities) Regulations, 1998: -Not

applicable during the review period.

VI. The Management has identified and confirmed the following laws specifically applicable to the company: National Textile Policy, 2000, Textile Control Orders, Cotton Control Orders and amendments thereunder, Indian Standard Specification for Cotton Bales, Textile (Development and Regulation) order, 2001, Essential Committees Act, 1955 with reference to ‘Hank Yarn Packaging Notification, 2003, Electricity Act, 2003 and other Labour Laws applicable to that extent; etc.

I have also examined compliance with the Listing Agreement and applicable Regulations of the Securities and Exchange Board of India (Listing Obligations and Disclosures Requirements) Regulations, 2015 and Secretarial Standards issued by The Institute of Company Secretaries of India.

During the year under review the Company has complied with the provisions of the Act, Rules, Regulations,

Guidelines, Standards, etc., mentioned above.

I further report that:

The Board of Directors of the Company is duly constituted with proper balance of Executive Directors, Non-Executive Director, Independent Directors including Women independent Director. There were no changes in the composition of the Board of Directors during the year under review.

Adequate notice is given to all directors to schedule the Board Meetings, agenda and detailed notes on agenda were sent atleast seven days in advance. A system exists for seeking and obtaining further information and clarifications on the agenda items before the meeting and for meaningful participation at the meeting.

As per the minutes of the Meeting duly recorded and signed by the Chairman, the decisions of the Board

were unanimous and no dissenting views have been recorded.

As informed the company has responded appropriately to the notices received from various statutory

/regulatory authorities wherever found necessary.

I further report that there are adequate systems and processes in the Company commensurate with the size and operations of the Company to monitor and ensure compliance with applicable Laws, Rules, Regulations and Guidelines. I further report that during the audit period there were no instance of:

a) Public / Rights / Preferential Issue of Shares / Debentures / Sweat Equity b) Redemption c) Foreign Technical Collaboration d) Merger / Amalgamation / Reconstruction, etc

This report is to be read with my letter of even date which is annexed as Annexure A and forms an integral

part of this report.

ANNEXURE A

To

The Members,

M/s. Salona Cotspin Limited [CIN: L17111TZ1994PLC004797] SF.No.74/12 & 75/3, Sathy Road, Pungampalli Village, Sathyamangalam, Tamilnadu - 638402

My Secretarial Audit Report of even date is to be read along with the following:

1. Maintenance of Secretarial Records and Statutory Registers is the responsibility of the management of the company. My responsibility is to express an opinion on these Secretarial records based on my audit.

2. I have followed the audit practices and processes as were appropriate to obtain reasonable assurance about the correctness of the contents of the Secretarial Records. The verification was done on test basis to ensure that correct facts are reflected in Secretarial Records. I believe that the processes and practices, I followed, provide a reasonable basis for my opinion.

3. I have not verified the correctness and appropriateness of financial records and books of accounts of the Company.

4. Wherever required, I have obtained the managements representation about the compliance of laws, rules and regulations and happening of events etc.

5. The Compliance of the provisions of Corporate and other applicable laws, rules and regulations standards is the responsibility of Management. My examination was limited to verification of procedures on test basis.

6. The Secretarial Audit Report is neither an assurance as to the future viability of the Company nor of the efficacy or effectiveness with which the Management has conducted the affairs of the Company.

ANNEXURE – III

ANNUAL REPORT ON CSR

Annual Report on Corporate Social Responsibility (CSR) activities

for Financial Year ended 31 March 2024

1. A brief outline of the Companys CSR Policy, including overview of Projects or Programs proposed to be undertaken and a reference to the web-link to the CSR Policy and Projects or Programs.

CSR is a sense of responsibility towards the community and environment in which we operate. It can be expressed through contribution / participation in Education, Health, Water Management, Waste Management, Infrastructure and Eradication of Hunger. The CSR activities under the Policy are those covered under the ambit of Schedule VII to the Companies Act 2013. The policy is available on the Website of the Company www.salonacotspin.com.

2. Composition of the CSR Committee

a. Dhiresh Jayasi –	Chairman
b. Shyamlal Agarwala –	Member – Managing Director
c. Manoj Kumar Jhajharia –	Member – Joint Managing Director

3. Average Net Profit of the Company for last three financial years

Rs. 1825.59 Lakhs

4. Prescribed CSR Expenditure (Two percent of the amount as in item 3 above)

Rs. 36.51 Lakhs

5. Details of CSR spent during the financial year

a. Total amount spent for the financial year :	Rs. 38.52 Lakhs
b. Amount unspent, if any :	Nil

c. Manner in which the amount was spent during the financial year is detailed below:

S.No . CSR Project or activity identified	Sector in which the project is covered	Projects or programs (1) Local area or other (2) Specify the State and district where projects or programs was undertaken	Amount outlay (budget) project or programs wise	Amount spent on the projects or programs Sub heads: (1) Direct expenditure on Projects or programs. (2) Overheads.	Cumulative expenditure up to the reporting period	Amount spent: Direct or through implementing agency
1 Promoting Health care	Clause i	PHC Vinnapalli, Erode District, Tamil Nadu	2.10	Direct Expenditure	2.10	Direct
2 Promoting Health care- Medical Support	Clause i	Kolkata, West Bengal	5.42	Direct Expenditure	5.42	Direct
3 Promoting Health care- Medical Support	Clause i		2.55	Direct Expenditure	2.55	Direct
4 Animal Welfare	Clause iv	Jhajhar, Jhunjhunu District, Rajasthan	1.41	Direct Expenditure	1.41	Direct
5 Promotion of Education	Clause ii	Coimbatore, Tamil Nadu	1.71	Direct Expenditure	1.71	Directs
6 Promotion of Education	Clause ii	Bhopal, Madhya Pradesh	0.49	Direct Expenditure	0.49	Directs
7 Construction of Govt. Senior Secondary School building	Clause ii	Jhajhar, Gram Panchayat, Nawalgarh, Jhunjhunu District, Rajasthan	21.84	Direct Expenditure	21.84	Directs
8 Rural Works, Rajarhat Bishnupur Gram Panchayat	Clause X	Rajarhat Bishnupur Gram Panchayat, Parganas District, West Bengal	3.00	Direct Expenditure	3.00	Maitreyi Charitable Trust, Kolkata, West Bengal
	Total		38.52		38.52

Details of unspent Corporate Social Responsibility amount for the preceding three financial years -Nil

S.No Preceding Financial year	Amount Transferred to unspent CSR account under Sub-section (6) of Section 135 (Rs in Lakh)	Balance Amount in Unspent CSR Account under Sub- section (6) of Section 135 (Rs in Lakh)	Amount spent in the Financial Year (Rs in Lakh)	Amount transferred to a fund specified under Schedule VII as per second provision to Sb-section (5) of Section 135 if any		Amount remaining to be spent in succeeding financial year (Rs. In Lakh)	Deficiency if any
				Amount (Rs in Lakh)	Date of Transfer
1 2020-21	Nil
2 2021-22	Nil
3 2022-23	21.57	21.57		21.57	26.09.2023	Nil	Nil

1. Whether any Capital assets have been created /acquired through Corporate Social Responsibility amount spent in the financial year : Nil

2. If yes enter the number of capital assets created /acquired – Not applicable

The details relating to such asset(s) so created or acquired through Corporate Social Responsibility amount spent

in the financial year

S.No Short particulars of the property or asset(s) (including complete address and location of the property)	Pincode o f t h e p r o p e r t y of assets	Date of Creation	Amount of CSR spent	Details of entity / authority/beneficiary of the registered owner
				CSR Registration	Name	Registered Address
				No if applicable

8. Specify the reason(s) if the company has failed to spend two per cent of the average net profit as per sub-section (5) of Section 135 -Not applicable

ANNEXURE IV

ANNEXURE TO THE DIRECTORS REPORT

FORM-A

Pursuant to Section 134(3)(m) of the Companies Act, 2013 read with Rule 8(3) of the Companies (Accounts)

Rules, 2014 on Conservation of Energy, Technology Absorption, Foreign Exchange Earnings and Outgoings.

1. (A) CONSERVATION OF ENERGY:

Efforts are being undertaken to reduce power consumption. Energy efficient motors are being installed in

place of conventional motors. (Rs. in Lakhs)

CAPTIVE POWER GENERATION	31.03.2024	31.03.2023
Wind Electricity Unit Generation (Units in Lakh)	69.87	65.84
Solar Power Unit Generation (Units in lakh)	36.01	34.34

By captive consumption, the Wind Electricity& Solar power contributed to reduction in power cost and contributed to the profits of the textile mill. Hence the overall performance of the Company should be considered as Satisfactory.

(B) TECHNOLOGY ABSORPTION:

The South Indian Textile Research Association that is undertaking Research and Development in the field of textiles on behalf of its members. Production and quality norms have been established in the past and further Research and Development programs are being undertaken by the Association. Total Expenditure on Research and Development as a percentage of income is negligible.

2. FOREIGN EXCHANGE EARNINGS AND OUTGO:

(Rs. in Lakhs)

	31st March 2024	31st March 2023
EARNED
Total Foreign Exchange earned:
F.O.B. Value of Exports of Finished and Traded goods	56217.99	33669.43
USED
Remittance in Foreign Exchange:
Purchase of Capital goods, Spares, Commission on
Exports and interest on foreign currency loan	315.65	597.43

ANNEXURE V

Remuneration of Directors and Key Managerial Personnel under Section 197(12) of the Companies Act, 2013

read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014

(I) The Ratio of the Remuneration of each Director to the Median Remuneration of the Employees of the Company

for the Financial Year and the Percentage Increase in Remuneration of each Director, Chief Executive Officer,

Chief Financial Officer, and Company Secretary in the financial year ended 31st March 2024.

(Rs. In Lakhs)

Sl.No. Name of Directors	Designation	Remuneration	Ratio of Directors remuneration to Median remuneration	% increase in the remuneration
I	Executive Directors
1 Shyamlal Agarwala	Chairman and Managing Director	113.22	13.94:1	36.82%
2 Manoj Kumar Jhajharia	Joint Managing Director	80.24	9.88:1	51.14%
3 Arun Kumar Jhajharia	Director	25.00	-3.08:1	-3.63%

Non-Executive Non-Independent Directors

1 Raghav Agarwal	Director	28.00	3.45:1	19.34%
II	Non-Executive Independent Directors
1 Dhiresh Jayasi	Independent Director	0.30	0.04:1	0.08%
2 Meena Kumari	Independent Director	0.24	0.03:1	0.06%
3 G.S. Hari Desikan	Independent Director	0.12	0.01:1	0.01%
4 Prabhu Damodaran	Independent Director	0.12	0.01:1	0.12%
III	Key Managerial Personnel
1 M.S. Selvaraj	Chief Financial Officer	13.62	1.68:1	2.98%
2 Archana R Jha	Company Secretary and
	Compliance Officer	10.38	1.28:1	10.89%

 

(a) Percentage increase in the Median Remuneration of Employees in the Financial Year ended 31st March 2024	17.38%
(b) Number of Permanent Employees on the Rolls of the Company as at 31st March 2024	437

(c) Explanation on the Relationship between Average Increase in Remuneration and the Company Performance

The Relationship between Average Increase in Remuneration and the Company Performance is negligible and could not be compared.

(ii) Comparison of the remuneration of the Key Managerial Personnel (KMP) against the

Performance of the Company

KMPs remuneration 2023-24 ( in lakh)	% Increase / (Decrease) in KMPs Remuneration (2023-24 against 2022-23)	Sales 2023-24 ( in lakh)	% Increase in sales (2023-24 against 2022-23)
217.46	59.96%	674393.58	52.67%

(iii) Variation in Market Capitalization of the Company, Price Earnings Ratio as at the Closing Date of the Current Financial Year and Previous Financial Year and Percentage Increase over Decrease in the Market Quotations of the Shares of the Company in comparison to the Rate at which the Company came out with the Previous Public Offer:

Particulars	As at 31st March 2023	As at 31st March 2024	Variations	%
Market Capitalization (crores)	123.79	165.58	41.78	33.75%
Price Earnings Ratio	7.05	27.03	9.99	283.68%

 

Market Quotation of the Shares as at 31st March 2024 (NSE)	Rs.314.64 Per Share of Face Value Rs.10 Per Share
Market Quotation of the Shares as at 31st March 2024(BSE)	Rs.310.50 Per Share of Face Value Rs.10 Per Share
Market Quotations of the Shares when the Company came out with the Previous Public Offer	Nil
Percentage increase / decrease over in the market quotations of the Company

(iv) Average percentile increase already made in the salaries of Employees other than Managerial Personnel in the previous financial year and its comparison with the percentile increase in managerial remuneration and justification thereof if there are any exceptional circumstances for increase in the managerial remuneration

The Average Increase granted to Employees other than Managerial Personnel is 17.38%.

The Average Increase granted to Managerial Personnel is 6.12%.

(v) Comparison of remuneration of the Key Managerial Personnel against Performance of the Company

KMPs Name and Designation	CTC for 2023-24 ( in lakhs)	% Increase/ (Decrease) in CTC (2023-24 against 2022-23)	Sales for 2023-24 ( in lakhs)	% Increase in sales (2023-24 against 2022-23)
Shyamlal Agarwala (Chairman and Managing Director)	113.22	36.82%
Manoj Kumar Jhajharia (Joint Managing Director)	80.24	51.14%	67439.58	52.67%
M.S. Selvaraj Chief Financial Officer	13.62	2.98%
Archana R Jha Company Secretary and Compliance Officer (From March 2023)	10.38	10.89%

(vi) The key parameter for any variable component of remuneration availed by the Directors

The company does not pay any Remuneration to the non-executive directors, as they are paid only sitting

fee for attending the meetings. With respect to executive directors, variable components are not paid.

(vii) Ratio of the Remuneration of the highest paid Director to that of the Employees who are not

Directors but receive Remuneration in excess of the highest paid Director during the year

-Not applicable -

(viii) The Board of Directors of the Company affirm that the Remuneration paid to Directors, Key Managerial Personnel and Employees is as per the Remuneration Policy approved by the Board of Directors of the Company.