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Shahlon Silk Industries Ltd Directors Report

21.84
(-3.06%)
Oct 21, 2025|12:00:00 AM

Shahlon Silk Industries Ltd Share Price directors Report

DEAR MEMBER(S),

Your Directors are pleased to present the 17th Annual Report along with the Audited Financial Statements of your Company for the financial year ended March 31,2025.

1. FINANCIAL PERFORMANCE ( in Lakhs)

Particulars

2024-25 2023-24

Total Income

25,193.83 31139.09

Profit before Interest, Depreciation and Tax

2911.98 2838.86

Less : Interest

1717.87 1478.39

Depreciation

640.00 781.67

Profit before exceptional items and Tax

554.11 578.80

Profit (loss) on sale of Assets/Investment

38.27 32.69

Profit before Tax

592.38 611.49

Less : Provision for Current Taxation

325.26 204.34

Provision for Deferred Taxation

-82.73 8.99

Excess/(Short) provision for taxation in earlier year

- -

Net Profit

349.85 398.16

Add : Balance brought forward from previous year

3166.15 2802.86

Depreciation on Fixed Assets Revaluation

16.66 18.71

Amount available for Appropriation

3532.66 3219.73

Less: Dividend paid during the year

53.58 53.58

Balance Carried to Balance Sheet

3479.08 3166.15

2. OPERATIONAL PERFORMANCE

During the year under review, your Company has achieved turnover of Rs. 25,193.83 lakh as against Rs. 31,139.09 lakh in the previous year, marginal decrease by 19.09% as compared to previous financial year. Despite the reduction in revenue, Earnings Before Interest, Depreciation, and Tax (EBITDA) remained robust at 2,911.97 lakh, marginally higher than 2,871.55 lakh recorded in the preceding year, reflecting an improvement in the operating margin of 1.41%. During the year under review, Profit before tax was Rs. 592.38 lakh as compared to profit of Rs. 611.49 lakh in the previous year. The Profit after tax for the financial year under review was Rs. 349.86 lakh as against Rs. 398.16 lakh for the previous year.

3. DIVIDEND AND RESERVES Dividend:

The Board of Directors is pleased to recommend a dividend of Rs.0.07/-(i.e.3.50%) per equity share of Rs.2/- each on the paid-up equity share capital of company amounting to Rs.62.51 lakh. The dividend payment is subject to approval of members at the ensuing Annual General Meeting. The final dividend once approved by Shareholders will be paid within the stipulated time subject to deduction of tax at source.

Transfer to Reserves:

As permitted under the Act, the Board does not propose to transfer any amount to General Reserves. The closing balance of the retained earnings of the Company for FY 2024-25, after all appropriations and adjustments, was Rs. 3,479.08 Lakhs.

4. CHANGE IN SHARE CAPITAL, IF ANY

The Capital structure of the Company is given below:

Sr No.

Particulars As on 31/03/2025 () As on 31/03/2024 ()

1

Authorised Capital of the Company
16,00,00,000 (16,00,00,000 - PY) Equity Shares of Rs.2/- each 3,200.00 3,200.00

2

Total Authorised Capital 3,200.00 3,200.00
Issued, subscribed and paid-up Capital of the Company
8,93,02,450 (8,93,02,450 - PY) Equity shares of Rs.2/- each 1,786.05 1,786.05
Total paid-up Capital 1,786.05 1,786.05

During the Financial Year 2024-25, there was no change in the share capital of the Company.

5. DEPOSITS

During the year under review, your Company has neither accepted / renewed any deposits during the year nor has any outstanding deposits within the meaning of Section 73 of the Companies Act, 2013 read with the Companies (Acceptance of Deposits) Rules, 2014.

6. CHANGE IN THE NATURE OF BUSINESS

There has been no change in the nature of business of the Company.

7. CHANGE IN REGISTERED OFFICE

During the year under review, the registered office of the Company shifted within the Local limits of the City w.e.f. 17/04/2024, as approved at the Board of Directors Meeting held on April 17, 2024.

From

3rd Floor, Dawer Chambers, Beside J.K. Tower, Ring Road, Surat-395002, Gujarat, India

To

C.S. Nondh No. 451/A, R.S. No. 33/1 Paiki, Plot No. 5, Nr. Narendra Dyeing Mill, B/H.: Old Sub-Jail, Khatodara, Ring Road, Surat-395002, Gujarat, India

(Coming within the jurisdiction of Police Station - Khatodara Police Station).

8. DIRECTORS AND KEY MANAGERIAL PERSONNEL

Directors:

The Companys Board of Directors comprises an optimum blend of Executive, Non-Executive and Independent Directors. The Chairperson of the Board is an Executive Director. As on March 31, 2025, the Board of directors comprises Six (6) Directors; one Managing Director, one whole-Time Director, One Executive Director, and the remaining three (3) Independent Directors.

As on 31st March, 2025, Your Company has 6 (Six) Directors, namely;

I.

Mr. Dhirajlal Raychand Shah Executive Chairperson

ii.

Mr. Arvind Raichand Shah Executive Director-Managing Director

iii.

Mr. Nitin Raichand Shah Executive Director- Whole-Time Director

iv.

Mr. Rajendra Kundanlal Desai Non-Executive - Independent Director

v.

Mrs. Richa Manoj Goyal Non-Executive - Independent Director

vi.

Mr. Vaibhav Jayantbhai Mehta Non-Executive - Independent Director

Changes Occurred in the Board of Directors;

i. During the year under review:

No changes in composition of Board have occurred during the year under review.

ii. Between the ends of the financial year to which these financial statements relate and the date of the report:

> Mrs. Richa ManojGoyal, Non-Executive - Independent Director of the Company has resigned from the directorship of the Company w.e.f. from July 3, 2025.

> Ms. Ketaki Naginbhai Patel (DIN: 11249634), on the basis of approval and recommendation of the Nomination and Remuneration

Committee, the Board of Directors of the Company approved and appointed Ms. Ketaki Naginbhai Patel (DIN: 11249634) as an Additional Director (Non-Executive Independent, with effect from August 23, 2025.

Moreover, the Nomination and Remuneration Committee and the Board of Directors of the Company have recommended the appointment of Ms. Ketaki Naginbhai Patel (DIN: 11249634), as an Independent Director of the Company and put the resolution to vote as a Special Resolution, for a term of five (5) consecutive years from August 23, 2025, to August 22, 2030, at ensuing General Meeting of the Company.

Re-appointment of Director(s) retiring by rotation:

Pursuant to the provisions of section 152 of the Companies Act, 2013 and in accordance with provisions of Articles of Association of the Company, Mr. Shah Dhirajlal Raychand (DIN: 00010480), an

Executive Chairman of the Company retires by rotation at the ensuing Annual General Meeting and being eligible, offers himself for re-appointment. Your Directors recommend his re-appointment.

None of the Directors of the Company are disqualified for being appointed as Directors as specified under Section 164(2) of the Act read with Rule 14(1) of the Companies (Appointment and Qualification of Directors) Rules, 2014.

Key Managerial Personnels (KMPs):

As on 31st March, 2025, Your Company has the following Key Managerial Personnel (KMPs):

I.

Mr. Dhirajlal Raychand Shah Executive Chairperson

ii.

Mr. Arvind Raichand Shah Managing Director

iii.

Mr. Nitin Raichand Shah Whole-Time Director

iv.

Mr. Satish Hargovinddas Shah Chief Financial Officer

v.

Mr. Hitesh Kantilal Garmora Company Secretary & Compliance Officer

There were no changes occurred during the year under review AND between the ends of the financial year to which these financial statements relate and the date of the report.

9. COMMITTEES OF THE BOARD:

As on March 31, 2025, the Board has four

committees: Audit, Nomination and Remuneration, Stakeholders Relationship and Corporate Social Responsibility. The composition of the committees is in line with the applicable provisions of the Act, Rules and the Listing Regulations and are as detailed below.

Name of the Committee

Composition of the Committee Remarks

Audit Committee

Chairperson:

Mr. Rajendra Kundanlal Desai Members:

Mrs. Richa Manoj Goyal***

Mr. Dhirajlal Raychand Shah Mr. Vaibhav Jayantbhai Mehta**

The Audit committee of the Board of directors was constituted in conformity with the requirements of Section 177 of the Act and regulation 18 of the Listing Regulations and its role has been the same as stipulated in the Act and the Regulations mentioned above.

All recommendations made by the Audit committee during the year were accepted by the Board.

Nomination and

Remuneration

Committee

Chairperson:

Mr. Rajendra Kundanlal Desai Members:

Mrs. Richa Manoj Goyal*** Mr. Vaibhav Jayantbhai Mehta Mr. Dhirajlal Raychand Shah

The Nomination and Remuneration committee of the Board of Directors was constituted in conformity with the requirements of Section 178 of the Act and Regulation 19 of the Listing Regulations and its role has been the same as stipulated in the Act and the Regulations mentioned above.

Stakeholders

Relationship

Committee

Chairperson:

Mr. Rajendra Kundanlal Desai Members:

Mr. Arvind Raichand Shah Mr. Dhirajlal Raychand Shah

The Stakeholders Relationship committee of the Board of directors was constituted in conformity with the requirements of Section 178 of the Act and Regulation 20 of the Listing Regulations and its role has been the same as stipulated in the Act and the Regulations mentioned above.

Corporate Social

Responsibility

Committee*

Chairperson:

Mr. Dhirajlal Raychand Shah Members:

Mr. Arvind Raichand Shah Mr. Rajendra Kundanlal Desai

The Corporate Social Responsibility committee of the Board of directors was constituted in conformity with the requirements of Section 135 of the Act.

The Committee monitors the implementation of the CSR Policy from time to time.

* The Corporate Social Responsibility Committee was formed on August 12,2024, at the duly convened meeting of the Board of Directors of the Company.

** Mr. VaibhavJayantbhai Mehta was appointed as member of Audit committee w. e.f. February 12,2025.

*** After the closure of the reporting FY.2024-25, Mrs. Richa Manoj Goyal, tendered her resignation; Therefore she ceased to be a member of the Committees of the Board w.e.f. July3,2025.

# After the closure of the reporting FY.2024-25, Ms. Ketaki Naginbhai Patel, appointed by the Board as an additional Independent Director of the Company and was also appointed as member of Audit committee and Nomination and Remuneration Committee w. e.f. August23,2025.

A detailed note on the Board and its Committees along with the dates of meetings is provided in the Corporate Governance Report.

13. MEETINGS OF THE BOARD AND COMMITTEE:

During the Financial Year 2024-25, the Board of Directors met Five (5) times, and the details of the Meetings of the Board and its Committees are given in the Corporate Governance Report, , which forms part of this Annual Report.

The gap intervening between the two Meetings were within the time prescribed under the Act and SEBI (LODR), Regulations.

Details of attendance at Meetings of the Board, its committees, and the Annual General Meeting are included in the Report on Corporate Governance, which forms part of this Annual Report.

14. MEETING OF INDEPENDENT DIRECTORS:

In terms of requirements under Schedule IV of the Companies Act, 2013 and Regulation 25(3) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, a Separate Meeting of the Independent Directors was held on February 12, 2025.

The Independent Directors at the Meeting, inter alia, reviewed the following:

> Performance of Non-Independent Directors and Board as a whole.

> Performance of the Chairman of the Company, taking into account the views of Executive Directors and Non-Executive Directors.

> Assessed the quality, quantity, and timeliness of the flow of information between the Company Management and the Board that is necessary for the Board to effectively and reasonably perform their duties.

15. STATEMENT ON DECLARATION GIVEN BY INDEPENDENT DIRECTORS UNDER SECTION 149

The Independent Directors have submitted a declaration of independence, as required pursuant to sub-section (7) of Section 149 of the Companies Act, 2013.

All the Independent Directors of the Company have declared that:

[a] they meet the criteria of independence as laid down under the Act and the Listing Regulations;

[b] they have complied with the Code of Independent Directors prescribed under Schedule IV of the Act; and

[c] they have registered themselves with the Independent Directors Database maintained by the Indian Institute of Corporate Affairs.

16. STATEMENT REGARDING OPINION OF THE BOARD WITH REGARD TO INTEGRITY, EXPERTISE AND EXPERIENCE (INCLUDING THE PROFICIENCY) OF THE INDEPENDENT DIRECTORS APPOINTED DURING THE YEAR:

In the opinion of the Board of Directors of the Company, Independent Directors on the Board of Company hold the highest standards of integrity and are highly qualified, recognized and respected individuals in their respective fields. Its an optimum mix of expertise (including financial expertise), leadership and professionalism.

All the Independent Directors of your Company have been registered and are members of Independent Directors Data bank maintained by the Indian Institute of Corporate Affairs (IICA) and have passed the Online Proficiency Self-Assessment Test conducted by Indian Institute of Corporate Affair (IICA).

17. POLICY ON APPOINTMENT & REMUNERATION OF DIRECTORS AND KEY MANAGERIAL PERSONNEL:

Pursuant to provision of Section 178(3) of the Companies Act, 2013, the Board has framed a Policy for selection, appointment and remuneration of Directors , Key Managerial Personnel and Senior Management employees and other employees, including criteria for determining qualifications, positive attributes and independence of Directors. The salient features of the Nomination and Remuneration Policy of the Company has been disclosed in the Corporate Governance Report, which is a part of this report. The said Policy is available on the Companys website and can be accessed using the https://www.shahlon.com/ reports/disclosure/NAR_Policy.pdf .

18. PARTICULARS OF EMPLOYEES AND REMUNERATION

The Disclosure required under Section 197(12) of the Companies Act, 2013 read with the Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, relating to percentage increase in remuneration, ratio of remuneration of each Director and Key Managerial Personnel to the median of employees remuneration is provided in, is annexed as Annexure - 1 and forms an integral part of this Report.

A statement comprising the names of top 10 employees in terms of remuneration drawn in terms of Rule 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, is provided in a separate annexure forming part of this report. However, in terms of Section 136 of the Act, the Integrated Annual Report is being sent to the shareholders and others entitled thereto, excluding the said annexure, Members who are interested in obtaining these particulars may write to the Company Secretary at the Registered Office of the Company. The aforesaid Annexure is also available for inspection by Members at the Registered Office of the Company, 21 days before and up to the date of the ensuing Annual

General Meeting during the business hours on working days.

There were no employees whose remuneration was in excess of the limits in pursuance of section 197(12) of the Companies Act, 2013 read with Rule 5(2) of The Companies (Appointment & Remuneration of Managerial Personnel) Rules, 2014.

19. NUMBER OF EMPLOYEES AS ON THE CLOSURE OF FINANCIAL YEAR AND GENDERWISE BIFURCATION THEROF:

The details relating to the number of employees as on the closure of financial year and gender wise bifurcation thereof is as follows:

Sr. No.

Category No. of Employees

I.

Female 53

ii.

Male 644

iii.

Transgender 0
Total Employees 697

20. POLITICAL CONTRIBUTION:

During the year under review, the Company has made Political contribution of Rs. 30,00,000/- (Rupees Thirty Lakhs Only) to a political party, which is in compliance with the Section 182 and other applicable provisions of the Companies Act, 2013.

21. DETAILS OF SUBSIDIARY/JOINT VENTURES / ASSOCIATE COMPANIES

Your Company does not have any Subsidiary, Joint Ventures or Associate Company.

22. ENERGY CONSERVATION, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS ANDOUTGO

As required under section 134(3)(m) of the Companies Act, 2013 read with Rule 8(3) of the Companies (Accounts) Rules, 2014 the particulars relating to conservation of energy, Technology Absorption and foreign exchange earnings and outgo is appended as an Annexure-2 to this Boards Report.

23. DIRECTORS RESPONSIBILITY STATEMENT

To the best of their knowledge, belief and according to the information and explanations obtained, your

Directors make the following statements in terms of

Section 134(3) (c) & 134 (5) of the Companies Act, 2013:

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

b) the directors had 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 and loss of the company for that period;

c) 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;

d) The directors had prepared the annual accounts on a going concern basis;

e) The 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.

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

24. AUDITORS AND AUDITORS REPORT

Statutory Auditors :

M/s Rasesh Shah & Associates, Chartered Accountants (Firm Registration No. 0108671W) completed their second term and have been retired as the Statutory Auditors of the company w.e.f. 30.09.2024 i.e. on conclusion of the 16th AGM of the company.

Based on the recommendation of Audit Committee and Board of Directors, Shareholders approved the appointment of M/s. HTKS & Co., Chartered Accountants (Firm Registration No 111032W), at the 16th AGM, as the Statutory Auditors of the Company, for a term of 5 consecutive years commencing from the conclusion of 16th AGM till the conclusion of 21st AGM of the Company.

Accordingly, M/s. HTKS & Co., Chartered Accountants, Statutory Auditors of the Company will continue as such till the conclusion of Annual General Meeting to be held in the Year 2029. In this regard, the Company has received a Certificate from the Auditors to the effect that their continuation as Statutory Auditors would be in accordance with the provisions of Section 141 of the Companies Act, 2013.

> Statutory Auditors Observations in Audit Report:

There are no qualifications, reservations or adverse remarks or disclaimers made by M/s. HTKS & Co., Chartered Accountants (Firm Registration No 111032W), Statutory Auditors in their report for the Financial Year ended March 31, 2025.

Moreover, there is no incident of fraud requiring reporting by the Auditors under Section 143(12) of the Act.

> Boards response on Auditors qualification, Reservation or adverse Remark or disclaimer made

There are no qualifications, reservations or adverse remarks made by the statutory auditors in their report for the reporting financial year.

Secretarial Auditors:

The Company has appointed Shri Bhairav H. Shukla, Practicing Company Secretary, (CP: 5820) Surat to conduct the Secretarial Audit of the Company as required by Section 204 of the Companies Act, 2013 and Rules made thereunder. The Company provided all assistance and facilities to the Secretarial Auditors for conducting their audit. Shri Bhairav H. Shukla, has also conducted the Annual Secretarial Compliance pursuant to Regulation 24A of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. The Secretarial Audit Report, in Form MR-3, for the financial year ended March 31, 2025 is annexed herewith as Annexure- 3.

Pursuant to the amended provisions of Regulation 24A of the SEBI (LODR) Regulations and Section 204 of the Act read with Rule 9 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, Based on the recommendation of the Audit Committee, the Board of Directors have approved and recommended the appointment of M/s. JDM and Associates LLP, Peer Reviewed Firm of Company Secretaries in Practice as Secretarial Auditors of the Company for a term of up to 5 (Five) consecutive years to hold office from the conclusion of ensuing 17th AGM till the conclusion of 22nd AGM of the Company to be held in the Year 2030, for approval of the Members at ensuing AGM of the Company. Brief resume and other details of M/s. JDM and Associates LLP, Company Secretaries in Practice, are separately disclosed in the Notice of ensuing AGM.

M/s. JDM and Associates LLP have given their consent to act as Secretarial Auditors of the Company and confirmed that their aforesaid appointment (if made) would be within the prescribed limits under the Act & Rules made thereunder and SEBI (LODR) Regulations. They have also confirmed that they are not disqualified to be appointed as Secretarial Auditors in terms of provisions of the Act & Rules made thereunder and SEBI (LODR) Regulations.

> Secretarial Auditors Observations in Audit Report:

The Secretarial Audit Report for the financial year ended March 31, 2025 issued by Shri Bhairav H. Shukla, Practicing Company Secretary, (CP: 5820) Surat, is annexed herewith as Annexure- 3. The report is self-explanatory and does not call for any further explanation / comments as required under Section 134(3)(f) of the Companies Act, 2013.

Moreover, there is no incident of fraud requiring reporting by the Secretarial Auditor under Section 143(12) of the Act.

Cost Auditors:

In terms of the provisions of Section 148 of the Act read with the Companies (Cost Records and Audit) Rules, 2014 as amended from time to time, the Board of Directors, on the recommendation of the Audit Committee, has appointed M/s. PNR & Co. LLP, Cost Accountants, Surat (Firm Registration No: 006470) as Cost Auditor of the Company, for the financial year ending March 31, 2026, on a remuneration as mentioned in the Notice convening the 17th Annual General Meeting for conducting the audit of the cost records maintained by the Company.

A Certificate from M/s. PNR & Co. LLP, Cost Accountants, has been received to the effect that their appointment as Cost Auditor of the Company, if made, would be in accordance with the limits specified under Section 141 of the Act and Rules framed thereunder.

A resolution seeking Members approval for remuneration payable to Cost Auditors forms part of the Notice of the 17th Annual General Meeting of the Company and the same is recommended for your consideration.

Cost Audit Report for the year March 2024 was filed with the Central Government, within the prescribed time limit AND The Cost Audit Report for the year ended on 31st March 2025, shall be filed within prescribed time after completion of Cost Audit by Cost Auditors.

The company has made and maintained books of account and records pursuant to the rules made by the Central Government for the maintenance of cost records under section 148(1) of the Companies Act, 2013.

> Cost Auditors Observations in Audit Report:

There are no qualifications, reservations or adverse remarks or disclaimers made by M/s. PNR & Co. LLP, Cost Accountants, Surat (Firm Registration No: 006470), in his Cost Audit Report for the Financial Year ended March 31,2024.

Moreover, there is no incident of fraud requiring reporting by the Cost Auditor under Section

143(12) of the Act.

> Boards response on Auditors qualification, Reservation or adverse Remark or disclaimer made

There are no qualifications, reservations or adverse remarks made by the Cost auditors in their report.

25. INTERNAL FINANCIAL CONTROLS SYSTEMS AND THEIR ADEQUACY:

The Company believes that Internal Control is one of the key pillars of governance, which provides freedom to the management within a framework of appropriate checks and balances. The Company has a robust internal control framework, which has been developed considering the nature, size and risks in the business.

The Company has adequate internal control systems in place and also has reasonable assurance on authorizing, recording and reporting transactions of its operations. The Company has well-placed, proper and adequate internal controls environment, commensurate with its size, scale and complexities of its operations. The Company had already developed and implemented a framework for ensuring internal controls over financial reporting. This framework includes entity level policies, processes and operating level standard operating procedures (SOP). Internal control systems are an integral part of your Companys Corporate Governance structure. Information Technology (IT) policies and processes also ensure that they mitigate the current business risks. The Company has in placed ERP software system, supported by BI tools. The systems and processes are continuously improved by adopting best in class processes and automation and implementing the latest IT tools which help further for maintaining financial and commercial discipline. These have been designed to provide reasonable assurance with regard to credibility of data and compliances, inter-alia:

a) Recording and providing reliable financial and operational information;

b) Complying with the applicable statutes;

c) Safeguarding assets from unauthorized use;

d) Executing transactions with proper authorization, and ensuring compliance with corporate policies;

e) Prevention and detection of Frauds / errors;

f) Continuous updating of IT software/systems.

These are aimed at giving the Audit Committee a reasonable assurance on the reliability of financial reporting and statutory & regulatory compliances, effectiveness and efficiency of your Companys operations. The Internal Financial Control Systems are reviewed periodically and revised to keep in tune with the changing business environment.

Statutory Auditors of the company has conducted audit of internal financial control system over financial reporting and operating effectiveness of such controls. Separate audit report on internal financial control is annexed to Auditors Report and forming part of this report.

26. VIGIL MECHANISM / WHISTLE BLOWER POLICY:

Your Company has adopted a Whistle Blower Policy and has established the necessary vigil mechanism for Directors and employees in confirmation with Section 177 of the Act and Regulation 22 of SEBI Listing Regulations, to facilitate reporting of the genuine concerns about unethical or improper activity, without fear of retaliation. The vigil mechanism of the Company provides for adequate safeguards against victimization of Directors and employees who avail of the mechanism and also provides for direct access to the Chairman of the Audit Committee in exceptional cases. The said policy is uploaded on the website of the Company at https://www.shahlon.com/reports/ disclosure/VIGIL%20MECHANISM_SSIL.pdf .

27. BUSINESS RISK MANAGEMENT

The Company has laid down a Risk Management Policy and identified threat of such events which if occur may adversely affect either or value to shareholders, ability of Company to achieve objectives, ability to implement business strategies. Such inherent risks are categorized into Strategic risk, Operating risk and Regulatory risk. Managing Director and other Directors of the Company in consultation with Audit Committee will review from time to time the risk and suggest steps to be taken to control and mitigate the same through a properly defined framework. It may be noted that none of the identified risks is of a nature which would threaten the existence of the Company. We consistently and periodically review our systems and policies in order to establish sound risk management

and internal control systems.

28. ANNUAL RETURN:

Pursuant to Section 134(3)(a) and Section 92(3) of the Act read with Companies (Management and Administration) Rules, 2014, the Annual Return of the Company in Form MGT-7 has been placed on the Companys website (www.shahlon.com ).

29. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS:

The company has not given any guarantees or provided any security covered under the provisions of section 185 and 186 of the Companies Act, 2013 during the year under review.

The Company has complied with provisions of the Companies Act, 2013 with respect to loans granted, investments made or guarantee given.

30. PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES:

All the related party transactions are entered on arms length basis, in the ordinary course of business and are in compliance with the applicable provisions of the Companies Act, 2013 and the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. There are no materially significant related party transactions made by the Company with Promoters, Directors, Key Managerial Personnel etc. which may have potential conflict with the interest of the Company at large or which warrants the approval of the shareholders.

The Company has developed a Policy on Related Party Transactions for the purpose of identification and monitoring of such transactions.

The particulars of contracts or arrangements with related parties referred to in sub section (1) of Section 188 entered by the Company during the Financial Year ended March 31, 2025, in prescribed Form AOC-2 is annexed to this Boards Report as "Annexure - 4".

All Related Party Transactions are presented to the Audit Committee and the Board. Omnibus approval is obtained for the transactions which are foreseen and repetitive in nature. A statement of all related party transactions presented before the Audit Committee on a quarterly basis, specifying the nature, value and terms and conditions of the transactions.

The policy on Materiality of Related Party Transactions and on dealing with Related Party Transactions as approved by the Board is uploaded on the website of the Company and the web link is https://www.shahlon . com/reports/disclosure/RPT_Policy.pdf.

31. EVALUATION OF THE BOARDS PERFORMANCE

The Company has devised a Policy for performance evaluation of the Board as a whole, Committees and individual Directors (including Independent Directors) which include criteria for performance evaluation of Non-executive Directors and Executive Directors. The exercise was carried out through a structured evaluation process covering various aspects of the Boards functioning such as composition of the Board & committees, experience & competencies, performance of specific duties & obligations, governance issues etc. Separate exercise was carried out to evaluate the performance of individual Directors including the Board Chairman who were evaluated on parameters such as attendance, contribution at the meetings and otherwise, independent judgment, safeguarding of minority shareholders interest etc.

The evaluation of the Independent Directors was carried out by the entire Board and that of the Chairman and the Non-Independent Directors were carried out by the Independent Directors.

The Directors were satisfied with the evaluation results, which reflected the overall engagement of the Board and its Committees with the Company.

Further, The Chairperson, based on the Evaluation done by the Directors, informed that the performance of the Directors is satisfactory, and they are recommended for continuation as Directors of the Company.

32. SCHEME OF AMALGAMATION / ARRANGEMENT

During the financial year under review, your Company has not proposed or considered or approved any Scheme of Merger / Amalgamation / Takeover / Demerger or Arrangement with its Members and/or Creditors.

33. DETAILS OF APPLICATION MADE OR ANY PROCEEDING PENDING UNDER THE INSOLVENCY AND BANKRUPTCY CODE, 2016, DURING THE FINANCIAL YEAR ALONG WITH THEIR STATUS AS AT THE END OF THE FINANCIAL YEAR

During the financial year under review, there was no application made and proceeding initiated / pending

by any Financial and/or Operational Creditors against your Company under the Insolvency and Bankruptcy Code, 2016.

As on the date of this Report, there is no application or proceeding pending against your Company under the Insolvency and Bankruptcy Code, 2016.

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

During the financial year under review, the Company has not made any settlement with its bankers for any loan(s) / facility(ies) availed or / and still in existence.

35. SECRETARIAL STANDARDS

The Company complies with all applicable mandatory Secretarial Standards issued by the Institute of Company Secretaries of India (ICSI).

36. SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALS:

There are no significant and material orders passed by the Regulators or Courts or tribunals which would impact the going concern status of the Company and its future operations.

37. MATERIAL CHANGES AFFECTING THE COMPANY

There have been no material changes and commitments affecting the financial position of the Company between the end of the financial year and date of this report.

38. DISCLOSURE AS PER SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013

The Company has zero tolerance for sexual harassment at work place and has adopted a policy against sexual harassment in line with the provisions of Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and the rules framed thereunder. An Internal Complaints Committee (ICC) has been set up in compliance with the said Act.

The following is a summary of sexual harassment complaints received and disposed of during the year:

a) number of complaints filed during the financial year - Nil

b) number of complaints disposed of during the financial year - Nil

c) number of complaints pending as on end of the financial year - Nil

39. COMPLIANCE WITH THE PROVISIONS RELATING TO THE MATERNITY BENEFIT ACT 1961.

The Company declares that it has duly complied with the provisions of the Maternity Benefit Act, 1961. All eligible women employees, if any, have been extended the statutory benefits prescribed under the Act, including paid maternity leave, continuity of salary and service during the leave period, and post-maternity support such as nursing breaks and flexible return-to- work options, as applicable. The Company remains committed to fostering an inclusive and supportive work environment that upholds the rights and welfare of its women employees in accordance with applicable laws.

40. TRANSFER OF UNCLAIMED DIVIDEND AND SHARES TO IEPF

During the year, the Company has transferred the unclaimed and unpaid dividend of 266496.25/-. Further, the corresponding equity shares on which dividends were unclaimed for seven consecutive years were also transferred as per the requirements of the IEPF Rules.

41. CORPORATE SOCIAL RESPONSIBILITY

In accordance with the requirements of Section 135 of the Companies Act, 2013, and the Rules made there under, the Company has constituted a Corporate Social Responsibility (CSR) Committee and also formulated a Corporate Social Responsibility Policy (CSR Policy) which is available on the website of the Company at https://www.shahlon.com/reports/ disclosure/CSR_Policy.pdf.

An Annual Report on CSR activities of the Company for the Financial Year 2024-25 as Required to be given under Section 135 of the Companies Act, 2013 read with Rule 8 of the Companies (Corporate Social Responsibility Policy) Rules, 2014 has been provided as an "Annexure - 5" to this Report.

During the F.Y.2024-25 the Company was required to spend an amount of Rs. 7.05 Lakhs for implementation of various CSR activities in terms of Section 135 of the Companies Act, 2013. In this regard the Company has

spent an amount of Rs. 7.25 Lakhs on CSR activities which is in excess of the minimum amount required to be spent by the Company.

42. CORPORATE GOVERNANCE:

A separate report on Corporate Governance pursuant to Regulation 34(3) of Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, read with Part C of Schedule V thereof, along with a certificate from Shri Bhairav H. Shukla, Practicing Company Secretary, (CP: 5820) Surat confirming compliance of the conditions of Corporate Governance is provided as a distinct section of this Annual Report.

43. MANAGEMENT DISCUSSION AND ANALYSIS REPORT

Pursuant to Regulation 34(2)(e) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, Management Discussion and Analysis Report is given in Annexure- 6 to this Report.

44. ACKNOWLEDGMENT

Your Directors express their grateful appreciation for the assistance and co-operation received from the Banks, Financial Institutions, Government Authorities, Customers, Suppliers and Shareholders during the year under review. Your Directors also wish to place on record their deep sense of appreciation for committed services of employees of the Company at all the levels.

ANNEXURE- 1

RATIO OF DIRECTORS REMUNERATION TO MEDIAN EMPLOYEES REMUNERATION AND OTHER DISCLOSURE

[Pursuant to Sub-Section (12) of Section 197 of the Companies Act, 2013 and Rule 5(1) 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 2024-25 Directors Name Ratio to median remuneration
1 Shri. Dhirajlal R. Shah 48.19 : 1
2 Shri. Arvind R. Shah 48.19 : 1
3 Shri. Nitin R. Shah 48.19 : 1

(ii)

The Percentage increase in remuneration of each Director, Chief Financial Officer, Chief Executive Officer, Company Secretary or Manager if any in the financial year 2024-25 compared to 2023-24 Directors/CFO/CEO/CS/ Manager name % increase in remuneration
1 Mr.Dhirajlal R. Shah 0.00%
2 Mr. Arvind R. Shah 0.00%
3 Mr. Nitin R. Shah 0.00%
4 Mr. Satish Shah 7.71%
5 Mr. Hitesh K. Garmora 8.05%

(iii)

Percentage increase in the median remuneration of employees in the financial year 2024-25 compared to 2023-24-

47.49%

(iv)

Number of permanent employees on the rolls of the company;

As on 31.03.2025 As on 31.03.2024
547 745

(v) average percentile increase already made in the salaries of employees other than the managerial personnel in the last financial year and its comparison with the percentile increase in the managerial remuneration and justification thereof and point out if there are any exceptional circumstances for increase in the managerial remuneration;

The average percentage increase in the salaries of employees other than Managerial Personnel in Financial Year 2024-25 was 7.00%. The increments given to employees are based on their potential, performance, and contribution, which are benchmarked against applicable Industry norms. Whereas the remuneration of the Managerial Personnel remained unchanged, except for the Company Secretary and Chief Financial Officer, whose average remuneration increased by 7.87%. There is no exceptional increase in remuneration of key Managerial Personnel.

(vi) Affirmation that the remuneration is as per the Remuneration policy of the Company: It is hereby affirmed that the remuneration paid is as per the remuneration policy for Directors, Key Managerial Personnel and other employees of the Company.

ANNEXURE- 2

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 of The Companies (Accounts) Rules, 2014.

(A) Conservation of energy-

(I) the steps taken or impact on conservation of

energy;

> Maintaining power factor and accordingly obtained rebate from DGVCL of Rs. 1182697. 70/- during the year.

> Further, following steps taken to save energy:

> ETP Aeration Tank 2 motor connect with 2 no. VFD - which saves 185 kwh per day i.e. Rs.39,960/- per month.

> Replaced 11 Nos. Waterjet Humidity motor (consuming 878 kwh per day) with 11 New Exhaust Fan motor (consuming 275 kwh per day), which saves Rs. 1,29,360/- per month.

> Replaced 9 Nos. TFO Humidity motor (consuming 492 kwh per day) with 9 New Exhaust Fan (consuming 152 kwh per day), which saves Rs. 76,962/- per month.

> Replaced 850 Nos. 28 w Tube light (consuming 570 kwh per day) with 850 new 16 w LED light (consuming 325 kwh per day), which saves Rs. 61,005/- per month.

> Replaced 8 Nos. 250 w Sidium lamp (consuming 48 kwh per day) with 8 new 100w Flude light (consuming 19.2 kwh per day), which saves Rs. 7,171.20/- per month.

(ii) the steps taken by the company for utilising alternate sources of energy;

> The Company is exploring potential of using alternate source of energy, which may be considered for implementation in future. The company has installed in past two 0.6MW, one 1.2MW and one 2.1MW windmills for captive generation of power.

(iii) the capital investment on energy conservation equipments; - NIL

(B) Technology absorption-

(I) The efforts made towards technology absorption; and

(ii) the benefits derived

Your company is keeping a close eye on the new product development and upgradation of technology in existing products. Upgradation in various areas of plant and machinery is continuously carried out. The company has adopted standard cost for each product quality and comparing it with actual cost from time to time. If there is any major deviation, then proper and prompt remedial action is taken to improve it. These developments will result in improvement in the quality of the product and yield resulting in superior cost competitiveness.

(iii) in case of imported technology (imported during the last three years reckoned from the beginning of the financial year) - NIL

(iv) the expenditure incurred on Research and Development. - NIL

(C) Foreign exchange earnings and Outgo:

Total Foreign Exchange used and earned.

Particulars

2024-25 2023-24

I) Foreign Exchange Earnings

1536.69 1765.43

II) Foreign Exchange Outgo:

a) Raw Materials

119.02 95.23

b) Capital Goods

- 1.46

c) Consumables Stores

4.75 30.39

d) Foreign Travelling Expenses

4.02 5.55

e) Export Commission

2.44 17.88

f) Business Convention Expenses

- 4.51

ANNEXURE- 3

SECRETARIAL AUDIT REPORT

For The Financial Year Ended on 31st March, 2025

[Pursuant to section 204(1) of the Companies Act, 2013 and Rule No.9 of the Companies (Appointment and Remuneration Personnel) Rules, 2014]

SECRETARIAL AUDIT REPORT

FOR THE FINANCIAL YEAR ENDED 31ST MARCH, 2025

To,

The Members,

SHAHLON SILK INDUSTRIES LIMITED

(CIN - L17120GJ2008PLC053464)

Plot No. 5, C.S. Nondh No. 451/A, R.S. No. 33/1 paiki,

Nr. Narendra Dyeing Mill, B/h. Old Sub-Jail, Khatodara,

Ring Road, Surat-395002, Guiarat, India.

I have conducted the Secretarial Audit of the compliance of applicable statutory provisions and the adherence to good corporate practices by SHAHLON SILK INDUSTRIES LIMITED (CIN - L17120GJ2008PLC053464) (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, the company has, during the audit period covering the financial year ended on 31st March, 2025, 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, 2025, according to the provisions of:

(I) The Companies Act, 2013 (the Act) and the rules made there-under;

(ii) The Securities Contracts (Regulation) Act, 1956 (SCRA) and the rules made there-under;

(iii) The Depositories Act, 1996 and the Regulations and Bye-laws framed there-under;

(iv) Foreign Exchange Management Act, 1999 and the rules and regulations made there-under to the extent of Foreign Direct Investment;

(v) The following Regulations and Guidelines prescribed under the Securities and Exchange Board of India Act, 1992 (SEBI Act)

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) Regulations, 2018; (Not applicable to the Company during the financial year under review);

d. The Securities and Exchange Board of India (Share Based Employee Benefits and Sweat Equity) Regulations, 2021; [Not applicable as the Company has not issued shares to the Employees during the financial year under review];

e. The Securities and Exchange Board of India (Issue and Listing of Non-Convertible Securities) Regulations, 2021. [Not applicable as the Company had not issued and listed any debt securities, non-convertible securities or commercial paper during the financial year under review];

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. [Not applicable as the company is not registered as Registrar to Issue and Share Transfer Agent during the financial year under review;]

g. The Securities and Exchange Board of India (Delisting of Equity Shares) Regulations, 2021. [Not applicable as the Company has not delisted / proposed to delist its equity shares from Stock Exchange during the financial year under review];

h. The Securities and Exchange Board of India (BuyBack of Securities) Regulations, 2018. [Not applicable as the Company has not bought back / proposed to buy-back any of its securities during the financial year under review];

I. The Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015.

(vi) Other laws specifically applicable to the Company

namely -

1. Factories Act, 1948

2. The Environment (Protection) Act, 1986

3. Air (Prevention and Control of Pollution) Act, 1981

4. Water (Prevention and Control of Pollution) Act, 1974

5. Foreign Trade Regulation Act, 1992

I have also examined compliances with the applicable

clauses of the following:

(I) Secretarial Standards pursuant to section 118(10) of the Act, issu ed by the Institute of Company Secretaries of India.

(ii) The Listing Agreement entered into by the company with the BSE Ltd.

I report that, during the year under review, the company has complied with the provisions of the Acts, rules, regulations and guidelines, standards mentioned above subject to the following observations:

Sr. No.

01.

Compliance Requirement (Regulations/circulars/guidelines including specific clause)

Fees and other charges to be paid to the recognised stock exchanges(s).

The listed entity shall pay all such fees or charges, as applicable, to the recognised stock exchange(s), in the manner specified by the Board or the recognized stock exchange(s).

Regulation/Circular No.

Regulation 14 Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015

Deviations

Delayed in payment of Annual Fees of the BSE (Bombay Stock Exchange).

Action Taken by

BSE Limited

Type of Action

Levied Interest of Rs. 6500/- plus (GST) 1170/- (Total Rs. 7670/-)

Details of Violation

Delayed in Compliance of Regulation 14 of Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015

The Listed entity shall pay annual fees on or before 30th April every year.

However, the Company has paid annual fees of BSE on 11.06.2024

Fine Amount

No fine imposed

Observations/Remarks of the Practicing Company Secretary

Delayed in payment of Annual Fees

The listed entity has paid annual fees of the BSE (Bombay Stock Exchange) on 11.06.2024

Management Response

The Company made the payment towards Annual Listing Fees to the Bombay Stock Exchange (BSE) on June 11, 2024, for the financial year 2024-25. The delay in payment was due to overlooked administrative circumstances.

Remarks

Acknowledged

 

Sr. No.

02.

Compliance Requirement (Regulations/circulars/guidelines

Restrictions on communication and trading by Insiders

including specific clause)

Regulation 3(5)- The Board of directors or head(s) of the organization of every person required to handle unpublished price sensitive information shall ensure that a Structured Digital Database is maintained containing the nature of Unpublished Price Sensitive Information and the names of such persons who have shared the information and also the names of such persons with whom information is shared under this regulation along with the Permanent Account Number or any other identifier authorized by law where Permanent Account Number is not available. Such database shall not be outsourced and shall be maintained internally with adequate internal controls and checks such as time stamping and audit trails to ensure non-tampering of the database.
Regulation 3(6)- The Board of Directors or Head(s) of the organization of every person required to handle unpublished price sensitive information shall ensure that the structured digital database is preserved for a period of not less than eight years after completion of the relevant transactions and in the event of receipt of any information from the Board regarding any investigation or enforcement proceedings, the relevant information in the structured digital database shall be preserved till the completion of such proceedings.

Regulation/Circular No.

Regulation 3(5) and 3(6) Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations, 2015.

Deviations

Non-Maintenance of structured digital database (SDD) software by the listed entity for the period from 01.04.2024 to 31.12.2024. [Reg. 3(5)] AND

Non-Preservation of structured digital database (SDD) software as required under [Reg. 3(6)].

Action Taken by

No action taken by the exchange yet.

Type of Action N.A.

Details of Violation Non-Compliance of Regulation 3(5) and 3(6) Securities and Exchange

Board of India (Prohibition of Insider Trading) Regulations, 2015.

The Listed entity has not maintained SDD Data Base for a period from 01.04.2024 to 31.12.2024 [Reg. 3(5)].

AND

Non-Preservation of structured digital database (SDD) software as required under [Reg. 3(6)].

Fine Amount N.A.

Observations/Remarks of the Non-Maintenance & Preservation of structured digital database (SDD)

Practicing Company Secretary software by the listed entity.

Management Response Malicious viruses led to hard disk failure, consequently, disruption in

working of the computer occurred, in which the SDD software was maintained by the Company, which ended up loss of data of the Company, Even after all the endeavors, the company lost the data including data available in SDD Software of the Company and same was disclosed in the Corporate Governance Report filed with the BSE for the quarter ended 31.12.2024.

Remarks Acknowledged

I further report that-

The Board of Directors of the Company is duly constituted with proper balance of Executive Directors, Non-Executive Directors, Independent Directors and Women Director. The changes in the composition of the Board of Directors that took place during the period under review were carried out in compliance with the provisions of the Act.

Adequate notice is given to all directors to schedule the Meetings of the Board and Committees of the Board. Except where consent of the directors was received for scheduling meeting at a shorter notice (to transact urgent business on fulfilling conditions as prescribed under section 173 (3) of the Companies Act, 2013), and 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 meetings of the Board of Directors & the committee thereof duly recorded and signed by the Chairman the decision of the Board or Committee was unanimous and there were no dissenting views on any matter.

I further report that based on review of compliance mechanism established by company and on the basis of representation made / certificate issued by the Company and its officers, there are adequate systems and processes in the company commensurate with the size and operations of the company to monitor and ensure compliance with the applicable laws, rules, regulations and guidelines.

I further report that during the audit period there were no specific events / actions having a major bearing on the Companys affairs in pursuance of the above referred laws, rules, regulations, guidelines, standards, etc.

"ANNEXURE - A"

FORM No. MR - 3 SECRETARIAL AUDIT REPORT

For The Financial Year Ended on 31st March, 2025

To,

The Members,

SHAHLON SILK INDUSTRIES LIMITED

(CIN - L17120GJ2008PLC053464)

Plot No. 5, C.S. Nondh No. 451/A, R.S. No. 33/1 paiki,

Nr. Narendra Dyeing Mill, B/h. Old Sub-Jail, Khatodara,

Ring Road, Surat-395002, Gujarat, India.

My Report of even date is to be read along with this letter.

1. Maintenance of secretarial record 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 and for which we relied on the report of statutory auditor.

4. Where ever required, I have obtained the Management 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, regulations, standards is the responsibility of management. My examination was limited to the 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- 4

Form No. AOC-2

(Pursuant to clause (h) of sub-section (3) of Section 134 of the Companies Act, 2013 and 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 contracts or arrangements or transactions not at arms length basis:

During the year, The Company has not entered into any contracts or arrangements with any of the related parties which are not on arms length basis.

2. Details of material contracts or arrangement or transactions at arms length basis:

1.

Name(s) of the related party M/s. Lotus Marketing
Nature of relationship Directors are partners
Nature of contracts / arrangements/ transactions Sale, purchase or supply of any goods materials, availing or rendering of any services
Duration of the contracts / arrangements / transactions 01-04-2024 to 31-03-2025
Salient terms of the contracts or arrangements or transactions including actual / expected contractual amount 56.69 Lakhs
Date of approval by the Board (DD/MM/YYYY) February 13, 2024
Amount paid as advances, if any Nil

2.

Name(s) of the related party M/s. Autotech Non-Wovens Private Limited
Nature of relationship Common Directors
Nature of contracts / arrangements / transactions Sale, purchase or supply of any goods materials, availing or rendering of any services
Duration of the contracts / arrangements / transactions 01-04-2024 to 31-03-2025
Salient terms of the contracts or arrangements or transactions including actual / expected contractual amount 53.79 Lakhs
Date of approval by the Board (DD/MM/YYYY) February 13, 2024
Amount paid as advances, if any Nil

3.

Name(s) of the related party M/s. Shahlon Enterprises LLP
Nature of relationship Relative of Directors are partners
Nature of contracts / arrangements / transactions Sale, purchase or supply of any goods materials, availing or rendering of any services
Duration of the contracts / arrangements / transactions 01-04-2024 to 31-03-2025
Salient terms of the contracts or arrangements or transactions including actual / expected contractual amount 786.48 lakhs
Date of approval by the Board (DD/MM/YYYY) February 13, 2024
Amount paid as advances, if any Nil

4.

Name(s) of the related party M/s. Fairdeal Textile Park Private Limited
Nature of relationship Common Directors
Nature of contracts / arrangements / transactions Sale, purchase or supply of any goods materials, availing or rendering of any services including payment of lease rent and other charges
Duration of the contracts / arrangements / transactions 01-04-2024 to 31-03-2025
Salient terms of the contracts or arrangements or transactions including actual / expected contractual amount 24.19 Lakhs
Date of approval by the Board (DD/MM/YYYY) February 13, 2024
Amount paid as advances, if any Nil

5. Name(s) of the related party M/s. Fairdeal Eco Infra Private Limited

Nature of relationship Common Directors

Nature of contracts / arrangements / Sale, purchase or supply of any goods materials,

transactions availing or rendering of any services

Duration of the contracts / arrangements / 01-04-2024 to 31-03-2025

transactions

Salient terms of the contracts or arrangements 0.18 Lakhs or transactions including actual / expected contractual amount

Date of approval by the Board (DD/MM/YYYY) February 13, 2024 Amount paid as advances, if any Nil

* All transaction entered by the Company is at market rate i.e. on arms length basis and in ordinary course of business.

ANNEXURE - 5

ANNUAL REPORT ON CORPORATE SOCIAL RESPONSIBILITY (CSR) ACTIVITIES [Pursuant to Section 135 of the Companies Act, 2013]

1. A brief outline of Companys CSR Policy:

The Company follows community development strategy with initiatives interlinked to its long term objectives for sustainable development. Its business and economic growth has always been underlined / complimented by adherence to environmental preservation, societal upliftment and financial prudence. The contributions by the Company in the field of corporate social responsibility fall within the

broad framework of Schedule VII to the Companies Act, 2013 which inter-alia include wide range of areas aligned to national priorities and sustainable development such as education, healthcare, sustainable livelihood, women empowerment, rural and infrastructure development, environment protection, supporting widows/dependents of martyrs of armed forces and promotion of art, culture & sports, epitomizing a holistic approach to inclusive growth.

2. Composition of CSR Committee*:

Sr.

No.

Name of

Committee Member

Designation / Nature of Directorship Number of meetings of CSR Committee held during the year Number of meetings of CSR Committee attended during the year

1.

Mr. Shah Dhirajlal Raychand Chairperson 1 1
(DIN: 00010480) (Executive Chairman)

2.

Mr. Arvind Raichand Shah Member 1 1
(DIN: 00010483) (Managing Director)

3.

Mr. Rajendra Kundanlal Desai Member 1 1
(DIN: 00198139) (Independent Director)

* CSR Committee was constituted at the duly convened Board Meeting of the Board of Directors of the Company held on August 12, 2024.

3. Provide the web-link(s) where Composition of CSR Committee, CSR Policy and CSR Projects approved by the board are disclosed on the website of the company.

> CSR Committee: https://www.shahlon.com/ Committees.php

> CSR Policy & Project: https://www.shahlon . com/Policies.php

4. Provide the executive summary along with web- link(s) of Impact Assessment of CSR Projects carried out in pursuance of sub-rule (3) of rule 8, if applicable.

The impact assessment is not applicable to the Company.

5. (a) Average net profit of the company as per Section 135(5):

Sr. No.

Financial Year Net Profit as per Section 198 (in RS.)

1.

2021-22 575.58

2.

2022-23 -97.41

3.

2023-24 578.80
Total 1056.97
Average Net Profit 352.32

(b) Two per cent of average net profit of the company as per section 135(5): 7.05 Lakhs

(c) Surplus arising out of the CSR Projects or programmes or activities of the previous financial years. : N.A.

(d) Amount required to be set-off for the financial year, if any. : N.A.

(e) Total CSR obligation for the financial year [(b)+(c)-(d)]. : 7.05 Lakhs

6. (a) Amount spent on CSR Projects(both Ongoing and other than Ongoing Project): 7.25 Lakhs

(b) Amount spent in Administrative Overheads: Nil

(c) Amount spent on Impact Assessment, if applicable: Not Applicable

(d) Total amount spent for the Financial Year [(a)+(b)+(c)]. : 7.25 Lakhs

(e) CSR amount spent or unspent for the financial year:

Total Amount Spent for the Financial Year. (Rs. In lakhs)

Amount Unspent (in Rs.)

Total Amount transferred to Unspent CSR Account as per section 135 (6)

Amount transferred to any fund specified under Schedule VII as per second proviso to 135 (5)

Amount Date of transfer Name of the Fund Amount Date of transfer

7.25 Lakhs

Not Applicable

(f) Excess amount for set-off, if any:

Sr.

No.

Particular Amount (Rs. In Lakhs)

(I)

Two percent of average net profit of the company as per sub-section (5) of section 135 7.05 Lakhs

(ii)

Total amount spent for the Financial Year 7.25 Lakhs

(iii)

Excess amount spent for the Financial Year [(ii)-(I)] 0.20 Lakhs

(iv)

Surplus arising out of the CSR projects or programmes or activities of the previous Financial Years, if any Nil

(v)

Amount available for set off in succeeding Financial Years [(iii)-(iv)] 0.20 Lakhs

7. Details of Unspent CSR amount for the preceding three financial years:

Sr. No

Preceding Financial Year Amount transferred to Unspent CSR Account under Balance Amount in Unspent CSR Account under Amount spent in the Financial Year (Rs.)

Amount transferred to any fund specified under Schedule VII as per second proviso to Section 135(5), if any

Amount remaining to be spent in succeeding financial Deficiency, if any
Section 135 (6) (Rs.) section 135(6) (Rs.) Amount (in Rs) Date of transfer years. (in Rs.)

Not Applicable

8. Whether any capital assets have been created or acquired through Corporate Social Responsibility amount spent in the Financial Year: No

If Yes, enter the number of Capital assets

created/acquired: Not applicable

Details relating to such asset(s) so created or acquired through Corporate Social Responsibility amount spent in the Financial Year

Sr. No

Short particulars of the property or asset(s) Pin code of the property Date of creation Amount of CSR amount

Details of entity/ Authority/ beneficiary of the registered owner

[including complete address and location of the property] or asset(s) spent CSR Registration Number, if applicable Name Date of transfer

Not Applicable

(All the fields should be captured as appearing in the revenue record, flat no, house no, Municipal Office/Municipal Corporation/ Gram panchayat are to be specified and also the area of the immovable property as well as boundaries)

9. Specify the reason(s), if the Company has failed to spend two per cent of the average net profit as per section 135(5): N.A.

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