Shahlon Silk Industries Ltd Directors Report

DEAR MEMBER(S),

Your Directors are pleased to present the 18th Annual Report along with the Audited Financial Statements of your Company for the financial year ended March 31, 2026.

1. FINANCIAL PERFORMANCE

( Rs. in Lakhs)

Particulars	2025-26	2024-25
Total Income	26,018.97	25,193.83
Profit before Interest, Depreciation and Tax	2,624.79	2,911.98
Less : Interest	1,545.79	1,717.87
Depreciation	484.75	640.00
Profit (loss) before exceptional items and Tax	594.25	554.11
Profit (loss) on sale of Assets/Investment	15.63	38.27
Profit before Tax	609.88	592.38
Less : Provision for Current Taxation	183.85	325.26
Provision for Deferred Taxation	27.04	(82.73)
Excess/(Short) provision for taxation in earlier year	(45.57)	-
Net Profit	444.56	349.85
Add : Balance brought forward from previous year	3,479.08	3,166.15
Depreciation on Fixed Assets Revaluation	14.85	16.66
Amount available for Appropriation	3,938.49	3,532.66
Less: Dividend paid during the year	62.51	53.58
Balance Carried to Balance Sheet	3,875.98	3,479.08

2. OPERATIONAL PERFORMANCE

During the year under review, your Company has achieved turnover of Rs. 26,018.97 lakh as against Rs. 25,193.83 lakh in the previous year, with marginal increase of 3.28% as compared to previous financial year. Earnings Before Interest, Depreciation, and Tax (EBITDA) for the financial year under review was Rs. 2,624.79 lakh, as compared to Rs. 2,911.98 lakh in the previous year. During the year under review, Profit before tax was Rs. 609.88 lakh as compared to profit of Rs. 592.38 lakh in the previous year. Profit after tax for the financial year under review remained robust at Rs. 444.56 lakh as against Rs. 349.86 lakh in the previous year reflecting an improvement in the net profit by 27.07% mainly on account of reduction in interest and tax outgo.

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 2025-26, after all appropriations and adjustments, was Rs. 3,875.98 Lakhs.

4. CHANGE IN SHARE CAPITAL, IF ANY

The Capital structure of the Company is given below:

(Rs. in Lakhs)

Sr. No Particulars	As On 31/03/2026	As On 31/03/2025
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
Total Authorised Capital	3,200.00	3,200.00
2. 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 2025-26, 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 during the financial year under review. During the year, the Company continued its existing Textile business activities and also carried out activities under the Real Estate & Construction Services segment as part of its business operations.

7. CHANGE IN REGISTERED OFFICE

During the year under review, there was no change in the registered office of the Company.

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 31st March, 2026, 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. Ms. Ketaki Naginbhai Patel-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:

Mrs. Richa Manoj Goyal, 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 recommended the appointment of Ms. Ketaki Naginbhai Patel (DIN: 11249634), as an Independent Director of the Company for a term of five (5) consecutive years commencing from August 23, 2025, to August 22, 2030, and the appointment was subsequently approved by the members of the Company by way of Special Resolution at the Annual General Meeting held on September 30, 2025.

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

There is no changes in composition of Board between the end of the financial year to which these financial statements relate and the date of the report.

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. Arvind Raichand Shah (DIN: 00010483 ), a Managing Director of the Company retires by rotation at the ensuing Annual General Meeting and being eligible, offers himself for reappointment. Your Directors recommend his reappointment.

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, 2026, 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 end 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, 2026, 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	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
	Members:
	Ms. Ketaki Naginbhai Patel#	Listing Regulations and its role has been the same as stipulated in the Act and the Regulations mentioned above.
	Mr. Dhirajlal Raychand Shah	All recommendations made by the Audit committee during the year were accepted by the Board.
	Mr. Vaibhav Jayantbhai Mehta
Nomination and Remuneration Committee	Chairperson:
	Mr. Rajendra Kundanlal Desai	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.
	Members:
	Ms. Ketaki Naginbhai Patel#
	Mr. Vaibhav Jayantbhai Mehta
	Mr. Dhirajlal Raychand Shah
Stakeholders\u2019 Relationship Committee	Chairperson:
	Mr. Rajendra Kundanlal Desai	The Stakeholders\u2019 Relationship committee of the Board of directors was constituted in conformity with the requirements of Section 178 of the Act and
	Members:
	Mr. Arvind Raichand Shah	Regulation 20 of the Listing Regulations and its role has been the same as stipulated in the Act and the Regulations mentioned above.
	Mr. Dhirajlal Raychand Shah
Corporate Social Responsibility Committee	Chairperson:
	Mr. Dhirajlal Raychand Shah	The Corporate Social Responsibility committee of the Board of directors was constituted in conformity with the requirements of Section 135 of the Act.
	Members:	The Committee monitors the implementation of the CSR Policy from time to time.
	Mr. Arvind Raichand Shah
	Mr. Rajendra Kundanlal Desai

*During the reporting FY.2025-26, Mrs. Richa Manoj Goyal, tendered her resignation; Therefore she ceased to be a member of the Committees of the Board w.e.f. July 3, 2025.

# During the reporting FY.2025-26, Ms. Ketaki Naginbhai Patel, appointed by the Board as an additional Independent Director of the Company w.e.f. August 23, 2025 and subsequently the members of the Company by way of Special Resolution at the Annual General Meeting held on September 30, 2025 appointed her as an Independent Director of the Company for a term of five (5) consecutive years commencing from August 23, 2025, to August 22, 2030. She was also appointed as member of Audit committee and Nomination and Remuneration Committee w.e.f. August 23, 2025.

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

10. MEETINGS OF THE BOARD AND COMMITTEE:

During the Financial Year 2025-26, the Board of Directors met Seven (7) 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.

11. 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 14, 2026.

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.

12. 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.

13. 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).

14. 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.

15. 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 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.

Sr. No. Gender	No. of Employees
I. Female	101
ii. Male	570
iii. Transgender	0
Total Employees	671

17. POLITICAL CONTRIBUTION:

During the year under review, the Company has not made any Political contribution under Section 182 and other applicable provisions of the Companies Act, 2013.

18. DETAILS OF SUBSIDIARY / JOINT VENTURES / ASSOCIATE COMPANIES

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

19. ENERGY CONSERVATION, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

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.

20. 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 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.

16. 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:

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.

21. AUDITORS AND AUDITORS REPORT

Statutory Auditors:

M/s. HTKS & Co., Chartered Accountants (Firm Registration No 111032W), have been appointed as 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 by the shareholders at 16th Annual General Meeting of the members 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, 2026.

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:

JDM and Associates LLP, Practicing Company Secretaries (Peer Review No: 6787 /2025) (Firm Registration: L2025GJ019100), have been appointed by the shareholders at 17th Annual General Meeting of the members of the company as the Secretarial Auditor of the Company to conduct the Secretarial Audit for five consecutive financial years from 2025-26 to 2029-30 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.

JDM and Associates LLP have conducted the Secretarial Audit of the Company for FY 2025-26. The Company provided all assistance and facilities to the Secretarial Auditors for conducting their audit. The Secretarial Audit Report, in Form MR-3, for the financial year ended March 31, 2026 is annexed herewith as Annexure- 3.

JDM and Associates LLP, has also conducted the Annual Secretarial Compliance pursuant to Regulation 24A of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

Secretarial Auditors Observations in Audit Report:

The Secretarial Audit Report for the financial year ended March 31, 2026 issued by JDM and Associates LLP 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, have 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, 2027, on a remuneration as mentioned in the Notice convening the 18th 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 18th Annual General Meeting of the Company and the same is recommended for your consideration.

Cost Audit Report for the year March 2025 was filed with the Central Government, within the prescribed time limit AND The Cost Audit Report for the year ended on 31st March 2026, will 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 their Cost Audit Report for the Financial Year ended March 31, 2025.

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.

22. 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.

23. 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/NAR_Policy.pdf.

24. 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.

25. 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).

26. 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.

27. 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, 2026, 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.

28. 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.

29. 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.

30. 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.

31. 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.

32. SECRETARIAL STANDARDS

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

33. 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.

34. 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.

35. 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

36. 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.

37. TRANSFER OF UNCLAIMED DIVIDEND AND SHARES TO IEPF

During the year, the Company has transferred the unclaimed and unpaid dividend of 172952.50/-. 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.

38. 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 2025-26 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.2025-26 the Company was required to spend an amount of Rs. 6.90 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. 7.00 Lakhs on CSR activities which is in excess of the minimum amount required to be spent by the Company.

39. 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 JDM and Associates LLP, Practicing Company Secretaries (Peer Review No: 6787 /2025) (Firm Registration: L2025GJ019100), Surat confirming compliance of the conditions of Corporate Governance is provided as a distinct section of this Annual Report.

40. 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.

41. 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.

	For and on behalf of Board of Directors of
	Shahlon Silk Industries Limited
	Dhirajlal Raychand Shah
Place : Surat	Executive Chairman
Date : 13.08.2026	(DIN: 00010480)