Sri Nachammai Cotton Mills Ltd Directors Report

Dear Shareholders,

The Board of Directors of your Company is pleased to present the 44^th Annual Report on the business of the Company along with summary of financial statements for the year ended 31st March, 2024. The report is prepared in accordance with the provisions of the Companies Act, 2013.

Financial Highlights

During the year under review, performance of your company is as under:

Particulars	31.03.24 (Rs.in Lakhs)	31.03.23 (Rs.in Lakhs)
Profit /(Loss) before Finance Costs and Depreciation	-139.39	15.51
Finance costs	346.63	406.91
Depreciation	115.28	141.88
Profit /(Loss) before taxation	(601.30)	(533.28)
Less:Current tax (MAT)	-	-
MAT Credit Entitlement	-	-
Excess Income Tax Provision Reversed	0	5.61
Deferred Tax	122.33	195.05
Profit /(Loss) after tax	(478.97)	(332.62)
Add:Other comprehensive income
Remeasurement of post-employment benefit obligations	4.12	(4.18)
Gain on fair value of investments	3.97	0.46
Income tax relating to these items	(1.48)	1.04
Total other comprehensive income for the year	6.61	(2.68)
Total comprehensive (Loss) / income for the year	(472.36)	(335.30)
Earnings per share basic / diluted	(11.17)	(7.76)

Dividend

The Company is unable to declare any Dividend due to inadequacy of profits.

Review of Operations

During the year, the company has made a turnover of Rs.6635.93 (in lakhs) as against Rs. 11721.04 (in lakhs) in the previous year. The Companys Loss is Rs.472.36 Lakhs during the current year as compared to Loss of Rs.335.30 Lakhs last year.

Managements Discussion and Analysis

As per the Regulation 34(1) (e) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 the report on "Management Discussion and Analysis" forms an integral part of Annual Report as Annexure-I

Deposits

Company has not accepted any deposits from public.

Directors and Key Managerial Personnel

I. Pursuant to the provisions of Section 152 of the Companies Act, 2013 Smt.C.Renuka (DIN: 02209915) retire by rotation and being eligible offers herself for reappointment and the resolution is placed before the shareholders for approval. A brief resume, expertise, shareholding in the company and details of other entities in which the director is interested as stipulated under Regulation 36(3)(a) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and as per Secretarial Standard is provided in the notice attached.

II. All the Directors of the Company have confirmed that they are not disqualified from being appointed as directors in terms of Section 184(1) and Rule 9(1) of the Companies Act, 2013.

III. Pursuant to Regulation 34(3) and Schedule V para Clause (10)(i) of SEBI( Listing Obligation and Disclosure Requirements) Regulations, 2015 Certificate of Non Disqualification of Directors is received from the Practicing Company Secretary CS M.R.L Narasimha is attached as Annexure-VI Declaration by Independent Directors

The Company has received necessary declaration from each independent director under Section 149(7) of the Companies Act, 2013, that he/she meets the criteria of independence laid down in Section 149(6) of the Companies Act, 2013 and Regulation 25 of SEBI LODR.

During the year, the independent Directors were present in meeting of Independent Directors. The Independent Directors assessed the quality, quantity and timeliness of flow of information between the management and the Board and expressed that the Current flow of information and contents were adequate for the Board to effectively perform its duties.

Familiarization Programmes

The Company had conducted various sessions during the financial year to familiarize all the Directors including the Independent Directors with the updates of Company, their rules, responsibilities in the Company, and the technology and the risk management systems of the Company. Further, the Directors are encouraged to attend the training programmes being organized by various regulators/ bodies/institutions on above matters.

Number of Board Meetings and Committee Meetings

• The Board meets four (4) times during the financial year on 22^nd May 2023, 10^th August 2023, 09^th November 2023, 08^th February 2024.

• The Audit Committee meets four (4) times during the financial year on 22^nd May 2023, 10^th August 2023, 09^th November 2023, 08^th February 2024.

• The Stakeholders Relationship Committee meets four (4) times during the financial year on 22^nd May 2023, 10^th August 2023, 09^th November 2023, 08^th February 2024.

• The Share Transfer Committee meets six (6) times during the financial year on 22^nd April 2023,12^th June 2023,14^thJuly 2023,04^thSeptember 2023,12^th September 2023.

• The Nomination and Remuneration Committee met one (1) time during the financial year on 22^nd May 2023.

• The Independent Directors met one (1) time for Independent Director Meeting during the financial year on 08^th February 2024.

Statutory Auditors

The Companys Auditors, M/s. Gopalaiyer and Subramanian., Chartered Accountants, Coimbatore, hold office for a term of five years (5) commencing from the financial year 2022-2027 till the conclusion of the 47^th Annual General Meeting.

The Auditors Report for the year 2023-2024 does not contain any qualification, reservation or adverse remark. The auditors report is enclosed with the financial statements in the Annual Report.

Secretarial Auditor

As required under Section 204 of the Act, and Rules made there under CS M.R.L. Narasimha, Practising Company Secretary was appointed to conduct the Secretarial Audit of the Company for the financial year 2023-2024. The Secretarial Audit Report for the financial year 2023-2024 forms part of the Annual Report as Annexure-VII to the Boards Report.

Cost Auditor

Section 148 of the Companies Act, 2013 pertaining to audit of Cost Records is applicable to the Company. Based on the recommendation of the Audit Committee, CMA B.Venkateswar, Cost Accountant was appointed as Cost Auditor of the Company for the financial year 2024-2025 and the remuneration payable to Cost Auditor is placed before the Shareholders for ratification.

Internal Auditor

The Company has re-appointed CA H. Venugopal as the Internal Auditor of the Company for a further period of one year for the financial year 2024-2025. The scope of work includes review of process for safeguarding the assets of the Company, review of operational efficiency, effectiveness of system and processes and assessing the strength and weaknesses of internal control. Internal Auditor reports are placed before the Audit Committee on a regular basis for taking suitable action for improvement, wherever required.

Subsidiaries, Joint Ventures and Associates

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

Corporate Social Responsibility

Corporate Social Responsibility is not presently applicable as the Company does not satisfy the conditions laid down in Sec.135 with regard to net worth, turnover and net profit.

Material Changes and Commitments

There have been no material changes and commitments between the end of financial year (March 31, 2024) and the date of the report affecting the financial position of the Company.

Adequacy of Internal Financial Controls and Internal Control System

The Company has in place adequacy internal financial controls with reference to financial statements. During the year under review, such controls were tested and no reportable material weakness in the design or operation was observed.

Company has established adequate Internal Control procedures, commensurate with the nature of its business and size of its operations and for ensuring the orderly and efficient conduct of its business for safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information. No fraud was reported during the financial year.

The Company has appointed Internal Auditor to observe the Internal controls, whether the work flow of organization is being done through the approved policies of the Company. In every quarter during the approval of financial statements, Internal Auditors will present the Internal Audit Report and Management Comments on the Internal Audit observation.

Particulars of Loan, Guarantees and Investments under Section 186 - Details of Loan

Sl. No Period of making Loan	Details of Lender	Amount in Rs.	Purpose for which the loan is to be utilized by the recipient	Time period for which it is given	Date of BR	Rate of interest
1. 01.04.2023 to 31.03.2024	Supreme Yarn Spinners Pvt Ltd Door No.181, VASANTHAM, 4th Cross Street, New Fairlands, Salem 636 016	15,82,51,000	Inter Corporate Loan	Repayable on Demand	22.05.2023 10.08.2023 09.11.2023 08.02.2024	5.75%
2. 01.04.2023 to 31.03.2024	Raja Yarn Private Ltd Door No.181, VASANTHAM, 4th Cross Street, New Fairlands, Salem 636 016	11,33,89,500	Inter Corporate Loan	Repayable on Demand	22.05.2023 10.08.2023 09.11.2023 08.02.2024	3.00%

Investment made under Section 186 of the Companies Act, 2013

Investment made by the Company is within the limits specified under Section 186 of the Companies Act, 2013. Significant & Material orders

No Significant and Materials orders have been passed by any Regulator or Court or Tribunal which can have an impact on the going concern status and the Companys operations in future.

Disclosure as required under Section 22 of Sexual Harassment of Workmen at Workplace (Prevention, Prohibition and Redressal) Act, 2013

As per the provisions of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013, the Company has constituted an Internal Complaints Committee. During the Financial Year 2023-2024 no compliant was received before the committee.

Conservation of Energy, Technology Absorption, Exports and Foreign Exchange earnings and outgo.

The 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 is annexed herewith as Annexure - II

Corporate Governance

As per the new Regulation 27(2) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, a Corporate Governance Report, together with the Certificate from the Companys Auditors confirming the compliance of conditions on Corporate Governance is given in Annexure-III

Copy of Annual Return

As per the requirements of Section 92(3) and Rule 12(1) of the Companies (Management and Administration) Rules, 2014 (as amended), the copy of the Annual Return in the prescribed Form MGT-7 for the financial year ended March 31, 2024 is placed on the companys website www.sncmindia.com.

Contracts or Arrangements with Related Parties

Transactions entered with related parties have been explained in Form AOC - 2 -Annexure - IV annexed with this report and forms part of this Report. Further, policy on dealing with Related Party transactions has been uploaded on the Companys website http.www.sncmindia.com.

Vigil Mechanism/Whistle Blower Policy

In pursuant to the provisions of Section 177(9) & (10) of the Companies Act, 2013, a Vigil Mechanism for Directors and employees to report genuine concerns has been established.

The Vigil Mechanism Policy has been uploaded on the website of the Company at http.www.sncmindia.com. The main objective of this policy is to ensure sustainable business growth with stability and to promote a pro-active approach in reporting, evaluating and resolving risks associated with the business. In order to achieve the key objective, the policy establishes a structure and disciplined approach to risk management, in order to guide decisions on risk related issues.

Audit Committee

Audit Committee is in existence in accordance with the provisions of Section 177 of the Companies Act, 2013. The details relating to the composition, meetings, and functions of the Committee are given in Corporate Governance Report. The Board has accepted recommendations of Audit Committee, hence no disclosure required under Section 177(8) of the Companies Act, 2013.

Risk Management Policy

As per the Regulation 27(2) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 the Board members were informed about risk assessment and minimization procedures after which the Board formally adopted steps for framing, implementing and monitoring the risk management plan for the company. All the results and evaluation has been communicated.

Board Evaluation

The Board of Directors has carried out an annual evaluation of its own performance, board committees and individual directors pursuant to the provisions of the Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015.

The performance of the board was evaluated by the board after seeking inputs from all the directors on the basis of criteria such as the board composition and structure, effectiveness of board processes, information and functioning, etc. as provided by the guidance Note on Board Evaluation issued by the Securities and Exchange Board of India on January 5, 2017

The performance of the committees was evaluated by the board after seeking inputs from the committee members on the basis of criteria such as the Composition of committees, effectiveness of committee meetings, etc.

The Board and the Nomination and Remuneration Committee reviewed the performance of individual directors on the basis of criteria such as contribution of the individual director to the board and committee meetings like preparation on the issues to be discussed, meaningful and constructive contribution and inputs in meetings, etc.

Nomination and Remuneration Policy

The Board has, on the recommendation of the Nomination & Remuneration Committee framed the policy on directors appointment and remuneration, including criteria for determining qualifications, positive attributes, independence of a director and other matters as required under sub-section (3) of Section 178 of the Companies Act, 2013 which have been outlined in Nomination & Remuneration policy forming part of this Report.

The details of Remuneration to Directors are given in Annexure-V

Directors Responsibility Statement

In accordance with the provisions of Section 134(5) of the Companies Act, 2013, your directors confirm that:

(a) in the preparation of the annual accounts, the applicable accounting standards has 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) have 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.

Particulars of Employees

The disclosure referred to the Rule 5(2) of Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 does not apply to the Company as there were no employees who are in receipt of remuneration in aggregate of more than Rs.1,02,00,000/- if employed throughout the year or Rs.8,50,000/- per month if employed for part of the year.

Details of top 10 employees based on their salary are disclosed in Annexure-VIII.

Listing

The Equity Shares of the Company are listed in BSE Limited and the Company has duly paid the Annual listing fees for the year 2023-2024

M/s. Cameo Corporate Services Limited, Chennai is the Registrar for providing depository services through National Securities Depository Limited (NSDL) and Central Depository Services (India) Limited (CDSL) for holding Shares in Electronic mode (De-mat) of our Shareholders and also is the Registrar for Share Transfer Services for physical segment.

Compliance with Secretarial Standards

The Company has complied with applicable Secretarial Standards issued by the Institute of Company Secretaries of India.

Acknowledgements

Your Directors wish to place on record their deep sense of appreciation for the tremendous support from the Bankers M/s. Indian Overseas Bank, the shareholders, and all our suppliers and customers. The Board also wishes to place on record their appreciation for the contribution made by the employees at all levels.