Your directors have great pleasure in presenting their Thirtieth Annual Report together with Audited financial statements of the Company for the financial year ended 31^st March 2024.

DIVIDEND:

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

REVIEW OF OPERATIONS:

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

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

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGOINGS:

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

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

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

OUTLOOK FOR THE IMMEDIATE FUTURE:

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

CHANGES IN NATURE OF BUSINESS:

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

MATERIAL CHANGES AND COMMITMENT OCCURRED DURING PERIOD AFFECTING FINANCIAL POSITION OF COMPANY:

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

PUBLIC DEPOSITS:

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

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

CORPORATE GOVERNANCE:

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

EXTRACT OF ANNUAL RETURN:

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

DIRECTORS:

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

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

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

Key Managerial Personnel of the Company are listed below.

KEY MANAGERIAL PERSONNEL:

COMMITTEES:

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

POLICIES:

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

1. Related Party Transactions

2. Whistle Blower Policy & Vigil Mechanism

3. Policy for Preservation of Documents

EVALUATION OF BOARD OF DIRECTORS:

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

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

BOARD MEETINGS:

The Board of Directors met Six (6) Times during the Financial Year on 18^th April 2023, 26^th May 2023, 11^th August 2023, 9^th November 2023, 6^th January 2024 and 12^th February 2024, through Physical Mode at the Corporate Office of the Company situated at Coimbatore. The Composition of Board and Other Details form Part of the Report on Corporate Governance.

PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS:

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

PARTICULARS OF SUBSIDIARIES, JOINT VENTURES AND ASSOCIATE COMPANIES:

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

RELATED PARTY TRANSACTIONS:

All related party transactions that were entered into during the financial year were on arm's length basis and in the ordinary course of business. The transactions were within the permitted/approved limits only. Further, there were no materially significant related party transactions made by the Company with Promoters, Key Managerial Personnel or other designated persons which may have potential conflict with interest of the Company at large. Reporting in Form AOC-2 is attached as Annexure-I. Approval of Audit Committee was obtained for transactions of repetitive nature on an annual basis. All related party transactions are placed before the Audit Committee and Board of Directors for their review. The policy on Related Party transactions is available on the Website of the Company at www.salonacotspin.com.

SIGNIFICANT / MATERIAL ORDERS PASSED BY THE REGULATORS / COURTS:

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

DIRECTORS' RESPONSIBILITY STATEMENT:

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

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

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

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

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

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

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

AUDITORS:

M/s. Gopalaiyer and Subramanian, Chartered Accountants, Coimbatore were re-appointed as the Auditors of the Company for the next term of five years pursuant to the resolution passed by the Members at the Annual General Meeting held on 28^th September 2022 and they will hold office up to the date of 33^rd Annual General Meeting of the Company.

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

EXPLANATION OR COMMENTS BY THE BOARD ON QUALIFICATION, RESERVATION OR ADVERSE REMARK OR DISCLAIMER MADE BY THE AUDITORS IN THEIR REPORT:

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

SECRETARIAL AUDIT:

Pursuant to Section 204 of the Companies Act, 2013, read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, and other applicable provisions, if any (including any statutory amendments, modifications or re-enactments thereof, from time-to-time), and the recommendation of the Audit Committee, the Board has appointed Sri. Ramanathan Kannan, Practicing Company Secretary, Chennai, to conduct the Secretarial Audit of the Company. The Report is enclosed herewith as Annexure -II.

COMPLIANCE WITH SECRETARIAL STANDARDS:

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

COST AUDITOR:

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

INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY:

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

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

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

RISK MANAGEMENT:

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

CORPORATE SOCIAL RESPONSIBILITY COMMITTEE:

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

STATUTORY DISCLOSURES:

The particulars required to be included pursuant to Section 134(3)(m) of the Companies Act, 2013 read with Rule 8(3) of the Companies (Accounts) Rules 2014 on Conservation of Energy, etc., is enclosed as Annexure IV.

No employee of the Company was in receipt of remuneration of Rs. 60.00 Lakh per annum or more and no employee of the Company employed for a part of the financial year ended 31^st March 2024 was in receipt of remuneration of Rs. 5.00 Lakhs per month or more.

The information required pursuant to Section 197(12) of the Companies Act 2013 read with Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014 and forming part of the Directors Report for the financial year ended 31^st March 2024 is enclosed as Annexure V.

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

INDUSTRIAL RELATIONS:

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

FINANCES:

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

DETAILS REGARDING ISSUE OF SHARES

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

ESTABLISHMENT OF VIGIL MECHANISM / WHISTLE BLOWER POLICY:

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

DISCLOSURE PERTAINING TO THE SEXUAL HARASSMENT OF WOMEN:

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

TRANSFER TO INVESTOR EDUCATION AND PROTECTION FUND:

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

OTHER DISCLOSURE:

During the year, there were no transactions requiring disclosure or reporting in respect of matters relating to:

i) Pendency of any proceeding under the Insolvency and Bankruptcy Code, 2016 and

ii) Instance of one-time settlement with any bank or financial institution.

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

ACKNOWLEDGEMENT:

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

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