Sri Lakshmi Saraswathi Textiles (Arni) Ltd

Ladies and Gentlemen,

Your Directors present the 60^th Annual Report of the Company alongwith the audited statement of accounts for the year ended 31^st March 2024.

1. FINANCIAL RESULTS

Details of Loss Carried Forward for the year ending 31.03.2024

2. PRODUCTION AND INCOME FROM OPERATIONS:

The production and income from operation of the current year and previous year are as under:

3. DIVIDEND

Due to accumulated loss, your Directors do not recommend Dividend.

4. SCHEME OF ARRANGEMENT

The Board of Directors of Sri Lakshmi Saraswathi Textiles (Arni) Limited at their meeting held on 29th April 2022 approved the Scheme of Arrangement between Sri Lakshmi Saraswathi Textiles (Arni) Limited (Demerged Company) and SLST Industries Limited (Resulting Company) and their Respective members pursuant to the provisions of Section 232 read with Section 230 and all other applicable provisions of the Companies Act, 2013. Pursuant to the approval of the Scheme of arrangement by the Board Directors, the Company has submitted Application for getting In-Principle approval from BSE on 13th May 2022. The Company has received In-principle approval from BSE on 01^st August 2023 and submitted application to NCLT, Chennai for its approval.

5. TRADE PROSPECT AND OUTLOOK

Overall the Textile industry has been going through turmoil for the past two years. High raw material prices, high imports of cheap yarns and fabrics, economic downturn and recessions scenarios across major buying markets of Europe of North America and Europe has disrupted the industry. Despite many companies closing operations temporarily, there has been very slow demand for yarns this financial year.

High Raw material prices - Cotton reached its peak prices of Rs.115,000 Per candy which destabilized the entire Textiles supply chain. This affected us drastically as our consumers were not able to absorb the increase in prices.

Low selling prices due to high imports from China. There has been very high imports of material at very low costs which has pushed the selling prices of Synthetic blended yarns drastically low. The government has implemented Quality Control Orders (QCO) against anti dumping of yarns and fabrics from China and other countries. We are positive this move will help over the current year in potentially better selling prices of our yarns.

Decline in Sales/ Demand- Our key selling markets has been very dull as they majority of Apparel manufacturers have sluggishness in export markets. Owing to war situations in Europe and North America, the quantities and demand for Finished products has been slower. Due to lack of export orders, most mills have been selling yarns in the domestic market with excess supply. This in turn has affected the supply chain of yarn and fabrics.

We are hopeful FY 2024-2025 will have a positive outlook as the government has made some policy changes regarding Imports and Anti Dumping duties in certain Textile products. With some stability in raw material pricing and improved export demand, we can expect a much better performance.

6. DIRECTOR APPOINTMENT / RESIGNATION / RETIRE BY ROTATION.

Mr. Jagamohan Grover (DIN: 00084735) ceased to be an Independent Director with effect from close of business hours of 31^st March 2024 on completion of second terms of office. Your Directors put on records their appreciation for the guidance and valued services received from Mr. Jagamohan Grover during the tenure of his office

Appointment of Directors

Ms. Umaa Sharvani (DIN: 10566378) and Ms.Sivarani (DIN: 02304269), were appointed as Independent Directors of the Company by the Board of Directors of the Company at their meeting held on 27^th May 2024 for a period of five years (first term) with effect from 27^th May 2024 subject to the approval of the Members. The Nomination and Remuneration Committee (NRC) after considering their skills, background and experience, recommended to the Board their appointment as Independent Directors of the Company. Based on the recommendations of the NRC, the Board appointed them as Independent Directors, not liable to retire by rotation, subject to approval of the Members at the ensuing AGM of the Company, to hold office as under: " Ms. Umaa Sharvani (DIN: 10566378) for first term commencing from 27^th May 2024 up to 26^th May 2029 (both days inclusive) and Ms.Sivarani (DIN: 02304269), for first term commencing from 27^th May 2024 up to 26^th May 2029 (both days inclusive). The resolutions seeking shareholders' approval for their appointment forms part of the Notice.

7. DETAILS OF KEY MANAGERIAL PERSONNEL (KMP)

According to Section 203 of the Companies Act, 2013, the following are the Key Managerial Personnel of the Company:

Mr. Balakrishna S – Managing Director

Mr. R. Padmanaban – Joint Managing Director and CFO Mr. Jitendra Kumar Pal- Company Secretary

8. ANNUAL RETURN

The Annual Return of the Company as on March 31, 2024 is available on the Company's website and can be accessed at www.slstindia.com

9. DETAILS OF MEETINGS OF BOARD AND COMMITTEES OF BOARD HELD DURING 2023-24.

a) There were five Board meetings held during the year 2023-24. The details and attendance record of Directors at the Board Meetings are as under.

b) There were Four Audit Committee meetings held during the year 2023-24. The details and attendance record of Directors at the Audit Committee Meetings are as under.

c) There was one Independent Directors meetings held during the year 2023-24. The details and attendance record of Directors at the Independent meetings are as under.

d) There was no Nomination and Remuneration Committee held during the year 2023-24.

e) There was no Stakeholders Relationship Committee Meeting held during the year 2023-24.

f) There was no Corporate Social Responsibility Committee held during the year 2023-24.

g) Details of Board and Committee Meetings' Attendance Record of Individual Directors:

9. DIRECTORS' RESPONSIBILITY STATEMENT

In terms of Section 134(5) of the Companies Act, 2013, the Directors state that –

1. In the preparation of Annual Accounts for the year ended 31st March 2024, the applicable accounting standards had been followed along with proper explanation relating to material departures.

2. 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 ended 31st March 2024, and of the profit/ loss of the company for that period.

3. The Directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities.

4. The Directors had prepared the annual accounts on a going concern basis.

5. 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.

6. 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.

10. INDEPENDENT DIRECTORS

a) 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 (Listing Obligations and Disclosure Requirements) Regulations, 2015.

b) Terms and conditions of appointment of Independent Directors can be viewed at the company Website: www.slstindia.com

11. REMUNERATION POLICY

The Remuneration Policy was recommended by Nomination and Remuneration Committee at its meeting held on February 11, 2015 and adopted by the Board of Directors at its meeting held on the same day and the policy can be viewed at the company website www.slstindia.com

12. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS UNDER SECTION 186

The Company has not given any Loans, guarantees or Investments covered under Sec 186 of Companies Act 2013.

13. PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES UNDER SEC 188(1) COMPANIES ACT 2013

(a) i) Disclosure of details of Related Parties under employment of the company.

(Rs.in Lakhs)

ii) Borrowing from Director

Amount outstanding as on 31^st March 2024

Interest Amount outstanding as on 31^st March 2024

(b) 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 in Form No. AOC 2 is provided in ANNEXURE – 2.

14. MATERIAL CHANGES

There are no material changes affecting the financial position of the company which occurred between the end of the financial year of the company to which the financial statements relate and the date of this report.

15. DETAILS TO BE DISCLOSED UNDER RULE 8(3) OF COMPANIES (ACCOUNTS), RULES 2014.

The information to be disclosed under RULE 8(3) OF COMPANIES (ACCOUNTS), RULES 2014 is given in

16. RISK MANAGEMENT POLICY

The Board of Directors framed and adopted a Risk Management Policy at its meeting held on March 31, 2017 and the Risk Management Policy can be viewed at the Company website www.slstindia.com

17. CORPORATE SOCIAL RESPONSIBILITY

In terms of Section 135 and Schedule VII of the Companies Act, 2013, the Board of Directors have constituted a Corporate Social Responsibility (CSR) Committee on March 23, 2017. The Board of Directors adopted a CSR Policy, as recommended by the CSR Committee, which is in line with Section 135 of the Companies Act, 2013, which can be viewed at the Company Website: www.slstindia.com. Annexure - 4

As the company has incurred loss in the current year, the company is not required to spend any amount on CSR.

18. EVALUATION OF BOARD

BOARD EVALUATION Pursuant to the provisions of the Companies Act, 2013, and Regulation 17 of the SEBI ( LODR) Regulations, 2015 the Board has carried out an annual performance evaluation of its own performance, the directors individually as well as the evaluation of the working of its Audit, Nomination & Remuneration and other Committees. The board's performance for the current year was assessed on the basis of participation of directors, quality of information provided, quality of discussion and contribution etc. The overall performance of the Board and Committee's of the Board was found satisfactory. The overall performance of Chairman, Executive Directors and the Nonexecutive Directors of the Company is satisfactory. The review of performance was based on the criteria of performance, knowledge, analysis, quality of decision making etc.

19. DETAILS TO BE DISCLOSED UNDER RULE 8(5) OF COMPANIES (ACCOUNTS), RULES 2014.

The information to be disclosed under RULE 8(5) OF COMPANIES (ACCOUNTS), RULES 2014 is given in

ANNEXURE – 5.

20. DISCLOSURE ON AUDIT COMMITTEE

The composition of the Audit Committee is as below:

All the members have wide exposure in the relevant areas.

21. ESTABLISHMENT OF WHISTLE BLOWER POLICY AND VIGIL MECHANISM

A Whistle Blower Policy and Vigil Mechanism was adopted by the Board of Directors at its meeting held on March 9, 2015. The policy can be viewed at the company website www.slstindia.com.

22. SECRETARIAL AUDIT REPORT

The Secretarial Audit Report for the year 2022-23 is provided in ANNEXURE - 6.

There are no qualification made by the Secretarial Auditor.

23. DETAILS TO BE DISCLOSED UNDE RULE 5(1) OF THE COMPANIES (APPOINTMENT AND REMUNERATION OF MANAGERIAL PERSONNEL) RULES, 2014

The required disclosures are provided in ANNEXURE – 7.

24. DETAILS TO BE DISCLOSED UNDER RULE 5(2) OF THE COMPANIES (APPOINTMENT AND REMUNERATION OF MANAGERIAL PERSONNEL) RULES, 2014.

None of the employees was in receipt of remuneration in excess of the prescribed limits, under Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014. Hence there is no report under this category.

25. INFORMATION REQUIRED UNDER THE SEXUAL HARASSMENT OF WOMEN AT THE WORKPLACE (PREVENTION, PROHIBITION & REDRESSAL) ACT, 2014.

The company has complied with provisions relating to the constitution of Internal Complaints Committee under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.

The company has in place a system to redress complaints received regarding sexual harassment in line with the requirements of the Sexual Harassment of women at the workplace (Prevention, Prohibition & Redressal) Act, 2013

All employees (permanent, contractual, temporary, apprentices and trainees) are covered under this policy.

The following is a summary of sexual harassment complaints received and disposed off during the year 2023-24.

26. FINANCE

The Board of Directors thanks Indian Overseas Bank and State Bank of India for their continued assistance and co-operation.

27. LABOUR

The relationship with labour continues to be cordial. Your Directors place on record their appreciation of the devoted services of the Officers, Members of the Staff and Workers during the year.

28. COST AUDIT

Your Company is required to maintain cost records as specified by the Central Government under sub-section (1) of section 148 of the Companies Act, 2013 and accordingly such accounts and records are made and maintained,

The Company has appointed M/s.S V M & Associates, Cost Accountants, as Cost Auditor of the Company for the financial year 2024-25.

The enabling resolution for appointment of M/s.S V M & Associates, Cost Accountants, as Cost Auditor of the Company has been placed in the AGM Notice.

29. AUDITORS AND AUDITORS REPORT.

M/s.S B S B and Associates, Chartered Accountants were appointed as Statutory Auditors of the Company to hold office for a term of five years from the conclusion of this 56th Annual General Meeting till the conclusion of the 61st Annual General Meeting.

The Notes on financial statements referred to in the Auditors' Report are self-explanatory and do not call for any further comments. The Auditors' Report does contain some qualification, reservation, remark or disclaimer for which reply has been given in the Directors Report.

Auditors' Report:

The Report of Auditors and Notes forming part of the Accounts are attached along with the Annual Report.

Reply to the qualifications made in Auditor's report

STATEMENT OF IMPACT OF QUALIFIED OPINION OF STATUTORY AUDITOR.:

The Auditors qualified opinion, Management's explanations thereon and Statement of Impact of Audit Qualifications are given in ANNEXURE – 1.

33. MANAGEMENT DISCUSSION AND ANALYSIS REPORT

Management Discussion and Analysis Report is part of Directors Report. ANNEXURE–8

34. DISCLOSURE REGARDING ACCOUNTING TREATMENT.

In preparation of financial statement the treatment prescribed in all the applicable Accounting Standards are followed and no alternative treatment has been adopted.

35. CORPORATE GOVERNANCE REPORT

Regulation 15 of SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015, does not apply to your company, as your company's equity share capital and net worth is below the threshold limit prescribed under the said Regulation and hence the Report on Corporate Governance is not provided.

36. DECLARATION BY CEO AFFIRMING COMPLIANCE WITH CODE OF CONDUCT

Declaration from CEO has been given ANNEXURE – 9

37. COMPLIANCE CERTIFICATE REGARDING CORPORATE GOVERNANCE.

The certificate is not applicable as the provisions of Corporate Governance does not apply to your company.

38. DISCLOSURES WITH RESPECT TO DEMAT SUSPENSE ACCOUNT/ UNCLAIMED SUSPENSE ACCOUNT

There are no shares in demat suspense account or unclaimed suspense account.

39. STATEMENT OF DEVIATION/ VARIATION OF USE OF FUNDS RAISED THROUGH ANY PUBLIC ISSUE.

The company has not raised any fund through public, right or preferential issue of any security in recent time. Hence there is no Report on any deviation/ variation of the use of such funds.

40. DISCLOSURE OF COMPLIANCE WITH SECRETARIAL STANDARDS.

The Directors have devised proper systems to ensure compliance with the provisions of all applicable Secretarial Standards and that such systems are adequate and operating effectively.

41. RELATED PARTY TRANSACTION POLICY.

The Board of Directors framed and adopted a Related Party Transaction Policy at its meeting held on October 9, 2021 and the Related Party Transaction Policy can be viewed at the Company website www.slstindia.com

42. DIRECTORS' REPORT PLACED IN WEBSITE.

This Directors' report is placed in company's website and the same can be viewed at www.slstindia.com

43. ACKNOWLEDGEMENT AND APPRECIATION

Your Directors would like to thank Company' would like to express their gratitude for the co-operation and assistance extended to the Company by its Bankers, Customers, Suppliers, Contractors, Government and Local Authorities, etc. The Directors also wish to thank all its Shareholders for their unstinted support. The Directors would like to sincerely thank and place on record their appreciation of the consistent and dedicated services of the employees at all levels who have immensely contributed to the performance of the Company during the period under review.