Rajapalayam Mills Ltd

TO THE MEMBERS

Your Directors have pleasure in presenting their 89^th Annual Report and the Audited Accounts of the Company for the year ended 31^st March, 2025.

1. FINANCIAL RESULTS

The financial results for the year ended 31^st March, 2025 after charging all expenses but before deducting finance cost and depreciation have resulted in operating profit (EBITDA) of Rs. 9,881.61 Lakhs against Rs. 10,718.45 Lakhs for the previous financial year 2023-24. Summary of Separate Financial Results of the Company is furnished below:

(Rs. in Lakhs)

2. SHARE CAPITAL

The Paid-up Capital of the Company is Rs. 922.02 Lakhs (PY: Rs. 922.02 Lakhs) consisting of 92,20,200 Shares of Rs. 10/- each.

3. DIVIDEND

Your Directors have pleasure in recommending a Dividend of Rs. 0.50 per share (PY: Rs. 0.60 per share). The total amount of Dividend outgo for the year will be Rs. 46.10 Lakhs (PY: Rs. 55.32 Lakhs).

As per Income Tax Act, 1961, the dividend will be taxable in the hands of the Shareholders and the Company will make payment of dividend after deducting applicable TDS.

The payment of Dividend is in accordance with the "Dividend Distribution Policy" of the Company. The Policy is available on the website of the Company and the same can be accessed with the following web link : https://www.rajapalayammills.co.in/wp-content/themes/ramco/pdf/dividend-distribution-policy.pdf

4. TAXATION

The Company has opted to pay tax under Section 115BAA of the Income Tax Act, 1961. The Company is not liable to pay income tax and not provided any amount towards current tax provision. Deferred Tax of Rs. 1,647.91 Lakhs (PY: Rs. 485.72 Lakhs) has been withdrawn for the financial year 2024-25.

5. MANAGEMENT DISCUSSION AND ANALYSIS

The cotton production in India during the cotton season 2023-24 was 327 Lakh bales (170 Kgs), compared to 319 Lakh bales, representing a 3% increase.

At the beginning of the cotton season 2024-25, the CAI estimated the cotton crop for the new season to be 302 Lakh bales (compared to the previous year's 327 Lakh bales). However, the actual cotton arrivals in the market reached 291 Lakh bales. The Cotton Corporation of India (CCI) covered 100 Lakhs bales during 2024-25 and further increased the MSP price per quintal of medium staple cotton and long staple cotton by 8% and 7% respectively. Despite some price correction in cotton, the fall in yarn prices was much sharper, leading to a wider disparity that affected the margins of yarn spinners across India.

International Cotton prices were traded in the range of 77.74 US cents per LB to 87.52 US cents per LB compared to domestic cotton which traded in the range of 76.80 US cents per LB to 93.32 US cents per LB.

The Company strategically shifted its focus to more value-added counts, and imported more high-quality cotton when prices were at reasonable levels. This strategy helped the company procure diversified varieties of cotton from across the globe and offer competitive prices for its yarn. In February 2024, the Government of India exempted Customs duty on the import of Extra Long Staple Cotton exceeding 32 mm, enhancing the competitiveness of Indian exporters for premium products.

The production volume has increased to 141.01 Lakhs Kgs during the FY 2024-25 as against 128.67 Lakhs Kgs of previous year due to better capacity utilization.

During FY 2024-25, the Company's sale volume was 131.80 Lakhs Kgs as against 127.24 Lakhs Kgs of previous year. The sale value of yarn has decreased to Rs. 644.61 Crores during the FY 2024-25 as compared to Rs. 656.97 Crores of previous year.

Due to geopolitical challenges and sluggish market demand for cotton yarn, there was severe hit in margins for Spinning Mills. This situation forced many spinning mills across India to operate at lower capacity, with many spinning mills cutting down their production due to huge losses in yarn production. However, the Company's focus on producing a flexible and wide range products helped it to protect its sales volume during this sluggish period. Further, the red sea crisis has caused significant impact on Exports resulting higher freight cost, insurance cost and shipping delays.

The Company's focus on strengthening its infrastructure to produce diverse products, including various high-quality value-added yarn and collaborating with customers to manufacturer innovative products helped it maintain capacity utilization and sales volume in export market. Sales volume of value-added yarn such as Elitwist, Gassing, High twist, Melange, Core yarn and Mercerized yarn increased to 3,255 Tonnes during the FY 2024-25, a 10% growth from 2,945 Tonnes during the previous year.

The Company has made export of Cotton Yarn (including merchant exports) during the financial year 2024-25 with a value of Rs. 267.45 Crores compared to Rs. 279.74 Crores in the previous year. The Company's focus on Product enhancement through technology advancement, traceability of entire production process, continuous customer-centricity and production of unmatched quality helped it to maintain export volume.

Your Directors are thankful to M/s. Asahi Kasei Advance Corporation, Japan for their continued support and efforts towards promoting exports to Japan.

The Fabric Unit is operating with 328 Looms which includes 174 Looms commissioned during September, 2023. Furthermore, it established fabric finishing capacity capable of producing 50,000 meters of finished fabrics per day.

In terms of production and sales, the Fabric unit manufactured 155 Lakhs Meters of Fabric (compared to 119 Lakhs Meters in the previous year) and sold 153 Lakhs Meters of Fabrics (compared to 122 Lakhs Meters in the previous year). The total revenue generated by the Fabric unit for the financial year 2024-25 amounted to Rs. 241.37 Crores (compared to Rs. 190.82 Crores in the previous year). The increase in volume can be attributed to the expansion of loom capacity. Additionally, the export turnover of Fabric for the financial year 2024-25 was Rs. 57.44 Crores (compared to Rs. 69.38 Crores in the previous year).

The quality of fabric produced by the Company has been well accepted both in domestic and export markets, leading to numerous enquiries from leading brands across the globe for the supply of processed fabric.

During the financial year 2024-25, the Company was able to consume power from its own wind farms to the extent of 50% (PY: 56%) of the total power requirement. The power cost increased during the financial year 2024-25 to Rs. 59.61 Crores, compared to Rs. 53.17 Crores in the previous year, due to increase in power consumption on account of enhanced fabric capacity and increase in the power tariff by Tamil Nadu Electricity Board (TNEB). In order to mitigate the higher power cost, the Company made arrangements with Solar Power developers for supply of 17 MW of power on long term basis at a fixed cost under group captive arrangement, which is cheaper as compared to TNEB's Rate.

The finance cost of the Company increased to Rs. 90.90 Crores during the financial year 2024-25 from Rs. 74.03 Crores in the previous financial year. The increase is attributed to additional borrowings for expansion and modernization programs and general trend of increasing interest rates. A similar trend was observed globally, which made the cost of foreign currency-denominated borrowings equal to working capital loans availed in Indian Rupee.

In addition to the increase in interest rates, additional working capital requirements, enhanced Fabric capacity and additional term loan borrowings had resulted in an increased outflow of finance costs during the FY 2024-25 compared to FY 2023-24.

During the financial year 2024-25, the Company received dividend income of Rs. 8.67 Crores (PY: Rs.7.24 Crores) and the particulars of dividend received are provided under Note No. 50(a) (ix).

Pursuant to Schedule V(B) of SEBI (LODR) Regulations, 2015, the Key Financial Ratios for the year 2024-25 are given below:

Note: EBITDA denotes Profit Before Tax + Interest + Depreciation

The decline in Operating Profit is on account of sluggish market conditions in the textile industry and increase in finance cost is on account of expansion of projects which results in reduction of Interest Coverage Ratio, Return on Net worth and Return of Capital Employed.

6. MODERNISATION / EXPANSION

During the FY 2024-25, the Company has invested an amount of Rs. 24.78 Crores in modernizing Comber Machine, Rewinding Machine, Batch Dyeing System etc. which has been funded from internal accruals and term loan from Banks.

7. PROSPECTS FOR THE CURRENT YEAR

The volatility in cotton prices continues, with prices of both cotton and yarn experiencing wide fluctuations. According to data published by the Foreign Agricultural Service of USDA, world cotton production for the 2025-26 season is expected to decrease by 3% on account of lower projection in production for China, India, Turkey, Egypt and Australia. However, global cotton consumption is projected to grow by 2.70% on account of larger global cotton supplies, replenishment of inventories across the textile and product supply chain, and prospects for global economic growth.

The Company is continuously monitoring various process parameters and implementing various system controls to deliver consistent quality yarn and fabric to end customers and leading brands. Strengthening its product lines with more value-added customized yarn counts such as Mercerized Yarn, M?lange Yarn, and Core Yarn will help the company mitigate the impact of falling demand for commodity counts. Over the last 5 years, the volume of value-added products has increased from 12% to 43%.

The company's modernization of spinning mills and forward integration by setting up fabric manufacturing and fabric processing facilities are expected to drive top-line growth and protect margins during the current year. The company's efforts to adopt sustainable manufacturing processes, including the reuse of water, zero-liquid-discharge systems, and bio-treatment of wastewater for recycling, ensure environmental sustainability, positioning the company among the top-rated textile companies globally. The synergies between the company's spinning and fabric capacities are expected to enable the offering of a wide range of textile products with quick turnaround times. The Company has secured "A Grade" in Social Audit Compliances and leading brands in domestic and international markets are approaching the company for sourcing yarn and fabric. The Company is confident that these measures will contribute to decent growth in its top line and sustainable profitability in the years ahead.

8. WINDMILL

The Company has windmills with installed capacity of 35.15 MW for its captive power consumption. During the financial year 2024-25, the wind farm generated 573 Lakhs Kwh, which is lower than 608 Lakhs Kwh generated in the previous year. This was due to low wind velocity during the current year. All the units generated by the windmills were adjusted for captive consumption at the Company's Spinning / Fabric Division. The income generated by the windmill division during the year was Rs. 43.13 Crores, as compared to Rs. 43.77 Crores in the previous year.

9. ASSOCIATE COMPANY

The Company has three Associate Companies: M/s. The Ramco Cements Limited, M/s. Ramco Industries Limited and M/s. Ramco Systems Limited.

As per Rule 5 of Companies (Accounts) Rules, 2014, a statement containing the salient features of the financial statements of the Company's Associates' is attached in Form AOC-1 as Annexure - I.

As per provisions of Section 129(3) of the Companies Act, 2013 and Regulation 34 of SEBI (LODR) Regulations, 2015, Companies are required to prepare consolidated financial statements of its Subsidiaries and Associates to be laid before the Annual General Meeting of the Company. Accordingly, the consolidated financial statements incorporating the accounts of Associate Companies, viz. M/s. The Ramco Cements Limited, M/s. Ramco Industries Limited, M/s. Ramco Systems Limited, along with the Auditors' Report thereon, form part of this Annual Report. As per Section 136 (1) of the Companies Act, 2013, the Financial Statements including Consolidated Financial Statements are available on the Company's website at the following link: https://www.rajapalayammills.co.in/investors/financial-report/

The Consolidated profit of the Company amounted to Rs. 1,704.52 Lakhs for the year ended 31^st March, 2025 as compared to Rs. 4,436.42 Lakhs of the previous year.

The Consolidated Total Comprehensive Income for the year under review is Rs. 1,332.14 Lakhs as compared to Rs. 6,083.37 Lakhs of the previous year.

In accordance with Section 134(5)(e) of the Companies Act, 2013, the Company has Internal Financial Controls Policy by means of Policies and Procedures commensurate with the size & nature of its operations and pertaining to financial reporting. In accordance with Rule 8(5)(viii) of Companies (Accounts) Rules, 2014, it is hereby confirmed that the Internal Financial Controls are adequate with reference to the financial statements. The ERP System developed by Ramco Systems Limited has been installed for online monitoring of all functions and management information reports are being used to have better internal control system and to make timely decisions.

In compliance with Section 177(9) and (10) of the Companies Act, 2013 and Regulation 22 of SEBI (LODR) Regulations, 2015, the Company has established a Vigil Mechanism and Whistle Blower Policy. The Policy provides a mechanism for the receipt, retention and treatment of complaints and to protect the confidentiality and anonymity of the stakeholders. The complaints can be made in writing and dropped into Whistle Blower Drop Boxes or sent through e-mail to dedicated e-mail addresses accessible only by the Corporate Ombudsman. The Policy also provides complainants with access to the Chairman of the Audit Committee. The web link for the Vigil Mechanism is disclosed in the Corporate Governance Report.

Based on the recommendations of the Nomination and Remuneration Committee and the Board of Directors, the Shareholders through Postal Ballot process have approved the appointment of following Independent Directors for a term of 5 consecutive years from 01-04-2024 to 31-03-2029:

1. Shri M. Rathinasamy (DIN: 10391134)

2. Shri Sivaguru Chellappa (DIN: 01309727)

3. Shri N.S. Krishnamma Raja (DIN: 01655571)

In the opinion of the Board, the above Independent Directors possess integrity, expertise and experience for being appointed as an Independent Director.

According to the provisions of the Companies Act, 2013 and the Memorandum and Articles of Association of the Company, the following Directors will retire by rotation at the ensuing Annual General Meeting and are eligible for re-appointment:

1. Shri P.R. Venketrama Raja (DIN: 00331406)

2. Shri P.V. Abinav Ramasubramaniam Raja (DIN: 07273249)

Shri. K.B. Nagendra Murthy (DIN: 00359864) ceased to be a Non-executive independent director of the Company upon completion of his second term of five consecutive years with effect from close of business hours on 3^rd August, 2024.

Pursuant to Rule 8(5)(iii) of Companies (Accounts) Rules, 2014, there have been no changes in the Directors or Key Managerial Personnel during the year, except as mentioned above.

The Independent Directors hold office for a fixed term of 5 years from the date of their appointment and are not liable to retire by rotation.

The Company has received necessary declarations from all the Independent Directors under Section 149(7) of the Companies Act, 2013, stating that they meet the independence criteria provided in Section 149(6) of the Companies Act, 2013.

Independent Directors have complied with the Code for Independent Directors prescribed in Schedule IV of the Companies Act, 2013. The Company has formulated a Code of Conduct for the Directors and Senior Management personnel, which has been complied with.

The Audit Committee has four members, out of which three are Independent Directors. Pursuant to Section 177(8) of the Companies Act, 2013, it is reported that there has not been an occasion, where the Board had not accepted any recommendation of the Audit Committee.

The Company has a policy relating to appointment and remuneration of Directors, Key Managerial Personnel and other employees duly approved by the Board of Directors, based on the recommendation of the Nomination and Remuneration Committee, in accordance with Section 178(3) of the Companies Act, 2013.

As per Provision to Section 178(4), the salient features of the Nomination and Remuneration Policy should be disclosed in the Board's Report. Accordingly, the following disclosures are given:

Salient Features of the Nomination and Remuneration Policy:

The objective of the Policy is to ensure that:

(a) the level and composition of remuneration is reasonable and sufficient to attract, retain and motivate Directors of the quality required to run the Company successfully;

(b) the relationship of remuneration to performance is clear and meets the appropriate performance benchmarks;

(c) remuneration to directors, key managerial personnel and senior management involves balance between fixed and incentive pay reflecting short and long term performance objectives shall be appropriated to the working of the Company and its goals.

The Nomination and Remuneration Committee and this Policy are in compliance with the Companies Act, 2013 and SEBI (LODR) Regulations, 2015. The web address of the Policy is https://www.rajapalayammills.co.in/wp-content/themes/ramco/pdf/nomination-and-remuneration-policy.pdf

As required under Regulation 25(7) of LODR, the Company has programmes for familiarisation for the Independent Directors about the nature of the industry, business model, roles, rights and responsibilities of Independent Directors and other relevant information. As required under Regulation 46(2)(i) of LODR, the details of the Familiarisation Programme for Independent Directors are available at the Company's website, at the following link -https://www.rajapalayammills.co.in/wp-content/uploads/2025/02/Familiarisation-10-02-2025.pdf

The details of familiarization programme are explained in the Corporate Governance Report also.

Pursuant to Section 134(3)(p) of the Companies Act, 2013, and Regulation 25(4) of SEBI (LODR) Regulations, 2015, Independent Directors have evaluated the quality, quantity and timeliness of the flow of information between the Management and the Board, Performance of the Board as a whole and its Members and other required matters.

Pursuant to Schedule II, Part D of SEBI (LODR) Regulations, 2015, the Nomination and Remuneration Committee has laid down evaluation criteria for performance evaluation of Independent Directors, which will be based on attendance, expertise and contribution brought in by the Independent Director at the Board Meeting, which shall be taken into account at the time of re-appointment of Independent Director.

Pursuant to Regulation 17(10) of SEBI (LODR) Regulations, 2015, the Board of Directors have evaluated the performance of Independent Directors and observed the same to be satisfactory and their deliberations beneficial in Board / Committee meetings.

As per Section 178(2) of the Companies Act, 2013, the Board of Directors have evaluated the performance of the Committees of the Board.

Pursuant to Regulation 4(2)(f)(ii)(9) of SEBI (LODR) Regulations, 2015, the Board of Directors have reviewed and observed that the evaluation frame work of the Board of Directors was adequate and effective.

The Board's observations on the evaluations for the year were under review similar to their observations for the Previous year. No specific actions have been warranted based on current year observations. The Company would continue to familiarize its Directors on the industry, technological and statutory developments, which have a bearing on the Company and the industry, so that Directors would be effective in discharging their expected duties.

During the year, five Board Meetings were held. The details of the Meetings of the Board and its various Committees held during the financial year including the number of meetings attended by each Director are given in Corporate Governance Report.

As required under Clause 9 of Secretarial Standard 1, the Board of Directors confirms that the Company has complied with applicable Secretarial Standards.

Pursuant to Rule 8 (5)(v) & (vi) of Companies (Accounts) Rules, 2014, it is reported that the Company has not accepted any deposit from public during the financial year under review. There was no outstanding of deposits as on 31-03-2025 (Previous year: NIL). The Company has no deposit, which is not in compliance with the Chapter V of the Companies Act, 2013.

Pursuant to Rule 8(5)(vii) of Companies (Accounts) Rules, 2014, it is reported that, no significant and material orders have been passed by the Regulators or Courts or Tribunals, impacting the going concern status and Company's operations in future.

Pursuant to Section 186(4) of the Companies Act, 2013, it is reported that:

(a) the particulars of loans are provided under Note No. 50 (b) (i).

(b) the particulars of the guarantees and investments are provided under Note No. 46 and Note No. 11 & 12 respectively of Notes forming part of financial statements. The guarantees are provided to secure the loans from Banks / Financial Institutions at a competitive pricing by the borrowers.

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 and adopted a CSR Policy which is based on the philosophy that "As the Organization grows, the Society and Community around it also grows."

The Company has undertaken various projects in the areas of eradication of hunger, promotion of healthcare including preventive healthcare, education, restoration of buildings and sites of historical importance, ensuring environmental sustainability etc., largely in accordance with Schedule VII of the Companies Act, 2013.

The CSR obligations pursuant to Section 135(5) of the Companies Act, 2013, for the year 2024-25 was Rs. 26.27 Lakhs. As against the requirement, the Company has spent an amount of Rs. 13.49 Lakhs. Corporate Social Responsibility Committee and the Board of Directors had accorded its approval for set-off of excess amount spent under CSR activities against the future CSR obligations and pursuant to such approval the Company has set-off an amount of Rs. 12.78 Lakhs against the obligation of current year. The Company had also spent a sum of Rs. 6.37 Lakhs (PY: Rs. 4.64 Lakhs) on other social causes and projects, which do not qualify as CSR expenditure under the classifications listed out in Schedule VII of the Companies Act, 2013.

The CSR policy is available at the Company's website at the following link: https://www.rajapalayammills.co.in/wp-content/uploads/2022/07/corporate-social-responsibility-policy.pdf

The Annual Report on CSR activities as prescribed under Companies (Corporate Social Responsibility Policy) Rules, 2014 is attached as Annexure - II.

M/s. N.A. Jayaraman & Co. Chartered Accountants (FRN: 001310S) and M/s. SRSV Associates, Chartered Accountants (FRN: 015041S), who have been appointed as the Statutory Auditors of the Company for second term of five consecutive years at the 86^th Annual General Meeting, would be the Auditors of the Company till the conclusion of 91^st Annual General Meeting to be held in the year 2027.

As required under Regulation 33(1)(d) of SEBI (LODR) Regulations, 2015, the Auditors have confirmed that they hold a valid certificate issued by the Peer Review Board of the Institute of Chartered Accountants of India.

The report of the Statutory Auditors for the year ended 31^st March, 2025 does not contain any qualification, reservation or adverse remark and no instance of fraud has been reported by Auditors under Section 143(12) of the Companies Act, 2013.

Shri M.R.L. Narasimha, a Practicing Company Secretary is the Secretarial Auditor of the Company. Pursuant to Section 204(1) of the Companies Act, 2013, the Secretarial Audit Report submitted by the Secretarial Auditor for the year ended 31^st March, 2025 is attached as Annexure - III. The report does not contain any qualification, reservation or adverse remark.

As per Regulation 24A(1)(b) of LODR, on the basis of recommendation of Board of Directors, a listed entity shall appoint the Secretarial Auditor / Secretarial Audit Firm for a term of five consecutive years with the approval of its shareholders at the AGM. Accordingly, the Board of Directors at their meeting held on 28-05-2025 have recommended Shri. M.R.L. Narasimha, Practising Company Secretary, as the Secretarial Auditor for the Company. The matter relating to his appointment has been included in the Notice convening the 89^th AGM, for Members' approval.

As per Section 148(1) of the Companies Act, 2013 read with Rule 3 of Companies (Cost Records and Audit) Rules,2014, the Company is required to maintain cost records and accordingly such records and accounts are made and maintained.

The Board of Directors had approved the appointment of M/s. N. Sivashankaran & Co., Practising Cost Accountants as the Cost Auditor of the Company to audit the Company's Cost Records relating to manufacture of textile products for the year 2025-26 at a remuneration of Rs. 2,25,000/- (Rupees Two Lakhs Twenty-Five Thousand) exclusive of GST and out-of-pocket expenses.

The remuneration of the cost auditor is required to be ratified by the members in accordance with the provisions of Section 148(3) of the Companies Act, 2013 and Rule 14 of Companies(Audit and Auditors) Rules, 2014. Accordingly, the matter is being placed before the Members for ratification at the ensuing Annual General Meeting.

The Cost Audit Report for the financial year 2023-24 due to be filed with Ministry of Corporate Affairs by 31-08-2024, had been filed on 23-08-2024. The Cost Audit Report for the financial year 2024-25 due to be submitted by the Cost Auditor within 180 days from the closure of the financial year will be filed with the Ministry of Corporate Affairs, within 30 days thereof.

Pursuant to Section 134(3)(m) of the Companies Act, 2013 and Rule 8(3) of Companies (Accounts) Rules, 2014, the information relating to Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo is attached as Annexure - IV.

In Accordance with Section 92(3) of the Companies Act, 2013, read with Rule 12 of Companies (Management and Administration) Rules, 2014, the copy of the Annual Return for the year ended 31-03-2024 has been placed on the website of the Company and web link of such Annual Return is- https://www.rajapalayammills.co.in/wp-content/uploads/2024/11/annual-return-31-03-2024.pdf

The Company has complied with the requirements regarding Corporate Governance as stipulated in SEBI (LODR) Regulations, 2015. As required under Schedule V(C) of SEBI (LODR) Regulations, 2015, a Report on Corporate Governance being followed by the Company is attached as Annexure - V.

As required under Schedule V(E) of SEBI (LODR) Regulations, 2015, a Certificate from the Auditors confirming compliance of conditions of Corporate Governance is also attached as Annexure - VI to this Report.

As required under Regulation 34(3) read with Schedule V Para C (10)(i) of SEBI (LODR) Regulations, 2015, Certificate from the Secretarial Auditor that none of the Company's Directors have been debarred or disqualified from being appointed or continuing as Directors of Companies, is attached as Annexure - VIA.

During the year under review, no complaints had been received regarding sexual harassment. The relevant statutory disclosure related to the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013, are available at Point No.12(xii) of Corporate Governance Report.

The disclosures in terms of provisions of Section 197(12) of the Companies Act, 2013 read with Rule 5(1) of Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, relating to remuneration are provided in Annexure - VII.

The statement containing names of the top ten employees in terms of remuneration drawn and the particulars of employees as required under Section 197(12) of the Companies Act, 2013, read with 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, the annual report is being sent to the Members, excluding the aforesaid Annexure. In terms of Secion 136 of the Companies Act, 2013, the said Annexure is open for inspection. Any Member interested in obtaining a copy of the same may write to the Company Secretary.

The Company has 5,030 employees as on 31-03-2025 (PY: 4,809). Industrial relations with employees remained cordial during the year. The Company focused more on Human Resources Development activities and imparted training to develop the skill-set of the employees to enable them to face the challenges in the work environment.

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.

Prior approval / Omnibus approval is obtained from the Audit Committee for all related party transactions and the transactions are periodically placed before the Audit Committee for its approval. Transactions with the related party which are material in nature, in accordance with Company's "Related Party Transaction Policy" and Regulation 23 of SEBI (LODR) Regulations, 2015 and required to be disclosed in Form AOC-2 is attached as Annexure VIII. In accordance with Indian Accounting Standard - 24 (Related Party Disclosure), the details of transactions with the related parties are set out in Note No: 50 of disclosures forming part of Financial Statements.

As required under Regulation 46(2)(g) of SEBI (LODR) Regulations, 2015, The Company's Related Party Transaction Policy is disclosed in the Company's website and its web link is: https://www.rajapalayammills.co.in/wp-content/uploads/2025/04/related-party-transaction-policy-2022.pdf

Pursuant to Section 134(3)(n) of the Companies Act, 2013 and Regulation 17(9) of SEBI (LODR) Regulations, 2015, the Company has developed and implemented a Risk Management Policy. The Policy envisages identification of risk and procedures for assessment and minimization of risk thereof. The Risk Management policy of the Company is available at the Company's website and its web link is: https://www.rajapalayammills.co.in/wp-content/themes/ramco/pdf/risk-management-policy.pdf

Dividend amount remaining unclaimed/unpaid for a period of over 7 years was transferred to IEPF as detailed below:

Shares corresponding to the said dividend were transferred to IEPF, as detailed below:

Year wise amount of unpaid / unclaimed dividend lying in the unpaid account and corresponding shares, which are liable to be transferred to IEPF and due dates for such transfer, are tabled below:

* Net of TDS

There have been no changes affecting the financial position of the Company between the end of the financial year (31-03-2025) and till the date of this report (28-05-2025).

Pursuant to Section 134(5) of the Companies Act, 2013, the Directors confirm that:

(a) they had followed the applicable accounting standards along with proper explanation relating to material departures, if any, in the preparation of the annual accounts for the year ended 31^st March, 2025;

(b) they 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 as on 31^st March, 2025 and the loss of the Company for the year ended on that date;

(c) they 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) they had prepared the Annual Accounts on a going concern basis;

(e) they 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) they had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

The Directors are grateful to the various Departments and agencies of the Central and State Governments for their help and co-operation. They are thankful to the Financial Institutions and Banks for their continued help, assistance and guidance. The Directors wish to place on record their appreciation of employees at all levels for their commitment and their contribution.