Shiva Mills Ltd

Dear Members,

Your Directors have pleasure in presenting the 9^th Annual Report together with Audited Financial Statements of the Company for the year ended 31^st March, 2024. The Financial Results are summarized and given below:

Rs. in Lakhs

Your directors have not recommended any Dividend for the year under review.

The Financial Statements for the year ended 31^st March, 2024 have been prepared in accordance with the Indian Accounting Standard (Ind AS) notified under Section 133 of the Companies Act, 2013 (hereinafter referred to as "the Act”) read with Companies (Accounts) Rules, 2014 and other relevant provisions of the Act.

During the year under review, the Spinning Unit produced 5594.27 tonnes (Last Year 4370.28 tonnes) of cotton yarn and 1701.21 tonnes (Last Year 1403.11 tonnes) of waste cotton. The Spinning unit sold 5384.89 tonnes (Last Year 4392.33 tonnes) of cotton yarn and 1571.59 tonnes (Last Year 1463.74 tonnes) of waste cotton.

The Wind Mills with aggregate installed capacity of 10.65 MW generated 181.64 lakh units (Last Year 165.07 lakh units) of Wind Electricity during the year. There has been an increase in wind power generation by 10.03% as compared with previous year generation. The power generated by the wind mills were utilized for captive consumption at the textile mill, except banked quantity of 18.63 Lakhs units (Last Year 28.94 Lakhs units ), which was sold to TANGEDCO and the value of wind power sold to TANGEDCO and included in other income amounted to Rs.38.37 Lakhs (Last Year Rs.59.62 Lakhs ).

The annual performance of the Company for the current year depends on demand for the yarn in domestic market as well as in export market at remunerative prices and availability of quality cotton at a reasonably stable price. The Company is expected to achieve marginal profit with the support of wind mills.

The Company has not transferred any amount to Reserves during the year.

There were no changes in the share capital of the Company during the year.

TRANSFER OF UNCLAIMED DIVIDEND/INVESTOR EDUCATION AND PROTECTION FUND There was no unclaimed dividend amount liable to transfer to IEPF during the year under review.

There were no material changes and commitments affecting the financial position of the Company between the end of the financial year to which the financial statements relate and the date of the report .

There are no proceedings pending under the Insolvency and Bankruptcy Code, 2016. There was no instance of one-time settlement with any Bank or Financial Institution.

The Company has not accepted any public deposits within the meaning of Section 73 to 76 of the Companies Act, 2013 and the Companies (Acceptance of Deposits) Rules, 2014 during the year under review. The Company has no public deposits outstanding at the beginning and at the end of the year.

To comply with requirements of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 both in letter and spirit, your Company is committed to the principles of good Corporate Governance and continues to adhere good corporate governance practices consistently.

A separate section is given on Corporate Governance, Management Discussion and Analysis along with a certificate from a Practicing Company Secretary regarding compliance of conditions of Corporate Governance as stipulated under Regulation 34(3) read with Schedule V of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 which forms part of this Annual Report.

Pursuant to the sub-section (3) of Section 92 of the Companies Act, 2013, Annual Return for Financial Year ended on 31^st March, 2024, is being posted on the website of the Company viz., www.shivamills.com

Sri S V Alagappan, Chariman and Managing Director (DIN 00002450) will retire by rotation at the ensuing Annual General Meeting; he is eligible for re-appointment and seeks his re-appointment.

Sri M Ganeshkumar (DIN 10175966) was appointed as an additional Director of the Company w.e.f. 26.6.2023 with the approval of shareholders at the Annual General Meeting held on 21.9.2023. Sri M Ganeshkumar was appointed as a Non- Executive Independent Director to hold office for 5 years from 26.6.2023 to 25.6.2028.

Based on the recommendation of Nomination and Remuneration Committee, Sri K Manikandan (DIN 10674837) was inducted in to the Board of Directors w.e.f. 28.6.2024 as an Additional Director (Non-Executive Independent Director), subject to approval of shareholders.

All the Independent Directors have given declarations that they have met the criteria of independence as laid down under Section 149 (6) of the Companies Act, 2013 and Regulation 25(8) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

Pursuant to Regulation 34(3) and Schedule V Para C clause (10) (i) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Company has obtained a certificate from Sri R Dhanasekaran, Company Secretary in Practice certifying that none of the Directors on the Board of the Company have been debarred or disqualified from being appointed or continuing as Directors of Companies by SEBI/Ministry of Corporate Affairs or any such Statutory Authority.

The Audit Committee comprises of

Appointed w.e.f. 26.6.2023

The Board has implemented the suggestions made by the Audit Committee from time to time. KEY MANAGERIAL PERSONNEL

Key Managerial Personnel of the Company are as below:

Pursuant to the provisions of the Companies Act, 2013 and Regulation 17 (10) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the evaluation of Independent Directors are done by the entire Board of Directors including performance and fulfilment of independence criteria specified in the Regulation and their independence from the Management. Independent Directors at their meeting held on 30.1.2024 without participation of non-Independent Directors and Management, considered and evaluated the Board's performance and performance of the Chairman and Managing Director.

The Board has carried out an annual evaluation of performance of Board and of individual Directors as well as the Committees of Directors. The evaluation has been conducted internally in the manner defined by Nomination and Remuneration Committee.

During the year under review, Five Board Meetings were conducted. The details of the same have been given in the Corporate Governance Report under applicable Regulations of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, forming part of this Report.

The Company has not given any loans or guarantees regulated by the provisions of Section 186 of the Companies Act, 2013. The details of the investments made by the Company are given in the notes to the Financial Statements.

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 in the website of the Company: www.shivamills.com

The Board of Directors have framed a policy setting out the framework for payment of Remuneration to Directors, Key Managerial Personnel and Senior Management Personnel of the Company. The Policy lays down the principles relating to appointment, cessation, remuneration and evaluation of Directors, Key Managerial Personnel and Senior Management Personnel of the Company. The policy is explained as part of the Corporate Governance Report. The Committee ensures 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) Relationship of remuneration to performance is clear and meets appropriate performance benchmarks and

c) Remuneration to Directors, Key Managerial Personnel and senior management involves a balance between fixed and incentive pay reflecting short and long-term performance objectives appropriate to the working of the Company and its goals.

All the related party transactions that were entered into during the financial year in the ordinary course of business and the prices were at arm's length basis. Hence, the provisions of Section 188 (1) of the Companies Act, 2013 are not attracted. Further no materially significant related party transactions were entered by the Company with Promoters, Directors, Key Managerial Personnel or other designated persons which may have potential conflict with interest of the company at large. Approval of Audit Committee was obtained for transactions of repetitive nature on annual basis. All related party transactions are placed before the Audit Committee for approval and Board of Directors for their review. The policy on Related Party Transactions is available in the website www.shivamills.com

There were no transactions made with any person or entity belonging to promoter/promoter group which holds 10% or more shareholding in the Company.

Disclosure of these transactions in form AOC-2 pursuant to Section 134 (3)(h) of the Companies Act, 2013 read with Rule 8(2) of the Companies (Accounts) Rules, 2014 is set out below:

Particulars of contracts / arrangements entered into by the Company with related parties referred to in subsection (1) of section 188 of the Companies Act, 2013 including certain arm's length transactions under third proviso thereto are given in form AOC - 2 in Annexure - I

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

As stipulated in Section 134 (5) of the Companies Act, 2013 your Directors confirm that:

a) Your Directors have followed in the preparation of the annual accounts, the applicable accounting standards with proper explanation relating to material departures;

b) Your Directors have 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) Your Directors have 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) Your Directors have prepared the annual accounts on a going concern basis;

e) Your Directors have 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) Your Directors have devised proper system to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

The present Auditors of the Company M/s V K S Aiyer & Co., Chartered Accountants, Coimbatore (Firm Registration No: 000066S), were appointed for a term of 5 years, pursuant to the resolution passed by the members at the Annual General Meeting held on 20^th September, 2021. Pursuant to Section 40 of the Companies (Amendment) Act, 2017, the proviso to Section 139 (1) relating to ratification of appointment of Auditors every year has been omitted. Accordingly, the term of office of present Auditors will be continued without requirement of ratification.

Auditor's Report for the Financial year 2023-2024 does not contain any qualification, reservation or adverse remarks requiring any comments by the Board of Directors.

There were no frauds reported by the Statutory Auditors under provisions of Section 143 (12) of the Companies Act, 2013 and rules made thereunder.

Pursuant to provisions of Section 204 of the Companies Act, 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 the Company appointed Sri R Dhanasekaran, Practicing Company Secretary to undertake the Secretarial Audit of the Company. The Secretarial Audit Report is annexed herewith as Annexure - II

The report does not contain any qualification, reservation or adverse remark.

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

Pursuant to Section 148 of the Companies Act, 2013 read with the Companies (Cost Records and Audit) Rules 2014, as amended from time to time, the Board of Directors, on the recommendation of Audit Committee, has re-appointed Sri M Nagarajan, Cost Accountant, Coimbatore as Cost Auditor to conduct Cost Audit of the Company for the financial year 2024-2025. The Company has maintained such accounts and cost records as required under Section 148 (1) of the Companies Act, 2013.

The Company does not have any Joint Venture, Associate and Subsidiaries as per Rule 6 of the Companies (Accounts) Rules, 2014. Hence, no reporting of the same in Form AOC -1 has been made.

The Company has an Internal Control System, commensurate with the size, scale and complexity of its operations.

The Company has appointed M/s B M Associates, Chartered Accountants, to monitor and evaluate the efficiency and adequacy of internal control system 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 Auditors, corrective actions are taken in the respective areas and thereby strengthen the controls. Significant audit observations and recommendations along with corrective actions thereon are presented to the Audit Committee of the Board.

The Company has developed a Risk Management Policy and implemented the same. At present the Company has not identified any element of risk which may be of threat to the existence of the Company.

The Company has constituted Corporate Social Responsibility 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 Company has not met the criteria prescribed under Section 135(1) of the Companies Act, 2013, during the immediately preceding Financial Year i.e., 2022-23 and hence the Company is not required to spend any amount on account of CSR for the Financial Year 2023-24. Annual Report on CSR activities and its related particulars are not applicable for the Financial Year 2023-24 hence it is not enclosed. The Committee consists of the following Directors:

The Company has amended and adopted the CSR Policy on 6.2.2021 in line with the CSR Rules as amended by Ministry of Corporate Affairs. The Policy on Corporate Social Responsibility is available in the website www.shivamills .com.

I. Conservation of Energy and others - The particulars required to be included in terms of Section 134(3) (m) of the Companies Act, 2013 read with Rule 8(3) of the Companies (Accounts) Rules, 2014 for the year ended 31^st March, 2024 relating to Conservation of Energy, etc., is enclosed as Annexure - III.

II. Remuneration of Directors and other details - The information required under 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 year ended 31^st March, 2024 is provided in Annexure -IV.

During the year under review the human relations continued to be very cordial.

The Company has an Anti-Sexual Harassment Policy in line with the requirements of the Sexual Harassment of Women at the Workplace (Prevention, Prohibition & Redressal) Act, 2013, and an Internal Complaints Committee (ICC) has been constituted to redress complaints of sexual harassment as provided therein. All employees (permanent, contractual, temporary, trainees) are covered under this policy.

Your Directors acknowledge with thanks the financial assistance extended by the Bankers for providing the required credit facilities to the company. Your Directors wish to place on record their appreciation of the contribution made by the employees for their support to get over the difficulties faced by the Company.