Shanti Spintex Ltd

To,

The Members, Shanti Spintex Limited

Your directors have pleasure in presenting the 14^th Annual Report of Shanti Spintex Limited along with the Audited Financial Statements for the year ended March 31, 2024.

FINANCIAL SUMMARY AND HIGHLIGHTS

The performance of the Company for the financial year ended March 31, 2024, summarized as follows:

KEY HIGHLIGHTS ON FINANCIAL PERFORMANCE

For the financial year 2023-24, Shanti Spintex Limited achieved a significant milestone by recording a revenue from operations of INR 50,583.06 Lakhs. This represents a substantial growth of approximately 36.65% compared to the previous financial year's revenue of INR 37,033.22 Lakhs. This impressive increase is attributed to enhanced utilization of production capacity, improved sales strategies, and expansion into new markets.

The Profit After Tax for the financial year ended March 31, 2024, stood at INR 1,301.75 Lakhs, showcasing an increase of approximately 28.56% over the previous year's profit of INR 1,012.80 Lakhs. This improvement is primarily due to efficient management of resources and cost optimization measures implemented during the year.

The Earnings Per Share (EPS) for the year 2023-24 is INR 8.71, as against INR 7.13 in the previous year, reflecting a growth of approximately 22.14%. The consistent increase in EPS highlights the company's commitment to enhancing shareholder value.

The company remains optimistic about the future, with plans to further enhance its production capabilities, explore new markets, and invest in technology to drive growth and profitability. The focus will remain on sustainable growth and maximizing shareholder value.

BASIS OF PREPARATION OF FINANCIAL STATEMENTS

The financial statements of Shanti Spintex Limited have been prepared in accordance with Indian Accounting Standards (Ind AS) notified under Section 133 of the Companies Act, 2013, read with the Companies (Indian Accounting Standards) Rules, 2015, as amended, and other relevant provisions of the Act.

TRANSFER TO RESERVES

During the financial year ended March 31, 2024, Shanti Spintex Limited has transferred an amount of INR 1,612.80 Lakhs to the Securities Premium Reserve. This amount represents the premium collected over and above the face value of shares issued during the Initial Public Offering (IPO). The Securities Premium Reserve will be utilized in accordance with the provisions of the Companies Act, 2013.

DIVIDEND

The Board of Directors of the Company has decided not to declare any dividend for the financial year ended March 31, 2024. This decision has been taken to conserve resources for future growth and expansion plans of the Company. The retained earnings will be utilized to strengthen the financial position and support ongoing and future business initiatives.

BUSINESS EXPANSION, MODERNIZATION & INNOVATION

Shanti Spintex Limited continues to expand its business operations, consistently crossing new milestones of growth and creating value-added products in the textile industry. The Company's unwavering commitment to expansion, innovation, and productivity, combined with modernization of business operations, forms the cornerstone of its success.

During the year under review, the Company has taken a significant step by bringing its Initial Public Offering (IPO) to the market. This milestone not only reflects the Company's growth trajectory but also strengthens its financial base for future expansion and innovation endeavors.

The Company remains committed to serving its customers and ensuring their needs are met, even in adverse market conditions. The Company's dedication to its core values of expansion, innovation, productivity, and modernization positions it as a leading player in the textile industry, poised for continued success and growth.

LISTING OF SHARES ON SME PLATFORM OF BSE LIMITED

During the financial year 2023-24, Shanti Spintex Limited successfully listed its shares on the SME Platform of BSE Limited on December 27, 2023. This significant milestone marks a new chapter in the Company's growth journey, providing it with enhanced visibility and access to a broader investor base.

The listing fee for the year 2024-2025 has been duly paid.

SHARE CAPITAL STRUCTURE

As on March 31, 2024, the Authorized Share Capital of the Company is INR 20,00,00,000.00/-(Rupees Twenty Crores Only) and Issued, Subscribed, and Paid-up Share Capital (Fully Subscribed) is INR 16,88,80,000.00/- (Rupees Sixteen Crores Eighty-Eight Lacs and Eighty Thousand Only)

Changes in Share Capital During the Year

Bonus Issue: On August 2, 2023, the Company issued 71,00,000 bonus shares in a 1:1 ratio. This bonus issue reflects the Company's strong financial performance and commitment to rewarding its shareholders.

Initial Public Offering (IPO): On December 22, 2023, the Company successfully completed its IPO, issuing 26,88,000 new shares. This IPO marks a significant milestone, enhancing the

Company's capital base and providing access to a broader investor base through the listing on the SME Platform of BSE Limited.

Summary of Share Capital:

Authorized Capital: INR 20,00,00,000.00/-

Paid-up Capital Before Bonus Issue: INR 7,10,00,000.00/-

Paid-up Capital After Bonus Issue (1:1): INR 14,20,00,000.00/-

Paid-up Capital After IPO: INR 16,88,80,000.00/-

DETAILS OF THE ASSOCIATES/ JOINT VENTURE / SUBSIDIARIES COMAPANIES

During the financial year 2023-24, Shanti Spintex Limited did not have any associates, joint ventures, or subsidiary companies. The Company continues to focus on its core operations and strategic initiatives to drive growth and enhance shareholder value.

PUBLIC DEPOSIT

Shanti Spintex Limited has not accepted any public deposits during the financial year 2023-24. Furthermore, there were no outstanding amounts against any public deposits at the end of the year.

CORPORATE GOVERNANCE

In compliance with Regulations 17 to 22 and Regulation 34 of the Listing Regulations, a separate report on Corporate Governance, is annexed as "Annexure-A" to this report.

MEETINGS OF THE BOARD

The Board met 15 (Fifteen) times during the financial year. Details of meetings are given in the Corporate Governance Report annexed herewith as Annexure-A and forms part of this report. The intervening gap between the Meetings was within the period prescribed under the Companies Act, 2013 and the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

SECRETARIAL STANDARDS

During the year under review, your company has complied with the applicable Secretarial Standards.

MATERIAL CHANGES OR COMMITMENTS, IF ANY, AFFECTING THE FINANCIAL POSITION OF THE COMPANY WHICH HAVE OCCURRED BETWEEN THE END OF THE FINANCIAL YEAR TO WHICH THE FINANCIAL STATEMENTS RELATES AND THE DATE OF THE REPORT

There were no other material changes or commitments which affected the financial position of the Company which have occurred between the end of the financial year and the date of this Report.

CHANGE IN NATURE OF BUSINESS, IF ANY

There is no change in the nature of your Company's business during the year under review.

PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS UNDER SECTION 186 OF COMPANIES ACT, 2013

The details of loans, guarantees and investments covered under the provisions of Section 186 of the Companies Act, 2013 are given in the note to the financial statements.

DECLARATION BY INDEPENDENT DIRECTORS

The Company has received necessary declarations from each Independent Director of the Company confirming that he/she met with the criteria of independence as laid out in subsection (6) of Section 149 of the Companies Act, 2013 and under Regulation 16(1)(b) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

REPORTING OF FRAUD

During the year under review, the Statutory Auditors and Secretarial Auditors have not reported any instances of fraud committed by the Company's officers or employees to the Audit Committee under Section 143(12) of the Act, as required for disclosure in this report.

POLICIES

The updated policies adopted by the Company as per statutory and governance requirements are uploaded on website of the Company at www.shantispintex.com

MEETING OF INDEPENDENT DIRECTORS

During the year under review, the Independent Directors met on December 22^nd, 2023 inter alia, to discuss:

Review of the performance of Non-independent Directors and the Board of Directors as a whole.

Assess the quality, content and timeliness of flow of information between the management and

To ensure the Board effectively and reasonably perform its duties.

All Independent Directors were present at the meeting.

BOARD EVALUATION

As part of our commitment to excellence in corporate governance, Shanti Spintex Limited has implemented a comprehensive evaluation process for the Board of Directors, its committees, and individual directors. This process is conducted annually to ensure that the Board and its committees are functioning effectively and efficiently, in line with the company's strategic objectives and governance standards.

EXTRACT OF ANNUAL RETURN

In pursuance to Section 92 and 134 (3) (a) of the Companies Act, 2013 ("the Act") read with relevant Rules thereunder The Annual Return of the Company for the Financial Year 2023-2024 is available on the website of the Company at: www.shantispintex.com.

SIGNIFICANT AND MATERIAL ORDERS

There are no significant and material orders passed by any regulator or court or tribunal impacting the going concern status and your Company's operations in future.

DIRECTORS AND KEY MANAGERIAL PERSONNEL

The composition of the Board at Shanti Spintex Limited adheres to statutory provisions. The Board consists of five members, including two independent directors.

None of the Directors of the Company are disqualified from being appointed as Directors under Section 164(2) of the Companies Act, 2013, and Rule 14(1) of the Companies (Appointment and Qualification of Directors) Rules, 2014.

Changes in the Board of Directors and KMPs:

The following changes occurred in the Board of Directors and Key Managerial Personnel (KMPs):

a. The Board has appointed Mr. Bhavik Rameshbhai Talati as a non-executive director of the Company w.e.f. 31.07.2023.

b. The Board has appointed Mrs. Mohini Singhal as Company Secretary and compliance officer of the Company w.e.f. 02.08.2023

c. The Board has appointed Mr. Bharatbhushan O. Agarwal as the Chief financial officer of the Compay w.e.f. 24.08.2023

d. The Board has appointed Miss. Kruti Vyas as the Non-Executive Independent Director of the Company w.e.f. 31.08.2023

e. The Board has appointed Mrs. Sejal R. Agrawal as the Non-Executive Independent Director of the Company w.e.f. 31.08.2023

f. The Board re-designated Mr. Rikin B. Agarwal as the Managing Director of the Company w.e.f. 31.08.2023

g. The Board re-designated Mr. Bharatbhushan O. Agarwal as the Chairman and Whole-Time Director of the Company w.e.f. 31.08.2023

h. Pursuant to Section 152 of Companies Act, 2013 Mr. Bharatbhushan O. Agarwal shall retire by rotation at the ensuing Annual General Meeting being eligible offers himself for re-appointment for directorship of the company.

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

The Management Discussion and Analysis Report for the Financial Year 2023-2024 is annexed as "Annexure-B" and forms an integral part of this Board Report.

BUSINESS RESPONSIBILITY REPORT

The Business Responsibility Report for the year ended March 31, 2024 as stipulated under Regulation 34(2) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 is not applicable as your Company is not falling in the list of top 1000 Companies as per the Market Capitalization as on March 31, 2024.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

In accordance with Section 134(3)(m) of the Companies Act, 2013, and Rule 8 of the Companies (Accounts) Rules, 2014, details regarding conservation of energy, research and development, technology absorption, and foreign exchange earnings and outgo are provided in "Annexure-C" to the Directors' Report.

SAFETY, HEALTH, AND ENVIRONMENTAL RESPONSIBILITY

At Shanti Spintex, safety, occupational health, and environmental responsibility are central to our operations. We prioritize zero harm to employees and the community through continuous training and safety initiatives. Our operations comply with environmental regulations and focus on preserving natural resources.

We have obtained all necessary approvals from relevant government authorities, demonstrating our commitment to high safety and environmental standards.

INSURANCE

All assets of the company including inventories, building, plant and machineries are adequately insured.

DIRECTORS' RESPONSIBILITY STATEMENT

Pursuant to Section 134(3) (c) and 134(5) of the Companies Act, 2013, the Board of Directors, to the best of their knowledge and ability, confirm that:

1. That in the preparation of the annual financial statements for the financial year ended 31st March, 2024, the applicable accounting standards have been followed along with proper explanation relating to material departures, if any;

2. They 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 as at the end of the financial year as on 31st March, 2024 and of the profit and loss of the Company for that period;

3. 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;

4. They had prepared the annual financial statements on a going concern basis;

5. The Directors have laid down internal financial controls to be followed by the company and that such internal financial controls are adequate and are operating effectively; and

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.

DISCLOSURES UNDER SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION & REDRESSAL) ACT, 2013:

Shanti Spintex is dedicated to maintaining a safe and harassment-free workplace. In compliance with the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013, we have implemented a policy to prevent and address sexual harassment. This policy covers all employees, including permanent, contractual, temporary, and trainees. This policy is accessible on our website at www.shantispintex.com.

No complaints of sexual harassment were received during the Financial Year 2023-24.

CORPORATE SOCIAL RESPONSIBILITY (CSR)

The Company has a has a dedicated Policy on Corporate Social Responsibility (CSR), accessible on our website at www.shantispintex.com. Details of our CSR Policy, along with activities undertaken during the year, are outlined in "Annexure-D" of this Board Report.

Additionally, specifics regarding the composition, number, and dates of CSR Committee meetings, including member attendance, are provided separately in the Corporate Governance Report (Annexure-A).

NOMINATION AND REMUNERATION POLICY

In compliance with the provisions of Section 178 of the Act, The Nomination and Remuneration Policy as approved by the Board of Directors has been uploaded on the website of the Company www.shantispintex.com.

PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES:

The Company ensured all related party transactions were in compliance with Section 188 of the Companies Act and Regulation 23 of the Listing Regulations. During the year under review, all the transactions were conducted on an arm's length basis in the ordinary course of business.

The Audit Committee reviewed and approved the statements of related party transactions as required by law and Listing Regulations. The Company also submitted half-yearly disclosures of related party transactions to the Stock Exchanges in accordance with Regulation 23 of the Listing Regulations. "Annexure-E" in the Board Report provides details of related party contracts and arrangements in accordance with Section 134(3)(h) of the Act.

AUDITORS AND AUDITORS' REPORT

Statutory Auditor

Pursuant to Section 139 of the Companies Act, 2013, M/s Anil S Shah & Co., Chartered Accountants (FRN.: 100474W), were appointed as the Statutory Auditor of the Company at 10TH Annual General Meeting for 5 (five) consecutive years till the conclusion of the Annual General Meeting to be held for Financial Year 2025, on such remuneration as may be agreed between Board of Directors and the firm.

There are no observations (including any qualification, reservation, adverse remark or disclaimer) of the Auditors in their Audit Report that may call for any explanation from the Directors. Further, the notes to accounts referred to in the Auditors Report are self-explanatory.

Secretarial Auditor

Pursuant to the provisions of Section 204 of the Companies Act, 2013 read with rules made thereunder, the Board of Directors has appointed M/s HDS & Associates., Practicing Company Secretaries, as Secretarial Auditor to conduct Secretarial Audit of the Company for the Financial Year 2023-24. The report submitted by the Secretarial Auditor in Form MR-3 is attached to this report as "Annexure-F". The remark of secretarial auditor is self-explanatory in nature.

Cost Auditor

M/s. Mayur Chhaganbhai Undhad and Co, Cost Accountant, Ahmedabad appointed as a Cost Auditor of the Company for the Financial Year 2023-24 in the Board meeting held on 31^st Day of May, 2023 for conducting the audit of cost records of the Company for the Financial Year 2023-2024. Further there are no audit qualifications, reservations, adverse remarks or disclaimer in the Cost Audit Report.

Internal Auditor

In accordance with the provisions of Section 138 of the act and rules made thereunder, the Board of Directors of the Company have appointed M/s Rajat Bansal & Associates (Firm Reg. No. 330094E) as Internal Auditor to conduct the Internal Audit of the Company for the F.Y. 2023-24. Further the report with no audit qualifications, reservation, adverse remark or disclaimer on Internal Auditor of the Company for the Financial Year 2023-2024 has been received.

INTERNAL FINANCIAL CONTROL SYSTEM:

The Company maintains a robust and effective internal financial control system, ensuring the safeguarding and protection of all assets, as well as the accurate authorization, recording, and reporting of transactions. The internal audit encompasses a broad range of operational aspects and verifies compliance with specific standards pertaining to the availability and appropriateness of policies and procedures.

It is noteworthy that in the past year, no significant weaknesses in the design or operation of this system were identified or reported

ADEQUACY OF INTERNAL FINANCIAL CONTROLS WITH REFERENCE TO THE FINANCIAL STATEMENTS:

The Companies Act of 2013 underscores the importance of establishing an efficient internal financial control system within the company. Additionally, Rule 8(5)(viii) of the Companies (Accounts) Rules, 2014 mandates the disclosure of information concerning the adequacy of internal financial controls in relation to the financial statements within the Board's report. This comprehensive report is an integral component of the Independent Auditor's Report.

CODE OF CONDUCT

The Board of Directors of the Company has laid down a Code of Conduct for all the Board Members and Senior Management Personnel of the Company. The Board Members and the Senior Management personnel have affirmed compliance with the code for the year 2023-24. The said Code of Conduct has been posted on the website of the Company at www.shantispintex.com. A declaration to this effect is annexed to the Corporate Governance Report, which forms part of this Annual Report.

PREVENTION OF INSIDER TRADING

Pursuant to the provisions of SEBI (Prohibition of Insider Trading) Regulation, 2015 the Board has formulated and implemented a Code of Conduct to regulate, monitor and report trading by its employees and other connected persons and Code of Practices and Procedures for fair disclosure of Unpublished Price Sensitive Information.

The updated "Code of Practices and Procedures for Fair Disclosure of Unpublished Price Sensitive Information" has been uploaded on the Company's website at www.shantispintex.com.

VIGIL MECHANISM / WHISTLE BLOWER POLICY

The Company has framed a Whistle Blower Policy to deal with instances of fraud and mismanagement, if any.

The said policy has been disseminated within the organization and has also been uploaded on the Company's website at www.shantispintex.com.

RISK MANAGEMENT POLICY:

Risk management at Shanti Spintex is a fundamental aspect of our operational strategy, encompassing a proactive approach to identifying, assessing, and mitigating risks across all facets of our business. We have established a robust Risk Management Policy that guides our efforts in minimizing uncertainties that could impact our business objectives, financial stability, and reputation.

Our comprehensive risk management framework integrates key risk factors into our strategic planning processes and operational decisions, ensuring that risks are identified early and managed effectively. Regular reviews and updates of our risk management practices enable us to adapt swiftly to evolving market conditions and regulatory requirements, thereby safeguarding our stakeholders' interests and fostering sustainable growth.

TRANSFER TO THE INVESTOR EDUCATION AND PROTECTION FUND (IEPF)

During the year under review, no amount was due for transfer to IEPF in accordance with Section 125 of the Companies Act, 2013.

PARTICULARS OF EMPLOYEES

A statement containing the names and other particulars of employees in accordance with the provisions of section 197(12) of the Companies Act, 2013 read with rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is appended as "Annexure-G" to this report.

During FY 2023-24, no employee has received remuneration in excess of the limits set out in rules 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014.

DISCLOSURE ON COMPLIANCE

The Company is in compliance with all the laws, regulations and provisions of the Stock Exchange(s), SEBI, ROC, MCA and all other statutory authorities.

CAUTIONARY STATEMENT

The Directors' Report of Shanti Spintex includes cautionary language to inform stakeholders about potential risks and uncertainties that could affect the company's future performance. These risks may include, but are not limited to, market fluctuations, economic conditions, regulatory changes, and operational challenges. Stakeholders are advised to consider these factors when evaluating the information provided in the report and should not rely solely on forward-looking statements or projections due to the inherent uncertainties involved. The company undertakes no obligation to update or revise any forward-looking statements to reflect events or circumstances that may arise after the report's publication.

APPRECIATION

Our directors extend their heartfelt gratitude to all employees at every level for their unwavering hard work, dedication, and commitment. They sincerely thank and appreciate the continued contributions, support, and cooperation of all employees, which greatly enhance the company's operations and performance.

ACKNOWLEDGEMENT:

Our directors wish to convey their heartfelt appreciation for the cooperation and assistance extended by Shareholders, Bankers, regulatory bodies, and other vital business partners throughout the year under review.

Furthermore, our directors want to acknowledge and express their deep sense of gratitude for the unwavering commitment exhibited by all executives, officers, and staff, which played a pivotal role in the Company's successful performance during the year.