Divyashakti Ltd Directors Report

In the FY 2023-24, there was a 7.62% decrease in revenue from operations, declining from Rs. 7553.12 Lakhs to Rs. 6977.15 Lakhs. Additionally, the profit before tax dropped significantly, standing at Rs. 322.68 Lakhs compared to Rs. 1101.26 Lakhs in the previous year, marking a decrease of 70.67%. These declines are attributed to the unstable US market conditions, which have adversely affected revenue generation.

During the FY 2023-24, the market experienced a lack of sale price increase due to an enormous surge in quartz supply globally, very huge competition for supply of quartz accompanied with an unprecedented price war while the demand in the US Market considerably cooled given the very high interest rates and inflationary pressures. Consequently, this led to stagnant market conditions and declining profits throughout the fiscal year.

Your directors are pleased to recommend for your consideration a Dividend of Rs.2.00 per share (20% on the face value Rs.10/-) on the equity share capital of the company for the financial year ended 31^st March, 2024, aggregating an amount of Rs.205.38 Lakhs. The same is put for approval of members at the ensuing Annual General Meeting.

In terms of the provisions of Regulation 43A of the SEBI (Listing Obligations and Disclosure

Requirements) Regulations, 2015 as amended ("the Listing Regulations"), The Company has formulated a Dividend Distribution Policy.

The recommended dividend is in line with our Companys dividend policy, which is available on the Companys Website http://www.divyashakti.com.

The Company proposes to transfer an amount of Rs26.66 Lakhs to Reserves during the financial year under review.

Cash and cash equivalents as at 31^st March, 2024 were Rs.857.06 Lakhs and Rs.707.96 Lakhs in the previous year. The Company continues to focus on judicious management of its working capital, receivables, inventories and other working capital parameters and they were kept under strict check through continuous monitoring.

Throughout the FY, your Company achieved notable success by exporting polished granite slabs and Quartz slabs valued at Rs. 6874.27 Lakhs to the United States. This significant export activity underscores the companys commitment to international markets and highlights its competitive edge in the industry.

Furthermore, as the year came to a close, the company experienced a positive trajectory, with export orders on hand amounting to Rs.400 Lakhs. While this figure represents a slight decrease compared to the previous years Rs.500 Lakhs, it still demonstrates the companys resilience and capacity to maintain a robust export pipeline despite market fluctuations and challenges.

During the year the Company has not changed its business.

There are no material changes and commitments that have bearing on the financial position of the Company.

There are no significant and material orders by the Regulators or Courts or Tribunals impacting the going concern status and Companys operations in future.

The Management continuously reviews the internal control systems and procedures for the efficient conduct of the Companys business. The Company adheres to the prescribed guidelines with respect to the transactions, financial reporting and ensure that all its assets are safeguarded and protected against losses. The Internal Auditors of the company conduct audit on regular basis and the Audit Committee periodically reviews internal audit reports and effectiveness of internal control systems.

The Company does not have any Subsidiaries or Joint-Venture or Associate Companies.

Since the Company does not have any Subsidiaries or Joint Venture or Associate Companies, consolidation of financial statements of the Company is not applicable.

The Company has not accepted/renewed any fixed deposits from the public during the year.

M/s. Pavuluri & Co, Chartered Accountants, Hyderabad (Firm Registration. No.012194S), Independent Auditors of the Company were appointed in the Annual General Meeting held on 18^th August 2022, for a period of Five years till conclusion of Thirty Sixth (36^th) Annual General Meeting to be held in the year 2027 and no ratification is required based on the amended Section 139 of the Companies Act, 2013 and the ordinary resolution passed at the previous Annual General Meeting.

There are no observations in the Audit report which require any comments of the Directors for the Financial Year 2023-24.

Pursuant to provisions of Section 204 of the Companies Act, 2013, M/s. Puttaparthi Jagannatham, Company Secretaries, Hyderabad has undertaken the Secretarial Audit of the Company. The Secretarial Audit Report obtained is annexed within as Annexure-I. The Secretarial Audit report does not have any qualifications, reservations, observation, or adverse remark.

The extract of the Annual Return is placed on the website of the Company. The link to access the

The Paid-up share capital of the Company is Rs.102688700/- and there has been no change during the year. None of the following issues were taken up during the year and hence details thereof were not required to be furnished

A) Issue of shares with differential rights B) Issue of sweat equity shares C) Issue of employee stock options

D) Provision of money by company for purchase of its own shares by employees or trustees for the benefit of employees

a) Awareness programmers for employees were conducted for reducing energy waste. b) Company ensures that the manufacturing operations are conducted in the manner whereby optimum utilization and maximum possible savings of energy is achieved. c) No specific Capital investment has been made on reduction in energy consumption during the current financial year. d) As the impact of measures taken for conservation and optimum utilization of energy are not quantitative, its impact on cost cannot be stated accurately. e) Details of electricity consumption are as under:

No outside technology is being used for manufacturing activities; therefore, no technology absorption is required. The Company constantly strives for maintenance and improvement in quality of its products and entire research and development activities are directed to achieve the aforesaid goal.

(C) Foreign exchange earnings and outgo:

Details of foreign exchange earnings and outgo are as follows

Pursuant to Section 135 of the Companies Act, 2013 read with the Companies (Corporate Social Responsibility Policy) Rules, 2014, your Company has constituted the CSR committee consisting of the following Directors with the roles and responsibilities duly defined in accordance with the CSR Policy Rules. The Committee met on 22^nd January 2024 during the financial year ended 31^st March, 2024.

In accordance with Section 135 of The Companies Act, 2013 and its associated regulations, the Board of Directors, acting upon the recommendations of the CSR Committee, formulated a comprehensive CSR Policy. This policy delineates the specific activities to be undertaken by the Company as outlined in Schedule VII of The Companies Act, 2013.

As part of its CSR commitments, the Company has engaged in various impactful initiatives. These include providing childcare services in collaboration with the Janyaa Foundation, contributing to the construction of old age homes, supporting educational needs for orphans, and making donations to the Narsapur Municipal Corporation, which falls within the vicinity of the Companys factory. These endeavors collectively aim to foster the holistic development of the surrounding community and fulfill the Companys corporate social responsibility obligations. The Annual Report on CSR activities, pursuant to Rule 8 of The Companies (Corporate Social Responsibility) Rules, 2014, is given in Annexure-II and forms part of this Report.

i. In accordance with the stipulations outlined in Sections 149, 150, and 152, along with

Schedule IV, and Section 161(1) read in conjunction with the Companies (Appointment and Qualification of Directors) Rules, 2014, Sri Mohan Krishna Pamidimukkala (DIN: 02032808) has been appointed as a Non-Executive and Independent Director of the Company. This appointment, effective from 11th February 2024, for a tenure of 5 years, was ratified through a Circular Resolution dated 23.02.2024, subsequently endorsed by the Shareholders via Postal Ballot.

ii. In compliance with the provisions detailed in Sections 149, 150, and 152, together with

Schedule IV, and Section 161(1) read with Companies (Appointment and Qualification of Directors) Rules, 2014, Sri Srinivas Karunendra Jasti (DIN: 01021857) has assumed the role of a Non-Executive and Independent Director of the Company. This appointment, effective from 11th February 2024, for a duration of 5 years, was sanctioned through a Circular Resolution dated 23.02.2024, subsequently validated by the Shareholders through Postal Ballot.

iii. In adherence to the guidelines delineated in Sections 196, 197, and 203, in conjunction with

Schedule V, and other relevant provisions, if any, of the Companies Act, 2013, Mr. Nallapati Sai Venkateshwara Prasad (DIN: 07426498) has been appointed as the Global Marketing Advisor of the Company for Overseas Markets. This appointment, effective from 10th February 2024, for a tenure of 5 years, was ratified during the Board Meeting convened on 10th February 2024, subsequently endorsed by the Shareholders via Postal Ballot.

iv. As per the mandates of the Companies Act, 2013 and the Articles of Association of the

Company, Sri T.H. Sastry (DIN No. 01786600), Sri T.R.C. Bose (DIN. 00160630), and Sri S. Srinivas (DIN: 00194094), Independent Directors, have retired from their positions with effect from 10.02.2024, consequent to the completion of their tenure as Independent Directors of the Company.

v. Pursuant to the requirements of the Companies Act, 2013 and Articles of Association of the

Company, Ms. Anuradha Anne, Director retires by rotation at the ensuing Annual General Meeting and being eligible offers herself for re-appointment.

All the Independent Directors have given declarations under Section 149(7) of the Companies Act, 2013 that they meet the criteria of independence as provided in sub-section (6) of Section 149 of the Companies Act, 2013 and Regulation 16(2) and 25 of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015.

Pursuant to the provisions of the Companies Act, 2013 and the Listing Regulations, the Board has formulated a policy for evaluation of its Board, Board Committee, Directors, and their performances and carried out an evaluation of them. The manner in which the evaluation has been carried out has been explained in the Corporate Governance Report.

The Directors met for 5 times during the financial year 2023-24. A calendar of meetings is prepared and circulated in advance to all the Directors. The number and details of the meetings of the Board are furnished in the Corporate Governance Report.

A separate meeting of Independent Directors of the Company was held on 10^th February 2024 as required under Schedule IV to the Companies Act, 2013 (Code for Independent Directors) and Regulation 17 of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015. At the Meeting, the Independent Directors reviewed the performance of Non-Independent Directors and the Board as a whole.

F) Familiarization Programme for Independent Directors

The Company proactively keeps its directors informed of the activities of the Company, its management and operations and provides an overall industry perspective as well as issues being faced by the industry. The Familiarisation programme for Independent Directors is disclosed on the

Companys website.

The Board of Directors of the Company constituted Audit Committee consisting of the following Directors, with the roles and responsibilities duly defined in accordance with the applicable statutory and other requirements. During the year, four (4) meetings of the Committee took place.

The Board has accepted all the recommendations of the Audit Committee.

The Company presently maintains a robust vigilance mechanism to address any potential instances of fraud or mismanagement. In handling concerns, strict confidentiality is upheld, and there is a firm commitment to ensuring that no individual faces discrimination for raising genuine issues. Oversight of this mechanism is entrusted to the audit committee.

Additionally, the Company has crafted a Whistleblower Policy, empowering its Directors, Employees, and Stakeholders to report any perceived unethical behavior, suspected fraud, or breaches of the Companys Code of Conduct or Ethics Policy.

The Company reaffirms that all Directors and employees retain unhindered access to the Chairman of the Audit Committee, and no complaints were received throughout the fiscal year.

The Board of Directors has approved a comprehensive code of conduct, applicable to both Board members and all employees during the course of the Companys daily operations. Firmly opposing bribery, corruption, and any form of unethical behaviour, the Board has instituted directives to combat such actions. Termed the "Code of Business Conduct," this code is detailed in the Report as an appendix, with compliance declarations included.

This code delineates the expected standards of business conduct for Directors and designated employees, emphasizing integrity in workplace practices, business dealings, and interactions with stakeholders.

All Board members and Senior Management Personnel have affirmed their adherence to the code, with comprehensive training provided to all management staff on these guidelines.

The Company has adopted a Code of Conduct as per Securities and Exchange Board of India (SEBI) (Prohibition of Insider Trading) Regulations, 2015 for prevention of insider trading with a view to regulate trading in securities by the Directors and designated employees of the Company. The code requires pre clearance for dealing in the Companys shares and prohibits the purchase or sale of Companys shares by the Directors and designated employees while in possession of unpublished price sensitive information in relation to the company and during the period when the trading window is closed. The Board is responsible for implementation of the code. The Code is in line with the latest amendments.

During the year under review, there has been due compliance with SEBI (Prohibition of Insider Trading) Regulations, 2015.

The Board of Directors of the Company constituted of Nomination and Remuneration Committee consisting of the Following are the members of Nomination and Remuneration Committee with the roles and responsibilities duly defined and in accordance with the applicable statutory and other requirements.

The Board has formulated a policy in consultation with the Nomination and Remuneration Committee for selection and appointment of Directors, Senior management and fixation of their remuneration keeping in view the requirements given in Section 178 of the Companies Act, 2013 and it also involves in the evaluation of the Board and its remuneration policies. During the Financial Year under review, the Committee has met two times i.e. on 22^nd July, 2023 and 22^nd January, 2024.

All transactions entered with Related Parties for the year under review were on arms length basis.

The particulars of every contract or arrangements entered into by the Company with related parties referred to in sub-section (1) of Section 188 of the Companies Act, 2013 including certain arms length transactions under third proviso thereto are disclosed in Form No. AOC-2 as

Annexure-III to this Report.

Policy on Related Party Transactions as approved by Board has been uploaded on Companys

There were no materially significant transactions with Related Parties during the financial year 2023-24 which were in conflict with the interest of the Company. Suitable disclosures as required under Accounting Standard have been made in Note 3.07 of the Notes to the financial statements.

Details of the ratio of the remuneration of each Director to the median employees remuneration and other details as required pursuant to Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014.

b) There is no information required pursuant to Section 197 read with 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 as no employee of the Company is covered by these rules. c) It is hereby affirmed that the remuneration paid is as per the remuneration policy for Directors, Key Managerial Personnel and other Employees. d) The median remuneration of employees of the company during the financial year was Rs. 1.02 Lakhs. e) There were permanent employees on the rolls of company as on 31^st March,2024

f) No Director is in receipt of any commission from the company and the Managing Director and Whole-time Director of the Company have not received any remuneration or commission from any other Company subject to its disclosure by the Company in the Boards Report.

The Directors reassert their dedication to upholding high standards of corporate governance. Throughout the reviewed period, the Company diligently adhered to the regulations concerning corporate governance outlined in Regulation 27 of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015. The compliance report, along with the Auditors Certificate verifying adherence to the conditions of Corporate Governance as per the Listing Regulations, is provided as Annexure-IV to this Report.

The Managing Director and Chief Financial Officer of the Company have issued necessary certificate pursuant to the provisions of Regulation 17(8) of the Listing Regulations and the same forms part of this Report.

The Company maintains ongoing vigilance over business and operational risks by implementing business process re-engineering and conducting regular reviews across various areas including production, finance, legal, and others. A comprehensive initiative is in progress to establish a robust risk management framework. Additionally, the Company ensures that its assets are sufficiently insured against risks arising from fire and earthquake hazards.

The Board has not identified any risks that, in its view, pose a threat to the Companys existence.

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

(a) In the preparation of the annual accounts, the applicable accounting standards had been followed and that there are no material departures;

(b) We have selected such accounting policies in consultation with the Statutory Auditors and have 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 of the company for that period;

(c) We have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013, for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities;

(d) The annual accounts have been prepared on a going concern basis;

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

At present the equity shares of the Company are listed on The Bombay Stock Exchange at Mumbai. The Company confirms that it has paid Annual Listing Fees due to The Bombay Stock Exchange for the year 2024-25.

As the Members are aware, your Companys shares are tradable compulsorily in electronic form and your Company has established connectivity with National Securities Depository Limited /Central Depository Services (India) Limited (CDSL). In view of the numerous advantages offered by the depository system, the Members are requested to avail the facility of Dematerialization of the

Companys shares on NSDL & CDSL. The ISIN allotted to the Companys Equity shares is

INE410G01010. The Company is pursuing the shareholders, holding the shares in physical form for dematerialization of their shares.

There are no loans, guarantees or investments made under section 186 of the Companies Act, 2013.

The Management Discussion and Analysis Report as required Regulation 34(3) and 53(f) of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 With Stock Exchange forms part of this report as Annexure-V.

The "Internal Complaints Committee" constituted as per Section 4 (1) of Sexual harassment of women at work place (Prevention, Prohibition and Redressal) Act, 2013 has the following members.

During the year under review, no complaints of harassment at the workplace were received by the committee.

Your Directors place on record their appreciation of the financial assistance and support extended by HDFC and State Bank of India. The Directors thank the shareholders for their continued confidence and trust placed by them with the Company. The Board also thanks all categories of employees of the Company for their dedicated and sincere services.

We have conducted the Secretarial Audit pursuant to Section 204 of the Companies Act, 2013, on the compliance of applicable statutory provisions and the adherence to good corporate practices by

Divyashakti Limited (hereinafter called "the Company"). Secretarial Audit was conducted in a manner that provided us a reasonable basis for evaluating the Corporate Conducts/Statutory Compliances and expressing our opinion thereon.

Based on our verification of the Companys books, papers, minutes books, forms and returns filed and other records maintained by the Company and also the information provided by the Company, its officers, agents and authorized representatives during the conduct of the secretarial audit, we hereby report that in our opinion, the Company has, during the audit period covering the financial year ended on 31^st March 2024 complied with the statutory provisions listed hereunder and also that the Company has proper Board-processes and compliance mechanism in place to the extent, in the manner and subject to the reporting made hereinafter:

We have examined the books, papers, minute books, forms and returns filed and other records maintained by the Company for the financial year ended on 31^st March 2024 according to the provisions of:

Board of India Act, 1992 (‘SEBI Act):-

a) The Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 2011;

b) The Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations, 2015;

c) The Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2009; Not Applicable during the period under review;

d) The Securities and Exchange Board of India (Share Based Employee Benefits and Sweat Equity) Regulations, 2021; Not Applicable during the period under review; e) The Securities and Exchange Board of India (Issue and Listing of Debt Securities) Regulations, 2008; Not Applicable during the period under review;

f) The Securities and Exchange Board of India (Registrars to an Issue and Share Transfer Agents) Regulations, 1993 regarding the Companies Act and dealing with client; Not Applicable during the period under review;

g) The Securities and Exchange Board of India (Delisting of Equity Shares) Regulations, 2009; Not Applicable during the period under review;

h) The Securities and Exchange Board of India (Buyback of Securities) Regulations, 2018; Not Applicable during the period under review;

i) The Securities Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulation, 2015; and

j) The Securities and Exchange Board of India (Depositories and Participants) Regulations, 2018. We have also examined compliance with the applicable clauses of the following:

(i) Secretarial Standards issued by The Institute of Company Secretaries of India with relating to Board Meetings and General Meetings. (ii) The Listing Agreements entered into by the Company with BSE Limited (BSE) on 31^st March, 2024 read with the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015. (iii) Other Specifically applicable laws to the Company in respect of which we relied on the Internal Audit report and noted relevant compliances and observations made by the Internal Auditor.

(iv)

(i) As per the information and explanations provided by the company, its officers, agents and authorized representatives during the conduct of Secretarial Audit, we report that the provisions of the Foreign Exchange Management Act, 1999 and the Rules and Regulations made thereunder to the extent of:

(ii) As per the information and explanations provided by the company, its officers, agents and authorized representatives during the conduct of secretarial audit, we report that the Company has not made any GDRs/ADRs or any Commercial Instrument under the financial year under Report.

(i) based on the information provided by the Company, its officers, and its authorized representatives during the conduct of the audit and also on review of quarterly reports by respective Department Heads/Company Secretary/ CEO taken on record by the Board of Directors of the Company, adequate systems and processes and control mechanism exist in the company to monitor and ensure the compliance of with the applicable general laws like Labour laws, competition law and environment laws.

(ii) the Compliance by the Company of applicable financial laws like direct and indirect laws has not been reviewed in this Audit since the same have been subject to review by Statutory Financial Audit and Other designated professionals.

(iii) the Board of Directors of the Company is duly constituted with proper balance of Executive Directors, Non-Executive Directors and Independent Directors.

(iv) adequate notice is given to all Directors to schedule the Board and Committee Meetings, agenda and detailed notes on agenda were sent electronically well in advance or shorter consent were taken in other cases, and a system exists for seeking and obtaining further information and clarifications on the agenda items before the meeting and for meaningful participation at the meeting.

(v) all the decisions at the Board Meetings and Committee Meetings have been carried out unanimously as recorded in the Minutes of the meetings of the Board of Directors or Committee of the Board, as the case may be.

(i) The Company, vide its Boards approval dated July 31, 2023, has appointed Ms. Nilima Kumari (Membership No. 66577) as the Company Secretary and Compliance Officer, effective from July 1, 2023.

(ii) Mr. Mohan Krishna Pamidimukkala (DIN: 02032808) and Mr. Srinivas Karunendra Jasti (DIN: 01021857) have been appointed as a Non-Executive and Independent Directors of the Company. This appointment, effective from February 11, 2024, for a tenure of five years, was ratified through a Circular Resolution dated February 23, 2024, and subsequently endorsed by the Shareholders via Postal Ballot.

(iii) Mr. Nallapati Sai Venkateshwara Prasad (DIN: 07426498) was appointed as the Global Marketing Advisor for Overseas Markets. This appointment, effective from February 10, 2024, for a tenure of five years, was ratified during the Board Meeting convened on February 10, 2024, and subsequently endorsed by the Shareholders via Postal Ballot.

(iv) During the period, two MCA Forms were filed late with an additional fee, however, the Compliance has been met by the Company.

(v) The Company have submitted documents in relation to in relation to re-classification of

"Promoter Category" to Public Shareholding Category - Non-Resident Individuals under Regulation 31A of SEBI (Listing Obligations and Disclosure Requirements). However, the approval is pending from BSE.

(i) there are adequate systems and processes in the Company commensurate with the size and operations of the Company to monitor and ensure compliance with applicable laws, rules, regulations and guidelines.

(ii) there were no specific events/actions in pursuance of the above referred laws, rules, regulations, etc., having a major bearing on the Companys affairs except as reported in the Financial Audit

Report.

(Pursuant to clause (h) of sub-section (3) of section 134 of the Act and Rule 8(2) of the Companies (Accounts) Rules, 2014)