Mafatlal Industries Ltd

To

The Members,

Your Board of Directors are pleased to present the 110^th Annual Report on the business and operations of the Company and the

Audited Financial Statements for the financial year ended on March 31, 2024.

The financial results of the Company are as under:

in Crores

During the financial year 2023-24 India continued its growth trajectory despite global disruptions. This growth was supported by continuing strength in domestic demand, a rising working-age population and proactive Government policies. Similarly, the

Company has also showcased significant improvement in its financial performance, maintaining its leadership position in the school and corporate uniform segment, with an enhanced robust supply chain network across the country, backed by successful implementation of tenders with various State Governments.

During the financial year under review, the Company reported a Total Income of 2,142.22 Crores, an EBITDA of 109.37 Crore and a Net Profit 79.04 Crores. The Company reported 51% increase in total income, a 48% growth in EBITDA, and a growth of 96% in profit before tax due to improved operational performance and non-core asset monetization.

Duringthe repaid long-term borrowings amounting to 29.15 Crores. The company expresses gratitude to all the banks and financial institutions for having stood by the Company for its growth and financing requirements. MIL has not granted any loan, given any guarantee, or made any investments as referred to in Section 186 of the Companies Act, 2013.

During the financial year under review, Acuite Ratings &

Research Limited assigned the credit rating ‘ACUITE BBB' with stable outlook for long-term facilities and ‘ACUITE A3+' (Upgraded) for short term facilities.

Care Ratings Limited (CARE) upgraded the credit rating during the year to ‘CARE BBB' with stable outlook for long-term facilities with a tenure of more than one year and ‘CARE A3+' for short-term facilities with a tenure of up to one year.

A detailed analysis of the financial results has been provided in the Management Discussion and Analysis Report, which forms a part of this Report.

While the Company has made profit during the year, the

Board of Directors regrets its inability to declare dividend in view of past accumulated losses. It may be noted that the

Company has filed Scheme of the Arrangement ("Scheme") between the Company and its Shareholders for reduction and reorganization of its capital. The past accumulated losses will be adjusted against various items of Reserves in the Balance Sheet. Your attention is drawn to para captioned ‘Scheme of the Arrangement for capital reduction and capital reorganization' for more details.

Pursuant to the applicable provisions of the Companies Act, 2013 (‘the Act') read with the Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) Rules, 2016 (‘the IEPF Rules'), during the year, unclaimed dividend amounting to 7,69,458/- was transferred by the

Company to the Investor Education and Protection Fund (‘IEPF'), established by the Government of India.

Further, a total of 8,87,845 shares were transferred to the demat account of the IEPF, in accordance with IEPF Rules, as the dividend was not claimed by the shareholders for seven years. Details of the shares and dividend transferred to the IEPF account are available on the website of the Company at www.mafatlals.com/investors/

During the year, the Company allotted an aggregate of

9,05,500 fully paid-up equity shares of 2/- each under the Mafatlal Employee Stock Option Scheme 2017. Accordingly, the subscribed and paid-up equity share capital of the Company increased from 14,11,94,860/- to 14,30,05,860/- consisting of 7,15,02,930/- equity shares of 2/- each. There was no issue of equity shares with differential rights related to the dividend, voting, or otherwise, and no buyback of shares.

The Board of Directors at their meeting held on November 14,

2022, approved the Scheme of the Arrangement (‘Scheme') between the Company and its Shareholders for reduction and reorganization of capital of the Company wherein the credit balances of various items of Reserves in the Balance Sheet would be adjusted against the entire debit balance of Retained Earnings. The scheme of the Company does not prejudicially affect the Company or its Shareholders or any other Stakeholders. It also does not in any way adversely affect the operations of the Company or its ability to honor its commitments. After the receipt of No Objection Letters from BSE Ltd and based on the direction of the Hon'ble National Company Law Tribunal, Ahmedabad Bench (‘Tribunal') separate meetings of the Equity Shareholders, the Secured Creditors, and the Unsecured Creditors of the Company were held on January 24, 2024, to approve the scheme.

The National Company Law Tribunal, Ahmedabad (‘NCLT'), vide its order dated April 29, 2024 (the ‘NCLT order') has approved the Scheme with the Appointed Date / Effective Date as March 31, 2024. Against this, the Company has filed an interlocutory application on May 6, 2024 seeking modification with a plea to reinstate the Appointed date of April 1, 2022 in the

NCLT order, in accordance with the Scheme filed

10, 2023. The NCLT order with respect to the interlocutory application is awaited. The Company proposes to give the accounting effect prescribed in the Scheme on receiving the approval for the aforesaid interlocutory application from the NCLT which is supported by a legal opinion obtained by the Company. Once the order pursuant to such application is passed by the Tribunal, the Company shall give effect to the Scheme in the books of accounts.

The Scheme, Voting Results along with Scrutinizer's Report, Tribunal's Order, and other documents are available on the website of the Company at www.mafatlals.com/investors/

Pursuant to the requirements of the Companies Act, 2013, Mr.

Priyavrata H. Mafatlal (DIN 02433237), retires by rotation at the ensuing Annual General Meeting and, being eligible, offers himself for re-appointment.

The first tenure of five years of Mr. Atul K. Srivastava (DIN: 00046776), Independent Director, expires on August 4, 2024. The Board of Directors at its Meeting held on May 27, 2024, on the recommendation of the Nomination and Remuneration Committee and subject to the approval of the members of the Company in the 110^th Annual General meeting, Mr. Atul K Srivastava will be appointed as an Independent Director for a second term of five years from August 5, 2024, up to August 4,

2029, and that such term be continued notwithstanding that he shall cross the age of 75 years during such tenure.

On May 27, 2024, the Board of Directors on the recommendation of the Nomination and Remuneration Committee and subject to approval from members of the Company in the 110^th Annual General meeting, appointed

Mr. Abhay Jadeja (DIN: 03319142) and Mr. Ashutosh Bishnoi (DIN: 02926849), as Independent Directors for a period of five years from May 27, 2024 to May 26, 2029.

As required under provisions of the Act and Listing Regulations, all Independent Directors of the Company have confirmed that they meet the requisite criteria of independence. None of the Directors are disqualified under the provisions of the Companies Act, 2013.

As per provisions of Section 196(3)(a) of the Companies Act, 2013, no company shall appoint or continue the employment of any person as managing director, whole-time director or manager who is below the age of twenty-one years or has attained the age of seventy years, provided that appointment of a person who has attained the age of seventy years is made by passing a Special Resolution in which case the explanatory statement annexed to the notice for such motion shall indicate the justification for appointing such person. Mr. Hrishikesh A. Mafatlal (DIN: 00009872), the Executive Chairman of the Company, will attain the age of 70 (seventy) years on November 24, 2024. On May 27, 2024, the Board of Directors on the recommendation of the Nomination and Remuneration Committee and subject to approval from members of the Company in the 110^th Annual General meeting, approve the proposal to continue Mr. Hrishikesh A. Mafatlal as the Executive Chairman after attaining the age of

70 years, on the existing terms and conditions duly approved by the members in the 107^th Annual General Meeting through a Special Resolution.

The Board recommends the appointment / re-appointment of the above Directors for approval. The brief details of the Directors proposed to be appointed / re-appointed, as required under Regulation 36 of SEBI Listing Regulations, are provided in the Notice of Annual General Meeting.

During the year under review, there has been no change in Key Managerial Personnel of the Company.

The Company received annual declarations from all

Independent Directors of the Company, confirming that they meet the criteria of ‘independence' provided in Section 149(6) of the Companies Act, 2013 and Regulations 16(1)(b) and 25 of the SEBI (Listing Obligations and Disclosure Requirements)

Regulations, 2015. There was no change in the circumstances which could affect their status as Independent Directors during the financial year.

The Independent Directors met on March 28, 2024, without the attendance of Non-Independent Directors and members of the Management. The Independent Directors reviewed the performance of the Non-Independent Directors and the Board as a whole, and of the Chairman of the Company after considering the views of Executive Directors and Non-Executive Directors. The Independent Directors also assessed the quality, quantity, and timeliness of information flow between the Company's Management and the Board necessary for them to effectively perform their duties.

Pursuant to the applicable provisions of the Companies Act, 2013, as amended from time to time and Regulations

17 and 25 of the SEBI (Listing Obligations and Disclosure Requirements), Regulations, 2015, the Board has carried out an annual performance evaluation of its own performance, of individual Directors as well as the evaluation of the working of its Audit, Nomination and Remuneration, and other Committees. The various criteria considered for evaluation of Whole Time / Executive Directors included qualification, experience, knowledge, commitment, integrity, leadership, engagement, transparency, analysis, decision making, governance etc. The Board commended the valuable contributions and the guidance provided by each Director in achieving the desired levels of growth. This is in addition to evaluation of Non-Independent Directors and the Board as a whole by the Independent Directors at their separate meeting being held every year.

The Company's policy on Directors' appointment and remuneration and other matters provided in Section 178(3) of the Companies Act, 2013, is available on the website of the Company at www.mafatlals.com/investors/

Pursuant to requirements under Section 134(5) of the

Companies Act, 2013, the Board, to the best of its knowledge and belief, confirms that: i. the applicable accounting standards have been followed in preparation of annual accounts for the Financial Year ended on March 31, 2024, and proper explanations have been furnished relating to material departures. ii. accounting policies have been selected and applied consistently and prudent judgments and estimates have been made to give a true and fair view of state of affairs of the Company at the end of financial year and of profit and loss of the Company for the year under review. iii. proper and sufficient care has been taken for maintenance of adequate accounting records in accordance with provisions of the Act, for safeguarding assets of the Company and for preventing and detecting fraud and other irregularities. iv. the annual accounts for the financialyear ended on March 31, 2024, have been prepared on a going concern basis. v. internal financial controls are in place and that such financial controls are adequate and operating effectively. vi. adequate systems to ensure compliance with the provisions of all applicable laws are in place and operating effectively.

The shareholders of the Company at the 103^rd Annual General

Meeting held on August 2, 2017, consented to the creation of 34,75,000 (after adjustment of the sub-division of equity shares of 10/- each to 2/- each) equity shares Employee Stock Option pool under the Mafatlal Employee Stock Option

Scheme, 2017 (ESOP Scheme, 2017) by way of a Special

Resolution.

ESOP Scheme, 2017 is in conformity with the Securities Exchange Board of India (Share Based Employee Benefits) Regulations, 2014, as amended and modified from time to time, as well as with the SEBI (Share Based Employee

Benefits and Sweat a certificate from Umesh Ved & Associates, the Secretarial

Auditors of the Company, will be placed at the ensuing 110^th Annual General Meeting for inspection by members.

The detailed information on capital and reserves are provided in the attached audited accounts of the Company. The further disclosures, as required under the SEBI (Share Based

Employee Benefits and Sweat Equity) Regulations, 2021 and other applicable provisions, are provided in ANNEXURE- D to this Report with other disclosures.

The financial position of the subsidiary company is given in the Notes to Consolidated Financial Statements. The Company does not have any material subsidiary or associate Company. The Policy on Material Subsidiary, framed by the Board of Directors of the Company, is available on www. mafatlals.com/investors/ The audited accounts of Mafatlal Services Limited, subsidiary of the Company, for the financial year ended on March 31, 2024, has been placed on the Company's website www.mafatlals. com/investors/. It is open for inspection by any member at the Registered Office of the Company on all working days (Monday-Friday) between 3.00 pm to 5.00 pm. The Company will make these documents available on request by any member of the Company who may be interested in obtaining the same.

As reported earlier, Al Fahim Mafatlal Textiles LLC. (UAE) remained non-operational and since there was no foreseeable beneficial future, the Board of Directors of the Company and the joint venture partner decided on a voluntary winding-up/ closure of that entity. The Company wrote to the Ministry of Commerce, Department of Economic Development, Dubai, that there was no operation of the said joint venture company from 2016. Accordingly, the Company has not applied for a renewal of license to continue to operate the business there. The audited accounts of that JV company are not consolidated with the Accounts of the Company from 2018-19 onwards. There is no Company that has become or ceased to be subsidiary, associate or joint venture of the

Company during the financial year.

The statement containing salient features of the financial statement ofsubsidiarycompany(Pursuanttofirstproviso to sub-section (3) of Section 129 read with Rule 5 of Companies (Accounts) Rules, 2014) is further annexed as part of the

Notes forming a part of the Consolidated Financial Statement as FORM AOC-1.

The Company does not have ‘Deposits' as contemplated under Chapter V of the Companies Act, 2013. Further, it has

Regulations, 2021. In this regard, not invited or accepted any such deposit during the financial year ended on March 31, 2024.

There are no material changes and commitments in the business operations of the Company for the financial year ended on March 31, 2024, to the date of the signing of the

Directors' Report.

The existing IFCs are adequate and commensurate with the nature, size, and complexity of the business and business processes followed by the Company. The Company has a well laid down framework for ensuring adequate internal controls over financial reporting.

Based on the examination, the Management confirms that the Company has used accounting software for maintaining its books of account which has a feature of audit trail (edit log) and that has operated throughout the year for all relevant transactions recorded in the software except that audit trail was not available in case of modification with certain specific functionality in the application and for direct database changes. Further, the Company, has not noticed any instance of audit trail feature being tampered with in cases where the audit trail feature was enabled. Further, the Company also has set up practices for daily back up of the entire database and application in remote locations.

As of March 31, 2024, 765 equity shares have been transferred into an Unclaimed Share Suspense Account in terms of

Regulation 39(4) read with Schedule VI to the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

The voting rights on the said shares shall remain frozen till the rightful owner of such shares claims the shares. The rightful owner can still claim his/ her shares from the suspense account after complying with the procedure laid down in the statute regarding the same.

The relations between the employees and the Management remained cordial and harmonious during the financial year under review. There were 1216 (1121 in the previous financial year) permanent employees on the payroll of the Company as on March 31, 2024.

Mafatlal Industries Limited, a part of the Arvind Mafatlal

Group, has been fulfilling its CSR duties for more than 52 years, much before CSR had been statutorily prescribed. The Company's work in this domain has focused on poverty alleviation, healthcare, education for young children, and upliftment of women across rural India. In conformity with the provisions of Section 135 of the Companies Act, 2013, read with the Companies (Corporate Social Responsibility Policy)

Rules, 2014, the Company has formed a CSR Committee, comprising Mr. Hrishikesh A. Mafatlal, who is the Chairman of the said Committee, and Mr. Atul Kumar Srivastava, and Mr. Sujal Shah, both of whom are Independent Directors.

Based on the recommendations of the CSR Committee, the Board of Directors formulated a CSR Policy encompassing the Group's and the Company's philosophy, underlying its CSR activities. It laid down the guidelines and mechanisms for undertaking socially relevant programs in conformity with the statutory provisions. This policy is posted on the website of the Company and available on www.mafatlals.com/investors/.

As per the provisions of Section 135, read with the Section

198 of the Companies Act, 2013, due to the losses incurred by the Company over the years, there was no CSR obligation for financial year 2023-24. Accordingly, there were no meetings of the CSR Committee during the year. The statutory disclosures with respect to CSR is annexed hereto, as an Annexure-E, which is forming a part of this report.

RELATED PARTY TRANSACTIONS and material orders transactions There are no materially significant undertaken by the Company during the financial year. The

Company's policy for related party transactions is posted on the website of the Company and available on www.mafatlals. com/investors/.

The details of all transactions with the related parties are disclosed in Notes, forming a part of the financial statements, financia annexed to the financialstatements for the 2023-24 and annexed as a part of this report in AOC- 2, as an

Annexure-A.

All the related party transactions entered into by the Company are in the ordinary course of business and on an arm's length basis, for which requisite prior approvals from the Audit Committee and the Board of Directors were obtained. None of the related party transactions require approval from the shareholders.

As required under Schedule V (B) and (C) of the SEBI (LODR)

Regulations, 2015, Management Discussion and Analysis

Report as well as Corporate Governance Report, are attached herewith and marked as Annexure I and II respectively and the same forms the part of this Directors' Report.

The details of Board meetings and the attendance of the Directors are provided in the Corporate Governance Report, which forms a part of this Report.

Details of the various committees constituted by the Board of Directors, as per the provisions of the SEBI (Listing Obligations and Disclosure Requirements)

Regulations, 2015 and the Companies Act, 2013, are provided in the Corporate Governance Report and forms a part of this Report.

The Company adopted a Whistle Blower Policy and established a necessary vigil mechanism for employees and Directors to report concerns about unethical activities. No person had been denied access to the Chairman of the Audit Committee. The said policy is uploaded on the website of the Company at www. mafatlals.com/investors/.

There are no significant by the Regulators or Courts or Tribunals, which would impact the going concern status and the Company's operations.

The Annual Return of the Company as on March 31,

2024, is available on the website of the Company at www.mafatlals.com/investors/

The Company has in place an Anti-Sexual Harassment Policy in line with the requirements of the said Act, read with other applicable provisions. Internal Complaints

Committees are constituted and regularly redress complaints, if any. During the financial year under review, no complaint was received with regard to sexual harassment from any employee of the Company and necessary disclosure for the same has been given to the concerned Government departments for respective locations.

The Company has taken appropriate insurance for all assets against foreseeable perils. In line with the requirements of Regulation 25(10) of the SEBI (LODR) Regulations 2015, the Company has in place a directors and officers liability insurance policy.

The Directors have devised proper systems and processes for complying with the requirements of applicable Secretarial Standards (SS) issued by the Institute of Company Secretaries of India (ICSI), and such systems are adequate and operating effectively.

Business Risk Evaluation and Management is an ongoing process within the organization. The Company has a comprehensive risk management framework to identify, monitor, and minimize risks, while identifying business opportunities.

As per Regulation 21(5) of SEBI (Listing Obligations and Disclosure Requirements) Regulation, 2015, Risk

Management Committee is applicable to top 1000 listed entities, determined on the basis of market capitalization, as at the end of the immediate previous financial year.

Since the Company does not feature in this list, the said regulation is not applicable.

During the financial year under review, the Board of

Directors of the Company reviewed all changes and adopted applicable policies to comply with the recent amendments in the Companies Act, 2013 and SEBI Regulations.

Accordingly, the updated policies are uploaded on website of the Company at www.mafatlals.com/ investors/.

(k) No proceedings are made or pending under the insolvency and Bankruptcy Code, 2016 and there is no instance of one-time settlement with any reservation orBank or Financial Institution.

(l) No shares with differential voting rights and sweat equity shares have been issued.

(m) None of the Auditors of the Company have reported any fraud as specified under the second proviso of Section 143(12) of the Act.

(n) There has been no change in the nature of business of the Company.

(o) There was no instance of one-time settlement with any Bank or Financial Institution.

(p) As there was no buyback of shares during the year, the Company has nothing to disclose with respect to buyback of shares.

Pursuant to the provisions of Section 139 and other applicable provisions, if any, of the Companies Act, 2013 and the Rules made thereunder, M/s. Price Waterhouse Chartered Accountants LLP (Firm registration

No.012754N/N500016) were re-appointed as statutory auditorsoftheCompanyforaperiodoffive years by the members of the Company at the 108^th Annual General

Meeting (AGM) to hold officefrom the conclusion of the

108^th AGM till the conclusion of the 113^th AGM to be held in 2027.

The Company received written consent and a certificate of eligibility in accordance with Sections 139, 141 and other applicable provisions of the Companies Act and Rules issued thereunder, from M/s. Price Waterhouse

Chartered Accountants LLP. They confirmed to hold a valid certificate issued by the Peer Review Board of the

Institute of Chartered Accountants of India (ICAI) as required under listing regulations.

M/s. Price Waterhouse Chartered Accountants LLP,

Chartered Accountants, (Firm registration No.012754N/ N500016) issued Auditors Report for the financial year ended on March 31, 2024, and there are no qualifications in Auditors' Report.

Pursuant to the provisions of Section 204 of the

Companies Act, 2013 and the rules made thereunder, Mr. Umesh Ved (Umesh Ved & Associates), Company Secretaries in practice, was appointed to undertake the Secretarial Audit of the Company. The Secretarial Audit

Report for the financial year 2023-24 is annexed, which forms a part of this report, as Annexure III. There were adverse remarks given noqualifications, by Secretarial Auditor of the Company in the Secretarial Audit Report of the Company.

Pursuant to the provisions of Section 148 of the

Companies Act, 2013 read with relevant rules made thereunder, maintenance of cost records for Company's ‘Textiles' products is required and accordingly such accounts and records are made and maintained by the

Company. The cost audit for the financial year 2022-23 was carried out in time, and the Cost Audit Report with requisite data, in the prescribed form CRA-4, has already been filedwith Ministry of Corporate Affairs (MCA) within the permissible time, last year.

Further, in accordance with the said applicable provisions, the audit of the cost records of the Company for the financial year 2023-24 relating to the ‘Textiles' products as required is being carried out by Cost Auditors M/s.

B. Desai & Co. (Firm Registration No. 005431) Cost Auditors. The Cost Audit Report will be filedon or before the due date with the MCA in due course of time after the same is approved by the Board of Directors of the Company within the permissible timeline.

On the recommendation of the Audit Committee, the

Board has in their Meeting held on May 27, 2024, re- appointed M/s. B. Desai & Co. (Firm Registration No.

005431), Cost Auditors to audit cost records in respect of ‘Textiles' products as required for the financial year 2024-25. The remuneration payable to the Cost Auditor has been proposed for approval by the Members of the Company at the ensuing Annual General Meeting.

M/s. Aneja Associates, a reputed firm of Chartered

Accountants, has carried out the Internal Audit of the Company for the financial year 2023-24. On the recommendation of the Audit Committee, the Board has in their Meeting held on May 27, 2024, appointed

M/s. Aneja Assurance Pvt. Ltd., as an Internal Auditors of the Company for the financial year 2024-25.

The Audit Committee of the Board of Directors, in consultation with the Internal Auditors, formulates the scope, functioning, periodicity and methodology for conducting the internal audit.

Information required under section 134 (3)(m) of the

Companies Act, 2013 read with the Companies (Accounts)

Rules, 2014 is enclosed as ANNEXURE - B and forms part of the Report.

The information required pursuant to Section 197 read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 in respect of employees of the Company is enclosed as ANNEXURE - C and forms a part of the Report.

The Directors wish to place on record their appreciation of the devoted services of the workers, staff and the officers for their continued contribution to the Company. They also express appreciation to the Company's customers, business associates, banks, Government departments, agencies, service providers, suppliers, and other shareholders for their continued support and cooperation.