GTN Textiles Ltd

To the Members,

Your Directors' present the 19^th (Nineteenth) Boards' Report together with the Audited Statement of Accounts (Standalone & Consolidated) for the year ended 31^st March 2024.

1. FINANCIAL RESULT

The Standalone and Consolidated financial highlights of your Company for the year ended 31st March 2024 are summarized as follows:

(Rs. In Crores)

*Since Cotton Yarn manufacturing operations were discontinued during the second quarter of FY 2022-23, there is no revenue / expenses from operations for FY 2023-24.

2. FINANCIAL PERFORMANCE

Your Board would like to state that Company's cotton yarn manufacturing operations from its Aluva, Kerala Plant was discontinued wef. 13.06.2022 on account of unsustainable wages, paucity of working capital and steep increase in cotton prices, which resulted in lower capacity utilization and making the operations unviable. In view of this, there was no operating revenue for the financial year 2023-24. Fixed and other expenses incurred were disclosed under the heading "Profit/(Loss) for the year from discontinued operations" and breakup of the same is given herein below.

Amount Rs. In Crs.

In view of the discontinued operations, figures of the current financial year are not comparable with that of the previous year.

3. STATUS OF DISPOSAL OF PROPERTY PLANT AND EQUIPMENT

Pursuant to the stoppage of manufacturing operations of the company with effect from 13.06.2022, your Board has taken effective steps to sell the assets of the company and to pay the dues of the workmen & employees, bankers, creditors etc. The company's bankers have issued NOC on 26.05.2022 for sale of the assets and to repay their dues.

Pursuant to the NOC, the company has sold its entire machinery at its Plant in Aluva and Offices in Mumbai and from the said sale proceeds paid the dues of bankers to the extent of Rs. 36.62 Cr till date. The Company has entered into an MOU on 08.04.2024 for sale of 24.67 acres of land for a consideration of Rs.80 Crores. Accordingly, we have requested the lenders to extend the validity of the NOC issued up to 31.10.2024, to enable sale of the aforesaid 24.67 acres of land and from the sale proceeds to repay the balance dues of the bankers along with interest without any haircut of whatsoever. The Bankers have recently approved extension of NOC issued for sale of the aforesaid land and from the sale proceeds, repay the bank dues and close the NPA account of the Company. Your Board expects to complete sale within the time allowed and also pay entire dues as stipulated by the Lenders.

With the surplus funds as would be available after the said land sale, the company intends to carry on outsourcing of cotton yarn manufacturing / trading in cotton yarn or any other business as permitted in the object clause of the Memorandum of Association for better prospects of the company.

4. DIVIDEND

In view of the losses for the financial year ended 31^st March 2024, the Board of Directors, regret their inability to recommend any dividend for the year 2023-24.

5. CONSOLIDATED FINANCIAL STATEMENTS

The consolidated financial statements, prepared in accordance with the applicable Indian Accounting Standards issued by the Institute of Chartered Accountants of India and Regulation 33 of the SEBI (LODR) Regulations, 2015 together with Auditors

Report. The Auditors report on the consolidated financial statements also attached. The same is with unmodified opinion (unqualified).

6. SUBSIDIARY, JOINT VENTURE AND ASSOCIATE COMPANY

The Company did not have any Subsidiary or Joint

Venture during the financial year. The Company has one

Associate Company, Patspin India Limited.

7. MANAGEMENT DISCUSSION AND ANALYSIS

As mentioned in the Financial Performance above, the manufacturing operations of the company has been suspended with effect from 13.6.2022 and the company has not yet commenced trading in cotton yarn or any other business as permitted in Object Clause in the Memorandum of Association. Normal Business challenges are expected to remain as the Company operates in a competitive sector. The Company has adequate systems of Internal Controls commensurate with its size and operations to ensure orderly and efficient conduct of business. These controls ensure reduction and detection of fraud and error, adequacy and completeness of the accounting records and timely preparation of reliable financial information.

With the reasons above, the Management Discussion and Analysis Report on the operations of the Company, as required under the SEBI (LODR) Regulations, 2015 is not separately attached.

8. PUBLIC DEPOSITS

The Company does not have "Deposits" as contemplated under Clause V of the Companies Act 2013. Further, the company has not accepted any such deposits during the year ended 31st March 2024.

9. CORPORATE GOVERNANCE

The Company has taken the requisite steps to comply with the recommendations concerning Corporate Governance.

A separate statement on Corporate Governance together with a certificate from the

Secretary of the Company regarding compliance of conditions of Corporate Governance as stipulated under SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 forms part of this Annual Report.

10. DIRECTORS

All the Directors have affirmed that they have complied with the Company's Code of Business Conduct & Ethics. In terms of requirements of the Listing Regulations, the Board has identified core skills, expertise and competencies of the Directors in the context of the Company's businesses, which are detailed in the Report on Corporate Governance.

Further, in terms of Section 150 of the Act read with Rule

6 of the Companies (Appointment and Qualification of

Directors) Rules, 2014, Independent Directors of the

Company have confirmed that they have registered themselves with the databank maintained by the Indian Institute of Corporate Affairs. The Independent Directors who were required to clear the online proficiency self-assessment test have passed the test. In the opinion of the Board, the Independent Directors fulfilthe conditions of independence, are independent of the management, possess the requisite integrity, experience, expertise, proficiency and qualifications to

Board of Directors

During the year under review there is no change in the composition of the Board of Directors and the Key Managerial Personnel.

Pursuant to the requirements of the Companies Act, 2013, Smt. Kalpana Mahesh Thakker(DIN 08601866), retires by rotation at the ensuing Annual General Meeting and, being eligible, offers herself for reappointment. The Board recommends the appointment / re-appointment of the above Director for approval. The brief details of the Director proposed to be appointed / re-appointed, as required under Regulation 36 of SEBI Listing Regulations, are provided in the Notice of Annual General Meeting.

11. KEY MANAGERIAL PERSONNEL

Shri B.K. Patodia, Managing Director, Shri. M Achuthan,

Chief Financial Officer and Shri E.K.Balakrishnan,

Company Secretary were the Key Managerial Personnel of your Company, in accordance with the provisions of Section 203 of the Companies Act 2013 during the year under review.

12. NUMBER OF MEETINGS OF THE BOARD

The Board of Directors met 5 (Five) times during the financial year 2023-24. The details of the meetings of the Board of Directors of the Company convened and attended by the Directors during the financialyear 2023-

24 are given in the Corporate Governance Report which forms part of this Annual Report.

13. MEETING OF INDEPENDENT DIRECTORS

The Independent Directors of the Company met on 22^nd February, 2024, without the presence of Non-Independent Directors and members of the management to review the performance of Non-Independent Directors and the Board of Directors as a whole; review the performance of the Chairman and Managing Director of the Company and to assess the quality, quantity and timeliness of flow of information between the management and the Board of Directors. The performance evaluation of the Independent Directors was carried out by the entire Board.

14. DIRECTORS' RESPONSIBILITY STATEMENT

The Board of Directors acknowledge the responsibility for ensuing compliances with the provisions of Section 134(3)(c) read with Section 134(5) of the Companies Act, 2013 in the preparation of Annual Accounts for the year ended on 31st March, 2024 and state that: 1. in the preparation of the Annual Accounts, the applicable Indian Accounting Standards have been followed and there are no material departures from the same 2. the 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 your company as at 31st March

2024 and of the profit or loss of the company for that period;

3. the Directors 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 your company and for preventing and detecting fraud and other irregularities; 4. the Directors have prepared the Annual Accounts 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 have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

Pursuant to the provisions of Companies Act and Listing Regulations, the Board has carried out the annual performance evaluation of its own performance, of Committees of the Board and of the Directors individually. A structured questionnaire was prepared after taking into consideration inputs received from the Directors, covering various aspects of the Board's functioning such as adequacy of the composition of the Board and its Committees, Board culture, execution and performance of specified duties, obligations and governance.

A separate exercise was carried out to evaluate the performance of individual Directors, who were evaluated on parameters such as level of engagement and contribution, independence of judgement, safeguarding the interest of the Company.

16. FAMILIARISATION PROGRAMME FOR DIRECTORS

At the time of appointing a Director, a formal letter of appointment is given, which interalia explains the role, function, duties and responsibilities expected as a Director of the Company. This is to provide insights into the Company to enable the Independent Directors to understand its business in depth, to familiarize them with the process, business and functionaries of the Company and to assist them in performing their role as Independent Directors of the Company. The Director is also explained in detail the Compliance required under the Companies Act, 2013, SEBI (LODR) Regulations,

2015 and other relevant regulations and affirmation taken with respect to the same.

The Chairman and the Management has also one to one discussion with the Directors to familiarize with the company's operations.

M/s. L.U.Krishnan& Co. (Regn.No.001527S) Chartered Accountants, Chennai were appointed as the Auditors of the Company for second term of 5 years at the 17^thAnnual General Meeting (AGM) held on 30^th

September, 2022 to hold office till the conclusion of the

22^ndAGM of the Company to be held in the year 2027. The Auditors' Report for FY 2023-24 does not contain any qualifications, reservations or adverse remarks.

18. SECRETARIAL AUDIT REPORT

Pursuant to the provisions of Section 204 of the Companies Act, 2013 and rules made there under, the Company has appointed Shri. MRL Narasimha (C.P No. 799), Practicing Company Secretary to undertake the Secretarial Audit of the Company.

Secretarial Audit Report issued by Shri. MRL Narasimha, Practicing Company Secretary in Form MR-3 forms part to this report Annexure I. The said report does not contain any observation or qualification requiring explanation or adverse remark

19. COST AUDITORS

In terms of the Companies (Cost Records and Audit) Amendment Rules, 2014 published vide GSR No.

01(E) on 31^st December 2014 issued by the Central Government in terms of the powers conferred by Section 148 of the Companies Act,2013, due to the reduction of the turnover from the auditable product as per the previous audited financial statement and also there is no manufacturing operations being held in the company, the cost audit is not mandatory during the next financial year 2024-25. Hence Board has not recommended the appointment of Cost Auditor for the next FY 2024-25.

20. EXTRACT OF ANNUAL RETURN

Pursuant to provisions of Section 134(3)(a) and Section 92(3) of the Companies Act, 2013, read with Rule 12 of the Companies( Management and Administration) Rules, 2014, the Annual Return of the company for the Financial Year 31^st March 2024 is uploaded on the website of the company and can be accessed at the www.gtntextiles.com

21. RELATED PARTY TRANSACTIONS

All transactions entered with related parties were on arm's length basis and in the ordinary course of business.

There were no materially significant the related parties during the financial year and were not in conflict with the interest of the company. Thus, a disclosure in Form AOC -2 in terms of Section 134 of the Companies Act 2013 is not required. All related party transactions are placed before the Audit Committee as also before the Board for approval.

The Board of Directors, as recommended by the Audit Committee, adopted a policy to regulate transactions between the Company and its Related Parties, in compliance with the applicable provisions of the Companies Act 2013, the Rules thereunder and the Listing Regulations. This Policy has been uploaded on the website of the Company.

22. LOANS & INVESTMENTS

Details of loans, guarantees and Investments covered under the provisions of Section 186 of the Companies Act, 2013 are given in the Notes to Financial Statements forming part of this report.

23. CREDIT RATING

The company has stopped cotton yarn manufacturing operations effective from 13.06.2022 and is in the process of selling its assets and repaying the bank dues fully. Due to classification of account as sub-standard, the lenders have not made available any credit facilities to the company. In view of the aforesaid, the external credit rating was not carried out during the year 2023-24.

24. RISK MANAGEMENT

The company has laid down a well-defined risk management mechanism covering the risk mapping and trend analysis, risk exposure, potential impact and risk mitigation process. A detailed exercise is being carried out to identify, evaluate, manage and monitor business risks. The Audit Committee and the Board periodically review the risks and suggest steps to be taken to manage/ mitigate the same through a properly defined framework.

During the year, a risk analysis and assessment was conducted, and no major risks were noticed, which may threaten the existence of the company.

25. VIGIL MECHANISM / WHISTE BLOWER POLICY

The company has a Vigil Mechanism / Whistle Blower Policy to report genuine concerns or grievances. The Vigil Mechanism (Whistle Blower Policy) has been posted on the company's website (www.gtntextiles. com).

26. CORPORATE SOCIAL RESPONSIBILITY (CSR)

Even though the provisions of Section 135 (5) of Companies Act, 2013 regarding Corporate Social Responsibility are not yet attracted, the company has been, over the years, pursuing as part of its corporate philosophy, an unwritten CSR policy voluntarily which goes much beyond mere philanthropic gestures and integrates interest, welfare and aspirations of the community with those of the Company itself in an environment of partnership for inclusive development. transactions with

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

Information required under section 134 (3) (m) of the Companies Act, 2013 read with Rule 8 of the Companies (Accounts) Rules, 2014 is as follows: a) Conservation of Energy The manufacturing operations of the company has been suspended with effect from 13.6.2022 and the company now intends to carry on outsourcing of cotton yarn manufacturing / trading in cotton yarn or any other business as permitted in Object Clause in the Memorandum of Association, and hence it does not consume heavy electricity b) Technology absorption The Company propose to introduce various measures to help the above activities. c) Foreign Exchange Earnings and Outgo Foreign Exchange Earnings – NIL

Foreign Exchange Outgo – NIL

28. INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY

The Company has an effective internal control and risk mitigation system designed to effectively control the operations at its Head Office and Depots. The internal control systems are designed to ensure that the financial and other records are reliable for the preparation of financial statements and for maintaining assets. The

Company has well designed Standard Operating Procedures. Independent Internal Auditors conduct audit covering a wide range of operational matters and ensure compliance with specified standards. Planned periodic reviews are carried out by Internal Audit.

The findings of Internal Audit are reviewed by the top management and by the Audit Committee of the Board of Directors.

Based on the deliberations with Statutory Auditors to ascertain their views on the financial statements including the Financial Reporting System and Compliance to Accounting Policies and Procedures, the Audit Committee was satisfied with the adequacy and effectiveness of the Internal Controls and Systems followed by the company.

29. NOMINATION & REMUNERATION POLICY

The Board of Directors has framed a policy which lays down a framework in relation to remuneration of Directors, Key Managerial Personnel and Senior Management of the Company. This policy also lays down criteria for selection and appointment of Board Members. More details on the same are given in the Corporate Governance Report.

30. INVESTOR EDUCATION AND PROTECTION FUND (IEPF)

In accordance with the applicable provisions of Companies Act, 2013 (hereinafter referred to as "the Act") read with Investor Education and Protection Fund (Accounting, Audit, Transfer and Refund) Rules, 2016 (hereinafter referred to as the "IEPF Rules"), all unclaimed dividends are required to be transferred by the Company to the IEPF, after completion of seven (7) years. Further, according to IEPF Rules, the shares on which dividend has not been claimed by the shareholders for seven (7) consecutive years or more shall be transferred to the demat account of the IEPF Authority. The details relating to shares on which dividends were unclaimed are provided in the General Shareholders Information section of Corporate Governance report forming part of this Annual Report.

31. DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013

The Company has in place an anti-sexual harassment policy in line with the requirements of the sexual harassment of women at the workplace (Prevention, Prohibition and Redressal) Act, 2013. Internal Compliance Committee (ICC) is already been functioned for redressing complaints received regarding sexual harassment. All employees (permanent, contractual, temporary, trainees) are covered under this policy. The Company has not received any complaints under this policy during the year ended 31st March, 2024.

32. PARTICULARS OF EMPLOYEES PURSUANT TO SECTION 134 (3) (q) OF THE COMPANIES ACT, 2013 READ WITH RULE 5 (1) OF THE COMPANIES (APPOINTMENT AND REMUENRATION OF MANAGERIAL PERSONNEL) RULES, 2014

The information required pursuant to section 134 (3) (q) of the Companies Act, 2013 read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 in respect of employees of the company will be provided upon request. In terms of Section 136 of the Act, the Report and Accounts are being sent to the Members and others entitled thereto, excluding the information on employees' particulars which is available for inspection by the Members at the Registered officeof the company during business hours on working days of the company up to the date of the ensuing Annual General meeting. If any Member is interested in obtaining a copy thereof, such member may write to the company in this regard.

33. PERSONNEL & INDUSTRIAL RELATIONS

Industrial Relations were cordial and satisfactory. There were no employees whose particulars are to be given in terms of Section 134(3)(q) of the Companies Act,2013 read with Rule 5(2) and 5(3) of the companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014.

34. SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS

There are no significant and material the Regulators or Courts or Tribunals that would impact the going concern status of your Company and its future operations.

35. GENERAL a) There was no issue of equity shares with differential rights as to dividend, voting or otherwise: and; b) There was no issue of shares (including sweat equity shares) to the employees of the company under any scheme.

36. ACKNOWLEDGEMENT

Your Directors place on record their gratitude to Central Bank of India, State Bank of India and the concerned Departments of the State and Central Government, valuable customer, Employees and Shareholders for their assistance, support and co-operation to the Company.