Candour Techtex Ltd Directors Report

Further, details on the NRC its Meetings, composition and attendance are provided in the Corporate Governance Report, which forms part of this Annual Report.

Stakeholders Relationship Committee:

The Board of Directors has constituted a Stakeholders Relationship Committee: (“SRC”), with its composition, quorum, powers, role and scope in line with the applicable provisions of the Act and SEBI Listing Regulations.

Further, details on the SRC its Meetings, composition and attendance are provided in the Corporate Governance Report, which forms part of this Annual Report.

11. SECRETARIAL STANDARDS:

The Institute of Company Secretaries of India had revised the Secretarial Standards on Meetings of the Board of Directors (SS-1) and Secretarial Standards on General Meetings (SS-2) with effect from October 1, 2017. The Company is in compliance with the provisions of the same.

12. DISCLOSURE FROM INDEPENDENT DIRECTORS:

All Independent Directors have submitted the declaration of Independence, pursuant to the provisions of Section 149(7) of the Act and Regulation 25(8) of the SEBI Listing Regulations, stating that they meet the criteria of Independence as provided in Section 149(6) of the Act and Regulation 16(1)(b) of the SEBI Listing Regulations and they are not aware of any circumstance or situation, which exist or may be reasonably anticipated, that could impair or impact their ability to discharge their duties with an objective Independent judgment and without any external influence. The Board is of the opinion that the Independent Directors of the Company possess requisite qualifications, experience, expertise and hold the highest standards of integrity.

The Independent Directors have also confirmed their registration with the data bank of Independent Directors maintained with the Indian Institute of Corporate Affairs in compliance with requirements of the Companies (Appointment and Qualification of Directors) Rules, 2014.

13. BOARD EVALUATION:

The evaluation framework for assessing the performance of the Directors of the Company comprises of contributions at the Meeting(s) and strategic perspective or inputs regarding the growth and performance of the Company, amongst others.

Pursuant to the provisions of the Act and SEBI Listing Regulations and in terms of the Framework of the Board Performance Evaluation, the Board of Directors have carried out an annual performance evaluation of the Board as-a-whole, performance of various Committees of the Board, and Individual Directors. A separate meeting of the Independent Directors was also held during the financial year under review for the evaluation of the performance of Non-Independent Directors, performance of the Board as-a-whole. The manner in which the evaluation has been carried out has been set out in the Corporate Governance Report, which forms part of this Annual Report.

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

The particulars as required under the provisions of Section 134(3)(m) of the Companies Act, 2013 read with Rule 8 of the Companies (Accounts) Rules, 2014 in respect of conservation of energy, technology absorption, foreign exchange earnings and outgo etc. are furnished in Annexure I which forms part of this Report.

15. STATUTORY AUDITORS AND AUDITORS REPORT:

In terms of the provisions of Section 139 of the Companies Act, 2013 read with the Companies (Audit and Auditors) Rules, 2014, M/s Ambavat Jain & Associates, LLP, Chartered Accountants, Firm Registration No. 109681W was appointed as statutory auditors of the Company to hold office for one term of 5 years till the conclusion of 42nd Annual General Meeting of the Company.

The Auditors have issued their report on the financial statements for the financial year ended March 31, 2025, with an unmodified opinion.

16. REPORTING OF FRAUD

The Auditors have not reported any fraudulent matter under Section 143(12) of the Companies Act, 2013 and therefore no detail is required to be disclosed under Section 134 (3)(ca) of the Companies Act, 2013.

17. SECRETARIAL AUDIT REPORT:

Pursuant to the provisions of Section 204 of the Companies Act, 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company has appointed M/s N L Bhatia and Associates, Company Secretaries, to undertake the Secretarial Audit of the Company and to issue Secretarial Audit Report for the financial year ended on 31^st March, 2025.

The Secretarial Audit Report issued by M/s N L Bhatia and Associates for the financial year ended 31st March, 2025 is set out as “Annexure II” to this Report. The said report does not contain any observation or qualification requiring explanation or comments from the Board under Section 134(3) of the Companies Act, 2013.

18. MAINTENANCE OF COST RECORDS:

The maintenance of cost records as specified by the Central Government under sub section (1) of section 148 of the Companies Act, 2013 read with The Companies (Cost Records and Audit) Rules 2014 is not applicable to the Company.

19. CORPORATE SOCIAL RESPONSIBILITY POLICY

The Company has not developed and implemented any Corporate Social Responsibility initiatives as the said provisions are not applicable to the Company.

20. RISK MANAGEMENT:

The requirement of Risk Management Committee under Regulation 21 of SEBI (Listing Obligations and Disclosures Requirements) Regulation, 2015 is not applicable to the Company as the same is applicable to top 1000 listed entities. The Company has in a place Business Risk Management framework to identify, evaluate business risks and opportunities. This framework seeks to create transparency, minimize adverse impact on the business objectives and enhance the Companys competitive advantage.

There are no risks which in the opinion of the operating management threaten the existence of your Company.

21. INTERNAL FINANCIAL CONTROLS AND THEIR ADEQUECY:

The Company has an Internal Control System, commensurate with the size, scale and complexity of its operations. However, this requires up gradation and improvement under new business environment. The Company is constantly improving the quality and implementing more internal financial controls. The Internal Auditor monitors and evaluates operating systems, accounting procedures and policies at all locations of the Company. Based on the report of internal auditor, the Audit Committee/ Board initiate corrective action in respective areas and advise the operating people about the action taken on such report and thereby strengthen the controls. Significant audit observations and corrective actions thereon are presented to the Audit Committee of the Board.

22. VIGIL MECHANISM / WHISTLE BLOWER POLICY:

The Company has a vigil mechanism named Whistle Blower Policy which is in compliance with the provisions of Section 177 (10) of the Companies Act, 2013 and Regulation 22 of SEBI (Listing Obligations and Disclosures Requirements) Regulation, 2015. The policy deals with instance of fraud and mismanagement, if any. The details of the Whistle Blower Policy are explained in the Corporate Governance Report and also posted on the website of the Company.

23. RELATED PARTY TRANSACTIONS:

During the financial year under review, all transactions entered into by the Company with related parties were in ordinary course of business and at arms length basis and were not considered material as per the provisions of Section 188 of the Act read with the Companies (Meetings of Board and its Powers) Rules, 2014 and Regulation 23 of the SEBI Listing Regulations. Hence, disclosure in form AOC-2 under Section 134(3)(h) of the Act, read with Rule 8 of the Companies (Accounts of Companies) Rules, 2014, is not applicable.

Prior approval of the Audit Committee is obtained for all Related Party Transactions (“RPTs”) which are of a repetitive nature and entered into in the ordinary course of business and at arms length. A statement on RPTs specifying the details of the transactions, pursuant to each omnibus approval granted, is placed on a quarterly basis for review by the Audit Committee.

There were no material transactions entered into with related parties during the period under review, which may have had any potential conflict with the interests of the Company at large. The details of transactions with related parties of the Company for the financial year under review, are given in Note No. 46 to the Financial Statements, which forms part of this Annual Report.

24. CORPORATE GOVERNANCE

Pursuant to Schedule V of Listing Regulations, Management Discussion and Analysis, Corporate Governance Report and Certificate issued by Secretarial Auditor regarding compliance of conditions of Corporate Governance forms part of the Annual Report. A declaration signed by the Managing Director regarding compliance with the Code of Conduct by the Board Members and Senior Management Personnel also forms part of the Annual Report. Code of Conduct and various other policies are available on the website of the Company.

25. ANNUAL RETURN:

26. PARTICULARS OF EMPLOYEES:

The Directors sincerely appreciate efforts put in by employees of the Company at all levels and thank them for their contribution in achieving the overall results during the year.

Disclosure pertaining to the remuneration and other details as required under Section 197(2) of the Companies Act 2013 and Rule, 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is enclosed as “Annexure III” to this report.

27. DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION ANDREDRESSAL) ACT, 2013:

The Company has zero tolerance for sexual harassment at the workplace. As per the requirement of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013, the Company has formed an Internal Committee to address complaints pertaining to sexual harassment in the workplace.

28. DIRECTORS RESPONSIBILITY STATEMENT:

Based on the framework and testing of internal financial controls and compliance systems established and maintained by the Company, work performed by the internal, statutory and secretarial auditors and the reviews performed by Management and the relevant Board Committees, the Board is of the opinion that the Companys internal financial controls were adequate and effective during the financial year 2024-25. Accordingly, pursuant to Section 134(5) of the Act, the Board of Directors, based on the assurance given of the business operations, to the best of their knowledge and ability, confirm that:

i. in the preparation of the annual accounts, the applicable accounting standards have been followed and there are no material departures;

ii. they have, in the selection of the accounting policies, consulted the Statutory Auditors and have applied their recommendations consistently and made judgements and estimates that are reasonable and prudent 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;

iii. they have taken proper and sufficient care to the best of their knowledge and ability, for the maintenance of adequate accounting records in accordance with the provisions of the Act, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

iv. they have prepared the annual accounts on a going concern basis;

v. they have laid down internal financial controls to be followed by the Company and that such internal financial controls were adequate and operating effectively; and

vi. they have devised a proper system to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

29. DETAILS OF SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS/COURTS/TRIBUNAL

No significant and material orders were passed by the Regulators or the Courts or Tribunals impacting the going concern status and the Companys operations in future.

30. MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANCIAL POSITION OF THE COMPANY AFTER THE END OF THE FINANCIAL YEAR TILL THE DATE OF THIS REPORT:

Except as otherwise mentioned in this report, there are no material changes and commitments affecting the financial position of the Company which have occurred between the end of the Financial year of the Company to which the Financial Statements relates and the date of this report.

There is no other change in the nature of business during the year under review.

31. COMPLIANCE STATEMENT:

During the year under review, there were no cases where maternity benefit was availed by employees of the Company.

32. OTHER DISCLOSURE:

• A Business Responsibility and Sustainability Report as required under Regulation 34 of SEBI (Listing Obligations and Disclosures Requirements) Regulation, 2015 is not applicable to the Company as the same is applicable for top 1000 listed entities based on market capitalization.

• Dividend Distribution Policy as required under Regulation 43A of SEBI (Listing Obligations and Disclosures Requirements Regulation, 2015 is not applicable to the Company.

g. The Securities and Exchange Board of India (Share Based Employee Benefits) Regulations, 2014; Not Applicable during the period under review.

h. The Securities and Exchange Board of India (Delisting of Equity Shares) Regulations, 2021; Not Applicable during the period under review.

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

Other Laws applicable to the Company are as given in Annexure A.

We have also examined compliance with the applicable clauses of the following:

(i) Secretarial Standards issued by the Institute of Company Secretaries of India (ICSI);

(ii) Circulars / Notifications issued by Ministry of Corporate Affairs (“MCA”) for holding Meetings through Video Conferencing (“VC”) / Other Audio-Visual Means (“OAVM”).

During the period under review, the Company has complied with the provisions of the Act, Rules, Regulations, Guidelines and Standards, etc., mentioned above.

We further report that, the Board of Directors of the Company is duly constituted with proper balance of Executive Directors, Non-Executive Directors and Independent Directors. There is changes in the composition of Board of Directors during the period under review.

Adequate notice was given to all the Directors to schedule the Board and Committee meetings. Agenda and detailed notes on agenda were sent well in advance of the meetings, in case of less than seven days the Company has taken shorter notice consent from the Directors/ Members of the Board/ Committees, 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.

All the Decisions at the Meetings of the Board of Directors and Committees thereof were carried out unanimously as recorded in the minutes of the Meetings of Board of Directors and/or Committee(s) of the Board, as the case may be and with requisite majority at General Meetings.

We further report that, the Company received show cause notice from Bombay Stock Exchange and Metropolitan Stock Exchange of India Limited, levying a fine of Rs. 16,520/- for non-compliance of Regulation 6(1) of the Listing Regulations, for Delay appointment of company secretary and compliance officer. The Company has duly paid the fine.

We further report that, 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. All the notices and orders received by the Company pursuant to the above mentioned laws have been adequately dealt with/duly replied/complied with.

We further report that, during the audit period, the Company raised funds through a preferential issue as under:

1. Allotment of Convertible Warrants: The Company allotted 12,00,000 convertible warrants at a price of ?83.70/- (including a premium of ?73.70/-) per share warrant, aggregating to ^10,04,40,000 (Rupees Ten Crores Four Lakhs and Forty Thousand only), on a preferential basis to M/s. Mangal Keshav Capital Limited, a non-promoter of the Company.

In accordance with the terms of issue, the Company has received 25% of the warrant issue price, i.e., ^20.925/- per warrant, aggregating to ^2,51,10,000 (Rupees Two Crores Fifty One Lakhs Ten Thousand only) from the allottee.

2. Allotment of Equity Shares: The Company further allotted 10,19,475 equity shares of face value ?10/- each, fully paid-up, at a price of ?83.70/- (including a premium of ?73.70/-) per share, aggregating to ^8,53,30,058 (Rupees Eight Crores Fifty Three Lakhs Thirty Thousand and Fifty Eight only), to the following non-promoter(s):

We further report that, during the audit period, the Members at the Annual General Meeting held on September 27, 2024 approved the following:

1. Appointment of Director in place of Sharmila Hiralal Amin (DIN: 06770401), who retires by rotation and being eligible offers himself/herself for re-appointment.

2. Revision in terms of remuneration of Mr. Jayesh Ramniklal Mehta, Chairman and Managing Director of the company.

3. Appointment of Mr. Jayesh Bhanushali (DIN: 10765301) as an Independent Director of the Company.

4. Appointment of Mr. Zareer Dinshaw Colabavala (DIN: 01835112) as an Independent Director of the Company.

We further report that, during the audit period the members at the Extra-Ordinary General Meeting held on 10th February 2025, approved the following:

1. Company Increased its Authorised Share Capital of from Rs. 20,00,00,000/- (Rupees Twenty Crores only) consisting of 2,00,00,000/- (Two Crores only) Equity Shares of Rs.10/- (Rupees Ten only) each to Rs. 23,70,00,000/- (Rupees Twenty Three Crores Seventy Lakhs Only) consisting of 2,37,00,000/- (Rupees Two Crores Thirty Seventy Lakhs Only) Equity Shares of Rs.10/- (Rupees One only) each.

2. Approved the sub-divisions / split of existing 1(one) Equity Share of face value of Rs. 10/- (Rupees Ten Only) each fully paid up into 10 (Ten) Equity share of face value of Rs. 1/- (Rupee One only) each fully paid up.

3. Approved the alteration of Capital Clause of the Memorandum of Association of the Company on account of above sub-division/ split of Equity Shares.

1. Tax Laws:

a. CGST Act, 2017

b. SGST Act, 2017

c. IGST Act, 2017

d. UTGST Act, 2017.

e. Income Tax Act, 1961.

2. Employee Laws:

a. Payment of Gratuity Act, 1972 and Payment of Gratuity (Central) Rules, 1972.

b. The Payment of Bonus Act, 1965 and Payment of Bonus Rules, 1975.

c. The Payment of Wages Act, 1936.

d. The Minimum Wages Act 1948.

e. The Employees Provident Fund and Miscellaneous Provisions Act, 1952, and Scheme framed thereunder.

f. The Employees State Insurance Act 1948.

g. The Maternity Benefit Act, 1961.

h. The Contract Labour (Abolition and Regulation) Act, 1970 & Rules.

i. Equal Remuneration Act, 1976.

j. Workmens Compensation Act, 1923.

k. Employment Standing Orders Act, 1946.

l. Child Labour (Prohibition and Regulation) Act, 1986.

m. Factories Act, 1948 and rules made thereunder

n. Industrial Disputes Act, 1947

o. The Employment Exchanges (Compulsory Notification of Vacancies) Act, 1959.

p. The Apprentices Act, 1961 and Apprenticeship Rules, 1991 under the above Rules.

q. Labour Welfare Fund Act.

3. Environment (Protection) Act, 1986

4. The Shops and Establishment Act.

5. Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. Note: This is an indicative list and not an exhaustive list.

To,

The Members,

Candour Techtex Limited

(Formerly known as Chandni Textiles Engineering Industries Limited)

Our report of even date is to be read along with this letter.

1. Maintenance of Secretarial Record is the responsibility of the Management of the Company. Our responsibility is to express an opinion on these Secretarial Records based on our audit.

2. We have followed the auditing standards issued by the Institute of Company Secretaries of India (“ICSI”) and audit practices and processes as were appropriate to obtain reasonable assurance about the correctness of the contents of the Secretarial records. The verification was done on test basis to ensure that correct facts are reflected in the Secretarial records. We believe that the processes and practices, we have followed are aligned with Auditing Standards issued by the Institute of Company Secretaries of India (“ICSI”) provide a reasonable basis for our opinion.

3. We have not verified the correctness and appropriateness of financial records and Books of Accounts of the Company.

4. Wherever required, we have obtained the Management Representation about the Compliance of Laws, Rules and Regulations and happening of events etc.

5. The compliance of the provisions of Corporate and other applicable Laws, Rules, Regulations, Standards is the responsibility of the Management. Our examination was limited to the verification of procedures on test basis.

6. The Secretarial Audit report is neither an assurance as to the future viability of the Company nor the efficacy or effectiveness with which the Management has conducted the affairs of the Company.

The Secretarial Audit report is neither an assurance as to the future viability of the Company nor the efficacy

or effectiveness with which the Management has conducted the affairs of the Company.

[Pursuant to Sub-Section 12 of Section - 197 of the Companies Act, 2013 read with Rule - 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014]