Donear Industries Ltd Directors Report

Dear Members,

Your Directors present the 39 th (Thirty-Ninth) Annual Report of the Company together with the Audited Financial Statements for the Financial Year ended March 31, 2025.

Financial Performance

(Rs. in Lakhs)

	Standalone		Consolidated
Particulars
	2024-25	2023-24	2024-25	2023-24
Revenue from operations	91,369.78	79,914.31	91,369.78	79,914.31
Other income	727.91	880.95	727.91	880.95
Total Revenue	92,097.69	80,795.26	92,097.69	80,795.26
Profit before Depreciation and Amortisation expenses, Finance Costs and Tax
	8,997.29	8,971.87	8,997.29	8,971.87
expenses
Less: Depreciation and Amortisation expense	1,311.03	1,204.27	1,311.03	1,204.27
EBIT	7,686.26	7,767.60	7,686.26	7,767.60
Less: Finance costs	3,223.25	3,019.96	3,223.25	3,019.96
Profit before tax	4,463.02	4,747.64	4,463.02	4,747.64
Less: Tax expenses	1,274.20	1,276.30	1,274.20	1,276.30
Profit after	3,188.82	3,471.34	3,186.79	3,470.98
Other Comprehensive Income	(67.66)	(18.63)	(67.66)	(18.63)
Total Comprehensive Income	3,121.16	3,452.71	3,119.13	3,452.35
Earning per Equity Share of Face Value of Rs.2/- each
Basic and diluted	6.13	6.68	6.13	6.67

The financial performance of the Company is as follows:

Review of Financial Performance

The total standalone revenue from operations for Financial Year 2024-25 was 92,097.69 Lakhs as compared to 80,795.26 Lakhs in previous Financial Year. During the Financial Year the Company earned a Standalone profit before tax of 4,463.02 Lakhs against Profit of 4,747.64 Lakhs in the Previous Year.

The Standalone Net Profit after tax for the Financial Year was 3,188.82 Lakhs against Profit of 3,471.34 Lakhs reported in the Previous Year. The Consolidated revenue from operations for Financial Year 2024-25 was 92,097.69 Lakhs and Consolidated Net Profit after tax for the Financial Year was 3,186.79 Lakhs.

There have been no material changes and commitments affecting the financial position of the Company which have occurred between end of the financial year and the date of this report. Ther remains no change in the nature of the business of the company as well.

Dividend

The directors of the company at its Board meeting held on May 27 th 2025, has recommended a dividend of 0.20 (10%) per Equity share of

2.00 each for the financial year ended March 31, 2025, subject to the approval of members of the Company at the ensuing Annual General Meeting (AGM).

The dividend, if approved by the members would entail a gross outflow of 104 Lakhs for the Financial Year 2024-2025 and it will be taxable in the hands of the shareholders of the company.

In consonance with the provisions of regulation 43A of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 ("Listing

Regulations") pertaining to formulation of a Dividend Distribution Policy (DDR), the company falls out of the ambit of the regulations and therefore, is not required to formulate a policy. Thus, the company after maintaining a balance between profit retention and a fair, sustainable and consistent distribution of profits among its members, declared the dividend.

Transfer to General Reserve

The Board of Directors of the company has decided not to transfer any amount to general reserves or to any such reserves during the year.

Subsidiary / Associate / Joint Venture Companies

The Company has does not have any subsidiary company. The Company has only one associate Company.

Pursuant to the provisions of Section 129(3) of the Companies Act, 2013 read with the Companies (Accounts) Rules, 2014, a statement containing salient features of financial statements of subsidiaries, associates and joint venture companies in Form AOC-1 is attached to the report as Annexure D .

Further, no subsidiary, associate, or joint venture company was formed or ceased to exist during the financial year under review.

Issue of equity shares

During the year under review, the company has not issued any equity shares and therefore there is no change in the issued or paid-up share capital of the company. There is no issuance of equity shares with differential voting rights.

Credit Rating

The Company has obtained ratings from India Ratings and Research Private Limited. They did revise the outlook on Donear Industries Limited from Negative to Positive while affirming the Long-Term Issuer Rating at IND BBB/Stable.

The detailed credit rating instrument is outlined in Corporate Governance Report which is a component of Annual Report.

Directors Responsibility Statement

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 preparation of the annual accounts for the financial year ended 31st March, 2025 the applicable accounting standards have been followed along with proper explanation relating to material departures, if any; b) they have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit and loss of the Company for that period; c) they have taken proper and sufficient care towards the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; d) they have prepared the annual accounts on a going concern basis; e) they have laid down internal financial controls, which are adequate and are operating effectively; f) they have devised proper systems to ensure compliance with the provisions of all applicable laws and such systems are adequate and operating effectively.

Directors and Key Managerial Personnel

Retirement by rotation and subsequent re-appointment Appointment(s)

During the year under review, the term of Mr. Kishorsinh Parmar who was appointed as an Executive Professional Director of the company with effect from August 10, 2022 was expiring on August 09, 2025. Based on the recommendation of Nomination and Remuneration Committee (NRC), the re-appointment of Mr. Kishorsinh Parmar as an Executive Professional Director for another term of three years with effect from August 10, 2025 was approved by the Board of Directors at its Board meeting held on May 27 th 2025, subject to the approval of shareholders in the Annual general Meeting.

During the year 2024, Mr. Govind Shrikhande, an Independent Director (DIN : 09692520) of the company was re-appointed in the year 2024 for one year with effective from November 11, 2024 , based on the recommendation of Nomination and Remuneration Committee and approval of Board of Directors in the Board meeting. The approval of the shareholders was duly taken for the same vide postal ballot. During the year 2024-2025, Mrs. Aparna Chaturvedi was appointed as an Additional Director in the category of Non-Executive Independent Director based on the recommendation of Nomination and Remuneration Committee and approval of Board of Director in a duly held meeting effective from 14 February, 2025.

During the year 2024, Ms. Sejal Shah was appointed as a Company Secretary and Compliance Officer of the company based on the recommendation of the Nomination and Remuneration Committee and approval of board of Directors, with effect from October 28, 2024.

Resignations(s)

After the closure of the financial year 2024-2025, Mrs. Aparna Chaturvedi, one of the Independent Director of the company has tendered her resignation from the position vide letter dated May 29 th 2025 due to her personal commitments and other professional responsibilities and the same has been accepted and noted by Board of Directors of the Company with effect from close of Business hours on 29 th May 2025. Mrs. Aparna Chaturvedi has also confirmed that there is no other material reasons for her resignation.

It is to be noted that CS Sachin Gupta resigned from the post of Company Secretary and Compliance officer with effect from July 31, 2024 which was duly noted by the Board of Directors with effect from the close of business hours on the same day.

Key Managerial Personnel

In consonance with the provisions of Section 2(51) and 203 of the Companies Act, 2013, read with The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the following are the Key Managerial Personnel of the Company :

· Mr. Rajendra Agarwal, Managing Director

· Mr. Ajay Agarwal, Whole-time Director

· Mr. Ashok Agarwal, Chief Financial Officer and

· Mrs. Sejal Shah, Company Secretary and Compliance Officer After the closure of the financial year 2024-2025, Mrs. Sejal Shah, Company Secretary and Compliance Officer of the Company has tendered her resignation due to unavoidable personal commitments and the same has been accepted and noted by the Board of Directors of the Company with effect from the close of business hours on 14 th August 2025. Mrs. Sejal Shah has also confirmed that there is no other material reasons for her resignation.

Independent Director(s)

Mrs. Medha Pattanayak, Mr. Govind Shrikhande and Mr. Aniruddha Deshmukh, Independent Directors, hold office for their respective term. They are not liable to retire by rotation pursuant to section 152(6) of the Act.

The Company has received declarations from all the Independent Directors of the Company confirming that each of them meet the criteria of independence as provided in Section 149(6) of the Act along with Rules framed thereunder and Regulation 16(1)(b) of the Listing Regulations. In opinion of the Board, they fulfil the conditions of independence as specified in the Act and the Rules made thereunder and are independent of the management and also possess the requisite integrity, experience, expertise, proficiency and qualifications. There has been no change in the circumstances affecting their status as Independent Directors of the Company.

The Independent Directors of the Company have undertaken requisite steps towards the renewal of their names in the data bank of Independent Directors maintained with the Indian Institute of Corporate Affairs in terms of Section 150 of the Act read with Rule 6 of the Companies (Appointment & Qualifications of Directors) Rules, 2014. During the year under review, the Board has also identified the list of core skills, expertise and competencies of the Board of Directors as are required in the context of the business and sector applicable to the Company and mapped with each of the Directors on the Board. The same is disclosed in the Report of Corporate Governance forming part of the Annual Report.

Annual Evaluation of Board Performance and Performance of its Committees and of Directors:

Pursuant to the provisions of the Act and Listing Regulations, the Board of Directors has carried out an annual evaluation of performance of its own, the Committees thereof and the Directors.

The Nomination and Remuneration Committee, in order to facilitate the performance evaluation process, laid down the evaluation criteria for the performance of Executive / Non-Executive / Independent Directors, Chairman of the Board, Committees and the Board as a whole and approved specific evaluation forms.

These forms were circulated to each of the Director, as applicable, and Directors were requested to provide their valuable feedbacks and suggestions on the overall functioning of the Board and its Committees. Accordingly, Directors submitted their feedbacks on various parameters such as composition, manner of circulating agenda for meetings, participations, frequency of meetings, timeliness and accuracy of information, infrastructure for effective deliberations, flow of information between Board and Management, contribution towards corporate performance, internal control, management information system, etc. The performance of individual directors was evaluated on the basis of parameters such as engagement, leadership, analysis, knowledge and skills, quality of decision making, interactions, ethics and integrity, willingness to devote time and efforts, corporate governance, relationships with stakeholders, relationships with Management, contribution, attendance, independent judgment, etc.

The Independent Directors at their separate meeting held on February 14, 2025, reviewed the performance evaluation of Non-Independent Directors, the Board as a whole, the Chairperson of the Board after taking into account the views of Executive Directors and Non-Executive Directors of the Company and also assessed the quality, quantity and timelines of flow of information between the Company Management and the Board.

Policy on Directors Remuneration

The company has curated remuneration policy for the Directors, Key Managerial Personnel, Senior Management Personnel and other employees. The policy is designed on the recommendation of the Nomination and Remuneration Committee and approval of the Board of Directors from time to time. The policy can be availed at Companys website at www.donear.com/investor and is also disclosed in the Corporate Governance Report which forms the part of the Annual Report.

Number of Meetings of the Board

There were 5 (five) meetings held of Board of Directors of the Company in financial year 2024-2025. The details of such meetings and attendance of directors are outlined in the Corporate Governance Report which is the component of Annual Report.

Committees of the Board

There is constitution of the following committees by the Board of Directors, viz:

1. Audit Committee

2. Nomination and Remuneration Committee

3. Stakeholder Relationship Committee

4. Corporate Social Responsibility Committee

5. Risk Management Committee

The details of such Committees including their composition, number of meetings held, attendance and terms of reference as required under provisions of the Act and Listing Regulations are disclosed in the Corporate Governance Report, which forms part of this Annual Report. There remain no instances where the Board had not accepted any of the recommendations of the Audit Committee.

Auditors and Auditors Report Statutory Auditors

The Members of the Company on Thirty Fourth Annual General Meeting of the Company held on September 25, 2020, approved the re-appointment of M/s. Kanu Doshi Associates LLP, Chartered Accountants (Firm Registration No. 104746W/W100096), as Statutory Auditors of the Company for the second term to hold office from the conclusion of the Thirty Fourth Annual General Meeting till the conclusion of Thirty Ninth AGM to be held in the year 2025.

The Audit Report certifying the financial statements of the Company for the Financial year ended March 31, 2025 is outlined in the Corporate governance Report forming a part of this Annual Report. The Report is without any qualification, reservation, adverse remark or disclaimer. A total fee of 10.52 Lakhs for statutory audit (including out of pocket expenses) and 1.14 Lakhs for other services was paid to M/s. Kanu Doshi Associates LLP, Statutory Auditor of the Company.

Secretarial Auditors

Pursuant to Section 204 of The Companies Act, 2013 and Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 and Regulation 24A of Listing Regulations, the company is required to conduct the secretarial audit of the Company for which M/s. Yogesh Sharma & Co., Practicing Company Secretaries (Membership No. F11305 / Certificate of Practice No. 12366) was appointed as Secretarial Auditor.

The Secretarial Audit Report for the Financial Year 2024-25 is marked and attached herewith as Annexure A . Their Audit Report confirms that the Company has complied with applicable provisions of the Act and the rules made thereunder, Listing Regulations, other SEBI Regulations and laws applicable to the Company and that there remains no non-compliance.

Cost Auditors

As per the requirements of the Section 148 of the Act read with the Companies (Cost Records and Audit) Rules, 2014 as amended from time to time, the Company is required to maintain cost records and accordingly, such accounts are prepared and records have been maintained relating to Textile Division every year.

The Board of Directors, on the recommendation of the Audit Committee has re-appointed M/s. Y. R. Doshi & Co., (Firm Registration No. 000003), Cost Accountants, Mumbai, as Cost Auditors for undertaking Cost Audit for the Financial Year ending March 31, 2026. The Company has received their written consent and confirmation that the appointment will be in accordance with the applicable provisions of the Act and rules framed thereunder.

The remuneration payable to Cost Auditors has been approved by the Board of Directors on the recommendation of the Audit Committee and in terms of the Act and Rules therein. A resolution seeking members approval for ratification of remuneration payable to Cost Auditor forms part of the Notice convening Annual General Meeting.

Reporting of frauds by Auditors

During the year, the Statutory Auditors, the Cost Auditors and Secretarial Auditors have not reported any instances of frauds committed in the company by its Officers or Employees, to the Audit committee under section 143(12) of the Companies Act, 2013.

Significant and Material Orders

No significant and material orders was passed by any regulators, courts or tribunals impacting the going concern status of the Company and its operations in future.

Corporate Social Responsibility (CSR)

Pursuant to the requirements of Section 135 of the Companies Act, 2013, the company has constituted a Corporate Social Responsibility ("CSR") Committee as the CSR expenditure exceeds 50 Lakhs in the current financial year. The composition and terms of reference of the CSR Committee are detailed in the Corporate Governance Report forming part of this Annual Report.

The brief outline of the CSR Policy of the Company and the initiatives undertaken by the company to contribute towards CSR during the financial year 2024-2025 are set out in a report in the format prescribed in Companies (Corporate Social Responsibility Policy) Rules, 2014, which is marked and herewith attached as Annexure B to this Report.

Deposits from Public

The Company has not accepted any deposits from the public as defined under Chapter V of the Act and as such, no amount on account of principal or interest on deposits from public was outstanding as on March 31, 2025.

Corporate Governance Report

Pursuant to Regulation 34(3) read with Schedule V of the Listing Regulations, the Company is required to prepare a Corporate Governance Report detailing the mechanisms of governance in the organisation. The same forms a part of Annual Report.

In accordance with Regulation 17 to 27 of Listing Regulations, a certificate from Statutory Auditor of the Company regarding the compliance with the regulations and applicable provisions of Listing Regulations, is annexed to the Corporate Governance Report forming a part of this Annual Report.

Particulars of Employees

Section 197(12) of Companies Act, 2013 read with Rule 5 of Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 requires a company to disclose the details regarding the remuneration of the employees. The information pertaining to remuneration and other details thereof are marked and attached as Annexure C , which is part of this Report.

Secretarial Standards

During the year under review, the Company has complied with the requirements of applicable Secretarial Standards issued by the Institute of Company Secretaries of India (ICSI) in terms of Section 118(10) of the Act.

Disclosure Requirements

Details of familiarization programs for Independent Directors are available on the website of the Company at www.donear.com/investor. Policy for determining Materiality of Events of the Company is available on the website of the Company at www.donear.com/investor.

Policy for archival of documents of the Company is available on the website of the Company at www.donear.com/investor.

The code of conduct for Directors and senior management of the Company is available on the website of the Company at www.donear. com/investor.

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

Vigil Mechanism / Whistle Blower Policy

Principle of fairness, transparency, accountability and responsibility aligned with best management practices and ethical values outlines the essence of companys philosophy.

Keeping in view of the same, the company has framed a Vigil Mechanism/Whistle blower policy for its Stakeholders to report genuine concerns that could have serious and material impact on the operations and performance of business of the Company.

The policy curated aims to provide adequate safeguards against victimization of directors, employees and other stakeholders who use this policy / mechanism and contains the provision of direct access to the Chairperson of the Audit Committee in appropriate or exceptional cases.

This policy is available on the website of the Company at www.donear. com/investor .

Disclosure under the Sexual Harassment of Women at workplace (prevention, prohibition and redressal) Act, 2013

In compliance with Sexual Harassment of Women at Workplace (Prevention, Prohibition & Redressal) Act, 2013 ("POSH Act"), the Company has constituted Sexual Harassment Internal Complaints Committee, chaired by Head of Human Resource Department who is given the responsibility of creating awareness among the female staff on sexual harassment of women at workplace.

All Women employees whether contractual, permanent or temporary, were made aware of appropriate ways and methods of approaching and responding to sexual harassment concerns and incidents. Further, they were made aware of the present laws protecting them against any sexual abuse and were motivated to share any incident/instances which seem suspicious and harmful to them relating to their safety. Complying with the laws, the company has registered their Internal committee on She-Box Portal of the government. The annual report of financial year 2024-25 detailing the composition of committee and the complaints received is duly uploaded on the portal. During the year under review, there were no cases reported to the Board. The company has complied with the provisions relating to the constitution of Internal Complaints Committee under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 [14 of 2013] and the details required under section 134 are as follows ?€“a) Number of complaints of sexual harassment received in the year - 0 b) Number of complaints disposed off during the year - 0 c) Number of cases pending for more than ninety day ?€“ 0

The details of application made or any proceeding pending under the Insolvency and Bankruptcy Code, 2016 (31 of 2016) during the year

Pursuant to financial year 2024-2025, there were no applications made by the company with respect to invoking proceedings under Insolvency and Bankruptcy Code (IBC), 2016. It is to be noted that no proceedings are invoked against the Company under the Code and hence there remains no pending proceeding under the Code during the year.

A statement on compliance with the provisions relating to the

Maternity Benefits Act, 1961.

The Company has complied with the provisions of the Maternity Benefits Act, 1961.

Disclosure on One Time Settlement

During the year under review, the Company has not made any one-time settlement for loans taken from the Banks or Financial Institutions, and hence the details of difference between amount of the valuation done at the time of on time settlement and the valuation done while taking loan from the Banks or Financial Institutions along with the reasons thereof is not applicable.

Particulars of Loans, Guarantees and Investments

During the year under review, the Company has not made any investment. Further, the Company has not given any loans or corporate guarantee or provided any security during the year.

Risk Management Committee

In accordance with the provisions of Companies Act, 2013 and SEBI (LODR) Regulations, the company is not required to constitute a Risk Management Committee as the company falls out of top 1000 listed entities based on market capitalisation. However for better transparency, the company has constituted a Risk Management Committee to identify, manage and control the risks exposed to the company. The details of risk management policy, control measures are discussed in the Management and Discussion Analysis.

Particulars of Contracts or Arrangements with Related Parties

In accordance with Section 134(3)(h) of the Act, and Rule 8(2) of the Companies (Accounts) Rules, 2014, the particulars of the contracts or arrangements with related parties referred to in Section 188(1) of the Act, in Form AOC-2, is attached as Annexure E to this Boards Report. All contracts and arrangements with related parties were at arms length and in the ordinary course of business of the Company. The contracts/ arrangements /transactions with the related parties are necessary in the ordinary course and have a significant role in the Companys operations.

Moreover, the Company has formulated a Policy on Related Party Transactions which is available on the website of the Company at www.donear.com/investor .

Disclosure of transactions with related parties as required under Listing Regulations and the applicable Accounting Standards is given in the relevant note forming part of the Financial Statements.

Particulars Regarding Conservation of Energy, Technology absorption and Foreign Exchange Earnings and outgo

The particulars as required under Section 134(3)(m) of the Act read with Rule 8 of Companies (Accounts) Rules, 2014, relating to conservation of energy, technology absorption, foreign exchange earnings and outgo, are marked and attached as Annexure F to this report.

Investors Education and Protection Fund ("IEPF")

During the financial year under review, the Company transferred shares to the Unclaimed Suspense Account as specified under Schedule V of the SEBI Listing Regulations. The details of the number of shares transferred to the Unclaimed Suspense Account are provided in the Corporate Governance Report, which forms part of this Annual Report

Annual Return

Pursuant to the provisions of Section 134(3)(a) and Section 92(3) of the Act read with Rule 12 of the Companies (Management and Administration) Rules, 2014, a copy of the Annual Return of the Company for the Financial Year ended March 31, 2025 is uploaded on the website of the Company and can be accessed at www.donear. com/investor .

Appreciation

The Board of Directors place on record sincere gratitude and appreciation for all the employees of the Company. Our consistent growth was made possible by their hard work, solidarity, cooperation, and dedication during the year.

The Board conveys its appreciation for its customers, shareholders, suppliers as well as vendors, bankers, business associates, regulatory and government authorities for their continued support.

For and on behalf of the Board of Directors Rajendra Agrawal Ajay Agrawal Managing Director Whole- Time Director

DIN: 00227233 DIN: 00227279 Place: Mumbai Date : August 14, 2025