Fractal Industries Ltd Directors Report

Executive Director is interested to the extent of remuneration paid to them for services rendered to the company.

Except as stated under "Annexure 31 - Related Party Transactions" under Chapter titled "Restated Financial Statement" beginning on page 215 of the Draft Red Herring Prospectus, our company has not entered into any contracts, agreements or arrangements during the preceding two years from the date of the Draft Red Herring Prospectus in which our directors are interested directly or indirectly.

Except for Mr. Pankaj Bishwanath Agrawal, none of our Directors were involved in the promotion and formation of our Company.

Our Company has not availed loans from Directors of our Company as on the date of this Draft Red Herring Prospectus. Interest of our Directors in property

None of our Directors are interested in any property acquired or proposed to be acquired of our Company.

No sum has been paid or agreed to be paid to our Directors or to any firms or companies in which they may be partners or members respectively, in cash or shares or otherwise by any person either to induce him / her to become, or to qualify him/ her as, a Director, or otherwise for services rendered by him/ her or by such firm or company, in connection with the promotion or formation of our Company.

Except mentioned below, none of our directors have not been associated with any company that has been struck-off by the registrar of companies or the Ministry of Corporate Affairs.

In additions to the applicable provisions of the Companies Act, 2013 with respect to the Corporate Governance, provisions of the SEBI Listing Regulations will be applicable to our company immediately up on the listing of Equity Shares on the Stock Exchanges.

As on date of this Draft Red Herring Prospectus, as our Company is coming with an issue in terms of Chapter IX of the SEBI (ICDR) Regulations, 2018, the requirements specified in regulations 17, 18, 19, 20, 21, 22, 23, 24, 25, 26, 27 and clauses (b) to (i) of sub-regulation (2) of regulation 46 and para C, D and E of Schedule V of SEBI (Listing Obligations and Disclosures Requirement) Regulations, 2015 are not applicable to our Company, although we require to comply with requirement of the Companies Act, 2013 wherever applicable. In spite of certain regulations and schedules of SEBI (Listing Obligations and Disclosures Requirement) Regulations, 2015 is not applicable to our Company, our Company endeavours to comply with the good Corporate Governance and accordingly certain exempted regulations have been compiled by our Company.

Our Company has complied with the corporate governance requirement, particularly in relation to appointment of independent directors including woman director on our Board, constitution of an Audit Committee, Stakeholders Relationship Committee and Nomination and Remuneration Committee. Our Board functions either on its own or through committees constituted thereof, to oversee specific operational areas.

Currently our Board consists of 5 (Five) Directors, which includes 1 (One) Chairman and Managing Director, 1 (One) Executive Director. 1 (One) Non-Executive Director and 2 (Two) Independent Directors.

Composition of Board of Directors is set forth in the below mentioned table:

Our company has constituted the following Committees of the Board;

Details of composition, terms of reference etc. of each of the above committees are provided hereunder:

The Board of Directors of our Company has, in pursuance to provisions of Section 177 of the Companies Act, 2013 and rules made thereunder, as amended from time to time, read with SEBI (Listing Obligations and Disclosures Requirement) Regulations, 2015, as applicable, in its meeting held on August 20, 2025, constituted Audit Committee.

The constitution of the Audit Committee is as follows:

The Role of Audit Committee not limited to but includes:

1. The recommendation for the appointment, re-appointment and, if required, the replacement or removal of the statutory auditor, their remuneration and fixation of terms of appointment of the Auditors of the Company;

2. Review and monitor the auditors independence and performance, and effectiveness of audit process;

3. Examination of financial statement and auditors report thereon including interim financial result before submission to the Board of Directors for approval, with particular reference to;

a. Matters required to be included in the directors responsibility statement to be included in the Boards Report in terms of clause (c) of sub-section (3) of Section 134 of the Companies Act, 2013;

b. Changes, if any, in accounting policies and practices and reasons for the same;

c. Major accounting entries involving estimates based on the exercise of judgment by management;

d. Significant adjustments made in the financial statements arising out of audit findings;

e. Compliance with listing and other legal requirements relating to financial statements;

f. Disclosure of any related party transactions;

g. Qualifications in the draft audit report.

4. Approval or any subsequent modification of transactions of the Company with related parties;

Provided that the Audit Committee may make omnibus approval for related party transactions proposed to be entered in to by the Company subject to such conditions provided under the Companies Act, 2013 or any subsequent modification(s) or amendment(s) thereof; Provided further that in case of transaction, other than transactions referred to in section 188 of Companies Act 2013 or any subsequent modification(s) or amendment(s) thereof, and where Audit Committee does not approve the transaction, it shall make its recommendations to the Board;

Provided also that in case any transaction involving any amount not exceeding one crore rupees is entered into by a director or officer of the company without obtaining the approval of the Audit Committee and it is not ratified by the Audit Committee within three months from the date of the transaction, such transaction shall be voidable at the option of the Audit Committee,

5. Reviewing, with the management, and monitoring the statement of uses / application of funds raised through an issue (public issue, rights issue, preferential issue, etc.), the statement of funds utilized for purposes other than those stated in the Offer Document/Draft Red Herring Prospectus/Prospectus/ notice and the report submitted by the monitoring agency monitoring the utilization of proceeds of a public or rights issue, and making appropriate recommendations to the Board to take up steps in this matter;

6. Scrutiny of Inter-corporate loans and investments;

7. consider and comment on rationale, cost-benefits and impact of schemes involving merger, demerger, amalgamation etc., on the histed entity and its shareholders;

8. Reviewing and discussing the findings of any internal investigations by the internal auditors into matters where there is suspected fraud or irregularity or a failure of internal control systems of a material nature and reporting the matter to the board;

The Stakeholders Relationship Committee shall meet atleast once in a year. The quorum shall be one third of total members of the Stakeholders Relationship Committee or 2 members, whichever is higher.

The Board of Directors of our Company has, in pursuance to provisions of Section 178 of the Companies Act, 2013 and rules made thereunder, as amended from time to time, read with SEBI (Listing Obligations and Disclosures Requirement)

Regulations, 2015, as applicable, in its meeting held on August 20, 2025, constituted Nomination and Remuneration Committee.

The constitution of the Nomination and Remuneration Committee is as follows:

i. Formulation of the criteria for determining qualifications, positive attributes and independence of a director and recommend to the Board a policy, relating to the remuneration of the directors, key managerial personnel and other employees;

ii. For every appointment of an independent director, the Nomination and Remuneration Committee shall evaluate the balance of skills, knowledge and experience on the Board and on the basis of such evaluation, prepare a description of the role and capabilities required of an independent director The person recommended to the Board for appointment an independent director shall have the capabilities identified in such description. For the purpose of identifying suitable candidates, the Committee may:

- use the services of an external agencies, if required;

- consider candidates from a wide range of backgrounds, having due regard to diversity; and

- Consider the time commitments of the candidates.

iii. Formulation of criteria for evaluation of Independent Directors and the Board;

iv. To ensure that the relationship of remuneration to performance is clear and meets appropriate performance benchmarks; and

v. Identifying persons who are qualified to become directors and who may be appointed in senior management in accordance with the criteria laid down, and recommend to the Board of Directors their appointment and removal and shall carry out evaluation of every directors performance;

vi. recommend to the board, all remuneration, in whatever form, payable to senior management;

vii. Such other matters as may be required by any statutory, contractual or other regulatory requirements to be attended to by such committee from time to time.

The Committee is required to meet at least once in a year. The quorum necessary for a meeting of the Nomination and

Remuneration Committee is one third of total members of the Nomination and Remuneration Committee or 2 members,

whichever is higher.

Except as mentioned below, there are no other changes in the Key Managerial Personnel and Senior Management Personnel in the last three years preceding the date of filing this Draft Red Herring Prospectus:

Currently, our Company does not have any bonus or profit-sharing plan for our Key Managerial personnel and Senior Management.

No amount or benefit (non-salary related) was paid or given to our Key Managerial Personnel and Senior Management, within the two (2) preceding years or is intended to be paid or given to our Key Managerial Personnel and Senior Management, other than in the ordinary course of employment.

All the Key Managerial Personnel and Senior Management mentioned above are on the payrolls of our Company as permanent employees.

There is no arrangement / understanding with major shareholders, customers, suppliers or others pursuant to which any of the above-mentioned personnel have been recruited.

Our Key Managerial Personnel and Senior Management are governed by the terms of their respective employment letters / resolutions of our Board on their terms of appointment. None of our Key Managerial Personnel and Senior Management have entered into a service contract with our Company, entitling them to any benefits upon termination of employment.

Our Key Managerial Personnel and Senior Management do not have any interest in our Company other than (i) as stated in "Annexure 31 - Related Party Transations" in the chapter titled "Restated Financial Statement" beginning on page 215, respectively; or (ii) to the extent of remuneration or benefits to which they are entitled to as per their terms of appointment and reimbursement of expenses incurred by them during the ordinary course of business. The Key Managerial Personnel and Senior Management may also be deemed to be interested to the extent of dividend payable to them and other distributions in respect of Equity Shares held by them in our Company.

For details of unsecured loan taken from or given to our Directors/KMPs/SMPs and for details of transaction entered by them in the past see "Annexure 31 - Related Party Transactions" in the chapter titled "Restated Financial Statement" beginning on page 215.

1. Mr. Pankaj Bishwanath Agrawal

2. Mrs. Priti Pankaj Agrawal

For details of the Capital build-up of our Promoters in our Company, see chapter titled "Capital Structure" beginning on page no. 68 of this Draft Red Herring Prospectus.

The details of our Promoters are as follows:

We declare and confirm that the details of the permanent account numbers, bank account numbers, passport numbers, Aadhar card number and driving license numbers of our Promoters are being submitted along with filing of this Draft Red Herring Prospectus with the Stock Exchange on which the specified securities are proposed to be listed.

There has been no change in control of our Company since incorporation immediately preceding the date of this Draft Red Herring Prospectus.

Except as stated in the chapter titled "Statement of Financial Indebtedness" and "Restated Financial Statements" beginning on page no. 267 and 215 of this Draft Red Herring Prospectus respectively, our Promoters has not given any material guarantee to any third party with respect to the Equity Shares as on the date of this Draft Red Herring Prospectus.

Our Promoters are interested in our Company to the extent of their shareholding and directorship in our Company and the dividend declared, if any, by our Company. Our Promoters may also be deemed to be interested to the extent of Equity Shares held by them and their immediate relatives in our Company and also to the extent of any dividend payable to them and other distributions in respect of the said Equity Shares in our Company. For details regarding the shareholding of our Promoters in our Company, see the chapter titled "Capital Structure" on page 68 of this Draft Red Herring Prospectus.

None of our Promoters have any interest in our Company except to the extent of compensation payable paid, and reimbursement of expenses (if applicable) and to the extent of any equity shares held by them or their relatives and associates or held by the companies, firms and trusts in which they are interested as director, member, partner, and / or trustee, and to the extent of benefits arising out of such shareholding.

For further details please see the chapter titled "Capital Structure", "Restated Financial Statements" and "Our Management" beginning on page no. 68, 215 and 193 of this Draft Red Herring Prospectus.

Except as stated otherwise in this Draft Red Herring Prospectus, we have not entered into any contract, agreements or arrangements in which our Promoters is directly or indirectly interested and no payments have been made to them in respect of the contracts, agreements or arrangements which are proposed to be made with them including the properties purchased by our Company other than in the normal course of business. For further details, please refer the chapter titled "Restated Financial Statements" beginning on page no. 215 of this Draft Red Herring Prospectus.

Further, our Promoters may be deemed to be interested to the extent of the payments made by our Company, if any, to the Group entities and payment to be made by our Company to the Group Entities. For the payments that are made by our Company to certain Group entities, please refer "Annexure 31 - Related Party Transations " under chapter titled "Restated Financial Statement" beginning on Page No. 215 of this Draft Red Herring Prospectus.

Our Company is currently promoted by the promoters in order to carry on its present business. Our Promoters are interested in our Company to the extent of their shareholding and directorship in our Company and the dividend declared, if any, by our Company.

Our Promoters has confirmed that they does not have any interest in any property acquired by our Company within three years preceding the date of this Draft Red Herring Prospectus or proposed to be acquired by our Company as on the date of this Draft Red Herring Prospectus except as mentioned under the chapter titled "Business Overview" and "Restated Financial Statements" beginning on page no. 138 and 215 respectively, of this Draft Red Herring Prospectus.

Except as stated in "Annexure 31 - Related Party Transations " under chapter titled "Restated Financial Statement" beginning on Page No. 215 of this Draft Red Herring Prospectus, there has been no payment of benefits to our Promoters in the two years preceding the filing of this Draft Red Herring Prospectus. Further, our Company may enter into transaction with or make payment of benefit to the Promoters Directors or Promoters Group, towards remunerations as decided by Board of Directors.

Our Company and Promoter confirm that they have not been declared as wilful defaulters or Fraudulent Borrowers by the RBI or by any other government authority and there are no violations of securities laws committed by them in the past or are currently pending against them or restraining period are continued.

Further, our Promoter, Promoters Group or Directors have not been directly or indirectly, debarred from accessing the capital market or have not been restrained by any regulatory authority, directly or indirectly from acquiring the securities.

Additionally, our Promoter, Promoters Group or Directors do not have direct or indirect relation with the companies, its Promoters and Whole-time Director, which are compulsorily delisted by any recognized stock exchange or the companies which is debarred from accessing the capital market by the Board.

Also, Our Promoters has not been declared as fugitive economic offenders under the provisions of Section 12 of the Fugitive Economic Offenders Act, 2018.

We and our Promoter, Group Entities, and Companies promoted by the Promoter confirm that:

- No material regulatory or disciplinary action has been taken by a stock exchange or regulatory authority in the past one year against us; and

- There are no defaults in respect of payment of interest and/or principal to the debenture/bond/fixed deposit holders, banks, FIs during the past three years.

The details of outstanding litigation including its nature and status are disclosed in the section titled "Outstanding Litigation and Material Developments " beginning on Page No. 287 of this Draft Red Herring Prospectus.

Our Promoter has not disassociated himself from any Company or Firm during the preceding three years.

Our Promoter is not related to any of our Companys directors within the meaning of Section 2 (77) of the Companies Act, 2013.

In addition to our Promoter named above, the following individuals and entities form a part of the Promoters Group: a. Natural persons who are part of our Individual Promoter Group:

b. Companies related to our Promoter Company: Not Applicable as our Promoters is not Company.

For further details on our Group Companies refer Chapter titled "Information with respect to Group Companies/Entities" beginning on page no. 306 of this Draft Red Herring Prospectus.

For details of the shareholding of our Promoters and members of our Promoter Group as on the date of this Draft Red Herring Prospectus and lock-in of Promoters shareholding (including Promoters contribution), refer Chapter titled "Capital Structure" beginning on page no. 68 of this Draft Red Herring Prospectus.