GHCL Textiles Ltd Directors Report

Dear Shareholders,

We are delighted to present the 6^th Boards Report and the Audited Financial Statements of the Company for the financial year ended on March 31, 2026.

This report provides a comprehensive overview of the Companys performance and developments during the year under review. It highlights the key achievements, challenges faced, and the strategic measures undertaken to ensure sustainable growth and operational e iciency. The report also covers the core aspects of our business operations, including financial performance, operational milestones, risk management, internal controls, and governance practices. Further, it reflects the Companys continued commitment towards creating value for its stakeholders while maintaining high standards of corporate governance, ethical business conduct, and contributing positively to the environment and society.

1: FINANCIAL RESULTS AND STATE OF AFFAIRS

Summary of the financial performance of the Company for the financial year ended March 31, 2026 (compared to the previous year ended on March 31, 2025) as follows:

in crores

Particulars	Year ended March 31, 2026	Year ended March 31, 2025
Net Sales /Income	1,334.80	1,168.12
Gross profit before interest and depreciation	156.11	116.68
Finance Cost	5.25	2.74
Profit before Depreciation and amortization expense	150.86	113.94
Depreciation and amortization expense	57.90	50.65
Profit before Tax (PBT)	92.96	63.29
Tax Expenses	22.59	7.32
Profit for the year	70.37	55.97
Other comprehensive income (OCI)	-0.48	0.43
Total Comprehensive income for the period	69.89	56.40
Balance brought forward from last year	78.10	26.48
Appropriations
Final Dividend	4.78	4.78
Balance carried to Balance Sheet	213.10	78.10
EPS (basic and diluted) (in )	7.36	5.86
Book Value of Shares (in )	157.19	150.38

The financial statements of the Company have been prepared in accordance with the Indian Accounting Standards (Ind AS) as prescribed under the applicable provisions of the Companies Act, 2013 and the rules made thereunder. The adoption of Ind AS ensures a high degree of compliance, transparency, and consistency in financial reporting. These standards provide a robust framework for the recognition, measurement, presentation, and disclosure of financial information, thereby enabling a true and fair view of the Companys financial position, financial performance, and cash flows. The management has exercised due care and diligence in the preparation of these financial statements, ensuring that they are reliable, comparable, and aligned with globally accepted accounting practices.

2: MANAGEMENT DISCUSSION & ANALYSIS

In accordance with Regulation 34(2)(e) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, attention is drawn to the Management Discussion and Analysis (MDA) Report, which provides a comprehensive review of the Companys operations, performance, and future outlook. The MDA Report forms an integral part of this Annual Report and is incorporated herein by reference.

The MDA offers detailed insights into various aspects of the Companys business, including industry and market trends, financial performance, key achievements, challenges, and strategic initiatives. It presents a holistic perspective on the Companys operations and outlines managements views on future prospects, growth opportunities, and potential risks.

Stakeholders, including shareholders and investors, are encouraged to refer to the MDA Report for a comprehensive understanding of the Companys business performance and outlook, as it serves as a valuable resource for in-depth analysis and evaluation of the Companys strategic direction.

3: DIVIDEND

We are pleased to announce that in accordance with our Dividend Distribution Policy, the Board of Directors has recommended a dividend of 0.60 (Sixty Paise) per equity share of 2/- each, representing 30% of the paid-up equity share capital, for the financial year ending on March 31, 2026. The recommended dividend is in conformity with the Companys Dividend Distribution Policy adopted pursuant to Regulation 43A of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. The proposed dividend, if approved at the Annual General Meeting scheduled on Saturday, June 27, 2026, will be paid to those shareholders whose names appear on the Register of Members or in the records of the depositories as on the Record Date, i.e., Saturday, June 20, 2026. Further in compliance with the applicable provisions of the Income Tax Act, 2025, the following TDS framework is applicable on dividend payments made by the Company:

Resident shareholders: TDS is applicable at the rate of 10% on dividend payments under Section 393(1) of the Income Tax Act, 2025. However, no TDS shall be deducted where the aggregate dividend payable to an individual resident shareholder during the financial year does not exceed 10,000, in accordance with Section 393(4).

Exempt categories: In terms of Section 393(4), TDS is not applicable on dividend payments made to the Life Insurance Corporation of India, the General Insurance Corporation of India, and other specified insurers notified for this purpose. Further, dividend payments made to Mutual Funds are exempt under Schedule VII of the Income Tax Act, 2025 and accordingly no TDS shall be deducted thereon.

Non-resident shareholders: TDS shall be deducted at the rate of 20% (plus applicable surcharge and Health and Education Cess) under Section 393(2) of the Income Tax Act, 2025, or at the lower rate as may be applicable under the relevant Double Taxation Avoidance Agreement (DTAA) between India and the country of residence of the shareholder, subject to furnishing of prescribed documents and declarations within the stipulated timelines.

Shareholders are requested to update their residential status, PAN, and other relevant details with their Depository Participant / the Companys Registrar and Share Transfer Agent to ensure correct application of TDS provisions.

The Company remains committed to adhering to the applicable regulatory requirements, promoting transparency, and maximizing shareholder value through responsible dividend distribution practices.

4: DIVIDEND DISTRIBUTION POLICY

In terms of Regulation 43A of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Board of Directors of the Company formulated and adopted the Dividend Distribution Policy (DDP) in a meeting held on January 02, 2023 and further amended the policy in its meeting held on May 05, 2025. The policy has been established to promote transparency and clarity in determining the quantum of dividends. It outlines the Boards commitment to maintaining a dividend pay-out ratio, which includes the dividend tax, in the range of 8% to 12% of profits after tax (PAT) on a standalone basis.

The updated Dividend Distribution Policy is available on Companys website at the following link: https:// ghcltextiles.co.in/wp-content/uploads/2025/05/GHCL-Textiles-Dividend-Policy.pdf The Policy serves as a guiding framework for the Board of Directors in making decisions on the recommendation of dividends. It ensures a consistent and balanced approach to dividend pay-outs and rea irms the Companys commitment to enhancing shareholders value.

5: TRANSFER TO RESERVES

The Board of Directors has decided that no amount of profit for Financial Year 2025-26 shall be transferred to the reserve account. Instead, the profits after dividend payments will be retained to strengthen financial stability, support growth initiatives, and enhance overall financial resilience.

6: SHARE CAPITAL

As on March 31, 2026, the Authorised Equity Share Capital of the Company is 35,15,00,000/- comprising of 17,57,50,000 equity shares of 2/- each and the paid-up Equity Share Capital of the Company is 19,11,71,572/- comprising of 9,55,85,786 equity shares of 2/- each.

a. Suspense Escrow Account

Pursuant to the approved Scheme of Demerger effective from April 1, 2023, the Board of Directors of Resulting Company, GHCL Textiles Limited in its meeting held on April 12, 2023 issued and allotted 9,55,85,786 equity shares of 2/- each to the shareholder of Demerged Company (GHCL Limited) who held shares of demerged Company as on cut-o date (i.e. April 08, 2023). Further as per the approved Scheme and in compliance with SEBI guidelines, Company issued and allotted shares only in Demat mode and all the shares due to physical shareholders were credited to a separate Suspense Escrow Demat Account maintained by the Company. The Company had sent intimation letters alongwith a detailed procedure for claiming the entitled shares in GHCL Textiles Limited to the address available with the RTA. The detailed procedure and necessary Forms for claiming said shares from Suspense Escrow Demat Account are also available on the website of the Company on the following links https://ghcltextiles. co.in/claim-procedure-physical-shares.

Physical shareholders who hold shares of Demerged Company on record date, are required to submit their claim alongwith the requisite documents and completed forms to the RTA, who will process the request. The details of shares lying in Suspense Escrow Account are as follows:

Particulars	No. of share- holders	No. of shares
Aggregate Number of Shareholders and shares in Suspense Escrow Account at the beginning of the financial year i.e. as on April 1, 2025.	8,150	19,15,043
Less: Number of Shareholders who claimed and to whom shares from suspense Account credited during the financial year 2025-26	107	28052
Number of Shareholders and outstanding shares lying in Suspense Escrow Account at the end of the financial year i.e. as on March 31, 2026	8,043	18,86,991

Voting rights on these shares shall remain frozen till the rightful owner of such shares claim the shares.

b. Investor Education and Protection Fund (IEPF)

GHCL Textiles Limited allotted and credited 10,90,366 equity shares of the Company to the eligible Shareholders as per their entitlement of the Shareholders, who held shares of GHCL Limited (Demerged Company) as on record date (i.e. April 08, 2023), and whose share had already been transferred to the IEPF account by the Demerged Company. Such Shareholders can claim their respective shares in GHCL Textiles Limited from the IEPF Authority by filing Form IEPF- 5. The detailed procedure for claiming shares from IEPF account is also available on the website of the Company i.e. https://ghcltextiles. co.in/claim-procedure-iepf

7: FINANCE

7.1. Resource Mobilization

During the year, your Company renewed its working capital facilities at the existing level of 400 crores, comprising Fund-Based limits of 300 crores and Non-Fund-Based limits of 100 crores. The working capital consortium consists of Bank of Baroda, CTBC Bank, HDFC Bank, IDBI Bank, ICICI Bank and State Bank of India, with State Bank of India acting as the Lead Bank. These working capital facilities are su icient for day-today operations of the company.

7.2. Interest Rate Management

During the year, the Reserve Bank of India reduced the Repo Rate by 100 basis points from 6.25% to 5.25%. However, the benefit of this rate reduction was not fully transmitted to borrowing costs across the Indian economy due to the global macroeconomic environment and persistent tight liquidity conditions in the banking system. Despite these challenges, your Company proactively managed its banking and treasury operations and successfully achieved significant reduction in its borrowing cost during the year, reflecting strong financial discipline, e icient treasury management, and enhanced confidence among lending institutions. As on March 31, 2026, the Companys short-term borrowings stood at 133.61 crores, including foreign currency suppliers credit, at a weighted average interest rate of 6.66% per annum, inclusive of forward premium. Interest accrued on these borrowings amounting to 0.61 crore has been paid in the subsequent quarter. During the year, the Company fully repaid its term loan amounting to 7.16 crores on a timely basis, and accordingly, no term loan was outstanding as on March 31, 2026.

7.3. Upgradation of External Credit Ratings

During the year, your company achieved a significant milestone as the credit rating were upgraded for the first time ever, since demerger. CARE Ratings Limited upgraded the Companys credit ratings from CARE A- (Stable) to CARE A (Stable) for long-term bank facilities and from CARE A2+ to CARE A1 for short-term bank facilities. The rating upgrade reflects the Companys e icient cash flow management, prudent financial practices, consistent track record of timely debt servicing and a healthy balance sheet position. The improvement in ratings further reinforces the confidence of credit rating agency, lenders, financial institutions, and other stakeholders in the Companys operational and financial strength.

7.4. Expansion through Internal Accruals

During the year, your company incurred 67.93 crores on growth and maintenance capital expenditure. These funds were financed through companys internal accruals. This Capex has further strengthened companys capacity, forward integration into knitting fabric and enhancing the solar energy capacity. This demonstrates the prudent capital allocation policies and strength of balance sheet.

8: BOARD MEETINGS

The Board of Directors follows a structured approach to planning and conducting its meetings, which are typically scheduled in advance. However, meetings may occasionally be convened at shorter notice for urgent matters, subject to compliances with applicable requirements. During the financial year ended March 31, 2026, the Board of Directors met four times (i.e. on May 05, 2025, July 29, 2025, November 01, 2025 and January 29, 2026) to review strategic, operational and financial performance of the company. However, no meeting was held on shorter notice during the reporting financial year. Details of the Board meetings are also provided in the Corporate Governance Report. The intervals between the meetings were in compliance with the Companies Act, 2013 and SEBI Listing Regulations, 2015.

9: DIRECTORS

(i) Your Directors are pleased to announce that Mr. Raman Chopra, Non-Executive Director, is retiring by rotation and being eligible, offer himself for re-appointment. The Board recommends his re-appointment at the ensuing Annual General Meeting.

(ii) On the recommendation of the Nomination and Remuneration Committee(NRC), the Board of Directors at their meeting held on January 29, 2026 recommended the appointment of Mr. Alok Raj, IRS(Retd.) as Independent Director of the Company for a term of 5 consecutive years w.e.f. April 01, 2026 to March 31, 2031, which was approved by the shareholders through postal ballot on March 12, 2026.

(iii) Justice Ravindra Singh (Retd.) had completed his term as Independent Director of the Company on March 31, 2026. The Board of Directors and management of the Company expressed their appreciation and gratitude to him for his valuable contribution for sustainable growth of the Company.

(iv) All Independent Directors have submitted declarations confirming their independence and a irming their ability to discharge duties objectively and without external influence. Compliance with Section 149(6) of the Companies Act, 2013, and Regulation 16(1) (b) & Regulation 25(8) of the SEBI Listing Regulations has been duly ensured.

Further, None of the Directors are debarred from holding the office of Director pursuant to any order issued by SEBI, MCA or any other authority in line with SEBI circular dated June 20, 2018 on the enforcement of SEBI order on the appointment of Directors by the listed Companies. The certificate in this regard have been obtained from the Secretarial Auditor of the Company.

In the opinion of the Board, the Independent Directors on the Board of the Company possess the requisite qualifications, experience, expertise, proficiency and uphold high standards of integrity in terms of Rule 8 of the Companies (Accounts) Rules, 2014.

(v) Lead Independent Director:

The Board of Director, in its meeting held on July 29, 2025, appointed Mrs. Sudha Pillai, Independent Director and Chairperson of the Nomination & Remuneration Committee, as the Lead Independent Director. Her role involved strengthening governance, facilitating independent oversight, and enhancing board effectiveness. The specific roles and responsibilities of the Lead Independent Director are detailed in the Corporate Governance Report within the Annual Report.

(vi) Procedure for Nomination and Appointment of Directors

Detailed information regarding the nomination and appointment process of Directors, along with the list of core skills, expertise, and competencies of the Board of Directors, is provided in the Corporate Governance Report, which is formed part of the Annual Report. The Corporate Governance Report offers comprehensive insights into the governance practices of the Company, ensuring transparency and accountability in the selection and composition of the Board of Directors.

(vii) Familiarization program for Independent Directors:

The Company has a structured familiarization programme for its Independent Directors, aimed at enabling them to understand the Company, its operations, business environment, and the regulatory framework applicable to it. At the time of appointment of a Director (including Independent Directors), a formal letter of appointment is issued, outlining, inter alia, the role, functions, duties, and responsibilities expected of them as a Director of the Company. The Directors are also apprised of their compliance obligations under the Companies Act, 2013, the Listing Regulations, and other applicable laws.

The management conducts interactions with newly appointed Directors to familiarize them with the Companys operations. Additionally, upon request, site visits to various plant locations are organized to provide practical exposure to the Companys operational processes. Further, on an ongoing basis, presentations are regularly made as part of the agenda of Board and Committee meetings, covering, inter alia, the Companys business and operations, industry developments, and regulatory updates. During the Financial year, Company also organized the plant visit of the three Independent Directors.

(viii) Board Evaluation

In line with the Companies Act, 2013, SEBI Guidance Note on Board Evaluation, and SEBI Listing Regulations, the Board conducted its annual evaluation for the financial year 2025-26 during its meeting held on April 30, 2026, wherein the performance of all Independent Directors (except the Director being evaluated) was assessed by the entire Board. Additionally, a separate meeting of Independent Directors was held on April 10, 2026, to evaluate the performance of the Non-Independent Directors, Chairman of the Board, the Board as a whole and its Committees, in accordance with the requirements of Schedule IV to the Companies Act, 2013 and Regulation 25(3) of the SEBI Listing Regulations. For reference, the corresponding evaluations for the financial year 2024-25 were conducted at the Board meeting held on May 5, 2025, and at the separate Independent Directors meeting held on April 15, 2025.

The Boards evaluation covered critical areas such as roles and responsibilities, competencies, strategic direction, risk management, diversity, and industry relevance. A comprehensive questionnaire was circulated to assess Directors knowledge, independence, involvement in decision-making, strategic engagement, and risk awareness. The evaluation also included an assessment of the Chairmans leadership, coordination, and facilitation skills after taking feedback from executive directors and non-executive directors.

The Nomination and Remuneration Committee (NRC) reviewed the performance of individual Directors based on their contributions to the Board and its committees. Additionally, the profit-based commission for Directors was determined, ensuring that remuneration aligns with individual and overall Board performance.

This structured evaluation process strengthens Board effectiveness, enhances individual contributions, and ensures fair and performance-driven remuneration, reinforcing our commitment to strong corporate governance.

10: KEY MANAGERIAL PERSONNEL

During the financial year ended on March 31, 2026, Mr. R Balakrishnan, Chief Executive O icer of the Company was superannuated on May 31, 2025 and Mr. Marshal Rajendrakumar Sonavane was appointed as Chief Executive O icer of the Company w.e.f. June 01, 2025. Further Mr. M. Parasuraman is also appointed as Chief Financial O icer (CFO) of the Company w.e.f. May 29, 2025. The Board had designated them as Key Managerial Personnel of the Company.

In terms of Section 203 of the Act, the Key Managerial Personnel (‘KMPs) of the Company during the Financial Year ended on March 31, 2026 are

1. Mr. Marshal Rajendrakumar Sonavane, CEO

2. Mr. Lalit Narayan Dwivedi, Company Secretary and

3. Mr. M. Parasuraman, CFO

11: MANAGERIAL REMUNERATION & PARTICULARS OF EMPLOYEES

Disclosures regarding remuneration and other relevant details, as required by Section 197(12) of the Companies Act, 2013, and Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, have been provided as an Annexure to this Report.

Further as per the provisions of Section 197(12) of the Companies Act, 2013, read with Rule 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, a statement containing the names and other particulars of employees who receive remuneration exceeding the limits specified in the aforementioned rules has been attached as Annexure-I to this Report. This statement provides the necessary information about such employees in accordance with applicable accounting requirements.

12: COMMITTEES OF THE BOARD OF DIRECTORS

In view of the changes in the composition of the Board and to strengthen corporate governance practices and executing smooth business operations of the Company, the Board of Directors has constituted/ reconstituted the following Committees:

Sr. No.	Name of Committees
1	Audit Committee
2	Nomination & Remuneration Committee
3	Stakeholders Relationship Committee
4	Risk Management Committee
5	Corporate Social Responsibility Committee
6	Banking & Operations Committee

12.1. Audit Committee

The Board of Directors in its meeting held on March 06, 2023 constituted the Audit Committee as per the requirement of Section 177 of the Companies Act, 2013 read with Rule 6 of the Companies (Meetings of Board and its Powers) Rules, 2014, and Regulation 18 of the Listing Regulations. The Committee was subsequently reconstituted w.e.f. March 06, 2025.

The primary purpose of the Audit Committee is to ensure effective supervision and monitoring of the managements financial reporting process, while upholding the highest standards of transparency, integrity, and financial reporting quality.

As on March 31, 2026, the Committee comprises of three members. The Committee is chaired by Mr. C. R. Rajagopal, with Mr. V. K. Jeyakodi and Mr. Raman Chopra serving as members. All members of the Committee are Non-Executive Directors (majority of Independent Director), having expertise in finance, accounts, strategy, tax, and general administration. During the financial year, the committee convened four meetings (May 05, 2025, July 29, 2025, November 01, 2025 and January 29, 2026). Further details about the Audit committee can be found in the Corporate Governance Report at page no. 60-61.

Communication Framework between Those Charged with Governance (TCWG) and Statutory Auditors:

Pursuant to the NFRA circular dated January 07, 2026, the Board of Directors in its Meeting held on January 29, 2026, formed the TCWG, consisting all the members of Audit Committee. Subsequent to the financial year ended on March 31, 2026, on the recommendation of the Audit Committee, the Board of Directors of the Company, in its meeting held on April 30, 2026 approved a formal Communication Framework between Those Charged with Governance (TCWG) and Statutory Auditors — a structured governance mechanism designed to strengthen audit quality, enhance transparency, and ensure effective two-way communication between the Audit Committee and the Statutory Auditors throughout the audit cycle.

The Framework establishes, inter alia, the following governance architecture:

The Audit Committee of the Board of Directors has been designated as TCWG for the purposes of the Framework, with the Chairman of the Audit Committee and Mr. Raman Chopra, Audit Committee Member serving as Nodal Persons on behalf of the Board, and the Audit Engagement Partner serving as Nodal Person on behalf of the Statutory Auditors;

Structured meetings between the Nodal Persons of the Board and the Audit Engagement Team at least once every quarter, separately from and in addition to the regular Audit Committee meetings, to facilitate candid and direct communication on significant audit matters;

A minimum of three formal communications by the Statutory Auditors to TCWG during the year

— before commencement of audit along with the Audit Plan; after completion of test of controls and before conclusion of substantive testing; and at the completion of the audit;

A comprehensive two-way communication protocol covering audit strategy and planning, risk of material misstatement, significant accounting estimates and judgments, internal financial controls, related party transactions, fraud risks, going concern assessment, auditor independence, and key audit matters;

A formal escalation mechanism for immediate communication to TCWG of significant matters having impact on financial reporting, fraud, serious control failures, regulatory breaches, or any di iculties encountered in the conduct of the audit; and

Robust documentation standards for all communications, including agreed minutes of meetings, written confirmations prior to issuance of audit reports, and maintenance of a traceable audit communication record.

The TCWG held an independent meeting with the Statutory Auditors on April 28, 2026, in compliance with the requirements of the NFRA Circular dated January 07, 2026 and the applicable provisions of the Framework. This meeting provided TCWG with an unrestricted forum to engage directly with the Statutory Auditor on matters of audit quality, independence, and significant findings.

The Board believes that the adoption of this Framework reflects GHCL Textiles Limiteds commitment to the highest standards of audit governance and positions the Company at the forefront of evolving regulatory expectations in this area. The Framework is available on the Companys website at www.ghcltextiles.co.in

12.2. Nomination & Remuneration Committee

The Nomination & Remuneration Committee has been constituted as per the requirement of Section 178 of the Companies Act, 2013 and Regulation 19 of the Listing Regulations. The Committee was reconstituted w.e.f. March 06, 2025. Subsequent to the financial year end, the

Committee was further reconstituted on April 01, 2026, following the appointment of Mr. Alok Raj, Independent Director.

The Committee is responsible for determining the qualifications, positive attributes, and independence of Directors, and to recommending a remuneration policy for Directors, Key Managerial Personnel, and other employees.

As on March 31, 2026, Nomination & Remuneration Committee comprised of three Independent Directors. The Committee is chaired by Mrs. Sudha Pillai, with Justice Ravindra Singh (Retd.) and Mr. V K Jeyakodi, serving as members. Further details about the Committee can be found in the Corporate Governance Report at page no. 62-65.

Nomination and Remuneration Policy

The Board, upon the recommendation of NRC, has approved the Nomination and Remuneration Policy for Directors, Key Managerial Personnel (KMP), and all other employees. The Policy aims to attract, retain, and motivate qualified individuals, ensure market competitiveness in salaries, provide performance-based rewards, and comply with statutory requirements. It provides guidance for the effective management of nominations and remuneration decision, aligning with Companys strategic objectives and industry benchmarks. The Policy is available on the website at the company https://ghcltextiles.co.in/wp-content/ uploads/2024/04/GHCL-Textiles-Limited-Nomination-and-Remunration-Policy.pdf

12.3. Stakeholders Relationship Committee

The Stakeholders Relationship Committee has been established in accordance with Section 178(5) of the Companies Act, 2013, and Regulation 20 of the Listing Regulations. The Committee was reconstituted w.e.f. March 06, 2025. Subsequent to the financial year end, the Committee is further reconstituted w.e.f. April 01, 2026 after appointment of Mr. Alok Raj as an Independent Director and tenure completion of Justice Ravindra Singh (Retd.).

The Committees main responsibility is to address and resolve grievances raised by the Companys security holders, which include concerns related to share transfers, non-receipt of annual reports, and non-receipt of dividends, among others. The detail composition of the Committee is provided in Corporate Governance Report. As on March 31, 2026, Stakeholders Relationship Committee comprised four Non-Executive Directors. The Committee is chaired by Justice Ravindra Singh (Retd.) with Mr. Ravi Shanker Jalan, Mr. Raman Chopra, and Mr. Neelabh Dalmia serving as members of the Committee. Further details about the Committee can be found in the Corporate Governance Report at page no. 65-66.

12.4. Risk Management Committee

As per Regulation 21 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, constitution of a Risk Management Committee is mandatory for the top 1,000 listed companies based on market capitalisation as at the end of the immediately preceding financial year. Although this requirement is not presently applicable to the Company, the Board of Directors, as a measure of good corporate governance, has voluntarily constituted a Risk Management Committee and formulated a Risk Management Policy to identify, assess, and mitigate key business risks.

As on March 31, 2026, the Committee comprised five Non-Executive Directors, with Mr. C. R. Rajagopal, Independent Director, serving as Chairman. The other members of the Committee are Mr. Anurag Dalmia, Mr. Ravi Shanker Jalan, Mr. Raman Chopra, and Mr. Neelabh Dalmia. Subsequent to the financial year end, the Committee was further reconstituted vide a circular resolution with effect from April 01, 2026, pursuant to which Mr. Marshal R. Sonavane, CEO (non-Board member), was appointed as a member of the Committee in recognition of the importance of senior management participation in the risk oversight framework.

The Company recognises that technological advancements, geopolitical developments, and evolving regulatory and environmental requirements have significant bearing on its business. To ensure long-term sustainability, the Company systematically manages risks and seeks to capitalise on opportunities arising from these factors. The Board of Directors holds ultimate responsibility for risk oversight, while the Risk Management Committee provides strategic guidance for implementing the Risk Management Policy across the organisation. The operational heads of each business unit serve as risk owners, monitoring key risks and proactively implementing appropriate mitigation plans, thereby preventing significant adverse events and contributing to long-term value creation.

The Companys Risk Management Policy, as approved by the Board, is available on the Companys website at: https://ghcltextiles.co.in/wp-content/uploads/2023/02/ Risk-Management-Policy.pdf

12.5. Corporate Social Responsibility Committee

The Company continues to uphold its dedication to promoting inclusive and sustainable growth and has been involved in initiatives focused on the overall development and well-being of society. In order to reach a wider range of beneficiaries, the company has expanded and improved its Corporate Social Responsibility (CSR) initiatives through the GHCL Foundation Trust.

These efforts aim to empower marginalized and disadvantaged communities by enhancing access to quality education, healthcare, job opportunities, and environmental sustainability. The Company has also played a role in building vital social infrastructure, thus improving the overall quality of life and wellness of the communities it supports. By adopting a systematic and results-focused strategy, the Company persists in generating significant and enduring value for the broader society The Companys CSR activities are guided by a comprehensive CSR Policy. The details of policy and annual plan can be accessed on Company website www.ghcltextiles.co.in. The CSR Policy can be found directly at the link: https://ghcltextiles.co.in/investors/ csr-policies. During the financial year, Company has incurred 66 lacs towards its CSR obligation and adjusted the same against the value of the land donated to the State Government of Tamilnadu for construction of a stadium to support rural sports. GHCL Foundation also incurred 55 lacs towards CSR activities, during the financial year 2025-26 in the nearby areas of the plants of the Company in the field of Agriculture, Health, Education & Vocational Training, Women empowerment etc. and there were approx. 10,000 beneficiaries benefited from the CSR activities during the financial year.

The CSR Committee of the Company was reconstituted w.e.f. March 06, 2025, with four Non-Executive Directors. Mr. Anurag Dalmia, Non-Executive Director serving as the Chairperson. The other members of the Committee are Justice Ravindra Singh (Retd.), Mrs. Sudha Pillai, Independent Directors and Mr. Neelabh Dalmia, Non-executive Director. Subsequent to the financial year end, the Committee is further reconstituted w.e.f. April 01, 2026 after appointment of Mr. Alok Raj as an Independent Director and tenure completion of Justice Ravindra Singh (Retd.). Detailed information about the Committee and its activities can be found in the Corporate Governance Report and website of the Company. A detailed report on CSR activities is provided in Annexure-II attached with this report.

12.6. Banking & Operations Committee

The Board of Directors had constituted the Banking and Operations Committee to facilitate the day to day functioning of the Company and to exercise powers delegated by the Board. This Committee meets as per the requirement of business, to expedite all matters relating to operations and granting authority for various functional requirements such as issue of Power of Attorney, arranging / negotiating of term loans, working capital loan, short term loan, dealings with Central / State Governments including their agents and various statutory / judicial / regulatory / local / commercial / excise / customs / port / sales tax / income tax / electricity board etc. and other authorities on behalf of the Company in line with the delegated authority of Board of Directors from time to time. As on March 31, 2026, the Members of the Committee include Justice Ravindra Singh (Retd.), Independent Director, Mr. Raman Chopra and Mr. Neelabh Dalmia, Non-Executive Directors of the Company. Subsequent to the financial year end, the Committee is reconstituted w.e.f. April 01, 2026 and Mr. Alok Raj, Independent Director, Mr. Ravi Shanker Jalan, Mr. Raman Chopra and Mr. Neelabh Dalmia, Non-Executive Directors are the present members of the Committee.

13:VIGIL MECHANISM

In terms of Section 177(9) and (10) of the Companies Act, 2013 read with Rule 7 of the Companies (Meetings of Board and its Powers) Rules, 2014 and Regulation 22 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, every listed company is required to establish a Vigil Mechanism for its Directors and employees to report genuine concerns about unethical behaviour, actual or suspected fraud, or violation of the Companys Code of Conduct or Ethics Policy.

In compliance with the above requirements and in furtherance of its commitment to conducting its affairs in a fair, transparent, and ethical manner, GHCL Textiles Limited has established a robust Vigil Mechanism, the framework for which is embodied in the Companys Whistle Blower Policy. The Policy provides a structured and secure channel for Directors, employees, and other stakeholders to report genuine concerns, instances of misconduct, or violations of applicable laws, regulations, or the Companys Code of Conduct, directly to the Ombudsperson and / or the Chairperson of the Audit Committee, without fear of retaliation, victimisation, or any adverse consequences. Adequate safeguards are in place to protect persons who avail of the Vigil Mechanism and report concerns in good faith.

The Vigil Mechanism ensures that:

any Director or employee may report concerns directly to the Chairperson of the Audit Committee in exceptional cases, bypassing the normal reporting hierarchy; the identity of the person availing the Vigil Mechanism is protected to the extent possible and consistent with the need to conduct a fair investigation; and the Audit Committee oversees the functioning of the Vigil Mechanism and receives periodic updates on complaints received, investigated, and resolved thereunder.

The Vigil Mechanism is periodically reviewed to ensure its continued relevance and effectiveness. During the financial year ended March 31, 2026, no complaint was received under the Vigil Mechanism. The Whistle Blower Policy, which embodies the Vigil Mechanism framework of the Company, is available on the Companys website at www.ghcltextiles.co.in.

14: DISCLOSURES AS PER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION & REDRESSAL) ACT, 2013

Your Company is deeply committed to creating and maintaining a safe, inclusive and respectful work environment where every individual is protected from any form of harassment, exploitation, or intimidation. In line with this commitment, and as mandated by the Sexual Harassment of Women at Workplace (Prevention, Prohibition & Redressal) Act, 2013 ("POSH Act") and its related Rules, the Company has adopted a comprehensive Policy for the prevention of sexual harassment. Internal Complaints Committees have been set up at all major locations of the Company. These Committees are entrusted with the responsibility of receiving and addressing any complaints of sexual harassment at the workplace. They operate with transparency, impartiality, and adhere to prescribed timelines, to ensure a fair and unbiased investigation process. The Company also conducts regular awareness programs to educate employees about their rights, the provisions of the POSH Act, and the available redressal mechanism. These initiatives aim to build a culture of respect, sensitivity, and gender equality in the workplace. We are pleased to report that no complaint related to sexual harassment were received during the financial year ended on March 31, 2026, under the POSH Act.

15: CHANGE IN NATURE OF BUSINESS

During the financial year 2025-26, the core business of the Company remained unchanged, ensuring continuity, stability, and consistency in its operations. The Company has undertaken strategic initiatives to expand its product portfolio, with the addition of Specialty Yarn (Core Spun and Slub Yarn) in its product basket, in the financial year 2025-26.

Further, we would like to confirm that there is no material change in the nature of business of the Company during the period from April 1, 2026, to till the date of signing this report.

16: SUBSIDIARIES, JOINT VENTURES & ASSOCIATES

The Company does not have any subsidiary, joint venture or associate Company as on March 31, 2026.

17: CORPORATE GOVERNANCE

The Company places great importance on maintaining the highest standards of Corporate Governance. It recognizes that good governance practices not only promote transparency and accountability but also contribute to the overall credibility and trustworthiness of the organization. In line with this commitment, the Company diligently adheres to the Corporate Governance requirements set out by the Securities and Exchange Board of India (SEBI). To strengthen its governance framework, the Company has implemented several best practices. These practices encompass various aspects of governance, including board composition and structure, independent Directors, board Committees, risk management, internal controls, ethical conduct, and stakeholder engagement. These practices are designed to ensure effective oversight, decision-making, and protection of the interests of all stakeholders. As part of the Annual Report, the Company includes a comprehensive report on Corporate Governance, as mandated by Regulation 34 of the SEBI Listing Regulations. This report provides detailed information on the Companys governance structure, policies, and practices, giving stakeholders valuable insights into the Companys governance framework. Furthermore, the Company obtains a certificate from its Statutory Auditor, confirming compliance with the conditions of Corporate Governance as stipulated under SEBI Listing Regulations,2015. This certificate serves as an independent validation of the Companys adherence to the prescribed governance norms.

By upholding strong Corporate Governance standards and integrating best practices, the Company aims to foster trust, integrity, and long-term sustainability. It recognizes that effective governance is essential for creating value and maintaining strong relationships with shareholders, employees, customers, suppliers, and other stakeholders.

18: BUSINESS RESPONSIBILITY AND SUSTAINABILITY REPORT (BRSR)

As per the revised Regulation 34(2)(f) of the SEBI Listing Regulations, 2015 and the National Guidelines on Responsible Business Conduct (NGRBC) issued by the Ministry of Corporate Affairs, Government of India, the top one thousand listed Companies by market capitalization are required to prepare and present a Business Responsibility and Sustainability Report (BRSR) in line of the erstwhile Business Responsibility Report (BRR) to the stakeholders. As on December 31, 2025, GHCL Textiles Limited is ranked on 1525^th position at NSE and on 1607^th position at BSE based on market capitalization, accordingly reporting of Business Responsibility and Sustainability Report (BRSR) as per Regulation 34(2)(f) of the Listing Regulations, 2015 is not applicable for FY 2025-26.

19: SECRETARIAL STANDARDS

During the year under review, the Company has complied with all the applicable provisions of the Secretarial Standards issued by the Institute of Company Secretaries of India and notified by the Ministry of Corporate Affairs. These standards serve as essential benchmarks for ensuring effective corporate governance, standardized practices, and regulatory compliance in the conduct of Board and General Meetings.

The Company has consistently ensured compliance through well-defined internal processes, proper documentation, and timely and accurate disclosures. This disciplined approach not only strengthens the Companys governance framework but also enhances stakeholder confidence and trust in the Companys operations and management practices.

20: AUDITORS AND AUDIT REPORTS

(i) Statutory Auditor

S. R. Batliboi & Co. LLP, Chartered Accountants (ICAI Firm Registration No. 301003E/E300005), were appointed as the Statutory Auditor of the Company at the 1st Annual General Meeting held on June 18, 2021, for a period of five consecutive years commencing from the conclusion of the 1st AGM until the conclusion of the 6th AGM, to conduct the statutory audit for the financial years 2021-22 to 2025-26. S. R. Batliboi & Co., LLP have audited the books of accounts of the Company for the financial year ended March 31, 2026 and have issued their Audit Report thereon. Their tenure stands completed at the conclusion of the ensuing 6th Annual General Meeting.

Appointment of New Statutory Auditor: Upon the recommendation of the Audit Committee, the Board of Directors at its meeting held on April 30, 2026 has recommended to the Members the appointment of Deloitte Haskins & Sells Chartered Accountants LLP, (Firm Registration No. 117364W/W100739) as the Statutory Auditor of the Company, for a term of five consecutive years commencing from the conclusion of the 6th Annual General Meeting until the conclusion of the 11th Annual General Meeting, to conduct the statutory audit for the financial years 2026-27 to 2030-31, subject to approval of Members at the ensuing 6th Annual General Meeting.

The Company has received from Deloitte Haskins & Sells Chartered Accountants LLP a written consent to the proposed appointment under Section 139(1) of the Companies Act, 2013, and a certificate confirming that the firm satisfies the eligibility criteria prescribed under Section 141 of the Act and that the appointment, if made, shall be in accordance with the applicable provisions of the Act and the rules framed thereunder.

An Ordinary Resolution proposing this appointment, along with the detailed profile of Deloitte Haskins & Sells Chartered Accountants LLP, the remuneration structure, and the Explanatory Statement pursuant to Section 102 of the Companies Act, 2013, forms part of the Notice of the 6th Annual General Meeting annexed to this Annual Report, to which Members are requested to refer.

(ii) Cost Auditor

The Company maintains cost records as prescribed under Section 148 of the Companies Act, 2013, and appoint Cost Accountant to conduct an audit of these records. The Board of Directors in its meeting held on May 05, 2025 based on the recommendation of the Audit Committee, appointed R J Goel & Co., Cost Accountants, New Delhi, as the Cost Auditor of the Company for the financial year ended on March 31, 2026. The Cost Audit Report for the financial year ended March 31, 2025, does not contain any qualification or adverse remarks requiring clarification or explanation.

(iii) Internal Auditor

As per provisions of Section 138 of the Companies Act, 2013, every Listed Company is required to appoint an Internal Auditor to conduct internal audit of the functions and activities of the Company.

The Board of Directors in its meeting held on May 05, 2025 based on the recommendation of the Audit Committee, has approved the appointment of M/s. SPMB and Co. LLP, Chartered Accountants, Chennai, as the Internal Auditor of the Company for the financial year ended on March 31, 2026 to conduct the internal audit of the activities of the Company.

(iv) Secretarial Auditor

Section 204 of the Companies Act, 2013 read with Regulation 24A of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 requires every listed company to undertake a Secretarial Audit and annex the Secretarial Audit Report, given by a Company Secretary in practice in the prescribed form, to its Boards Report.

In compliance with the above requirements, the shareholders of the Company at the 5th Annual General Meeting held on July 21, 2025 appointed Chandrasekaran Associates, Company Secretaries, New Delhi (Firm Registration No. P1988DE002500), as the Secretarial Auditor of the Company for five consecutive financial years from FY 2025-26 to FY 2029-30.

The Secretarial Audit Report in Form MR-3 for the financial year ended March 31, 2026, as issued by

Chandrasekaran Associates, is annexed to this Boards Report as Annexure-III and forms an integral part thereof. Members are requested to refer to the said Report for details of the secretarial audit conducted and the findings thereof.

(v) Auditors Report

The Board is pleased to report that neither the Statutory Auditor, S. R. Batliboi & Co. LLP, nor the Secretarial Auditor, Chandrasekaran Associates, have made any qualification, reservation, adverse remark, or disclaimer in their respective Reports for the financial year ended March 31, 2026. Accordingly, no further explanation or comment is required from the Board under Section 134(3)(f) of the Companies Act, 2013.

However, the Board wishes to place on record the following clarification in respect of the observations made by the Statutory Auditors regarding transfer of title deeds: the properties in question were duly transferred from GHCL Limited (Demerged Company) to GHCL Textiles Limited (Resulting Company) pursuant to the approved Scheme of Demerger sanctioned by the National Company Law Tribunal. Mutation of the said properties in the revenue records has been completed for a majority of the land parcels, and the process is actively underway for the remaining parcels. The Board expects the mutation process to be fully completed during the financial year 2026-27.

21: LISTING STATUS

Companys equity shares are listed on BSE Limited and National Stock Exchange of India Limited w.e.f. June 12, 2023. We have paid the annual listing fees for the financial years 2025-26 and 2026-27 to both stock exchanges, ensuring our continued listing and trading.

22: WEB ADDRESS FOR ANNUAL RETURN AND OTHER POLICIES / DOCUMENTS

The Company has a fully functional website viz www. ghcltextiles.co.in. All the Policies/documents are available on the website of the Company as per the statutory requirements. In terms of Section 92(3) read with Section 134(3)(a) of the Act and rules thereto, the Annual Return of the Company in Form MGT – 7 for the financial year ended on March 31, 2026 is available on the Companys website at: https://ghcltextiles.co.in/ investors/annual-report-integrated-report/

23: CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNING AND OUTGO

The information on conservation of energy, technology absorption, and foreign exchange earnings and outgo, as required under Section 134 (3) (m) of the Companies Act, 2013 and Rule 8 of the Companies (Accounts) Rules, 2014, is provided in Annexure – IV, which is an integral part of this Report.

24: RELATED PARTY TRANSACTIONS

The Company has not engaged in any significant related party transactions with its Promoters, Directors, Key Managerial Personnel, or other designated persons that could potentially conflict with the Companys interests. Therefore, the disclosure requirement under Section 134(3)(h) of the Companies Act, 2013, in Form AOC-2 does not apply. All Related Party Transactions undergo thorough review and approval by the Audit Committee. For repetitive transactions conducted on an arms length basis in the ordinary course of business, prior omnibus approval is obtained from the Committee. Quarterly, a statement detailing all related party transactions, supported by a certificate from the Chief Financial O icer / person controlling the finance, is presented to both the Committee and the Board. There are no materially significant related party transactions made by the Company with Promoters, Directors, Key Managerial Personnel or other designated persons which may have a potential conflict with the interest of the Company at large.

25: PARTICULARS OF LOANS/GUARANTEES, OR INVESTMENTS

The details of loans, guarantees, and investments covered under the provisions of Section 186 of the Companies Act, 2013 are provided in the notes to the Financial Statements. These notes offer comprehensive information regarding the nature, terms, and conditions of such loans, guarantees, and investments. They also include disclosures on any Related Party Transactions, if applicable, and any significant developments or changes in these arrangements.

The purpose of including these details in the notes to the Financial Statements is to ensure transparency and provide stakeholders with a clear understanding of the Companys financial activities and commitments.

Stakeholders are encouraged to refer to the relevant section in the Financial Statements to obtain a comprehensive overview of the loans, guarantees, and investments made by the Company in accordance with the provisions of Section 186 of the Companies Act, 2013.

26: 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 the preparation of the annual accounts for the financial year ended March 31, 2026, the applicable accounting standards have been followed along with proper explanation relating to material departures, if any; b. such accounting policies as mentioned in the Notes to the Financial Statements have been selected and applied 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 as at March 31, 2026 and of the Profit and Loss of the Company for the financial year ended March 31, 2026; c. the proper and su icient care has been taken by them for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; d. the annual accounts for the financial year ended March 31, 2026 have been prepared by them on a going concern basis; e. proper internal financial controls have been followed by the Company and that such internal financial controls are adequate and were operating effectively; and f. proper systems to ensure compliance with the provisions of all applicable laws were in place and that such systems were adequate and operating effectively.

27: GENERAL DISCLOSURES

Your Directors state that no disclosure or reporting is required in respect of the following matters as there is no transaction on these items during the year under review: (i) Details relating to deposits covered under Chapter V of the Act.

(ii) Issue of equity shares with differential rights as to dividend, voting or otherwise.

(iii) Issue of shares (including sweat equity shares) to employees of the Company under any scheme. (iv) The Company does not have any Employee Stock Option Scheme. Further, the Company does not have any scheme of provision of money for the purchase of its own shares by employees or by trustees for the benefit of employees.

(v) No significant or material orders were passed by the Regulators or Courts or Tribunals, which impact the going concern status and Companys operations in future.

(vi) No fraud has been reported by the Auditors to the Audit Committee or the Board under Section 143(12) of the Act.

(vii) There is no Corporate Insolvency Resolution Process initiated under the Insolvency and Bankruptcy Code, 2016.

28: ACKNOWLEDGEMENT

The Board of Directors extends its heartfelt gratitude to the customers, vendors, dealers, investors, business associates, and bankers for their support throughout the year. Their continued trust and collaboration have played a significant role in the Companys success.

The Board also acknowledges and appreciates the dedication and contributions of the employees at all levels. Their commitment, hard work, teamwork, and support have been instrumental in overcoming challenges and achieving our goa s. We value their resilience and unwavering commitment to the Companys growth.

Furthermore, the Board expresses sincere thanks to the Government of India, the State Governments, statutory authorities, and other government agencies for their support. We acknowledge their role in creating a conducive business environment and look forward to their continued support in the future.

The collective efforts and support of all stakeholders have been crucial in driving the Companys progress, and the Board acknowledges their invaluable contributions.

	For GHCL TEXTILES LIMITED
	Sd/
	Anurag Dalmia
Date: April 30, 2026	Chairman
Place: Noida	DIN: 00120710