GHCL Textiles Ltd Directors Report

Dear Members,

We are delighted to present the 5^th Board?s Report and the Audited Financial Statements of the Company for the financial year ended March 31, 2025.

In this report, we highlight the key achievements, challenges, and progress made by our Company during the reporting financial year. We delve into the core aspects of our business, including our financial performance, operational activities, governance practices, and our contributions to the environment, society, and stakeholders.

FINANCIAL RESULTS AND STATE OF AFFAIRS

Your Directors are pleased to inform that post demerger of Spinning Division of GHCL Limited ("Demerged Company") into GHCL Textiles Limited (‘Resulting Company?), Company started its business operations w.e.f. April 01, 2023. Summary of the financial performance of the Company for the financial year ended March 31, 2025 (compared to the previous year ended on March 31, 2024) as follows:

	Rs. in crores
Particulars	Year ended March	Year ended March
	31, 2025	31, 2024
Net Sales /Income	1,168.12	1059.50
Gross profit before interest and depreciation	116.68	89.26
Finance Cost	2.74	7.35
Profit before Depreciation and amortization expense	113.94	81.91
Depreciation and amortization expense	50.65	47.36
PBT before exceptional items	63.29	34.55
Profit before Tax (PBT)	63.29	34.55
Tax Expenses	7.32	9.50
Profit after Tax	55.97	25.05
Profit for the year	55.97	25.05
Other comprehensive income (OCI)	0.43	1.44
Total Comprehensive income for the period	56.40	26.49
Balance brought forward from last year	26.48	(0.01)
Appropriations
FVTOCI Reserve	--	-
Final Dividend	4.78	-
Balance carried to Balance Sheet	78.10	26.48
EPS (basic) (in Rs.)	5.86	2.62
EPS (diluted) (in Rs.)	5.86	2.62
Book Value of Shares (in Rs.)	150.38	144.98

Company discontinued the production at the outdated Kaveri section of Manaparai unit of the Company w.e.f. March 24, 2025, due to high repair and maintenance costs associated with aging machinery. The proceeds from the sale of these assets will be strategically utilized to modernize other sections of the Unit, with a focus on value-added products.

The financial statements have been prepared in accordance with the Indian Accounting Standard (Ind AS). Adhering to Ind AS ensures compliance, transparency, and reliability in financial reporting, accurately presenting the Company?s financial position, performance, and cash flows.

DIVIDEND

We are pleased to announce that in accordance with our Dividend Distribution Policy, the Board of Directors has recommended a dividend of _ 0.50(fi_y paise) per equity share of _ 2/- each, representing 25 % of the paid-up equity share capital, for the financial year ending on March 31, 2025. The proposed dividend on equity shares is subject to the approval of the shareholders at the upcoming Annual General Meeting (AGM) scheduled on Monday, July 21, 2025.

Upon shareholder?s approval the dividend will be paid after the AGM, commencing on July 21, 2025 (Monday). The Record Date for determining the shareholders eligible for the dividend will be July 14, 2025 (Monday). In compliance with Section 194 of the Income Tax Act, 1961, our Company is obligated to deduct Tax Deducted at Source (TDS) at a rate of 10% on dividend payments. However, if the aggregate amount of dividend payable to an individual resident shareholder does not exceed _ 10,000, no TDS shall be deducted. Dividend payments made to entities such as Life Insurance Corporation, General Insurance Corporation of India, specified insurers, and Mutual Funds, as per Section 10(23D) of the Income Tax Act, 1961.

In case of non-resident shareholders, tax shall be deducted at source(TDS)at the rate of 20% along with the applicable surcharge and cess as per Section 195 of the Income Tax Act, 1961.

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

TRANSFER TO RESERVES

The Board of Directors has decided that no amount of profit for FY 2024-25 shall be transferred to the reserve account.

SHARE CAPITAL

As of March 31, 2025, 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

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 alognwith 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	8,315	19,54,028
Account at the beginning of the year i.e. as on April 1, 2024
Less: Number of Shareholders who claimed shares from Suspense Escrow	165	38,985
Account during the year 2024-25
Number of Shareholders and outstanding shares lying in the Suspense	8,150	19,15,043
Escrow Account at the end of the year i.e. as on March 31, 2025

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

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, 2025, the Board of Directors met four times (i.e. on

May 06, 2024, August 01, 2024, October 29, 2024 and February 03, 2025) to review the strategic, operational and financial performance of the Company. The 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, thereby ensuring effective governance and timely performance evaluation.

DIRECTORS

(i) Y our Directors are pleased to announce that Mr.

Ravi Shanker Jalan, 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) Y our Directors are pleased to inform that based on the recommendations of the Nomination and Remuneration Committee and the Board of Directors, the shareholders have appointed Mrs. Sudha Pillai, IAS (Retd.), Mr. V.K. Jeyakodi, IAS (Retd.) and Mr. C R Rajagopal as Independent Directors for a term of 5 consecutive years w.e.f. March 01, 2025 to February 28, 2030.

F urther Mrs. Vijaylaxmi Joshi, IAS (Retd.), Dr. Manoj

Vaish and Mr. Arun Kumar Jain, IRS (Retd.) have completed their term as Independent Directors of the Company on March 05, 2025. The Board of Directors and management of the Company expressed their appreciation and gratitude to all of them for their valuable contribution for sustainable growth of the Company.

(iii) 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. Additionally, no director is 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.

In the opinion of the Board, the 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.

(iv) Procedure for Nomination and Appointment of Directors

De tailed information regarding the nomination 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.

(v) F amiliarization program for Independent

Directors:

The Company has a structured familiarization programme for its Independent Directors. The objective of the programme is to enable the Independent Directors 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 to him, which inter alia outlines the role, function, duties and responsibilities expected of them as a Director of the Company. The Director is also briefed on the compliance obligations under the Companies Act, 2013, Listing Regulations and other applicable laws. The management of the Company also conducted interactions with the newly appointed Directors to familiarize them with the Company?s operations. Upon request, site visits to various plant locations are organized by the Company to provide the Directors with practical understanding of the operations of the Company. Further, on an ongoing basis and as part of Agenda of Board and Committee meetings, presentation are regularly made on various matters inter alia covering the Company?s business and operations, industry developments and regulatory updates.

(vi) Bo ard Evaluation

In ac cordance with the Companies , 2013,Act the SEBI Guidance Note on Board evaluation issued (via SEBI Master Circular dated July 11, 2023) and the relevant provisions of the SEBI Listing Regulations, 2015, the Independent Directors conducted an annual evaluation of the Board and its Committees and and individual Directors. The evaluation process involved a separate meeting of the Independent Directors and an assessment by the Board as a whole.

The Board assessed the effectiveness of its functioning, the Committees? performance, and the individual Directors? contributions based on feedback gathered from Directors and Committee members. The performance evaluation of the independent Directors was conducted on the Board meeting held on May 06, 2024, excluding the director being evaluated.

A dedicated meeting of the Independent Directors was held on April 15, 2024, to review the performance of non-independent Directors, the overall functioning of the Board and its Committees. The criteria for performance evaluation were broadly based on the SEBI Guidance Note on Board Evaluation, encompassing aspects such as Committee structure and composition, effectiveness of Committee meetings, and other governance parameters.

The performance evaluation of the Board and its Committees focused on various factors, including their functions, responsibilities, competencies, strategy, oversight tone at the top, risk identification and control, diversity, and nature of the business. A comprehensive questionnaire were circulated to the Independent Directors, covering multiple aspects of the Board?s functioning, organization culture, discharge of duties, professional obligations, and governance standards. The questionnaire aimed to assess Directors? knowledge, independence in decision-making, involvement in business planning, constructive engagement with colleagues, and understanding of the Company?s risk profile. Additionally, the Chairman of the Board and/ or Committee was evaluated based on leadership, coordination, and steering capabilities.

The Nomination & Remuneration Committee reviewed the performance of individual Directors, taking into account their contributions as members of the Board and its Committees. The Committee also determined the quantum of profit-based commission payable to Directors based on their individual performance and contribution.

These evaluation processes ensure that the Board operates effectively, individual Directors contributes significantly, and appropriate remuneration is provided based on performance.

KEY MANAGERIAL PERSONNEL

Pursuant to Section 203 read with Section 2(51) of the Companies Act, 2013, the Board of Directors in its meeting held on March 06, 2023 had appointed Mr. R Balakrishnan, as the CEO of the Company, Mr. Gaurav V as the CFO of the Company and Mr. Lalit Narayan Dwivedi, as a Company Secretary and Compliance O_icer of the Company. These appointments constituted the Key Managerial Personnel (KMP) of the Company in accordance with the statutory requirements. Further, Mr. Gaurav V. resigned from the post of CFO and was relived from the services of the Company w.e.f. closing of business hours on March 31, 2025. Apart from this, there were no change in the composition of the Key Managerial Personnel during the financial year 2024-25.

Subsequent to the end of the financial year, Mr. R Balakrishnan, CEO of the Company will superannuated on May 31, 2025 and to ensure smooth transition of business, based on the recommendation of Nomination & Remuneration Committee, the Board of Directors in its meeting held on May 05, 2025, approved the appointment of Mr. Marshal Rajendrakumar Sonavane as CEO w.e.f.

June 01, 2025 and during the interim period he is serving as CEO (designate). Further the Board of Directors, on recommendation of NRC and Audit Committee, approved the appointment Mr. M. Parasuraman as CFO of the Company w.e.f. May 29, 2025.

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.

RE-CONSTITUTION OF VARIOUS 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

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 management?s financial reporting process, while upholding the highest standards of transparency, integrity, and financial reporting quality. As on March 31, 2025, the Committee comprises of three members. The Committee is chaired by Mr. C R Rajagopal, with Mr. V K Jeyakodi, IAS(Retd.) 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 06, 2024, August 01, 2024, October 29,2024 and February 03, 2025). Further details about the Audit Committee can be found in the Corporate Governance Report at page no. 57-60.

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. 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, 2025, Nomination & Remuneration Committee comprised of three Independent Directors. The Committee is chaired by Mrs. Sudha Pillai, IAS (Retd), with Justice Ravindra Singh (Retd.) and Mr. V K Jeyakodi, IAS (Retd.) serving as members. Further details about the Committee can be found in the Corporate Governance Report at page no. 60- 64.

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. The Committee?s main responsibility is to address and resolve grievances raised by the Company?s 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, 2025, 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. 64-66.

4. Risk Management Committee

As per Regulation 21 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, for constitution of a Risk Management Committee is mandating for top 1000 Companies, based on market capitalization as at the end of the immediate preceding financial year. All though this requirement is not applicable upon the Company, the Board of Directors as a measure of good Corporate Governance, has voluntarily constituted a Risk Management Committee and formulated the Risk Management Policy to identify and mitigate key business risks. Subsequently, the Risk Management Committee was reconstituted w.e.f. March 06, 2025.

As on March 31, 2025, the Committee comprised of five Non-Executive Directors. Mr. C R Rajagopal, Independent Director serving as the Chairman. The other members of the Committee are Mr. Anurag Dalmia, Mr. Ravi Shanker Jalan, Mr. Raman Chopra and Mr. Neelabh Dalmia. Detailed information about the Committee and its activities can be found in the Corporate Governance Report at page no. 68-69.

The Company believes that various factors such as technological advancements, geopolitical environment, regulatory and environmental requirements have significant impacts on the business of the Company. To ensure sustainability, it is essential to systematically manage risks and seize opportunities arising from these factors. The Board of Directors holds the ultimate responsibility for risk oversight, while the Risk Management Committee provides guidance for implementing the risk management policy throughout the organization.

The operational heads of each business unit are primarily accountable for implementing the Company?s Risk Management Policy and fostering a risk-aware culture that support performance excellence. Senior executives in respective functional areas act as risk owners, monitoring key risks and proactively implementing appropriate mitigation plans. Their role is to prevent significant deviations or adverse events and to contribute to create a long term value creation for the business.

The Company?s Risk Management Policy, approved by the Board, can be accessed on the Company?s website https://ghcltextiles.co.in/wp-content/uploads/2023/02/ Risk-Management-Policy.pdf

5. Corporate Social Responsibility (CSR) Committee

Our Company is committed to fostering inclusive growth and has been actively engaged in projects aimed at society?s holistic development and welfare. Through the GHCL Foundation Trust, the Company expanded its CSR initiatives to reach a broader spectrum of beneficiaries, supporting marginalized communities and developing social infrastructure for their well-being.

The Company?s 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. The CSR Committee of the Company was reconstituted 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, IAS (Retd.), Independent Directors and Mr. Neelabh Dalmia, Non-executive Director. 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 as Annexure-II.

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, 2025, 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.

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 provide guidance for the effective management of nominations and remuneration decision, aligning with Company?s strategic objectives and industry benchmark. The Policy is available on the website of the Company https://ghcltextiles.co.in/wp-content/uploads/2024/04/ GHCL-Textiles-Limited-Nomination-and-Remunration-Policy.pdf

VIGIL MECHANISM / WHISTLE BLOWER POLICY

As a conscious and vigilant organization, GHCL Textiles Limited believes in the conduct of the affairs of its constituents in a fair and transparent manner, by adopting the highest standards of professionalism, honesty, integrity and ethical conduct. In its endeavor to provide its employee a secure and fearless working environment, the Company has established the "Whistle Blower Policy".

The objective of this Policy is to provide a platform for the Directors and employees to report any instance of unethical behaviour, actual or suspected fraud or violation of Company?s code of conduct or Ethics Policy, directly to the Ombudsperson and /or Chairperson of the Audit Committee. The Whistle Blower Policy is posted on the website of the Company at www.ghcltextiles.co.in. There are no complaints reported during the financial year under Vigil mechanism.

DIVIDEND DISTRIBUTION POLICY

As per Regulation 43A of the Securities and Exchange Board of India (Listing Obligations and Disclosures Requirements) Regulations, 2015, our Company?s Board of Directors 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 Board?s 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 Dividend Distribution Policy is available on Company?s 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 Company?s commitment to enhancing shareholder?s value.

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 2024-25 under the POSH Act.

CHANGE IN NATURE OF BUSINESS

During the Financial Year 2024-25, our Company?s core business remained unchanged, ensuring stability and consistency in our operations and services to customers.

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, 2025, to the date of signing this report.

SUBSIDIARIES, JOINT VENTURES & ASSOCIATES

The Company does not have any subsidiary, joint venture or associate Company as on March 31, 2025.

MANAGEMENT DISCUSSION & ANALYSIS

In accordance with Regulation 34 (2) (e) of the SEBI Listing Regulations, 2015, we would like to draw your attention to the comprehensive review of our Company?s operations, performance, and future outlook provided in the Management Discussion and Analysis (MDA) Report. This report is included as part of this Annual Report and is incorporated herein by reference.

The MDA offers detailed insights into various aspects of our business, including market trends, financial performance, key achievements, challenges, and strategic initiatives. It provides a holistic view of the Company?s operations and outlines our management?s perspective on the future prospects and opportunities. Stakeholders including shareholders and investors are encouraged to refer to the MDA for a comprehensive understanding of Company?s business performance and outlook. It serves as a valuable resource for in-depth analysis and assessment of Company?s strategic directions.

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 Company?s governance structure, policies, and practices, giving stakeholders valuable insights into the Company?s 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 Company?s 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.

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.

Starting from the financial year 2022-2023, filing the BRSR has become mandatory for the top 1000 listed companies based on market capitalization. As on December 31, 2024, GHCL Textiles Limited is ranked on 1368^th position at NSE and on 1427^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 2024-25.

SECRETARIAL STANDARDS

During the year under review, the Company has complied with all the applicable provisions of Secretarial Standards issued by Institute of Company Secretaries of India and notified by the Ministry of Corporate Affairs of India.

These standards are vital guidelines for ensuring compliance and governance. Adhering to these standards underscores our commitment to transparency, ethical practices, and effective stakeholder communication. Our strict adherence reflects our dedication to robust internal processes, accurate disclosures, and compliance culture, strengthening our governance framework and stakeholder trust.

AUDITORS AND AUDIT REPORTS

(i) Statutory Auditor

Your Directors would like to inform that in the 1^st AGM held on June 18, 2021, S. R. Batliboi & Co. LLP, Chartered Accountants (ICAI Firm Reg. No. 301003E / E300005), was appointed as the statutory auditor of the Company for a period of five consecutive years i.e. from the conclusion of 1^st AGM till the conclusion of 6^th AGM.

S. R. Batliboi & Co. LLP has audited the books of accounts of the Company for the financial year ended March 31, 2025 and has issued the Audit Report thereon.

(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 06, 2024 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, 2025. The Cost Audit Report for the financial year ended March 31, 2024, 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 06, 2024 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, 2025 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 SEBI (Listing Obligations and

Disclosure Requirements) Regulation 2015 inter-alia requires every listed Company to undertake Secretarial Audit and shall annex with its Board?s Report a Secretarial Audit Report given by a Company Secretary in practice, in the prescribed form. In line with the requirement of Section 204 of the Companies Act, 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 read with Regulation 24A of the Listing Regulations and other applicable provisions, if any, the Board of Directors of the Company in its meeting held on May 06, 2024 had appointed Chandrasekaran Associates, Company Secretaries, New Delhi, to conduct Secretarial Audit of the Company for the financial year 2024-25. The Secretarial Audit Report as issued by Secretarial Auditor of the Company is annexed with Board?s Report as Annexure-III.

(v) Auditor?s Report

The Company?s Statutory Auditors or Secretarial Auditor did not make any qualification, reservation, adverse remark, or disclaimer in their Report for the financial year ended March 31, 2025. Hence, no further explanation or comment is required under Section 134(3)(f) of the Companies Act, 2013.

LISTING STATUS

Company?s 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 years 2024-25 and 2025-26 to both stock exchanges, ensuring our continued listing and trading.

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, 2025 is available on the Company?s website at: https://ghcltextiles.co.in/wp-content/uploads/2025/06/ GHCL-Textiles-Annual-Return-FY2024-25.pdf

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.

RELATED PARTY TRANSATIONS

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 Company?s 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 arm?s 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.

PARTICULAR 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 Company?s financial activities and commitments. By presenting this information, GHCL Textiles Limited aims to adhere to regulatory requirements and promote accountability.

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.

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, 2025, the applicable accounting standards have been followed along with proper explanation relating to material departures, if any; b. such ac counting policies as mentioned in the Notes to the Financial Statements have been selected 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 as at March 31, 2025 and of the Profit and Loss of the Company for the financial year ended March 31, 2025; 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, 2025 have been prepared by them on a going concern basis; e. pr oper Internal financial controls have been followed by the Company and that such internal financial controls are adequate and were operating effectively; and f. pr oper systems to ensure compliance with provisions of all applicable laws were in place and that such systems were adequate and operating effectively.

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) De tails relating to deposits covered under 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 Company?s operations in future.

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

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

ACKNOWLEDGEMENT

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

The Board also acknowledges and appreciates the dedication and contributions of the employees at allV levels. Their commitment, hard work, teamwork, and support have been instrumental in overcoming challenges and achieving our goals. We value their resilience and unwavering commitment to the Company?s 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 Company?s progress, and the Board acknowledges their invaluable contributions.