H P Cotton Textile Mills Ltd Directors Report

On a standalone basis, the Total Income for FY 2022-23 was Rs. 8,605.57 lacs, which was lower than the previous years Total Income of Rs. 13449.82 lacs by 36% due to volatility in cotton prices and global recession resulting from the ongoing Russia-Ukraine conflict. Consequently, the Company reported a Loss after tax for FY 2022-23 of Rs. 1,805.22 lacs in comparison with profit after tax of Rs. 703.96 lacs for FY 2021-22.

On a consolidated basis, the Total Income for FY 2022-23 was Rs. 8,605.57 lacs and the Loss after tax attributable to shareholders and non-controlling interests for FY 2022-23 was Rs. 1,807.22 lacs.

The production of Sewing Threads has decreased by 44% than the previous year to 8,74,095 kg as compared to the production of the previous year of 15,60,918 kg. Further, the product turnover has also decreased by 37.7% than the previous year to Rs. 7,696.23 lacs as compared to the previous year turnover of Rs. 12,351.93 lacs.

There was no production of Hosiery Yarn during the FY 2022-23.

The Net Block as at March 31, 2023 was Rs. 3,591.91 lacs as compared to Rs. 3,642.60 lacs in the previous year.

The current assets as at March 31, 2023 were Rs. 4,940.64 lacs as against Rs. 6,237.22 lacs in the previous year.

The Board has not proposed to transfer any amount to the General Reserves.

The Board has not recommended any dividend for the current FY in view of losses for the FY ended on March 31, 2023.

Pursuant to the provisions of Section 125(2) of the Companies Act, 2013 (hereinafter referred to as ‘the Act), during the year under review, the Company has transferred Rs. 163,493, lying in the unpaid dividend account of the Company pertaining to FY 2014-15, to the Investor Education and Protection Fund.

The Authorised Share Capital of the Company as on March 31, 2023, remains unchanged at Rs.4,25,00,000 divided into 42,50,000 Equity Shares of Rs.10 each.

The Issued, Subscribed and Paid-up Equity Share Capital of the Company increased from Rs.3,86,60,000 consisting of 38,66,000 Equity Shares of Rs.10/- each to Rs.3,92,20,000 consisting of 39,22,000 Equity Shares of Rs.10/- each on allotment of 56,000 equity shares upon conversion of 56,000 warrants.

Preferential Issue of Warrants: During the FY 2021-22, the Company had issued and allotted 1,12,000 Share Warrants each convertible into or exchangeable for one fully paid up equity share of Rs. 10 each of the Company on preferential basis pursuant to approval of shareholders at their Extraordinary General Meeting (EGM) held on February 07, 2022 in accordance with the applicable provisions of the Act read with rules made thereunder, and applicable provisions of the Securities Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2018. Out of 1,12,000 warrants, 56,000 Warrants has been converted into 56,000 Equity Shares upto March 31, 2022.

During the FY 2022-23, the balance 56,000 Warrants has also been converted into 56,000 Equity Shares. Therefore, the Paid-up Equity Share Capital of the Company increased to Rs.3,92,20,000 consisting of 39,22,000 Equity Shares of Rs.10/- each as on March 31, 2023

The issue proceeds were utilised by the Company for the purposes/objects as stated in the Offer document and Explanatory Statement to the Notice of the said EGM. All the funds have been utilized on April 19, 2023.

The Management Discussion and Analysis Report for the year under review, in terms of Regulation 34 of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (hereinafter referred to as ‘SEBI Listing Regulations) is presented in a separate Section, forming integral part of the Annual Report.

During the FY 2022-23, Mr. Vikram Sumatilal Sheth (DIN: 03349632) and Mr. Siddharth Agrawal (DIN:09693278) had been appointed as Additional Director (Non-Executive & Independent) w.e.f. April 30, 2022 and August 10, 2022 respectively by the Board of Directors of the Company. In the opinion of the Board Mr. Vikram Sumatilal Sheth possess the requisite expertise and experience (including proficiency) and is a person of high integrity and repute. He fulfills the conditions specified in the Act as well as the Rules made thereunder and is independent of the management.

Thereafter, at the 41^st AGM of the Company held on September 27, 2022, Mr. Siddharth Agrawal had been appointed as Director (Non-Executive & Independent) for a period of One (1) year commencing from August 10, 2022 till August 09, 2023 and Mr. Vikram Sumatilal Sheth has been appointed as Director (Non-Executive & Independent) for a period of five (5) years commencing from April 30, 2022 till April 29, 2027.

Mr. Siddharth Agrawal has been re-appointed as a Director (Non-Executive & Independent) w.e.f. August 10, 2023 for term of five (5) years by the Board of Directors by passing a resolution through circulation on July 01, 2023. In terms of Section 149 and 152 of the Act, read with the Companies (Appointment and Qualification of Directors) Rules, 2014, the Board had, on the recommendation of the Nomination and Remuneration Committee, proposed to the Shareholders for the re-appointment of Mr. Siddharth Agrawal as a Director (Non-Executive & Independent) of the Company, not liable to retire by rotation which the Shareholders of the Company have approved by way of postal ballot on August 05, 2023. In the opinion of the Board Mr. Siddharth Agrawal possess the requisite expertise and experience (including proficiency) and is a person of high integrity and repute. He fulfills the conditions specified in the Act as well as the Rules made thereunder and is independent of the management.

Further, Mr. Raghavkumar Agarwal (DIN: 02836610) was appointed for a term of five (5) years from May 30, 2019 till May 29, 2024. Since, his tenure is going to expire on May 29, 2024. In terms of Section 152 of the Act, read with the Companies (Appointment and Qualification of Directors) Rules, 2014, the Board had at its meeting held on August 12, 2023, on the recommendation of the Nomination and Remuneration Committee, proposed to the Shareholders for the re-appointment of Mr. Raghavkumar Agarwal as a Whole-Time Director designated as Executive Director, CEO & CFO of the Company w.e.f. May 30, 2024 for term of five (5) years, liable to retire by rotation in the ensuing Annual General Meeting.

The disclosures required pursuant to Regulation 36(3) of the SEBI Listing Regulations and the Secretarial Standards on General Meeting (‘SS-2) are given in the Notice of this AGM, forming part of the Annual Report.

In compliance with provisions of Section 203 of the Act, following are the KMPs of the Company as on March 31, 2023:

In accordance with the provisions of Section 152 of the Act and Articles of Association of the Company, Mrs. Ritu Bansal (DIN: 03619069), Non-Executive Director of the Company, retires by rotation at the conclusion of the forthcoming Annual General Meeting and being eligible, offers herself for reappointment. The Board recommends her appointment for the consideration of the members of the Company at the ensuing Annual General Meeting.

A brief profile, expertise of Director and other details as required under the Act, Secretarial Standard-2 and SEBI Listing Regulations relating to the director proposed to be re-appointed is annexed to the notice convening the AGM.

In terms of Section 149 of the Act and SEBI Listing Regulations, Mr. Parshotam Dass Agarwal, Mr. Vikram Sumatilal Sheth and Mr. Siddharth Agrawal are the Independent Directors of the Company as on the date of this report. All Independent

Directors of the Company have given requisite declarations under Section 149(7) of the Act, that they meet the criteria of independence as laid down under Section 149(6) of the

Act alongwith Rules framed thereunder and SEBI Listing Regulations and have complied with the Code of Conduct and Ethics of the Company as applicable to the Board of Directors and Senior Management. In terms of Regulation 25(8) of the SEBI Listing Regulations, the Independent Directors have confirmed that they are not aware of any circumstance or situation, which exists or may be reasonably anticipated, that could impair or impact their ability to discharge their duties with an objective independent judgement and without any external influence.

In terms of Section 150 of the Act read with Rule 6 of the Companies (Appointment and Qualification of Directors) Rules, 2014, Independent Directors of the Company have confirmed that they have registered themselves with the databank maintained by the Indian Institute of Corporate Affairs, Manesar (‘IICA). The Independent Directors are also required to undertake online proficiency self-assessment test conducted by the IICA within a period of 2 (Two) years from the date of inclusion of their names in the data bank, unless they meet the criteria specified for exemption. Mr. Vikram Sumatilal Sheth Independent Director of the

Company has confirmed and declared that he has passed the online proficiency self-assessment test as conducted by IICA. Mr. Parshottam Dass Agarwal and Mr. Siddharth Agrawal, Independent Directors of the Company meet the criteria specified for exemption and hence they are not required to undergo the online proficiency self-assessment test as conducted by IICA.

In the opinion of the Board, the Independent Directors possess the requisite expertise and experience (including proficiency) and are persons of high integrity and repute.

They fulfill the conditions specified in the Act as welln as the Rules made thereunder and are independent ofthe management.

The terms and conditions of appointment of Independent

Directors are as per Schedule IV of the Act.

The Board met five (5) times during the year under review.

The intervening gap between the meetings was within the period prescribed under the Act and the SEBI Listing Regulations. The Committees of the Board usually meet on the day of the Board meeting, or whenever the need arises for transacting business. Details of composition of the Board and its Committees as well as details of Board and Committee meetings held during the year under review and Directors attending the same are given in the Corporate Governance Report forming integral part of the Annual Report.

The Nomination and Remuneration Committee (‘NRC) engages with the Board to evaluate the appropriate characteristics, skills and experience for the Board as a whole as well as for its individual members with the objective of having a Board with diverse backgrounds and experience in business, finance and governance. The NRC, basis such evaluation, determines the role and capabilities required for appointment of Director. Thereafter, the NRC recommends to the Board the selection of new Directors.

Based on the recommendations of the NRC, the Board has formulated the Nomination & Remuneration Policy (‘NRC Policy) on Directors appointment and remuneration which includes the criteria for determining qualifications, positive attributes, independence of a director and process of appointment and removal as well as components of remuneration of Director(s), Key Managerial Personnel (‘KMP) and Senior Management of the Company and other matters as provided under Section 178(3) of the Act.

The salient features of the Policy are:

It acts as a guideline for matters relating to appointment and re-appointment of directors;

It contains guidelines for determining qualifications, positive attributes and independence for appointment of a director(s) of the Company;

It lays down the parameters based on which payment of remuneration (including sitting fees and remuneration) should be made to Independent Directors and Non-Executive Directors.

It lays down the parameters based on which remuneration (including fixed salary, benefits and perquisites, bonus/performance linked incentive, commission, retirement benefits) should be given to Whole-time Directors, KMPs and rest of the employees.

During the year under review, there were no substantive changes in the Policy except to align the Policy with amendments made to applicable laws which was approved by the Board at their meeting held on August 10, 2022. The same is available on the Companys website at https://hpthreads.com/pdf/Nomination%20and%20 Remuneration%20Policy.pdf.

In terms of the provisions of the Section 178(2) of the Act, the Board has adopted a formal mechanism for evaluating its performance as well as that of its Committees and individual directors, including the Chairman of the Board. A structured questionnaire was prepared and circulated to the Directors for each of the evaluation.

Performance of the Board was evaluated by each Director on the parameters such as Structure and Composition of Board, Meetings of the Board, Functions of the Board, Board & Management etc.

Board Committees were evaluated on the parameters such as Mandate and Composition of Committee, Effectiveness of the Committee, Structure of the Committee and meetings, Independence of the Committee from the Board, Contribution to decisions of the Board etc.

Performance of the Chairman was evaluated by all other Directors (except the Director himself) on the parameters such as Knowledge and Competency, Fulfilment of Functions, Ability to function as a team, Initiative, Availability and attendance, Commitment, Contribution, Integrity, Impartiality, Commitment, Ability to keep shareholders interests in mind etc.

Directors were also evaluated individually by all other Directors (except the Director himself) on the parameters such as Knowledge and Competency, Fulfilment of Functions, Ability to function as a team, Initiative, Availability and attendance, Commitment, Contribution, Integrity etc.

Meeting of Independent Directors without the attendance of Non-Independent Directors, and members of the management of the Company was held on March 01, 2023. The Independent Directors, inter-alia, evaluated performance of Non-Independent Directors, the Chairman of the Company and the Board as a whole for FY 2022-23. They also assessed the quality, content and timeliness of flow of information between the Management and the Board that is necessary for the Board to effectively and reasonably perform its duties.

Outcome of the evaluation was submitted to the Chairman of the Company. The Directors discussed and expressed their satisfaction with the entire evaluation process.

The objective of the Companys Corporate Social Responsibility (‘CSR) initiatives is to improve the quality of life of communities through long-term value creation for all stakeholders. The Companys CSR policy provides guidelines to conduct CSR activities of the Company. The salient features of the Policy forms part of the Annual Report on CSR activities is annexed herewith as Annexure - I forming integral part of this report.

During the year under review, there were no changes in the CSR Policy and the same is available on the Companys website at https://hpthreads.com/pdf/Corporate%20 Social%20Responsibility%20Policy.pdf.

A well-established, independent, multi-disciplinary Internal Audit team operates in line with governance best practices. It reviews and reports to management and the Audit Committee about compliance with internal controls and the efficiency and effectiveness of operations as well as the key process risks.

The Company has in place adequate internal financial controls with reference to Financial Statements and such controls were operating effectively as at March 31, 2023. These controls have been designed to provide a reasonable assurance with regard to maintaining of proper accounting controls for ensuring reliability of financial reporting, monitoring of operations. During the year, such controls were tested and no reportable weaknesses in the design or operations were observed.

Pursuant to Sub-section 3(a) of section 134 and Subsection (3) of section 92 of the Act, read with Rule 12 of the Companies (Management and Administration) Rules, 2014 a copy of the Annual Return in Form MGT-7 is available on the website at https://hpthreads.com/shareholder-meetings. php.

Disclosures pertaining to remuneration and other details as required under Section 197(12) of the Act read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is annexed herewith as Annexure - II forming integral part of this report.

Statement containing particulars of top 10 employees and particulars of employees as required under Section 197 (12) of the Act read with Rule 5(2) and (3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is provided as a separate Annexure forming part of this report. In terms of proviso to Section 136(1) of the Act, the Report and Accounts are being sent to the Shareholders, excluding the aforesaid Annexure. The said Statement is also open for inspection. Any member interested in obtaining a copy of the same may write to the Company Secretary. The

Managing Director and the Executive Director, listed in the said Annexure, are related to each other. However, none of the employee drawing remuneration in excess of the limits set out in the Rule 5(2)(i), Rule 5(2)(ii) and Rule 5(2)(iii) of Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 during the year under review.

Particulars of loans, guarantees and investments made under the provisions of Section 186 of the Act have been disclosed in Note No. 4 to the Financial Statements forming integral part of the Annual Report.

All contracts / arrangements / transactions entered by the Company during the financial year with related parties were in compliance with all the applicable provisions of the Act and SEBI Listing Regulations in respect of such transactions. Requisite approval of the Audit Committee and the Board (wherever required) was obtained by the Company for all Related Party Transactions. Prior omnibus approval of the Audit Committee and the Board is obtained for the transactions which are foreseeable and of a repetitive nature. Further, your Company has not entered into any arrangement / transaction with related parties which could be considered material in accordance with the SEBI Listing Regulations and the provisions of the Act. The Policy on Related Party Transactions as approved by the Board of Directors is available on the Companys website at https://hpthreads. com/pdf/Policy%20on%20materiality%20of%20and%20 dealing%20with%20Related%20Party%20Transactions.pdf.

There are no transactions under sub-section (1) of section 188 of the Act that are required to be reported in Form AOC-2, hence the said form does not form part of this report. However, names of Related Parties and details of transactions with them have been included in Notes to the financial statements provided in the Companys financial statements under Indian Accounting Standards 18.

M/s Walker Chandiok & Co LLP, Chartered Accountants (ICAI Firm Registration Number 001076N/N500013) were appointed as the Statutory Auditors of the Company to hold office for a term of five (5) years from the conclusion of the 37^th Annual General Meeting (AGM) held on 22^nd September, 2018 until the conclusion of the 42^nd AGM of the Company to be held in the year 2023. M/s Walker Chandiok & Co LLP, Chartered Accountants, Statutory Auditors of the Company will complete their term at the conclusion of the 42^nd AGM of the Company.

The Auditors Report read together with Annexure referred to in the Auditors Report do not contain any qualification, reservation, adverse remark or disclaimers.

The Company has received a Special Notice under Section 140(4) read with Section 115 of the Companies Act, 2013 from Mr. Kailash Kumar Agarwal dated July 27, 2023, a shareholder of the Company and eligible to give such a Special Notice, proposing the appointment of M/s D. Kothary & Co., Chartered Accountants (FRN: 105335W) as Statutory Auditors of the Company in place of the retiring Auditor M/s. Walker Chandiok & Co LLP, Chartered Accountants (Firm Registration No. 001076N/N500013) at the ensuing 42^nd Annual General Meeting of the Company.

The Board of Directors has recommended the appointment M/s D. Kothary & Co., Chartered Accountants (ICAI Firm Registration Number: 105335W) as the new Statutory Auditors for a term of five (5) consecutive years from the conclusion of the 42^nd AGM until the conclusion of the 47^th AGM of the Company. Accordingly, a resolution proposing appointment of M/s D. Kothary & Co., Chartered Accountants (ICAI Firm Registration Number: 105335W), as Statutory Auditors of the Company for a term of five (5) consecutive years which forms part of the AGM notice is placed before the members for their approval.

As required under the provisions of Section 139(1) and 141 of the Act, read with the Companies (Accounts and Auditors) Rules, 2014, the Company has received a written consent and certificate from M/s D. Kothary & Co., Chartered Accountants (ICAI Firm Registration Number: 105335W) to the effect that they are eligible to be appointed as Statutory Auditor of the Company and that their appointment, if made, would be within the limits specified under Section 141(3)(g) of the Act.

In terms of Section 148 of the Act, the Company is required to maintain cost records of the Company. Cost records are prepared and maintained by the Company as required under Section 148(1) of the Act.

However, in accordance with the provisions with the Rule 4(3) of the Companies (Cost Records and Audit) Rules, 2014 as amended thereto, the requirement for Cost Audit under the Rules shall not apply to a Company whose revenue from export, in foreign exchange, exceeds 75% of its total revenue or which is operating from a SEZ or which is engaged in generation of electricity for captive consumption through Captive Generating PIant.

Your companys turnover is below Rs.100 crore during the year under review and more than 75% of the Companys turnover is earned from exports in foreign exchange by the Company. Therefore, the Company is exempted from the said requirement of cost audit.

Therefore, the Company has not appointed any Cost Auditor for auditing the cost records of the Company.

M/s Tarun Jain & Associates, Company Secretaries, were appointed as Secretarial Auditors of the Company by the Board of Directors of the Company in its meeting held on August 10, 2022 for the FY 2022-23.

The Secretarial Audit Report for the financial year ended March 31, 2023 received from M/s Tarun Jain & Associates, Company Secretaries, Secretarial Auditors of the Company is annexed herewith as Annexure - III forming integral part of this report.

The said report is self-explanatory and does not contain any qualification, reservation, adverse remark or disclaimers.

There is no Material Unlisted Indian Subsidiary of the Company as on March 31, 2023 and as such the requirement under Regulation 24A of the SEBI Listing Regulations regarding the Secretarial Audit of Material Unlisted Indian Subsidiary is not applicable to the Company for the FY 2022-23.

In accordance with Regulation 30A(2) of SEBI Listing Regulations, the details of Agreements specified in clause 5A of para A of part A of schedule III of SEBI Listing Regulations are annexed as Annexure – IV. The complete details of the Agreements are also available on the website of the Company at http://www.hpthreads.com/shareholder-information.php.

During the FY 2022-23, your Company has incorporated a wholly owned subsidiary Company with a name "HP MMF TEXTILES LIMITED" on June 24, 2022 and it has not commenced its operations yet. Further, there are no Associates and Joint Ventures during the financial year 2022-23.

The Company has, in accordance with Section 129(3) of the Act prepared Consolidated Financial Statements of the Company and its subsidiary which form part of the Annual Report. Further, the report on the performance and financial position of the subsidiary company of your Company is presented in Form AOC-1 is annexed herewith as Annexure - V forming integral part of this report.

Except as disclosed elsewhere in the Annual Report, there have been no material changes and commitments which can affect the financial position of the Company between the end of the financial year and the date of report.

The information required under Section 134(3)(m) of the Act, read with the Companies (Accounts) Rules, 2014 is provided as follows and forms part of this report.

• Replace outdated equipment and appliances with energy-efficient models.

• Special Measures taken to reduce load on air conditioners.

• Minimizing idle running of equipments like air conditioners, lights, fans etc.

• Educate and train employees on energy saving practices

• 100% Biomass consumption at our manufacturing facility

• Utilization of Biomass as fuel in boiler

iii. Capital investment on energy conservation equipment: The Company has not incurred major capital investment on energy conservation equipments but focused on optimum utilization of available resources.

B) Technology Absorption: i. Efforts made towards technology absorption:

The Company has in place a state-of-the-art equipments for identifying the quality of raw materials and control check equipments for each process of manufacturing of threads and yarns leading to higher quality of finished products with efficiency.

Technology absorption brings several benefits like enhancement of productivity, cost reduction, innovation and product development.

iv. Expenditure incurred on Research and Development: None

The Directors hereby confirm: a) that in the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures; b) that they have selected such accounting policies as mentioned in the Notes to the financial statements have been applied consistently and judgments and estimates that are reasonable and prudent have been made so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit of the Company for that period; c) that proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; d) that the annual accounts have been prepared on a going concern basis; e) that proper internal financial controls were followed by the Company and that such internal financial controls are adequate and were operating effectively; and f) that proper systems to ensure compliance with the provisions of all applicable laws were in place and that such systems were adequate and operating effectively.

Risk mitigation continues to be a key area of concern for the Company, which has regularly invested in insuring itself against unforeseen risks. The Companys stocks and insurable assets like building, plant & machinery, computer equipment, office equipment, furniture & fixtures, lease hold improvements and upcoming projects have been adequately insured against major risks.

The Board of Directors of the Company has also formulated Risk Management Policy in accordance with the Act. The aim of risk management policy is to maximize opportunities in all activities and to minimize adversity. The policy includes identifying types of risks and its assessment, risk handling, monitoring and reporting, which in the opinion of the Board may threaten the existence of the Company.

The Company has established a robust Vigil Mechanism and a whistle blower policy in accordance with the provisions of the Act and the SEBI Listing Regulations, with a view to provide its directors and employees an avenue to report genuine concerns of unethical behavior, actual or suspected fraud or violation of the codes of conduct and to provide adequate safeguard for protection from any victimization.

Accordingly, the Company has established a Compliance Task Force to evaluate and investigate the actual or suspected fraud or violation of the of applicable laws and regulations and the Code of Conduct and Ethics. The Compliance Task Force operates under the supervision of the Audit Committee.

Employees are required to report actual or suspected violations of applicable laws and regulations and the Code of Conduct and Ethics. Such genuine concerns disclosed as per Policy are called "Protected Disclosures" and can be raised by a Whistle-blower through an e-mail or a letter to the Chairman of Compliance Task Force or to the Chairman of the Audit Committee.

The Whistle Blower Policy may be accessed on the Companys website at https://hpthreads.com/pdf/ Whistle%20Blower%20Policy.pdf.

This Policy inter-alia provides a direct access to the Chairman of the Audit Committee and affirms that no Director/employee have been denied access to the Chairman of the Audit Committee and that no complaints were received during the year.

The Company has adopted a policy on sexual harassment at workplace in line with the requirements of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 ("POSH Act"). All the employees (permanent, contractual, temporary, trainees) are covered under this policy.

During the year under review, there was no complaints filed or registered pursuant to this Act.

The Company has complied with the provisions relating to the constitution of Internal Complaints Committee under the POSH Act to redress complaints received regarding sexual harassment. The Internal Complaints Committee was reconstituted by the Board of Directors of the Company during the year under review.

Upon approval of the audited financials on May 9, 2022 for the financial year ended on March 31, 2022, pursuant to which the net worth of the Company exceeded Rs. 25 Crore and consequently, the Corporate Governance provisions, as specified in Securities Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, have become_applicable on the Company.

While the Corporate Governance provisions became applicable on the Company during the financial year, our Company already has a strong legacy of following fair, transparent and ethical governance practices and is committed to maintain the highest standards of Corporate Governance and strictly adheres to the Corporate Governance requirements set out by SEBI. Our Companys Corporate Governance policy is based on the belief that good governance is an essential element of business, which helps us fulfill our responsibilities towards all our stakeholders.

A separate report on Corporate Governance pursuant to Regulation 34(3) of the SEBI Listing Regulations, read with Part C of Schedule V thereof, along with a certificate from M/s M Siroya and Company, Practicing Company Secretaries regarding compliance of the conditions of Corporate Governance forms an integral part of the Annual Report.

The Chairman and Managing Director (CMD) and the Chief Financial Officer (CFO) of the Company give annual certification on financial reporting and internal controls to the Board in terms of Regulation 17(8) of the SEBI Listing Regulations, copy of which forms part of the Corporate Governance Report.

All the Boards Members and the Senior Management have confirmed compliance with the Code for the Financial Year ended March 31, 2023. The declaration to this effect signed by Chief Executive Officer (CEO), forms part of the Corporate Governance Report.

During the year under review:

1. No significant and material orders were passed by the Regulators/ Courts/ Tribunals which impact the going concern status and Companys operations in future.

2. No equity shares were issued with differential rights as to dividend, voting or otherwise.

3. No sweat equity shares were issued.

4. The Company has not issued any shares pursuant to the Employee Stock Options Scheme.

5. The Company has not issued any Bonus Shares.

6. 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.

7. No deposits have been accepted by the Company from the public. The Company had no outstanding, unpaid or unclaimed public deposits at the beginning and end of FY 2022-23.

8. Neither the Managing Director nor the Whole-time Directors of the Company receive any remuneration or commission from any of its subsidiaries as on March 31, 2023.

9. No Change in nature of Business of Company.

10. No fraud has been reported by the Statutory Auditors and Secretarial Auditors to the Audit Committee or the Board.

11. No Corporate Insolvency Resolution Process initiated under the Insolvency and Bankruptcy Code, 2016. 12. No instance of onetime settlement with any Bank or Financial Institution.

13. There was no revision of financial statements and Boards Report of the Company.

The Company has complied with the applicable Secretarial Standards on Meetings of the Board of Directors (SS-1) and on General Meetings (SS-2) issued by the Institute of Company Secretaries of India.

Certain statements in the Directors Report describing the Companys objectives, projections, estimates, expectations or predictions may be forward-looking statements within the meaning of applicable securities laws and regulations. Actual results could differ from those expressed or implied. Important factors that could make a difference to the Companys operations include labour and material availability, and prices, cyclical demand and pricing in the Companys principal markets, changes in government regulations, tax regimes, economic development within India and other incidental factors.

We thank our customers, vendors, dealers, investors, business associates and bankers for their continued support during the year. We place on record our appreciation of the contribution made by employees at all levels. Our resilience to meet challenges was made possible by their hard work, solidarity, co-operation and support.

We thank the Government of India, the State Governments and other regulatory authorities and government agencies for their support and look forward to their continued support in the future.

For and on behalf of the Board

Chairman and Managing Director DIN: 00063470

New Delhi August 12, 2023