Harish Textile Engineers Ltd Directors Report

To The Members,

Harish Textile Engineers Limited

Your Directors are pleased to present the Fifteenth Annual Report on the business and operations of Harish Textile Engineers Limited ("the Company") together with the audited financial statements along with the report of the Auditors for the financial year ended 31^st March, 2025 prepared as per Indian Accounting Standards prescribed under Section 133 of the Companies Act, 2013 ("the Act").

1. FINANCIAL HIGHLIGHTS:

The financial statements of the Company have been prepared in accordance with the Indian Accounting Standards (Ind AS) notified under the Companies (Indian Accounting Standards) Rules, 2015 read with Section 133 of the Companies Act, 2013 ("the Act") and The Companies (Accounts) Rules, 2014. The financial statements for the financial year ended 31^st March, 2025 as well as comparative figures for the year ended 31^st March, 2025 are Ind AS compliant.

The financial highlights of your Company for the year ended 31^st March, 2025 are summarized as follows:

(Rs. In Lakhs)

Particulars	Year ended 31st March, 2025	Year ended 31st March, 2024
Gross Income	13,259.96	13258.58
Profit Before Interest and Depreciation	579.29	684.69
Depreciation	167.94	186.81
Net Profit Before Tax	15.57	-47.84
Provision for Tax (Net of reversal)	-7.98	-10.58
Net Profit After Tax	23.55	-37.26
Balance of Retained Earning brought forward	536.49	576.09
Balance of Retained Earning carried forward	555.30	536.49

2. DIVIDEND:

In order to strengthen the financial position of the Company and support future growth initiatives, the Directors have decided to plough back the profits into the business. Accordingly, no dividend is recommended for the financial year under review

3. MANAGEMENT DISCUSSIONS AND ANALYSIS:

Pursuant to Regulation 34 of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements), Regulation 2015 ("Listing Regulations"), the Management Discussion and Analysis Report for the year under review, is present in separate section as Annexure I, forming part of Annual Report.

4. TRANSFER TO RESERVES:

The entire balance in Retained Earning is proposed to be carried forward.

5. TRANSFER OF UNCLAIMED DIVIDEND TO INVESTOR EDUCATION AND PROTECTION FUND:

The Provisions of Sec.125 (2) of the Companies Act, 2013 do not apply as there was no dividend declared and paid last year.

6. MATERIAL CHANGES AND COMMITMENTS, IF ANY, AFFECTING THE FINANCIAL POSITION OF THE COMPANY WHICH HAVE OCCURRED BETWEEN THE END OF THE FINANCIAL YEAR OF THE COMPANY TO WHICH THE FINANCIAL STATEMENTS RELATE AND THE DATE OF THE REPORT:

There have been no material changes and commitments affecting the financial position of the Company between the end of the financial year and the date of this Report, except as stated below:

1. Approval for Slump Sale of Textile Processing and Finishing Machinery Business:

During the reporting period, the Board of Directors, at its meeting held on 10^th June, 2025, approved the sale/transfer of the Textile Processing and Finishing Machinery Business of the Company to Nfinia Industries Private Limited, a Company owned and controlled by the Promoter(s) of the Company, as a going concern on a slump sale basis, through a Business Transfer Agreement to be executed between the Company and Nfinia Industries Private Limited, subject to the approval of Shareholders and, if required, the prior approval of the Companys bankers.

In this regard, the approval of the Shareholders is being sought through a Postal Ballot process. The Postal Ballot has already commenced, and the period of e-voting is as follows: e-voting commenced on Friday, 13^th June, 2025, and will conclude on Saturday, 12^th July, 2025.

7. DETAILS OF SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALS IMPACTING THE GOING CONCERN STATUS AND COMPANYS OPERATIONS IN FUTURE:

With reference to our earlier disclosure regarding Petition No. 128 of 2022 filed by the petitioner Mr. Nikhil H. Gandhi & two Ors. (Mrs. Chhaya Nikhil Gandhi and Mrs. Kumudben Himatlal Gandhi) against Pacific Harish Industries Ltd. & eight Ors. (Mr. Sandeep K. Gandhi, Mr. Hitendra C. Desai, Mr. Manish K. Vagadia, Mrs. Shaila S. Gandhi, Harish Textile Engineers Limited, Kasha Textile Private Limited, Mr. Kirtikumar S. Gandhi and M/s. K. M. Swadia & Co.), Harish Textile Engineers Limited is respondent no. six, and Mr. Sandeep Gandhi is respondent no. two. The Honble NCLT (National Company Law Tribunal), Mumbai had passed the order dated 14^th June, 2023 has stayed the further proceedings till the pendency of the Hon. High Court order.

8. DETAILS OF HOLDING / SUBSIDIARY / JOINT VENTURES / ASSOCIATE COMPANIES:

The Company does not have any Holding/Subsidiary/Joint Ventures/Associate Companies.

9. DECLARATION BY INDEPENDENT DIRECTORS:

Pursuant to the provisions of Section 149(6) of the Companies Act, 2013 and Regulation 16(1)(b) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the

Company has received declarations from all continuing Independent Directors confirming that they meet the criteria of independence as laid down in the aforesaid provisions and are not aware of any circumstances which may affect their status as Independent Directors except the following director.

Mr. Ritesh Harshad Patel, Director of the Company, has not submitted the declaration as required under the provisions of the Companies Act, 2013. The Company was not formally notified of the disqualification by the Director. The matter came to light during an internal compliance review undertaken in the normal course, following the directors continued absence from meetings and non-filing of the annual disclosure for FY 2025-26. Upon becoming aware, the Company immediately took appropriate steps to ensure compliance, and Mr. Ritesh Patel ceased to be a director effective 10^th June, 2025. All requisite statutory filings were duly made.

It is further confirmed that these Independent Directors have affirmed their commitment to discharge duties with objectivity and independence and have complied with the applicable requirements under the Companies (Creation and Maintenance of Databank of Independent Directors) Rules, 2019 and the Companies (Appointment and Qualification of Directors) Rules, 2014, as amended.

10. EXTRACT OF ANNUAL RETURN:

As required pursuant to Section 92(3) of the Companies Act, 2013 and Rule 12(1) of the Companies (Management and Administration) Rules, 2014, an extract of annual return in MGT- 9 as a part of this Annual Report annexed as Annexure-II.

The annual return in MGT-7 is available on the website of the Company at the web link: https://www.harishtextile.com/investors/annual-return.

11. DIRECTORS AND KEY MANAGERIAL PERSONNEL:

As on the date of Report, the Company has five Directors comprising of two Executive Directors and three Non-Executive Directors out of which all three are Independent Directors. There is one Women Director.

Retirement by Rotation:

In accordance with the provisions of Section 152 of the Companies Act, 2013 read with Companies (Appointment and Qualifications of Directors) Rules, 2014 and the Articles of Association of the Company, Mr. Sandeep Gandhi (DIN: 00941665), Managing Director of the Company, retires by rotation at the ensuing Annual General Meeting of the Company and offers himself to be re-appointed as Executive Director of the Company.

Independent Directors:

Pursuant to the provisions of Section 149 of the Companies Act, 2013 ("the Act"), the independent directors have submitted declarations that each of them meets the criteria of independence as provided in Section 149(6) of the Act along with Rules framed thereunder and Regulation 16(1)(b) of the SEBI Listing Regulations. There has been no change in the circumstances affecting their status as Independent Directors of the Company.

During the year under review, the Non-Executive Directors of the Company had no pecuniary relationship or transactions with the Company, other than sitting fees, commission, if any and reimbursement of expenses incurred by them for the purpose of attending meetings of the Board / Committee of the Company.

The Board, after undertaking assessment and on examination of the relationships disclosed, considered the following Non-Executive Directors as Independent Directors:

Sr. No. Name of Directors	Designation
1 Mrs. Bhavna Ronil Brahmbhatt	Non-Executive, Independent Director
2 Mr. Mahesh Ratilal Sapariya	Non-Executive, Independent Director
3 Mr. Ashwini Ramakant Gupta	Non-Executive, Independent Director

Change in Directors and Key Managerial Personnel:

During the year under review there are following changes in the Board of Directors of the

Company.

a) Mrs. Bhavna Ronil Brahmbhatt (DIN: 10736860) was appointed as a Non-Executive, Independent Director of the Company w.e.f. 04^th September, 2024.

b) Mr. Nainesh Bhanushankar Trivedi (DIN: 08816850) has resigned from the post of NonExecutive, Independent Director of the Company w.e.f. 04^th September, 2024.

c) Mr. Sunil Narayan Bhirud (DIN: 03469816) was appointed as an Executive Director of the Company w.e.f. 27^th March, 2025.

d) Mr. Mahesh Ratilal Sapariya (DIN: 00414104) was appointed as a Non-Executive, Independent Director of the Company w.e.f. 27^th March, 2025.

e) Mr. Hitendra Chimanlal Desai (DIN: 00452481) has resigned from the post of Executive, Whole-Time Director of the Company w.e.f. closure of business hours on 27^th March, 2025.

f) Ms. Sushmita Swarup Lunkad (DIN: 09044848) has resigned from the post of NonExecutive, Independent Director of the Company w.e.f. closure of business hours on 27^th March, 2025

g) Mr. Ritesh Harshad Patel (DIN: 00700189) has resigned from the post of Non-Executive, Independent Director of the Company w.e.f. 10^th June, 2025

h) Mr. Ashwini Ramakant Gupta (DIN: 08930567) was appointed as a Non-Executive, Independent Director of the Company w.e.f. 10^th June, 2025.

Composition of Board of Directors till date of the report

During the year under review, there is change in the composition of the Board as stated below:

Name of Directors	Designation
1 Mr. Sandeep Gandhi	Managing Director
2 Mr. Sunil Bhirud	Executive Director
3 Mr. Pinkesh Upadhyay	Chief Financial Officer
4 Ms. Priya Gupta	Company Secretary & Compliance Officer
5 Mrs. Bhavna Brahmbhatt	Non-Executive, Independent Director
6 Mr. Mahesh Sapariya	Non-Executive, Independent Director
7 Mr. Ashwini Gupta	Non-Executive, Independent Director

Key Managerial Personnel:

Pursuant to the provisions of Sections 2(51) and 203 of the Act read with The Companies (Appointment and Remuneration of Managerial Personnel), Rules 2014, the following are the Key Managerial Personnel of the Company as on the date of report:

Name of Key Managerial Personnel	Designation
1 Mr. Sandeep Gandhi	Managing Director
2 Mr. Sunil Bhirud	Executive Director
3 Mr. Pinkesh Upadhyay	Chief Financial Officer
4 Ms. Priya Gupta	Company Secretary & Compliance Officer

12. REMUNERATION TO DIRECTOR AND EMPLOYEES:

Details/Disclosures of ratio of remuneration to each Director to median employees remuneration as required pursuant to Section 197(12) of the Companies Act 2013 read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 and details of remuneration paid to Employees vide Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is given as Annexure- V.

13. AUDITORS:

Statutory Auditor:

M/s. K. M. Swadia & Co., Chartered Accountant (FRN: 110740W) were re-appointed as statutory auditors of the Company for a second term shall hold office for a term of five years, from the conclusion of the 14^th Annual General Meeting until the conclusion of the 19^th Annual General Meeting of the Company to be held in the year 2029, subject to ratification of their appointment by the members, if required, at every intervening Annual General Meeting held after this Annual General Meeting.

Cost Auditor:

During the year under review, in accordance with Section 148(1) of the Act, the Company has maintained the accounts and cost records, as specified by the Central Government. The Board of Directors had appointed M/s. Y S Thakar & Associates, (Membership No. 9688 & Firm Registration No.: 000318), as Cost Auditors of the Company, for conducting the audit of cost records for the financial year ended 31^st March, 2025. The audit is in progress and the report will be filed with the Ministry of Corporate Affairs within the prescribed period.

Pursuant to Section 148 of the Companies Act, 2013 read with the Companies (Cost Records and Audit) Rules, 2014 (as amended), the Board of Directors, on the recommendation of the Audit Committee have appointed M/s. Y S Thakar & Associates, (Membership No. 9688 & Firm

Registration No. 000318), Practicing Cost Accountant, Vadodara, as the Cost Auditor of the Company for the Financial Year 2025-2026.

The remuneration payable to the Cost Auditor is subject to ratification of Shareholders at the ensuing Annual General Meeting.

Secretarial Auditor:

Pursuant to the provisions of Section 204 of the Act, read with Rule 9 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Board of Directors had appointed M/s. D N Vora & Associates (ACS No.: 46989, CP No. 21254), Company Secretary in Practice, Mumbai to conduct the Secretarial Audit of the Company for the financial year ended 31^st March, 2025.

The Secretarial Audit report for the financial year ended 31^st March, 2025 is attached as Annexure III to this Report.

Pursuant to the provisions of Section 204 of the Companies Act, 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Board of Directors have appointed M/s. D N Vora & Associates (ACS No.: 46989, CP No. 21254), Company Secretaries in Practice to undertake the Secretarial Audit of the Company for the five financial year from 2025-2026 to 2029-2030.

Internal Auditors:

Subsequent to the close of the year, as recommended by the Audit Committee, M/s Ravi H. Dasija & Co., Chartered Accountants have been appointed as an Internal Auditors of the Company for the three financial year with effect from FY 2022-2023 to 2024-2025.

Pursuant to the provisions of Section 138 of the Companies Act, 2013 and the Companies (Accounts) Rules, 2014, the Board of Directors have Re-appointed M/s Ravi H. Dasija & Co., Chartered Accountants (ICAI FRN No. 138346W) to undertake the Internal Audit of the Company for period of three financial year from 2025-2026 to 2027-2028.

14. STATUTORY AUDITORS REPORT:

The Auditors Report contains the following Qualification, observation on Going Concern and other matters:

1. "The Company has ascertained the particulars of dues to Micro, Small and Medium enterprises, under MSMED Act, 2006. The interest liability arising out of delayed payment to undertakings registered under the MSMED Act, has not been quantified and provided for. "

Management Response:

The Company has ascertained particulars of registration from vendors covered under by the provisions of MSME Act. With respect to provision of interest under MSME Act, there are several issues that required clarification from legal interpretation point of view. The Company will seek legal advice to address the issues. Until, the issues are addressed, it would not be possible for the Company to correctly compute the interest liability arising out of delayed payment to vendors under the MSME Act. Hence, no provision pertaining to interest liability for the vendors registered under the MSME Act has been provided for pertaining to the Financial Year 2024-2025 and prior period except for the cases for which Company has received order under Micro Small Enterprise Facilitation Council.

2. In connection with the observation made in the Auditors Report, though not in the nature of qualification pertaining to "Material Uncertainty Related to Going Concern":

"We draw attention to Note no. 19 to the financial statements, regarding extensions of timelines /defaults in repayment of debenture obligations arising out of liquidity crunch faced by the Company. We further draw your attention to the fact that the net working capital of the Company is negative at the year end. The current liabilities (including short term borrowings) amounted to INR 6465 Lacs. The current assets amounted to INR 4325 Lacs. The net negative working capital amounted to INR 2140 Lacs.

In view of the above, the Companys ability to continue as a going concern is dependent on its ability to raise additional funds as required and successful negotiations with lenders/debenture holders and vendors for continued support and generation of cash flow from its operations that it needs to settle its liabilities as they fall due. Our opinion is not modified in respect of this matter."

Management Response:

In view of the default in discharging the liability of Old Series III Debentures due on 12^th May, 2025, a meeting of the said series Debenture Holders was convened on Thursday, 22^nd May, 2025. During the meeting, it was collectively agreed that the formal extension and processing of the revised redemption timeline shall be undertaken only upon receipt of duly signed No Objection Certificates (NOCs) from majority debenture holders.

The extensions of timelines/defaults in repayment of debenture obligations have taken place arising out of liquidity crunch faced by the Company. The net working capital of the Company is negative at the year end. The current liabilities (including short term borrowings) amounted to INR 6465 Lacs. The current assets amounted to INR 4325 Lacs. The net negative working capital has amounted to INR 2140 Lacs.

The Companys ability to continue as a going concern is dependent on its ability to raise additional funds as required and successful negotiations with debenture holders and continued support of lenders and vendors along with generation of cash flow from its operations that it needs to settle its liabilities as they fall due.

As of date, the Company has met all its debt obligations payable to its lenders/banks and financial institutions along with applicable interest except for debentures as stated above. The Company is confident of raising resources to tide over the liquidity crunch.

The Company believes that it will be able to conclude the negotiations with debenture holders for settlement of their dues and will have continued support from lenders/vendors and generation of cash flow from operations that will enable it to settle its liabilities as they fall due. These financial statements have, therefore, been prepared on a Going Concern basis.

3. Based on our examination, which included test checks, the Company has maintained its books of account using accounting software that has the feature of recording an audit trail (edit log) facility. However, the said feature was not enabled during the year, as described

in Note 46 to the financial statements. Accordingly, the question of tampering with the audit trail does not arise.

Management Response:

In connection with the observation made in the Auditors Report, though not in the nature of qualification, the Company uses the accounting software that has a feature of recording audit trail (edit log) facility and is in the process of enabling this facility for all relevant transactions in the accounting software used for maintaining books of account for the Company.

15. SECRETARIAL AUDIT REPORT:

Pursuant to Section 204 of the Companies Act, 2013, the Company had appointed, M/s D N Vora & Associates, Practicing Company Secretary as its Secretarial Auditor to conduct the Secretarial Audit of the Company for the F.Y 2024-2025. The Company has provided all the assistance and facilities to the Secretarial Auditor for conducting their audit. Report of Secretarial Auditors for the F.Y 2024-2025 in Form MR-3 is annexed to this report as Annexure-III.

The Secretarial Audit Report contains the following Qualification, Observation, Reservation, and Adverse Remark/Disclaimer as follows:

a) The Company has received an intimation from the Honble Micro and Small Enterprises Facilitation Council, Ahmedabad, Gujarat, regarding a claim filed by a supplier for Rs. 61,47,306/-, including the principal amount of Rs. 25,50,385/- (already disclosed in the books) and interest of Rs. 35,96,921/-.

Management Response:

The Company has received a hearing intimation from the Honble Micro and Small Enterprises Facilitation Council, Ahmedabad, Gujarat, in connection with a claim amounting to Rs. 61,47,306/-, which includes the principal amount of Rs. 25,50,385/- (already disclosed in the books of accounts) and an interest component of Rs. 35,96,921/-. The Company is in the process of seeking appropriate legal advice in the matter and intends to file its detailed reply and submissions before the relevant authority. The Company believes it has strong merits in the case and will take all necessary steps to defend its position through the proper legal channels.

b) A notice has been received from the State Tax Officer, Commissionerate of Taxes, Government of Gujarat, demanding a sum of Rs. 4,80,971/- in relation to unpaid/short-paid tax or wrongful availment of input tax credit. The notice does not allege fraud or wilful misstatement.

Management Response:

The matter is currently being dealt with and is under process. The Company, in consultation with its legal and tax advisors, is actively engaged in preparing and filing the necessary responses before the concerned authorities. The case is ongoing and pending conclusion. The Company remains committed to complying with all applicable tax laws and regulations.

c) A legal notice has been served upon the Company by the advocate/legal consultant of M/s. Machine Tools and Bearing Corporation, demanding payment of Rs. 3,10,110.93/- along with interest for outstanding dues.

Management Response:

The matter is currently under review and is being dealt with in consultation with the Companys legal advisors. The Company has evaluated the claim and is in the process of finalizing and submitting an appropriate response. As the case is under process and yet to be concluded, the Company will continue to take all necessary steps to resolve the matter appropriately while ensuring compliance with applicable legal requirements.

d) An intimation dated 19^th March 2025 has been received from the Micro and Small Enterprises Facilitation Council, District (East), Delhi, directing the Company to make payment within 15 days to M/s. Leon International Logistics LLP for outstanding dues.

Management Response:

The Company has already made the payment to M/s. Leon International Logistics LLP for the said dues. Accordingly, the claim is not valid, and the notice received in this regard is void. The Company has communicated with the supplier and provided all necessary documentation supporting the payment made. Appropriate steps are being taken to clear up any misunderstanding and resolve the matter with the supplier.

e) A warrant of attachment under Order XXI, Rules 43 and 54 of the Civil Procedure Code has been issued against the Companys movable and immovable properties in connection with the matter of M/s. Ramdev Resins Private Limited vs. Harish Textile Engineers Limited. This follows Arbitration Award No. 7 of 2023 for Rs. 28,20,230/-, including a principal sum of Rs. 11,79,330/- and interest of Rs. 16,40,900/-. A Settlement Agreement/Memorandum of Understanding has been executed, pursuant to which the Company agreed to pay Rs. 28,36,111/- in full and final settlement. The MOU has been filed before the Honble High Court of Bombay.

Management Response:

We are pleased to report that the matter has been amicably settled. A Memorandum of Understanding (MoU) has been executed with M/s. Ramdev Resins Private Limited, and the Company has made a full and final settlement payment of Rs. 28,41,111/-. A No Due Certificate dated 12^th June, 2025, has been received from the claimant. The parties will be filing the consent terms before the Honble High Court of Bombay in due course to formally conclude the matter.

f) The Company has amicably settled a matter with M/s. Jagjiwan Enchem Udhyog Ltd. through an mOu dated 6^th June 2024. A payment of Rs. 42,00,000/- was made on 27^th June 2024 via cheque no. 144013 as full and final settlement.

Management Response:

We are pleased to report that the matter has been amicably settled. A Memorandum of Understanding (MOU) dated 6^th June, 2024, has been executed with M/s. Jagjiwan Enchem Udhyog Ltd., pursuant to which the Company has made a payment of Rs. 42,00,000/-

(Rupees Forty-Two Lakhs only) vide Cheque No. 144013 dated 27^th June, 2024, drawn on Union Bank of India, towards full and final settlement of the claim.

g) An intimation of tax liability amounting to Rs. 28,25,811/- has been received in Form GST DRC-01A under Section 73(5) of the CGST Act from the State Tax Officer, Commissionerate of Taxes, Government of Gujarat, dated 13^th June 2024. The demand relates to unpaid/short-paid tax or wrongful availment of input tax credit, excluding instances of fraud or wilful misstatement.

Management Response:

Based on the advice of its tax advisors/ consultants, the Company submitted a comprehensive response within the stipulated timeframe. Upon consideration of the submissions, the authorities passed an order, dropping the proceedings. Accordingly, the matter now stands conclusively closed.

h) The Company has received a Demand Cum Show Cause Notice from the Honble CGST & Central Excise Commissionerate, Surat, alleging wrongful availment and utilization of Input Tax Credit amounting to Rs. 2,61,274/-.

Management Response:

Based on the advice of its tax advisors/ consultants, the Company submitted a

comprehensive response within the stipulated timeframe. Upon consideration of the submissions, the authorities passed an order, dropping the proceedings. Accordingly, the matter now stands conclusively closed.

i) During the period under review, it was observed that Mr. Ritesh Patel incurred disqualification under Section 164(2) of the Companies Act, 2013. Notwithstanding such disqualification, Mr. Ritesh Patel continued to be shown as a director on the records of the Company until 10^th June, 2025, post which he ceased to be a director of the Company. It is further observed that although Mr. Ritesh Patel was disqualified during the reporting period, the overall composition of the Board of Directors remained in compliance with the provisions of the Companies Act, 2013 and the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.Based on the records and documents made available for our verification, it is also noted that Mr. Ritesh Patel did not attend any Board or Committee meetings, nor did he sign any resolutions or documents during the period of his disqualification.

Management Response:

The Company acknowledges the observation regarding Mr. Ritesh Patels disqualification under Section 164(2) of the Companies Act, 2013. The Company was not formally notified of the disqualification by the director or any regulatory authority. The matter came to light during an internal compliance review undertaken in the normal course, following the directors continued absence from meetings and non-filing of the annual disclosure for FY 2025-26. Upon becoming aware, the Company immediately took appropriate steps to ensure compliance, and Mr. Ritesh Patel ceased to be a director effective 10^th June, 2025. All requisite statutory filings were duly made.

It is important to note that during the relevant period, Mr. Ritesh Patel did not attend any Board or Committee meetings, nor did he participate in the Companys affairs or sign any documents during the period of his disqualification. As a result, there was no impact on the Companys governance or operations.

The composition of the Board remained in full compliance with the Companies Act, 2013, and SEBI (LODR) Regulations, 2015. The Company continues to strengthen its internal processes to monitor director eligibility and ensure timely compliance with all statutory requirements.

16. CORPORATE GOVERNANCE:

Non-applicability of Corporate Governance provisions of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015:

Pursuant to the provisions of Regulation 15(2) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, compliance with the provisions of Regulations 17,18,19,20,21,22,23,24,25,26,27, and clauses (b) to (i) of sub-regulation 2 of Regulation 46 and para C, D & E of Schedule V of the Securities and Exchange Board of India (Listing Obligations and Disclosures Requirements) Regulations, 2015, are not applicable to the Companies having paid up equity share capital not exceeding Rs. 10 Crore and Net Worth not exceeding Rs. 25 Crore, as on the last day of previous financial year.

In view of above, as per the latest Audited Financial Statement of the Company as at 31^st March, 2025, the paid-up Equity Share Capital and the Net Worth of the Company does not exceed the respective threshold limit of Rs. 10 Crore and Rs. 25 Crore, as aforesaid; hence Corporate Governance Report has not been enclosed to directors since the same is not applicable to the Company.

17. COMPLIANCE WITH SECRETARIAL STANDARDS:

The Directors have devised proper systems to ensure compliance with the provisions of all applicable Secretarial Standards issued by the Institute of Company Secretaries of India and that such systems are adequate and is operating effectively.

18. CODE OF CONDUCT FOR DIRECTORS AND SENIOR MANAGEMENT:

The Directors and members of Senior Management have affirmed compliance with the Code of Conduct for Directors and Senior Management of the Company. The copies of Code of Conduct as applicable to the Executive Directors (including Senior Management of the Company) and Non-Executive Directors are uploaded on the website of the Company-.

19. FAMILIARIZATION PROGRAM FOR INDEPENDENT DIRECTORS:

The Independent directors of Harish Textile Engineers Limited are eminent personalities having wide experience in the field of business, finance, education, industry, commerce and administration. Their presence on the Board has been advantageous and fruitful in taking business decisions.

The Company has practice of conducting familiarization program of the Independent directors. Independent Directors are appointed as per policy of the Company, with management expertise

and wide range of experience. The Directors appointed by the Board are given induction and orientation with respect to the Companys vision, strategic direction, core values, including ethics, corporate governance practices, financial matters and business operations by having one-to-one meetings.

The new Board members are also requested to access the necessary documents / brochures, Annual Reports and internal policies available at our website www.harishtextile.com, enable them to familiarize with the Companys procedures and practices.

Updates on relevant statutory changes encompassing important laws are regularly intimated to the Independent Directors. Their presence on the Board has been advantageous and fruitful in taking Business decisions.

Pursuant to Regulation 25(7) of the Listing Regulations, the Company has put in place a system to familiarize its Independent Directors about the Company, its financial products, the industry and business model of the Company and its subsidiary (if any). Pursuant to Regulation 46 of Listing Regulations the details of Familiarization Programme is uploaded on the Companys website at https://www.harishtextile.com/investors/policies.

20. DOCUMENTS PLACED ON THE WEBSITE OF THE COMPANY:

The following documents have been placed on the website in compliance with the Act:

• Financial statements of the Company along with relevant documents as per third proviso to Section 136(1)

• Details of Vigil mechanism for directors and employees to report genuine concerns as per proviso to Section 177(10)

• Latest Announcements

• Annual Reports

• Annual Return

• Shareholding Pattern

• Code of Conduct

• Policies

• Nomination and Remuneration Policy

• Materiality Policy under Regulation 30 of SEBI (LODR) Regulations, 2015

21. HUMAN RESOURCE MANAGEMENT (MATERIAL DEVELOPMENTS IN HUMAN RESOURCES / INDUSTRIAL RELATIONS FRONT, INCLUDING NUMBER OF PEOPLE EMPLOYED):

The Company offers a growth environment along with monetary benefits in line with industry standards. The Company has a number of employee initiatives to attract, retain and develop talent in the organization. The industrial relations during the year were cordial on all the fronts. The number of people employed in the year of report were 139.

22. SHARE CAPITAL OF THE COMPANY:

Authorized Share Capital:

The Authorized Share Capital as on 31^st March, 2025 was Rs. 10,00,00,000 divided into 1,00,00,000 Equity Shares of Rs. 10 each, which is same as at the previous year end.

An increase in Authorized Share Capital and the corresponding alteration of the Memorandum

of Association were approved by the shareholders at the 14^th Annual General Meeting.

However, this approval was subsequently withdrawn by the shareholders through a Postal

Ballot.

Issued, Subscribed and Paid-up Share Capital:

The Paid-up Equity Share Capital as on 31^st March, 2025 was Rs. 3,33,60,000 divided into

33,36,000 Equity shares of Rs. 10 each, which is same as at the previous year end.

PROPOSED RIGHTS ISSUE

The Board of Directors has constituted Right Issue Committee to evaluate, oversee and decide

on all matters pertaining to the Rights Issue.

23. SHARES/ DEBENTURES:

• Buyback of Securities: The Company has not bought back any of the securities during the year under review.

• Sweat Equity: The Company has not issued any sweat equity shares during the year under review.

• Employee Stock Option Plan: The Company has not provided any stock options to the employees.

• Non-Convertible Debentures: During the year under review, the Company did not issue any debentures but redeemed the Old Series-II Debentures (Non-Convertible Debentures).

The Company had issued and allotted 4,23,209 7% (non-cumulative) Unlisted, Secured, Unrated Redeemable, Non-Convertible Debentures of the face value of Rs.100/- each, aggregating to Rs. 4,23,20,900 (Rupees Four Crore Twenty-Three Lakh Twenty Thousand and Nine Hundred Only) on 21^st September, 2022 for tenure of three (3) years. The said NCDs were divided into four (4) different series having different maturity dates.

Series of Debentures	Date of Redemption
Old Series-I Debentures	Redeemed
Old Series-II Debentures	Redeemed
Old Series-III Debentures	*12th May, 2025
Series-IV Debentures	20th December, 2025

*The Old Series-III Debentures, due on 12^th May, 2025, have not yet been redeemed. A meeting of the NCD holders was held on 22^nd May, 2025, wherein a proposal to extend the redemption timeline was approved. The Company is currently in the process of obtaining the necessary No Objection Certificates (NOCs) from the NCD holders and completing the required formalities in connection with the approved extension.

24. CREDIT RATING:

The Company does not have any debt instrument or a fixed deposit program or any scheme or proposal involving mobilisation of funds either in India or abroad that requires Credit Rating.

25. PROCEEDING PENDING UNDER THE INSOLVENCY AND BANKRUPTCY CODE, 2016:

During the year under review, no application has been made nor any proceeding are pending under the Insolvency and Bankruptcy Code, 2016 against the Company.

26. ONE-TIME SETTLEMENT AND VALUATION:

During the year under report, there was no one time Settlement with any of the banks or lenders.

27. COMPLIANCE WITH SECRETARIAL STANDARDS:

Your Company is in compliance with the applicable Secretarial Standards issued by the Institute of Company Secretaries of India and approved by the Central Government under Section 118(10) of the Companies Act, 2013.

28. REPORTING OF FRAUDS BY AUDITORS:

During the year under review, neither the statutory auditors nor the secretarial auditor has reported to the audit committee, under Section 143 (12) of the Companies Act, 2013, any instances of fraud committed against your Company by its officers or employees, the details of which would need to be mentioned in the Directors report.

29. DEPOSITS FROM PUBLIC:

The Company has not accepted any deposits from public and as such, no amount on account of principal or interest on deposits from public was outstanding as on the date of the balance sheet.

30. DIRECTORS RESPONSIBILITY STATEMENT:

Your Directors, to the best of their knowledge and belief and according to the information and explanations obtained by them and as required under Section 134(5) of the Companies Act, 2013 state that:

a) in the preparation of the annual accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures;

b) the Directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit of the Company for that period;

c) the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

d) the Directors have prepared the annual accounts on a going concern basis;

e) the Directors have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively; and

f) the Directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

Remuneration to the Directors/KMP

Name of KMP	Designation	Remuneration in the year 2024-25 (in Lacs)
1 Sandeep Gandhi	Managing Director	162.54
2 Hitendra Desai	Whole-Time Director	7.35
3 Pinkesh Upadhyay	Chief Financial Officer	18.00
4 Priya Gupta	Company Secretary & Compliance Officer	6.62

31. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, RESEARCH & DEVELOPMENT AND FOREIGN EXCHANGE EARNINGS AND OUTGO:

Information pursuant to Section 134(3)(m) of the Companies Act 2013 read with Rule 8(3) the Companies (Accounts) Rules, 2014 forming part of Directors Report for the year ended 31^st March, 2025 is as under:

Conservation of Energy: The Companys operations involve low energy consumption. However efforts to conserve and optimize the use of energy through improved operational methods and other means will continue.

Technology Absorption: The Technology available and utilized is continuously being upgraded to improve overall performance and productivity.

Research & Development: Your Company believes that research & development is a continuous process for sustained corporate excellence. Our research & development activities help us in product and service improvement, effective time management and are focused to provide unique benefits to our customers. Such methods do not involve any specific cost burden to the Company.

Foreign Exchange Earnings: Rs. 3,14,98,752/- (previous year Rs. 1,52,54,919/-)

Foreign Exchange Outgo: Rs. 2,61,69,026/- (previous year Rs. 1,68,75,788/-)

32. BOARD EVALUATION:

Pursuant to the provisions of the Companies Act, 2013, the Board has carried out an annual performance evaluation of its own performance, the directors individually as well as the evaluation of the working of its Audit, Nomination & Remuneration Committee.

Criteria for Performance Evaluation of Independent Directors includes:

• Attendance and Participation.

• Maintaining confidentiality.

• Acting in good faith and in the interest of the Company as a whole.

• Exercising duties with due diligence and reasonable care.

• Complying with legislations and regulations in letter and spirit.

• Openness to ideas, perspectives and opinions and ability to challenge old practices and throwing up new ideas for discussion.

• Capacity to effectively examine financial and other information on operations of the Company and the ability to make positive contribution thereon.

The performance of the Board was evaluated by the Board after seeking inputs from all the directors on the basis of criteria such as the board composition and structure, effectiveness of board processes, information and functioning, etc.

The performance of the committees was evaluated by the board after seeking inputs from the committee members on the basis of criteria such as the composition of committees, effectiveness of committee meetings, etc.

The above criteria are broadly based on the Guidance Note on Board Evaluation issued by the Securities and Exchange Board of India on 05^th January, 2017.

In a separate meeting of independent directors, performance of non-independent directors, the Board as a whole and the Chairman of the Company was evaluated, taking into account the views of executive directors and non-executive directors.

The Board expressed its satisfaction on the performance of all the directors, Board and its committees which reflected the overall engagement of the directors, the Board and its committees with the Company.

33. LISTING OF SHARES:

The Shares of the Company is listed on BSE Limited. Applicable listing fees have been paid up to date. The Shares of the Company have not been suspended from trading at any time during the year by the concerned Stock Exchanges.

34. NUMBER OF MEETINGS OF THE BOARD:

During the year, 20 Board Meetings were held.

The dates on which the Board Meetings were held along-with attendance are as follows:

BOARD MEETING DATE	DIRECTORS PRESENT
30-04-2024	Sandeep Gandhi
	Hitendra Desai
	Ritesh Patel
	*Nainesh Trivedi
	Sushmita Lunkad
30-05-2024	Sandeep Gandhi
	Hitendra Desai
	Ritesh Patel
	*Nainesh Trivedi
	Sushmita Lunkad
05-06-2024	Sandeep Gandhi
	Hitendra Desai
	Ritesh Patel
	*Nainesh Trivedi
	Sushmita Lunkad
24-06-2024	Sandeep Gandhi
	Hitendra Desai
	Ritesh Patel
	*Nainesh Trivedi
	Sushmita Lunkad
09-07-2024	Sandeep Gandhi
	Hitendra Desai
	Ritesh Patel
	*Nainesh Trivedi
	Sushmita Lunkad
13-08-2024	Sandeep Gandhi
	Hitendra Desai
	Ritesh Patel
	*Nainesh Trivedi
	Sushmita Lunkad
04-09-2024	Hitendra Desai
	Ritesh Patel
	*Nainesh Trivedi
	Sushmita Lunkad
16-09-2024	Sandeep Gandhi
	Hitendra Desai
	Ritesh Patel
	Sushmita Lunkad
	#Bhavna Brahmbhatt
19-09-2024	Sandeep Gandhi
	Hitendra Desai
	Ritesh Patel
	Sushmita Lunkad
	#Bhavna Brahmbhatt
04-10-2024	Sandeep Gandhi
	Hitendra Desai
	Ritesh Patel
	Sushmita Lunkad
	#Bhavna Brahmbhatt
29-10-2024	Sandeep Gandhi
	Hitendra Desai
	Ritesh Patel
	Sushmita Lunkad
	#Bhavna Brahmbhatt
06-12-2024	Sandeep Gandhi
	Hitendra Desai
	Sushmita Lunkad
	#Bhavna Brahmbhatt
19-12-2024	Sandeep Gandhi
	Hitendra Desai
	Sushmita Lunkad
	#Bhavna Brahmbhatt
14 23-12-2024	Sandeep Gandhi
	Hitendra Desai
	Sushmita Lunkad
	#Bhavna Brahmbhatt
15 27-12-2024	Sandeep Gandhi
	Hitendra Desai
	Sushmita Lunkad
	#Bhavna Brahmbhatt
16 23-01-2025	Sandeep Gandhi
	Hitendra Desai
	Sushmita Lunkad
	#Bhavna Brahmbhatt
17 12-02-2025	Sandeep Gandhi
	Hitendra Desai
	Sushmita Lunkad
	#Bhavna Brahmbhatt
18 28-02-2025	Sandeep Gandhi
	Hitendra Desai
	Sushmita Lunkad
	#Bhavna Brahmbhatt
19 18-03-2025	Sandeep Gandhi
	Hitendra Desai
	Sushmita Lunkad
	#Bhavna Brahmbhatt
20 27-03-2025	Sandeep Gandhi
	Hitendra Desai
	Sushmita Lunkad
	#Bhavna Brahmbhatt

#Mrs. Bhavna Ronil Brahmbhatt (DIN: 10736860) was appointed as a Non-Executive, Independent Women Director of the Company w.e.f. 04^th September, 2024.

*Mr. Nainesh Bhanushankar Trivedi (DIN: 08816850) has resigned from the post of NonExecutive, Independent Director of the Company w.e.f. 04^th September, 2024.

35. INTERNAL FINANCIAL CONTROL SYSTEM:

The details in respect of internal financial control and their adequacy are included in the Management Discussion and Analysis (Annexure I), which is a part of this report.

36. COMPOSITION OF AUDIT COMMITTEE:

The composition of the Audit Committee is as under and it is in compliance with the provisions of Section 177 of the Companies Act, 2013 read with the rules thereunder and Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulation, 2015 ("SEBI Listing Regulations").

The Audit Committee acts as a link between the statutory and internal auditors and the Board of Directors. Its purpose is to assist the Board in fulfilling its oversight responsibilities of monitoring

financial reporting processes, reviewing the Companys established systems and processes for internal financial controls, governance and reviewing the Companys statutory and internal audit activities.

The Company has an Internal Auditor, who is responsible for conducting independent Internal Audit. The Internal Auditor reports directly to the Audit Committee of the Board.

Committee invites such of the executives as it considers appropriate, representatives of the statutory auditors and internal auditors, to be present at its meetings. The Company Secretary acts as the Secretary to the Audit Committee. Reports are sent to the members of the Committee on matters relating to the Insider Trading Code.

During the year, 15 Audit Committee Meetings were held.

The dates on which the Audit Committee Meetings were held along-with attendance are as follows:

AUDIT COMMITTEE MEETING DATE	COMMITTEE MEMBERS PRESENT
30-04-2024	Ritesh Patel
	Hitendra Desai
	*Nainesh Trivedi
	Sushmita Lunkad
30-05-2024	Ritesh Patel
	Hitendra Desai
	*Nainesh Trivedi
	Sushmita Lunkad
05-06-2024	Ritesh Patel
	Hitendra Desai
	*Nainesh Trivedi
	Sushmita Lunkad
24-06-2024	Ritesh Patel
	Hitendra Desai
	*Nainesh Trivedi
	Sushmita Lunkad
09-07-2024	Ritesh Patel
	Hitendra Desai
	*Nainesh Trivedi
	Sushmita Lunkad
13-08-2024	Ritesh Patel
	Hitendra Desai
	*Nainesh Trivedi
	Sushmita Lunkad
04-09-2024	Ritesh Patel
	Hitendra Desai
	*Nainesh Trivedi
	Sushmita Lunkad
16-09-2024	Ritesh Patel
	Hitendra Desai
	Sushmita Lunkad
	#Bhavna Brahmbhatt
06-12-2024	Hitendra Desai
	Sushmita Lunkad
	#Bhavna Brahmbhatt
23-12-2024	Hitendra Desai
	Sushmita Lunkad
	#Bhavna Brahmbhatt
23-01-2025	Hitendra Desai
	Sushmita Lunkad
	#Bhavna Brahmbhatt
12-02-2025	Hitendra Desai
	Sushmita Lunkad
	#Bhavna Brahmbhatt
28-02-2025	Hitendra Desai
	Sushmita Lunkad
	#Bhavna Brahmbhatt
18-03-2025	Hitendra Desai
	Sushmita Lunkad
	#Bhavna Brahmbhatt
27-03-2025	Hitendra Desai
	Sushmita Lunkad
	#Bhavna Brahmbhatt

The members of the Audit Committee and their attendance at committee meetings are as under:

Name of the Director	Category	No. of Meetings attended
Mr. Ritesh Patel	Chairman, Non-Executive & Independent Director	08
*Mr. Nainesh Trivedi	Non-Executive & Independent Director	07
Mr. Hitendra Desai	Executive Director & Whole Time Director	15
Ms. Sushmita Lunkad	Non-Executive & Independent Director	15
#Mrs. Bhavna Brahmbhatt	Non-Executive & Independent Director	08

#Mrs. Bhavna Ronil Brahmbhatt (DIN: 10736860) was appointed as a Non-Executive, Independent Women Director of the Company w.e.f. 04^th September, 2024.

*Mr. Nainesh Bhanushankar Trivedi (DIN: 08816850) has resigned from the post of NonExecutive, Independent Director of the Company w.e.f. 04^th September, 2024.

The Committee in particular looks into:

• Oversight of the Companys financial reporting process and the disclosure of its financial information to ensure that the financial statement is correct, sufficient and credible.

• Recommending the appointment, re-appointment and removal of statutory auditor, fixation of audit fees and also approval of payment of any other services.

• To ensure proper disclosure in the Quarterly, Half yearly and Annual Financial Statements.

• To review the functioning of the Whistle Blower Mechanism.

• Reviewing with management the quarterly / annual financial statements before submission to the Board focusing primarily on the following:

- Matters required to be included in the Directors Responsibility Statement.

- Any change in accounting policies and practices.

- Major accounting entries based on exercise of judgment by management.

- Significant adjustment arising out of audit.

- Compliance with accounting standards.

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

- Qualification in draft audit report.

• Any related party transaction, i.e., transaction of the management, their subsidiaries or relatives, etc., that may have potential conflict with the interest of Company at large. Approval or any subsequent modification of transactions of the Company with related parties and granting omnibus approval to related party transactions which are in the ordinary course of business and on an arms length basis and to review and approve such transactions.

• Reviewing with the management, statutory and internal auditors and the adequacy of internal control systems and reviewing the adequacy of internal audit function, including the structure of the internal audit department, staffing and seniority of the official heading the department, reporting structure coverage and frequency of internal audit.

• Discussion with internal auditors any significant findings and follow up thereon.

• Reviewing the finding of any internal investigations by the internal auditors into matters where there is suspected fraud or irregularity of a failure of internal control systems of a material nature and reporting the matter to the Board.

• Discussion with statutory auditors before the audit commences, nature and scope of audit as well as have post audit discussion to ascertain any area of concern.

• Reviewing the Companys financial and risk management policies (if any).

• Scrutiny of inter-corporate loans and investments.

• Valuation of undertakings or assets of the Company, wherever it is necessary.

• Evaluation of internal financial controls and risk management systems.

• Approval of appointment of CFO (i.e., the Whole Time Finance Director or any other person heading the finance function or discharging that function) after assessing the qualifications, experience & background etc. of the candidate.

• Review and monitor the Auditors independence, performance and effectiveness of audit process.

• Approve policies in relation to the implementation of the Insider Trading Code and to supervise implementation of the same.

37. NOMINATION REMUNERATION COMMITTEE:

The Board has, on the recommendation of the Nomination & Remuneration Committee framed a policy for selection and appointment of Directors, Senior Management and their remuneration.

Nomination remuneration and compensation committee policy (NRC Committee):

The NRC Committee of the Company shall be formed by the Board of Directors of the Company out of its Board members. The NRC Committee shall consist of minimum three non-executive directors out of which two shall be independent directors. The chairperson of the Company may be appointed as a member of the NRC Committee but shall not chair the NRC Committee. The Chairman of the NRC Committee shall be an independent director. No member of the NRC

Committee shall have a relationship that may interfere with his independence from management and the Company or with the exercise of his duties as a NRC committee member. The NRC Committee may invite such of the executives of the Company, as it considers appropriate (and particularly the Managing Director) to be present at the meetings of the NRC committee, but on occasions it may also meet without the presence of any executives of the Company. The Company Secretary shall act as the Secretary to the NRC Committee.

The Nomination and Remuneration Policy is available on the Companys website at: https://www.harishtextile.com/investors/policies

Remuneration Policy:

The Remuneration policy of your Company is a comprehensive policy which is competitive, in consonance with the industry practices and rewards good performance of the employees of the Company. The policy ensures equality, fairness and consistency in rewarding the employees on the basis of performance against set objectives. Remuneration of employees largely consists of basic remuneration and performance incentives. The Company while deciding the remuneration package takes into consideration the employment scenario, remuneration package of the industry and the remuneration package of other Industries.

The Remuneration of the Executive Directors is decided by the Nomination and Remuneration Committee based on criteria such as industry benchmarks, the Companys performance vis-avis the industry performance, track record of the Executive Directors.

The Nomination and Remuneration committee met Four Time during the year dated 30^th April, 2024, 30^th May, 2024, 04^th September, 2024, and 27^th March, 2025. Company Secretary of the Company acted as the Secretary to the Committee.

The members of the Nomination and Remuneration Committee and their attendance at committee meetings are as under:

Name of the Director	Category	No. of Meetings attended
Mr. Ritesh Patel	Non-Executive & Independent Director	3
*Mr. Nainesh Trivedi	Non-Executive & Independent Director	3
Ms. Sushmita Lunkad	Non-Executive & Independent Director	4
#Mrs. Bhavna Brahmbhatt	Non-Executive & Independent Director	1

#Mrs. Bhavna Ronil Brahmbhatt (DIN: 10736860) was appointed as a Non-Executive, Independent Women Director of the Company w.e.f. 04^th September, 2024.

*Mr. Nainesh Bhanushankar Trivedi (DIN: 08816850) has resigned from the post of NonExecutive, Independent Director of the Company w.e.f. 04^th September, 2024.

The Company has not issued any Stock options to the Directors. Independent Directors of the Company have disclosed that they do not hold any Equity Shares of the Company. There has been no pecuniary relationship or transactions of the Non-Executive Directors vis-a-vis the Company during the year under review.

The Committee in particular looks into:

The nomination and remuneration committee of the Company is constituted in line with the provisions of Regulation 19 with Part D of the Schedule II of SEBI Listing Regulations, read with Section 178 of the Act.

• Recommend to the Board the setup and composition of the Board and its Committees.

• To approve the annual Remuneration of the Directors and Employees of the Company.

• To review the performance of the Chairman and Managing Director and the Whole-time Directors after considering the Companys performance.

• To review overall compensation policy, service agreements, performance incentive and other employment conditions of Executive Director(s).

• Recommend to the Board the appointment/re-appointment of Directors and Key Managerial Personnel.

• Recommend to the Board the Remuneration Policy for Directors, executive team or Key Managerial Personnel as well as the rest of employees.

• Support the Board and Independent Directors in evaluation of the performance of the Board, its Committees and individual Directors.

• Oversee familiarization programs for Directors.

38. STAKEHOLDERS RELATIONSHIP COMMITTEE:

The Stakeholders Relationship Committee is constituted in line with the provisions of Regulation 20 of SEBI Listing Regulations read with Section 178 of the Companies Act, 2013.

Terms of reference:

The Committee is responsible for assisting the Board of Directors in the Boards overall responsibilities relating to attending and redressal of the grievances of the security holders of the Company.

Functions:

The Members of the stakeholders relationship committee met Three Time during the financial year under review dated 30^th April, 2024, 04^th September, 2024, and 27^th March, 2025. Company Secretary of the Company acted as the Secretary to the Committee.

The Composition of the Shareholders Relationship Committee constituted and details of the meetings attended by the Directors are given below.

The members of the stakeholders relationship committee and their attendance at committee meetings are as under:

Name of the Director	Category	No. of Meetings attended
Mr. Ritesh Patel	Chairman, Non-Executive & Independent Director	2
*Mr. Nainesh Trivedi	Non-Executive & Independent Director	2
Ms. Sushmita Lunkad	Non-Executive & Independent Director	3
Mr. Hitendra Desai	Executive & Whole-Time Director	3
# Mrs. Bhavna Brahmbhatt	Non-Executive & Independent Director	1

#Mrs. Bhavna Ronil Brahmbhatt (DIN: 10736860) was appointed as a Non-Executive, Independent Women Director of the Company w.e.f. 04^th September, 2024.

*Mr. Nainesh Bhanushankar Trivedi (DIN: 08816850) has resigned from the post of NonExecutive, Independent Director of the Company w.e.f. 04^th September, 2024.

The committee meets at frequent intervals, to approve inter-alia, transfer/ transmission of Equity shares, non-receipt of annual Report, attending to complaints of investors routed by SEBI/Stock Exchanges and reviews the status of investors grievances and redressed mechanism and recommend measures to improve the level of investor services. Details of share transfer / transmission approved by the committee are placed at the Board meetings from time to time. Company Secretary of the Company acted as the Secretary to the Stakeholders Relationship Grievance Committee.

The Committee in particular looks into:

• To oversee and review redressal of shareholder and investor grievances, on matters relating to issue, transfer, transmission of securities, non-receipt of annual report, non-receipt of dividends/interests.

• To issue duplicate share/debenture certificate(s) reported lost, defaced or destroyed as per the laid down procedure and to resolve the grievances of security holders of the Company, if any.

• Attending to complaints of security holders routed by SEBI (SCORES)/Stock Exchanges/RBI or any other Regulatory Authorities.

• Taking decision on waiver of requirement of obtaining the Succession Certificate/Probate of Will on case to case basis within the parameters set out by the Board of Directors.

• To monitor transfer of the amounts/shares transferable to Investor Education and Protection Fund.

• To list the securities of the Company on Stock Exchanges.

• Any other matters that can facilitate better investor services and relations.

• Review activities with regard to the Health Safety and Sustainability initiatives of the Company.

• Review of the various measures and initiatives taken by the listed entity for reducing the quantum of unclaimed dividends and ensuring timely receipt of dividend warrants / annual reports / statutory notices by the shareholder of the Company.

During the year under review, few queries/complaints were received from shareholders/investors and all of them got resolved on time. Hence, no complaint / query is remaining unresolved & pending as on 31^st March 2025. The number of pending share transfers as on 31^st March 2025 were Nil.

39. RIGHTS ISSUE COMMITTEE:

The Rights Issue Committee was constituted by the Board of Directors at its meeting held on 28th April, 2025, in line with the provisions of the Companies Act, 2013 and applicable SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

Terms of Reference:

The Committee was constituted to evaluate, oversee, and take all decisions in relation to the proposed Rights Issue of equity shares, including determination of issue size, price, ratio, record date, appointment of intermediaries, and ensuring compliance with applicable legal and regulatory requirements.

Functions:

The Committee was entrusted with:

• Structuring and finalising the terms of the Rights Issue;

• Appointment of intermediaries such as merchant bankers, registrars, legal advisors, etc.;

• Approving offer documents and undertaking filings with SEBI, BSE, and ROC;

• Opening bank accounts and handling related operational matters.

• To monitor compliance with applicable provisions of the Companies Act, 2013, SEBI (LODR) Regulations, 2015, and SEBI (ICDR) Regulations, 2018;

• To review and approve timelines, advertisements, notices, and announcements related to the Rights Issue;

• To take any other incidental or ancillary actions necessary for successful execution or withdrawal of the Rights Issue.

Composition of the Rights Issue Committee and Meeting Details:

Name of the Director	Designation	Category
1 Mr. Sandeep Gandhi	Managing Director	Chairman
2 Mr. Sunil Bhirud	Executive Director	Member
3 Mrs. Bhavna Brahmbhatt	Non-Executive, Independent Woman Director	Member
4 Mr. Mahesh Sapariya	Non-Executive, Independent Director	Member

40. INDEPENDENT DIRECTORS MEETING:

During the year under review, as required under Schedule IV to the Companies Act, 2013 and the provisions of SEBI Listing Regulations, 2015, the Independent Directors met on 27^th March, 2025, without the presence of Executive Directors or members of management, inter alia, to discuss:

• Evaluation of performance of Non-Independent Directors and the Board of Directors as a whole

• Evaluation of performance of the Chairman of the Company, taking into account the views of the Executive and Non-Executive Directors

• Evaluation of the quality, content and timelines of flow of information between the Management and the Board that is necessary for the Board to effectively and reasonably perform its duties.

41. VIGIL MECHANISM (WHISTLE BLOWER POLICY):

The Companys Whistle Blower Policy provides a mechanism under which an employee/director of the Company may report unethical behaviour, suspected or actual fraud, violation of code of conduct and personnel policies of the Company. The Vigil Mechanism ensures standards of professionalism, honesty, integrity and ethical behaviour. The Whistle Blower Policy/Vigil Mechanism is uploaded on the Companys website at

https://www.harishtextile.com/investors/policies

During the year under review, there were no complaints received under this mechanism.

42. RISK MANAGEMENT POLICY:

As per Regulation 21 of Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulation, 2015 the top 1000 listed entities need to adopt Risk Management Policy. Therefore, the Company is not required to adopt Risk Management Policy.

43. PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES:

The particulars of every contract or arrangements entered into by the Company with related parties referred to in sub-section (1) of Section 188 of the Companies Act, 2013 including certain arms length transactions under third proviso thereto have been disclosed in Form No. AOC-2 as Annexure-IV.

44. CORPORATE SOCIAL RESPONSIBILITY:

The Company is not required to constitute a Corporate Social Responsibility Committee as it does not fall within the purview of Section 135(1) of the Companies Act, 2013 and hence it is not required to formulate policy on Corporate Social Responsibility.

45. PARTICULARS OF EMPLOYEE:

None of the employees of the Company is drawing remuneration in excess of the limits described under rule (5) (2) chapter XIII as provided under section 197 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014. The information required under section 197 of the act read with rule (5)(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are mentioned in the Annexure V.

46. VARIOUS POLICIES OF THE COMPANY:

In accordance with the provisions of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and the Companies Act, 2013 the Company has formulated, implemented and amended (as per the Companies (amendments) Act, 2017, SEBI (Prohibition of Insider Trading) (Amendment) Regulations, 2019) and SEBI (Listing Obligations and Disclosure Requirements) (Amendment) Regulations, 2018 and other applicable provisions, Company has formulated various policies and the Amended copy of all such Policies are available on Companys website (www.harishtextile.com). The Policies are reviewed periodically by the Board and updated based on need and requirements.

47. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS:

Details of Loans, Guarantees and Investments covered under the provisions of Section 186 of the Companies Act, 2013 are given in the notes to the Financial Statements.

48. POLICY FOR PROHIBITION OF INSIDER TRADING:

Vide notification no. EBI/LAD-NRO/GN/2018/59 Securities and Exchange Board of India (SEBI) has notified SEBI (Prohibition of Insider Trading) (Amendment) Regulations, 2018. The Company has accordingly amended its Prohibition of Insider Trading Code and Code of Practices and Procedures for Fair Disclosure of Unpublished Price Sensitive Information. The Code also provides for pre-clearance of transactions by designated persons, whenever required.

The Company follows closure of trading window for the end of every quarter till 48 hours after the declaration of financial results. The Company has been advising the designated persons covered by the said Code not to trade in Companys securities during the closure of trading window period.

49. PREVENTION OF SEXUAL HARASSMENT AT WORKPLACE:

As per the requirements of the Sexual Harassment of Women at Workplace (Prevention, Prohibition & Redressal) Act, 2013 ("POSH Act") and Rules made thereunder, the Company has formed an Internal Committee to address complaints pertaining to sexual harassment in the workplace. The Company policy mandates prevention of sexual harassment and to ensure a free and fair enquiry process with clear timelines for resolution. During the year under review, there were no cases filed under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.

The Prevention of Sexual Harassment (POSH) of Women at Workplace Policy is available on the Companys website at: https://www.harishtextile.com/investors/policies.

50. REMUNERATION TO DIRECTOR AND EMPLOYEES:

Details/Disclosures of ratio of remuneration to each Director to median employees remuneration as required pursuant to Section 197(12) of the Companies Act 2013 read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 and details of remuneration paid to Employees vide Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is given as Annexure- V.

51. CEO & CFO CERTIFICATION:

In terms of Listing Regulations, the certification by the Managing Director and the Chief Financial Officer is annexed to this Annual Report.

52. INVESTOR RELATIONS:

Your Company always endeavours to keep the time of response to shareholders request/grievance at the minimum. Priority is accorded to address all the issues raised by shareholders and provide them a satisfactory reply at the earliest possible time. The

Stakeholder Relationship Committee of the board meets periodically and reviews the status of the Shareholders Grievances.

53. ACKNOWLEDGEMENTS:

Your Directors would like to express their sincere appreciation for the assistance and cooperation received from various stakeholders including financial institutions and banks, government authorities and other business associates who have extended their valuable support and encouragement during the year under review.

Your Directors take this opportunity to place on record their appreciation for the committed services rendered by the employees of the Company at all levels, who have contributed significantly towards the Companys performance and for enhancing its inherent strength.

Your Directors also acknowledge with gratitude the encouragement and support extended by our valued shareholders.

For and on behalf of the Board of Directors
Harish Textile Engineers Limited
Sandeep Gandhi	Sunil Bhirud
Managing Director	Executive Director
DIN: 00941665	DIN: 03469816
Date: 25th June, 2025
Place: Mumbai