Macfos Ltd Directors Report

The dates on which Nomination and Remuneration Committee meetings were held are as follows

E. STAKEHOLDERS RELATIONSHIP COMMITTEE

In compliance with Regulation 20 of SEBI LODR Regulations read with Section 178 of the Companies Act, 2013, the Company has a duly constituted Stakeholders Relationship Committee (SRC) to address the grievances of the shareholders, debenture holders, and other security holders. The composition is as follows:

STAKEHOLDERS RELATIONSHIP COMMITT E

The dates on which Stakeholders Relationship Committee meetings were held are as follows.

Investor Grievance Status for FY 2025-26:

F. CORPORATE SOCIAL RESPONSIBILITY COMMITTEE:

As per the provisions of section 135 sub-section (1) and other applicable provisions of the Companies Act, 2013, read with a rule made under the Companies (Meetings of Board and its Power) Rules, 2014, the Board was required to constitute a Corporate Social Responsibility Committee. Hence, the Board constituted the Corporate Social Responsibility Committee, which consists of one Independent Directors and two Executive Director as on 31st March 2026. The detailed composition of the members of the Stakeholder Relationship Committee at present is given below:

CORPORATE SOCIAL RESPONSIBILITY COMMITTEE

The dates on which Corporate Social Responsibility Committee meetings were held are as follows;

G. CORPORATE EXECUTIVE COMMITTEE:

The Company constituted a Corporate Executive Committee during the year to enhance operational efficiency and strategic decision-making. The Committee was established with defined terms of reference encompassing key areas of business operations, including strategic planning, resource allocation, and performance monitoring. The formation of this Committee represents a significant step in strengthening the Companys governance framework and ensuring more agile management of critical business matters.

The dates on which Corporate Executive Committee meetings were held are as Follows

H. CODE OF CONDUCT

I. DISCLOSURES

The Board of Directors of the Company has laid down a code of conduct for all the Board Members and Senior Management of the Company. The main object of the Code is to set a benchmark for the Companys commitment to values and ethical business conduct and practices. Its purpose is to conduct the business of the Company in accordance with its value systems, fair and ethical practices, applicable laws, rules and regulations. Further, the Code provides for the highest standard of professional integrity while discharging the duties and promotes and demonstrates professionalism in the Company.

All the Board Members and Senior Management of the Company have affirmed compliance with the code of conduct for the financial year ended on March 31, 2026, as required by Regulation 26(3) of the Listing Regulations. A declaration signed by the Chairman & Managing Director to this effect is attached as a part of this Annual Report in Annexure II

18. POLICY FOR PREVENTION OF INSIDER TRADING:

The Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations, 2015 came into effect on May 15, 2015, to put in place a framework for the prohibition of insider trading in securities and to strengthen the legal framework thereof. According to Regulation 8 of the Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations, 2015, the Company has formulated and adopted the Code of Practices and Procedures for Fair Disclosure of Unpublished Price Sensitive Information ("Code of Fair Disclosure") of the Company.

19. VIGIL MECHANISM/WHISTLE BLOWER POLICY:

20. BOARD EVALUATION:

The Board evaluated the effectiveness of its functioning, that of the Committees, and of individual Directors, pursuant to the provisions of the Act and SEBI Listing Regulations.

The Board sought the feedback of Directors on various parameters, including:

• Degree of fulfilment of key responsibilities towards stakeholders (by way of monitoring corporate governance practices, participation in long-term strategic planning, etc.);

• Structure, composition, and role clarity of the Board and Committees;

• Extent of coordination and cohesiveness between the Board and its Committees;

• Effectiveness of the deliberations and process management;

• Board/Committee culture and dynamics; and

• Quality of the relationship between Board Members and the Management The evaluation frameworks were the following key areas:

1. For Non-Executive & Independent Directors:

• Knowledge

• Professional Conduct

• Comply with Secretarial Standards issued by ICSI Duties,

• Role and functions

2. For Executive Directors:

• Performance as a leader

• Evaluating Business Opportunities and analysis of Risk Reward Scenarios

• Set the key investment goal

• Professional conduct and integrity

• Sharing of information with the Board.

• Adherence to applicable government law

21. RISK MANAGEMENT POLICY:

The Company is aware of the risks associated with the business. It regularly analyses and takes corrective actions for managing/mitigating the same.

22. DISCLOSURES UNDER SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION & REDRESSAL) ACT, 2013:

Your Company provides equal opportunities and is committed to creating a healthy working environment that enables our Minds to work with equality and without fear of discrimination, prejudice, gender bias or any form of harassment at the workplace.

The composition of the internal complaint committee is as follows:

23. AUDITORS:

i. STATUTORY AUDITORS:

As recommended by the Audit Committee Meeting held on 29th July 2024, the Company board of directors of the company has approved the Reappointment of M/s Kishor Gujar & Associates, Chartered Accountants, Pune, having Firm

Registration No. FRN-116747W, for the next term of the Five Financial year from the conclusion of the 7th Annual General Meeting till the conclusion of the 12th Annual General Meeting.

The Company reappointed M/s Kishor Gujar & Associates, Chartered Accountants, Pune, having Firm Registration No. FRN-H6747W as the Statutory Auditors for the next term of five (5) financial years. The auditors were previously appointed with effect from the 1st day of April, 2019, and their term expired at the 7th (Seventh) Annual General Meeting of the Company. Consequently, the same auditors were reappointed at the 7th (Seventh) Annual General Meeting for the next term of five (5) years, effective from the conclusion of the 7th (Seventh) Annual General Meeting until the conclusion of the 12th (Twelfth) Annual General Meeting.

The Auditors Report for the financial year ended on March 31, 2026, has been provided in "Financial Statements" forming part of this Annual Report.

The report of the Statutory Auditor does not contain any qualification, reservation, adverse remark or disclaimer. The observations made in the Auditors Report are self-explanatory and therefore do not call for any further comments.

ii. INTERNAL AUDITORS:

M/s. Moore Singhi Advisors LLP has been appointed as the Internal Auditor of the company on 28th July 2025 for the Financial Year 2024-25 and 2025-26 and will continue until further. The Internal Auditor is appointed by the Board of Directors of the Company on a yearly basis and based on the recommendation of the Audit Committee. The Internal Auditor reports their findings on the Internal Audit of the Company to the Audit Committee on a half-yearly basis. The scope of the internal audit is approved by the Audit Committee.

Further company upon expiry of the term of the internal auditor on 31st March 2026, M/s. Singhi & Co., a Chartered Accountant Firm, has been appointed as the Internal Auditor of the company on 28th April 2026 for the Financial Year 2026-27 and 2027-28. The Internal Auditor reports their findings on the Internal Audit of the Company to the Audit Committee on a Quarterly basis. The scope of the internal audit is approved by the Audit Committee.

iii. SECRETARIAL AUDITOR:

Pursuant to Section 204 of the Companies Act, 2013 and rules made thereunder, the Company has appointed M/s. CZ & ASSOCIATES LLP., Practicing Company Secretary Firm, as Secretarial Auditor of the Company for the five financial years Commencing form 2025-26 to 2029-30. The Secretarial Audit Report in Form MR-3 for the financial year ended on March 31, 2026, is attached to the Directors Report and forms part of this Annual Report. (Annexure - III)

The report of the Secretarial auditor does not contain any qualification, reservation, adverse remark, or disclaimer.

24. DIRECTORS RESPONSE ON AUDITORS QUALIFICATIONS, RESERVATIONS,

OR ADVERSE REMARKS, OR DISCLAIMER MADE:

There is no qualification or Disclaimer of Opinion in the Auditors Report on the Financial Statements to the shareholders of the Company made by the Statutory Auditors in their report.

25. COMPLIANCE WITH SECRETARIAL STANDARDS:

The Company has articulated proper systems to ensure compliance with Secretarial Standards issued by The Institute of Company Secretaries of India and its provisions, and complies with the same.

26. ANNUAL RETURN:

27. MANAGEMENT DISCUSSION AND ANALYSIS REPORT:

The Management Discussion and Analysis Report as required under Regulation 34(2)(e) read with Schedule V Part B of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 ("SEBI Listing Regulations, 2015") is annexed herewith as Annexure IV

28. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS MADE UNDER SECTION 186 OF THE COMPANIES ACT, 2013:

The details of loans/guarantees/ investments (if any) made by the Company under Section 186 of the Companies Act, 2013, have been disclosed in the Financial Statement.

29. LOANS FROM DIRECTOR/ RELATIVE OF DIRECTOR:

The balances of monies accepted by the Company from Directors/ relatives of Directors at the beginning of the year and at the close of the year have been disclosed in the Financial Statement.

The Funds have been given out of the Directors own Funds and are not being given out of funds acquired by borrowing from others

30. PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES:

All contracts/arrangements/transactions entered by the Company during the financial year with related parties were in the ordinary course of business and on an arms length basis. During the year, the Company enter into any contract/arrangement/transaction with related parties which is on an arms-length basis in accordance with the policy of the Company, the disclosure of Related Party Transactions as required under Section 188 and 134(3) of the Companies Act in Form AOC-2 is Provided as Annexure V. The attention of the members is drawn to the disclosures of transactions with the related parties are set out in Notes to Accounts forming part of the financial statement.

31. CORPORATE SOCIAL RESPONSIBILITY:

The total amount spent by the Company on CSR activities during the financial year 2025-26 is R32,00,000/- (Rupees Thirty-Two Lakhs Only). The Company has availed the benefit of set-off of excess CSR expenditure incurred in the preceding financial years 2023-24 and 2024-25, as permitted under Rule 7(3) of the Companies (Corporate Social Responsibility Policy) Rules, 2014, as amended.

The following table sets out the details of CSR obligations prescribed, amounts actually paid, and the excess/shortfall for each of the financial years relevant to the set-off mechanism:

In accordance with Rule 7(3) of the Companies (Corporate Social Responsibility Policy) Rules, 2014, as amended, any surplus or excess amount spent by a company on CSR activities over and above the prescribed obligation in a given financial year may be set off against the required CSR expenditure for the immediately succeeding three financial years.

In the financial year 2023-24, the Company spent ^11,00,000/- against a prescribed obligation of ^10,50,839/-, resulting in an excess payment of R49,161/-. Similarly, in the financial year 2024-25, the Company spent R22,00,000/- against a prescribed obligation of ^21,85,686.84/-, resulting in an additional excess payment of ^14,313.16/-. The aggregate excess CSR amount available for set-off as at the beginning of FY 2025-26 was therefore ^63,474.16/- (Rupees Sixty-Three Thousand Four Hundred Seventy-Four and Paise Sixteen Only).

During the financial year 2025-26, the prescribed CSR obligation of the Company is Rs. 32,58,638.28/- (Rupees Thirty-Two Lakhs Fifty-Eight Thousand Six Hundred Thirty-Eight and Paise Twenty-Eight Only). The Company has spent Rs. 32,00,000/- (Rupees Thirty-Two Lakhs Only) during the year. The shortfall of RS. 8,638.28/- against the prescribed obligation is fully covered and extinguished by the set-off of the accumulated excess of ^63,474.16/- from the preceding two financial years. Accordingly, upon application of the set-off, the net CSR obligation of the Company for FY 2025-26 stands fully discharged, and no unspent CSR amount remains as on March 31, 2026.

As mentioned above, the Company has made payment of its CSR contribution to Mula Education Society, which is duly registered for undertaking CSR activities under Registration No. CSR00022356, vide PAN: AAATM5236E, having its registered office at At Post Sonai, Rahuri Road, Ahmednagar, Maharashtra - 414105.

32. INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY:

The Company has an effective and reliable internal control system commensurate with the size of its operations. At the same time, it adheres to local statutory requirements for the orderly and efficient conduct of business, safeguarding of assets, the detection and prevention of fraud and errors, adequacy and completeness of accounting records and timely preparation of reliable financial information. The efficacy of the internal checks and control systems is validated by self-audits and internal as well as statutory auditors.

33. PARTICULARS OF EMPLOYEES:

The information required under Section 197 of the Companies Act, 2013, read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, is as follows:

1. The ratio of the remuneration of each director to the median remuneration of the employees of the Company and the percentage increase in remuneration of each Director, Chief Executive Officer, Chief Financial Officer, and Company Secretary in the financial year:

2. The percentage increase in the median remuneration of employees in the financial year: 32.00%

3. The number of permanent employees on the rolls of the Company: -189

4. Average percentile increases already made in the salaries of employees other than the managerial personnel in the last financial year, and their comparison with the percentile increase in the managerial remuneration, and justification thereof, and point out if there are any exceptional circumstances for an increase in the managerial remuneration.

5. Affirmation that the remuneration is as per the remuneration policy of the Company: The Company affirms that the remuneration is as per the remuneration policy of the Company. The information pursuant to Rule 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, does not apply to the company as no employee receives remuneration exceeding Rs. 8,50,000/- per month or Rs. 1,02,00,000/- per annum.

34. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO:

1.1 Conservation of Energy:

The steps taken or impact on the conservation of energy: -

I. The company is putting continuous efforts to reduce the consumption of energy and achieve maximum possible energy savings.

II. The steps taken by the company for utilising alternate sources of energy: - The Company has used alternate sources of energy, whenever and to the extent possible.

III. The capital investment on energy conservation equipment: NIL

1.2 Technology Absorption:

a. The effort made towards technology absorption: -No specific activities have been done by the Company.

b. The benefits derived, like product improvement, cost reduction, product development or import substitution: -No specific activity has been done by the Company.

c. In case of imported technology (imported during the last three years, reckoned from the beginning of the financial year: N.A.

d. The expenditure incurred on Research & Development: 40 Lakh

1.3 Foreign Exchange Earnings and Outgo:

Further, the details of foreign exchange earnings or outgoings during the year under review, as required in accordance with the provisions of section 134 (m) of the Companies Act, 2013, are as follows:

Foreign Exchange Earning (Rs. in Lakh): 214.17/-

Foreign Exchange Outgo (Rs. in Lakh): 18,733.88 /-

35. SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS:

During the year under review, there were no significant and/or material orders passed by any Court or Regulator, or Tribunal, which may impact the going concern status or the Companys operations in the future.

36. INDUSTRIAL RELATIONS:

The company has maintained good industrial relations on all fronts. Your directors wish to place on record their appreciation for the honest and efficient services rendered by the employees of the company.

37. BUSINESS RESPONSIBILITY REPORT:

Pursuant to Regulation 34(2)(f) of the Listing Regulations, the Business Responsibility Report is to be given only by the top 1000 listed companies based on market capitalization; therefore, the same does not apply to the Company as of March 31, 2026

38. MAINTENANCE OF COST RECORD:

The Cost audit, as specified by the Central Government under section 148 of the Companies Act, 2013, read with the Companies (Cost Records and Audit) Amendment Rules, 2014, does not apply to the company. However, the maintenance of cost records is applicable as the turnover of the relevant HSN code is more than the prescribed limit, and our company is maintaining the cost records as per the applicable rules. The company had obtained the Certificate from the cost auditor for maintaining the cost audit records.

39. DEMATERIALIZATION OF SHARES:

The Demat activation number allotted to the Company is ISIN INE0OLH01013. The shares of your Company are being traded in electronic form, and the Company has established connectivity with both the depositories i.e. National Securities Depository Limited (NSDL) and Central Depository Services (India) Limited (CDSL).

40. INSOLVENCY AND BANKRUPTCY CODE:

There is no application made or any proceeding pending under the Insolvency and Bankruptcy Code, 2016 (31 of 2016) during the year. The details of the difference between the amount of the valuation done at the time of one-time settlement and the valuation done while taking a loan from the Banks or Financial Institutions, along with the reasons thereof, do not apply to the Company.

41. INTERNAL FINANCIAL CONTROL SYSTEMS AND THEIR ADEQUACY:

Your Company has laid down the set of standards, processes and structure which enables the implementation of internal financial control across the Organisation and ensures that the same are adequate and operating effectively. To maintain the objectivity and independence of Internal Audit, the Internal Auditor reports to the Chairman of the Audit Committee of the Board.

The Internal Auditor monitors and evaluates the efficacy and adequacy of the internal control system in the Company, its compliance with the operating systems, accounting procedures and policies of the Company. Based on the report of the Internal Auditor, the process owners undertake the corrective action in their respective areas and thereby strengthen the Control. Significant audit observations and corrective actions thereon are presented to the Audit Committee of the Board.

42. WEB LINK OF ANNUAL RETURN:

43. ACKNOWLEDGEMENTS:

The Board of Directors greatly appreciates the commitment and dedication of employees at all levels who have contributed to the growth and success of the Company. We also thank all our clients, vendors, investors, bankers and other business associates for their continued support and encouragement during the year.

We also thank the Government of India, Government of Maharashtra, Ministry of Commerce and Industry, Ministry of Finance, Customs and Excise Departments, Income Tax Department and all other Government Agencies for their support during the year and look forward to their continued support in future.

44. CAUTIONARY STATEMENT:

This report contains forward-looking statements based on the perceptions of the Company and the data and information available to the Company. The company does not and cannot guarantee the accuracy of various assumptions underlying such statements, and they reflect the Companys current views of future events and are subject to risks and uncertainties. Many factors, like changes in general economic conditions, amongst others, could cause actual results to be materially different.