Mafatlal Industries Ltd Directors Report

To

The Members,

Mafatlal Industries Limited

Your Board of Directors are pleased to present the 112th Annual Report on the business and operations of the Company together with the audited financial statements for the financialear ended on Mar y ch 31, 2026.

FINANCIAL RESULTS

The financial results of the Company are as under:

(Rs. in Crores)

Particulars	Current Year	Previous Year
	2025-26	2024-25
Revenue from operations	3,870.44	2,807.23
Other income	31.71	38.07
Total income	3,902.15	2,845.30
EBITDA	124.85	106.53
Less: Depreciation and amortization expenses	16.63	15.03
Less: Finance costs	8.65	10.96
Profit before exceptional items	99.57	80.54
Exceptional items	(2.87)	(6.00)
Profit before taxes	96.70	74.54
Tax expense / (benefits)	5.63	(23.60)
Profit after taxes	91.07	98.14

OVERVIEW, STATE OF THE COMPANY AFFAIRS AND THE YEAR IN RETROSPECT

In 2025-26, the global economy faced headwinds stemming from shifts in trade policies, including tariff measures imposed by the United States and rising trade barriers. These pressures were partly offset by technology-driven investments, monetary support across major economies, and the adaptability of the private sector. Despite these challenges, the Indian economy demonstrated strong resilience and is expected to remain among the fastest-growing major economies in the world, supported by robust domestic consumption, expanding export opportunities, and favorable government policies.

During 2025-26, the Company delivered significant growth and improved financial performance, reflecting a broader-based expansion across the textiles, digital infrastructure, and consumer durables categories. This growth was driven by the successful execution of large-scale institutional orders, expansion of the product portfolio, and a robust pan-India supply chain network.

For 2025-26, the Company reported a total income of

3,902.15 Crores, representing year-on-year growth of 37.14%. EBITDA stood at Rs. 124.85 Crores, reflecting growth of 17.00%, while Profit Before Tax was

96.70 Crores, underscoring strong operational execution and prudent financial management.

BORROWINGS, LOANS, GUARANTEES AND INVESTMENTS

During the year under review, the Company repaid long-term borrowings amounting to Rs. 14.26 Crores, reinforcing its commitment to prudent financial management and a stronger balance sheet. The Company extends its sincere appreciation to its banking partners and financial institutions for their continued support and confidence, which have been instrumental in facilitating its growth and meeting its financial obligations.

In accordance with the provisions of Section 186 of the Companies Act, 2013, the Company has not granted any loans or provided any guarantees during the financial year under review. However, the Company has made an investment of Rs. 51,00,000/- (Rupees Fifty-One Lakhs only) by subscribing to 51,00,000 (Fifty-One Lakhs) equity shares of face value of Rs. 1/- (Rupee One) each in the equity share capital of its newly incorporated subsidiary,

Mafatlal Apparel Exports Private Limited (MAEPL). Further, with a view to facilitate the expansion of business activities and to meet the working capital requirements and capital expenditure of its subsidiary companies, joint venture companies, and associate companies, the Board of Directors have proposed that the Company may, from time to time, provide loans, give guarantees, or offer securities in connection with borrowings of such entities, for an aggregate amount not exceeding Rs. 150 Crores (Rupees One Hundred Fifty Crores only) outstanding at any point of time. The aforesaid limit for granting loans, guarantees, or securities is subject to the approval of the members as Special Resolutions, through postal ballot only by remote e-voting process (‘e-voting) in compliance with the applicable provisions of Sections 185 and 186 of the Companies Act, 2013. The postal ballot process commenced on May 01, 2026, and the results of e-voting will be announced on or before June 03, 2026.

CREDIT RATING

During 2025-26, the Companys credit profile witnessed a notable improvement, as evidenced by upgrades from the leading credit rating agencies.

Acuit? Ratings & Research Limited revised the Companys credit rating to ‘ACUITE A- (Upgraded) with a Stable outlook for long-term facilities, and to ‘ACUITE A2+ (Upgraded) for short-term facilities. This upgrade reflects the Companys stronger financial position, consistent operational performance and sound credit metrics.

CARE Ratings Limited reaffirmed the Companys credit ratings to ‘CARE BBB+ with a Stable outlook for long-term facilities and ‘CARE A2 for short-term facilities.

A detailed analysis of the Companys financial and operational performance is presented in the Management Discussion and Analysis Report, which forms an integral part of this Annual Report.

DIVIDEND

During the year under review, the Board of Directors declared and paid an interim dividend of Rs. 1.25/- per equity share of Rs. 2/- each (i.e., 62.50% of the face value), which was disbursed in November 2025. Further, based on the Companys performance, the Board has recommended a Final Dividend of Rs. 1.25/- per equity share of Rs. 2/- each (i.e., 62.50% of the face value) for the financial year ended March 31, 2026, subject to the approval of members at the 112th Annual General

Meeting. With this, the total dividend for the financial year 2025-26 amounts to Rs. 2.50/- per equity share of

2/- each, representing 125% of the face value.

The Company has adopted a Dividend Distribution Policy in compliance with Regulation 43A of the SEBI (LODR) Regulations, 2015, which establishes the principles to ascertain amounts that can be distributed to equity shareholders as dividend by the Company.

The dividend recommendation is in accordance with the Companys Dividend Distribution Policy, which is available on the Companys website at: https://www. mafatlals.com/investors/.

In accordance with SEBI Circular SEBI/HO/MIRSD/ MIRSD-PoD-1/P/CIR/2023/37 dated March 16, 2023 and SEBI Circular SEBI/HO/MIRSD/POD-1/P/CIR/2024/81 dated June 10, 2024 (effective from April 01, 2024), dividend payments will be withheld for shareholders holding shares in physical form if any KYC details are not updated as of the record date. Intimations have already been sent to the concerned shareholders, advising them to update their KYC details by submitting the relevant ISR forms along with self-attested supporting documents. These forms can be downloaded from the websites of the Company and its Registrar and Transfer Agent (RTA).

Pursuant to the Finance Act, 2020, read with applicable provisions of the Income-tax Act, 1961, dividend income is taxable in the hands of shareholders with effect from April 01, 2020. Accordingly, the Company shall deduct tax at source (TDS) on the dividend payment at the prescribed rates, in compliance with applicable tax laws.

UNCLAIMED DIVIDEND AND INVESTOR EDUCATION AND PROTECTION FUND (IEPF)

Pursuant to the provisions of Section 124 of the Companies Act, 2013, any dividend remaining unclaimed for a period of seven consecutive years is required to be transferred to the Investor Education and Protection Fund (‘IEPF). Since the Company had not declared any dividend after the financial year 2016-17, no unclaimed dividend amount was otherwise due for transfer to the IEPF.

As on March 31, 2026, 10,70,984 equity shares of Rs. 2/- each, representing 1.48% of the total equity share capital of the Company, are lying with the Investor Education and Protection Fund (IEPF). Details of the shares and dividend transferred to the IEPF account are available on the Companys website at: https://www. mafatlals.com/investors/.

The Nodal Officer for the purpose of compliances relating to IEPF is Mr. Amish P. Shah, Company Secretary and Compliance Officer of the Company. The details of the same are mentioned on the Companys website.

CAPITAL STRUCTURE OF THE COMPANY

During the year under review, the Company allotted an aggregate of 2,53,500 fully paid-up equity shares of

2/- each under the Mafatlal Employee Stock Option

Scheme-2017. Consequently, the subscribed and paid-up equity share capital of the Company increased from Rs. 14,38,20,860/- to Rs. 14,43,27,860/-, comprising

7,21,63,930 equity shares of Rs. 2/- each.

There was no issue of equity shares with differential rights as to dividend, voting, or otherwise during the year. Additionally, the Company did not undertake any buyback of shares during the year under review.

APPOINTMENT/RE-APPOINTMENT AND CESSATION OF DIRECTORS

Re-appointment of Director retiring by rotation

Pursuant to Section 152(6) of the Companies Act, 2013 and the Articles of Association of the Company, Mr. Priyavrata H. Mafatlal (DIN: 02433237), retires by rotation at the forthcoming 112th Annual General Meeting and being eligible offers himself for reappointment.

The requisite particulars in respect of Director seeking re-appointment is provided in Notice convening the Annual General Meeting.

All the Directors of the Company have confirmed that they are not disqualified from being appointed as directors under Section 164 of the Companies Act, 2013.

Re-appointment of Executive Directors

The term of Mr. Hrishikesh A. Mafatlal (DIN: 00009872) as Executive Chairman will expire on October 31, 2026. Based on the recommendation of the Nomination and Remuneration Committee, the Board of Directors, at its meeting held on May 05, 2026, has approved his re-appointment as Executive Chairman for a further period of two years with effect from November 01, 2026, up to October 31, 2028, on revised terms and conditions of appointment, subject to the approval of the members at the forthcoming 112th Annual General Meeting (AGM). Mr. Hrishikesh A. Mafatlal has voluntarily not drawn any remuneration during his last two terms of appointment. The term of Mr. Priyavrata H. Mafatlal (DIN: 02433237) as Managing Director will expire on October 31, 2026. Based on the recommendation of the Nomination and Remuneration Committee, the Board of Directors, at its meeting held on May 05, 2026, has approved his re-appointment and re-designation, prior to the expiry of his existing tenure on October 31, 2026, proposed to re-designate him as Managing Director and Chief Executive

Officer (MD & CEO) with effect from June 01, 2026, on revised terms and conditions of appointment for a further period of three years till May 31, 2029, subject to the approval of the members at the forthcoming 112th Annual General Meeting (AGM).

Details of policy of appointment and remuneration of Directors are available on the website of the Company at : https://www.mafatlals.com/investors/.

Cessation

Upon completion of their respective second terms as Independent Director, Mrs. Latika P. Pradhan (DIN: 07118801) ceased to be an Independent Director from the close of business hours on April 16, 2025. Further, Mr. Sujal A. Shah (DIN: 00058019) and Mr. Gautam G. Chakravarti (DIN: 00004399) ceased be an Independent Director from the close of business hours on May 29, 2025.

The Company places on record its sincere appreciation for their contribution during their tenure on the Board.

CHANGES IN KEY MANAGERIAL PERSONNEL

In terms of Section 203 of the Act, following are the Key Managerial Personnel (KMP) of the Company during the financial year.

• Mr . Priyavrata H. Mafatlal, Managing Director

Chief Executive Officer (from June 01, 2026)

Mr . M. B. Raghunath, Chief Executive (up to May 31, 2026)

Mr . Milan P. Shah, Chief Financial (up to May 31, 2025)

Mrs . Smita Jhanwar, Chief Financial (from June 01, 2025)

• Mr . Amish P. Shah, Company Secretary

During the year under review, there were significant changes in Key Managerial Personnel of the Company.

Mr. Milan P. Shah, Chief Financial Officer of the

Company, superannuated from the services of the Company with effect from May 31, 2025. Based on the recommendations of the Nomination and Remuneration Committee and the Audit Committee, the Board of Directors, at its meeting held on May 13, 2025, approved the appointment of Mrs. Smita Jhanwar as the Chief Financial Officer (CFO) of the Company with effect from June 01, 2025. She has been with the Company for over nine years and was appointed as Vice President-(Finance) in the previous year.

Mr. M. B. Raghunath, Chief Executive Officer of the

Company, will superannuate on the completion of sixty years of age with effect from May 31, 2026. Based on the recommendations of the Nomination and Remuneration Committee, the Board of Directors, at its meeting held on May 05, 2026, approved the re-appointment and re-designation of Mr. Priyavrata H. Mafatlal as

Managing Director and Chief Executive Officer (MD &

CEO) of the Company with effect from June 01, 2026. Post superannuation, Mr. M. B. Raghunath will continue to contribute to the Company in the areas of Strategy and Projects.

COMMITTEES OF BOARD

As required under the Companies Act, 2013 and the

SEBI (LODR) Regulations, 2015, the Company has constituted various Statutory Committees. As of March 31, 2026, the Board has constituted the following committees/sub-committees:

• A udit Committee and

• Nom ination and Remuneration Committee

• Sta keholders Relationship/Investors Grievance Officer Committee

• Corporate Social Responsibility (CSR) Committee

Officer

• Sha re Allotment Committee

Inv estment and Diversification Committee Officer

The details including the composition of the Committees, attendance at the Meetings and terms of reference are included in the Corporate Governance Report, which forms a part of the Annual Report 2025-26.

INDEPENDENT DIRECTORS AND THEIR MEETING

In terms of Section 149 of the Companies Act, 2013, Mr. Atul K. Srivastava, Mr. Ashutosh S. Bishnoi, Mr. Abhay R. Jadeja, Mr. Jyotin K. Mehta, Mr. Desh Deepak Khetrapal and Dr. Archana N. Hingorani are the Independent Directors of the Company. Two separate meetings of the Independent Directors were duly held during the financial year

In accordance with Regulation 25(8) of the SEBI (LODR) Regulations, 2015, all Independent Directors has confirmed that they are not aware of any circumstances or situation which exists or may reasonably be anticipated to impair or impact their ability to discharge their duties. Based on the declarations received from the Independent Directors, the Board of Directors have confirmed that they meet the criteria of independence as mentioned under Section 149(6) of the Companies Act, 2013 and Regulation 16(1)(b) of the SEBI (LODR) Regulations, 2015, and that they are independent of the management.

In the opinion of the Board, there has been no change in the circumstances which may affect their status as Independent Directors of the Company and the Board is satisfied of the integrity, expertise and experience

(including proficiency in terms of Section 150(1) of the

Companies Act, 2013 and applicable rules thereunder) of all Independent Directors on the Board.

Further, in terms of Section 150 of the Companies Act, 2013 read with Rule 6 of the Companies (Appointment and Qualification of Directors) Rules, 2014, as amended, time to time, the Independent Directors of the Company have included their names in the data bank of Independent Directors maintained by the Indian Institute of Corporate Affairs (‘IICA).

During the year under review, the Non-Executive Independent Directors (‘NEIDs) of the Company had no pecuniary relationship or transactions with the Company, other than sitting fees and remuneration by way of commission, as applicable, received by them except Mr. Abhay R. Jadeja.

The Company has availed legal professional services from Jadeja & Partners (formerly known as Jadeja and Satiya), a Mumbai-based law firm in which Mr. Abhay R. Jadeja, Independent Director of the

Company, is a partner. The said firm consultancy services, including consultation, drafting, vetting, and review of various legal documents and matters, as and when required by the Company. The professional fees paid to the firm were determined on the basis of prevailing market rates. All transactions with the said law firmwere undertaken on an arms length basis and in the ordinary course of business. The Board is of the opinion that such engagements are in the best interest of the Company.

The aforesaid related party transactions were duly reviewed and approved by the Audit Committee in accordance with the applicable provisions of the Companies Act, 2013 and SEBI (LODR) Regulations, 2015. The details of payments made during the year form part of the Related Party Transactions disclosed in the standalone and consolidated financial statements of the Company.

BOARD EVALUATION

Pursuant to the applicable provisions of the Companies Act, 2013, as amended from time to time and in accordance with Regulations 17 and 25 of the SEBI (LODR) Regulations, 2015, the Board of Directors have carried out an annual evaluation of its own performance, the performance of Individual Directors and the functioning of its Committees, including the Audit Committee, the Nomination and Remuneration Committee and other Committees of the Board. The performance evaluation of the Whole-Time/ Executive Directors was conducted based on various qualitative and quantitative criteria including, but not limited to, qualifications, experience, domain knowledge, commitment, integrity, leadership capabilities, strategic vision, level of engagement, transparency, analytical skills, decision-making and adherence to sound governance practices.

The Board noted with appreciation the valuable contributions, strategic insights, and guidance provided by each Director, which have been instrumental in achieving the Companys objectives and fostering sustainable growth.

In addition, as required under Regulation 25 of the

SEBI (LODR) Regulations, 2015, two separate meetings of the Independent Directors were held, where theprovides performance of the Non-Independent Directors, the Board as a whole, and the Chairperson of the Company was half-yearly reviewed and evaluated.

POLICY ON APPOINTMENT OF DIRECTORS AND BOARD DIVERSITY

In terms of the provisions of Section 178(3) of the Companies Act, 2013 and Regulation 19 read with Part D of Schedule II to SEBI (LODR) Regulations, 2015, the Nomination and Remuneration Committee (NRC) is responsible for determining the qualifications, positive attributes and independence of a Director. The NRC is also responsible for recommending to the Board, a policy relating to the remuneration of the Managing Director, Executive Directors and Directors. Your Company recognizes and embraces the importance of a diverse Board in its success. The Board has adopted the Board Diversity Policy, which sets out the approach to the diversity of the Board of Directors, as well as the Policy on appointment of Directors and Board diversity. The policy is available on the website of the Company at https://www.mafatlals.com/investors/.

DIRECTORS RESPONSIBILITY STATEMENT

Pursuant to Section 134(5) of the Companies Act, 2013, the Board, to the best of their knowledge and based on the information and explanations received from the management of the Company, confirms i. The applicable accounting standards have followed in preparation of annual accounts for the financial year ended on March 31, 2026, and proper explanations have been furnished relating to material departures. ii. Accounting policies have been selected and applied consistently, and prudent judgments and estimates have been made 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 and loss of the Company for the year under review. iii. Pr oper and sufficient care has been taken maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities. iv. The annual accounts for the financial year on March 31, 2026, have been prepared on a going concern basis. v. Inte rnal financial controls are in place financial controls are adequate and operating effectively. vi. Adequate systems to ensure compliance with the provisions of all applicable laws are in place and operating effectively.

EMPLOYEE STOCK OPTION SCHEME-2017

At the 103rd Annual General Meeting held on August 02, 2017, the shareholders of the Company approved, by way of a Special Resolution, the creation of an Employee Stock Option Pool comprising 34,75,000 equity shares (post-adjustment for the sub-division of equity shares from Rs. 10/- each to Rs. 2/- each), under the Mafatlal Employee Stock Option Scheme-2017 (ESOP Scheme- 2017).

The ESOP Scheme - 2017 has been formulated in compliance with the provisions of the Securities and

Exchange Board of India (Share Based Employee

Benefits) Regulations, 2014, as amended from time to time, and is also aligned with the SEBI (Share Based

Employee Benefits and Sweat Equity) Regulations, 2021. In accordance with regulatory requirements, a been certificate from Umesh Ved & Associates, Secretarial Auditors of the Company, confirming that the Scheme complies with the applicable SEBI regulations, will be made available for inspection by shareholders at the forthcoming 112th Annual General Meeting. The disclosures as mandated under the SEBI (Share Based

Employee Benefits and Sweat Equity) Regulations,

2021, along with other applicable statutory information, are provided in Annexure C to this Report.

SUBSIDIARIES, ASSOCIATES AND JOINT VENTURES

During the financial year, the Company incorporated for a subsidiary, Mafatlal Apparel Exports Private Limited

(MAEPL), in which it holds 51% of the equity share capital. Accordingly, MAEPL has been classified as a subsidiary of the Company in accordance with the provisions of the Companies Act, 2013.

The incorporation of MAEPL aligns with the Companys ended long-term vision to diversify its garment operations, strengthen export capabilities, and establish a global presence through strategic partnerships and market-driven initiatives. All requisite disclosures in such connection with the incorporation of MAEPL have been duly made to BSE Limited in accordance with the SEBI (LODR) Regulations, 2015.

The financial details of the subsidiaries are included in the notes to the Consolidated Financial Statements forming part of this Annual Report. The Company does not have any material subsidiary or associate company as defined

However, the Company has formulated a policy for determining material subsidiary(ies) and such policy has been disclosed on the Companys website and can be accessed at:https://www.mafatlals.com/investors/ In accordance with the provisions of Section 129(3) of the Companies Act, 2013, read with Rule 5 of the Companies (Accounts) Rules, 2014, a statement containing the salient features of the financial statements of the Companys subsidiaries has been annexed in the prescribed Form AOC-1.

The audited financial statements of the subsidiaries of the Company for the financial year ended March 31, 2026, have been made available on the Companys website at: www.mafatlals.com/investors. These documents are open for inspection by any member at the Registered Office of the Company on all working days (Monday to Friday) between 3:00 p.m. to 5:00 p.m. The Company will also provide copies of the said documents to any member upon request.

The Company does not have any joint ventures or associate companies during the year or at any time after the closure of the year and till the date of the report.

As reported last year, Al Fahim Mafatlal Textiles LLC (UAE) (JV Company) remained non-operational and since there is no foreseeable beneficial future, the

Board of Directors of the Company and the JV Partner have consented for voluntary winding up/closure of that entity. The Company has also written to the Ministry of Commerce, Department of Economic Development, Dubai that there has been no operation of the said JV Company since 2016 and accordingly, the Company has not applied for renewal of license to continue to operate the business there. The audited accounts of that JV Company are not consolidated with the Accounts of the Company from 2018-19 onwards. Other than as disclosed herein, there is no company that has ceased to be subsidiary, associate or joint venture of the Company during the financial year.

DEPOSITS

The Company has neither accepted nor renewed any deposits during the financial year ended March 31,

2026, and as such, does not hold any deposits within the meaning of Chapter V of the Companies Act, 2013 read with the Companies (Acceptance of Deposits) Rules,

2014. Accordingly, no disclosure or reporting is required in respect of deposits under the said provisions.

MATERIAL CHANGES AND COMMITMENTS

There are no material changes and commitments in the business operations of the Company for the financial year ended March 31, 2026 to the date of the signing of the Directors Report.

INTERNAL FINANCIAL CONTROL (IFC)

The existing IFCs are adequate and commensurate with the nature, size, and complexity of the business and business processes followed by the Company. The Company has a well-laid down framework for ensuring adequate internal controls over financial reporting.

AUDIT TRAIL AND DATA BACK UP

Based on the examination, the Management confirms that the Company has used accounting software for maintaining its books of accounts which has a feature of audit trail (edit log) and that has operated throughout the year for all relevant transactions recorded in the software except that audit trail was not available in case of modification with certain specific functionality in the application and for direct database changes. Further, the Company has not noticed any instance of audit trail feature being tampered with in cases where the audit trail feature was enabled. Further, the audit trail, to the extent maintained in the prior year, has been preserved. Further, the Company has also implemented practices for daily backups of the entire database and application in remote locations.

SHARES LYING IN UNCLAIMED SUSPENSE ESCROW ACCOUNT IN ELECTRONIC MODE

As of March 31, 2026, a total of 2,000 equity shares were lying in the Unclaimed Share Suspense Account in accordance with Regulation 39(4) read with Schedule VI of the SEBI (LODR) Regulations, 2015. The voting rights on these shares shall remain frozen until the rightful owners claim their shares. Shareholders entitled to these shares may claim them by following the procedure prescribed under the applicable laws and regulations.

SEBI w.e.f. April 02, 2026, has dispensed with the requirement of Letter of Confirmation (LOC) and enabled direct credit of verified securities to investors demat accounts.

SUCCESSION PLAN

The Company has an effective mechanism for succession planning focusing on the orderly succession of Directors, Key Managerial Personnel and Senior

Management. The Nomination and Remuneration Committee implements this mechanism in concurrence with the Board.

FAMILIARISATION PROGRAMMES FOR THE INDEPENDENT DIRECTORS

The Company conducts familiarization programmes for its Independent Directors to provide insights into the nature of the industry in which the Company operates, as well as its business model. These programmes are designed to enable the Directors to perform their roles effectively and contribute meaningfully to Board deliberations.

In addition, the Directors are periodically updated on significant amendments to the Companies Act, 2013 and the SEBI

(Listing Obligations and Disclosure Requirements)

Regulations, 2015, particularly those pertaining to their roles, rights, and responsibilities.

There is also regular interaction between the Independent Directors and the Key Managerial Personnel (KMPs) to ensure a deeper understanding of the Companys operations and key strategic initiatives. The details of the familiarization programmes are available on the Companys website at: https://www. mafatlals.com/investors/.

CODE FOR PREVENTION OF INSIDER TRADING

The Company has adopted a comprehensive Code of Conduct (‘Code) to regulate, monitor, and report trading in its securities by designated persons and their immediate relatives, in line with the provisions of the Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations, 2015, as amended. The Code lays down detailed procedures to be followed by designated persons while trading in the Companys securities and while handling or sharing Unpublished Price Sensitive Information (‘UPSI). It includes provisions for maintaining a structured digital database, implementing a robust mechanism for the prevention of insider trading, and sensitising employees about the significance . and confidentialityofUPSI

Additionally, the Code incorporates a Code of Practices and Procedures for Fair Disclosure of UPSI, ensuring transparent and timely disclosure in accordance with regulatory requirements.

The Code is available on the Companys website at: https://www.mafatlals.com/investors/.

INDUSTRIAL RELATIONS

The relationship between the employees and management remained cordial and harmonious throughout the financial year under review. As of

March 31, 2026, the Company had 1,060 permanent employees on its payroll, compared to 1,043 in the previous financial year.

CORPORATE SOCIAL RESPONSIBILITY (CSR)

Mafatlal Industries Limited, a part of the Arvind Mafatlal Group, has been deeply committed to its social responsibilities, long before CSR became a statutory obligation. The Companys initiatives traditionally focus on poverty alleviation, healthcare, rural childhood education, village upliftment and community development and the empowerment of women, particularly in rural India.

In compliance with the provisions of Section 135 of the Companies Act, 2013, read with the Companies (Corporate Social Responsibility Policy) Rules, 2014, the Company has constituted a CSR Committee comprising the following members:

• Mr . Hrishikesh A. Mafatlal - Chairman

• Mr . Atul K. Srivastava - Member

• Mr . Abhay R. Jadeja - Member

The tenure of Mr. Sujal A. Shah, Independent Director, concluded on May 29, 2025, upon the completion of his second term. Consequently, the Board of Directors reconstituted the Corporate Social Responsibility (CSR) Committee on May 15, 2025, and Mr. Abhay R. Jadeja has been appointed as Member of the Committee in place of Mr. Sujal A. Shah.

Based on the recommendations of the CSR Committee, the Board of Directors has adopted a CSR Policy that reflects the Groups philosophy and commitment to meaningful social impact. The Policy outlines the guiding principles, implementation mechanisms, and focus areas for CSR initiatives in accordance with statutory requirements. The CSR policy of the Company is available on its website at: https://www.mafatlals. com/investors/.

In accordance with Section 135 of the Companies Act, 2013, the Companys CSR spending obligation is determined based on the calculation of net profits under Section 198 of the Companies Act, 2013. For financial year 2025-26, the Company continues to have accumulated losses and accordingly, there is no statutory obligation to spend 2% of the average net profits of the preceding three financial years on CSR activities.

However, in line with the Arvind Mafatlal Groups enduring commitment to social welfare, the Company voluntarily contributed Rs. 80 Lakhs towards various CSR initiatives during the year. To ensure effective implementation of the CSR Policy, review and approve the CSR Annual Action Plan, the CSR Committee convened two meetings during financial year 2025-26, held on May 12, 2025, and November 17, 2025.

The statutory disclosures required under the Companies

(Corporate Social Responsibility Policy) Rules, 2014 are annexed to this Report as Annexure D and form an integral part of the Boards Report.

RELATED PARTY TRANSACTIONS

All Related Party Transactions entered into by the

Company, during the financial year under review, were in the ordinary course of business and on arms length basis, pre-approved by the Audit Committee, comprising only Independent Directors of the Company. The said transactions were in accordance with the Policy on materiality of and on dealing with Related Party Transactions, formulated by the Company.

Related party transactions above Rs. 1 Crores proposed to be entered by the subsidiary of the Company to which the

Company is not a party, shall require prior approval of the audit committee if the value of the transaction exceeds 10% of the annual standalone turnover as per the last the audited financial threshold for material related party transactions of the Company as mentioned in the SEBI Listing Regulations. The Company has obtained the prior approval of the audit committee for all related party transactions entered into by its subsidiary companies. A statement on Related Party Transactions specifying the details of the transactions entered pursuant to the omnibus approval granted is reviewed by the Audit Committee and the

Board on a quarterly basis.

On announcement of half-yearly financial results, details of all related party transactions entered into by the Company and its subsidiaries are disclosed and filed with the BSE Ltd. where equity shares of the

Company are listed, within prescribed timelines and also uploaded on the website of the Company.

During the year, the Company has not entered into any contracts, arrangements or transactions that fall under the scope of Section 188 (1) of the Act. Accordingly, the prescribed Form AOC-2 is not applicable to the

Company for the financial year 2025-26 and hence does not form part of this Report.

The Company did not enter into any related party transactions during the year under review, which could be prejudicial to the interest of minority shareholders. The Company has adopted a Related Party Transactions Policy. The Audit Committee reviews this Policy periodically and also reviews and approves all related party transactions, to ensure that the same are in line with the provisions of applicable laws and the Policy. The Policy was amended by the Board at its meeting held on March 24, 2026, to align with the amendment in law. In conformity with the requirements of the Act, read with the SEBI (LODR) Regulations, 2015, the Policy is available on the Companys website at: https://www. mafatlals.com/investors/.

MANAGEMENT DISCUSSION AND ANALYSIS REPORT, CORPORATE GOVERNANCE REPORT

As required under Schedule V (B) and (C) of the SEBI

(LODR) Regulations, 2015, the Management Discussion and Analysis Report as well as the Corporate Governance Report are attached herewith and marked as Annexure I and II respectively and the same forms the part of this Directors Report.

OTHER STATUTORY DISCLOSURES (a) Number of Board Meetings

The details of Board Meetings and the attendance of the Directors are provided in the Corporate Governance Report, which forms a part of this Report.

(b) Com mittees of Board

Det ails of the various committees by the Board of Directors, as per the provisions of the SEBI (LODR) Regulations, 2015 and the Companies Act, 2013, are provided in the Corporate Governance Report which form a part of this Report.

(c) Vig il Mechanism Whistle Blower Policy /

The Company believes in conducting the its constituents in a fair and transparent manner by adopting the highest standards of professionalism, honesty, integrity, and ethical behavior. In line with this, the Company has adopted a Whistle Blower Policy and established an appropriate Vigil Mechanism to enable employees and Directors to report concerns about unethical behavior, actual or suspected fraud, or violation of the Companys code of conduct, without fear of retaliation. The mechanism provides for direct the Chairman of the Audit Committee, and it is confirmed that no person has been denied such access during the financial year.

The Whistle Blower Policy is available on the Companys website at: www.mafatlals.com/ investors/.

(d) Sig nificant and Material Orders Passed

Regulators or Courts orders The re are no significant passed by the Regulators or Courts or Tribunals, which would impact the going concern status and the Companys operations.

(e) A nnual Return

The Annual Return of the Company March 31, 2026, is available on the website of the Company at www.mafatlals.com/investors/.

(f) Dis closures Under Sexual Harassment of at Workplace (Prevention, Prohibition and Redressal) Act, 2013

The Company has put in place an Anti-

Harassment Policy in line with the requirements of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013, read with other applicable provisions. Internal

Complaints Committees are constituted and regularly redress complaints, if any in a timely manner. During the financial year under review, no complaints were received with regard to sexual harassment from any employee of the Company and necessary disclosure for the same has been given to the concerned Government departments for respective locations.

(g) Maternity Benefits of

The Company complies with the provisions of the Maternity Benefit Act, 1961, and provides maternity benefits to eligible women employees. Adequate facilities and support are provided in line with statutory requirements.

(h) Insurance

The Company has taken appropriate insurance for all assets against foreseeable perils. In line with the requirements of Regulation 25(10) of the to SEBI (LODR) Regulations 2015, the Company has in place a directors and officers liability insurance policy.

(i) Secr etarial Standards

The Company has established appropriate systems to ensure compliance with all applicable the Secretarial Standards issued by the Institute of Company Secretaries of India (ICSI). The Board affirms that these systems are adequate and are operating effectively to ensure consistent adherence to the prescribed standards.

All applicable Secretarial Standards (SS) have been complied with by the Company during the financial year. on

(j) Risk E valuation and Management

Business Risk Evaluation and Management is an ongoing process embedded within the Companys operations. The Company has established a comprehensive risk management framework designed to identify, assess, monitor, and mitigate Sexual risks, while also recognizing and leveraging potential business opportunities.

In accordance with Regulation 21(5) of the SEBI (LODR) Regulations, 2015, the constitution of a Risk Management Committee is mandatory for the top 1,000 listed entities based on market capitalization as at the end of the immediate previous financial year. As the Company does not fall within this threshold, the said provision is not applicable to the Company.

(k) P olicies

During the financial year under review, the Board of Directors of the Company reviewed all changes and adopted applicable policies to comply with the recent amendments in the Companies Act, 2013 and SEBI (LODR) Regulations, 2015.

Accor dingly, the updated policies are the Companys website at: https://www.mafatlals. com/investors/.

(l) Cybersecurity

The Company has established and crisis management policies to prevent cyber threats and manage incidents pertaining to cybersecurity and data privacy effectively. It also tracks emerging practices and technologies to enhance the security of IT systems and infrastructure on a continuous basis.

During the year under review, your Company did not face any incidents, breaches, or loss of data in cybersecurity.

GENERAL DISCLOSURES

(m) No proceedings are made or pending Insolvency and Bankruptcy Code, 2016 and there is no instance of one-time settlement with any bank or financial institution.

(n) No shares with differential voting rights and equity shares have been issued. All equity shares issued by the Company carry equal voting rights.

(o) The re has been no change in the business of the Company.

(p) As there was no buyback of shares during the the Company has nothing to disclose with respect to buyback of shares.

(q) Nei ther the Managing Director nor CEO,

CS of the Company received any remuneration or commission from any of the subsidiary of the Company.

(r) The Company has deployed a Statutory Compliance Mechanism providing guidance on broad categories of applicable laws and process for monitoring compliance. In furtherance to this, the Company has instituted an online compliance management system within the organization to monitor compliances and provide update to the senior management on a periodic basis.

(s) The Company has adequate systems and processes in place to comply with CSR obligations and timely payment of taxes. on (t) The Consolidated Financial Statements pursuant to Section 129(3) of the Companies Act, 2013 and Regulation 34 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, prepared in accordance with the provisions of the Companies Act, 2013 and the Indian Accounting Standards (Ind AS).

AUDITORS

I. Statutory Auditors

Pursuant to the provisions of Section 139 and other applicable provisions of the Companies Act, 2013 and the Rules made thereunder, M/s. Price Waterhouse Chartered Accountants LLP (Firm registration No.012754N/N500016) were re-appointed as statutory auditors of the Company the for a period offive years by the members of the

Company at the 108th Annual General Meeting (AGM). Their appointment is effective from the conclusion of the 108th AGM till the conclusion of sweat the 113th AGM, which will be held in 2027.

The Company received written consent and a certificate of eligibility in accordance with of Sections 139, 141 and other applicable provisions of the Companies Act, 2013 and Rules made thereunder, from M/s. Price Waterhouse Chartered year, Accountants LLP. They confirmed to hold a valid certificate issued by the Peer Review Board of the

Institute of Chartered Accountants of India (ICAI) as and required under the SEBI (LODR) Regulations, 2015.

M/s. Price Waterhouse Chartered Accountants LLP, Chartered Accountants, (Firm registration

No.012754N/N500016) issued Auditors Report for the financial year ended on March 31, 2026.

The Auditors Report does not contain qualification, reservation, adverse remark or disclaimer. The Notes to the financial statements referred in the Auditors Report are self-explanatory and do not call for any further comments.

ll. Secr etarial Auditor

Pursuant to the provisions of Section 204 of the Companies Act, 2013 and the rules framed thereunder, the Company appointed CS Umesh Ved, M/s. Umesh Ved & Associates, Practicing Company Secretaries, Ahmedabad (FCS No.: 4411, COP No.: 2924, Peer Review No.: 6564/2025) to conduct the Secretarial Audit for the financial year 2025-26. The Secretarial Audit Report is annexed to this Report as Annexure III and forms an integral part of the Boards Report. The Report does not contain any qualifications, reservations, or adverse remarks.

In accordance with Regulation 24A of the SEBI (LODR) Regulations, 2015, as amended in

2024, listed entities are required to appoint a peer-reviewed Secretarial Auditor for a term of five consecutive years. Such appointment shall be based on the recommendation of the Audit Committee and approval of the Board of Directors and shall be subject to the approval of members at the Annual General Meeting.

In compliance with the above requirements,

Members of the Company, at the 111th Annual General Meeting, held on August 04, 2025 has approved the appointment of CS Umesh Ved, M/s. Umesh Ved & Associates, Practicing Company Secretaries, Ahmedabad, as the Secretarial Auditor for a term of five consecutive financial years from

2025-26 to 2029-30. CS Umesh Ved continued as the Secretarial Auditor of the Company during the year under review.

The Company has received a certificate Umesh Ved confirming his eligibility and consent to act as the Secretarial Auditor, in accordance with the applicable provisions of the Companies Act, 2013 and SEBI (LODR) Regulations, 2015.

III. Cost Auditor

Pursuant to the provisions of Section 148 of the any Companies Act, 2013, read with the relevant rules made thereunder, the maintenance of cost records is applicable to the Companys ‘Textile products. Accordingly, the Company has duly maintained the requisite cost accounts and records as prescribed. The cost audit for the financial year 2024-25 was completed in a timely manner, and the Cost

Audit Report, along with the requisite data in the prescribed Form CRA-4, was duly filed with the

Ministry of Corporate Affairs (MCA) within the stipulated timeline.

F or the financial year 2025-26, the cost audit of the Companys ‘Textile segment is being carried out by M/s. B. Desai & Co. (Firm Registration No. 005431), Cost Auditors, in accordance with applicable provisions. The Cost Audit Report for the financial year 2025-26 will be submitted to the

MCA on or before the due date, after it is reviewed and approved by the Board of Directors.

Based on the recommendation of the Audit Committee, the Board of Directors, at its meeting held on May 05, 2026, has re-appointed M/s. B. Desai & Co. as the Cost Auditors of the

Company for the financial year 2026-27, for auditing the cost records relating to the ‘Textile products.

The Audit Committee has received a certificate the from the Cost Auditors confirming their independence and eligibility to act as Cost Auditors under applicable laws.

The Board of Directors has approved a remuneration of Rs. 4,75,000/- (Rupees Four Lakhs Seventy-Five Thousand only) plus applicable taxes, and reimbursement of out-of-pocket expenses actually incurred for the purpose of the audit for the financial year 2026-27.

As required under the provisions of Section 148 CS of the Companies Act, 2013, the remuneration payable to the Cost Auditors is being placed before the Members for ratification at the 112th Annual General Meeting of the Company.

IV. Internal Auditor

M/s. Aneja Assurance Private Limited, a reputed internal audit firm of Mumbai, conducted Internal Audit of the Company for the financial year 2025-26. Pursuant to the provisions of Section 138 of the Companies Act, 2013, read with the relevant rules made thereunder, based on the recommendation of the Audit Committee, the Board of Directors, at its meeting held on May 13, 2025, appointed M/s. Aneja Assurance Private Limited as the Internal Auditors of the Company for the two consecutive financial years 2025-26 and 2026-27.

The Audit Committee, in consultation the Internal Auditors, determines the scope, functioning, periodicity, and methodology for conducting the internal audit to ensure effective evaluation and monitoring of internal controls and processes across the organization.

REPORTING OF FRAUDS BY AUDITORS

During the year under review, the Statutory Auditors and Secretarial Auditors of your Company have not reported any instances of fraud committed in your Company by officers or employees, to the Audit Committee, as required under Section 143(12) of the Companies Act,

2013.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO

Information required under Section 134(3)(m) of the Companies Act, 2013 read with the Companies (Accounts) Rules, 2014 is enclosed as Annexure - A and forms part of this Report.

PARTICULARS OF EMPLOYEES

The information required under Section 197 of the Act, read with rules 5(1), 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, relating to percentage increase in remuneration, ratio of remuneration of each Director and Key Managerial Personnel to the median of employees remuneration are provided in Annexure-B of this Report.

APPRECIATION

The Board of Directors places on record its sincere appreciation for the dedicated efforts and commitment withof the Companys workers, staff and officers, whose continued contribution has been instrumental in the Companys performance.

The Directors also extend their gratitude to the Companys customers, business associates, bankers, government departments, regulatory authorities, service providers, suppliers and shareholders for their steadfast support and cooperation during the year.

For and on behalf of the Board of Directors,

Mafatlal Industries Limited

Hrishikesh A. Mafatlal

Chairman

(DIN: 00009872)

Place: Mumbai

Date: May 05, 2026