Modern Threads Director Discussions


To (lie members of Modern Tine ads (India) Limited,

Your Directors are pi eased to present the 42ndAnnual Report on the business and operations of the Company together with Audited Financial Statements for the financial year ended 31st March, 2023.

The Standalone financial statements for the financial year ended March 31, 2023. forming part of this Annual Report, have been prepared in accordance with the Indian Accounting Standards (hid AS) as notified by the Ministry of Corporate Affairs, vide its notification in the official Gazette dated 16th February, 2015.

Key highlights of financial performance of your Company for die financial year 2022-23 are provided below:

FINANCIAL SUMMERY

Particulars

Year ended 31/03/2022 Year ended 31/03/2023

Revenue from operations & other Ineome

224.70 305.31

Profit before exceptional items & tax

7.25 25.37

Exceptional items

0.70 188.75

Profit before tax

7.95 214.12

Less-Tax expenses

0.01 -

Profit for die year

7.94 214.12

Other Comprehensive Ineome

0.27 0.16

Total Comprehensive Income

8.21 214.28

STATE OF COMPANYS AFFAIRS

The performance of the Woollen Division of the Company7 has been satisfactory over- past few years in spite of stiff competitions in the Domestic and International Markets. During die year under review the turnover of the Woollen Division of the Company is Rs. 202.92 Crores as against Rs. 134.18 Croces in the previous year. Dining the ye ar under revi ew the turnover of the Yam Division of the Company is Rs. 99.04 Crores as against Rs 88.45 Crones in die previous year. Your company has been able to generate the profit of Rs. 25.37 Crores duimg the year under review as against Rs. 7.25 Ciores in previous year before exceptional items and tax.

There is no change in die nature of business of the Company during die financial year under review.

POST COVID-19 PHASE & GEO-POLITICAL SITUATION.

From the highs of the pandemic, growth and demand for the textiles sector lias moderated tins financial year. The Russia-Ukraine war, high inflation and the threat of a looming recession in key markets like the US and Europe have led to a slowdown in exports. Die silver lining for the sector has, however, been robust domestic demand and new7 pockets of growth.

After short cyclical ups and downs in demand the net effect of die pandemic on die domestic market has been a net increase in size of the domestie market by 15-20%, as people learnt to spend more on their homes and living environment and opt for better quality. While exports picked up for some time, other non-pandemic factors like the Ukraine war and high inflation maired them in key markets like the European Union, USA and Japan More recently, some signs of international demand re-emerging. Skyrocketing prices of cotton, winch constitute a major part of Indias textile exports, impacted demand adversely in this segment Now7 that the prices are revetting to normal, however for our worsted industiy raw material prices were more or less stabl e due to low7er Chinese demand & demand of wonted yam from India in both export & domestic sector were extremely good.

Just before Russia-Ukraine war, GBP & EURO were in pressure & caused dent in realization, but slowly it is now back to square one & resultedpositive impact SHARE CAPITAL

The authorized Share Capital of the Company stood at Rs. 185,00,00,000. During the year under review, there was no change in the authorized share

capital of the Company The paid-up Equity Share Capital as at March 31, 2023 stood at Rs. 34,77,51,600.

During the year under review, the Company has not issued shares with differential voting lights nor has granted any stock options or sweat equity or warrants. As on March 31,2023, none of the Directors of the Company hold instruments convertible into equity shares of the Company. TRANSFER TO RESERVES

The Company has not transferred any amount to reserves during the year under review.

DIVIDEND

In ol der to conserve the resources of the company and for expansion and modernization of old plant and machinery, the Board of Directors of your company7 havedecidednot to recommend any7 dividend on Hie Equity7 Shares of the company for the y7ear under review.

EXPORTS

As inflationary conditions cool off and retailers exhaust their stocks, added by7 growing preference ofimporters to move awwyatleastpart of their sourcing from China, Indian textile exporters should see good demand from in 2023. We are certainly facing stiff competition from countries labour cost advantage also enjoy7 favourable trade terms and duty-free access to many markets. India is in discussion with many countries on FTA & alreadyconcludedFEAwith Australia and tire UAE Dus should work to its advantage. We need to do similar agreements with larger buyers like Europe andETSA.

Die biggest challenge which we feel exists is thatpaying enough importance to product quality7 & development, marketing and distributing. Production could be one of the challenge. Export production is always led by buyer specification. So we have little say7 there* fulfilling their requirement is of extreme importance.

FUTURE PROSPECTS

Sustainabilityisbuzzwordnow. Producers are increasingly7using sustainable raw7 materials, recycled fibres, biodegradable inputs from raw materials to process and package goods. Alternatives like KWS, Bio Wool, Organic Wool, recycled polyester are increasingly7 being used. Natural dyes and organic chemicals are being used for textile processing. Offering products that meet the defined standards of European and American agencies, certifying their products as sustainable, organic, biodegradable and eco-friendly7 is many cases a MUST now.

MSME CERTIFICATE

Your Company has getting registered under MSME vide UDYAM Registration Number -UDYAM-RJ-07-0000022.

FINANCE AND ACCOUNTS

As mandated by the Ministry of Corporate Affairs, the financial statements for the year ended on March 31, 2023 has been prepared in accordance with the Indian Accounting Standards (IndAS) notified under Section 133 of the Companies Act, 2013 (hereinafter- referred to as "Die Act) read with the Companies (Accounts) Rules, 2014 as amended from time to time. Die estimates and judgments relating to the Financial Statements are made on a prudent basis, so as to reflect in a true and fair manner1, the form and substance of trails actions and reasonably present the Companys state of affaire, profits and cash flows for the year ended March 31, 2023. Die Notes to the Financial Statements form an integral part of this Report. Accounting policies have been consistently applied except where a newly issued accounting standard, if initially adopted or a revision to an existing accounting standard requires a change in the accounting policy hitherto in use. Management evaluates all recently issued or revised accounting standards on an ongoing basis. Die Company discloses financial results on a quarterly basis which are subjected to limited review.

FIXED DEPOSITS

Die Company has neither accepted nor renewed any fixed deposits during the year under review within the meaning of Section 73 of the Companies Act, 2013 and the Companies (Acceptance of Deposits) Rules, 2014.

DIRECTORS AND KEY MANAGERIAL PERSONNEL Directors

The Board of Directors on tire recommendations of the Nomination and Remuneration Committee vide its meeting held on 24th April, 2023, has revised (he terms and conditions of remuneration of Shn Rajesh. Ranka (DIN : 03438721). Chairman & Managing Director of the Company with effect h orn 1st May. 2023 till remainder of duration of his tenure i.e. up to 3Oth June, 2025. subject to the approval of shareholders in the ensuing General Meeting.

In accordance with the provisions of Section 152 of the Act and the Companys Articles of Association, Shri Ram Awatar Kabra (DIN : 00945603), Whole-Time Director retires by rotation at the ensuing Annual General Meeting ("AGM")and being eligible, offers himself for reappointment. His appointment is placed for approval of the members and forms part of the notice of the ensuing Annual General Meeting. The information about the Director seeking Ins reappointment as per Para 1.2.5 of Secretarial Standards on General Meetings has been given in the notice convening the ensuring Annual General Meeting.

Appropriate resolutions for the remuneration and appointment/ieappointment of the aforesaid directors are being moved at the ensuing Annual General Meeting of the company, which the board recommends for your approval Key Managerial Personnel

The Board of Directors on the recommendation of Nomination and Remuneration Committee has revised the terms and conditions of remuneration of Shri Prabodh Kumar Nahar, Chief Financial Officer of the Company with effect from 01/07/2023, for a further period of three years In teims of the provisions of Sections 2(51) and 203 of the Act, read with the Companies (Appointment and Remuneration of Managerial Personnel)Rules, 2014, Shrt Rajesh Ranka, Chairman & Managing Director, Shri Prabodh Kumar Nahar, Chief Financial Officer and Shri Ban wan Lai Saini, Company Secretary are the Key Man aged al Personnel (KMP) of the Company. The appointment and remuneration of Director; and KMPs are as per policy of the Company.

ANNUAL EVALUATION OF THE PERFORMANCE OF THE BOARD, ITS COMMITTEES AND INDIVIDUAL DIRECTORS

Pursuant to the provisions of the Companies Act, 2013 and the SEBI (Listing Obligations and Disclosure Requirements) Regulation, 2015, as amended, 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 Committee, Nomination & Remuneration Committee, Stakeholders Relationship Committee and Corporate Social Responsibility Committee. Standard parameters were prepared after taking into consideration various aspects of toe Board functioning such as adequacy of the composition of the Board and its Committees, Board culture, execution and performance of specific duties, obligations and governance. The Board and toe Nomination and Remuneration Committee reviewed the performance of individual directors on the basis of criteria such as the contribution of the individual director to toe board and committee meetings like preparedness on the issues to be discussed, meaningful and constructive contribution and inputs in meetings, etc.

A separate exercise was earned out to evaluate toe performance of individual Directors including the Chaiiman of the Company, who were evaluated on parameters such as level of engagement and contribution, independence of judgment, safeguarding the interest of toe Company and its minority shareholders etc. Die performance evaluation of toe Independent Directors was c anied out by the entire Bo aid and the performance evaluation of toe Chaiiman and toe Non-Independent Directors of the Company was earned out by toe Independent Directors in a separate meeting who have expressed their satisfaction with the evaluation process.

NUMBER OF BOARD MEETINGS

Die Board meets regular intervals to discuss and decide on business strategies andpohaes and review the financialperfoimance of toe Company.

Die notice and detailed agenda alcngwith other material information are sent in advance separately to each Directors.

In the Financial Year 2022-23, the Board met seven times. The Meetings were held on 30to May, 2022, 27th July, 2022, 2nd September, 2022, 14th September, 2022, 23rd November, 2022, 10th February, 2023 and 30th March, 2023. The intervening gap between the meetings was within toe period prescribed under section 173 of the Companies Act, 2013 and regulation 17(2) of SEBI (Listing Obligation andDisclosure Requirements) Regulations, 2015. Die attendance of directors in board meetings held during the financial year ending 31st March, 2023 is given in corporate governance report attached as Annexure G to the Board s report.

COMNHTTEES OF THE BOARD AUDIT COMMITTEE

Audit Committee of the Board of Directors is entrusted with, the responsibility to supervise the Companys internal controls and financial reporting process. The composition, quorum, powders, role and scope are in accordance with Section 177 of the Companies Act, 2013, rules made thereunder and toe provisions of Regulation 18 of toe Listing Regulations. All members of the Audit Committee are financially literate and bring in expertise in the fields of Finance, Taxation, and Economics etc. The constitution of the committee as on 31st March 2023 is as follows:

SI.

No.

Name of Director Position held in the Committee Category of Director

1.

Smt. Ankita Jain

(w.e.f. 27/07/2022)

Chairperson Independent Director

2.

Shn C. M. Jam

(w.e.f. 27/07/2022)

Member Independent Director

3.

Shii R.A. Kabra Member Executive Director

4

Shri Ram Rai Kabra (up to 18/07/2022) Chairman Independent Director

5.

Slni Rohit Singh (up to 18/07/2022) Member Independent Director

(Shn Ram Rai Kabra and Shii Rohit Singh have resigned as a member ot the committee with effect from 18/07/2022. Smt. Ankita Jain and Slni C.M. Jain were appointed as a member of toe Audit Committee with effect from

27/07/2022.)

All the recommendations made by the Audit Committee, during toe year were accepted by toe board of directors of the Company. Further details relating to the Audit Committee are provided in the Corporate Governance Report, attached as Annexure - G to the Board s report.

NOMINATION AND REMUNERATION COMMITTEE As pel the provisions of section 178 of toe Companies Act, 2013 and the rales made thereunder and as per the mtena laid down under regulation 19 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the company has in place a Nomination and Remuneration Committee. The constitution ofthe Committee as on 31st March 2023 is as follows:

SL

No.

Name of Director Position held in (lie Committee Category of Director

1.

Smt. Ankita Jain

(w.e.f 27/07/2022)

Chairperson hi dependent Director

2.

Shri C. M. Jam (w.e.f 27/07/2022) Member hi dependent Director

3.

Shri J. N. Shanna Member hi dependent Director

4.

Shri Ram Rai Kabra (up to 18/07/2022) Chairman hi dependent Director

5.

Shri Rohit Singh Member hi dependent Director

(Shri Ram Rai Kabia and Shii Rohit Singh have resigned as a member of the committee wvdi effect from 18/07/2022. Smt. Ankita Jam and Shn C.M. Jain were appointed as a member of the Audit Committee with effect from

27/07/2022)

The Nomination and Remuneration Committee shall identify persons who are qualified to become directors and who may be appointed in senior management in accordance with the criteria laid down and recommend to the Board for their appointment and removal and shall specify the manner for effective evaluation of performance of Board, its committees and individual directors to be earned out either by the Board or by the Nomination and Remuneration Committee.

The Board has, on the recommendation of the Nomination & Remuneration Committee, framed and adopted a policy i.e. Nomination & remuneration Policy for selection and appointment of Directors, Senior managerial personnel and their remuneration. Salient features of the Nomination & remuneration Policy are as below:

POLICY FOR DIRECTORS, KMP AND OTHER EMPLOYEES Appointment Criteria and Qualifications

1. The Committee shall identify and ascertain the integrity, qualification, expertise and experience of the person for appointment as Director, KMP or other employees and recommend to the Board for his/her appointment

2. A person should possess adequate qualification, expertise and experience for the position he/she is considered for appointment. The Committee has discretion to decide whether qualification, expertise and experience possessed by a person is sufficient/ satisfactory for the concerned position.

3. The appointment/reappointment of Independent Directors of the Company shall be as per the provisions of Companies Act, 2013 and Independent Directors Data Bank of die Indian Institute of C orp orate Affairs (DCA).

Term/Tenure

(a) Managing Director/Whole-time Director:

The Company shall appoint or re-appoint any person as its Executive Chairman, Managing Director or Executive Director for a term not exceeding five years at a time. No re-appointment shall be made earlier than one year before the expiry of the term

(b) Independent Director:

An Independent Director shall hold office for a term up to five consecutive years on the Board of the Company and will be eligible for re-appointment on passing of a special resolution by the Company and disclosure of such appointment in the Boards report.

No Independent Director shall hold office for more than two consecutive terms of 5 years, but such Independent Director shall be eligible for appointment after expiry of three years of ceasing to become an Independent Director. Provided that an Independent Director shall not, dining the said period of three years, be appointed in or be associated with the Company in any other capacity, either directly or indirectly.

Remuneration

a) Remuneration to Managing Director,TJhole Time Direct orKMP

and other Employees:

Remuneration/ Compen sation Commi ssi on etc. to be paid to Director/ Managing Director etc. shall be governed as per provisions of the Companies Act, 2013 and rales made there under or any other enactment for the time being m force.

(b) Remuneration to Non-Executive Independent Director:

Non-Executive Independent Director may receive remuneration1 compensation1 commission, as per the provisions of Companies Act, 2013. The amount of sitting fees shall be subject to ceiling1limits as

provided under Companies Act, 2013 and rales made there under or any other enactment for the time being in force.

Evaluation

The Committee shall cany out evaluation of performance of eveiy Director,

KMP and Other employees at regular interval

Removal

Due to reasons for any disqualification mentioned in the Act or under any other applicable Act, rales and regulations there under, the Committee may recommend, to the Board with reasons recorded in wilting, removal of a Director KMP or Other employees sub] ectto the provisions and compliance of die said Act, rales and regulations.

Retire me ill

Tile Director, KMP and Other employees shall retire as per the applicable provisions of the Act and the prevailing policy of the Company. The B oaid will have die discretion to retain the Director, KMP and odier employees in the same position/remuneration or otherwise even after attaining the retirement age, for die benefit of the Company.

This policy is available on the website of the company https:// www. mo demwooll ens. com.

In case of appointment of Independent Directors, the Committee shall satisfy its elf with regard to the independent nature of the Directors and also ensure that the candidate identified for appointment as an Independent Director is not disqualified for appointment under Section 149 and 164 of the Companies Act, 2013.

Further details relating to the Nomination and Remuneration Committee and policy are provided in the Corporate Governance Report, attached as Annexure G to the Boards report.

STAKEHOLDERS RELATIONSHIP COMMITTEE

As pei die requirement of sec. 178 of the Companies Act, 2013 and the rales made tiiereunder and also as per the criteria laid down under SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the company has in place the Stakeholders Relationship Committee. The constitution of die Committee as on 31st March 2023 is as follows:

SI. Name of Director No.

Position held in the Committee Category of Director

1. Smt. Ankita Jain (w.e.f. 27/07/2022)

Chairperson Independent Director

2. Shri C. M. Jain

(w.e.f. 27/07/2022)

Member Independent Director

3. Shri R A Kabra

Member Executive Director

4. Shri Ram Rai Kabra (up to 18/07/2022)

Chairman Independent Director

5. Shri Rohit Singli (up to 18/07/2022)

Member Independent Director

(Shri Ram Rai Kabra and Slui Rohit Singh have resigned as a member of the committee with effect from 18/07/2022. Smt. Ankita Jain and Shri CM. Jain were appointed as a member of die Audit Committee with effect from

27/07/2022.)

Further details relating to the Stakeholders Relationship Committee are provided in the Corporate Governance Report, attached as Annexure G to the Boards report

CORPORATE SOCIAL RESPONSIBILITY COMMITTEE

As pei the provisions of section 135(1) of the Companies Act, 2013 and the rales made thereunder, the Company has constituted die Coiporate Social Responsibility Committee. The constitution of the Committee as on 31st March 2023 is as follows:

SI.

No.

Name of Director Position held in the Committee Category of Director

I.

Shn Rajesh Ranka Chairman Managing Director

2.

Smt. Ankita Jain

(w.e.f 27/07/2022)

Member Independent Director

3.

Slur C. M. Jain

(w.e.f 27/07/2022)

Member Independent Director

4.

Sim Ram Rai Kabra (up to 18/07/2022) Member Independent Director

5.

Sim Roliit Singli (up to 18/07/2022) Member Independent Director

(Sliri Ram Rai Kabra and Shri Rohit Singh have resigned as a member of the committee with effect from 18/07/2022. Smt. Ankita Jain and Shri CM Jain were appointed as a member of tiie Audit Committee with effect from 27/07/2022.)

During the year under review two meetings of the CSR Committee were held on 3OthMay. 2022 and 10thFebruary, 2023 with all three directors as mentioned above were present

The Board has, on the recommendation of the Corporate Social Responsibility Committee, framed and adopted a policy for CSR which is available on the Companys website, https:// www.modemwoollens.CQm. The disclosures as per rule 9 of Companies (Corporate Social Responsibility Policy) Rules, 2014 are disclosed in Amiexure - C as a part of Boaids Report.

INFORMATION REQUIRED UNDER SEXUAL HARASSMENT OF WOMENAT WORK PLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013

Your Company has complied with the provisions relating to the constitution of Internal Complaints Committee under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and constituted Internal Complaints Committee as per the provisions of The Sexual H am ssment of Women at Workplace (Prevention, Prohibition and Redressal) Act,2013. The Company has also adopted a policy on Sexual Harassment of Women at Workplace and framework for employees to report sexual harassment cases at workplace and its process ensures complete anonymity and confidentiality of information.

Details of complaints received/disposed during the financial year 2022-23 is provided on page 24 of this Annual Report

DIRECTORS RESPONSIBILITY STATEMENT

In terns of Section 134 (5) of the Companies Act, 2013, your directors would like to state and confirm 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 had selected such accounting policies and applied them consistently and made judgments and estimates that were reasonable and piudent 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 and loss 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 had laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively;

(f) The directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such system were adequate and operating effectively.

AUDITORS AND AUDITORS REPORT Statutory Auditors

S.S. Surana & Co. Chartered Accountants, Jaipur (Film Registration No. 001079C) were appointed as Statutory Auditors of the Company in the 41st Annual General Meeting of the Company held on 30th September, 2022 for a period of five years from the conclusion of 41st Annual General Meeting upto the conclusion of 46th Annual General Meeting of the Company.

The observations made in the Auditors Repoit read together with relevant notes thereon are self-explanatory and hence, do not call for any further comments under Section 134 of the Companies Act, 2013.

The Statutory Auditors of the Company have not reported any fraud as specified under section 143(12) of the Companies Act, 2013 in the year wider review.

Secretarial Auditors

Pursuant to the provisions of Section 204 of the Companies Act, 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company has appointed M/s. R.K. Jain & Associates, Company Secretaries, Bhilwara to undertake the Secretarial Audit of the Company for the financial year ended 31st March, 2023.

The Company has also undergone an audit for the FY 2022-23 pursuant to SEBI Circular No. CIR/CFD/CMO/I/27/2019 dated 8th February, 2019 for all applicable compliances as per the Securities andExchange Board of India Regulations and Circular/guideline3 issued thereunder from tune to time The Report (Annual Secretarial Compli ance Report) has been submitted to the stock exchanges within the prescribed time limit, of the end of the financial year ended 31st March, 2023.

The Secretarial Audit report is annexed as Aim ex lire-A to the Boards report. The observations in Secretarial Audit Report, which pertains mainly to listing regulations requirements, Stock Exchange compliances etc. Since company had been a sick industrial company for a long time and draft rehabilitation scheme pending for examination and approval of BIFR but pursuant to Sick Industrial Companies (Special Provision) Repeal Act, 2003 (SICA Repeal Act) the proceedings pending before BIFR stands abated with effect from 01/ 12/2016 and the company has not filed rehabilitation/revival scheme to NCLT under insolvency and bankruptcy code 2016. However, the company has made application to BSE andNSE for revocation of suspension of trading of securities and The Company lias received in- principal approval for revocation of suspension of trading of equity shares from BSE Limited on 12/10/2022. The other observations made in the Secretarial Audit Repoit are self- explanatory and hence, do not call for any further comments under Section 134 of the Companies Act, 2013.

Cost Auditors

Pursuant to Section 148(1) of the Companies Act, 2013 your Company is required to maintain Cost Records as specified by the Central Government and accordingly such accounts and records am made and maintained. Pursuant to the provisions of Section 148(2) of (he Companies Act, 2013 read with the Companies (Cost Records and Audit) Amendment Rules. 2014, your company is required to get its cost accounting records audited by cost auditors. Accordingly, (he Board, at its meeting held on 30th May, 2022hasonthere commendation of the Audit Committe e, re- app ointe d M. Goyal & Co., Cost Accountants, Jaipur (Finn Registration No. 000051) to conduct the audit of the cost accounting records of (he Company for FY 2022-23 on a remuneration of Rs. 50,000/- plus applicable taxes and reimbursement of actual travel and out-of-pocket expenses upto Rs 25,000/-. The remuneration is subject to (he ratification of (he Members in tenns of Section and a resolution seeking members approval for die remuneration payable to the Cost Auditors forms paid of the Notice convening Annual General Meeting for their Ratification Internal Auditors

Shri Rahul Kumar Jain was reappointed as the Internal Auditor of the Company in the Board Meeting held on 30th March, 2023, on the re commendation of Audit Committee. IntemalAuditReport, their significant findings and follow up actions taken by the management is reviewed by the audit committee oil a quarterly basis.

PARTICULARS OF LOANS, GUARANTEE S OR INVESTMENTS

During the yearunderthe Company has taken unsecured borrowing ofRs 10 crores from Modem Polytex Limited and the same has also been repaid. INTERNAL FINANCIAL CONTROL SYSTEMS AND THEIR ADEQUACY

The Company has an effective internal control and lisk-mitigation system, which are constantly assessed and strengthened with new revised standard operating procedures. The Companys internal control system is commensurate with its size, scale and complexities of its operations. The main thrust of internal audit is to test and review controls, appraisal of risks and business processes, besides benchmarking controls with best practices in tire industry. The Audit Committee of the Board of Directors actively reviews the adequacy and effectiveness of the internal control systems and suggests improvements to strengthen the same.

The Company is also initiating action for strengthening the systems and procedures to ensure effective Internal Financial Controls in accordance with Section 134(5) (e) of the Companies Act, 2013. An Internal Audit process is in place under the overall supervision of the Audit Committee of the Board. Qualified and experienced professionals are engaged to ensure effective and independent evaluation of the Internal Financial Controls. The Audit Committee of die Board ofDirectors, Statutory Auditors and the Business Heads are periodically apprised of the internal audit findings and corrective actions are being taken

CONSERV ATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO

The information on conservation of energy, technology absorption. Foreign exchange earnings and outgo as required under Section 134 (3)(m) of die Companies Act, 2013readwithRule S of die Companies (Accounts) Rules, 2014 is annexed as Annexure-B to die Board s Report VIGIL MECHANISMAVHLSTLE BLOWER POLICY Pursuant to the provision of Section 177(9) and (10) of the Companies Act, 2013, read nidi Securities andExchange Board of India (Listing Obligations and Disclosure Requirement) Regulations, 2015 the Company has formulated and implemented die Whistle Blower PolicyAigil Mechanism. This has provided a mechanism for Directors and employees of the Company and other persons dealing with the Company to report genuine concerns about unethical behavior, actual or suspected fraud and violation of die

Companys code of conduct and ethics. Tire Company has also provided adequate safeguards against victimization of employees and Directors who express their concerns. This policy is available on die website of the company adittps ://www.modemwo ollens. com.

ENV IRONMENT HEALTH AND SAFTY

Hie Company is conscious of die importance of environmentally clean and safe operations to ensure about safety of all concerned, compliances of environmental regulations and prevention of natural resources.

The Company has zero tolerance towards sexual harassment at the woikplace and has a proper management system to prevention, prohibition andredressalofsexualharassmentat workpl ace in line widi the provisions ofthe Sexual Harassment of women at Woikplace (Prevention, Prohibition and Redressal) Act. 2013 and the Rules made thereunder. During the financial year 2022-23. the Company has not received any complaints of sexual harassment.

ANNUAL RETURN

Pursuant to Section 92(3) read with Section 134(3)(a) of die Act and Rule 12(1) ofthe Companies (Management and Administration) Rules, 2014 (as amended) the Annual Return as on March 31,2023 is available on the Companys website at the weblink https://modemwoolfenscomadmm public/uploads/l/2023-09/form_no_mgt_7_aminal_ retum.pdf By virtue of amendment to Section 92(3) ofthe Companies Act, 2013, die Company is not required to provide extract of Annual Return (Form MGT-9) as part of die Boards report.

CONTRACTS OR ARRANGE1MENTS 1MADE WITH RELATED PARTIES

In line with the provisions of the Companies Act, 2013 and the Listing Regulations, the Board lias approved a policy on related party transactions. A policy on related party transactions has been placed on the Companys websrte.https://www.modemwooHens.com_

In accordance with, the provisions of section 188 of the Companies Act, 2013 and mles made thereunder, all related party transactions that wae entered into during the financial year were on arms length basis and were in the ordinary course of business. There were no materially significant related party transactions which may have a potential conflict with the interests of the Company at large. All related party transactions are placed before the Audit Committee for approval. Omnibus approval was obtained on a yearly basis for transactions which are of repetitive nature.

The details of c outrac ts and arrangement with related parties for the financial year ended 31st March, 2023, are given in Note No. 34 to the Financial Statements forming part of this Annual Report.

Pursuant to Section 134(3)(h) of the Companies Act, 2013 read with Rule 8(2) of the Companies (Accounts) Rules, 2014, information in fonn AOC- 2 is provided as Annexure-D to the Board s Report.

SUBSIDIARIES, JOINT VENTURES AND ASSOCIATE COMPANIES

The Company does not have any Subsidiary, Joint venture or Associate Company as on 31st March, 2023.

CODE OF CONDUCT

In compliance of SEBI (Listing Obligation and Disclosure Requirements) Regulations, 2015 and the Companies Act, 2013, ihe Company has framed and adopted a Code of Conduct and Ethics. The code is applicable to the Board ofDirectors, Key Managerial Personnel and all other employees in the course of day to day business operations of the Company. The Code lays down the standard procedure of business conduct wfiich is expected to be followed by the Directors, Key Managerial Personnel and all other designated employees of the Company in their business dealings and in particular on matters relating to integrity in the work place, in business practices and in dealing with stakeholders. This code is available on the website of the company at https://www.modemwoollens.com.

DECLARATION BY INDEPENDENT DIRECTORS

The Company has received declarations from all the Independent Directors of the Company that they meet tire criteria of independence as laid down under section 149(6) ofthe Companies Act. 2013 and Regulation 25 ofthe SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. In the Opinion ofthe Board, the Independent Directors fulfill the conditions specified in the Companies Act and Listing regulations and also independent of tire Management etc.

The Ministiy of Corporate Affairs (‘MCA) vide Notification No. GS.R.S04(E) dated October 22, 2019 and effective from December 01, 2019 has introduced the provision relating to inclusion of names of Independent Directors in the Data Bank maintained by Indian Institute of Corporate Affairs (TICA). All Independent Directors of your Company are registered with IICA. In the opinion of the Board, the independent directors possess the requisite integrity, experience, expertise, proficiency and qualifications.

FAMILIARIZATION PROGRAM FOR INDEPENDENT DIRECTORS

The company believe that the board be continuously empowered with, the knowledge of tire latest developments in the companys business and the external environment affecting the industry as a whole. Familiarization Program for Independent Directors has been adopted by the Company, pursuant to the provisions of Schedule IV of the Companies Act, 2013 and Regulation 25 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and is available on tire website of the company at https://www.modemwoollens.com. The details of the familiarization program are provided on page 25 of this Annual Report BUSINESS RISK MANAGEMENT

In compliance of SEBI (Listing Obligation and Disclosure Requirements) Regulations, 2015 and the Companies Act, 2013, tire Board of Directors of the Company formally adopted a Risk Management Policy for framing, implementing and monitoring the risk management plan for tire Company The main objective of this policy is to ensure sustainable business growth with stability and to pr omote a pro-active approach in reporting, evaluating and resolving risks associated with the business. Die policy establishes a stiu ctured and disciplined approach t o Risk Man agement. hi tli e ch all en gin g and competitive environment, strategies for mitigating inherent risks in accomplishing the growth plans of the Company are imperative. The common risks ofthe Company inter alia are financial lisk, human re some e risk technology obsolescence, regulatory risk and strategic lisk etc. As a matter of policy, these nsks are assessed and appr opr iate steps are taken to mitigate the same. Dus policy is available on die website of the company https://www.modernwoollens.caui.

INDUS TRIAL RELATIONS AND PARTICULARS OF EMPLOYEES

The Company has enjoyed healthy and cordial industrial relations throughout die period The infoimation required pursuant to Section 197 read with rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 in respect of employees ofthe Company is provided as Annexure - E to the Boards Report In terms of Section 136 of the Act, the reports and accounts are being sent to die members and other: entitled thereto, excluding die information on employees particulars which is available for inspection by the member: at the Registered office ofthe company during business hour: on working days ofthe Company up to the date of ensuing Annual General Meeting. If any member is interested in inspecting the same, such member may write to the Company Secretary in advance.

SECRETARIAL STANDARDS

Die Company has complied with the applicable Secretarial Standards issued by the institute of Company Secretaries of India (ICSI).

DISCLOSURES WITH RESPECT TO DEMAT SUSPENSE ACCOUNT/ UNCLAIMED SUSPENSE ACCOUNT (UNCLIAMED SHARES

Die Company has not issued any shares during the financial year under review and disclosure regarding demat suspense account/unclaimed suspense account is not applicable.

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

The Management Discussion and Analysis Report on die operations of the Company, as required under the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, is set out as Annexure-F to the Boards Report and foims an integral part of the Report.

LISTING OF SHARES

The shares ofthe Company are listed at BSE Limited and National Stock Exchange of India Limited (NSE) but hading of the shares is suspended. The Company has filed an application to BSE Ltd. and National Stock Exchange of India Ltd. (NSE) for Revocation of suspension of trading in equity7 shares of the Company. The Company has received in-principal approval for revocation of suspension of trading of equity7 shares from BSE Limited on 12/10/2022.

CORPORATE GOVERNANCE REQUIREMENTS

The Company constantly7 endeavours to follow7 the Corporate Governance guidelines and best practices sincerely7 and discloses the same transparently7. The Board is conscious ofits inherent responsibility7 to disclose timely7 and accurate information on Company7s operations, performance, material corporate events as well as on the leadership and governance matter related to the Company7.

The Company has Complied with the requirements of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 to the extent as mentioned in the Coiporate Governance report annexed with the Boards report

Die Company has also adopted the policies m line with new governance requirements including the Policy7 on Related Party7 Transactions, Whistle Blower Policy, Policy guidelines on orderly succession for appointments to the board and senior management. Remuneration Policy, Risk Management Policy, Policy on preservation of documents etc. Diese policies are available on the website of the Company at https://www.miodeniwiDollens.com A separate report on Coiporate Governance is provided as Annexure - G together wife a Certificate from the Practicing Company Secretary regarding compliance with the conditions of Coiporate Governance as stipulated wider Listing Regulations.

MATERIAL CHANGES AND COMMITMENTS EFFECTTNGTHE FINANCIAL POSITION OFTHE COMPANY

Except as disclosed elsewhere in this Report, no material changes and commitments, which could affect the Companys financial position, have occulted between the end of the financial year of the Company and the date of tins Report

THE DETAILS OFAPPLI CATION MADE OR ANY PROCEEDING PENDING UNDER THE INSOLVENCY7 AND BANKRUPTCY C ODE, 2016 (31 OF 2016) DURING THE FINANCIAL YEAR

There is no application made or any proceeding pending under the Insolvency and Bankruptcy Code, 2016 (31 of 2016) during the financial year 2022-2023.

INSURANCE

Your Company has taken appropriate insurance for all assets against foreseeable perils.

GENERAL

Your Da e?tor state that no disclosure or reporting is required m respect of the following items as there were no transaction: on these items dwmg the year under review:

Issue of equity shares with differential lights as to dividend, voting or otherwise:

* Issue of shares (including sweat equity shares) to employees of the Company under any Scheme;

* No significant or material orders were passed by the Regulators or Courts or Tribunals which impact the going concern status and die Companys operations mthe future: and

There was no instance of fraud dining the year under review, which required the statutory auditors to repent to the audit committee and or board under section 143(12) of the Act and the rales framed thereunder.

APPRECIATIONS AND ACKNOWLEDGEMENTS

Your Directors take this opportunity to thank the customers, shareholders, suppliers, bankers, business partnersassociates, financial institutions and Central and State Governments for their consistent support and encouragement to the Company Your Directors also wish to place on record their deep appreciation to employees at all levels for their hard work, dedication and commitment.

For and on behalf of the Board of Directors
RAJESH ranka

Place : Bliilwara

Chainnan& Managing Director

Dated : 29th May, 2023

DIN: 03438721