Modern Threads (I) Ltd Directors Report

To the members of Modern Threads (India) Limited,

Your Directors are pleased to present the 44th Annual Report on the business and operations of the Company together with Audited Financial Statements for the financial year ended 31st March, 2025.

FINANCIAL SUMMARY

The summary of financial performance of the Company for the year ended 31 March, 2025 is furnished hereunder:

(Rs. in Crores)

Particulars	Year ended 31.03.2025	Year ended 31.03.2024
Revenue from operations & other Income	269.89	304.08
Profit before exceptional items & tax	4.75	25.93
Exceptional items
Profit before tax	4.75	25.93
Less-Tax expenses	1.38	0.50
Profit for the year	3.37	25.43
Other Comprehensive Income	0.21	0.35
Total Comprehensive Income	3.58	25.78

STATE OF COMPANYS AFFAIRS

The performance of the Woollen Division of the Company has been satisfactory over past few years. During the year under review the turnover of the Woollen Division of the Company is Rs. 167.60 Crores as against Rs 213.88 Crores in the previous year. During the year under review the turnover of the Yarn Division of the Company is Rs. 93.59 Crores as against Rs 87.26 Crores in the previous year. Your company has been able to generate the profit of Rs. 4.75 Crores during the year under review as against Rs. 25.93 Crores in previous year before exceptional items and tax.

EXPORTS

Global instability continued to be aggravated & impacted not only Woollen & worsted products, but across the line all textile material. Capacity utilization remained very critical because of small & short term delivery orders. 2nd half of the year was additionally fueled negatively on a/c of looming tariff barrier from USA. Raw material supply which is mainly from Australia remained stable in terms of price, but demand of yarn faced historical challenge.

In current market condition, Company adopted to focus on domestic sale of small lots to minimize loss of production, however it is not suitable for our existing infrastructural set-up. Further to fill this gap, company invested in infra-structure as per the market.

FUTURE PROSPECTS

It has been almost 2 year market is not showing real upward movement due to lack of demand from end users/ final customer. There is discussion among the industry, that 2nd half of the year could be turning point from where market can move positive. Cost competitiveness is real challenge in future due many players entered in this business & increased capacity or Infrastructure.

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 paid up share capital of the Company. The paid-up Equity Share Capital as at March 31, 2025 stood at Rs. 34,77,51,600 (Rupees Thirty Four Crore Seventy Seven Lakh Fifty One Thousand Six Hundred) divided into 3,47,75,160 equity shares of Rs. 10 each.

TRANSFER TO RESERVE

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

DIVIDEND

The Company is continuously searching new or used machines to update the old machines for better quality of supplied yarn and wool tops. In addition to replacement of old technology machines our aim is to increase the production through balancing of preparatory section and increase the profitability. Looking long term sustainability in market we conserve the resources of the company for expansion and modernization of old plant and machinery. The Board of Directors of your company have decided not to recommend any dividend on the Equity Shares of the company for the year under review.

FIXED DEPOSITS

The Company has neither accepted nor renewed any fixed deposits during the year under review within the meaning of Section 73 to 76 of the Companies Act, 2013 and the Companies (Acceptance of Deposits) Rules, 2014

FINANCE AND ACCOUNTS

As mandated by the Ministry of Corporate Affairs, the financial statements for the year ended on March 31, 2025 has been prepared in accordance with the Indian Accounting Standards (Ind AS) notified under Section 133 of the Companies Act, 2013 (hereinafter referred to as “The Act”) read with the Companies (Accounts) Rules, 2014 as amended from time to time. The estimates and judgments relating to the Financial Statements are made on a prudent basis, so as to reflect in a true and fair manner, the form and substance of transactions and reasonably present the Companys state of affairs, profits and cash flows for the year ended March 31, 2025. The 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. The Company discloses financial results on a quarterly basis which are subjected to limited review.

SUBSIDIARIES, ASSOCIATES AND JOINT VENTURES COMPANIES

During the year, a wholly owned subsidiary in name of “Modern Woollens UK Ltd” has been incorporated on 18.11.2024 with the Registrar of Companies at England and Wales. Modern Threads (India) Limited has agreed to subscribe 1 share of GBP 1 of Modern Woollens UK Ltd and subscription amount is yet to be paid. Modern Woollens UK Ltd is yet to commence business operations, hence Form AOC-1 and Consolidated Financial Results have not been prepared.

DIRECTORS AND KEY MANAGERIAL PERSONNEL

The Board of Directors consists of 6 (Six) members, of which 3 (Three) are Independent Directors and 1 (one) is Non-Executive Director. The Board also has one woman Independent Director.

During the year, Shri Ram Awatar Kabra has been re-appointed as Executive Director on 19th November, 2024 and Shri Mukesh Kumar Soni has been appointed as Non-Executive Independent Director on 14th November, 2024. Shri Jagdish Narayan Sharma (DIN: 07552825) have completed his term of five consecutive years as Independent Director of the Company on 28.02.2025. Consequently, Shri Jagdish Narayan Sharma has ceased to be Independent Director of the Company w.e.f close business hours on 28.02.2025.

Mr. Anil Kumar Jain has appointed as Company Secretary & Compliance Officer w.e.f 14.11.2024 in place of Shri Banwari Lal Saini who have resigned as Company Secretary & Compliance Officer w.e.f 6.11.2024.

DIRECTOR RETIREMENT BY ROTATION

Smt. Veena Jain (DIN: 07148606), Director of the Company, is liable to retire by rotation at the ensuing AGM pursuant to the provisions of Section 152 of the Act read with the Companies (Appointment and Qualification of Directors) Rules, 2014 and, being eligible, offers himself for reappointment. The Nomination and Remuneration Committee and the Board recommend her reappointment for the consideration of the Members of the Company at the ensuing Annual General Meeting.

Key Managerial Personnel

In terms of the provisions of section 2(51) and 203 of the Act, read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, Shri Rajesh Ranka, Chairman & Managing Director, Shri

Ram Awatar Kabra, Executive Director, Shri Prabodh Kumar Nahar, Chief Financial Officer and Shri Anil Kumar Jain, Company Secretary & Compliance officer are the Key Managerial Personnel (KMP) of the Company. The appointment and remuneration of Directors and KMPs are as per policy of the Company.

Declaration of Independent Directors

All Independent Directors have given declarations that they meet the criteria of independence as laid down under Section 149(6) of the Companies Act, 2013 and Regulation 16 (1)(b) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and confirmation that they have complied with the Code of Independent Directors prescribed in the Schedule IV of the Companies Act, 2013. The terms and conditions for the appointment of the Independent Directors are disclosed on the website of the Company. The Board of Directors is of the opinion that all the Independent Directors of the Company hold highest standards of integrity and possess requisite expertise and experience required to fulfill their duties as Independent Directors and that all the Independent Directors fulfill the conditions specified in the SEBI Listing Regulations and are Independent of the management.

Nomination and Remuneration Policy

The Board has, on the recommendation of the Nomination and Remuneration Committee, framed the Nomination and Remuneration Policy for appointment of Directors, Key Managerial personnel & Senior Management Personnel and also their remuneration and performance evaluations. The Nomination and Remuneration Policy is available at website of the company at https://www.modernwoollens.com.

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 the 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 the Nomination and Remuneration Committee reviewed the performance of individual directors on the basis of criteria such as the contribution of the individual director to the 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 carried out to evaluate the performance of individual Directors including the Chairman of the Company, who were evaluated on parameters such as level of engagement and contribution, independence of Judgment, safeguarding the interest of the Company and its minority shareholders etc. The performance evaluation of the Independent Directors was carried out by the entire Board and the performance evaluation of the Chairman and the Non-Independent Directors of the Company was carried out by the Independent Directors in a separate meeting who have expressed their satisfaction with the evaluation process.

NUMBER OF BOARD MEETINGS

The Board meets regular intervals to discuss and decide on business strategies and policies and review the financial performance of the Company. The notice and detailed agenda alongwith other material information are sent in advance separately to each Directors.

Seven meetings of the Board were held during the year. The detail of meetings of the Board held during the year forms part of the Corporate Governance Report.

AUDIT COMMITTEE

The Audit Committee was constituted by the Board in accordance with Section 177 of the Companies Act, 2013 and Regulation 18 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 i.e.

Listing Regulations. The composition, quorum, terms of reference, functions, powers, roles and scope are in accordance with Section 177 of the Companies Act, 2013 and the provisions of Regulation 18 of the Listing Regulations, 2015. All the members of the committee are financially literate and Smt. Ankita Jain, Chairman of the Committee is an Independent Director and possesses financial expertise.

The details regarding composition, terms of references, powers, functions, scope, meetings and attendance of members are included in Corporate Governance Report which forms part of the Annual 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 Harassment 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 2024-25 is provided in Corporate Governance Report which forms part of the Annual Report.

DIRECTORS RESPONSIBILITY STATEMENT

In terms 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) They had selected such accounting policies and applied them consistently and made judgments and estimates that were reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit and loss of the Company for that period; (c) They had 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) They had prepared the annual accounts of the Company for the year ended on 31^st March, 2025 on a going concern basis; (e) They 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) They 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 (Firm Registration No. 001079C) were appointed as Statutory Auditors of the Company in the 41^st Annual General Meeting of the Company held on 30^th September, 2022 for a period of five years from the conclusion of 41^st Annual General Meeting up to the conclusion of 46^th Annual General Meeting of the Company. The observations made in the Auditors Report 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 under 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 31^st March, 2025. The Secretarial Audit Report for the 2024-25 is attached as Annexure “A”. The observations in the report are self-explanatory and therefore, do not call for any further comments.

Cost Auditors

Pursuant to the provisions of Section 148 of the Companies Act, 2013 read with the Companies (Cost Records and Audit) Rules, 2014 as amended from time to time, your Company has been carrying out audit of Cost Records every year. The Board after considering the recommendations of its Audit Committee has appointed M/s S. Goyal & Company, Cost Accountants, Jaipur (Firm Registration No. 005883) as cost auditors for the financial year 2025-26, subject to the approval of the members at the ensuing Annual General Meeting.

Cost Records

The Cost accounts and records, as required to be maintained under Section 148 (1) of the Companies Act, 2013, are duly made and maintained by the Company.

Internal Auditor

Shri Naveen Kumar Vijayvargiya was appointed as the Internal Auditor of the Company for the financial year 2025-26, on the recommendation of Audit Committee. Internal Audit Report, their significant findings and follow up actions taken by the management is reviewed by the audit committee on a quarterly basis.

Tax Auditor

As per the requirement of Section 44AB of the Income Tax Act, 1961 M/S. S.S. Surana & Co., Chartered Accountants (Firm Registration No. 001079C), Jaipur have been appointed as Tax Auditor for the financial year 2025-26.

PARTICULARS OF LOANS GIVEN, INVESTMENTS MADE, GUARANTEES GIVEN AND SECURITIES PROVIDED

Particulars of loans given, investments made, guarantees given and securities covered under section 186 of the Companies Act, 2013 form part of the notes to the Financial Statements of the Company.

INTERNAL FINANCIAL CONTROL SYSTEMS AND THEIR ADEQUACY

The Company has an effective internal control and risk-mitigation system, which are constantly assessed and strength 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 the 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 the Board of Directors, Statutory Auditors and the Business Heads are periodically apprised of the internal audit findings and corrective actions are being taken.

CONSERVATION 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 the Companies Act, 2013 read with Rule 8 of the Companies (Accounts) Rules, 2014 is annexed as Annexure-B to the Boards Report.

VIGIL MECHANISM/WHISTLE BLOWER POLICY

Pursuant to the provision of Section 177(9) and (10) of the Companies Act, 2013, read with Securities and Exchange Board of India (Listing Obligations and Disclosure Requirement) Regulations, 2015 the Company has formulated and implemented the Whistle Blower Policy/Vigil 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 the Companys code of conduct and ethics. The Company has also provided adequate safeguards against victimization of employees and Directors who express their concerns. This policy is available on the website of the company at https://www.modernwoollens.com.

CORPORATE SOCIAL RESPONSIBILITY (CSR)

Your Company is committed to make a positive contribution to communities where it operates. Pursuant to Section 135 of the Companies Act, 2013, the Company constituted CSR committee and formulated CSR Policy as guiding principle for undertaking CSR activities. The Companys vision on CSR is that the Company being a responsible Corporate Citizen would continue to make a serious endeavor for improvement in quality of life and betterment of society through its CSR related initiatives. The CSR policy of the Company is available on the website of the company at https:// www.modernwoollens.com.

The disclosures of CSR activities pursuant to Section 134(3) of the Companies Act, 2013 read with Rule 9 of Companies (Corporate Social Responsibility) Rules, 2014 is annexed as Annexure ‘C hereto and form part of this report.

ANNUAL RETURN

Pursuant to the provisions of Section 92(3) of the Act, read with the Companies (Management & Administration) Rules, 2014, the annual return in the prescribed form is available on the website of the Company at https:/ /www.modernwoollens.com.

CONTRACTS OR ARRANGEMENTS MADE WITH RELATED PARTIES

In line with the provisions of the Companies Act, 2013 and the Listing Regulations, the Board has approved a policy on related party transactions A policy on related party transactions has been placed on the Companys ‘website https://www.modernwoollens.com.

In accordance with the provisions of section 188 of the Companies Act, 2013 and rules made thereunder, all related party transactions that were entered into during the financial year were on arms length basis and were in the ordinary course of business. There were no materiality 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 contracts and arrangement with related parties for the financial year ended 31st March, 2025, are given in Note No. 36 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 form AOC-2 is provided as Annexure-D to the Boards Report.

CODE OF CONDUCT

A declaration signed by the Managing Director in regard to compliance with the Code of Conduct by the Board Members and Senior Management personnel, also forms part of the Annual Report.

FAMILIARISATION PROGRAM FOR INDEPENDENT DIRECTORS

Your Company has formulated familiarization program for the Independent Directors to familiarize them with their role, rights and responsibility as Directors, the working of the Company, nature of the industry in which the Company operates, business model of the Company etc. The details of such familiarization program is available on the website of the Company at the website https://www.modernwoollens.com.

RISK MANAGEMENT POLICY

The Risk Management policy is formulated and implemented by the Company in compliance with the provisions of the Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. The policy aimed at creating and protecting shareholders value by minimizing threats and losses and identifying and maximizing opportunities. The risk management policy defines the risk management approach across the enterprise at various levels, including documentation and reporting.

PARTICULARS OF EMPLOYEES

The information required pursuant to Section 197 read with rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 in respect of employees of the Company is provided as Annexure-E to the Boards Report.

SECRETARIAL STANDARDS

The Board of Directors has devised proper systems and processes for complying with the requirements of applicable Secretarial Standards issued by the Institute of Company Secretaries of India (‘ICSI) and that such systems were adequate and operating effectively and the Company has complied with all applicable Secretarial Standards during the year under review.

CORPORATE GOVERNANCE REPORT

Your Company is committed to maintain the highest standards of Corporate Governance and adheres to the stipulations set out in the Listing Regulation and have implemented all the prescribed requirements. The Corporate Governance Report and Certificate from practicing company secretaries confirming compliance of conditions as required by Regulation 34(3) read with Part E of Schedule V of the Listing Regulations form part of this Boards Report.

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

The Management Discussion and Analysis Report on the 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 forms an integral part of the Report.

MATERIAL CHANGES AND COMMITMENT IF ANY AFFECTING THE FINANCIAL POSITION OF THE COMPANY OCCURRED BETWEEN THE END OF THE FINANCIAL YEAR TO WHICH THE FINANCIAL STATEMENTS RELATE AND THE DATE OF THIS REPORT

There are no material changes or commitments affecting the financial position or business activities of the Company between the end of the Financial Year and the date of this Boards Report.

DETAILS OF DIFFERENCE BETWEEN AMOUNT OF THE VALUATION DONE AT THE TIME OF ONE TIME SETTLEMENT AND THE VALUATION DONE WHILE TAKING LOAN FROM THE BANKS OR FINANCIAL INSTITUTIONS ALONG WITH THE REASONS THEREOF

During the year under review, the Company has not entered into any onetime settlement.

CHANGE IN NATURE OF BUSINESS

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

INSURANCE

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

GENERAL DISCLOSURES

Your Directors state that no disclosure or reporting is required in respect of the following items as there were no transactions on these items during the year under review: a) No issue of equity shares with differential rights as to dividend, voting or otherwise; b) No Significant and material orders were passed by the any Regulators or Courts or Tribunals impacts the going concern status and Companys operations in future; c) No fraud was reported by the Auditors to the Audit Committee or Board under section 143(12) of the Companies Act, 2013; d) No application made or any proceeding pending under the Insolvency and Bankruptcy Code, 2016 (31 of 2016) during the year.

ACKNOWLEDGEMENT

Your Directors take this opportunity to thank the customers, share holders, suppliers, bankers, business partners/associates, 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
	Chairman & Managing Director
Place: Bhilwara	DIN: 03438721
Dated: 30.05.2025