To

The Members,

Your Board of Directors present the 109^th Annual Report together with the Audited Statement of Accounts for the financial year ended on March 31, 2023.

The financial results of the Company are as under:•Rs in Lakhs

The financial year 2022-23 was one of the most encouraging years in the recent past. Despite a challenging external environment led by a volatile landscape, inflation, price and cost to consumer, the Company maintained its growth trajectory. The Company delivered double-digit growth along with the highest revenue in a decade.

During the financial year under review, the Company reported a total Income of 1,41,562.38 Lakhs, an EBITDA (Earnings before Interest, Taxes, Depreciation, and Amortization) of 7,389.06 Lakhs, and a Net Profitof 3,748.10 Lakhs(including an Exceptional Loss of 53.57 Lakhs). The Company reported a 33% increase in Total Income, a 4% de-growth in EBITDA, and a growth of 28% in Net Profit aided by improved operational performance and continued non-core asset monetization initiatives.

During the its investment in Vrata Tech Solutions Private Limited (VTSPL), a subsidiary company, representing 77.78% of the paid-up share capital of VTSPL for a total consideration of 407.48 Lakhs (based on fair value of equity share of VTSPL carried-out by the independent valuer).

During the financial year under review, the Company has recognized 53.57 Lakhs as expense towards compensation payable as full and final settlement to certain workers at Navsari location as an Exceptional Item.

During the financial year under review, the Company repaid long-term borrowings amounting to 1,639.77 Lakhs. The Company expresses gratitude to all the banks and financial institutions for having stood by it for its growth and financing requirements.

During the financial year under review, Acuite Ratings & Research Limited assigned the credit rating ‘ACUITE BBB'- with Outlook positive for long-term facilities with a tenure of more than one year and ‘ACUITE A3' (Reaffirmed) for short- term facilities with a tenure of up to one year.

During the financial year under review, Care Ratings Limited (CARE) assigned a credit rating of ‘CARE BBB-' with Outlook stable for long-term facilities with a tenure of more than one year and ‘CARE A3' for short-term facilities with a tenure of up to one year.

Acuite Ratings & Research Limited has upgraded the credit rating to ACUITE BBB' with outlook Stable for long-term facilities with a tenure of more than one year and ‘ACUITE

A3+' for short-term facilities with a tenure of up to one year on April 1, 2023.

A detailed analysis of the financial results has been provided in the Management Discussion and Analysis Report, which forms a part of this report.

In view of accumulated losses, Directors regret their inability to declare any Dividend. Also, recognizing the need for conserving cash to augment its working capital to continue the growth momentum, it would be prudent to plough back the profits for the year for the operations and not recommend any Dividend for the year under review.

Pursuant to the applicable provisions of the Companies

Act, 2013 (‘the Act') read with the Investor Education and

Protection Fund Authority (Accounting, Audit, Transfer and Refund) Rules, 2016 (‘the IEPF Rules'), during the year, unpaid or unclaimed dividend amounting to 6,05,463/- was transferred by the Company to the Investor Education and Protection Fund (‘IEPF'), established by the Government of India.

Further, a total of 6,65,495 shares were transferred to the demat account of the IEPF, in accordance with IEPF Rules, as the dividend was not paid or claimed by the shareholders for seven years. Details of the shares and dividend transferred to the IEPF account are available on the website of the Company at www.mafatlals.com/investors/

During the financial year, the company has allotted an aggregate of 2,40,500 fully paid equity shares of 2/- each, under the Mafatlal Employees Stock Option Plan 2017.

Consequent upon allotment of shares under the Mafatlal

Employees Stock Option Plan 2017 and sub-division of equity shares of the Company from 10/- each to 2/- each, the paid up share capital increased from 14,07,13,860/- consisting of 1,40,71,386 equity shares of 10/- each (prior to sub-division) to 14,11,94,860/- consisting of 7,05,97,430 equity shares of 2/- each.

To improve the liquidity of the Company's shares in the market, the Board of Directors at their meeting held on September

17, 2022, had approved, subject to approval of the members, the sub-division of face value of the equity shares from

10/- each into equity shares of 2/- each fully paid-up and consequent amendment in Capital Clause in Memorandum of Association (MoA) of the Company. Subsequently, the members approved the sub-division of face value of equity shares from 10/- each into 2/- each fully paid-up through Postal Ballot, on November 7, 2022. The record date for the aforesaid sub-division was November 25, 2022, Accordingly, the face value of equity shares of the Company stands sub- divided from 10/- each fully paid up into 2/- each fully paid-up. The physical shareholders were issued fresh shares of face value of 2/- each.

The Board of Directors at their meeting held on September

17, 2022, had approved, subject to approval of members, reclassification of the existing authorized share capital of

100/- Crores into Equity Shares divided into 35,00,00,000 equity shares of 2/- each aggregating to 70,00,00,000/- ( Seventy Crores) and Preference Share Capital of 10/- each divided into 3,00,00,000 aggregating to 30,00,00,000/- ( Thirty Crores). The members approved the reclassification of authorized share capital through Postal Ballot, on November

7, 2022. Subsequently the Capital Clause in Memorandum of Association (MoA) of the Company was modified.

The Audit Committee and the Board of Directors at their meeting held on June 16, 2022, had approved the proposal for divestment of its equity stake/investment in Vrata Tech Solutions Private Limited (‘VTSPL'). The entire 77.78% equity investment was sold to a promoter group entity, Sumil Trading Private Limited, on

June 30, 2022 at the price of 90.55/- per share for an aggregate consideration of 4,07,47,500/-. The Company had subscribed to 4,50,000 shares of the VTSPL at a face value of 10/- per share. The fair valuation of the equity shares of VTSPL was valued by Independent Registered Valuer CA Rashmin Shah.

VTSPL was not a material subsidiary of the Company and hence, approval of the Board was sufficientfor divestment of the equity stake in the Company.

The Board of Directors at their meeting held on November 14,

2022, approved the Scheme of the Arrangement (‘Scheme') between the Company and its Shareholders for reduction and reorganization of capital of the Company, wherein the credit balances of various items of Reserves in the Balance

Sheet would be adjusted against the entire negative balance of Retained Earnings. The afore mentioned reduction and reorganization of Capital of the Company does not prejudicially affect the Company or its Shareholders or any other Stakeholders. The Company has filed an application under the Regulation 37 of SEBI (Listing Obligations and Disclosure Requirements), Regulations, 2015, for obtaining "No Objection Letter" from the BSE Limited, where the Equity

Shares of the Company are listed. The application is lying before BSE Limited for a 'No Objection Letter.' Once the ‘No Objection Letter' is issued by BSE Limited, the Company will file an application before the Hon'ble National Company

Law Tribunal, Ahmedabad Bench (‘Tribunal') to complete the rest of the formalities and approval of the Scheme. Draft Scheme and other documents are available on the website of the Company at www.mafatlals.com/investors/ schemeofarrangement.

Pursuant to the requirements of the Companies Act, 2013, Mr. Hrishikesh A. Mafatlal (DIN 00009872), retires by rotation at the ensuing Annual General Meeting and, being eligible, offers himself for re-appointment.

The Board recommends the appointment / re-appointment of the above Director for approval. The brief details of the Director proposed to be appointed / re-appointed, as required under Regulation 36 of SEBI Listing Regulations, are provided in the Notice of Annual General Meeting.

The Company received annual declarations from all

Independent Directors of the Company, confirming that they meet the criteria of ‘independence' provided in Section 149(6) of the Companies Act, 2013 and Regulations 16(1)(b) & 25 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. There was no change in the circumstances which could affect their status as Independent Director during the financial year.

The Independent Directors met on November 14, 2022 and March 27, 2023, without the attendance of Non-Independent

Directors and members of the management. The Independent Directors reviewed the performance of the Non-Independent Directors and the Board as a whole, and of the Chairman of the CompanyafterconsideringtheviewsofExecutiveDirectorsand Non-Executive Directors. The Board also assessed the quality, quantity, and timeliness of information flow between the Company's management and the Board necessary for them to effectively perform their duties.

Pursuant to the provisions of Section 134 (3) of the Companies Act, 2013 and the applicable regulations of the SEBI (Listing Obligations and Disclosure Requirements), Regulations, 2015, the Independent Directors evaluated the performance of the Non- Independent Directors and Chairman of the Company after considering the views of the Executive and Non-Executive Directors and the Board as a whole. They assessed the quality, quantity, and timeliness of flow of information between the Company's Management and the Board.

The Nomination and Remuneration Committee evaluated the performance of every Director. The Board of Directors adopted a formal mechanism for the evaluation of its performance as well as that of its committees and Individual Directors, including the Chairman of the Board.

The Independent Directors were regularly updated on the industry and market trends, plant processes, and the operational performance of the Company through presentations.

The Company's policy on Directors' appointment and remuneration and other matters provided in Section 178(3) of the Act is available on the website of the Company at www.mafatlals.com/investors/

As required under the provisions of Section 134 (5) of the Companies Act, 2013, your Directors state that:

(i) In the preparation of the annual accounts, the applicable accounting standards have been followed and proper explanations relating to material departures, if any, have been given.

(ii) The Directors have selected such accounting policies, applied them consistently, and made judgements or estimates reasonable and prudent to provide a true and fair view of the state of the Company's affairs at the end of the financial year, and of the profit of the Company for the period under review.

(iii) 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.

(iv) The Directors have prepared the annual accounts on a ‘going concern' basis.

(v) The Directors have laid down financial controls to be followed by the Company and that such financial controls are adequate and operating effectively.

(vi) The Directors have devised systems to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively.

Mr. M. B. Raghunath, President & Business Head was appointed as Chief Executive Officer

April 1, 2022. Mr. Priyavrata H. Mafatlal, who was performing the twin duties of Managing Director and Chief Executive

Officer (CEO) of the Company till March 31, 2022, is continuing as Managing Director after the appointment of Mr. Raghunath as CEO of the Company. During the financial year under review, Mr. Ashish Karanji, Company Secretary and Compliance Officer resigned. In his place, Mr. Amish Shah was appointed as Company Secretary and Compliance Officerwith effect from April 1, 2022.

The shareholders of the Company at 103^rd Annual General Meeting held on August 2, 2017, consented to the creation of 6,95,000 (34,75,000 after adjustment of the sub-division) equity shares Employee Stock Option pool under the Mafatlal Employee Stock Option Plan, 2017 by way of a Special Resolution. The Board of Directors, as per the recommendation of the Nomination and Remuneration Committee (NRC), approved Mafatlal Employees Stock Option Plan 2017.

In terms of the approval of the shareholders by Postal Ballot for sub-division and related actions and as a consequence of the sub-division of equity shares from face value of 10/- into face value of 2/- the Company has made appropriate adjustments to the exercise quantity and price of the outstanding ESOPs granted to employees with effect from opening of business hours on November 26, 2022 (being the next working day post the record date of sub-division) so as to ensure that the resultant payment by ESOPs grantees on the exercise of ESOPs and the resultant benefits due to the adjustment to the revised exercise quantity and price remains unchanged for grantees.

The NRC has granted 4,56,000 (22,80,000 after sub-division) equity shares options in two tranches to certain senior management employees. NRC made a third option grant on May 27, 2022 to certain executives aggregating 3,20,000 (16,00,000 after sub-division) equity shares at 181/- ( 36.20/- after sub-division) each share.2,22,700 (11,13,500 after sub-division) options have lapsed on account of resignation of the concerned employees.

As on March 31, 2023, after sub-division, 1,61,500 options remained outstanding out of the first grant and 47,000 (after sub-division) options remained outstanding from the second grant.

The option grantees (employees) exercised 2,40,500 (after sub-division) equity shares of 2/- each at an exercise price of 15.73 (after adjustment of sub-division of shares at actual exercise price 78.65/-) options vested to them under the second grant. Accordingly, the Company has on May 28, 2022, September 12, 2022, and February 14, 2023 allotted shares to the eligible employees under the Mafatlal Employee

Stock Option Plan, 2017.

Pursuant to the aforesaid exercise of options and allotment of 2,40,500 equity shares, the subscribed and paid-up equity share capital of the Company changed from 1,407.14 Lakhs to 1,411.95 Lakhs consisting of 7,05,97,430 equity shares of 2 each (after adjustment of sub-division) and the share premium account was credited with a share premium of 45.08 Lakhs.

The detailed information on capital and reserves are provided in the attached audited accounts of the Company.

The further disclosures, as required under SEBI Employee

Share Based Benefits Regulations, 2016, and other applicable provisions, are provided in ANNEXURE- D to this report with other disclosures..

The financial position of the subsidiary company is given in the Notes to Consolidated Financial Statements. The Company does not have any material subsidiary. The Policy on Material Subsidiary, framed by the Board of Directors of the Company, is available on www.mafatlals.com/investors/ policies. VTSPL ceased to be the subsidiary of the Company w.e.f June 30, 2022, post the disinvestment of shares from the Company.

The audited accounts of Mafatlal Services Limited, subsidiary of the Company, for the financial year ended on March 31, 2023, has been placed on the Company's website www.mafatlals. com/investors and open for inspection by any member at the Registered Office of the Company on all working days (Monday-Friday) during working hours between 3.00 pm and 5.00 pm. The Company will make these documents available on request by any member of the Company who may be interested in obtaining the same.

As reported earlier, Al Fahim Mafatlal Textiles LLC. (UAE) remainednon-operationalandsincetherewasnoforeseeable beneficialfuture, the Board of Directors of the Company and the joint venture partner decided on a voluntary winding-up/ closure of that entity. The Company wrote to the Ministry of Commerce, Department of Economic Development, Dubai, that there was no operation of the said joint venture company from 2016. Accordingly, the Company has not applied for a 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.

The statement containing salient features of the financial statement of subsidiary companies (Pursuant to first proviso to sub-section (3) of Section 129 read with rule 5 of Companies (Accounts) Rules, 2014) is further annexed as part of the Notes forming a part of the Consolidated Financial Statement as FORM AOC-1.

The Company does not have ‘Deposits' as contemplated under Chapter V of the Companies Act, 2013. Further, it has not invited or accepted any such deposit during the financial year ended on March 31, 2023. related party

There are no material changes and commitments in the business operations of the Company for the financial ended on March 31, 2023, to the date of the signing of the Directors' Report.

The existing internal financial controls are adequate 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.

The relations between the employees and the management remained cordial and harmonious during the financial year under review. There were 1,121 (948 in the previous financial year) permanent employees on the payroll of the Company as on March 31, 2023.

Mafatlal Industries Limited., a part of the Arvind Mafatlal

Group, has been fulfilling its corporate social responsibilities for more than 51 years, much before CSR had been statutorily prescribed. The Company's work in this domain has focused on poverty alleviation, healthcare, education for young children, and upliftment of women across rural

India. In conformity with the provisions of Section 135 of the Companies Act, 2013, read with the Companies (Corporate Social Responsibility Policy) Rules, 2014, the Company has formed a CSR Committee, which comprises Mr. Hrishikesh A. Mafatlal, who is the Chairman of the said Committee, Mr. Atul Kumar Srivastava, and Mr. Sujal Shah, both are Independent Directors.

Based on the recommendations of the CSR Committee, the Board of Directors formulated a CSR Policy encompassing the Group's and the Company's philosophy, underlying its CSR activities. It laid down the guidelines and mechanisms for undertaking socially relevant programmes in conformity with the statutory provisions. This policy is posted on the website of the Company and available on www.mafatlals.com.

As per the provisions of Section 135, read with the Section 198 of the Companies Act, 2013, due to the losses incurred by the Company over the years, there was no CSR obligation for financial year 2022-23. Accordingly, there were no meetings of the CSR Committee during the year. The statutory disclosures with respect to CSR is annexed hereto, as an Annexure-E, which is forming a part of this report.

There are no materially significant undertaken by the Company during the financial year.

The Company's policy for related party transactions is posted on the website of the Company and available on www.mafatlals.com/investors/policies.

The details of all transactions with the related parties are disclosed in Notes, forming a part of the financial statements, annexed to the financial statements for 2022-23 and annexed as a part of this report in AOC- 2, as an Annexure-A.

All the related party transactions entered by the Company are in the ordinary course of business and on an arm's length basis, for which requisite for prior approvals from the Audit Committee and the Board of Directors were obtained. None of the related party transactions required approval from the shareholders.

As required under Schedule V (B) and (C) of the SEBI (LODR) Regulations, 2015, Management Discussion and Analysis Report as well as Corporate Governance Report, are attached herewith and marked as Annexure I & II respectively and the same forms the part of this Directors' Report.

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.

Details of the various committees constituted by the Board of Directors, as per the provisions of the SEBI

(Listing Obligations and Disclosure Requirements) Regulations, 2015 and the Companies Act, 2013, are provided in the Corporate Governance Report and forms a part of this report.

The Company adopted a Whistle Blower Policy and established a necessary vigil mechanism for employees and Directors to report concerns about unethical activities. No person had been denied access to the Chairman of the Audit Committee. The said policy is uploaded on the website of the Company at www.mafatlals.com/investors/policies

There are no significant and material orders passed by the Regulators or Courts or Tribunals, which would impact the going concern status and the Company's operations.

There were no loans or guarantees or investments given/ made by the Company under Section 186 of the Companies Act, 2013 during the financial year ended on March 31, 2023.

The Annual Return of the Company as on March 31, 2023, is available on the website of the Company at www.mafatlals.com/investors/

The Company has in place an Anti-Sexual Harassment

Policy in line with the requirements of the said Act, read with other applicable provisions. Internal Complaints Committees are constituted and regularly redress complaints, if any. During the financial year under review, no complaint was received in respect of 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.

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

The Directors have devised proper systems and processes for complying with the requirements of applicable Secretarial Standards (SS) issued by the Institute of Company Secretaries of India (ICSI), and such systems were adequate and operating effectively.

Business Risk Evaluation and Management is an ongoing process within the organization. The Company has a comprehensive risk management framework to identify, monitor, and minimize risks, while identifying business opportunities.

As per Regulation 21(5) of SEBI (Listing Obligations and Disclosure Requirements) Regulation, 2015, Risk

Management Committee is applicable to top 1000 listed entities, determined on the basis of market capitalization, as at the end of the immediate previous financial year.

Since the Company does not feature in this list, the said regulation is not applicable.

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 Regulations.

Accordingly, the updated policies are uploaded on website of the Company at www.mafatlals.com/ investors/policies.

(l) No proceedings are made or pending under the insolvency and Bankruptcy Code, 2016 and there is no instance of one-time settlement with any Bank or

Financial Institution.

(m) No shares with differential voting rights and sweat equity shares have been issued.

(n) None of the Auditors of the Company have reported any fraud as specified under the second proviso of Section 143(12) of the Act.

(o) There has been no change in the nature of business of the Company.

(p) During the financial year under review, no such agreement was entered into by the shareholders, promoters, promoter group entities, related parties, directors, key managerial personnel, employees of the Company or of its holding, subsidiary or associate company, among themselves or with the Company or with a third party, solely or jointly, whose purpose and effect is to, impact the management or control of the Company or impose any restriction or created any liability of the Company.

Pursuant to the provisions of Section 139 and other applicable provisions, if any, 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 for a period of five years by the members of the Company at the 108^th Annual General Meeting(AGM)toholdofficefrom the conclusion of the108^th AGM till the conclusion of the 113^th AGM to be held in 2027.

The Company received written consent and a certificate of eligibility in accordance with Sections 139, 141 and other applicable provisions of the Companies Act and Rules issued thereunder, from M/s. Price Waterhouse Chartered Accountants LLP. They confirmed to hold a valid certificate issued by the Peer Review Board of theInstitute of Chartered Accountants of India (ICAI) as required under listing regulations.

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, 2023, and there are no qualifications in Auditors' Report.

Pursuant to the provisions of Section 204 of the Companies Act, 2013 and the rules made thereunder, Mr. Umesh Ved, Company Secretary in practice, was appointed to undertake the Secretarial Audit of the Company. The Secretarial Audit Report for financial year 2022-23 is annexed, which forms a part of this report, as Annexure – III. There were no qualifications, reservation or adverse remarks given by Secretarial Auditor of the Company in the Secretarial Audit Report of the Company.

Pursuant to the provisions of Section 148 of the

Companies Act, 2013 read with relevant rules made thereunder, maintenance of cost records for Company's ‘Textiles' products is required and accordingly such accounts and records are made and maintained by the Company. The cost audit for the year 2021-22 was carried out in time, and the Cost Audit Report with requisite data, in the prescribed form CRA 4, has already been filed with Ministry of Corporate Affairs (MCA) within the permissible time, last year.

Further, in accordance with the said applicable provisions, the audit of the cost records of the Company for the year 2022-23 relating to the ‘Textiles' products as required is being carried out by Cost Auditors M/s. B. Desai & Co. (Firm Registration No. 005431) Cost Auditors. The Cost on or before the due date with AuditReportwillbefiled the Ministry of Corporate Affairs in due course of time after the same is approved by the Board of Directors of the Company within the permissible timeline.

On the recommendation of the Audit Committee, the Board has in their Meeting held on May 30, 2023 re- appointed M/s. B. Desai & Co. (Firm Registration No. 005431), Cost Auditors to audit cost records in respect of ‘Textiles' products as required for the Financial Year 2023-24. The remuneration payable to the Cost Auditor has been proposed for approval by the Members of the Company at the ensuing Annual General Meeting.

Chartered M/s. Aneja Associates, a reputed firm Accountants, are the Internal Auditors of the Company. The Audit Committee of the Board of Directors, in consultation with the Internal Auditors, formulates the scope, functioning, periodicity and methodology for conducting the internal audit.

Information required under section 134 (3)(m) of the Companies Act, 2013 read with the Companies (Accounts) Rules, 2014 is enclosed as ANNEXURE - B and forms part of the report.

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 enclosed as ANNEXURE - C and forms a part of the report.

The Directors wish to place on record their appreciation of the devoted services of the workers, staff and the officers for their continued contribution to the Company. The Directors also express appreciation to the Company's customers, business associates, banks, Government departments, agencies, service providers, suppliers, and other shareholders for standing by the Company during these challenging times.

For and on behalf of the Board of Directors,