Bhandari Hosiery Exports Ltd

To

The Members,

BHANDARI HOSIERY EXPORTS LIMITED

Your Directors are pleased to present the 31^st Annual Report together with Audited Accounts of the Company for the year ended 31^st March, 2024.

As mandated by the Ministry of Corporate Affairs, your company has prepared the financial statements (standalone) for the year ended March 31, 2024 as per Indian Accounting Standard (‘IND AS?) notified under Sec 133 of the Companies Act, 2013 read with notification no. G.S.R. 111(E) dated 16.02.2015 as amended from time to time.

"The Board of Directors of the Company has proposed final dividend of Rs. @ Rs. 0.01/- per Equity Share (i.e. 1%), which is subject to the approval by the shareholders at the ensuing Annual General Meeting. In accordance with the revised Indian Accounting Standard ‘Contingencies and Events occurring after the Balance Sheet Date? (effective from 01.04.2016), proposed dividend for the year has not been recognized as a distribution of profit in the current year?s accounts."

During the year 2023-24, your Company was able to achieve turnover of Rs. 26705.58 Lacs as against Rs. 28331.13 Lacs in the previous year, showing a decrease of 5.74% from the previous year. The Profits after Tax of the Company for the year ended 31.03.2024 has been at Rs. 653.35 Lacs as against Rs. 650.64 Lacs in the previous year showing an increase in profit of 0.41% in comparison to the previous year.

The Exports of the Company during the financial year were Rs 1234.02 Lacs as against Rs. 3494.54 Lacs in the previous year, showing the a decrease of 64.7% over the previous year.

The issued and paid up Equity Share Capital of the Company as on March 31, 2024 was Rs. 16,34,38,061 /- comprising 16,34,38,061 fully paid Equity shares of Rs. 1/- each. During the year under review, the Company has raised its Share Capital by way of Rights Issue of 1,69,11,111 Equity shares of Rs.1/- each at a premium of Rs.3.50 per share and allotment was made on 20.10.2023 as approved by BSE i.e. Designated Stock Exchange.

Your directors are pleased to recommend the dividend of 1% i.e. Rs. 0.01/- per Share of face value Rs. 1/- for the year 2023-24, (Previous year 2022-23 @ 1% i.e. Rs. 0.01/- per share of face value of Rs. 1/- each.) subject to the approval of the shareholders at the ensuing Annual General Meeting. The Final Dividend, if declared, shall be distributed to the members within 30 days from the date of AGM.

As per Regulation 43A of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, top five hundred listed entities based on market capitalization are required to formulate a Dividend Distribution Policy. However, your company has been classified by the stock exchanges as small cap and hence this regulation does not apply to the Company.

Pursuant to the provisions of Section 124 and 125 of the Companies Act, 2013, read with IEPF Authority

(Accounting, Audit, Transfer and Refund) Rules, 2016 (‘the Rules?), all unpaid or unclaimed dividends are required to be transferred by the Company to the IEPF established by the Central Government after the completion of seven years from the date of transfer to the Unpaid Dividend Account of the Company. The shareholders whose dividend has been transferred to the IEPF Authority can claim their dividend from the authority.

The unclaimed or unpaid dividend relating to the financial year 2016-2017 is due for remittance in the month of November, 2024 to Investor Education and Protection Fund established by the Central Government. The Company has already sent email / notices in due course to the members informing them to claim the Unclaimed Dividend / Shares before such transfer of dividend to the IEPF Authority.

During the year 2023-24, the unclaimed or unpaid dividend relating to the financial year 2015-2016 has been remitted to Investor Education and Protection Fund established by the Central Government. Further according to the Rules, the shares in respect of which dividend has not been paid or claimed by shareholders for seven consecutive years or more shall also be transferred to the IEPF Authority.

The Company proposes to transfer amount to the general reserves of the Company.

The report on Corporate Governance as stipulated under the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 forms an integral part of this Report. The requisite certificate from the Statutory Auditors of the Company confirming compliance with the conditions of corporate governance is attached to the report on Corporate Governance.

Management Discussion and Analysis Report is given at the end of Directors' Report and forms part of this Report.

During the financial year 2023-24, the company has completed its expansion plan by adding rotary printing machine as forward integration at a total cost of Rs. 28.75 cr. The project had been financed by way of term loan of Rs. 19.14 cr. from State bank of India and promoters contribution by way of Right issue and internal accruals. The company has started trial run and commercial production in the month of March 2024.

The company has availed WCTL sanctioned under GECL extension scheme during FY 2022-23. During the Current FY 2023-24, the cash credit limits were availed to the extent of Rs. 69.55 cr. against the sanctioned limit of Rs. 78.00 cr. The Company continues to key focus on judicious management of its working capital, receivables, inventories and other working capital parameters were kept under strict check through continuous monitoring.

DIRECTORS AND KMPs ? Appointments

During the F.Y. 2023-24 following appointments/ re-appointment were made:

1. Ms. Komal Bhalla (DIN: 09106916) was appointed as the Independent Director of the Company for a term of 5 years w.e.f. 28^th August, 2023 to 27^th August, 2028. Her appointment was approved by members on its AGM held on 30^th September, 2023.

2. Mr. Deepak Sharma was appointed as Chief Financial Officer of the company w.e.f. 13^th December, 2023.

3. Ms Shilpa Tiwari was appointed as Company Secretary & Compliance Officer of the Company w.e.f. 2^nd April, 2024.

? Retirement by rotation

In accordance with the provisions of the Companies Act, 2013 and Articles of Association of the Company, Mr. Vikas Nayar, Director, retires by rotation and is eligible for reappointment.

? Resignations

During the F.Y. 2023-24 following Resignations were made:

1. Ms. Geetika Bhalla (DIN: 08805488), Independent Director of the Company has resigned from the post of Independent Director w.e.f. 28^th August, 2023.

2. Mr. Daljeet Singh, Company Secretary & Compliance Officer of the company resigned from the post of Company Secretary & Compliance Officer w.e.f. 1^st April, 2024.

? Declarations by Independent Directors

Pursuant to sub section (6) of Section 149 of the Companies Act, 2013 and Reg. 16(1) (b) of the SEBI (Listing Obligations and Disclosure Requirement) Regulations, 2015, the Independent Directors of the Company have given declaration to the Company that they qualify the criteria of independence as required under the Act and the regulations.

? Board Evaluation

The Board has carried out an annual evaluation of its own performance, the directors and also committees of the Board based on the guideline formulated by the Nomination & Remuneration Committee. Board composition, quality and timely flow of information, frequency of meetings, and level of participation in discussions were some of the parameters considered during the evaluation process. A note on the familiarizing programme adopted by the Company for the orientation and training of the Directors and the Board evaluation process undertaken in compliance with the provisions of the Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 is provided in the Corporate Governance Report which forms part of this Report.

Further, a Separate Meetings of the Independent Directors of the Company was held once during the year on 14.02.2024 which also reviewed the performance of the Non-executive directors, Chairman of the Company and performance of the Board as a whole.

? Nomination & Remuneration Policy

On the recommendation of the Nomination & Remuneration Committee, the board has already framed a Policy for selection, appointment and remuneration of Directors and Key Managerial Personnel. Salient feature of Nomination and Remuneration Policy are annexed herewith as Annexure A.

? Board Meetings

During the year, 9 Board Meetings and 8 Audit Committee Meetings were convened and held. The details are given in the Corporate Governance Report. The intervening gap between the two Meetings was within the period prescribed under the Companies Act, 2013.

? Key Managerial Personnel

During the year 2023-24, the Company had three Key Managerial Personnel viz. Mr. Nitin Bhandari, Chairman & Managing Director, Mr. Deepak Sharma, Chief Financial Officer and Ms. Shilpa Tiwari, Company Secretary & Compliance Officer.

In compliance with Regulation 36(3) of SEBI (Listing Obligations and Disclosure Requirement) Regulations, 2015, Brief resume of all the Directors proposed to be appointed/re-appointed are attached along with the Notice to the ensuing Annual General Meeting.

The Company has not directly or indirectly

a) given any loan to any person or other body corporate other than usual advances envisaged for supply of materials if any, b) given any guarantee or provided security in connection with a loan to any other body corporate or person and c) Acquired by way of subscription purchase or otherwise, the securities of any other body corporate. The details of loans from Banks/FIs/ Directors, as required are given in Financial Statements and Notes thereto.

Your company has not invited/ accepted deposits from public as envisaged under Sections 73 to 76 of Companies Act, 2013 read with Companies (Acceptance of Deposit) Rules, 2014.

Pursuant to Section 177(9) of the Companies Act, 2013 and applicable provisions of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Company has formulated and established a Vigil Mechanism for directors and employees to report genuine concerns has been established. The Vigil Mechanism Policy has been uploaded on the website of the Company at www.bhandariexport.com.

The information relating to conservation of energy, technology absorption and foreign exchange earnings & outgo as required under Section 134(3)(m) of the Companies Act, 2013 read with Rule 8(3) of the Companies (Accounts) Rules, 2014 is Annexed herewith as "Annexure - D".

All related party transactions entered into during the financial year were on an arm's length basis and in the ordinary course of the business of the Company. All related party transactions are placed before the Audit Committee of the Board of Directors for its approval. Prior omnibus approval of the Audit Committee of the Board of Directors is obtained for the transactions, which are of foreseen and repetitive nature. A statement giving details of all related party transactions, entered pursuant to the omnibus approval so granted, is being placed before the Audit Committee of the Board of Directors for their review on a quarterly basis. During the year under reference, no Material Related Party Transactions were entered. All other related party transactions entered into by the Company were in ordinary course of business and were on an arm?s length basis. Hence the Company is not required to disclose details of the related party transactions in Form AOC 2 pursuant to clause (h) of sub-section (3) of Section 134 of the Act and Rule 8(2) of the Companies (Accounts) Rules, 2014. The policy on Materiality of and dealing with Related Party transactions as approved by the Board is uploaded on the Company?s website i.e. www.bhandariexport.com.

There are no significant and material orders passed by the Regulators/Courts which would impact the going concern status of the Company and its future operations.

M/s Raj Gupta & Co., Chartered Accountants, (Firm Registration No. 000203N), had been appointed as Statutory Auditors of the Company at the 29^th Annual General Meeting held on September 30, 2022 to hold office up to the conclusion of 34^th Annual General Meeting of the Company.

The Auditor?s report on the Annual Accounts of the Company for the year under review is self-explanatory and requires no comments. Further, there are no adverse remarks or qualifications in the report that calls for Board?s explanation.

During the year under review, there were no frauds reported by auditors under Section 143(12) of Companies Act, 2013.

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 had appointed M/s Rajeev Bhambri & Associates, Company Secretaries, a firm of Company Secretaries in Practice, to undertake the Secretarial Audit of the Company. Secretarial Audit Report as per Section 204 of Companies Act 2013 is placed as Annexure - B to this report.

The Board has re-appointed M/s Rajeev Bhambri & Associates, Company Secretaries, Ludhiana as Secretarial Auditor of the Company for Financial Year 2024-25.

No Cost Auditor was appointed during the financial year as there is no statutory requirement imposed for mandatorily according to the size and nature of the business.

There were no material changes and commitments affecting the financial position of the Company between the end of financial year and the date of the Report.

The Auditors' Report is self-explanatory and do not call for further comments as there are no adverse remarks in the Auditors' Report.

The Company has in accordance with the applicable provisions of the Companies Act, 2013, appointed M/s Rajeev Bhambri & Associates, Practicing Company Secretary (C.P. No. 9491), Ludhiana Secretarial Auditors. The Company has appointed M/s V.V. Bhalla & Company, Chartered Accountants, (Membership No. 081198, Firm Registration No. 002928N) as the Internal Auditors.

At present, the securities of the Company are listed on BSE Ltd. (BSE) and National Stock Exchange of India Limited (NSE). The Company has paid the Listing Fees to the BSE and NSE upto the financial year 2024-25.

The industrial relations remained very cordial and responsive during the year under review.

Considering gender equality, the Company has zero tolerance for sexual harassment at workplace. The Company has an Anti-Sexual Harassment Policy in line with the requirements of The Sexual Harassment of Women at the Workplace (Prevention, Prohibition and Redressal) Act, 2013. The following is a summary of sexual harassment complaints received and disposed of during the year 2023-24:

As per the Audited Financial Statements of the Company for the year 2023-24, the provisions of Section 135, read with Schedule VII and Companies (Corporate Social Responsibility) Rules, 2014 of the Companies Act, 2013, has become applicable to the Company. So in accordance with the provisions of Section 135 of the Companies Act, 2013 read with schedule VII of the Said Act and further read Companies (Corporate Social

Responsibility) Rules, 2014, "Corporate Social Responsibility Committee" had been constituted w.e.f.

28.05.2016 consisting of following persons as Members/ Chairman:

During the year 2023-24, the Company had identified certain projects/activities on which the CSR expenditure for the financial year 2023-24 was made. The activities included promoting health care including preventive health care, improvement in education which includes special education and employment strengthening vocation skills among children, women, elderly and the differently-abled and livelihood enhancement projects, facilities for senior citizens and measures for reducing inequalities faced by socially and economically backward groups, animal welfare etc. Details about the CSR policy and initiatives taken by the Company during the year are available on your company?s website www.bhandariexport.com. The Report on CSR activities is given in Annexure-E forming part of this Report.

The Company has an innate desire and zeal to contribute towards the welfare and social uplifting of the community. The Company continues to abide by its general Social Responsibility and maintain following certifications:

The Company heading towards good Corporate Social Responsibility also has s BSCI (Business Social Compliance Initiative) Certification. European retail companies and associations have developed a common monitoring system simplifying and standardizing the requirements and individual monitoring procedures. The BSCI is based on the labour standards of the International Labour Organization (ILO) and other important international regulations like the UN Charter for Human Rights, as well as on national regulations. The Initiative aims at continuously improving the social performance of suppliers, leading to Best Practice like SA8000 certification or equivalents and thus sustainably enhancing working conditions in factories worldwide. The Certification achieved by the Company in the true sense reflects the true spirit of the Company in improving working conditions, social health, safety, welfare and good corporate practices. The company would be able to get the confidence of EU based customers by ensuring good social compliance.

Bhandari Hosiery Exports Limited is certified for compliance to GOTS, the worldwide leading textile processing standard for organic fibres, including ecological and social criteria, backed up by independent certification. It ensures organic status of textiles, from harvesting of the raw materials, through environmentally and socially responsible manufacturing up to labelling in order to provide a credible assurance to the end consumer. This certification enables Bhandari Hosiery Exports Limited to supply certified organic garments to customers worldwide.

SMETA is the world?s most widely used audit. Businesses use SMETA to understand and make improvements to working conditions and environmental performance in their business and supply chain. Bhandari Hosiery Exports Limited got conducted Sedex Members Ethical Trade Audit and got certification. The Audit was conducted to understand standards of labour, health and safety, environmental performance, and ethics within own operations of the Company. The SMETA audit conducted by Bhandari Hosiery Exports Limited ensures protection of workers from unsafe conditions, overwork, discrimination, low pay, and forced labour.

There is no Subsidiary /Associate Company of the Company.

An extract of the Annual Return as of 31^st March 2024 pursuant to the sub-section (3) of Section 92 of the Companies Act, 2013 read with Rule 12(1) of the Companies (Management and Administration) Rules 2014 and forming part of the report is placed at the website of the Company as per provisions of Section 134 [3][a] of the Companies Act, 2013.

The provision for gratuity has been made as provided under the Payment of Gratuity Act and Actuarial Valuation report has been obtained as per IND AS 19 for Retirement Benefits Schemes as on Mar 31, 2024.

The information and other details required under Section 197(12) of the Companies Act, 2013 read with Rule 5 of the Companies (Appointment & Remuneration of Managerial Personnel) Rules, 2014 is given in the Statement annexed herewith at "Annexure- C".

The Company has designed and implemented a process driven framework for Internal Financial Controls. For the year ended on 31^st March 2024, the Board is of the opinion that the Company has sound Internal Financial Controls commensurate with the size, scale and complexity of its business operations. During the year, such controls were tested and no material weakness in their operating effectiveness was observed. The Company has a process in place to continuously monitor the same and identify gaps, if any, and implement new and/ or improved controls whenever the effect of such gaps would have a material effect on the Company?s operations.

Statements in this report, describing the Company?s objectives, expectations and/or anticipations may be forward looking within the meaning of applicable Securities Law and Regulations. Actual results may differ materially from those stated in the statement. Important factors that could influence the Company?s operations include global and domestic supply and demand conditions affecting selling prices of finished goods, availability of inputs and their prices, changes in the Government policies, regulations, tax laws, economic developments within the country and outside and other factors such as litigation and industrial relations.

The Company assumes no responsibility in respect of the forward-looking statements, which may undergo changes in future on the basis of subsequent developments, information or events.

To the best of their knowledge and belief and according to the information and explanations obtained by them, in terms of the Section 134(3)(c) of the Companies Act, 2013, your Directors confirm that :

a) in the preparation of the annual accounts for the financial year ended 31^st March 2024, the applicable Indian accounting standards had been followed and there were no material departures; b) the directors had selected such accounting policies and applied them consistently and made judgments and estimates that are 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 as at 31^st March 2024 and of the profit and loss of the company for that period; c) the directors 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) the directors had 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 systems were adequate and operating effectively.

During the, CRISIL Limited has reviewed the external credit rating of the company and gives credit rating of CRISIL BBB- Stable.

Directors, Key Managerial Personnel and senior management of the Company have confirmed compliance with the Code of Conduct applicable to the Directors and employees of the Company and the declaration in this regard made by the Managing Director & Chairman of the Company forms part of this Annual Report. The said code is available at the Company?s website i.e. www.bhandariexport.com.

Your Directors place on record their appreciation of the continued assistance and co-operation extended to the Company by the Government of India, Government of Punjab, State Bank of India, South Indian Bank, HDFC Bank and Union Bank of India, the large family of shareholders, business associates/customers/buyers, the dedicated employees and all other business constituents, who are continuing to assist your Company.