Market & News

*Note: Company does not have any Subsidiary or Associate Company in Previous Year but in the Financial Year 2023-24, post-acquisition of 2,200

Equity Shares of 10/- each representing 22% Paid Up Equity Share Capital of ‘Neo Stretch Private Limited' ("NSPL") on March 16, 2024, NSPL become the Associate Company of Donear Industries Limited.

The total standalone revenue from operations for Financial Year 2023-24 was 80,795.26 Lakhs as compared to 83,582.21 Lakhs in previous Financial Year. During the Financial Year the Company earned a Standalone profit before tax of 4,747.64 Lakhs against Profit of 4,856.90 Lakhs in the Previous Year.

The Standalone Net Profit after tax for the Financial Year was 3,471.34 Lakhs against Profit of 3,624.00 Lakhs reported in the Previous Year. The Standalone segment revenue from operations for Financial Year 2023-24 (a) Textile: 79,282.30 Lakhs (Previous Year: 81,843.88 Lakhs), (b) Rental Business: 632.01 Lakhs (Previous Year: 722.52 Lakhs). The segment Profit before Tax for Financial Year 2023-24 (a) Textile: 10,073.50 Lakhs (Previous Year: 9,255.64 Lakhs), (b) Rental Business : 200.64 Lakhs (Previous Year: 574.79 Lakhs).

The Consolidated revenue from operations for Financial Year 2023-24 was 80,795.26 Lakhs and Consolidated Net Profit after tax for the Financial Year was 3,470.98 Lakhs.

There have been no material changes and commitments affecting the financial position of the Company which have occurred between end of the financial year and the date of this report. There has been no change in the nature of business of the Company.

1. Economic Overview:

World Economy: The global economy witnessed many challenges during the Financial year 2023-24. While fluctuations in commodity prices led to inflation in both developed and developing nations, persistent geopolitical issues resulted in supply chain disruptions.

The latest World Economic Outlook (WEO) of the International Monetary Fund expects that the world economy is projected to maintain a modest but steady growth pace of 3.2% in 2024 and 2025, mirroring the performance of 2023. The pace of convergence toward higher living standards for middle- and lower-income countries has slowed, implying a persistence in global economic disparities. The relatively weak medium-term outlook reflects lower growth in GDP per person stemming, notably, from persistent structural frictions labour from moving to productive firms.

The global economy surprised many by demonstrating resilience during 2022-2023. Economic activity continued to grow even as concerns about stagflation (stagnant growth with high inflation) and recession were raised, while the short-term outlook appears growth rate for the next five years is the lowest in decades. This raises concerns about long-term economic health. The report emphasizes the need for urgent reforms to address these long-term challenges. While acknowledging the recent Israel-Palestine conflict adds uncertainty,

IMF believes its impact on global supply and demand will be less severe compared to the war in Ukraine. It remains cautiously optimistic about the overall global economic situation.

Indian Economy: If this prediction materialises for FY25, it would signify the fourth consecutive year post-pandemic that the Indian economy has maintained growth at or above 7%. Such an accomplishment would be remarkable, serving as a testament to the resilience and potential of the Indian economy, offering promising prospects for its future.

India's recently released Interim Budget allocated 11.1 lakh crore ($133.6 billion) for capital expenditure in Fiscal Year 2025. This represents 3.4% of GDP, a significant increase of 16.9% compared to the 2023-24 budget. The increased spending is expected to GDP growth trajectory as companies look to diversify their supply chains away from China, India is a potential beneficiary. This could attract more investment in manufacturing. The government's schemes to boost targeted manufacturing industries could see a better response from investors with an improved infrastructure base.

Looking ahead, several trends are anticipated to shape the future landscape. The era of hyper-globalisation in global manufacturing has drawn to a close. Nevertheless, this does not signify an imminent onset of de-globalisation, as countries are just beginning to grasp the extensive integration of global supply chains that has unfolded over recent decades.

Closely intertwined with this challenge is the ascent of Artificial Intelligence, presenting profound and intricate questions concerning growth in services trade and employment. The progression of technology poses a threat to the advantage of cost competitiveness enjoyed by countries exporting digital services.

2. Indian Textile Market Overview & Development:

As one of the largest textile industries in the world, the Indian textile industry contributes approximately 2.3% to the country's GDP, 13% to industrial production and 12% to total exports earnings. India is one of the largest producers of cotton and jute in the world. The textiles and apparel industry in India has strengths across the entire value chain from fibre, yarn, fabric to apparel. India has been observing a robust trade in technical textile products and the country has been a net exporter.

India's textile industry, a vital contributor to the economy, underwent significant technological and infrastructural productivity and global competitiveness. However, amid global disruptions, the country witnessed a decline in cotton yarn exports in FY24, generating $1.32 billion compared to $1.95 billion the previous year.

The government has also launched the Production Linked Incentive Scheme with an approved outlay of 10,683 crore to promote production of Man-Made Fibre Apparel, Man-Made Fibre Fabric and products of Technical Textiles in the country.

3. Opportunities, Risk & Concern:

Though India has the best textile industry, it also face numerous challenges like changing tax structure at the state and central government levels making garments expensive, rising interest rates and labour wages and workers' salaries. India is the most populous country with an estimated 1.44 million people as of 2024. Rising population densities may require changes in consumer preferences, driving demand for specific types of textiles.

The Indian textile industry has its own limitations such as access to the latest technology and failures to meet global standards in the highly competitive export market. There is fierce competition from countries in the low-price garment market. In the global market tariff and non-tariff barriers coupled with the quota are posing a major challenge to the Indian textile Industry. The environmental and social issues like child labour and personal safety norms are also some of the challenges for the textile industry in India.

Additionally, domestic cotton prices, which reached a lifetime high in H1 FY23, experienced a decline by approximately 25% in 9M FY24 due to a weak operating environment. Further, a projected 6% decrease in domestic cotton production for CY2024 is anticipated due to reduced cotton sown area amid uneven rainfall.

The broader economic trends are poised to directly affect a company's growth potential. Persistent inflation has resulted in increase in commodity prices worldwide. Furthermore, the anticipated rise in central bank interest rates in the coming year may dampen growth and strain economies, especially in emerging markets. It is thereby important to manage cost pressures to sustain the Company's overall performance in these conditions.

4. Future Outlook of Textile Industry:

The Company has closed the financial year with increased turnover and profits. The plan for expansion cum modernization is underway which is expected to be completed in FY 2024-25. This will make the Company ready for the future and will improve the performance in the forthcoming years.

The Government of India announced various schemes to support the textile sector. Schemes like Scheme for Capacity Building in Textile Sector (SAMARTH); Amended Technology Up-Gradation Fund Scheme (ATUFS); National Technical Textiles Mission; Production Linked Incentive Scheme (PLI); PM-MITRA; Scheme for Integrated Textile Parks (SITP); National Technical Textile Mission (NTTM); and National Institute of Fashion Technology (NIFT) are aimed to skill manpower, promote ease of doing business, promote development and use of technical textiles, manmade fiber apparels and fabrics, setting up world class infrastructure including plug-and -play facilities, among others.

The Company continues to maintain its leadership in Technical Textiles due to continued thrust on new product development and technology up-gradation. A number of steps taken to reduce costs and increase market penetration will lead to improved performance in the coming years.

5. Human Resources / Industrial Relations front:

Human Resources and Industrial Relations form the cornerstones of any organization, business, or economy. The Company's HR showed a strategic and coherent approach in managing the talent and put an endeavor in employing people and developing their capacities, utilizing and maintaining their services. Our Company continuously carries out the necessary improvements to attract and retain the best talent which results in low attrition rates.

The Company's policy of providing on the job training has been instrumental in developing a good work force for the Company. Moreover, the Company has an induction process wherein employees are made familiar with the organization structure, their reporting authority, various units/ plants location, major achievements and other related facts in order to make them congenial while working in the Company.

6. Risk Management and Internal control systems:

The Company has in place a Risk Management framework through its Policy, the main objective of which is to ensure sustainable business growth with stability and to promote a pro-active approach in reporting, evaluating and resolving the risks which are material in nature and are associated with the business. In order to achieve the key objective, the policy establishes a structured and disciplined approach to Risk Management, in order to guide decisions on material risk related issues. The policy is available on the website of the Company at www. donear.com/investor.

Further, the Company's activities are exposed to credit risk, liquidity risk, market risk, price risk and Interest Rate Risk. The sources of such risk and how Company manages such risk and the impact thereof are provided in the relevant note forming part of the Financial Statements, which forms part of this Annual Report.

Internal Audit plays a key role in providing an assurance to the Board of Directors with respect to the Company having adequate Internal Financial Control Systems. The Internal Financial Control systems provide, among other things, reasonable assurance of recording the transactions of its operations in all material respects and of providing protection against significant misuse or loss

Company has adequate internal control system which commensurate with its size, scale and complexities of its operations.

7. Key Financial Ratios:

As per provisions of SEBI Listing Regulations, 2015, changes in financial ratios in the Financial Year 2023-24, as compared to the immediately previous Financial Year along with detailed explanation thereof are provided in Note 45 to Standalone Financial Statements and the same forms part of the Annual Report.

8. Forward looking statement:

The statements made in this Management Discussion and Analysis Report regarding the Company's objectives, projections, estimates, expectations, or predictions may constitute ‘forward-looking statements' as defined by applicable securities laws and regulations. It's important to note that actual results could vary significantly from those expressed or implied in these statements. Several crucial factors could impact the Company's operations, including the availability and pricing of raw materials, cyclical demand and pricing trends in its primary markets, alterations in government regulations and tax regimes, economic developments both in India and in the countries where the Company operates, and other related factors.

The Board at its meeting held on May 29, 2024, has recommended a dividend of 0.20 (10%) per Equity Share of 2.00 each for the Financial Year ended March 31, 2024, subject to the approval of the Members of the Company at the ensuing Annual General Meeting (AGM).

The Dividend, if approved by the Members would entail a gross outflow of 104 Lakhs for the Financial Year 2023-24 and it will be taxable in the hands of shareholders.

The provisions under Regulation 43A of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 ("Listing Regulations") regarding formulating Dividend Distribution Policy are not applicable to the Company. Hence, the Company declares the dividend by maintaining a balance between profit retention and a fair, sustainable and consistent distribution of profits among its Members.

The Board has decided not to transfer any amount to the General Reserve for the year under review.

During the year under review, the Company acquired 2,200 Equity Shares of 10/- each representing 22% Paid up Equity Share Capital of ‘Neo

Stretch Private Limited' ("NSPL") on March 16, 2024. Pursuant to which NSPL has become the Associate Company of Donear Industries Limited.

During the year under review Company has also acquired 66,00,000 Equity Shares of 10/- each on March 29, 2024 through right issue. NSPL yet to start its commercial production till this report.

Pursuant to Section 129(3) of the Companies Act, 2013 ("Act") read with Rule 5 of the Companies (Accounts) Rules, 2014, a statement containing salient features of the financial statements of Associate Companies is given in Form AOC-1 in Annexure D

During the year under review, the Company has not issued any equity shares and there is no change in issued and paid-up capital of the Company. The Company has also not issued any shares with differential voting rights.

The Company has obtained ratings from India Ratings and Research Private Limited. During the year under review, India Ratings and Research

Private Limited has revised the Outlook on Donear Industries Limited from Negative to Positive while affirming the Long-Term Issuer Rating at ‘IND

BBB/ Stable'.

For more details, please refer the Corporate Governance Report, which forms part of this Annual Report.

Pursuant to Section 134(5) of the Companies Act, 2013 ("the Act"), your Directors, confirm that: a) in the preparation of the annual accounts for the Financial Year ended March 31, 2024, the applicable accounting standards have been followed; b) they have 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 and of the profit of the

Company for that period; c) they have taken proper and sufficient are towards the maintenance of adequate accounting records in accordance with the provisions of the

Act for safeguarding the assets of the Company and for preventing and detecting fraud and irregularities; d) the annual accounts are prepared on a going concern basis; e) they have laid down Internal Financial Controls, which are adequate and are operating effectively; f) they have devised proper systems to ensure compliance with the provisions of all applicable laws and such systems were adequate and operating effectively.

In accordance with the provisions of Section 152 of the Act, Mr. Rajendra Agarwal, retires by rotation at the ensuing AGM and being eligible, offers himself for re-appointment. A resolution seeking Members' approval for his re-appointment forms part of the Notice. This re-appointment as a Director shall not constitute a break in his appointment as a Managing Director of the Company.

During the year under review, the Board on the recommendation of the Nomination and Remuneration Committee, has appointed Mr. Aniruddha

Prabhakar Deshmukh (DIN: 01389267), as an additional Independent Director of the Company for his first term of 5 years w.e.f. November 08,

2023. Accordingly, Members of the Company has appointed him as an Independent Director through Postal Ballot dated January 02, 2024.

During the year, Mr. Deepak Bhageria (DIN; 00540430), has tendered his resignation as Non-Executive Independent Director of the Company due to his pre-occupations and other personal commitments and the same has been accepted and noted by the Board of Directors of the Company with effect from the close of business hours of August 14, 2023.

Pursuant to the provisions of Sections 2(51) and 203 of the Act read with The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the following are the Key Managerial Personnel of the Company:

• Mr. Rajendra Agarwal, Managing Director;

• Mr. Ajay Agarwal, Whole-Time Director;

• Mr. Ashok Agarwal, CFO; and

Mr. Sachin Gupta, Company Secretary& Compliance Officer

After the Closure of Financial Year 2023-24, Mr. Sachin Gupta, Company Secretary has tendered his resignation to pursue career opportunity outside the Company commitments and the same has been accepted and noted by the Board of Directors of the Company with effect from the close of business hours on July 31, 2024. Mr. Sachin Gupta has also confirmed that there is no other material reasons for his resignation.

Mrs. Medha Pattanayak, Mr. Govind Shrikhande and Mr. Aniruddha Prabhakar Deshmukh, Independent Directors, hold office for their respective term. They are not liable to retire by rotation in terms of Section 149(13) of the Act.

The Company has received declarations from all the Independent Directors of the Company confirming that each of them meet the criteria of independence as provided in Section 149(6) of the Act along with Rules framed thereunder and Regulation 16(1)(b) of the Listing Regulations.

In opinion of the Board, they fulfil the conditions of independence as specified in the Act and the Rules made thereunder and are independent of the management and also possess the requisite integrity, experience, expertise, proficiency and qualifications. There has been circumstances affecting their status as Independent Directors of the Company.

The Independent Directors of the Company have undertaken requisite steps towards the renewal of their names in the data bank of Independent Directors maintained with the Indian Institute of Corporate Affairs in terms of Section 150 of the Act read with Rule 6 of the Companies (Appointment

& Qualifications of Directors) Rules, 2014.

During the year under review, the Board has also identified the list of core skills, expertise and competencies of the Board of Directors as are required in the context of the business and sector applicable to the Company and mapped with each of the Directors on the Board. The same is disclosed in the Report of Corporate Governance forming part of the Annual Report.

Pursuant to the provisions of the Act and Listing Regulations, the Board has carried out an annual evaluation of performance of its own, the Committees thereof and the Directors.

The Nomination and Remuneration Committee, in order to facilitate the performance evaluation process, laid down the evaluation criteria for the performance of Executive / Non-Executive / Independent Directors, Chairman of the Board, Committees and the Board as a whole and approved specific evaluation forms.

These forms were circulated to each of the Director, as applicable, and Directors were requested to provide their valuable feedbacks and suggestions on the overall functioning of the Board and its Committees. Accordingly, Directors submitted their feedbacks on various parameters such as composition, manner of circulating agenda for meetings, participations, frequency of meetings, timeliness and accuracy of information, infrastructure for effective deliberations, flow of information between Board and Management, contribution towards corporate performance, internal control, management information system, etc.

The performance of individual directors was evaluated on the basis of parameters such as engagement, leadership, analysis, knowledge and skills, quality of decision making, interactions, ethics and integrity, willingness to devote time and efforts, corporate governance, relationships with stakeholders, relationships with Management, contribution, attendance, independent judgment, etc.

The Independent Directors at their separate meeting held on February 13, 2024, reviewed the performance evaluation of Non-Independent Directors, the Board as a whole, the Chairperson of the Board after taking into account the views of Executive Directors and Non-Executive Directors of the

Company and also assessed the quality, quantity and timelines of flow of information between the Company Management and the Board.

The Company's remuneration policy for Directors, Key Managerial Personnel, Senior Management Personnel and other employees as recommended by the Nomination and Remuneration Committee and approved by Board from time to time has been disclosed in the Corporate Governance Report, which forms part of this Annual Report and also available at the Company's website at www.donear.com/investor.

During the year under review, 4 (Four) meetings of the Board of Directors of the Company were held. The details of such Board meetings and attendance of Directors therein, are given in the Corporate Governance Report, which forms part of this Annual Report.

The Board of Directors has constituted following Committees, viz.:

1. Audit Committee

2. Nomination and Remuneration Committee

3. Stakeholders' Relationship Committee

4. Corporate Social Responsibility Committee

5. Risk Management Committee

The details of such Committees including their composition, number of meetings held and attended and terms of reference as required under provisions of the Act and Listing Regulations are disclosed in the Corporate Governance Report, which forms part of this Annual Report.

There were no instances where the Board had not accepted any of the recommendations of the Audit Committee.

The Members of the Company on Thirty Fourth Annual General Meeting of the Company held on September 25, 2020, approved the re-appointment of M/s. Kanu Doshi Associates LLP, Chartered Accountants (Firm Registration No. 104746W/W100096), as Statutory Auditors of the Company for the second term to hold office from the conclusion of the Thirty Fourth Annual General Meeting till the conclusion of Thirty Ninth AGM to be held in the year 2025.

The Audit Report on the Financial Statements of the Company for Financial Year ended March 31, 2024 is made part of this Annual Report. The

Report does not contain any qualification, reservation, adverse remark or disclaimer.

A total fee of 9.26 Lakhs for statutory audit (including out of pocket expenses) and 0.44 Lakh for other services was paid to M/s. Kanu Doshi

Associates LLP, Statutory Auditor of the Company.

M/s. Yogesh Sharma & Co., Practicing Company Secretaries (Membership No. F11305 / Certificate of Practice No. as Secretarial Auditor to conduct the secretarial audit of the Company, as required under Section 204 of Act, Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 and Regulation 24A of Listing Regulations.

The Secretarial Audit Report for the Financial Year 2023-24 is given as Annexure A, which forms part of this Report. Their Audit Report confirms that the Company has complied with applicable provisions of the Act and the Rules made thereunder, Listing Regulations, other SEBI Regulations and laws applicable to the Company. This Secretarial Report does not contain any qualification, reservation, adverse remark or disclaimer.

As per the requirements of the Section 148 of the Act read with the Companies (Cost Records and Audit) Rules, 2014 as amended from time to time, your Company is required to maintain cost records and accordingly, such accounts are prepared and records have been maintained relating to Textile Division every year.

The Board of Directors, on the recommendation of the Audit Committee has re-appointed M/s. Y. R. Doshi & Co., (Firm Registration No. 000003), Cost Accountants, Mumbai, as Cost Auditors for undertaking Cost Audit for the Financial Year ending March 31, 2024. The Company has received their written consent and confirmation that the appointment will be in accordance with the applicable provisions of the Act and rules framed thereunder.

The remuneration payable to Cost Auditors has been approved by the Board of Directors on the recommendation of the Audit Committee and in terms of the Act and Rules therein. A resolution seeking member's approval for ratification of remuneration payable to Cost Auditor forms part of the

Notice convening Annual General Meeting.

During the year under review, the Statutory Auditors, Cost Auditors and Secretarial Auditors have not reported any instances of frauds committed in the Company by its Officers under Section 143(12) of the Act. or Employees, to the

There were no significant and material orders passed by any regulators or courts or tribunals impacting the going concern and its operations in future.

The composition and terms of reference of the Corporate Social Responsibility ("CSR") Committee is provided in the Corporate Governance Report, which forms part of this Annual Report.

The brief outline of the CSR policy of the Company and the initiatives undertaken by the Company on CSR activities during the year under review are set out in Annexure B of this Report in the format prescribed in Companies (Corporate Social Responsibility Policy) Rules, 2014.

The Company has not accepted any deposits from the public as defined under Chapter V of the Act and as such, no amount on account of principal or interest on deposits from public was outstanding as on March 31, 2024.

As per Regulation 34(3) read with Schedule V of the Listing Regulations, the Company's Corporate Governance Report for the year under review, forms part of this Annual Report.

A certificate from the Statutory Auditor of the Company regarding the compliance with the conditions of Corporate regulations 17 to 27 and other applicable provisions of Listing Regulations, is annexed to Corporate Governance Report and forms part of this Report.

The information pertaining to remuneration and other details as required under Section 197(12) of the Act read with Rule 5 of Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are given in Annexure C, which forms part of this Report.

During the year under review, the Company has complied with the requirements of applicable Secretarial Standards issued by the Institute of Company Secretaries of India (‘ICSI') in terms of Section 118(10) of the Act.

Details of familiarization programs for Independent Directors are available on the website of the Company at www.donear.com/investor. Policy for determining Materiality of Events of the Company is available on the website of the Company at www.donear.com/investor. Policy for archival of documents of the Company is available on the website of the Company at www.donear.com/investor.

The code of conduct for Directors and senior management of the Company is available on the website of the Company at www.donear.com/investor. There has been no change in the nature of business of the Company.

The essence of Company's philosophy is based on fairness, transparency, accountability and responsibility aligned with best management practices and ethical values.

Accordingly, Company has put in place Vigil Mechanism / Whistle Blower Policy for its Stakeholders to report genuine concerns that could have serious impact on the operations and performance of business of the Company.

This Policy also aims to provide adequate safeguards against victimization of directors, employees and other stakeholders who use this policy / mechanism and contains the provision of direct access to the Chairperson of the Audit Committee in appropriate or exceptional cases.

This policy is available on the website of the Company at www.donear.com/investor.

In compliance with Sexual Harassment of Women at Workplace (Prevention, Prohibition & Redressal) Act, 2013 ("POSH Act"), the Company has constituted Sexual Harassment Internal Complaints Committee, chaired by Head of Human Resource Department who introduced such Committee to female staff and imparted awareness on sexual harassment of women at workplace.

All Women employees whether contractual, permanent or temporary, were made aware of appropriate ways and methods of approaching and responding to sexual harassment concerns and incidents. Further, they were made aware of the present law protecting them against any sexual abuse and motivated them to share anything which they see absurd in relation to their safety.

During the year under review, there were no cases were reported to the Board under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.

During the year under review, the Company has not made any one-time settlement for loans taken from the Banks or Financial Institutions, and hence the details of difference between amount of the valuation done at the time of on time settlement and the valuation done while taking loan from the Banks or Financial Institutions along with the reasons thereof is not applicable.

During the year under review, the Company has made some investment. Further, the Company has not given any loans or corporate guarantee or provided any security during the year.

The details of loans, guarantees, investments and security, as required under the provisions of Section 186 of the Companies Act, 2013 are provided in the relevant note forming part of the Financial Statements, which forms part of this Annual Report.

In accordance with Section 134(3)(h) of the Act, and Rule 8(2) of the Companies (Accounts) Rules, 2014, the particulars of the contracts or arrangements with related parties referred to in Section 188(1) of the Act, in Form AOC-2, is attached as Annexure E to this Board's Report. All contracts and arrangements with related parties were at arm's length and in the ordinary course of business of the Company.

The contracts/ arrangements /transactions with the related parties are necessary in the ordinary course and have a significant operations.

Moreover, the Company has formulated a Policy on Related Party Transactions and also amended during the year to keep it in line with the Act and Listing Regulations and is available on the website of the Company at www.donear.com/investor.

Disclosure of transactions with related parties as required under Listing Regulations and the applicable Accounting Standards is given in the relevant note forming part of the Financial Statements.

The particulars as required under Section 134(3)(m) of the Act read with Rule 8 of Companies (Accounts) Rules, 2014, relating to conservation of energy, technology absorption, foreign exchange earnings and outgo, are given in Annexure F, which forms part of this Report.

The disclosure regarding amount of unclaimed/unpaid dividend and corresponding shares transferred to the IEPF and other related details are disclosed in the Corporate Governance Report, which forms part of this Annual Report.

Pursuant to the provisions of Section 134(3)(a) and Section 92(3) of the Act read with Rule 12 of the Companies (Management and Administration) Rules, 2014, a copy of the Annual Return of the Company for the Financial Year ended March 31, 2024 is uploaded on the website of the Company and can be accessed at www.donear.com/investor.

The Board of Directors place on record sincere gratitude and appreciation for all the employees of the Company. Our consistent growth was made possible by their hard work, solidarity, cooperation, and dedication during the year.

The Board conveys its appreciation for its customers, shareholders, suppliers as well as vendors, bankers, business associates, regulatory and government authorities for their continued support.

FOR THE FINANCIAL YEAR ENDED 31^ST MARCH, 2024

To,

The Members,

Donear House, 8^th Floor,

Plot No. A - 50 Road No. 1, MIDC, Andheri (East), Mumbai – 400093

I have conducted the Secretarial Audit of the compliance with applicable statutory provisions and the adherence to good corporate practices by DONEAR INDUSTRIES LIMITED (CIN- L99999MH1987PLC042076) (hereinafter called ‘the Company'). The secretarial audit was conducted in a manner that provided me a reasonable basis for evaluating the corporate conducts/statutory compliances and expressing my opinion thereon.

My responsibility is to express an opinion on the compliance of the applicable laws and maintenance of records based on audit. I have conducted the audit in accordance with the applicable Auditing Standards issued by The Institute of Company Secretaries of India. The Auditing Standards require that the Auditor shall comply with statutory and regulatory requirements and plan and perform the audit to obtain reasonable assurance about compliance with applicable laws and maintenance of records.

Based on my verification of the books, papers, minute books, forms and returns filed and other records maintained by the Company and also the information provided by the Company, its officers, agents and authorised representatives during the conduct of Secretarial Audit, I hereby report that in my opinion, the Company has, during the audit period from 1^st April, 2023 to 31^st March, 2024 (‘the Audit Period') generally complied with the statutory provisions listed hereunder and also that the Company has proper Board processes and compliance mechanism in place to the extent and in the manner and subject to the reporting made hereinafter:

I have examined the books, papers, minute books, forms and returns filed and other records maintained by the Company for the Financial Year ended 31^st March 2024 according to the provisions of: I. The Companies Act, 2013 (‘the Act') and the rules made thereunder; II. The Securities Contracts (Regulation) Act, 1956 (‘SCRA') and the rules made thereunder; III. The Depositories Act, 1996 and the Regulations and Bye-laws framed thereunder; IV. Foreign Exchange Management Act, 1999 and the rules and regulations made thereunder to the extent of Foreign Direct Investment (Overseas Direct Investment and External Commercial Borrowings- Not Applicable to the Company during the Audit period); V. The following Regulations and Guidelines prescribed under the Securities and Exchange Board of India Act, 1992 (‘SEBI Act'):-(a) The Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 2011; (b) The Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations, 2015; (c) The Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2018; (Not applicable to the Company during the Audit period)

(d) The Securities and Exchange Board of India (Issue and Listing of Non-Convertible Securities) Regulations, 2021; (Not applicable to the Company during the Audit period)

(e) The Securities and Exchange Board of India (Registrars to an Issue and Share Transfer Agents) Regulations, 1993 regarding the Companies Act and dealing with Client; (f) The Securities and Exchange Board of India (Delisting of Equity Shares) Regulations, 2021; (Not applicable to the Company during the Audit period)

(g) The Securities and Exchange Board of India (Buyback of Securities) Regulations, 2018; (Not applicable to the Company during the Audit period)

(h) The Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 ("LODR Regulation").

(i) The Securities and Exchange Board of India (Share Based Employee Benefits and Sweat Equity) Regulations, 2021;(Not applicable to the Company during the Audit period)

I have also examined compliance with the applicable clauses of the following: (i) Secretarial Standards issued by The Institute of Company Secretaries of India.

(ii) The Listing Agreements entered into by the Company with BSE Ltd. ("BSE") and NSE Limited ("NSE").

During the period under review, the Company has generally complied with the provisions of the Act, Rules, Regulations, Guidelines, Standards, etc. mentioned above.

I further report that, with regard to the compliance system prevailing in the Company and on the examination of the relevant documents and records in pursuance thereof, on test-check basis, the Company has generally complied with following laws which are applicable specifically to the

Company: i. Factories Act, 1948 ii. Water (Prevention and Control of Pollution) Act, 1974 iii. Air (Prevention and Control of Pollution) Act, 1981 iv. Environment Protection Act, 1986

I further report that, the Board of Directors of the Company is duly constituted with balance of Executive Directors, Non-Executive Directors and Independent Directors. The changes in the composition of the Board of Directors that took place during the period under review were carried out in compliance with the provisions of the Act and LODR Regulations.

Adequate notice was given to all directors to schedule the Board Meetings, Agenda and detailed notes on agenda were sent at least seven days in advance. A system exists for seeking and obtaining further information and clarifications on the agenda items before the meeting and for meaningful participation at the meeting.

All the decision in the board meetings and committee meetings are carried out unanimously or as recorded in the minutes of the meeting of Board of Directors or committee of the Board, as the case may be.

There are adequate systems and processes in the Company commensurate with the size and operations of the Company to monitor and ensure compliance with applicable laws, rules, regulations and guidelines.

I further report that during the audit period, the Company has acquired 66,02,200 Equity Shares representing 22% of paid up share capital of Neo Stretch Private Limited, pursuant to which ‘Neo Stretch Private Limited' became the Associate Company of the Company.

This report is to be read with our letter of even date which is annexed as Annexure and forms an integral part of this report.

[Pursuant to clause (o) of sub-section (3) of section 134 of the Act and Companies (Corporate Social Responsibility) Rules, 2021]

1. Brief outline on CSR Policy of the Company:

The CSR initiatives of the Company are either undertaken as projects or programmes or activities, whether new or ongoing, or by way of providing donations, contributions or financial assistance to such projects or to other CSR companies or entities undertaking such projects, as may be permitted under the Companies Act, 2013 read with applicable rules prescribed thereunder and which are in line with CSR Policy of the Company.

The Policy outlines the Company's responsibility as a corporate citizen and lays down the guidelines and mechanism for undertaking activities for welfare and sustainable development of the community at large.

The core element of CSR is the continuing commitment by business to ethical principles, protection of human rights, care for the environment while improving the quality of life of all the stakeholders including the local community and society at large.

2. Composition of CSR Committee:

3. The web-link(s) where Composition of CSR Committee, CSR Policy and CSR Projects approved by the : www.donear.com/investor board are disclosed on the website of the company.

4. The executive summary along with web-link(s) of Impact Assessment of CSR Projects carried out in : Not Applicable pursuance of sub-rule (3) of rule 8, if applicable.

5. (a) Average net profit of the company as per section 135 (5). : 2,415.41 Lakhs (b) Two percent of average net profit of the company as per section 135 (5). : 48.31 Lakhs (c) Surplus arising out of the CSR Projects or programmes or activities of the previous financial years. : Not applicable (d) Amount required to be set-off for the financial year, if any. : Nil (e) Total CSR obligation for the financial year [(b)+(c)-(d)]. : 48.31 Lakhs

6. (a) Amount spent on CSR Projects (both Ongoing Project and other than Ongoing Project). : 50.00 Lakhs (b) Amount spent in Administrative Overheads. : Nil (c) Amount spent on Impact Assessment, if applicable. : Nil (d) Total amount spent for the Financial Year [(a)+(b)+(c)]. : 50.00 Lakhs (e) CSR amount spent or unspent for the Financial Year : 50.00 Lakhs

(f) Excess amount for set-off, if any:

7. Details of unspent Corporate Social Responsibility amount for the preceding three financial years: Not applicable.

8. Whether any capital assets have been created or acquired through Corporate Social Responsibility amount spent in the Financial Year: No.

The Company has not directly created or acquired any capital asset through CSR spent during the financial year ended March 31, 2024. All

CSR expenditure has been done through the implementing agencies.

9. Specify the reason(s), if the Company has failed to spend two percent of the average net profit as per Section 135(5): Not applicable.

I. The ratio of the remuneration of each Director to the Median Remuneration of the Employees ("MRE") of the Company and the percentage increase in remuneration of each Director and Key Managerial Personnel ("KMP"), for the Financial Year 2023-24 are as under: