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Dear Members,

Your directors are pleased to present the 38^th Annual Report on the business and operation of the Company together with the Audited Financial Statements for the financial year ended on March 31,2025

(Rs in Lakhs)

As we continue to build capacity for enhanced performance and delivery across verticals, this will enable the Company to unlock the potential of the Business with existing business of branded Textile, Branded Apparel & Garmenting. Overall, the Company saw better performance in all its segments.

During the year under review, the Company has achieved a turnover of Rs 17,750.26 Lakhs as compared to Rs 21,760.03 Lakhs in the previous year. The Company has opted alternate plans and tapped available opportunities to continue to run its operations. The profit/ (Loss) after tax for the financial year 2024-25 was 119.93 Lakhs as compared to profit/ (Loss) after tax for the financial year 2023-24 was (140.90) Lakhs during the previous year.

Increasing demand for apparel from the fashion industry coupled with the growth of E-commerce platforms is expected to drive the market growth over the next few years.

Considering the less profit in Company's financial results during the year under review, the Board of Directors (‘the Board') have not proposed any dividend for the year.

The Company has not accepted any deposits from public and as such, no amount on account of principal or interest on deposits from public was outstanding as on the date of the balance sheet within the meaning of Section 73 of the Companies Act, 2013 read with the Companies (Acceptance of Deposits) Rules, 2014. There were no unpaid or unclaimed deposits as on 31^st March, 2025.

In view of less profit, the Board has decided not to transfer any amount to General Reserves for the financial year ended March 31,2025

As per Regulation 34(3) read with Schedule V of Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (‘Listing Regulations), a separate report on Corporate Governance is enclosed as a part of this Annual Report. A Certificate from Auditors of your Company regarding compliance of conditions of Corporate Governance as stipulated in Regulation 17(7) read with Part A of Schedule II of the Listing Regulations is also enclosed along with the Corporate Governance Report.

In terms of the provisions of Regulation 34 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (“the Listing Regulations”), the Management's discussion and analysis is set out as Annexure A forming part of this Annual Report.

Pursuant to the requirements of Section 134(5) of the Companies Act, 2013 (‘the Act'), with respect to Directors' Responsibility Statement it is hereby confirmed that:

i. In the preparation of Annual Accounts for the year ended on 31^st March, 2025 the applicable accounting standards have been followed and there are not material departures from the same.;

ii. the Directors 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 as at March 31, 2025 and of the profit of the Company for that period;

iii. the Directors have taken proper and sufficient care for 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 other irregularities;

iv. the Directors have prepared the annual accounts for the financial year ended March 31, 2025, on a going concern basis;

v. the Directors have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively;

vi. 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 year and as on date of this report, following were the changes in Director/ Key Managerial Personnel:

1. Mrs. Neha Agrawal (DIN: 10720820) was appointed as a Non-Executive Independent Director of the Company in the Board meeting held on July 30, 2024. Her appointment was subsequently regularized at the 37^th Annual General Meeting for a term of five consecutive years, effective from July 30, 2024 to July 29, 2029.

2. Mr. Jagdish Prasad Dave, the Chief Financial Officer of the Company, resigned from the position with effect from August 23, 2024 due to personal reason and other Occupancies.

3. Mr. Rahul Mehta, Non-Executive Independent Director of the Company, retired upon the successful completion of his second five-year term as a Non-Executive Independent Director, with effect from September 25, 2024.

4. Mr. Narendra Joshi, was appointed as the Chief Financial Officer of the Company, with effect from November 09, 2024.

5. Change in designation of Mr. Pradip Kumar Goenka (DIN: 00516381) from Chairman and Managing Director to Chairman and Executive Director of the Company, effective January 15, 2025, along with revision in the remuneration payable to him, as approved by the shareholders through postal ballot.

6. Change in the Designation of Mr. Tilak Pradip Goenka (DIN: 00516464) from Executive Director to Managing Director of the Company for a term of five years, effective January 15, 2025, along with a revision in the remuneration payable to him, as approved by the shareholders through postal ballot.

7. Mr. Abhishek Agarwal (DIN: 11194248) was Appointed as an Additional Non-Executive Independent Director of the Company with effect from July 15, 2025 and the Board recommends his Regularisation at the ensuing Annual General Meeting.

8. Mr. Tilak Goenka (DIN: 00516464), Executive Director, is retiring by rotation and being eligible, offer himself for reappointment. The Board recommends his re-appointment at the ensuing Annual General Meeting.

The necessary disclosures required under the Companies Act, 2013 (“Act”) and the SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015 (“Listing Regulations”) and Secretarial Standards-2 on General Meetings issued by the Institute of Company Secretaries of India, for the above-mentioned appointments/re-appointment are provided as on financial year.

The Company has received declarations from all its Independent

Directors, confirming that they meet the criteria of independence as prescribed under Section 149(6) of the Act and Regulation 16(1)(b) of the Listing Regulations.

Additional information on appointment/re-appointment of Directors as required under Regulation 36(3) of the Listing Regulations is given in the Notice convening the ensuing AGM.

In terms of Section 152 of the Act and Reg 17 (1C) of SEBI (LODR), Regulations 2015, Mr. Pradip Goenka retire by rotation at the ensuing AGM and being eligible, offers himself for re-appointment.

Additional information on appointment/re-appointment of Directors as required under Regulation 26(4) and 36 of the Listing Regulations is appended as on annexure to the notice convening the ensuing AGM.

The Company's policy on Directors' appointment and remuneration and other matters provided in Section 178(3) of the Act, has been disclosed in the Corporate Governance Report, which forms part of this Annual Report. The appointment of Director's are made based on merit, apart from compliance of legal and contractual requirements, that complements and expands the skills, experience and expertise of the Board as a whole taking into account knowledge, professional experience and qualifications, gender, age, cultural and educational background, and any other factors that the NRC might consider relevant for the Board to function effectively. While appointing any person as an Independent Director, utmost care is to be taken as to the independence of such person.

The Board met 7 (Seven) times during the year under review. The details of Board Meetings and the attendance of the Directors are provided in the Corporate Governance Report which forms part of this Annual Report.

Pursuant to the provisions of the Act and Regulation 17(10) and Regulation 25(4) of the Listing Regulations, the Board has carried out an annual evaluation of performance of its own, the Committees thereof and the Directors individually. At the meeting of the Board all the relevant factors that are material for evaluating the performance of the Committees and of the Board were discussed in detail.

A separate exercise was carried out to evaluate the performance of individual Directors including the Chairman of the Board, who were evaluated on parameters such as level of engagement and contribution, independence of judgment, safeguarding the interest of the Company and its minority shareholders, etc. The performance evaluation of the Independent Directors was carried out by the entire Board except the Independent Director being evaluated.

The performance evaluation of the Chairman and Non-Independent Directors was carried out by the Independent Directors.

The Company does not have any subsidiary, joint venture or associate Company as on March 31,2025.

During the year under review, the Audit Committee of the Company comprised of 3 (Three) Independent Directors viz. Mr. Amit Somani as Chairman, Mrs Neha Agrawal and Ms. Bindu Shah There are no instances where the Board did not accept the recommendations of the Audit Committee. The terms of reference, powers and roles of the Committee are disclosed in the Corporate Governance Report, which forms part of this Annual Report. The Company Secretary act as a Secretary of Audit Committee.

Details of other Committees of the Board along with their terms of reference, composition and meeting(s) held during the year are provided in the Corporate Governance Report which forms part of this Annual Report.

M/s. DMKH & Co., Chartered Accountants, Mumbai, were appointed as the Statutory Auditors of the Company at the 33^rd (Thirty-Third) Annual General Meeting held on September 29, 2020, for a term of five (5) consecutive years, to hold office till the conclusion of the 38^th (Thirty-Eighth) Annual General Meeting to be held financial year 2025-26.

The term of M/s. DMKH & Co., Chartered Accountants, as Statutory Auditors of the Company will expire at the conclusion of the ensuing 38th Annual General Meeting. The Board of Directors, based on the recommendation of the Audit Committee, recommends their reappointment for a second term of 5 (five) consecutive years from the conclusion of the 38^th AGM until the conclusion of the 43^rd AGM, subject to approval of the members at the ensuing AGM.

The Report given by the Auditors on the financial statements of the Company forms part of this Report. The Auditors' Report does not contain any qualification, reservation, adverse remark or disclaimer.

The Report given by the Auditors on the financial statements of the Company is part of this Report. There has been no qualification, reservation, adverse remark or disclaimer given by the Auditors in their Report.

Pursuant to Section 204 of the Companies Act, 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Board of Directors has appointed M/s. HD and Associates, Practicing Company Secretaries, to conduct the Secretarial Audit of the Company for the financial year 202425. The Secretarial Audit Report for the year ended March 31, 2025, is annexed to this Report as Annexure B.

Further, based on the recommendation of the Audit Committee, the Board has approved the appointment of M/s. HD and Associates, Practicing Company Secretaries, for a term of five (5) consecutive years commencing from the financial year 2025-26 to 2029-30, subject to the approval of the members at the ensuing Annual General Meeting (“AGM”), on such remuneration as may be determined by the Board of Directors. The said proposal is included in the Notice convening the AGM.

As per the requirement of Central Government pursuant to Section 148 of the Act read with the Companies (Cost Records and Audit) Rules, 2014 as amended from time to time, your Company has been carrying out audit of cost records relating to Textile products every year.

The Board, on the recommendation of Audit Committee, has appointed Ms. Ketki D. Visariya, Cost Accountant, as Cost Auditor to audit the accounts of the Company for the financial year 202526. As required under the Act, a resolution seeking ratification of members for the payment of remuneration to Cost Auditor forms part of the Notice convening the AGM.

The Cost Audit report for the financial year 2024-25 was filed with the Ministry of Corporate Affairs.

During the year under review, the Auditors have not reported any instances of frauds committed in the Company by its Officers or Employees to the Audit Committee under Section 143(12) of the Companies Act, 2013.

Details of programme for familiarisation of Independent Directors with the Company is available on the website of the Company at the following link https://www.kflindia.com/policies-and-codes.

Policy on dealing with related party transactions is available on the website of the Company at the following link https://www.kflindia. com/policies-and-codes. Policy for determining Materiality of Events of the Company is available on the website of the Company at the following link https://www.kflindia.com/policies-and-codes.

The code of conduct for Directors and senior management of the Company is available on website of the Company at the following link https://www.kflindia.com/policies-and-codes.

The Company has formulated and disseminated a Whistle Blower Policy to provide vigil mechanism for employees and Directors of the Company to report genuine concerns that could have serious impact on the operations and performance of the business of the Company. This Policy is in compliance with the provisions of Section 177(9) of the Act and Regulation 4(2) (d)(iv) of the Listing Regulations. Policy on Whistle Blower is available on website of the Company at the following link https://www.kflindia.com/policies-and-codes.

The company has constituted a Corporate Social Responsibility committee (CSR committee) in accordance with Section 135 of the Act. The Board of directors of the company has based on recommendation made by CSR committee, formulated and approved CSR Policy of the company and which has also been placed on website at a weblink:

https://www.kflindia.com/wp-content/uploads/201 9/01/ CORPORATE-SOCIAL-RESPONSIBILITY.pdf

The disclosure including inter-alia the composition of CSR committee and the brief outline of CSR Policy as per Rule 8 of Companies (Corporate Social Responsibility policy) Rule 2014 is made in prescribed form which is annexed to this report as Annexure C.

During the year under review, the Company has complied with Secretarial Standards on meetings of the Board (“SS-1”) and on General Meetings (“SS-2”) issued by the Institute of Company Secretaries of India in terms of Section 118(10) of the Act.

In terms of provisions of Section 134 and 92(3) of the Act, an Annual Return in prescribed format is available on the Company's website at the following link https:// www.kflindia.com/annual-return/.

During the year under review, all transactions entered by the Company with related parties as defined under the Act and Regulation 23 of the Listing Regulations, were in the ordinary course of business and on an arm's length basis. There were no materially significant transactions with the related parties during the financial year which were in conflict with the interest of the Company.

Disclosure of transactions with related parties as required under the Indian Accounting Standard (IND AS-24) has been made in the notes forming part of the financial statements. Accordingly, the disclosure of related party transactions as required under Section 134(3)(h) of the Act in Form AOC-2 is not applicable to your Company.

Your directors further state that during the year under review, the shareholders of the Company have approved the transfer of Company's business undertaking comprising the fabric distribution division and Made-To-Measure business as a going concern on Slump Sale basis to Tritoma Fashion Lab Private Limited by way of Business Transfer Agreement (“BTA”) along with all of the rights, title and interest therein for an aggregate cash consideration of Rs.5.91 crores via Postal Ballot on May 28, 2024. Accordingly, the Company has executed the Business Transfer Agreement (“BTA”) with Tritoma Fashion Lab Private Limited on June 25, 2024 except this there were no material changes have been taken place, that could have an impact on the financial position of the company.

The company has established a vigil mechanism to provide a framework to promote responsible and secure whistle blowing and to provide a channel to the employee(s) and director to report to the management, concern about unethical behaviour, actual or suspected fraud or violation of the code of conduct or policy/ ies of the company as adopted /framed from time to time. The mechanism provide for adequate safeguard against victimization of employees and directors to avail of the mechanism and also provide for direct access to the chairman of the audit committee in exceptional cases.

The Company has not granted any loans, not provided any Guarantee and not made any Investments which are covered under the provision of Section 186 of the Act.

There were no significant and material orders passed by the Regulators or Courts or Tribunals during the year.

Information pursuant to Section 134(3)(m) of the Act read with Rule 8(3) of Companies (Accounts) Rules, 2014 is given as Annexure D. The Company being focusing in Indian market, it has not taken any export initiative.

Disclosure as required under Section 197(12) of the Act read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 framed there under, the names and other particulars of employees are provided under Annexure E is annexed to this Report.

A statement containing the particulars as required under Rule 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are provided in this Annual Report.

In accordance with the provisions of the second proviso to Section 136(1) of the Act, the Annual Report excluding the aforesaid information is being sent to the Members of the Company. The said information is available on the Company's website www.kflindia.com.

The Company has in place a mechanism to identify, assess, monitor and mitigate various risks to key business objectives. Major risks identified by the businesses and functions are systematically addressed through mitigating actions on a continuing basis. The Company's internal control systems are commensurate with the nature of its business and the size and complexity of its operations. These are routinely tested by Statutory as well as Internal Auditors. Significant audit observations and follow up actions thereon are reported to the Audit Committee.

The Board has adopted policies and procedures for ensuring the orderly and efficient conduct of the business, including adherence to the Company's policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial disclosures.

The Audit Committee actively reviews the adequacy and effectiveness of the internal control systems and suggests improvements to strengthen the same. The Company has a robust Management Information System, which is an integral part of the control mechanism.

Your Company has always believed in providing a safe and harassment free workplace for every individual working in Company's premises through various interventions and practices. The Company always endeavours to create and provide an environment that is free from discrimination and harassment including sexual harassment.

The Company has in place a robust policy on prevention of sexual harassment at workplace. The policy aim at prevention of harassment of employees and lay down the guideline for identification reporting and prevention of sexual harassment. The company has complied with the provision relating to Internal Complaint Committee (ICC). Further ICC is responsible for redressal of complaint related to sexual harassment and follow the guideline as provided in the policy.

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

Pursuant to Sections 124 and 125 of the Act read with the Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) Rules, 2016 (“IEPF Rules”), dividend, if not claimed for a consecutive period of 7 (Seven) years from the date of transfer to Unpaid Dividend Account of the Company, are liable to be transferred to the IEPF.

The following table provides the due dates for the transfer of outstanding unpaid/unclaimed dividend by the Company as on March 31,2025:

During the year under review, the Company had transferred 8,001 (Eight Thousand One) equity shares and Rs. 88,966/- (Rupees Eighty-Eight Thousand Eight Hundred and Sixty-Six Only) as unpaid/unclaimed dividend and shares lying against them to Investor Education and Protection Fund authority for the financial year ended 2016-17 pursuant to Section 124(5) of the Act read with applicable rules made thereunder.

During the year under review, and in accordance with the requirement of Regulation 34(3) and Part F of Schedule V to the Listing Regulations, there were no shares transferred to suspense account.

The name of Registrar and Transfer Agent of the Company is changed to MUFG Intime India Private Limited (RTA) from Link Intime India Private Limited, with effect from December 31,2024. This is pursuant to acquisition of Link Group by Mitsubishi UFJ Trust & Banking Corporation, by way of scheme of arrangement.

Your Company is committed to upholding the rights and welfare of its women employees. During the year under review, the Company continued to comply with the provisions of the Maternity Benefit Act, 1961, as amended from time to time.

The Company provides maternity benefits to eligible female employees, including paid maternity leave, nursing breaks, and other necessary facilities, in accordance with the law. The Company also supports a conducive and inclusive workplace environment to ensure the health, safety, and dignity of women employees during and after maternity.

There were no instances of non-compliance by the Company on any matters related to the capital markets or penalties, strictures imposed on the Company by the Stock Exchange or SEBI or any statutory authority on any matter related to capital markets, during the last three years.

The Board wishes to place on record their sincere appreciation to all the bankers, customers, employees at all levels and stakeholders for the continued support and patronage during the year under review.