Market & News

To,

The Members,

Zodiac Clothing Company Limited.

The Board of Directors are pleased to present the Company's 40th Annual Report and the Company's Audited Financial Statements (Standalone and Consolidated) for the Financial Year ended 31st March 2024.

1. BUSINESS:

During the financial year ended 31st March, 2024, the operational revenue of the Company on a Standalone basis was Rs. 14,412.19 Lakhs vs. Rs. 16,900.01 Lakhs in the previous year. Profit/ (Loss) Before Tax and before exceptional items was Rs.(3510.92) Lakhs vs. Rs.(2385.26) Lakhs in the previous year, while the Net Profit/(Loss) after Tax for the Financial Year ended 31st March 2024 was Rs.(3,486.58) Lakhs vs. Rs. 1,579.28 Lakhs in the previous year. The Total Comprehensive Profit/ (Loss) for the year was Rs.(3261.74) Lakhs vs. Rs. 1998.79 Lakhs in the previous year.

On a Consolidated basis the Operational revenue of the Company for the year was Rs. 14,580.49 Lakhs vs. 17,480.87 Lakhs in the previous year. The Consolidated Profit/(Loss) before Tax and before exceptional items was Rs.(3627.79) Lakhs vs. Rs.(2343.49) Lakhs in the previous year, the Net Profit/(Loss) after tax being Rs.(3637.34) Lakhs vs. Rs. 1598.09 Lakhs in the previous year. The Consolidated Total Comprehensive Income/ (Loss) for the year was Rs.(3,308.95) Lakhs vs. Rs. 2084.93 Lakhs in the previous year.

During the year under review, the Indian economy continued its trajectory of robust growth, further solidifying its position as the world's fastest- growing major economy. India's GDP expanded by an impressive 8.2% in FY 2023-24, up from 7% in the preceding year. Inflation moderated to 5.3%, reflecting the Reserve Bank of India's (RBI's) timely interventions. However, the year was not without challenges, including subdued rural consumption due to erratic weather patterns, affecting agricultural output and a decline in household savings, which exerted pressure on liquidity across the economy and adversely affected discretionary spending.

Looking ahead, India is expected to continue growing strongly, with the RBI projecting a GDP growth rate of 7.2% for the next financial year. The nation is progressing towards its goal of becoming the world's third-largest economy by 2027.

The year was characterized by resilience within the global economy. Despite the considerable challenges posed by geopolitical tensions and elevated borrowing costs, global economic activity demonstrated modest growth, countering predictions of recession. Looking forward, the global economic growth is expected to sustain despite ongoing geopolitical tensions, high interest rates, and potential inflationary pressures.

Clothing remains one of the most dynamic and competitive sectors globally, characterized by rapid shifts in fashion trends, technological advancement and evolving consumer preferences. The global clothing market reached an estimated size of USD 1.7 trillion in 2023, reflecting a recovery from the pandemic's impact, but remains tempered by the challenges described above. The market is projected to grow at a 5% CAGR, crossing USD 2.3 trillion by 2030.

India continues to be one of the largest producers and exporters of textiles and clothing globally. The industry contributes approximately 2% to the country's GDP and accounts for about 7% of industrial output in value terms. Post-pandemic, there has been a discernible shift in consumer behaviour towards more sustainable and eco-friendly products. This trend is expected to continue, with consumers increasingly favouring brands that prioritize environmental and social responsibility. For Zodiac, having already advanced in sustainability with initiatives like GOTS-certified organic cotton and water-positive manufacturing, this shift offers an opportunity to enhance our offerings and expand our market presence. The net for the export business is being spread wider, with the addition of new markets and the Bangladesh initiative.

India's e-commerce sector is set for further impressive growth: Deloitte India has projected the online retail market size to reach USD 325 billion by 2030, up from USD 70 billion in 2022. This rapid growth is supported by significant investments and the increasing penetration of e-commerce in smaller cities. One caveat is the questionable impact of aggressive discounting by global majors to grab market share.

The company remains steadfast in executing its strategic roadmap, building on its strong foundations to enable future growth. During the year, the company launched two new product lines in its z3 range- fourway stretch 5 pocket trousers and Italian-inspired knitted shirts - both of which have been well received by the market. The company plans further new product introductions in the coming year.

Recognizing the shift towards online consumption, significant investments have been made to enhance our digital platforms, optimize the online portal, and utilize advanced analytics to predict consumer behaviour. As a result, the company's online business continues to grow remarkably and remains a key focus area for driving growth in the branded business. Social media campaigns and targeted online advertising are pivotal in our efforts to reach a broader audience and more effectively engage our customers. These initiatives are supplemented by efforts to enhance the retail experience, both through e-commerce and improved physical store presentations.

The company is set to commence operations at its new production facility in Bangladesh by the year's end. The company has also invested in a wholly- owned step-down subsidiary, Zela Technologies Inc., registered in Delaware, US. The goal of this initiative is to develop machine learning and other e-commerce tools to optimize Zodiac's digital business.

2. RESULTS OF OPERATIONS

Financial Results

(Rs. in Lakhs)

	Standalone		Consolidated
	2023-24	2022-23	2023-24	2022-23
Revenue from operations	14,412.19	16,900.01	14,580.49	17,480.87
Other Income	755.11	748.11	888.24	860.01
Total Income	15,167.3	17,648.12	15,468.73	18,340.88
Profit/(Loss) Before Exceptional Items and Tax	(3,510.92)	(2,385.26)	(3,627.79)	(2,343.49)
Exceptional Item	-	3,901.09	-	3,901.09
Profit/(Loss) Before Tax	(3,510.92)	1,515.83	(3,627.79)	1,557.60
Provision for taxation:
Current tax	-	-	4.26	-
Deferred tax Charge/(Credit)	(24.73)	(64.47)	(1.77)	(41.51)
Tax in respect of earlier years	0.39	1.02	7.06	1.02
Profit/(loss) after taxation	(3,486.58)	1,579.28	(3,637.34)	1,598.09
Other Comprehensive Income	224.84	419.51	328.39	486.84
Total Comprehensive Income/ (loss) for the year	(3,261.74)	1,998.79	(3,308.95)	2,084.93

3. SUBSIDIARY COMPANIES:

As on 31st March, 2024, the Company had one (1) subsidiary and Four (4) step-down subsidiaries. There are no Associate Companies within the meaning of Section 2(6) of the Companies Act, 2013 ("Act"). there has been no material change in the nature of the business of the subsidiaries.

Pursuant to the provisions of Section 129(3) of the Act, a statement containing salient features of the financial statements of the Company's subsidiaries/ step-down subsidiaries in Form AOC-1 is attached as Annexure 3 to this report.

Pursuant to the provisions of Section 136 of the Act, the Standalone and Consolidated financial statements of the Company along with relevant documents and the financial statements of the subsidiaries/step-down subsidiaries, are available on the website of the Company at the link https://www. zodiaconline.com/others.

4. CONSOLIDATED FINANCIAL STATEMENTS:

In accordance with the requirements of Accounting Standards AS-21, a Report on the performance and financial position of all the companies subsidiaries/step-down subsidiaries are included in the Consolidated Financial Statement and their contribution to the overall performance of the Company, is provided in Form AOC - 1 and forms part of this Annual Report.

5. CREDIT RATING:

The Company shall initiate the process of credit rating based on the audited consolidated accounts for the FY 2023-24 and the same is expected to be completed by September 2024.

6. CAPEX:

During the year the Company has incurred a Capital expenditure of Rs. 1,098.59 lakhs, primarily in state of the art production equipment, new stores and information systems to sharpen our competitiveness.

7. LIQUIDITY:

The Debt Equity ratio as on 31st March, 2024 was 0.39 on a Standalone basis and 0.35 on a Consolidated basis.

The Cash and Bank balances/Cash equivalents along with liquid investments (free reserves on consolidated basis) were Rs. 2821.03 in March 2024, as against Rs. 4221.90 last year.

8. SHARE CApITAL:

During the year under review, there has been no change in the paid- up share capital of the Company of 2,59,93,717 Equity Shares of Rs. 10/- each.

9. DIVIDEND:

The Board of Directors of your Company have not recommended any dividend for the Financial year 2023-24 (previous year - NIL)

10. CORPORATE GOVERNANCE:

The Company has complied with all the mandatory requirements regarding Corporate Governance as required under Regulations 17 to 27 and Schedule V of the SEBI LODR with the Stock Exchange(s). the report on Corporate Governance, Management Discussion and Analysis, as well as the Auditors Certificate on the compliance of Corporate Governance forms a part of the Annual Report. As required under Regulations 17(8) of Listing Regulations, the Managing Director and CFO have certified to the Board about compliance by the Company with the requirement of the said sub regulation for the financial year ended 31st March, 2024.

11. CONTRACTS AND ARRANGEMENT WITH RELATED PARTIES:

In line with the requirements of the Companies Act, 2013 and the amended SEBI LODR, the Company has a Policy on Related Party transactions which is also available on Company's website at the link https://www.zodiaconline.com/codes-and-policies. The Policy ensures that proper reporting, approval and disclosure processes are in place for all transactions between the Company and Related Parties.

The Policy interalia deals with the review and approval of Material Related Party Transactions (MRPTs) keeping in view the potential or actual conflict of interest that may arise because of entering into these transactions. All Related Party Transactions are placed before the Audit Committee for review and prior approval (including omnibus approvals) and wherever applicable board/members approvals are obtained. Note no. 44 of the Standalone financial statements contained disclosures on related party transactions.

Disclosure on MRPT is given in Form AOC 2 (Annexure 4) as per Section 134(3)(h) read with Section 188(2) of the Companies Act, 2013. In terms of the amended SEBI LODR, the prior approval of the members is required to be obtained every year in respect of each MRPTs.

12. QUALITY:

The focus on productivity gains and consistent quality continues to be the cornerstone of the Company's philosophy. Quality, continuous innovation and pursuit of high value addition and cost control continue to drive the Company.

Zodiac is implementing cutting edge technology through a paperless floor management software which tracks quality on a live basis and helps the manufacturing lines take pre-emptive steps and thereby control down time and rejections. This is a SAAS based model uploaded in the cloud with automatic escalation up the matrix of the management in a manner that ensures every stakeholder participates in the process of making a high quality product.

13. BRAND BUILDING:

The Company continues to invest in building the strength of it's 3 brands (Zodiac, Z3 and ZOD!), aspiring to get traction in sales in the present, as well as in the future.

Upgradation of quality to win customer loyalty is a continuously ongoing exercise, the objective being to get the customers delight at the price value relationship, with truly international quality and design at prices which are not exorbitant, even without any discounts.

14. CONSERVATION OF ENERGY, RESEARCH AND DEVELOpMENT, Technology ABSORpTION AND FOREIGN EXCHANGE EARNiNG And OuTGO:

(A) Conservation of Energy

i) The steps taken or impact on conservation of energy:

The Company having already achieved excellent bench marks in conservation of energy, has invested in steam optimization projects for its process requirements, which has resulted in a drop in the consumption and the efficiency going up.

Conservation of energy continues to receive increased emphasis at all units of the Company. Energy audits and Inter-unit studies are carried out on a regular basis for analyzing and taking steps for reduction of energy consumption. We believe that conservation is a continuous effort and every day there is an opportunity to be better than the previous day this is what helps us to live up to the stringent standard we set for ourselves.

All machinery and equipment are being continuously serviced, updated and overhauled to maintain them in good and energy efficient condition. This resulted in consumption of lesser energy.

The company has achieved significant advancements in energy conservation by transitioning from the utilization of furnace oil and diesel to employing gas-fired steam & power generation. This makes the entire process of steam generation more efficient, resulting in reduced fuel wastage and a diminished need for transportation. In contrast to previous practices involving the transportation of furnace oil via tankers from distant states, the adoption of gas delivery through on-site pipelines from the central grid has proven to be remarkably cost-effective and environmentally beneficial, effectively lowering the carbon footprint. Moreover, this shift has eradicated fuel losses attributed to transportation and spillage, ultimately amplifying the yield per unit of expenditure.

Our Higg score speaks for itself 100/100 on the following evaluation parameters water/waste water / 90 + on energy.

(B) Pollution Control

The Company's zero liquid discharge plant for water treatment has resulted in the Company's dependency on outside water to almost nil.

With the increase in the catchment area for rain water harvesting, the surplus water generated is used to recharge the existing ground water sources and for maintaining the beautiful garden and flowering plants around the factory premises thereby creating a very pleasant atmosphere. The Company's continuous efforts have been recognized by the Pollution Control Board and the Company is being referred as a model factory by the Pollution Control Board.

It is the Company's continuous thrust in this area that has resulted in results which far exceed the industry norm. As a result of aggressively mapping the input parameters /processes & live balancing of the effluent treatment, the Company has been able to achieve a high level of efficiency.

With its energy-efficient design, the ZODIAC corporate office continues to use around 60 percent less energy than a typical office of the same size.

(C) Technology, Absorption, Adaptations and Innovation:

(i) The efforts made towards technology absorption:

Continuing with its thrust on being energy efficient -the company has been investing in the process of changing over the boilers from diesel /furnace oil to gas fired -resulting in savings of fuel and making the process more cost effective .We are also optimizing the dye process house by bringing in more fully computerised automatic equipment to do the processing which will result in a further savings in chemicals and water -the next step is investment technology to monitor steam consumption and efficiency thereby making that next jump in our conservation efforts.

(ii) The benefits derived like product improvement, cost reduction, product development or import substitution;

The Company continues to use the latest technologies for improving the productivity and quality of its services and products. the Company's operations do not require significant import of technology. In addition to product development and raw material development which continue to be strengthened, Development activities on fashion designing are carried out on an on-going basis. Adopting technologies with state-of-art systems and machineries like PLM software, automated cutting machine, automated fabric inspection machines, etc., the quality of the products and efficiency of the systems have substantially improved. Applying these technologies has helped keep costs of production under control.

(iii) In case of imported technology (imported during the last three years reckoned from the beginning of the financial year)- Not Applicable

The Company continues to use the latest technologies for improving the productivity and quality of its services and products. The Company's operations do not require significant import of technology.

(D) Foreign Exchange Earnings and Outgo:

(Rs. in Lakhs)

Foreign exchange used and earned	2023-24	2022-23
a. Foreign Exchange Earnings	7,992	9,934
b. Foreign Exchange Outgor	2,857	2,581

15. corporate social responsibility:

Corporate Social Responsibility (CSR) is traditionally driven by a moral obligation and philanthropic spirit. The Company has a heritage of being engaged in such activities. The Company is committed to sustainability and all business decisions take in to account its social and environmental impact.

As per the provisions of Section 135 of the Companies Act 2013, the Company has a CSR Committee, details of which are given in the Corporate Governance Report forming part of this report. The details of the Company's CSR policy has been posted on the website of the Company at the link https://www.zodiaconline.com/codes-and- policies.

The Report on CSR activities as required under Companies (Corporate Social Responsibility) Rules, 2014 including a brief outline of the Company's CSR Policy, total amount to be spent under CSR for the Financial Year, amount unspent and the reasons thereof are set out at Annexure 1 forming part of the report.

16. DIRECTORS & KEY MANAGERIAL

PERSONNEL:

During the year under review, there were no changes in Directors/ Key Managerial Personnel of the Company.

However, based on the recommendation of NRC, the Board at its meeting held on 29th March, 2024, approved the below matters, subject to approval of the shareholders by way of postal ballot through remote e-voting:

1. Appointment of Mr. Mohamed Awais Jehangir Noorani (DIN: 00951424) as a Whole Time Director, to be re-designated as an Executive Director- Exports for a term of 3 years with effect from 1st April, 2024 till 31st March, 2027.

2. Appointment of Mr. Adnan Salman Noorani (DIN: 08689050) as a Whole Time Director to be designated as an Executive Director-Digital and the remuneration payable to him for a term of 3 years with effect from 1st April, 2024 till 31st March, 2027.

Notice of postal ballot dated 17th May, 2024, seeking approval, of the aforesaid matters, was sent to the Members, whose e-mail addresses were registered with the Company/Depositories.

In accordance with the provisions of Section 152 of the Companies Act 2013 and the Articles of Association of the Company, Mr. A. Y. Noorani, Chairman (NonExecutive Director) and Mr. S. Y. Noorani, Vice Chairman and Managing Director retire by rotation at the ensuing Annual General Meeting and being eligible, have offered themselves for re-appointment.

List of Key Managerial Personnel

Sr. No	Name of the person	Designation
1.	Mr. S. Y. Noorani	Vice Chairman & Managing Director
2.	Mr. B. Mahabala	V. P. Commercial & Chief Financial Officer
3.	Mr. Kumar Iyer	M. Legal & Company Secretary

EVALUATION OF PERFORMANCE OF THE BOARD, ITS COMMITTEES AND INDIVIDUAL DIRECTORS

During the year, annual performance evaluation of the Board and Committees of the Board, individual Directors including the Chairman of the Company, was carried out as per the criteria and process approved by Nomination and Remuneration Committee, which is in line with the SEBI Guidance Note on Board Evaluation.

The Chairman and other members of the Board discussed upon the performance evaluation outcome and concluded that they were satisfied with the overall performance of the Board and Committees of the Board and Directors individually. The Board also assessed the fulfillment of the independence criteria as specified in Listing Regulations, by the Independent Directors of the Company and their independence from the management.

The performance evaluation of the Non-Independent Directors including the Chairman of the Company and performance of the Board as a whole was discussed at the separate meeting of the Independent Directors.

DECLARATION BY INDEPENDENT DIRECTORS

The Company has received declarations from all the Independent Directors confirming that they meet the criteria of independence as prescribed under Section 149(6) of the Act and under Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 ("listing Regulations").

In the opinion of the Board, the Independent Directors fulfil the conditions specified under the Act and Listing Regulations and are independent of the management. The Board skill/ expertise/ competencies matrix of all the Directors, including the Independent Directors is provided in the Corporate Governance Report forming part of this Annual Report.

FAMILIARISATION PROGRAMME FOR THE INDEPENDENT DIRECTORS

The details of programmes for familiarization of Independent Directors with the Company, their roles, rights, responsibilities in the Company, nature of the industry in which the Company operates, business model of the Company and related matters are posted on the website of the Company at the link https://www.zodiaconline.com/codes-and-policies.

17. NUMBER OF MEETINGS OF THE BOARD:

The Board of Directors of the Company met 5 (Five) times during the year under review. The dates of the Board meeting and the attendance of the Directors at the said meetings are provided in detail in the Corporate Governance Report, which forms a part of this Report.

18. DIRECTORS' RESPONSIBILITY STATEMENT:

Your Directors state that:

(i) In the preparation of the annual accounts for the year ended 31st March, 2024, the applicable accounting standards read with requirements set out under Schedule III to the Act, have been followed and there are no 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 31st March, 2024 and of the profit and loss of the Company for the year ended on that date;

(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 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 are operating effectively and

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

19. MATERIAL CHANGES AFFECTING THE FINANCIAL POSITION OF THE COMPANY:

There are no material changes or commitments affecting; the financial position of the C ompany which have occurred between the end of the financial year and the date of this; Report.

20. POLACY ON DIRECTORS' APPOINTMENT AND REMUNERATION AND OTHER DETAILS:

The Company's policy on Board Diversity provides for an appropriate mix of diversity, skills, experience and expertise required on the Board and assesses the extent to which the required skills are represented on the Board including the criteria for determining qualifications, positive attributes and independence of a Director.

The Company has a Remuneration Policy to evaluate the performance of the members of the Board, to ensure remuneration to Directors, KMP and Senior Management involving a balance between fixed and incentive pay reflecting short and long-term performance objectives appropriate to the working of the Company and its goals and to retain, motivate and promote talent and to ensure long term sustainability of talented managerial persons and create competitive advantage. The policy ensures that the level and composition of remuneration is reasonable and sufficient to attract, retain and motivate Directors, KMP and Senior Management of the quality required to run the Company successfully and the relationship of remuneration to performance is clear and meets appropriate performance benchmarks.

The Independent Directors have complied with the requirements of the Companies Act 2013 and Regulation 16 (b) of SEBI LODR on their independence. The Company has obtained certification of independence from the Independent Directors in accordance with Section 149(6) of the Companies Act, 2013.

The remuneration details of the Executive and NonExecutive Directors is disclosed in the Corporate Governance report which forms part of the Directors Report. The above policy has been posted on the website of the Company at the link https://www. zodiaconline.com/codes-and-policies.

21. PARTICULARS OF LOANS, GUARANTEES AND INVESTMENTS:

The particulars of loans and investments have been disclosed in the financial statements. The Company has not given any guarantees.

22. HUMAN RESOURCE MANAGEMENT:

The Company recognizes the need for continuous growth and development of its employees to meet the challenges posed by the industry, besides fulfilling their own career path objectives. Consequently, the role of Human Resources continues to remain vital and strategic to the Company. Employee recruitment, training and development are a key focus area, with policies, processes and extensive use of technology to attract, retain and build on skills of high caliber employees. Industrial relations have continued to be harmonious throughout the year.

23. COMPLIANCE WITH THE CODE OF CONDUCT:

The Code of Conduct adopted by the Company for its Board of Directors and Senior Management Personnel has been uploaded on the Company's website at the link https://www.zodiaconline.com/ codes-and-policies.

The Declaration of the Compliance with the Code of Conduct has been received from all Board members and Senior Managerial Personnel. A certificate to this effect from Mr. S. Y. Noorani, Vice Chairman & Managing Director forms part of this report.

24. PUBLIC DEPOSITS:

During the Financial Year 2023-24, the Company did not invite or accept any deposits from the public under the provisions of Section 73 of the Companies Act, 2013.

25. COMPANY'S WEBSITE:

The Financial Statements, Annual Report, including Corporate Governance Report, Shareholding Pattern, etc., are displayed inter-se with the other information on the Company's website, viz. www. zodiaconline.com.

26. DONATIONS:

During the financial year, the Company has contributed Rs. 51,00,000 (Rupees Fifty-One Lakhs only) to various deserving causes.

27. INSURANCE:

All the properties/assets, including buildings, furniture/ fixtures, etc. and insurable interests of the Company are adequately insured. The international debtors who avail of credit are also insured, despite their flawless record, as a measure of abundant caution.

28. AUDITORS:

Pursuant to the provisions of Section 139 of the Companies Act and the Rules framed thereunder, M/s MSKA & Associates, Chartered Accountants (ICAI Firm Registration No. 105047W) have been appointed as statutory Auditors of the Company for a term of five (5) years to hold office from the conclusion of the 38th AGM till the conclusion of the 43rd AGM.

The Auditor's Report to the members for the financial year ended 31st March, 2024 year does not contain any qualification, reservation, adverse remark or disclaimer.

29. MAINTENANCE OF COST RECORDS BY THE COMPANY AS SPECIFIED BY THE CENTRAL GOVERNMENT:

Pursuant to the rules made by the Central Government of India, the Company is required to maintain cost records as specified under Section 148(1) of the Act in respect of its products and accordingly, such accounts and records are made and maintained by the Company.

However, in terms of the Companies (Cost Records and Audit) Amendment Rules, 2014, the Company is not covered under the purview of Cost Audit from the F. Y 2014-15 onwards.

30. SECRETARIAL AUDIT:

As per Section 204 of the Companies Act, 2013 and Rules made thereunder, the Company has appointed M/s. Robert Pavrey & Associates, Company Secretaries (CP No- 2928) to undertake the Secretarial Audit of the Company. The Secretarial Audit report is included as Annexure 2 and forms an integral part of this report.

The Secretarial Audit Report to the members for the year under review does not contain any qualification, reservation, adverse remark or disclaimer.

31. AUDIT COMMITTEE:

The details pertaining to the composition of Audit Committee are included in the Corporate Governance Report, which forms a part of this report.

32. DETAILS OF SHAREHOLDERS' FUNDS EMPLOYED FOR THE YEAR 2022-23 CONSOLIDATED:

33. RISK MANAGEMENT:

In line with the regulatory requirements, the Company has a Risk Management Policy to identify and assess the key risk areas, monitor and report the compliance and effectiveness of the same. The Risk Management Committee is responsible for reviewing the risk management plan and ensuring its effectiveness. The Audit Committee has additional oversight in the area of financial risks and controls. Major risks identified by the businesses and functions are systematically addressed through mitigating actions on a continuing basis.

34. INTERNAL CONTROL SYSTEMS AND THEIR ADEQuACY:

The Company has an effective internal control and risk-mitigation system, which are constantly assessed and strengthened with new/ revised standard operating procedures. Tlie Company's internal control system is commensurate with ids size, scale and complexities of its operations. The internal and operational audit is entrusted to M/r. M J Mange & Associates. The main thrust of internal audit is to test and review controls, appraisal of risks and business processes, besides bench marking controls with best practices in the industry.

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.

The Audit Committee members, Statutory Auditors and the Business Heads are periodically apprised of the Internal Audit findings and corrective action taken. Audit plays a key role in providing assurance to the Board of Directors. Significant audit observations and corrective actions taken by the management are presented to the Audit Committee. To maintain its objectivity and independence, the Internal Audit function reports to the Chairman of the Audit Committee.

35. POLICY ON PREVENTION OF SEXUAL HARASSMENT :

The Company has in place an Anti-Sexual harassment policy in line with the requirements of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 & the Rules made thereunder. Internal Complaints Committee (ICC) has been set up to redress Complaints received regarding sexual harassment. All employees, permanent, contractual, temporary and trainees are covered under the policy. During the year under review, there were no complaints received under the said Act.

36. ANNUAL RETURN:

Pursuant to Section 92(3) read with section 134(3) (a) of the Companies Act, 2013, copies of the Annual Returns of the Company prepared in accordance with Section 92(1) of the Act read with Rule 11 of the Companies (Manasement and Administration) Rules, 2014 are placed on the website of the Company and if occessible at the web-link: https:// www.zodiaconline.com/annual-reports.

37. SECRETARIAL STANDARDS:

The Company has complied with the Secretarial Standards issued by the Institute of Company Secretaries ofIndia on Board and General Meeting.

38. VIGIL MECHANISM/ WHISTLE BLOWER POLICY:

The details pertaining to the establishment of Vigil Mechanism/ Whistla Blower Policy is included in the Corporate Governance Report, which forms part of this report.

39. INVESTOR EDUC ATION AND PROTECTION FUND:

As per the provisions of Sections 124 and 125 of the Companies Act, 2013, read with the IEPF Authority (Accounting, Audit, Transfer and Refund) Rules, 2016 (‘the Rules') all unpaid or unclaimed dividends and the respective shares thereof for the Financial Year upto 2015-16 have been transferred to the IEPF established by the Central Government within the stipulated time.

40. FRAUD REPORTING:

There was no fraud reported by the Auditors of the Company under Section 143 (12) of the Companies Act, 2013, to the Audit Committee or the Board of Directors during the year under review.

41. PARTICULARS OF EMPLOYEES:

The information required under Section 197 of the Act read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are given below:

a. The ratio of the remuneration of each Director to the median remuneration of the employees of the Company for the Financial year 2023-24:

Non-executive directors*	Ratio to median remuneration
Mr. A. Y. Noorani	-
Mr. V. M. Apte	-
Mr. Y. P. Trivedi	-
Mr. S. R. Iyer	-
Dr. Naushad Forbes	-
Mr. Bernhard Steinruecke	-
Ms. Elizabeth Jane Hulse	-

*Note:

The Chairman is not paid any remuneration nor sitting fees for attending Board and Committee Meetings. The Non-Executive Directors of the Company are paid only Sitting Fees for attending the Board and Committee Meetings of the Company, details of which are given in the Corporate Governance Report and are not entitled to any other remuneration.

Executive director	Ratio to median remuneration
Mr. S. Y. Noorani	-

Note:

The ratio to median remuneration is nil for the F.Y. 2023-24 as Mr. S. Y. Noorani has voluntarily agreed to not receive remuneration.

b. The percentage increase in remuneration of each Director, Chief Financial Officer, Company

Secretary in the Financial Year:

Directors, Chief Financial Officer and Company Secretary*	% increase in remuneration in the financial year
Mr. V. M. Apte	-
Mr. Y. P. Trivedi	-
Mr. S. R. Iyer	-
Dr. Naushad Forbes	-
Mr. Bernhard Steinruecke	-
Ms. Elizabeth Jane Hulse	-
Mr. A.Y. Noorani	-
Mr. S.Y. Noorani	-
Mr. B. Mahabala (CFO)	-
Mr. Kumar Iyer (CS)	-

Note:

*The Chairman & Vice Chairman were not paid any remuneration nor sitting fees during FY 2023-24 for attending Board and Committee Meetings. The NonExecutive Directors of the Company were paid only Sitting Fees for attending the Board and Committee Meetings of the Company, details of which are given in the Corporate Governance Report and are not entitled to any other remuneration.

c. The percentage increase in the median remuneration of employees in the financial year: 0.94% (as the median employee is a piece rated worker)

d. The number of permanent employees on the rolls of Company: 1196 (as on 31st March, 2024)

e. The average percentile increase already made in the salaries of employees other than the managerial personnel in the last financial year and its comparison with the percentile increase in the managerial remuneration and justification thereof and point out if there are any exceptional circumstances for increase in the managerial remuneration:

f. The key parameters for any variable component of remuneration availed by the Directors: During the Financial Year 2023-24 no performance linked bonus or any other variable component of remuneration has been paid to the Executive Director of the Company.

g. Affirmation that the remuneration is as per the remuneration policy of the Company: The Company affirms that the remuneration is as per the remuneration policy of the Company.

h. Information of top 10 employees as required under Section 197(12) of the Act read with Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, for the year ended March 31, 2024 is given below.

Sr. No	Name	Date of Birth	Designation	Remuneration* (')	Nature of Employment	Qualification and Experience	Date of joining	Last Employment	Percentage of Equity Shares held	Relative of any director/ Manager of the Company
1	Mr. Imraan Surve	11-10-1968	VP-Marketing Zod, LFS & Z3	52,14,902	Contractual	B.A. (Hons.) Economics/ 32 years	18-12-2001	Contract Advertising Pvt. Ltd	0.02
2	Mr. B Mahabala	07-11-1951	VP Commercial & C.F.O	52,02,866	Permanent	M.com, MBA & Diploma in Cost & Management Accountancy/51 years	15-06-1984	Vulcan Engineers Limited	0.06
3	Ms. Behroze Daruwala	04-09-1950	VP - Fabrics & Merchandising	51,97,451	Permanent	B.A./ 52 years	30-05-1972		0.11
4	Mr. Awais Noorani	08-10-1975	VP - International Sales & Sourcing	51,72,050	Permanent	B.Com, MBA from IMD Switzerland/ 30years	01-12-2002		0.00	Son of Mr. A.Y Noorani, Chairman and nephew of Mr. S. Y. Noorani, Vice Chairman and Managing Director
5	Mr. Vikram Puri	29-06-1976	Senior Product Manager	41,23,540	Permanent	B.Sc Physics/28 years	07-05-2002	Cotton Club Inc.	0.00
6	Mr. Rajendra Shenoy B	15-06-1965	GM Manufacturing	40,58,158	Permanent	B.Com, M. Com & L.L.B./31 years	16-10-2002	Arvind Mills Limited	0.00
7	Mr. Anand Pisharody	19-10-1957	VP - Manufacturing	37,83,063	Permanent	B.A./ 45 years	02-05-1986	Indian Molasses Company Limited	0.00
8	Mr. Vishal Chadha	17-11-1964	GM - Sales MBO	34,81,843	Permanent	B.A./ 35 years	22-07-2004	Johnson & Johnson Private Limited	0.01
9	Mr. Kumar Iyer	11-06-1964	GM Legal & Company Secretary	34,54,456	Permanent	M. Com, ACS/ 40 years	15-05-2014	Advani Hotels & Resorts (India) Limited	0.00
10	Mr. Rajesh Pan	30-08-1974	GM- Retail	33,24,482	Permanent	B.com/ 26 Years	04-09-2000	Weekends Division of Personality Limited

Disclosure Requirements:

As per SEBI LODR, the Corporate Governance Report with the Auditors' Certificate thereon and Management Discussion and Analysis are attached and the same forms a part of this report.

42. OTHER DISCLOSURES:

In terms of the applicable provisions of the Act and the SEBI Listing Regulations, your Company additionally discloses that, during the year under review:

• there was no change in the nature of business of the Company;

• it has not issued any shares with differential voting rights;

• it has not issued any sweat equity shares;

• no significant or material orders were passed by the regulators or courts or tribunals which impact the going concern status operations of your Company in future;

• it has not transferred any amount to the Reserves;

• it has not raised any funds through qualified institutions placement as per Regulation 32(7A) of the SEBI listing Regulations;

• it does not engage in commodity hedging activities;

• it has not made application or no proceeding is pending under the Insolvency and Bankruptcy Code, 2016 and

• it has not made any one-time settlement for the loans taken from the Banks or Financial Institutions.

43. ACKNOWLEDGEMENT:

The Directors are grateful for the co-operation, support and assistance received from the customers, shareholders, the Government, other statutory bodies, Banks, Solicitors, Distributors, Suppliers and other business associates during these turbulent times.

The Directors also express their sincere appreciation of the employees at all levels for having risen to meet the several challenges encountered and look forward to their valuable support and commitment in the times ahead.

For and on behalf of the Board of directors
Place: Mumbai	A. Y. NOORANI
Date : 30th May, 2024	Chairman
	DIN: 00041686