Sundrop Brands Ltd

Your Directors hereby present their Annual Report, together with the audited accounts of the Company for the financial year ended March 31, 2025.

Your Company's Standalone Financial Results for the year ended March 31, 2025 is as follows:

*Includes other operating revenue

# Net of taxes

The Company closed the year with revenue of Rs.791 Crore, 5% higher than FY24. The Foods business closed the year with revenues of Rs.480 Crore, 7% higher than FY24. While your Company witnessed significant inflationary pressures during the year, it was able to largely mitigate the impact of commodity price changes and improved Gross Margin (GM) by Rs.6 Crore. However, EBITDA/Profit before exceptional items declined due to change in accounting estimate for the sales returns, increase in secondary freight & warehousing and higher royalty payout compared to prior year. Exceptional items include i) Provision for Impairment of Rs.70.57 Crore related to identified three cash generated units (CGUs) and Provision for impairment of Rs.65.47 Crore related to specified property, plant and equipment pertaining to certain products not expected to continue and where management will initiate process of disposal in due course, ii) Acquisition related costs of Rs.5.16 Crore on legal and professional, due diligence costs and other fees, iii) Provision for duty paid under protest for Custom Duty related litigation of Rs.5.55 Crore.

1.2 Key Indicators

With 18 years Revenue CAGR in the Foods business of 16.4% and accelerated growth in second half of FY25, your Company continues on track to be amongst India's best food companies.

FY25 Gross Margin was higher than prior year by Rs.6 Crores led by increase in Foods GM by Rs.10 Crore while Staples' GM declined by Rs.4 Crore.

With the change in ownership and board, your Company has embarked on a new phase and a revised business strategy is being developed. As a part of this exercise, the Board has evaluated all lines of business. As an outcome, the Company is going to enhance focus on high growth areas while some businesses that are underperforming are being deprioritized. In addition, the Company has revisited and provided for expenses related to certain past legal obligations where recovery was due to the Company. As a result, the Company has a negative PBT and PAT in FY25. Given the need to preserve cash and continue to be a zero-debt company, your Directors are recommending no Dividend for the year ended March 31, 2025.

Pursuant to Regulation 43A of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (hereinafter referred to as 'Listing Regulations'), the Company adopted a Dividend Distribution Policy vide its Board meeting held on July 22, 2021 in terms of the requirements of the Listing Regulations. The Policy is available on the Company's website at https://www.sundropbrands.com/pdf/code-of- conduct/DividendDistributionPolicv.pdf

The Board proposes not to transfer any amount to reserves.

The Directors confirm that:

(a) in the preparation of the annual accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures;

(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 statement of profit and loss of the Company for that period;

(c) they have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities;

(d) they have prepared the annual accounts on a going concern basis.

(e) they have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively; and

(f) they have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

The Promoter of the Company i.e. CAG-Tech (Mauritius) Limited, along with its holding company, Conagra Europe B.V. had entered into a Share Subscription Agreement dated February 29, 2024 (SSA) with Zest Holding Investments Limited ("Acquirer"), whereby, the Acquirer had acquired 100% control over the Promoter Company. Pursuant to the Public Announcement of Open Offer made on the February 29, 2024, Detailed Public Statement made on March 7, 2024, and pursuant to indirect acquisition of the Company by the Acquirer, the Acquirer indirectly held 1,26,16,619 equity shares of the Company on a fully diluted basis and has acquired control over the Company effective from August 28, 2024.

This Transaction had attracted an obligation on the Acquirer to make an open offer to the Public Shareholders of the Company as required under Regulation 3(1), 4 and 5 of the SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 2011. Accordingly, Letter of Offer (the "LOF") in relation to the Open Offer was dispatched to the Eligible Public Shareholders of the Company by Zest Holding Investments Limited along with Zest Investments Limited ("PAC 1"), Samara Capital Partners Fund III Limited ("PAC 2"), Infinity Holdings ("PAC 3") and Infinity Holdings Sidecar I ("PAC 4") collectively referred to as the persons acting in concerts with the Acquirer. The date of Opening of Offer was Thursday, July 11, 2024 and date of Closing of Offer was Thursday, July 25, 2024.

Pursuant to the completion of Open offer, 86 shares were tendered and transferred by 4 Shareholders of the Company in favour of Zest Investments Limited ("PAC 1").

Pursuant to change in Control of the Company, the Board of Directors was re-constituted with new nominees Directors recommended by the Promoter Company.

During the year, your Company has completed the acquisition of 100% of the issued and outstanding equity shares of Del Monte Foods Private Limited pursuant to (i) the share purchase agreement dated November 14,2024 executed amongst the Company, DMPL India Limited and Del Monte Foods Private Limited ("DMFPL"); and (ii) the share purchase agreement dated November 14, 2024 executed amongst the Company, Bharti Enterprises Limited, Bharti (SBM) Holdings Private Limited, Bharti (RBM) Holdings Private Limited, Bharti (RM) Holdings Private Limited and Bharti (Satya) Trustees Private Limited (on behalf of Bharti (Satya) Family Trust) and DMFPL. The acquisition was completed on February 6, 2025. Following the completion of the acquisition, DMFPL has become a wholly owned subsidiary of the Company. Consequent to acquisition of DMFPL, subsidiary of DMFPL, Delmonte Foods India (North) Private Limited has also become the step-down subsidiary of your Company.

The boards of directors of DMFPL and its subsidiary Del Monte Foods India (North) Private Limited was reconstituted with:

(a) nominees of the Company along with 1 independent director appointed on the board of directors of DMFPL; and

(b) nominees of the Company appointed on the board of directors of Del Monte Foods India (North) Private Limited.

In consideration for the acquisition of DMFPL and to give effect to the share swap arrangement (i.e. consideration other than cash), the Company has allotted 1,33,27,589 fully paid-up equity shares of the Company having a face value of Rs.10/- each at a price of Rs.975.5/- per equity share to the selling shareholders of DMFPL by way of a preferential allotment. The selling shareholders include DMPL India Limited, Bharti Enterprises Limited, Bharti (SBM) Holdings Private Limited, Bharti (RBM) Holdings Private Limited, Bharti (RM) Holdings Private Limited and Bharti (Satya) Trustees Private Limited (on behalf of Bharti (Satya) Family Trust). The preferential allotment was for consideration other than cash. However, for the purpose of accounting of business combination, the Company has considered fair value of Rs.792.75 per equity share on the date of the completion of acquisition i.e. February 6, 2025.

During the year, the Authorised Share Capital of the Company has been altered from the existing Authorised Share Capital of Rs.35,00,00,000 (' Thirty- Five crore) divided into 2,50,00,000 (Two crore fifty lakhs) Equity Shares of '10/- (' Ten Only) each and 10,00,000 (' Lakhs) cumulative preference shares of '100/- (' Hundred Only) each to Rs.50,00,00,000 (' Fifty crore) divided into 5,00,00,000 (Five Crore) Equity shares of Rs.10/- (' Ten Only) each and consequently the Memorandum of Association of the Company was also altered.

The name of the Company has been changed from "Agro Tech Foods Limited" to "Sundrop Brands Limited" w.e.f. March 8, 2025 as approved by the Ministry of Corporate Affairs. The new name of the Company i.e. Sundrop Brands Limited was also approved by BSE Limited (BSE) and National Stock Exchange of India Limited (NSE), the stock exchanges where the Shares of the Company are listed. The new name reflected on BSE & NSE' websites w.e.f. March 28, 2025.

Consequently, the old name, i.e. "Agro Tech Foods Limited" was substituted with the new name "Sundrop Brands Limited", wherever it occurred in all the relevant documents of the Company including agreements, deeds, documents, contracts, POA wherein the Company is a party or interested and at all other places, wherever appearing.

The Company has adopted the new set of Memorandum of Association and Articles of Association of the Company to align it with the provisions of Companies Act, 2013, which was approved by the Board of Directors of the Company, in their meeting held on November 14, 2024. The Shareholders' approval was also obtained in the 12th Extra Ordinary General Meeting (EGM) held on December 11, 2024.

In terms of the Listing Regulations, a report on Corporate Governance along with Auditors' Report on its compliance is annexed, forming part of the Annual Report.

Additionally, this contains compliance report signed by the Group Managing Director and CEO of the Company in connection with compliance with the Code of Conduct, and also CEO/CFO Certification as required by SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

In-line with the requirements of Companies Act, 2013, your Company has constituted the Board Committees and has in place all the statutory Committees required under the law.

Details of Board Committees along with their terms of reference, composition and meetings of the Board and Board Committees held during the year, are provided in the Corporate Governance Report.

Based on feedback from members on the Annual Report and Accounts, this report includes MD&A as appropriate so that duplication and overlap between the Directors' Report and a separate MD&A is avoided and the entire material is provided in a composite and comprehensive document.

The Indian FMCG market stays poised for remarkable growth in the coming years, fueled by rising disposable incomes, expanding middle-class, strong rural growth and the proliferation of digital commerce. While the industry witnessed a slowdown in 2024 and was impacted by rising raw material costs and inflation, the Company has seen a recovery from second half of 2024 and expect the momentum to sustain in 2025.

To secure a profitable slice of this competitive market, one needs to have a diverse portfolio of products with clear right to win which your Company has already established over many years of sustained investments. Because of the attractive nature of the Indian Foods market, it continues to attract capital both through public and private markets. However, your Company's strengths of a well distributed in-house manufacturing capabilities and a powerful distribution network covering around 493,000 stores across India ensures that your Company is well positioned to defend its turf and drive aggressive growth. Your Company continue to invest on mass media to strengthen the brand imagery and drive new consumer acquisition & consumption expansion from existing consumers. The Company also continue to innovate and expand the consumer base through entry in new segments, formats and taste experiences for the consumers and thereby ensuring that the brands and product offerings remain a preferred choice of the consumers.

The continued growth of the Indian Foods market and your Company's presence in low penetrated categories in food provides an enormous opportunity for a steady growth in Revenues and Profits for the Company.

The Company has strong Brands and powerful Foods portfolio representing fast growing categories like Ready to Cook Snacks, Ready to Eat Snacks, Spreads and Breakfast Cereals. The directors also believe that the company needs to prioritise resource allocation to proven high growth and high market share categories to power the Company into a strong Foods Company in India.

However, rising input costs, particularly for raw materials in edible oils segment, are impacting margins and potentially leading to price hikes there by impacting consumption and premiumisation. The primary threat to your Company's P&L has been the significant contribution of the Edible Oils business. However, over time this has been significantly reduced and in FY25 the Foods business contributed to 60% of sales and 60% of Gross Margin.

Your Company has registered a consistent growth in the Foods business with 16% CAGR over the last 18 years through entry into new categories and fastgrowing segments. Your Company has been pioneers in building the Popcorn based snacks and Peanut butter segment in the country and occupy a leadership or dominant share position in these categories. Key to this continued growth is expansion of distribution and investment in advertising spends. The Company was successfully able to further expand retail coverage in FY25 ending the year with direct retail coverage of around 493,000 retail stores. The Company also invested to build the Brand franchise in emerging channels like E-commerce and Quick Commerce and were able to grow its business in these channels substantially. Overall, A&P spends increased marginally but remained at healthy 6% to foods topline. The expansion of coverage together with steady brand investments sets your Company in a good place for a steady and sustained growth in the Foods business.

Revenues from the Ready to Cook Snacks business were up by 7% in FY'25 driven by 5% growth in volumes. While your Company enjoy leadership in the segment it operates in, it has significant headroom in this category by driving both penetration and consumption. Thus, the Board has enhanced the investments on mass media in latter part of last year and have seen growth acceleration. The Board shall continue to drive investments and shall innovate on pack size, price points and new flavours to further expand the business going forward.

Revenues from the RTE Snacks business grew handsomely by 30% in value and 26% in volume. The Company saw significant success in the RTE Popcorn business (grew by 42% vs prior year) and is now in a dominant national leadership position in this category. Going forward, your Company will seek to leverage the learnings, trade relationships and distribution infrastructure of RTE Popcorn business to help scale business in other RTE Savoury and Sweetened snack products in the portfolio and enhance its revenue and profitability of the segment.

Revenues from the Spreads business were lower by 7% vs. prior year. The Company has seen multiple new players entering the Peanut Butter segment in last few years which has expanded the category through innovations of natural and / or high protein offerings. The Company has been also innovating through launches of new tastier peanut butter products like Peanut Butter jelly which has seen good success in the last few months. Building on our recent success, the Company now plans to introduce and compete in a fast-growing high protein segment. The Company expects these introductions to significantly aid the expansion of Peanut Butter business in fast growing E- commerce and Quick commerce channels.

Your Company has continued to invest in mass media in the Peanut Butter on-the-table segment and have seen growth in small packs giving the confidence that the Company continue to attract new consumers in this fast-growing segment. Your Company shall also continue to launch newer tastier products and convenient formats in this segment to sustain the strong share and market position. Through this approach, the Board is confident to be able to drive growth and share recovery in the years ahead and strengthen the Company's market position in the overall segment.

Overall, Breakfast Cereals revenue declined by 3% as the Company discontinued some of the product lines launched in the previous year based on the muted market response. Having said that, your Company has also been able to identify winning products which shall allow to build attractive and sizeable portfolio in this segment. A steady expansion of distribution enabled the Company to grow centre-filled Sundrop Popz revenues by 11% in FY25. A distributed supply chain supported by plants across the country places the Company in a strong position to have clear leadership in this important category in the future. The Company also had a strong response in the Masala Oats segment with revenue growth of 15% and volume growth of 4%.

The Company saw a decline of 23% in revenue in the Chocolate Confectionery category in FY25. Based on the Board of Directors' assessment of the business, they have taken a call to focus on the fast-growing segments and hence not make any further growth investments in this category. In due course of time, the Board of Directors shall also look at opportunities to dispose off or re-pivot the capacities in this segment.

In line with the stated goals of the Company, the focus in FY25 remained on profitability for this category. The 20% additional import duty introduced on edible oils in the second half of the year led to a significant increase in raw material prices of edible oils, there by impacting Gross Margins. While the Company was able to pass on the price increases, it did see the impact on volumes in response to the increased pricing. On a full year basis, your Company was able to increase the premium staples volume by 2% and value by 4%, though the Gross Margin was marginally lower than the Prior Year by 3%. The Company was also successfully able to grow the adjacencies such as Plain Oats by 17% in value terms and is looking to further strengthen the business in this fast-growing segment.

Due to significant increase in the edible oil prices and to protect the margin, the Company reduced its focus in this Category in FY25 resulting in volume decline of 21% and revenue decline of 17%. Going forward the Company is re-evaluating its play in edible oils segment and shall focus on growth of premium oils while continuing to operate in the mass oil segment as a flanker. The Board believes play in this segment may be needed to sustain the sourcing strengths and scale of operation, which is critical to sustain the margins in this highly competitive category.

Innovation remains the driver of growth for your Company and the Board continues to make investments which ensure that your Company continue to deliver innovative products which address unmet consumer needs and bring delightful food experiences to the consumers. Your Company's unique plant centered innovation model ensures a robust flow of innovation at an efficient cost and quick turnaround time.

A Statement giving details of conservation of energy, technology absorption and foreign exchange earnings and outgo in accordance with Rule 8(3) of the Companies (Accounts) Rules, 2014 is attached as Annexure A and forms part of this report.

Engaged Employees are critical to the success of your Company. In FY25, despite the change of control news at the start of the year, employees have remained engaged and the Company successfully managed the transition with improving revenue growth rates quarter on quarter (from -3% in Q1, +2% in Q2, +8% in Q3 to +12% in Q4). The continuing strong momentum in the Company driven by solid foods business growth and innovation has helped the Company to stay positive on the future outlook for the business.

Your Company will continue to ensure that it has a highly engaged and productive organization to deliver on its vision and goals.

The details of significant changes in the key financial ratios are as follows:

The Return on Net worth as compared to the previous financial year is as follows:

The information required pursuant to Section 197(12) of the Act, read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, as amended, containing, inter alia, ratio of remuneration of directors and KMP to irormeriy Known a median remuneration of employees and percentage increase in the median remuneration are annexed herewith as Annexure B and forms part of this Report.

The statement containing particulars of employees as required under Section 197 of the Act read with Rule 5(2) of Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is provided in a separate annexure forming part of this Report. However, in terms of Section 136 of the Act, the Report and Accounts are being sent to the Members and others entitled thereto, excluding the information on employees' particulars which is available for inspection by the Members at the Registered Office of the Company during business hours on working days of the Company. In case any Member is interested in obtaining a copy thereof, such Member may write to the Company Secretary of the Company. The Nomination and Remuneration Committee of the Company has affirmed that the remuneration is as per the Remuneration Policy of the Company.

Loans, guarantees and investments covered under Section 186 of the Companies Act, 2013 form part of the notes to the financial statements provided in this Annual Report.

All contracts, arrangements or transactions entered into by the Company during the financial year with related parties were in the ordinary course of business and on an arm's length basis. During the year, the Company has not entered into any contract or arrangement or transaction with related parties which could be considered material in accordance with the policy of the Company on materiality of related party transactions, Companies Act, 2013 and Listing Regulations. Form AOC-2 containing the note on the aforesaid related party transactions is enclosed as Annexure C and forms part of this Report.

The Policy on materiality of related party transactions and dealing with related party transactions as approved by the Board may be accessed on the Company's website.: https://www.sundropbrands. com/pdf/code-of-conduct/ policy dealing related party transactions.pdf

The related party disclosures, including details of the transactions with Promoter group, form part of the financial statements provided in this Annual Report.

During the year, based on the recommendation of the Nomination and Remuneration Committee, the Board of Directors considered and approved the termination of the existing Agro Tech Employee Stock Option Plan of 2012, (as modified in 2015 and 2022) subject to completing all formalities as required under the applicable laws and regulations.

Based on the recommendation of the Nomination and Remuneration Committee, the Board of Directors considered and approved the formulation of "Agro Tech Foods Limited Employee Stock Plan 2024 (ATFOODS ESOP 2024 or "Scheme")", in terms of the SEBI (Share Based Employee Benefits and Sweat Equity) Regulations, 2021. The Shareholders of the Company had approved "Agro Tech Foods Limited Employee Stock Plan 2024" by passing a special resolution by requisite majority of the Shareholders on April 27, 2025 through Postal Ballot by voting through electronic means only, subject to other regulatory / statutory approvals as may be necessary. The result of the Postal Ballot was submitted to BSE and NSE on April 28, 2025 and was also uploaded on the website of the Company. The Company had submitted an application on May 3, 2025 to the Stock Exchanges where shares of the Company are listed i.e. BSE and NSE for their in-principal approval for "Agro Tech Foods Limited Employees Stock Plan 2024". The Plan is in compliance with the provisions of SEBI (Share Based Employee Benefits and Sweat Equity) Regulations, 2021. Further details of the Plan are available on the website of the Company at www.sundropbrands.com

Pursuant to the provisions of the Securities and Exchange Board of India (Share Based Employee Benefits and Sweat Equity) Regulations, 2021, ("eSoP Regulations"), the certificate received from the secretarial auditor of the Company confirming implementation of the Scheme in accordance with the said regulations and the resolution passed by the members, will be made available at the AGM. In terms of regulation 14 of the ESOP Regulations, a statement giving complete details, as at March 31, 2025, is available on the website of the Company at www.sundropbrands.com

Your Company has transferred the required CSR amount of Rs.44,46,130/- to the Prime Minister's National Relief Fund in the month of March, 2025 which is in line with regulatory requirements. In addition, your Company continues to work with Anganwadi's as part of the Company's Poshan program designed to address malnourishment.

As per Companies Act, 2013 as amended by Companies (Amendment), Act, 2017, all Companies having net worth of Rs.500 Cr or more, or turnover of Rs.1,000 Cr or more or a net profit of Rs.5 Cr or more during the immediately preceding financial year will be required to constitute a CSR Committee of the Board of Directors comprising three or more directors, at least one of whom will be an Independent Director.

Aligning with the guidelines, the Company has constituted a CSR Committee comprising Mr. Satish Premanand Rao, an Independent Director as the Chairperson of the Committee and Mr. Rajesh Jain, Ms. Richa Arora, Mr. Harsha Raghavan, Mr. Manish Mehta and Dr. Om Prakash Manchanda as its Members. The Committee is responsible for formulating and monitoring the CSR Policy of the Company. The CSR Policy of the Company, as approved by the Board of Directors is available on the Company's Website: https://www.sundropbrands.com/ pdf/code-of- conduct/CSR-POIICY.pdf

The Annual Report on CSR activities is annexed herewith as Annexure D and forms part of this Report.

The Company has formulated and adopted a revised Risk Management Policy which has been approved and adopted by the Board at the Board Meeting held on October 21,2021 pursuant to SEBI (LODR) (Second Amendment) Regulations, 2021, which requires top one thousand listed Companies (based on market capitalization of every financial year) to formulate and disclose a Risk Management Policy. The testing in accordance with the laid down policy is being carried out periodically. The Senior Management has been having regular Meetings for reassessing the risk environment and necessary steps are being taken to effectively mitigate the identified risks. A Risk Management Committee has also been constituted with a Committee of the Directors and senior management to address issues which may threaten the company.

The Vigil mechanism under Whistle Blower Policy has been approved by the Board of Directors on October 17, 2014. This Whistle Blower Policy of the Company provides opportunities to employees to access in good faith, to the Management, concerns (in certain cases to the Audit Committee) in case they observe unethical or improper practices (not necessarily a violation of law) in the Company and to secure those employees from unfair termination and unfair prejudicial employment practices. The policy has also been uploaded on the website of the Company: https://www.sundropbrands.com/pdf/code-of- conduct/Whistle%20Blower%20Policv.pdf

Your Company continues to focus on the use of technology and automation to drive productivity in engaging with the Customers & Suppliers. We also ensure that our Employees have access to robust information to ensure best in class analysis of the business and identification of opportunities to improve shareholder return.

The Company has a robust system of internal controls commensurate with the size and nature of its operations, to ensure orderly and efficient conduct of business. These controls ensure safeguarding of assets, prevention, and detection of fraud and error, accuracy and completeness of accounting records, timely preparation of reliable financial information and adherence to the Company's policies, procedures and statutory obligations.

Your Company has established standard operating procedures for smooth and efficient operations in addition to ensuring internal controls. Your Company has also documented:

• A comprehensive Code of Conduct for the Board Members and employees of your Company

• An Employee Handbook

• Whistle Blower Policy defined to provide channel of communication without fear

• Comprehensive frame work for Risk Management, and

• CEO/CFO Certification for Financial Reporting Controls to the Board

The Company had appointed M/s. Grant Thornton Bharat LLP as Internal Auditors of the Company for FY 24-25 to ensure adequacy of internal control systems and make recommendations there to. Audit reports are circulated to management, which takes prompt action as necessary. The Board of Directors in their meeting held on April 29, 2025, appointed M/s BDO India LLP as the Internal Auditors of the Company for FY 2025-26.

The Audit Committee of the Board meets periodically to review the performance as reported by the Auditors. The Internal and External Auditors also attend the meetings and convey their views on the adequacy of internal control systems as well as financial disclosures. The Audit Committee also issues directives and/or recommendations for enhancement in scope and coverage of specific areas, wherever felt necessary.

Statements in this Directors' Report and Management Discussion and Analysis describing the Company's objectives, projections, estimates and expectations may constitute "forward looking statements" within the meaning of applicable laws and regulations. Actual results may differ materially from those either expressed or implied.

With a Foods Turnover of Rs.480 Cr in FY25 and 18 year CAGR of 16.4%, your Company is well positioned to be a major player in the Foods industry in India. This proposition is further strengthened by a strong portfolio of products and a powerful retail and online distribution network which enables your Company to ride on the growth opportunities in the segments the Company operate in.

The Company shall continue to strengthen the focus and investments in the business to drive for accelerated growth of Revenue coupled with improvements in margins. The Company stay committed to become a significant player in the Indian Foods Industry and join the ranks of India's Best Performing Most Respected Food Companies.

The Company shall also invest on building talent and capabilities of people to build a highly engaged and agile organisation. Your Company shall also enhance its investments in technology and automation to improve the distribution effectiveness and efficiency through Sales Force Automation (SFA) and embrace use of technology to streamline supply chains cost and reduce costs at Company's in-house manufacturing facilities. Through, the acquisition of Del Monte Foods Private Limited, your Company shall also explore opportunities to build its business in foodservice segment and also use the expanded and distributed manufacturing set-up to build reach and efficiency of the business in high growth RTE snacks segment. The Company also plans to step up its presence in SAARC countries in the coming years to expand its business beyond India.

While commodity inflation remains a concern, your Company is going to aggressively work on identifying cost savings opportunities across the value chain through operational excellence across manufacturing, logistics, sourcing and sales so as to expand the business profitability going forward.

In accordance with the provisions of Article 157 of the Articles of Association of the Company, in so far as it is not inconsistent with the relevant provisions of the Companies Act, 2013, Mr. Harsha Raghavan and Mr. Manish Mehta retire by rotation and being eligible, offers themselves for re-appointment. A brief profile of Mr. Harsha Raghavan and Mr. Manish Mehta is given in the notice of the 38th Annual General Meeting.

A) Based on the recommendation of Nomination and Remuneration Committee and pursuant to the provisions of Section 161(1) of the Companies Act, 2013 and the Articles of Association of the Company, the Board of Directors had appointed in their meeting held on April 24, 2024;

i. Mr. Asheesh Kumar Sharma (DIN : 10602319) as Managing Director and CEO of the Company for a period of 5 years w.e.f. April 25, 2024 till April 24, 2029.

ii. Mr. Alexander Byron Jacobs (DIN : 10597668) as Additional Non-Executive Director of the Company.

The shareholder's approval was obtained on July 11, 2024 for Asheesh's appointment as MD & CEO and for Alexander Byron Jacobs appointment as NonExecutive Director of the Company.

B) Mr. Rajesh Jain, Mr. Satish Premanand Rao and Ms. Richa Arora were appointed as Non-executive Independent Directors of the Company pursuant to the provisions of Section 161(1) of the Companies Act, 2013 and Article 147 of the Articles of Association of the Company for a period of 3 years w.e.f. July 17, 2024. The Shareholders' approval was obtained for their appointment as Non-executive Independent Directors in the AGM held on September 30, 2024.

C) Based on the recommendation of Nomination and Remuneration Committee and pursuant to the provision of Section 161(1) of Companies Act, 2013 and Articles of Association of the Company, the Board of Directors has appointed in their meeting held on August 28, 2024:

i. Mr. Harsha Raghavan (DIN: 01761512) as Additional (Non-Executive) Director of the Company, liable to retire by rotation, with no remuneration and no sitting fees to be paid, with effect from August 28, 2024.

ii. Mr. Manish Mehta (DIN: 06442038) as Additional (Non-Executive) Director of the Company, liable to retire by rotation, with no remuneration and no sitting fees to be paid, with effect from August 28, 2024

The Shareholders' approval was obtained for appointment of Mr. Harsha Raghavan and Mr. Manish Mehta as Non-Executive Directors of the Company w.e.f. August 28, 2024 in the AGM held on September, 30, 2024.

D) Based on the recommendation of Nomination and Remuneration Committee and pursuant to the provisions of Section 161(1) of the Companies Act, 2013 and Article 147 of the Articles of Association of the Company, the Board of Directors has appointed in their meeting held on November 14, 2024:

i. Mr. Nitish Bajaj (DIN: 10835891) as an Additional Director and Group Managing Director of the Company for a period of 5 years effective from November 25, 2024, liable to retire by rotation, on the terms and conditions subject to the approval of the shareholders, as per the relevant provisions of the Companies Act, 2013, and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 ("Listing Regulation").

ii. Dr. Om Prakash Manchanda (DIN: 02099404) as Non-executive Independent Director of the Company effective from November 15, 2024 for an initial term of 5 (Five) years, subject to the approval of shareholders.

The Shareholders' approval was obtained for the appointment of Mr. Nitish Bajaj as Director and Group Managing Director and Dr. Om Prakash Manchanda as Non-executive Independent Director in the Extra Ordinary General Meeting (EGM) held on December 11, 2024.

E) Based on the recommendation of Nomination and Remuneration Committee and pursuant to the provisions of Section 161(1) of the Companies Act, 2013 and Article 147 of the Articles of Association of the Company, the Board of Directors has appointed in their meeting held on February 6, 2025:

i. Mr. Harjeet Singh Kohli (DIN: 07575784) as an Additional Non-Independent Non-Executive Director of the Company, effective from February 6, 2025 liable to retire by rotation, subject to the Shareholder's approval.

ii. Mr. Karamendra Daulet Singh (DIN-00110827) as an Additional & Non-Executive Independent Director of the Company effective from February 6, 2025 for an initial term of 5 (Five) years, subject to the Shareholder's approval.

The shareholders' approval was obtained for the appointment of (i) Mr. Harjeet Singh Kohli, as Non Executive Director, effective from February 6, 2025, whose period of office shall be liable to determination by retirement of Directors by rotation and (ii) Mr. Karamendra Daulet Singh, as Non-Executive Independent Director effective from February 6, 2025 for an initial term of 5 (Five) years whose period of office shall not be liable to determination by retirement of Directors by rotation. The said approval was obtained by passing an Ordinary Resolution and a Special Resolution for item (i) and (ii) above respectively through Postal Ballot by voting through electronic means only ("remote e- voting") as Special Business items. The said Resolutions were approved by requisite majority of the Shareholders and passed on April 27, 2025. The result of the Postal Ballot was submitted to BSE and NSE on April 28, 2025 and was also uploaded on the website of the company.

Mr. Asheesh Kumar Sharma (DIN: 10602319), vide Resignation Letter dated November 14, 2024, resigned from the position of Managing Director of the Company with effect from November 25, 2024. With the approval of Board, Mr. Asheesh Kumar Sharma continued to act as an Executive Director & Chief Executive Officer-Sundrop & Act-II Business of the Company with effect from November 25, 2024 for the remaining period of his tenure i.e. till April 24, 2029. The Shareholders' approval for the change in designation of Mr. Asheesh Kumar Sharma was obtained in the EGM held on December 11, 2024.

Mr. Sachin Gopal (DIN: 07439079) resigned from the Directorship and Managing Director & CEO of the Company w.e.f. close of business of April 24, 2024 on account of personal reasons.

Lt. Gen. D.B. Singh, Mr. Sanjaya Kulkarni, Mr. Narendra Ambwani, Mr. Arun Bewoor and Ms. Veena Gidwani, non-executive Independent Directors, retired as the Independent Directors of the Company w.e.f. close of business hours of July 16, 2024, pursuant to completion of their second term of appointment.

Mr. Pedro Labayen de Inza (DIN: 09576297) and Mr. Trevor John Foster (DIN: 09669509), resigned as NonExecutive Non-Independent Directors of the Company w.e.f. the close of business hours of July 16, 2024 due to personal reasons.

Mr. James Patrick Kinnerk (DIN: 08773594) and Mr. Alexander Byron Jacobs (DIN: 10597668), resigned as Non-Executive Non-Independent Directors of the Company w.e.f. August 28, 2024 due to change in control of the Company.

All the Independent Directors of the Company as on March 31, 2025 have also given confirmation to the Company as provided under Section 149(6) of the Companies Act, 2013 and Regulation 25(8) of SEBI (LODR) Regulations, 2015 that:

a. they are persons of integrity and possess relevant expertise and experience;

b. i. they are or were not a promoter of the

Company or its holding, subsidiary or associate Company or member of the promoter group of the company;

ii. they are not related to promoters or other directors in the Company, its holding, subsidiary or associate Company;

c. they do not have or had any pecuniary transaction or relationship other than remuneration as such director or having transaction not exceeding ten percent of their total income or such amount as may be prescribed with the company, its holding, subsidiary or associate Company, or their promoters, or directors, during the three immediately preceding financial years or during the current financial year;

d. none of their relatives-

(i) is holding any security of or interest in the company, its holding, subsidiary or associate company during the three immediately preceding financial years or during the current financial year:

Provided that the relative may hold security or interest in the company of face value not exceeding ' fifty lakh or two per cent of the paid-up capital of the company, its holding, subsidiary or associate company or such higher sum as may be prescribed;

(ii) is indebted to the company, its holding, subsidiary or associate company or their promoters, or directors, in excess of such amount as may be prescribed during the three immediately preceding financial years or during the current financial year;

(iii) has given a guarantee or provided any security in connection with the indebtedness of any third person to the company, its holding, subsidiary or associate company or their promoters, or directors of such holding company, for such amount as may be prescribed during the three immediately preceding financial years or during the current financial year; or

(iv) has or had any other pecuniary transaction or relationship with the company, its holding, subsidiary or associate company, or their promoters, or directors, amounting to two percent or more of its gross turnover or total income or fifty lakh rupees or such higher amount as may prescribed from time to time, whichever is lower, singly or in combination with the transactions referred to in sub-clause (i), (ii) or (iii).

e. neither they nor any of their relatives-

(i) hold or has held the position of a key managerial personnel or is or has been employee of the Company or its holding, subsidiary or associate Company or any company belonging to the promoter group of the company in any of the three financial years immediately preceding the financial year in which they were proposed to be appointed;

(ii) is or has been an employee or proprietor or a partner, in any of the three financial years immediately preceding the financial year in which they were proposed to be appointed, of

(A) a firm of auditors or company secretaries in practice or cost auditors of the Company or its holding, subsidiary or associate Company; or

(B) any legal or a consulting firm that has or had any transaction with the Company, its holding, subsidiary or associate Company amounting to ten percent or more of the gross turnover of such firm;

(iii) hold together with any relatives two percent or more of the total voting power of the Company; or

(iv) is a Chief Executive or director, by whatever name called, of any non-profit organization that receives twenty-five per cent or more of its receipts or corpus from the Company, any of its promoters, directors or its holding, subsidiary or associate Company or that holds two percent or more of the total voting power of the Company;

(v) is a material supplier, service provider or customer or a lessor or lessee of the Company;

f. they are not a non-independent director of any other company on the board of which any non independent director of the Company is an independent director.

g. they are not aware of any circumstance or situation, which exist or may be reasonably anticipated, that could impair or impact their ability to discharge their duties with an objective independent judgment and without any external influence.

h. they possess appropriate skills, experience and knowledge in one or more fields of finance, law, management, sales, marketing, administration, research, corporate governance, technical operations or other disciplines related to the company's business.

i. they have complied with the requirement of subrule (1) and sub-rule (2) of Rule 6 of Companies (Appointment and Qualification of Directors) Rules, 2014 with regard to inclusion of their names and/or renewal thereof, in the Independent Directors data bank maintained with Indian Institute of Corporate Affairs (IICA).

The Board of Directors met 6 times during the period April to March in the year 2024-2025 on the following dates:

1. April 24, 2024

2. July 16, 2024

3. August 28, 2024

4. October 24, 2024

5. November 14, 2024

6. February 06, 2025

The Company's Audit Committee as on date of this report comprises Five Directors, all of whom are nonexecutive and Independent Directors. This is in compliance with Companies Act, 2013 and the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. Mr. Rajesh Jain, an Independent Director, is the Chairman of the Committee while Mr. Satish Premanand Rao, Ms. Richa Arora, Dr. Om Prakash Manchanda and Mr. Manish Mehta are its Members. The Charter of the Committee is in line with the requirements of Section 177 of the Companies Act, 2013 and the relevant clauses of the Listing Regulations.

The performance of the Company's Key Managerial Personnel, Whole-time Director and Employees is measured on the progress being made on the strategic vision of the Company, its revenue and profitability.

Progress against the strategic vision of the Company is measured by improvement in Gross Margin and share of the Foods business to the total Net Sales of the Company. Profitability is measured using Earnings before interest, tax, depreciation and amortization (EBITDA) as key measure.

The details as required under Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is being provided as an Annexure B to this Report.

The Company has formulated a Remuneration Policy in line with the requirements of the Companies Act, 2013. The performance evaluation of independent directors is done by the entire Board of Directors (excluding the director being evaluated). On the basis of the report of performance evaluation, it shall be determined whether to extend or continue the term of appointment of the independent directors.

The annual evaluation of the Board is done at three levels as (i) Board as a whole; (ii) Committees of the Board and (iii) Individual Directors and Chairperson.

A detailed Questionnaire is circulated to all individual directors. The Directors are evaluated on the basis of the following performance evaluation criteria namely knowledge and competency, fulfillment of functions, ability to function as a team, initiative, availability and attendance, commitment, contribution and integrity. The additional criteria for Independent Directors are independence, independent views and judgment.

The remuneration/commission to Non-Executive and Independent Directors is fixed as per the provisions contained under Companies Act, 2013. The NonExecutive Independent Director may receive remuneration by way of fees for attending each meeting of Board or Committee thereof, provided that the amount of such fees shall not exceed ' 1,00,000/- (' One lakh only) per meeting of the Board or Committee or such amount as may be prescribed by the Central Government from time to time.

For Independent Women Directors, the sitting fee paid is not less than the sitting fee payable to other directors.

Non-Executive Independent Directors are entitled to remuneration by way of commission for each financial year, up to a maximum of ' 15,00,000/- individually, as approved by the Shareholders by way of Postal Ballot Meeting through remote e-voting concluded on April 27, 2025, pursuant to the provisions of Sections 149, 197, 198, Schedule V and all other applicable provisions of the Companies Act, 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014.

An Independent Director shall not be entitled to any stock options of the Company.

Copy of the Nomination and Remuneration policy is annexed here with as Annexure E and forms part of this Report and is also uploaded on the website of the Company : https://www.sundropbrands.com/pdf/ code-of-conduct/Nomination%20and%20 Remuneration%20Policv.pdf

Every new Independent Director of the Board attends an orientation. To familiarize the new inductees with the strategy, operations, business and functions of your Company, the Senior Management make presentations to the inductees about the Company's strategy, operations and products. The Company also encourages and supports its Directors to update themselves with the rapidly changing regulatory environment. Also, at the time of appointment of independent directors, the Company issues a formal letter of appointment describing their roles, functions, duties and responsibilities as a Director. During the year, the Company had arranged familiarization program for all Independent Directors (IDs) with respect to all functional areas i.e. Sales, Marketing, Finance, HR, Supply Chain, Manufacturing, Procurement and Research, Quality & Innovation (RQI).

More details about familiarization Programme are uploaded on Company's website : https:// www.sundropbrands.com/pdf/other-information/ familiarisation programme independent directors.pdf

M/s BSR and Co, Chartered Accountants (Firm Regn. No. 128510W), were appointed as the Statutory Auditors of the Company by the Shareholders' at the 37th Annual General Meeting held on September 30, 2024, to hold office from the conclusion of the 37th Annual General Meeting to the conclusion of the 42nd Annual General Meeting.

The Report given by the Auditors M/s BSR and Co, Chartered Accountants, on the financial statements of the Company for financial year 2024- 25 is part of the Annual Report. There has been no qualification, reservation or adverse remark or disclaimer in their Report. During the year under review, the Auditors had not reported any matter under Section 143(12) of the Companies Act, 2013 and hence, no detail is required to be disclosed under Section 134(3)(ca) of the Companies Act, 2013.

The Company is required to maintain the cost records as specified by the Central Government under Section 148(1) of the Companies Act, 2013 and accordingly such accounts and records are made and maintained by the Company. An Audit of the Cost Accounts maintained by the Company is also conducted by a Cost Auditor appointed by the Board subject to the approval of Shareholders.

Pursuant to the provisions of Section 204 of the Act, read with Regulation 24A (1), (1A), (1B) and Rule 9 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 and other applicable provisions, the Company appointed M/s. Tumuluru and Company [Firm Registration No. P1988AP052200], Company Secretaries to undertake Secretarial Audit of the Company for the financial year ended March 31,2025. The Secretarial Audit Report is annexed herewith as Annexure F and forms part of this Annual Report. There are no qualifications, reservations or adverse remarks in the Secretarial Audit Report. Pursuant to Regulation 24A of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Secretarial Audit Report of material subsidiary, Del Monte Foods Private Limited is annexed herewith as Annexure G.

Further, as per Section 204 of the Act, read with Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, and read with SEBI (LODR) (Third Amendment) Regulations, 2024, the Board on the recommendation of the Audit Committee has recommended to appoint M/s.

Tumuluru and Company [Firm Registration No. P1988AP052200], Company Secretaries as Secretarial Auditor of the Company for a term of five years effective from April 1, 2025 to March 31, 2030.

Your Company's wholly-owned subsidary company, Sundrop Foods India Private Limited has continued to perform the role of aiding the Company's expansion of distribution and display of your Company's products. At the end of FY25, the number of sales staff on the rolls of the subsidary company were 418.

Your Company's wholly owned subsidiary Agro Tech Foods (Bangladesh) Pvt. Ltd continues to deliver timely production as we work to expand our business in a neighboring emerging market with strong growth potential.

Your Company will also be working towards leveraging your Company's wholly-owned subsidiary Sundrop Foods Lanka (Private) Limited at an opportune time basis the economic developments in that market.

During the year, with effect from February 6, 2025, Del Monte Foods Private Limited (DMFPL) has become wholly owned material subsidiary of the Company. Del Monte Foods India (North) Pvt. Ltd. has become step-down subsidiary of the Company.

Del Monte Foods's product line-up, including the Italian range, sauces, ketchup, dips and spreads, and beverages, complements the Company's product portfolio with focus on high-quality, innovative food solutions. This strategic transaction would further enhance the Company's presence across retail and food services sectors, expanding its range and reach to traditional retail, modern retail, quick-service restaurants and food services customers.

During the year, the Board of Directors reviewed the affairs of the subsidiary Companies. The Company has published the audited consolidated financial statements for the financial year 2024-25 and the same forms part of this Annual Report. For DMFPL, 2 months' statement of Profit and Loss for a period starting from February 1,2025 till March 31,2025 and Balance Sheet as on March 31, 2025 have been taken into consideration for the audited consolidated financial statements of the Company for the financial year 2024-25. This Directors' Report does not contain the financial statements of our subsidiaries. The statements highlighting the summary of the financial performance of the subsidiaries in the prescribed format is annexed as Annexure H to this Report. The audited financial statements and related information of subsidiaries are available for inspection electronically and will be provided to any shareholder on demand. The separate audited financial statements in respect of each subsidiary Company is also available on the website of your Company https://www.sundrop brands.com/annual-reports.aspx

A copy of the Annual Return as provided under Section 92(3) of the Companies Act, 2013 and Rule12 of the Companies (Management & Administration) Rules, 2014 prepared as on March 31, 2025 shall be placed on the website of the Company and the same is available in the Company's website: https:// www.sundropbrands.com/investors-information.aspx

In terms of amendment to Regulation 34 (2) (f) notified by SEBI (LODR) (Second Amendment) Regulations, 2021 dated May 05, 2021, SEBI has mandated the new reporting requirements on ESG parameters called the Business Responsibility and Sustainability Report (BRSR) as part of the Annual Report for top 1000 listed entities based on market capitalization. The BRSR for FY 202425 is provided as part of this Annual Report.

Your Directors state that no disclosures or reporting are being made in respect of the following items as there were no applicable transactions or events on these items during the year under review:

a. Details relating to deposits covered under Chapter V of the Act.

b. Issue of equity shares with differential rights as to dividend, voting or otherwise.

c. Issue of shares (including sweat equity shares) to employees of the Company under any scheme save and except under the ESOP scheme referred to in this Report.

d. The Managing Director of the Company does not receive any remuneration or commission from any of its subsidiaries.

e. No significant or material orders were passed by the Regulators or Courts or Tribunals which impact the going concern status and Company's operations in future.

f. The Company has complied with the provisions relating to constitution of Internal Complaints Committee and no cases reported or filed during the year pursuant to the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.

g. During the year, your Company has not accepted any public deposits under Chapter V of Companies Act, 2013.

h. Pursuant to Section 124 and Section 125 of the Companies Act 2013 read with IEPFA (Accounting, Audit, Transfer and Refund) Rules 2016 and any amendment thereof, as may be applicable, an amount of ' 538,288/- which remained unpaid / unclaimed dividends pertaining to FY16-17 was transferred to Investor Education and Protection Fund on September 12, 2024.

i. During the year, the Company has transferred 8,901 unclaimed shares to IEPF account on October 01, 2024. The detailed list of unclaimed shares transferred to IEPF Authority is available in the Company's website www.sundropbrands.com

j. Pursuant to Section 124 and Section 125 of the Companies Act 2013 read with IEPFA (Accounting, Audit, Transfer and Refund) Rules 2016 and any amendment thereof, as may be applicable, an amount of ' 4,44,962.05/- (as on March 31, 2025) of unpaid/unclaimed dividends pertaining to FY17- 18 will be transferred to Investor Education and Protection Fund within the prescribed timelines.

k. Except as disclosed elsewhere in the Report, there have been no material changes and commitments made between the end of the financial year of the Company and the date of this Report. There has been no change in the nature of business of the Company during the year.

l. No application was made during the year and no proceeding is pending under the Insolvency and Bankruptcy Code, 2016 (31 of 2016) as at the end of the financial year.

m. No instance of the valuation was required for one time settlement and no valuation was done while taking the loan from the Banks or Financial Institutions.

The Board places on record their appreciation for the contribution of its customers, employees, distributors, co-packers, suppliers and all other stakeholders towards performance of the Company during the year under review.