Suditi Industries Ltd

Dear Shareholders,

The Directors are pleased to present the Thirty Fourth Annual Report of the Company together with the Audited Financial Statements for the financial year ended March 31, 2025.

Financial Results:

Company outlook

During FY 2024-25, Suditi Industries Limited undertook several strategic initiatives aimed at repositioning the Company for long-term sustainable growth, profitability, and brand visibility. A major highlight of the year was the acquisition of the iconic children's apparel brand Gini & Jony, which provides company with immediate access to a well-established retail network, a loyal customer base, and strong brand equity in the mid-premium kidswear segment. This acquisition is expected to catalyze significant growth in revenue and margins over the next five years, with targeted turnover from the brand portfolio projected to reach ^500- 600 crore and EBITDA margins stabilizing in the 7-8% range.

In parallel, the Company reinforced its backward integration strategy, ensuring greater control over quality, cost, and turnaround time. The Company continues to operate in-house facilities for knitting, dyeing (12 metric tonnes/day), printing, and finishing, with an annual knitted fabric production capacity of approximately 2,000 metric tonnes. This integrated manufacturing ecosystem enables the Company to offer

customized solutions to clients and ensures agility in meeting changing fashion demands. Further investments are being made to expand capacity and enhance energy-efficient production systems in line with sustainability goals. In 2024-25 Suditi Industries Limited has also precured two new major machineries like Boiler and Stenter Machine costing Rs.3crs to enhance the quality and the capacity. of production

To further broaden its product portfolio and market reach, the Company continued to expand its footprint in the licensed apparel and athleisure space. The Company successfully extended its licensing agreements with globally recognized sports and lifestyle brands such as NBA and FC Barcelona, while also strengthening its inhouse brands like Riot and Indianink. These brands, especially in youth and activewear categories, have gained strong traction through both traditional retail and e-commerce platforms. The emphasis on digitally enabled retail, including omni-channel strategies and data-driven design, has enhanced customer engagement and improved product turnaround cycles.

Additionally, Company is proactively aligning itself with evolving consumer expectations around sustainability and ethical sourcing. The Company has increased the use of eco-friendly materials and low-impact dyes and is in the process of obtaining recognized sustainability certifications to appeal to conscious global buyers. Operationally, the company is focusing on leaner working capital cycles, digital adoption in sampling and production, and automation in quality assurance, which will contribute to improved efficiency and resilience.

Looking ahead, the Company's strategy remains focused on building a strong brand-led portfolio, enhancing export competitiveness, and investing in sustainability and digital transformation-key enablers for long-term value creation.

HIGHLIGHTS OF THE FINANCIAL SUMMARYS

0 Revenue rose 41% to ^95.48 crore in FY2025 (from ^67.71 crore in FY2024)

0 Net profit returned to black at ^2.82 crore (vs. a ^11.88 crore loss in FY2024)

0 Operating margin improved significantly, from -17.6% to +3.8% year-on-year

Standalone Performance:

The total revenue from operations of the Company stood at Rs. 8,533.15 Lakhs. The Company earned a profit after tax of Rs. 121.91 Lakhs during the financial year, as compared to loss incurred amounting to Rs.

1216.08 Lakhs in the previous year.

Consolidated Performance:

The total consolidated revenue of the Company for the financial year stood at Rs. 9547.68 Lakhs. The company earned a consolidated profit after tax of Rs. 314.18 Lakhs during the financial year as compared to loss incurred amounting to Rs. 1200.86 Lakhs in the previous year.

Dividend:

Due to the prevailing market conditions and losses, the Board has not recommended any Dividend for the financial year. In terms of Regulation 43A of the SEBI Listing Regulations, the Board of the Company has adopted a Dividend Distribution Policy, which can be accessed on the website of the Company at https://suditi.in.

Share capital:

Authorised Share Capital

During the year, the company has increased its Authorised Share Capital to Rs. 60 Crores divided into 6 Crores Equity Shares of Rs. 10/- each.

Increase in Paid up Share Capital

Pursuant to the approval received from the Board of Director of the Company vide its Board resolutions dated December 4, 2024 and approval received from the Shareholders of the Company vide its resolution dated January 3, 2025 the Company has allotted 1,32,49,000 (One Crore Thirty-Two Lakh Forty Nine Thousand) equity shares on preferential allotment basis having face value of Rs. 10/- each (Rupees Ten Only) at a premium of Rs. 17.50 (Rupees Seventeen and Fifty Paise) on preferential basis by way circular resolution passed by Board directors on February 14, 2025; February 17, 2025; February 19, 2025 and February 21, 2025

Pursuant to aforesaid allotment of Equity shares, the Paid-up Share Capital of the Company was increased from Rs. 26,36,72,910 (Rupees Twenty-Six Crore Thirty-Six Lakh Seventy-Two Thousand Nine Hundred and Ten only) divided into 2,63,67,291 (Two Crore Sixty-Three Lakh Sixty-Seven Thousand Two Hundred and Ninety One) Equity Shares of Rs. 10/- (Rupees Ten) each to Rs. 39,61,62,910 (Rupees Thirty-Nine Crore Sixty- One Lakh Sixty Two Thousand Nine Hundred and Ten only) consisting of 3,96,19,291 (Three Crore Ninety-Six Lakh Nineteen Thousand Two hundred and Ninety-One) Equity Shares of Rs. 10/- (Rupees Ten Only) each.

The Company has neither issued shares with differential voting rights nor has it issued any sweat equity shares.

ISSUE AND ALLOTMENT OF SHARE WARRANTS:

During the year under review, the company has issued and allotted 1,23,00,000 Share Warrants convertible into Equity shares on preferential basis on February 12, 2025. The tenure of the Share warrants is of 18 months. The company has received an amount aggregating to Rs. 84,562,500/- (Rupees Eight Crores Forty- Five Lakhs Sixty-Two Thousand Five Hundred Only) at the rate of Rs. 6.875/- (Rupees Six and Eight Hundred Seventy-Five Paisa Only) per warrant, being 25% of the issue price per warrant as upfront payment ("Warrant Subscription Price").

Each Share warrant, so allotted, is convertible into or exchangeable for one fully paid-up equity share of the Company having a face value of Rs. 10/- (Rupees Ten Only) each in accordance with the provisions of Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2018 on payment of the balance consideration of Rs. 20.625/- per warrant ("Warrant Exercise Price"), being 75% of the issue price per warrant from the Allottees pursuant to exercise of conversion option against each such warrant, within 18 months from the date of allotment of warrants

ESOP:

During the year under review and in the previous year, the company has neither granted any options nor issued any shares to any employees under SUDITI ESOP 2011. The Certificate from the Secretarial Auditors of the Company certifying that the Company's Stock Option Plans are being implemented in accordance with the ESOP Regulations and the resolution passed by the Members, would be available for inspection during the meeting in electronic mode.

Details of Subsidiary/Joint Ventures/Associate Companies:

The company has two subsidiary companies namely M/s. Suditi Design Studio Limited and M/s. Suditi Sports Apparel Limited. Apart from this, the company has entered into a joint venture arrangement named M/s. SAA & Suditi Retail Pvt Ltd with PAS Lifestyles Pvt. Ltd, a company promoted by celebrity actor Ms. Anushka Sharma and her family. The statement containing the salient feature of the financial statement of a company's subsidiary or subsidiaries and joint venture (AOC-1) is annexed and marked as Annexure I.

The members of the company in their meeting held on January 3, 2025 has approved selling their stake of Suditi Sports Apparel Limited and has ceased to be the subsidiary of the company.

Deposits:

The Company has not accepted any deposits within the meaning of Section 73 & 76 of Companies Act, 2013 and the rules made there under.

Directors & the Key Managerial Personnel:

The list of Directors & KMP's of the company as on March 31, 2025 are as follows:

During the year under review, following changes took place in the composition of the Board of Directors and Key Managerial Personnel:

• Mrs. Seeta Chandanlal Shah has been appointed as Chief Financial Officer w.e.f. May 30, 2024

Post financial year, the following changes took place in the composition of Board & KMPs:

• Mr. Manish Singh (DIN 10729798) has been appointed as non-executive Independent Director of the company w.e.f. April 17, 2025.

Further in accordance with the provisions of Section 152 of the Companies Act, 2013 the Whole Time Director and CEO of the board Mr. Pawan Agarwal (DIN 00808731) retires by rotation in the forthcoming Annual General Meeting and being eligible offer himself for reappointment.

Further, none of the Directors are disqualified for being appointed as the Director of the Company in terms of Section 164 of the Companies Act, 2013.

A declaration by an Independent Director(s) that they meet the criteria of independence as provided in subsection (6) of Section 149 of the Companies Act, 2013 has been submitted to the Board every year in the first Board Meeting of the year. An independent director shall hold office for a term up to five consecutive years on the Board of a Company but shall be eligible for reappointment for next five years on passing of a special resolution by the Company and making disclosure of such appointment in the Board's report. In the opinion

of the Board, the independent directors fulfill the conditions specified in the Regulations and are independent of the management.

Directors' Responsibility Statement:

The Directors hereby confirm -

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

ii) That 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 at the end of the financial year and of the profit of the Company for that period;

iii) That the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

iv) That the Directors have prepared the annual accounts on a 'going concern' basis;

v) That the directors, have laid down internal financial controls to be followed by the company and that such internal financial controls are adequate and were operating effectively and;

vi) That the directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems are adequate and were operating effectively;

Meetings of the Board:

The company prepares a calendar of meetings in advance and circulated to the Directors. During the year, seven Board Meetings were convened and held. The details of which are given in the Corporate Governance Report. The intervening gap between the Meetings was within the period prescribed under the Companies Act, 2013 including the amendments and the rules.

Board Evaluation:

Pursuant to the provisions of the Companies Act, 2013 and Regulation 25 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015, the Independent Directors have reviewed the performance of all the Directors including their own performance, as well as the evaluation of the working of its Audit committee, Nomination & Remuneration committee and other Compliance Committees. The details are provided in the Corporate Governance Report.

Particulars of contracts or arrangements with related parties:

The related party transactions undertaken by the company are within the permissible limits of the special resolution passed by the shareholders and as a matter of prudence all the transactions with related parties are also placed before the Audit Committee for its review. An omnibus approval from the Audit Committee was obtained for the related party transactions which are repetitive in nature. All the transactions with related parties entered into during the year under review were in the Ordinary Course of Business and on Arms' Length Basis in accordance with the provisions of the Act, Rules made thereunder and SEBI Listing Regulations.

The Audit Committee and the Board reviewed all the transactions entered pursuant to the omnibus approvals, on a quarterly basis. Approval of the Members of the Company is also obtained in case any related

party transaction exceeds the prescribed limits and as good corporate governance practice, since there may be few transactions that may be carried out in the long-term interest of the Company. The Policy on Related Party Transactions is available on the Company's website and can be accessed at https://suditi.in.

The particulars of contract or arrangements entered by the Company with related parties at arm's length basis referred to in sub-section (1) of section 188 of the Companies Act, 2013 is disclosed in Form No. AOC-2 as Annexure II.

Particulars of Employees:

Pursuant to the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, details are annexed and marked as Annexure III and forms part of the report.

Energy, Technology and Foreign Exchange:

The particulars relating to conservation of Energy, Technology Absorption and Foreign Exchange earnings and outgo as required under Section 134 (3) (m) of the Companies Act, 2013 is given in the Annexure IV forming part of this report.

Corporate Governance:

A separate section on Corporate Governance and a certificate from the Auditors of the Company regarding compliance of conditions of Corporate Governance as stipulated under Regulation 34 & other applicable Regulations of the SEBI (Listing Obligations & Disclosure Requirements) Regulations 2015 (Listing Regulations), form part of the Annual Report.

Auditors:

M/s. Chaturvedi & partners, Chartered Accountants (FRN: 307068E) were appointed as Statutory Auditors of the Company, at the 31st Annual General Meeting held on September 29, 2022, for a term of 5 (five) consecutive years i.e. to hold office from the conclusion of 31st Annual General Meeting until the conclusion of 36th Annual General Meeting of the Company to be held in the financial year 2027.Further, the aforesaid Statutory Auditors have confirmed that they are not disqualified to act as Auditors and are eligible to hold office as Auditors of your Company for financial year.

Further, the report of the Statutory Auditors along with the notes to accounts is enclosed with the Financial Statements. The Auditors have issued an unmodified opinion on the Financial Statements for the financial year ended March 31, 2025. The Auditors of the Company have not reported any fraud as specified under Section 143(12) of the Companies Act, 2013.

Secretarial Audit Report:

In terms of Section 204 of the Companies Act 2013 and the rules made there under, M/s. HRU & Associates, Practicing Company Secretary had been appointed as Secretarial Auditors of the Company. The report of the Secretarial Auditors is enclosed. The Secretarial Audit Report is self-explanatory and does not call for any further additional comments since the comments are addressed separately in this report.

Cost Audit:

In view of the new Companies (Cost Records & Audit) Rules 2014 and amendment thereof, the company is now out of the purview of the Cost Audit Report Rules.

Internal Audit & Controls:

The Company had appointed M/s. Shambu Gupta & Co., Chartered Accountants as the internal Auditor to carry out the internal audit functions including the task of suggesting and implementing the board's recommendations to improve the control environment for the year 2023-24. Their scope of work covered review of processes for safeguarding the assets of the Company, review of operational efficiency, effectiveness of systems and processes, and assessing the internal control strengths in all areas. Internal Auditors findings are discussed with the process owners and suitable corrective actions taken as per the directions of Audit Committee on an ongoing basis to improve efficiency in operations.

Vigil Mechanism:

The company has set up a Vigil Mechanism in pursuant to the provisions of section 177(9) & (10) of the Companies Act, 2013 for directors and employees to report genuine concerns from time to time. The Vigil Mechanism Policy has been made available to each and every stakeholder and the Company has designated a senior official as Vigilance Officers to support the Vigilance Mechanism functions.

Risk management policy:

A statement indicating development and implementation of a risk management policy for Company including identification therein of elements of risk, if any, that in the opinion of the Board may threaten the existence of the company is given separately in the Corporate Governance Report.

Details in respect of adequacy of internal financial controls with reference to the Financial Statements:

The company has an internal control mechanism in operation to ensure that the financial statements prepared are true, fair and transparent. Apart from this there is an internal audit mechanism also apart from the direct supervision of the Management to ensure that all the financial transactions executed are in compliance with applicable laws and regulations and in line with the budget plans. All the major variations or deviations are appropriately dealt with by the internal Audit department as well as by the Audit committee. The Company had earlier engaged an independent Chartered Accountant Firm to develop an improved and strong standard operating procedures and the same is followed. According to the management the present mechanism followed in the company is adequate and effective. The details are also stated in the Management discussion and analysis report annexed herewith and form part of this report.

Particulars of loans, guarantees or investments under section 186 of the companies Act:

There are no loans/guarantee or security provided during the year under review. Details of 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.

Extract of Annual Return:

As required pursuant to section 92(3) read with Section 134(3) (a) of the Act, the annual return is placed on the website of the company.

Obligation of company under the "Sexual Harassment of Women at Workplace (Prevention, Prohibition, and Redressal) Act 2013:

The company has set up a separate internal compliance committee under the "Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013". The Internal Complaints Committee is empowered to look into complaints relating to sexual harassment at work place of any women employee. Accordingly, the Company has adopted a policy for prevention of Sexual Harassment of Women at workplace and the Committee ensures that the said policy is properly implemented all over the company. During the year Company has not received any complaint of harassment.

Corporate Social Responsibility (CSR):

As per the provisions of the Companies Act, 2013, the company has constituted a separate committee to formulate the CSR policy and ensure the compliance of the same as per the provisions of the Companies act 2013. In view of the substantial losses reported, there is no requirement for the company to earmark any amount for the purpose of CSR expenditure.

However as per the provisions of the Act for the financial year 2019-20, the company is required to spend an amount of Rs.7.20 Lakhs in the year 2020-21 and accordingly the company has spent an amount of Rs.9.75 lakhs against the same. The surplus spend is carried forward and the same will be adjusted against the amount to be spent subsequently. Apart from this, the company needs to spend another amount of Rs.9.51 lakhs pertaining to the profits computed based on the Financial Results of FY 2018-19. However, in view of the prevailing circumstances the company has not made the expenditure of the same. The details are separately provided in the disclosures as per Rule 9 of Companies (Corporate Social Responsibility Policy) Rules, 2014.

Transfer of amounts to Investor Education and Protection Fund:

There is an amount of Rs. 4,71,015/- being unclaimed dividend and 108890 equity shares have been transferred during the year to the Investor Education and Protection Fund as per applicable Rules and reported to the Registrar of Companies, Ministry of Corporate Affairs. Further an amount of Rs. 4,17,048/- being unpaid and unclaimed lying in the unpaid dividend account due to be transferred to Investor Education and Protection Fund (IEPF). Pursuant to the provisions of the Investor Education Protection Fund (Uploading of information regarding unpaid and unclaimed amounts lying with companies) Rules, 2012, the Company has already filed the necessary form and uploaded the details of unpaid and unclaimed amounts lying with the Company, as on the date of last AGM, with the Ministry of Corporate Affairs.

Listing with Stock Exchange:

The Company confirms that it has paid the Annual Listing Fees to BSE Ltd (Bombay Stock Exchange Limited) where the Company's Shares are listed.

Statement on compliances of secretarial standards:

The Board has complied with applicable Secretarial Standards as specified u/s 118 of Companies Act, 2013.

Miscellaneous:

• During the year, there was no change in the general nature of business of your Company.

• During the year, there are no significant and material orders passed by any regulators or courts or tribunals impacting the going concern status and company's operations in future.

• There are no material changes and commitment affecting financial position of the Company which has occurred between the end of the financial year of the Company i.e. March 31, 2024 and the date of this Report.

• During the year, the company has not issued equity shares with differential rights as to dividend, voting or otherwise;

• During the year, the Company has not allotted any sweat equity shares. Therefore, no disclosures as required under Rule 8 (13) of Companies (Share Capital and Debentures) Rules, 2014.

• During the financial year under review, no applications was made or proceeding initiated against the Company under the Insolvency and Bankruptcy Code, 2016 nor any such proceeding was pending at the end of the financial year under review.

Appreciation:

Your Company and its Directors wish to place on record their sincere appreciation for the support and assistance extended by different Central and State Government Departments and Agencies, Banks and Financial Institutions, Insurance companies, Customers and Vendors. Your directors are thankful to the esteemed shareholders for their continued support and confidence reposed in the company and its management. Your directors also wish to place on record their deep sense of appreciation to all the employees of the Company for their outstanding and dedicated contribution made towards the growth of the Company.