Sukhjit Starch & Chemicals Ltd

Dear Share Holders :

Your Directors are pleased to present before you the 81^st Annual Report and the Audited Statement of Accounts for the year ended 31^st March, 2025 :-

1. FINANCIAL RESULTS

(H in Crores)

2. PERFORMANCE

The annual turnover of the Company has increased by about 8.41% to H 1486.19 Crores during the current financial year against H 1370.86 Crores in the previous year.

The EBITDA (Earnings before Interest, Tax and Depreciation) stood at H 109.78 Crores v/s H 134.39 crores during the previous year.

After a charge of interest of H 28.52 Crores (H 30.50 Crores), depreciation of H 28.38 Crores (H 26.77 Crores) and tax of H 13.40 Crores (H 21.50 Crores), the Net Profit after tax came at H 39.48 Crores ( H 55.62 Crores) for the year.

For the year ended March 2025, our company has delivered a resilient performance despite a dynamic operating environment marked by fluctuations in maize prices and subdued demand in some sectors. The starch industry as a whole has navigated a year of elevated raw material costs and limited export opportunities owing to shifts in the global tariff structure. Domestic demand from certain segments also remained muted. Despite these headwinds, your Company has maintained its revenue momentum, recording a top line of H 1,486 crores.

Margins were impacted during the year, primarily due to volatility in maize prices influenced by varying demand from ethanol producers, as well as pricing pressure on finished goods across some downstream sectors. This scenario is expected to ease by H2FY26 supported by improved maize availability from the Rabi harvest and spring crops in key producing states there by stabilizing the price and supply.

3. DIVIDEND AND DIVIDEND DISTRIBUTION POLICY

The Directors are pleased to recommend a dividend of 20% i.e. H One per equity share of H 5/-each (after subdivision / split of the equity shares of the Company of face value of H 10/- each into two shares of face value of H 5/- each) during the financial year ended 31^st March, 2025 against interim dividend of 80% (i.e. H8/- per equity shares of H 10/- each) paid in 2023-2024. The outflow on account of the dividend will be H 3.12 cr. (P.Y.12.50 cr.) The payment of final dividend is subject to the approval of the shareholders at the ensuing Annual General Meeting. The dividend recommended is in accordance with the Company's Dividend Distribution Policy. The Policy, in terms of Regulation 43A of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 ('SEBI Listing Regulations') is available on the Company's website on https://www.sukhjitgroup.com/dividend-distribution-policy.

Pursuant to the provisions of the Income-tax Act, 1961, the dividend paid or distributed by a Company shall be taxable in the hands of the shareholders. Accordingly, in compliance with the said provisions, your Company shall make the payment of the dividend after the necessary deduction of tax at source at the prescribed rates, wherever applicable. For the prescribed rates for various categories, the shareholders are requested to refer to the Income Tax Act, 1961 and amendments thereof.

4. TRANSFER TO RESERVES

H 30 Crores have been transferred to the general reserves (PY H 40 Crores) and H 37.11 Crores have been carried forward in the Retained Earnings Account.

5. SHARE CAPITAL

The Company has sub-divided / split the equity share of the company of face value of H 10/- each into 2 shares of face value of H5/- each during the year reference increasing the number of equity shares to 31244000 with the paid up share capital of the Company remaining same at H 15.62 crores as on 31.03.2025. There was no issue of fresh shares by way of public issue, bonus issue, right or preferential issue during the financial year 2024-25.

6. CAPEX & WORKING CAPITAL POSITION

The total Net Fixed Assets Block (including capital work-in progress) of the Company appeared at H534.15 Crores as on 31.03.2025 against H524.61 Crores as on 31.03.2024 after providing depreciation of H 28.38

Crores during the year (H 26.77 Crores).

The Company has made a Capital expenditure (on addition of fixed assets) of H 39.50 Crores during the year on account of balancing / upgrading / expansion of its existing manufacturing facilities.

The Board of Directors has approved Capital expenditure of H 20 Crores for the financial year 2025-26, which will be used for modernizing some key equipment of the units to improve the operations and scale up efficiencies at the existing locations. The proposed Cap-ex will be met out of the internal accruals of the company.

The Current Assets of the Company appeared at H 470.55 Crores on 31.03.2025 as compared to H 462.72 Crores on 31.03.2024 including Inventories of H 215.34 Crores against H 217.76 Crores in the previous year. In view of the fluctuating raw material prices during the year, we opted for keeping optimum stocks of raw material by following prudent purchase policy, due to which the Company was able to cut its carrying cost, thereby saving on interest during the FY 2024-25.

The company has Nil long term Bank Borrowings as on 31.03.2025 (P.Y. H 3.75 Crores), net of the current maturity of the term loans of H 3.75 Crores (P.Y. H 26.27 Crores).

The internal accruals of the company will be sufficient to keep on strengthening the working capital of the company. Moreover, it has liquid investments of H 52.57 Crores against H 82.81 Crores last year as an additional cushion to the liquidity of the company. The management believes that the Company has sufficient liquid resources at hand to meet up any additional working capital requirements / other business exigencies.

7. MANAGEMENTDISCUSSIONANDANALYSIS

As per SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, Management Discussion and Analysis report is annexed herewith marked as 'Annexure A' and forms a part of this report.

8. CORPORATE GOVERNANCE

Your company is fully committed to the philosophy of transparency and believes in conducting its business scrupulously with due compliance of all the applicable laws, rules and regulations. Your directors believe that corporate governance is an ethically driven business process that is committed to strategies leading to long term sustainable growth of the Company. Your Company's corporate governance practices are driven by effective and strong Board oversight, timely disclosures, transparent accounting policies and high levels of integrity in decision making. In due compliance with the requirements of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, as amended to date, the report on the Corporate Governance is annexed to this report marked as 'Annexure B'.

9. DIRECTORS' RESPONSIBILITY STATEMENT

Pursuant to Section 134 (3c) of the Companies Act, 2013, the Directors state that: (a) in the preparation of the Annual Accounts for the financial year ended 31^st March, 2025, the applicable Indian Accounting Standards have been followed and there are no material departures; (b) appropriate accounting policies have been selected and applied 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 the years so ended; (c) proper and sufficient care has been taken 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) the Annual Accounts for the year ended 31.03.2025, have been prepared on a 'going concern' basis; (e) the internal financial controls have been laid down to be followed by the company and that such internal financial controls are adequate and are operating effectively; and (f) proper systems have been devised to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively.

The Vijoy Steel & General Mills Company Ltd., Phagwara: The Company held 96.17% of shares in the capital of The Vijoy Steel & the General Mills Co. Ltd. The Company continued providing necessary engineering support to the manufacturing operations of the Company.

Scott Industries Ltd., Phagwara: It held 99.97% of shares in the capital of the Scott Industries Ltd. The Company has shut down its operations. Most of its assets have been already disposed of and efforts are on to realize the old dues from its customers and wind up the Company.

Sukhjit Mega Food Park & Infra Ltd., Phagwara: The Company held 100% of shares in the capital of Sukhjit Mega Food Park & Infra Ltd. The Company had operationalised its project of the Mega Food Park in the state of Punjab in FY 2020-21 creating a State of Art Technology Infrastructure for setting up food processing units in the Mega Food Park. Most part of its assets have been leased out and operationalised. The Company has shown turnaround during FY 2024-25 and expects to continue increasing / expanding its operations / revenues during the coming years.

There has been no material change in the nature of business of the Subsidiaries. As required under the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, as amended to date, the Consolidated Financial Statements of the Company and its subsidiaries are attached and have been prepared in accordance with the relevant Indian Accounting Standard(s) as prescribed under the Companies Act, 2013.

In pursuance to the general circular issued by the Ministry of Corporate Affairs, the Balance Sheet, Profit & Loss Account and other documents of the subsidiary companies are not being annexed to the Balance Sheet of the Company. A statement containing the requisite financial details of the company's subsidiaries for the financial year ended 31^st March, 2025 is annexed to the consolidated results forming part of the Annual Report.

In accordance with Section 136(1) of the Companies Act, the audited financial statements including the consolidated financial statements and related information of the Company together with financial statements of each of the subsidiary companies, are available on the Company's website at https://www. sukhjitgroup.com. The annual accounts of these subsidiaries and the related detailed information will be made available on demand, to any shareholder of the Company who may be interested in seeking such information. Copies of the above documents are also available for inspection by any shareholder of the Company at the registered office of the Company during business hours.

In terms of the provisions of section 197(12) of the Companies Act, 2013 read with Rules 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the particulars of Directors / KMPs / Employees are set out in the 'Annexure C' to the Directors' Report.

(a) Smt. Shalini Umesh Chablani (DIN: 00885883), Non Executive Directoer of the Company, is retiring by rotation and being eligible, offers herself for reappointment. Board recommends her re-appointment as the Non Executive Director of the Company.

(b) Sh. Rakesh Chawla has been appointed as the new CFO of the Company (in place of the earlier CFO Sh. M.G. Sharma), as KMP under the provisions of section 203 of the Companies Act, 2013 w.e.f 07.08.2024 for a period of 5 years i.e. upto 06.08.2029. Sh. M.G. Sharma will however continue to act as the Executive Director of the Company.

(c) None of the Directors of your Company is disqualified under the provisions of Section 164(2) of the Act. A certificate dated 26^th May 2025 received from M/s Dinesh Gupta & Co., Company Secretaries (CoP No: 1947) certifying that none of the Directors on the Board of the Company has been debarred or disqualified from being appointed or continuing as directors of companies by Securities and Exchange Board of India ("SEBI")/Ministry of Corporate Affairs or any such statutory authority is annexed to the Corporate Governance Report. (d) The Company has received declarations from all the Independent Directors of the Company confirming that they meet the criteria of independence and comply with all the requirements in pursuance to sub-section (6) of Section 149 of the Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, so as to qualify themselves to be appointed / re-appointed or to continue as Independent Directors.

(e) Based on evaluation criteria laid down under the Nomination and Remuneration Policy of the Company, framed in accordance with the provisions of section 178 of the Companies Act, 2013, the Nomination & Remuneration Committee rates the performance of the individual directors and also the Board as a whole, which, inter-alia, include:

Evaluation of leadership abilities

Contribution to corporate objectives & growth

Regular monitoring of performance

Effective decision making ability

Attendance/Participationinthedeliberation of Board and Committee meetings The Company has in place a suitable Policy for the Appointment & Remuneration of the Directors / KMPs which may be accessed on the Company's website at https://www.sukhjitgroup.com/remuneration-policy-for-directors-kmps-other-executives. The Company has devised the Board's Performance Evaluation criteria for evaluation of Board's / Committees / Directors' performance. The performance of the Committees was evaluated by the Board on the basis of the criteria such as the composition of committees and effectiveness of committee meetings etc.

The Independent Directors in their Separate Meeting reviewed the performance of Non - Independent Directors, the composition & performance of the Board of Directors as a whole, frequency of Board meetings etc. The Independent Directors also reviewed the performance & participation of the Chairperson of the Company. Such proceedings were placed on record and discussed in the Board Meeting following the meeting of the Independent Directors. The Board of Directors expressed their satisfaction over the evaluation process.

Eight (8) meetings of the Board of Directors were convened and held during the financial year 2024-25. The maximum intervening gap between the meetings was within the limits prescribed under the provisions of Section 173 of the Act and Listing Regulations. The further details of Board / Committee Meetings including composition and attendance are set out in the 'Annexure B' the Corporate Governance

Report, forming part of this Report.

The powers, role and terms of reference of the Audit Committee cover the areas as contemplated under Section 177 of the Companies Act, 2013 ('the Act') and Regulation 18 of the SEBI (LODR) Regulations, 2015, as applicable, besides other matters as referred by the Board of Directors from time to time.

The primary objectives of the audit committee inter-alia include: to monitor and provide an effective supervision of the Management's financial reporting process, to ensure accurate and timely disclosures with highest levels of transparency, integrity and quality of financial reporting, to oversee the financial reporting process by the Management, the internal auditors and the independent auditors, to take all possible measures to ensure the objectivity and independence of the independent auditors.

The Committee mandatorily reviews information such as internal audit reports related to internal control process, management discussion & analysis and operational results, statement of significant related party transactions and such other matters as prescribed.

During the year under reference, the Audit Committee of the Company consisted of Sh. Ranbir Singh Seehra as the Chairman, Sh. Suresh Arora, Sh. Vikas Uppal and Sh. M. G. Sharma as its members. All recommendations made by the Audit Committee during the year were accepted by the Board.

Internal financial control systems of the company provide for proper authorization of the material transactions, timely recording & reporting of the transactions in the desired manner to ensure the reliability of financial reporting, timely feedback on the achievement of operational or strategic goals and compliance with all the applicable laws & regulations. The Internal & External Auditors of the Company also measure the effectiveness of internal controls through periodical checks and ensure that company has an effective internal control system duly commensurate with its size and nature of business. The management reviews the systems periodically to systematically improve business processes in regard to their effectiveness and efficiency The Company has implemented audit trail on the books of accounts.

Pursuant to Section 177 of the Companies Act, 2013 & rules made thereunder and the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Company has established a vigil mechanism, which also incorporates a Whistle Blower Policy, for Directors and employees of the Company to report genuine concerns of unethical behavior or violation of code of conduct by way of direct access to the Chairman of the Audit Committee. There are adequate safeguards against victimization of employees / directors who express their concerns. The Whistle Blower Policy of the Company stands placed on the Company's website at the link: https:// www.sukhjitgroup.com/whistle-blower-policy.

The company recognizes that the risk management and internal controls are the key elements for sustainable working of an organization and good corporate governance. It has formulated the Risk Management Policy which describes the manner in which the company identifies, assesses, monitors and manages risks. The details of the policy are available at company's website at https://www.sukhjitgroup. com/risk-management-policy.

(i) All the deposits have been accepted / renewed / repaid as per the provisions of the Companies Act. The company had no unclaimed / unpaid deposits on 31.03.2025.

(ii) Unsecured Loans as on 31.03.2025 include H 2.92

Crores (P.Y. H 0.58 Crores) received from directors, which have been made out of their own funds and not from the funds acquired by them by borrowing or accepting loans or deposits from others, as per the declarations received from the concerned directors.

(iii) The Company has duly complied with Secretarial Standards issued by the Institute of Company Secretaries of India on Meetings of the Board of Directors, Committee Meetings and the General Meetings.

(iv) No shares have been issued during the year under reference with differential rights as to dividend, voting or otherwise.

(v) There is no significant and material order passed by any Regulator, Court, Tribunal which may impact the going concern status of the Company and Company's operations in future.

(vi) There are no material changes or commitments affecting the financial position of the Company which occurred between the end of the financial year to the date of this report.

(vii) There is no Corporate Insolvency Resolution Process initiated against the Company or any of its subsidiaries under the Insolvency and Bankruptcy Code, 2016.

(viii) There is no change in the nature of company's business during the year under review.

(ix) There was no instance of fraud during the year under reference which required the Statutory Auditors to report to the Audit Committee and / or to the Board under Section 143(12) of Act and Rules made there under.

(x) The Board has constituted an Internal Committee for redressal of grievance(s) / complaint(s) (if any) under the provisions of the ''Sexual Harassment of Woman at Workplace (Prevention, Prohibition and Redressal) Act, 2013''. The committee has not received any complaint during the year under reference.

(xi) In view of the relaxation(s) granted by The Ministry of Corporate Affairs (MCA) / SEBI and as per the Green Initiatives of MCA, the Company has been serving to its shareholders all Notices, communications / documents including Annual Reports, Circulars etc. through electronic mode. (xii) There has been no default in repayment of deposits or payment of interest there on during the year.

(xiii) There was no instance during the year where the recommendations of any committee were not accepted by the Board.

(xiv) There was no case of one time settlement with any Bank or Institution.

The report on Corporate Social Responsibility activities carried out during the financial year 2024-25 is annexed herewith marked as 'Annexure D' forms part of this report.

Pursuant to the provisions of the Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations, 2015 and amendments thereto, the Company has adopted an Internal Code of Conduct for Regulating, Monitoring and Reporting of Trades in securities of the Company by the Directors and other Designated Persons. The Code seeks to prevent Insider Trading by the Directors and other Designated Persons who are considered to have access to the Unpublished Price Sensitive Information relating to the Company.

The Company has not entered into any material transaction with its Directors, Key Managerial Personnel or their Relatives which could have potential conflict with the interest of the Company. The salaries / remuneration of the directors and KMPs have been fixed after due consideration and approval by the Nomination and Remuneration Committee / Board / Shareholders as per applicable provisions of the Companies Act, 2013. The transactions with the subsidiary companies mainly include the supply of some key infrastructural facilities and utilities by Sukhjit Mega Food Park and Infra Ltd., which is a wholly owned subsidiary of the Company. However, the transactions with subsidiary Companies are incurred after due appraisal, approval(s) at appropriate levels and under the omnibus approval of the Audit Committee / Board, which are in the ordinary course of business and are at an arm's length price. In terms of INDAS-24, the details of such transactions are duly presented in the Notes to Accounts forming part of the Annual Report. Policy on related party transactions of the company appears on the Company's website at the link: https://www.sukhjitgroup.com/policy-on-dealing-with-related-party-transactions.

Particulars of loans given and Investments made by the Company are provided in the standalone financial statements. The Company has given / provided some Guarantees / Securities to the Govt. / other Departments in the ordinary course of business. The company has also provided Corporate guarantee(s) for H 40 Crores to the Yes Bank Ltd. against the Term

Loan for setting up the Mega Food Park by its wholly owned subsidiary M/s Sukhjit Mega Food Park & Infra Ltd. The outstanding balance of term loan appeared at H 2 Crores due to the Yes Bank Ltd. as on 31.03.2025. The amount will be cleared during the running year and the Corporate Guarantee of H 40 Crores will be released by the Yes Bank Ltd. There is no other Guarantee / third party Guarantee / security given / provided by the Company.

As required under the provisions of Section 134(3)(a) and Section 92(3) of the Companies Act, 2013 read with Rule 12 of the Companies (Management and Administration) Rules, 2014, (including any statutory modification(s) or re-enactment thereof, for the time being in force), the Annual Return is displayed on the website of the Company at https://www.sukhjitgroup. com/annual-return.

The necessary details are annexed herewith as 'Annexure E' to this report.

Pursuant to the applicable provisions of the Companies Act, 2013 read with the Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) Rules, 2016 (IEPF Rules), the company has transferred during the FY 2024-25 H 10,39,135/- as unpaid / unclaimed dividend for FY 2016-17 to Investor Education and Protection Fund (IEPF).

9,921 shares to the demat account of the IEPF Authority during FY 2024-25 on which dividend has not been paid / claimed by the shareholders for 7 (seven) consecutive years or more.

Pursuant to the provisions of section 139 and 142 of The Companies Act, 2013 and other applicable provisions, if any, of the Act or any amendments or enactments thereof, M/s Y K Sud & Co., Chartered Accountants (FRN 000047N) were appointed as Statutory Auditors of the Company in the Annual General Meeting held on 12/08/2022 for a period of 5 years and their tenure expires on the conclusion of 83^rd Annual General Meeting of the Company to be held in the year 2027. They have confirmed their eligibility to continue as the Statutory Auditors of the Company. The Company has paid a sum of H 7.08 Lacs (incl. GST) (PY H 7.08 Lacs) to M/s Y K Sud & Co., Chartered Accountants as audit fees during the Financial Year ended 31^st March, 2025.

The Auditors' report for the financial year ended 31.03.2025 does not have any qualification, reservation, adverse remark or disclaimer by the statutory auditors.

The Board of Directors recommends the re-appointment of M/s Khushwinder Kumar & Associates, Cost Accountants, as Cost Auditors of the Company for the financial year 2025 - 26, subject to the approval of the Central Government. The Cost Audit Report for the financial year ended 31^st March, 2025 is due to be filed with the Ministry of Corporate affairs on or before the 30^th September, 2025 and will be filed accordingly. The cost audit report for the financial year ended 31/03/2024 was duly filed within the due dates.

The term of M/s Dinesh Gupta & Co., Practicing Company Secretaries as Secretarial Auditors of the Company is expiring with the conclusion of the ensuing Annual General Meeting and pursuant to the provisions of section 204 of the Companies Act, 2013 read with Rule 9 of Companies, (Appointment and Remuneration of Managerial Personnel) Rules, 2014, Regulation 24A of SEBI (LODR) Regulations, 2015 and other applicable provisions, if any or any amendments or enactments thereof, the Board recommends the re-appointment of M/s Dinesh Gupta & Co., Practicing Company Secretaries as Secretarial Auditors of the Company for a further period of 5 years i.e. upto the conclusion of 86^th Annual General Meeting of the Company, to be held in the year 2030, subject to the approval of shareholders in the ensuing Annual General Meeting. They have confirmed their eligibility to be appointed / re-appointed as Secretarial Auditors of the Company.

The Secretarial Audit Report for the financial year ended 31^st March, 2025 in relation to compliance of Section 204 of the Companies Act, 2013 and all applicable SEBI Regulations / circulars / guidelines issued thereunder, pursuant to requirement of Regulation 24A of Listing Regulations is set out in 'Annexure G' to this report.

The Secretarial Audit Report does not contain any qualification, reservation or adverse remark.

The Company has undertaken an Annual Secretarial Compliance Audit for the financial year 2024-25 pursuant to Regulation 24A (2) of the SEBI Listing Regulations. The Annual Secretarial Compliance Report for the financial year ended 31^st March, 2025 has been submitted to the Stock Exchanges and the said report may be accessed on the Company's website at the link https://www.sukhjitgroup.com/ secretarial-compliance-report

Your Directors hereby acknowledge the dedication, loyalty, hard work and committed services of the executives, staff & workers of the Company. They also like to place on record their appreciation for the continued co-operation and support received by the Company during the year from bankers, financial institutions, government authorities, business associates, shareholders, vendors, customers and other stakeholders and for the confidence reposed in the Company and its management and look forward to their continued support in the future.