To The Members

Your Directors are pleased to present their Sixty-Second Annual Report on the business and operations of the Company and the financial results for the year ended 31^st March, 2025.

FINANCIAL SUMMARY / HIGHLIGHTS

(H in Lakhs)

COMPANY'S PERFORMANCE AND REVIEW OF OPERATIONS

The Operations for the current financial year 2024-25 on a turnover of H 796.34 crores resulted in a profit before tax of H 5.52 crores and a net profit after tax of H 3.63 crores. The production of yarn and fabric were maintained at the last year's level. This is partly on account of the worldwide geopolitical disturbances and political upheaval in our neighbourhood.

DIVIDEND

Your Company proposes to further modernize its machinery and production processes to keep pace with the evolving global trends in the industry. The Board, with a view to conserve resources has not recommended any dividend for the year under review.

CAPITAL EXPENDITURE

During the year under review the Company incurred capital expenditure of H 2230.01 lakhs.

EXPORTS

During the year our exports at H 186.05 crores registered a 9% increase over that in the previous year. You will be happy to note that this growth in exports was inspite of the geopolitical disturbances during the year. The disturbances in Bangladesh which is one of our main markets had significant impact on exports. A series of tariff wars resulting from the US Government's tariff changes have caused uncertainties in global trade and the markets are yet to stabilize.

FUTURE OUTLOOK

Considering the international scenario throwing up new challenges at regular intervals, the Company has been trying to partner with a couple of more European brands to spread the risks in future. The Company proposes to explore new markets like South America, Egypt, Indonesia, and South Korea while making every effort to increase business with existing brand leaders like WalMart, Levi's, Kontoor and Amazon. Further the Company relentlessly pursues the sustainability initiatives undertaken. The company continues to offer unique product mix and excellent service support as always.

CHANGES IN DIRECTORS:

Sri R. Surender Reddy was appointed as a Non-Executive Non-Independent Additional Director on 24/05/2024 and secured the members' approval at the Annual General Meeting held on 22/08/2024 for appointment as Non-Executive Non-Independent Director liable to retire by rotation.

Sri Arvind Sadashiv Mokashi, a retired banker appointed as a Non-Executive Independent Director on 10/08/2023 for a period of five years resigned on 25/12/2024 due to his personal commitments and the Board wishes to place on record its appreciation of his wise counsel and valuable guidance.

Smt. Aruna Prasad was appointed as a Non-Executive Independent Director for a period of five years at the Annual General Meeting held on 22/08/2024.

Dr. Malapally Chowda Reddy Balaji was appointed as a Non-Executive Independent Director on 16/12/2024 for a period of five years following resignation of Sri Arvind Sadashiv Mokashi through Postal Ballot.

CHANGES IN THE STATUS OF KMPs DURING THE YEAR:

Sri L N Agarwal was re-appointed as the Chairman and Managing Director of the Company for a period of five years w.e.f. 22/06/2024 at the Annual General Meeting held on 22/08/2024.

Sri Buddhavarapu Mahadeva Vijaya Kumar resigned from the post of CFO of the Company w.e.f. 17/10/2024 due to his personal commitments and Sri Santosh Kumar Agarwal was appointed as the CFO of the Company w.e.f 01/01/2025.

Further, Sri Paritosh Agarwal's term of appointment as a Managing Director ends in June 2025 and the Board has re-appointed him w.e.f. 21/06/2025 on the existing terms subject to approval of the members of the company in the ensuing 62^nd Annual General Meeting.

Further details about the above directors are given in the Corporate Governance Report.

EVALUATION OF THE BOARD'S PERFORMANCE

In compliance with the Companies Act, 2013, and as per the latest Listing Regulations, the annual performance evaluation of the Board, its Committees and of Individual Directors was carried out during the year under review. More details on the same are given in the Corporate Governance Report.

FAMILIARISATION PROGRAM FOR INDEPENDENT DIRECTORS

The Company has formulated a familiarisation program for the Independent Directors to provide insights into the Company to enable the Independent Directors to understand its business in depth and contribute significantly to the Company. The details of such program are available on the Company's website at http://www. suryalakshmi.com/investor-corporate-governance.aspx.

DECLARATION BY INDEPENDENT DIRECTORS

The Company has obtained the declaration from the Independent Directors confirming that they meet the criteria of Independence laid down in Section 149(6) of the Companies Act, 2013. The Independent Directors appointed during the financial year are persons of integrity and possess expertise and experience in their respective fields.

MEETING OF INDEPENDENT DIRECTORS

A separate meeting of the Independent Directors was held under the Chairmanship of Sri Dhruv Vijai Singh, Independent Director on February 14, 2025, inter-alia to discuss evaluation of the performance of Non-Independent Directors, the Board as a whole, evaluation of the performance of the Chairman, taking into account the views of the Executive and Non-Executive Directors and the evaluation of the quality, content and timeliness of flow of information between the management and the Board that is necessary for the Board to effectively and reasonably perform its duties.

The Independent Directors expressed satisfaction with the overall performance of the Directors and the Board as a whole.

POLICY ON APPOINTMENT & REMUNERATION OF DIRECTORS

The Board of Directors has framed a policy which lays down a framework in relation to remuneration of Directors, Key Managerial Personnel and Senior Management of the Company. The Policy broadly lays down the guiding principles, philosophy and the basis for payment of remuneration to Executive and Non-executive Directors (by way of sitting fees and commission), Key Managerial Personnel, Senior Management and other employees.

The policy also provides the criteria for determining qualifications, positive attributes and Independence of Directors and criteria for appointment of Key Managerial Personnel / Senior Management and performance evaluation which are considered by the Nomination and Remuneration Committee and the Board of Directors while making selection of the candidates. The above policy has been posted on the website of the Company at http://www.suryalakshmi.com/investor-corporate-governance.aspx.

DIRECTORS' RESPONSIBILITY STATEMENT

Your Directors state 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) the Directors had selected such accounting policies and applied them consistently and made judgements 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 and loss of the Company for that period;

(c) the Directors had 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) the Directors had prepared the annual accounts on a going concern basis;

(e) the Directors had laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and are operating effectively.

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

i) Annual Return:

The Company's Annual Return has been hosted on Company's website and can be accessed at the web link www.suryalakshmi.com. Therefore, the extract of Annual Return as per the provisions of Section 92 of the Companies Act, 2013 and Rule 12 of Companies (Management and Administration) Rules, 2014 has not been annexed to this Board's Report.

ii) Number of Board Meetings:

The Board of Directors met four times during the year 2024-2025. The details of the board meetings and the attendance of the Directors are provided in the Corporate Governance Report. iii) Committees of the Board:

There are various Board constituted Committees as stipulated under the Act and Listing Regulations namely Audit Committee, Nomination and Remuneration Committee, Stakeholders Relationship Committee, Risk Management Committee, Corporate Social Responsibility (CSR) Committee. Brief details pertaining to composition, terms of reference, meetings held and attendance of these Committees during the year have been enumerated in Corporate Governance Report and CSR Report which forms part of the Annual Report. iv) Related Party Transactions:

All the related party transactions are entered into on arm's length basis and are in compliance with the applicable provisions of the Companies Act 2013 and the Listing Regulations. There are no materially significant related party transactions made by the company with Promoters, Directors or Key Managerial Personnel etc. which may have potential conflict with the interest of the company at large. Thus disclosure in Form AOC-2 is not required to be made. All Related Party Transactions are disclosed to the Audit Committee and the Board.

Omnibus approval is obtained for the transactions which are foreseeable and repetitive in nature. A statement of all related party transactions is presented before the Audit Committee and the Board on a quarterly basis, specifying the nature, value and terms and conditions of the transactions for its review. The Related Party Transactions Policy as approved by the Board is uploaded on the company's website at the web link: http://www.suryalakshmi.com/ investor.corporate.governance.aspx v) Reporting of Frauds

There was no instance of fraud during the year under review, which required the Statutory Auditors to report to the Audit Committee and / or Board under Section 143(12) of Act and Rules framed thereunder. vi) No Loans / Guarantees / Investments under Section 186 of the Companies Act, 2013 have been made during the year. vii) There were no significant and material orders passed by the Regulators/ Courts that would impact the going concern status of the Company and its future operations

CORPORATE GOVERNANCE

As per the Listing Regulations, Management Discussion and Analysis Report forms part of the Corporate Governance in the Annual Report (ANNEXURE - V). The Company has complied with the corporate governance requirements under the Companies Act, 2013 as stipulated under the Listing Regulations. A separate section on corporate governance under the Listing Regulations, along with a certificate from a Practising Company Secretary confirming the compliance, is annexed and forms part of the Annual Report (ANNEXURE - I).

CORPORATE SOCIAL RESPONSIBILITY

At Suryalakshmi a major concern has been, the sincere effort by the Company to recognize the role played by the Society at large, the environment and its human resources in its sustainability and growth and to strive to discharge its social responsibility as a corporate citizen. To this end, the Company has always tried to strike a fine balance of economic, environmental and social commitments. The sustainable stewardship mantra is not limited to philanthropy, but encompasses holistic community development and other initiatives to strengthen business sustainability. The core areas for Suryalakshmi's Corporate Social Responsibility (CSR) Programmes for this year have been health care, environment and education. Details of the projects / activities implemented by the Company are furnished in a separate ANNEXURE-II to this report. The Company constituted a Committee of CSR consisting of Sri L. N. Agarwal, Sri Paritosh Agarwal and Sri Dhruv Vijai Singh, with Sri Dhruv Vijai Singh as Chairman.

RISK MANAGEMENT POLICY

The Company has instituted a proper mechanism for identifying and establishing controls to effectively manage different kinds of risks viz., Trend Related Risks, Raw Material Risks, Brand / Technology Risks, Operational Quality Risks, Human Resources Risks, Regulatory Risks and Financial Risks. A Committee headed by Sri Paritosh Agarwal, Managing Director periodically reviews the risks and takes steps to mitigate identified risks.

WHISTLE BLOWER POLICY

The Company has in place a Whistle Blower policy for vigil mechanism for Directors and employees to report to the management about unethical behaviour, fraud, violation of Company's Code of Conduct, which also ensures safeguards against victimization of those employees who seek to make use of the free access to the Audit Committee for this purpose. None of the Personnel has been denied access to the audit committee. The Whistle Blower Policy has been posted on the website of the Company at www. suryalakshmi.com/investor-corporate-governance.aspx

DECLARATION ABOUT COMPLIANCE WITH THE CODE OF CONDUCT BY MEMBERS OF THE BOARD AND SENIOR MANAGEMENT PERSONNEL.

The Company has complied with the requirements of Code of Conduct for Board members and Senior Management Personnel.

DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013

The Company has in place an Anti-Sexual Harassment Policy in line with the requirements of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. Internal Complaints Committee has been set up to redress complaints received regarding sexual harassment. All employees (permanent, contractual, temporary and trained) are covered under the Policy. The following is a summary of sexual harassment complaints received and disposed of during each Calendar year:

a) No. of Complaints received - NIL b) No. of Complaints disposed off during the year - NIL c) No.ofcasespendingasatendoftheFinancialYear-NIL

I. Statutory Auditors and their Report

M/s. Brahmayya & Co, Chartered Accountants, Hyderabad (ICAI Firm Regn No.000513S) were appointed as auditors for a period of 5 years in the 59^th AGM on a remuneration mutually agreed upon by the Board of Directors and the Statutory Auditors.

The Company has received the prescribed certificate from the Auditors regarding the appointment and the necessary consent for their appointment as Auditors. The Auditors' Report to the shareholders for the year under review does not contain any qualification, reservation or adverse remark.

II. Cost Auditor and Cost Audit Report

As per the requirement of Central Government and pursuant to Section 148 of the Act, 2013 read with the Companies (Cost Records and Audit) Rules, 2014 as amended from time to time, your Company was required to maintain cost records and accordingly, such accounts are made and records have been maintained relating to Textile Divisions every year.

Pursuant to Section 148 of the Companies Act, 2013 the Board of Directors on the recommendation of the Audit Committee, has appointed M/s. S. Hariharan

& Associates, Cost Accountants (Firm Registration No.100486) as the Cost Auditors for the Financial Year 2025-26 and has recommended their remuneration to the shareholders for their ratification at the ensuing Annual General Meeting. M/s. S. Hariharan & Associates, Cost Accountants have confirmed their appointment is within the prescribed limits and also certified that they are free from any disqualification.

III. Secretarial Auditor and Secretarial Audit Report

As required by the recently amended SEBI (LODR) Regulations, 2015 the Company has appointed M/s. K V C Reddy & Associates, Company Secretary in Whole-time Practice (M. No. F9268) as Secretarial Auditor subject to approval of members in the ensuing 62^nd Annual General Meeting for a period of five consecutive years to carry out the Secretarial Audit under the provisions of Section 204 of the Companies Act, 2013.

The report of the Secretarial Auditor for the financial year 2024-25 does not contain any qualifications, reservation or adverse remarks and is annexed to this report as ANNEXURE -III.

IV. Internal Auditor

Pursuant to the provisions of Section 138 of the Companies Act, 2013 read with rules made there under, the Board has appointed M/s. K. Vijayaraghavan & Associates, LLP, a reputed firm of Chartered Accountants, as Internal Auditors of the Company.

INTERNAL CONTROL SYSTEMS & THEIR ADEQUACY

Your Company has effective and adequate internal control systems in place commensurate with the size and complexity of the organisation. Internal and operational audit is carried by M/s. K. Vijayaraghavan & Associates LLP, a reputed firm of Chartered Accountants. The Internal Audit system is designed to meet the statutory requirements as well as ensure proper implementation of management and accounting controls. The internal auditors submit their report to the Managing Director and also to the Audit Committee, which reviews the report and ensures that the Audit observations are attended to by the Management.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO

Information on conservation of energy, technology absorption, foreign exchange earnings and out go, as required to be given pursuant to provision of Section 134 of the Companies Act, 2013 read with the Companies (Accounts) Rules, 2014 is annexed here to marked ANNEXURE-IV and forms part of this report.

DEPOSITS

The Company has not accepted any deposits from the public during the year under review.

COMPLIANCE WITH SECRETARIAL STANDARDS

The Company has complied with the Secretarial Standards issued by the Institute of Company Secretaries of India.

EMPLOYEES

Periodic Training programmes for developing a skilled workforce, personality development programmes, yoga camps, etc., encouragement of employee participation in district / state level sports events are regularly undertaken. An integrated woman focused program trains unskilled women to undertake skilled jobs at its units.

Disclosure pertaining to the remuneration and other details as required under Section 134 & 197(12) of the Act, and the Rules framed thereunder is enclosed as ANNEXURE-VI to the Board's Report.

MATERIAL CHANGES AND COMMITMENTS, IFANY,AFFECTINGTHEFINANCIALPOSITION OF THE COMPANY WHICH HAVE OCCURRED BETWEEN THE END OF THE FINANCIAL YEAR OF THE COMPANY TO WHICH THE FINANCIAL STATEMENTS RELATE AND THE DATE OF THE REPORT & CHANGE IN NATURE OF BUSINESS, IF ANY

There have been no material changes and commitments affecting the financial position of the Company