Himatsingka Seide Ltd Directors Report

Dear Shareholders,

We are pleased to present the Fortieth (40th) Annual Report on the business and operations of Himatsingka Seide Limited (Company), along with Audited Financial Statements and the Auditors Report for the financial year ended March 31,2025.

Key highlights of FY25 are as follows:

• The Standalone Total Revenue decreased by 12% and stood at ? 2,26,776 Lacs. The Standalone EBITDA for FY25 decreased by 9.9% and stood at ? 46,917 Lacs vs ? 52,088 Lacs during FY24.
• The Consolidated Total Revenue decreased by 0.7% and stood at ? 2,84,327 Lacs. The Consolidated EBITDA for FY25 decreased by 6.2% and stood at ? 57,922 Lacs vs ? 61,733 Lacs during FY24.

2. BUSINESS HIGHLIGHTS

• We continue to focus on broad basing our market presence and expand our presence across channels and geographies, these initiatives are not reflecting through in revenue streams as they are being offset by recalibration initiatives undertaken of our international branded revenue streams.
• We now operate in the Indian market with 3 brands- Himeya, Atmosphere and Liv. The 3 brands cover a broad cross section of home textile products and are positioned to service consumers across price points. We remain optimistic on the prospects of growth in the Indian market going forward.
• We see emerging opportunities on account of the recently signed Free Trade Agreement (FTA) between India and UK. However, we estimate potential benefits arising from the FTA to come through only after it comes into effect.

2. CHANGE IN THE NATURE OF BUSINESS

There was no change in the nature of business carried out by the Company during the period under review.

3. SHIFTING OF REGISTERED OFFICE

The Board of Directors of the Company, approved change in the registered office of the Company w.e.f. October 23, 2024, within local

limits of the city and the registered office was changed to "No.4/1-2, Crescent Road, Bangalore - 560001, Karnataka, India". The Corporate

office is "10/ 24, Kumara Krupa Road, High Grounds, Bengaluru 560 001, Karnataka, India".

4. SHARE CAPITAL

The Authorized Share Capital of the Company is ? 75,00,00,000 (Rupees Seventy-Five Crores) divided into 15,00,00,000 (Fifteen Crores)

Equity Shares with a face value of ? 5 (Rupees Five) each.

5. ISSUE OF SECURITIES

In accordance with the SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2018 as amended and Sections 42 and 62 of the Companies Act, 2013, as amended, including the rules made thereunder, the Company has vide Private Placement Document dated October 24, 2024, issued and allotted 2,72,85,129 equity shares of face value ^5 each to the eligible Qualified Institutional Buyers, at a price of ? 146.60 per Equity Share (including share premium of ? 141.60 per Equity Share), aggregating to ? 400 crore. Consequently, the Paid-up Capital of the Company increased during the year from ? 49,22,85,800 (Rupees Forty-Nine Crores Twenty-Two Lacs Eighty- Five Thousand and Eight Hundred) divided into 9,84,57,160 (Nine Crore Eighty-Four Lacs Fifty-Seven Thousand One Hundred and Sixty) Equity Shares of ? 5 (Rupees Five) each to ? 62,87,11,445 (Rupees Sixty-Two Crores Eighty-Seven Lacs Eleven Thousand Four Hundred and Forty-Five) divided into 12,57,42,289 (Twelve Crores Fifty-Seven Lacs Forty-Two Thousand Two Hundred and Eighty-Nine) Equity Shares of ? 5 (Rupees Five) each. Pursuant to the delegation of powers to Securities Committee ("SC") the aforementioned shares were allotted on October 30, 2024.

Funds received pursuant to aforementioned Qualified Institutional Placement ("QIP") have been utilized towards the objects stated in the placement document.

On the recommendation of the Audit Committee, the Board of Directors extended upto the second quarter of FY 2026, the timeline for utilisation of funds. The details as to utilization of funds is provided in note no. 12 of Notes to the Financial Statements for the year ended March 31,2025.

Statement of Deviation(s) and Variation(s): During the year under review, there is no deviation/ variation in the use of QIP proceeds. The Company has made necessary disclosures to the Stock Exchanges within statutory timelines, as per the provisions of Listing Regulations and any other Rules & Regulations as may be applicable and confirmed that there is no deviation/ variation in the use of issue proceeds.

6. DIVIDEND

Pursuant to the Dividend Distribution Policy of the Company, the Board of Directors at their meeting held on May 28, 2025, has recommended a final dividend at 5% (? 0.25 per equity share) for the financial year ended March 31,2025.

The final dividend is subject to the approval of Members at the ensuing 40th Annual General Meeting (AGM) of the Company. The dividend, if declared, will be paid to the Members holding equity shares as on record date i.e., September 19, 2025 and the aggregate dividend of Rs.314,35,572.25 will be paid within statutory timelines after deduction of tax at source, as applicable.

7. MATERIAL CHANGES AND COMMITMENTS

The material changes and commitments affecting the financial position of the Company between the end of the financial year and the date of this report were as follows:

650, series A unrated, unlisted, senior, secured, redeemable, Non-Convertible Debentures ("Series A NCDs") with a face value of ? 10,00,000 each aggregating to Indian ? 65,00,00,000/- (Rupees sixty five crores only) were allotted on May 07, 2025 through Private Placement.

8. TRANSFER TO RESERVES

The Company has not transferred any amount to the reserves during the year under review.

9. SUBSIDIARY, JOINT VENTURES AND ASSOCIATE COMPANIES AND CHANGES THEREON

As on March 31,2025, the following constitute the subsidiaries and associates of the Company:

Name of Subsidiaries	Wholly owned Subsidiary	Material Subsidiary	Step down Subsidiary
Himatsingka Wovens Private Limited (HWPL)	V	-	-
Himatsingka Holdings NA Inc. (HHNA)	V	V	-
Himatsingka America Inc.* (HIMA)	V	V	V

Associates:

AMPIN Energy C&I Twenty Four Private Limited (formerly AMP Energy C&I Twenty Four Private Limited) ("AMPIN") is an Associate Company. During the year the Company has invested in 47.30% of the paid up capital of AMPIN, a solar energy company to enhance its renewable energy footprint.

Pursuant to Section 129(3) of Companies Act, 2013 and Regulation 33 & 34 of the SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015 ("Listing Regulations"), the Consolidated Financial Statements of the Company are prepared in accordance with the Indian Accounting Standards (IndAS) prescribed by the Institute of Chartered Accountants of India forms part of this Annual Report.

The Consolidated Financial Statements presented by the Company include the financial results of the subsidiary companies. A statement containing the salient features of the Financial Statements of its subsidiaries in form AOC-1 is annexed to this report as Annexure 1.

Pursuant to section 136 of Companies Act, 2013, the Annual Report of your Company containing inter alia Financial Statements including Consolidated Financial Statements and Financial Statements of the subsidiaries may be accessed on the following weblink of the Companys website: https://www.himatsingka.com/investors/financial-reports

10. ANNUAL RETURN

As required under section 92(3) of Companies Act, 2013 read with Rule 11 of the Companies (Management and Administration) Rules, 2014, the draft of the Annual Return in form MGT-7 for the year 2024-25 may be accessed on the following weblink of the Companys website: https://www.himatsingka.com/investors/financial-reports?tab=annualfireportfitab

11. PUBLIC DEPOSITS

The Company has neither accepted nor has any outstanding deposits from the public pursuant to section 73 of Companies Act, 2013.

12. BOARD OF DIRECTORS AND COMMITTEES Composition of Board and changes thereto

As on March 31,2025, the Board Directors of the Company comprised of 6 (Six) Directors and its composition was as follows:

• 2 (Two) Promoter Executive Directors including the Chairman and Vice Chairman & Managing Director
• 3 (Three) Non-Executive Independent Directors including 1 (One) Non-Executive Independent Woman Director and
• 1 (One) Non-Executive Nominee Director.

The composition of Board of Directors as on the date of this report remains the same as stated above and the following were the changes in the composition of the Board, during the year:

• Mr. Shanmugasundaram Selvam ceased as Executive Director upon completion of his term w.e.f. end of business hours on December 14, 2024.
• Mr. Shyam Powar resigned as Non-Executive Independent Director with effect from January 24, 2025 on account of restrictions arising from new assignments undertaken by him and he has stated that there were no other material reasons for his resignation.

In the opinion of the Nomination and Remuneration Committee and the Board, Independent Directors hold the requisite expertise, experience and integrity, to serve on the Board of the Company.

As detailed below, the Board met 6 (Six) times during the year under review and the intervening gap between the meetings was within the period prescribed under the Companies Act, 2013 and Listing Regulations. The details of the meetings and attendance thereof are provided in the Corporate Governance Report which forms part of this Annual Report.

The requisite details pertaining to the Committees of the Board are included in the Corporate Governance Report which forms part of this Annual Report.

In accordance with the provisions of section 152(6) of the Companies Act, 2013 and the Articles of Association of the Company, Mr. Shrikant Himatsingka, Executive Vice Chairman & Managing Director, (DIN: 00122103), whose directorship was not subject to rotation is henceforth subject to retire by rotation. He is liable to retire by rotation at the ensuing Annual General Meeting and being eligible, offers himself for re-appointment. The Nomination and Remuneration Committee at their meeting held on May 28, 2025 has recommended his re-appointment for approval of the Board and the Board at their meeting held thereafter have recommended his re-appointment for approval of the Shareholders.

Further details form part of the explanatory statement of the notice of the Annual General Meeting.

The Company has received from each of its Independent Directors, declarations as stipulated under section 149(7) of Companies Act, 2013 and Regulation 25(8) of Listing Regulations, confirming that the Director meets the criteria of independence as laid down under section 149(6) of Companies Act, 2013 and Regulation 16(1)(b) of Listing Regulations. The Independent Directors have also declared compliance with Rule 6(1) and 6(2) of Companies (Appointment and Qualification of Directors) Rules, 2014 and have confirmed adherence to the standards of Code of Conduct for Independent Directors prescribed in schedule IV of Companies Act, 2013.

As required by the provisions of section 134(3)(c) of Companies Act, 2013, we the Directors of Himatsingka Seide Limited, confirm the following:

1. In the preparation of the Annual Financial Statements for the year ended March 31,2025, the applicable Accounting Standards have been followed along with proper explanation relating to material departures;
2. 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 2024-25 and of the profit and loss of the Company for that period;
3. The Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;
4. The Annual Financial Statements have been prepared on a Going Concern basis;
5. 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
6. The Directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

The Key Managerial Personnel of the Company as on date and as on March 31,2025 are:

• Mr. D.K. Himatsingka, Executive Chairman,
• Mr. Shrikant Himatsingka, Executive Vice Chairman & Managing Director,
• Mr. M Sankaranarayanan, President - Finance & Group Chief Financial Officer and
• Ms. Bindu D, Assistant General Manager - Corporate Compliance & Company Secretary.

There were no changes in KMP during the year.

The Company has, during the year, conducted an evaluation of the Board as a whole, its Committees and the individual Directors including the Non- Executive Independent Directors. The evaluation was carried out through different evaluation forms which covered among others, the evaluation of the composition of the Board and its committees, its effectiveness, activities, governance, and with respect to the Chairman and the individual Directors, their participation, integrity, independence, knowledge, impact and influence on the Board. The Non-Executive Independent Directors of the Company convened a separate meeting and evaluated the performance of the Board and its Committees, the Directors and the Chairman.

2. COMPLIANCE WITH SECRETARIAL STANDARDS

The Company has complied with the provisions of Secretarial Standard on Meetings of the Board of Directors (SS-1) and Secretarial Standard on General Meetings (SS-2) issued by the Institute of Company Secretaries of India pursuant to section 118(10) of Companies Act, 2013.

3. AUDITORS AND AUDITORS REPORTS

Pursuant to the provisions of section 139 of Companies Act, 2013 and the rules framed thereunder, the members of the Company at the 37th Annual General Meeting held on September 28, 2022 appointed M/s. MSKA & Associates, Chartered Accountants, as Statutory Auditors of the Company and are liable to hold office until the conclusion of the 42nd Annual General Meeting of the Company to be held in the year 2027.

The report on the consolidated and standalone financial statements of F.Y. 2024-25 by the Statutory Auditors, M/s. MSKA & Associates, Chartered Accountants, forming part of the Annual Report is an unmodified report.

• Information other than the Standalone Financial Statements and Auditors Report thereon by the Independent Auditors contains a remark vide point vi of 2(h):

With reference to the aforementioned the Board states that the auditor could not comment on the audit trail of one of the allied software used for recording workmens attendance in the factory, due to unavailability of System and Organization Controls (SOC) report for a short period during the financial year.

The Company remains committed to maintain robust IT controls and to strengthen the controls at the database level ensuring full compliance with applicable regulatory requirements.

• Report on Other Legal and Regulatory Requirements of Consolidated Financial Statements by the Independent Auditors contains remarks vide point 3:

Regarding the aforementioned the Board states that:

The property mentioned in the report with reference to point i(c) of Annexure B of the CARO report, will be transferred in the name of the Company after the expiry of lease period.

With reference to point vii(a) of Annexure B of the CARO report, any undisputed statutory dues including Goods and Services tax, provident fund, employees state insurance, income-tax, sales-tax, service tax, duty of customs, duty of excise, value added tax, cess, and other statutory dues have generally been regularly deposited with the appropriate authorities during the year, though there have been slight delays in very few cases. No undisputed amounts payable in respect of these statutory dues were outstanding as at March 31,2025, for a period of more than six months from the date they became payable. The Company remains committed to make payment of statutory dues as per the respective timelines and to ensure compliances.

1. Secretarial Auditor

The Company had appointed CS Vivek Manjunath Bhat, Company Secretary in Practice, (M. N.: F7708) to conduct the secretarial audit as required under section 204 of Companies Act, 2013.

The Secretarial Audit Report for the financial year 2024-25 does not contain any adverse remark, qualification or reservation. The report is appended as Annexure 2 to this report.

2. Secretarial Compliance Report

The Company had appointed CS Vivek Manjunath Bhat, Company Secretary in Practice, (M. N.: F7708) for issuing the Annual Secretarial Compliance Report ("ASCR") under Regulation 24A of Listing Regulations which is appended as Annexure 3 to this report. The aforementioned matters stated under Secretarial Audit also forms part of ASCR.

On the recommendation of the Audit Committee the Board has approved, subject to approval of the shareholders, the appointment of CS Vivek Manjunath Bhat, Company Secretary in Practice, (M. N.: F7708) as secretarial auditor of the Company for the period 2025-2030, to provide the Secretarial Audit Report and the Secretarial Compliance Report and such other services as permissible.

3. Cost Auditors

As the Companys export revenue in foreign exchange for the financial year 2024-25 was greater than 75% (seventy-five percent) of the total revenue of the Company, the Company falls within the exemption specified in Clause 4(3) of The Companies (Cost Records and Audit) Rules, 2014. In view of this, there is no requirement to furnish cost audit of cost records of the Company for its units at Hassan and Doddaballapur.

4. Internal Auditors

Pursuant to the provisions of section 138 of Companies Act, 2013, the Board of Directors of the Company has reappointed Grant Thornton Bharat LLP, to conduct the Internal Audit of the Company for the financial year 2024-25. The Audit Committee of the Board of Directors in consultation with the Internal Auditor formulates the scope, functioning, periodicity and methodology for conducting the internal audit of the Company.

5. Internal Financial Controls

The Statutory Auditors of the Company has audited Internal Financial Controls over Financial Reporting and their Audit Report is annexed as Annexure A to the Independent Auditors Report under Standalone Financial Statements and Consolidated Financial Statements.

The Company reviews the effectiveness of controls as part of Internal Financial Controls framework. There are regular scheduled reviews that covers controls, process level controls, fraud risk controls and the Information Technology environment.

Based on this evaluation, no significant events have been noticed during the year that have materially affected, or are reasonably likely to materially affect, our Internal Financial Controls. The management has also come to a conclusion that Internal Financial Controls and other financial reporting was effective during the year and is adequate considering the business operations of the Company.

6. Fraud Reporting

There have been no instances of fraud reported by the Auditors under section 143(12) of Companies Act, 2013 and rules framed thereunder either to the Company or to the Central Government.

2. PARTICULARS OF LOANS, GUARANTEES, INVESTMENTS AND SECURITIES MADE

The particulars of loans made, guarantees given, investments made and securities provided as per the provisions of section 186 of Companies Act, 2013 and Schedule V of the Listing Regulations and the relevant rules made thereunder are given in the note no. 35 and 36 of the Standalone Financial Statements.

• During the year the Company has acquired shares of AMPIN as detailed herein above and has invested in the shares of Isharays Energy One Private Limited. The Company has increased its investment in the wholly owned subsidiary HHNA and the same are within the limit specified by the Companies Act, 2013.

The Company does not fall in the category of sub section 11 of section 186.

The Company has not extended any loan or guarantee to any other company. There are no reportable transactions under section 186.

3. PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES

All transactions entered into by the Company with its related parties are at arms length and in the ordinary course of business. The details of related party transactions forms part of Note no. 34 of Standalone Financial Statements of the Company. However, the list of material related party transactions as per the Companys policy on related party transactions, as required under rule 8(2) of Companies (Accounts) Rules, 2014, is annexed to the Boards Report in form AOC-2 as Annexure4. The policy on materiality of related party transactions as approved by the Board may be accessed on the following weblink of the Companys website: https://www.himatsingka.com/investors/ corporate-governance

4. SIGNIFICANT OR MATERIAL ORDERS PASSED BY REGULATORS/ COURTS/ TRIBUNALS.

There are no significant or material orders passed by Regulators/ Courts / Tribunal impacting the going concern status and companys operations in future.

5. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION & FOREIGN EXCHANGE

A statement containing the necessary information on Conservation of energy, Technology absorption and Foreign exchange earnings and outgo stipulated under section 134(3)(m) of Companies Act, 2013 read with Rule 8 of the Companies (Accounts) Rules, 2014 is annexed to this report as Annexure-5.

6. RISK MANAGEMENT

The Company has developed and implemented a comprehensive Risk Management Policy and framework to identify and mitigate the various risks encountered by the Company. In terms of the provisions of section 134 of Companies Act, 2013 a Risk Management Report forms part of the Management Discussion & Analysis section of the Annual Report.

7. CORPORATE SOCIAL RESPONSIBILITY

Corporate Social Responsibility ("CSR") is central to the operating philosophy of the Company and it is the Companys constant endeavour to ensure that its businesses uphold the highest standards of governance and compliance. It aims to deliver sustainable value to society at large as well as to shareholders. In keeping with its philosophy, the Company has a CSR Committee that identifies CSR projects and overlooks, supervises and provides guidance for the implementation of the projects. The companys CSR activities envisage initiatives primarily in the areas of health, education, environmental protection, community development and sanitation among others.

During the year, the Company has contributed towards skill development and providing employment to Apprentices under Apprentices Act as per the National Apprenticeship Promotion Scheme. In addition to the following, the details of the Composition of CSR Committee, the CSR Policy and the CSR spending have been elaborated in the Annexure-6 to this report.

*The unspent amount in respect of ongoing projects is transferred to Himatsingka Foundation (formed by the Company) and Himatsingka Foundation has transferred it to a special account in accordance with the provisions of the Companies Act, 2013.

22. REMUNERATION OF DIRECTORS AND KEY MANAGERIAL PERSONNEL

1. The remuneration of Directors is given herein below: (T in Lacs)