PDS Ltd Management Discussions

Economic overview

Global economy¹

In CY 2024, the global economy maintained a growth rate of 3.3% despite economic turbulences. This growth highlights the resilience of economies around the world. The US economy has demonstrated resilience amid global disinflation trends driven by a series of interest rate cuts by the US Federal Reserve to further stimulate economic growth. In addition, robust consumption and a strong performance by the corporate sector helped the US economy to grow steadily. The global inflation level fell from an annual average of 6.6% in CY 2023 to 5.7% in CY 2024. The decline in inflation was largely attributed to the implementation of stringent monetary policies by central banks and an expansion in energy supply. These factors played a crucial role in stabilising prices and sustaining economic growth.

The emerging markets expanded at 4.3%, significantly outperforming the 1.8% growth rate of advanced economies despite facing a complex economic landscape. Despite concerns regarding potential stagflation and recession, economic activity maintained a steady pace, supported by robust government expenditure, resilient household consumption and a significant increase in labour force participation.

Going forward the global economic growth is projected to remain modest with estimates of 2.8% in CY 2025 and 3.0% in CY 2026. This moderate outlook reflects a gradual easing of inflation and the sustained efforts of Central Banks to uphold economic stability through favourable monetary policies. Emerging economies are anticipated to sustain a moderate growth, with a projected rise of 3.7% in CY 2025. In comparison, advanced economies are expected to recover at a slower pace, with growth likely reaching 1.4% in CY 2025.

Inflation is forecasted to decline further, dropping to 4.3% in CY 2025 and 3.6% in CY 2026, potentially augmenting consumer expenditure. While the recent implementation of tariffs by the US government has impacted global trade momentum, the broader interconnected framework of the global economy is expected to remain strong. Governments and businesses continue to adjust to evolving market dynamics by streamlining supply chains, and leveraging technological advancements, workforce efficiency and infrastructure improvements. These changes are likely to drive sustainable growth and support a positive long-term outlook.

Indian economy²

The economy of India continued to grow at an estimated rate of 6.5% in FY 2024-25 and sustained its position as one of the fastest-growing major economies of the world. Strong performance across the manufacturing and services sector remained a primary driver of this growth.

Inflation moderated to 4.7% during FY 2025, supporting economic stability and improving consumer confidence. This moderation of price pressures supported economic momentum and reflects demand across various industries. The Indian government also played an instrumental role in maintaining growth with notable structural reforms, pro-business regulations and considerable investment in infrastructure development. All these efforts cumulatively improved the investment environment and provided a robust foundation for long-term economic growth.

In addition, government policies like Make in India have significantly aided the manufacturing sector, heightening India?s competitiveness in the global market and establishing the nation as a manufacturing and export hub. Schemes such as the Production Linked Incentive (PLI) Scheme for Textiles is designed to increase manufacturing and encourage technical textiles, while the ‘PM MITRA Parks? scheme is aimed at creating world-class industrial infrastructure in seven states to enable

-outlook-april-2025 integrated textile value chains. Further, the ‘Samarth? scheme has been able to train more than 3.82 lakh beneficiaries successfully, with a placement rate of 77.74%, highlighting the sectors increasing emphasis on skill development and employment generation.³

The outlook for India?s economy remains optimistic, supported by sustained public capital expenditure, increasing industrial activity and expanding digital and physical infrastructure. Further, the 25-basis point repo rate cut implemented by the Reserve Bank of India is expected to enhance liquidity and credit flow in the economy, thereby, augmenting economic activity. The revision in income tax slabs is expected to elevate discretionary spending of salaried individuals.

As supply chains normalise and cost pressures ease, sectors tied to essential services and consumption are well-positioned to benefit from rising demand and improved operational efficiencies, reinforcing India?s status as one of the fastest-growing major economies. With close monitoring of the tariff scenario by the government, strong foreign reserves and strong consumption, the economy is well positioned to sustain its growth in the years ahead.

GDP Growth Trend in India (%)

Industry overview

Global fashion industry⁵

The global fashion industry has entered CY 2025 with emerging opportunities for innovation and growth, despite economic headwinds and evolving consumer preferences. There has been a 20% improvement in consumer sentiment, driven by declining inflation, increased tourism in Europe, and Asia?s new growth markets. Moreover, the financial stability of high-net-worth individuals in the United States is expected to make a positive contribution. In response to declining demand and rising customer acquisition costs, many e-commerce players are exploring alternative strategies to sustain growth. The year is likely to witness the growth of mass online marketplaces as businesses adapt to changing market dynamics.

Global apparel market

The global apparel market was valued at $1.79 trillion in CY 2024. This valuation was driven by the rising prominence of e-commerce, growing consumer inclination towards sustainable and ethically produced fashion and the integration of emerging technologies, such as Augmented Reality (AR) and Artificial Intelligence (AI) in the retail space. The market encompasses various segments, such as formal wear, lingerie and sportswear. North America commands a leading market shareonthebackofitsstrongconsumerspendingandadvanced retail systems, while Asia Pacific remains the manufacturing powerhouse. Countries like Bangladesh, Vietnam and India are further strengthening their roles as key production centres. The global apparel market is envisioned to witness steady growth and reach a valuation of $1.84 trillion in CY 2025.⁶

The industry is undergoing a transformative change due to the heightened emphasis on sustainability. More brands are adopting eco-conscious materials and transparent supply chains to align their operations and products with consumer expectations. Additionally, emergence of advanced technology is playing a major role through the introduction of features like digital fitting rooms and personalised shopping journeys that enhance user engagement. The market continues to exhibit improvement despite facing challenges due to economic volatility and supply chain disruptions. Apparel companies are heightening the integration of digital strategies and sustainable practises to maintain their competitive edge and effectively cater to the evolving needs of consumers.

Global apparel sourcing

Global apparel sourcing involves obtaining raw materials, components, and finished clothing from suppliers around the world. This process includes finding and selecting suitable vendors, negotiating contracts, managing logistics, and ensuring compliance with industry standards and regulations.

One of the main advantages of global sourcing is the opportunity to benefit from lower labour and production costs in developing countries. Many of these nations have built strong capabilities in garment manufacturing, becoming major hubs for international brands. For example, Bangladesh is known for its large pool of skilled garment workers, making it a popular choice for apparel production. By outsourcing manufacturing tasks to specialized sourcing firms, fashion brands can focus more on designing new collections and enhancing their brand image. This strategy enables them to prioritize creativity and innovation in fashion while relying on experienced partners to handle the complexities of production.

Trends in the apparel market

Digital innovation

Apparel retailers are increasingly integrating emerging technologies into their operations as digital adoption continues to grow. The pandemic significantly drove the growth of online capabilities, resulting in a blend of physical and digital channels. Investments in digital marketing, automated fulfilment and innovative shopping tools such as livestreaming and video chat were fast-tracked to meet evolving consumer demands.

ESG and Circular economy

Sustainability is now central to the fashion industry, with ESG initiatives shaping apparel retailers strategies. Consumers increasingly favour brands with ethical practices. In response, companies are embracing the circular economy through recycling, resale, and rental services, while also using sustainable materials like recycled and biodegradable fabrics to meet environmental goals without compromising quality.

Personalisation and customisation

Advanced technology is now enabling personalised shopping experiences by offering bespoke solutions and manufacturing on demand. Consumers are increasingly seeking unique products that reflect their individual styles.

Asia?s rising markets

While China faces a slowdown, markets, such as India, Japan and South Korea are emerging as key growth engines. Brands are localising their offerings and distribution models to tap into these high-potential regions.

Growth Enablers⁷

New growth engines in Asia

India is establishing itself as a global fashion market due to the expedited growth in its mid-market segment. The mid-market segment is predicted to expand by 12% to 17% in 2025.

Fashion executives are increasingly confident in the prospects of expansion in the Asian markets, especially in developed APAC countries like Japan and Korea. Due to economic slowdown, changing consumer preferences, and the rise in foreign travel, multinational fashion companies are looking to other Asian markets since they find it very challenging to grow in the country.

Rise of near shoring and diversified shoring

Fashion companies are increasingly reconfiguring their sourcing strategies by diversifying supply chains across Asia while simultaneously exploring nearshoring options. This shift is driven by rising costs, evolving trade policies, sustainability imperatives, and a push by major economies to align sourcing with politically aligned nations. Nearshoring—relocating production closer to key consumer markets—is gaining traction for its ability to reduce lead times by 3–5x, lower transportation costs, enhance supply chain transparency, and improve margins by optimizing inventory levels. This trend is expected to accelerate in 2025.

Policy support

Policy support for the sector includes Production Linked Incentive (PLI) schemes for Man-Made Fibre (MMF) apparel, MMF fabrics aimed at enhancing global competitiveness. The PM MITRA scheme promotes integrated textile parks with world-class infrastructure, also the government offer tax and duty benefits in order to augment exports. In addition, efforts are being directed towards strengthening skill development, encouraging innovation, sustainability and circularity by incentivising R&D and supporting startups in the textile ecosystem.

Opportunites

Sustainability

Shift in global sourcing preferences

Escalating labour costs and in Vietnam and China and political instability in Bangladesh are prompting international retailers to actively diversify their supply chains. This opens up avenues for India to capture greater market share by positioning itself as a preferred and stable sourcing destination.

Normalisation of retail inventories

As global retailer inventory levels return to optimal ranges, there is renewed buying interest, especially in home textiles. This trend supports deeper engagement with existing clients and the onboarding of new programs for volume growth.

Sustainability

Most companies are focusing on sustainability as a vital driving component within the garment industry, as customers are more environmentally conscious and demand ethical practices from manufacturers. Companies are adopting sustainable fabrics, shifting focus on natural cotton and recycled fabric. Moreover, they are strengthening brand loyalty while promoting environmentally responsible consumption.

Adoption of computer-controlled embroidery system

Apparel manufacturing companies are increasingly investing in computer-controlled embroidery systems to augment efficiency and reduce cost. These cutting-edge machines are equipped with a computer-controlled system, which can create accurate designs on fabric using pre-programmed digital embroidery patterns and also offer heightened design accuracy and efficiency. Increased efficiency enables companies to shorten delivery times.

Reimagining discovery through technology

Availability of a wide online product range often overwhelms consumers. AI-driven solutions for curation, search and personalised content experience are reshaping the shopping experience by enabling customers to easily discover, connect and buy fashion that aligns with their individual style and values.

Challenges⁸

Value shift

Consumers are increasingly exhibiting cost-conscious purchasing patterns. Macroeconomic pressures and escalating prices are the main factors contributing to this behavioural shift. This shift is propelling growth in value-driven segments, including resale and off-price goods, among others. In the current market scenario, to establish meaningful connection with the consumers, brands will need to clearly convey their value and relevance.

Inventory management

Inventory management continues to pose challenges for the industry with both excess stock and stocks-outs impacting brands. In 2025, margin pressures and sustainability regulation will require a stronger focus on end to-end planning. Brands are increasingly integrating advanced tools and adjusting their operating models to support more agile and efficient supply chains.

Global supply chain volatility

Frequent disruptions in global supply chains due to geopolitical tensions, climate-related events, or logistic constraints can impact timely sourcing and delivery.

Business overview

PDS Limited is a Global Supply Chain Solutions Partner that provides end to end solutions in design-led sourcing, manufacturing, and brand management for the fashion and retail industry. With operations spanning across continents, the company has strategically positioned itself to serve leading brands and retailers by leveraging regional manufacturing capabilities, digital transformation, and sustainable practices.

The Company follows a diversified business model, which emphasizes growth, innovation, operational efficiency, and value-added services. The company continues to focus on deepening customer relationships, and enhancing its technological and sustainable capabilities, positioning itself as a dynamic player in the evolving global apparel value chain.

Sourcing

Design-led sourcing

PDS operates as a global design-led sourcing platform that supports major fashion brands and retailers in expanding their design portfolios and optimising product sourcing. With a network of over 250 designers across key fashion hubs, the Company combines creative insights with market intelligence to develop innovative concepts. Its services encompass design, tailored product development, order and supplier management, compliance assurance and access to an extensive global supplier base, ensuring high-quality designs, cost-effective sourcing, fast market turnaround and ESG-compliant solutions.

Sourcing as a services

PDS serves as a key independent sourcing partner for retailers and brands, driving efficiency through joint budgeting, collaborative decision-making, and transparent pricing. By focusing on manufacturing hubs like Turkey, Bangladesh, and India, it minimizes infrastructure risks while fostering long-term partnerships. The company offers centralized support and delivers end-to-end sourcing solutions through its Sourcing as a Service framework. PDSs asset-light model aligns with retail trends favouring outsourcing and flexibility.

Brand management

PDS has broadened its offerings to include full-service brand management, covering everything from brand conceptualizationandmanagementtomarketing.Byleveraging its global design and supply network, PDS provides complete support for brands throughout their lifecycle, including design, product development, sourcing, manufacturing, licensing, and distribution. The company works closely with brand IP owners to build customized partnerships, ensuring brand integrity is preserved and enhanced at every step.

Manufacturing

PDS?s in-house manufacturing division supports its sourcing activities by offering specialized production services for clients who need direct manufacturing from their suppliers. With three strategically positioned manufacturing facilities in Bangladesh and Sri Lanka, PDS ensures better control over the production process, reinforcing its credibility with clients. Furthermore, PDS?s acquisition of a 55% stake in Knit Gallery, a manufacturing entity in India, is poised to drive increased revenue and profit margins.

PDS Ventures and others

PDS Ventures, the venture capital arm of PDS, focuses on investing in startups that drive innovation, sustainability, and circularity within the fashion industry. The fund has a diverse portfolio, including investments in companies like Materra, Atterley, and Zwift, aiming to foster growth and collaboration within the fashion ecosystem. Leveraging the broader PDS platform, PDS Ventures helps accelerate the impact of these emerging companies, strengthening its long-term growth potential. Additionally, PDS Ventures is an official nominator for the Global Change.

Business performance

FY25 marked a year of strong growth, strategic investment, and operational discipline for PDS. The Company continued to consolidate its position as a global, asset-light fashion infrastructure platform, delivering resilient performance despite macroeconomic volatility, inflationary pressures, and shifting customer dynamics across key geographies.

Operational Highlights

Growth delivered across all key geographies, with the Americas leading at 39% YoY, supported by a strengthened U.S. strategy

Added key customers including Fashion Nova, Target, Boots, Redtape, Home Depot of Canada, etc

Acquired India based Knit Gallery to strengthen India sourcing, backward integration, and speed-to-market, transaction consumated on 13th May 2025

UK-India FTA opens a long-term strategic sourcing runway for India region

U.S. tariff challenges being navigated through strategic negotiations, preserving volume and margin stability

Cost optimization initiatives are put in place, supported by BCG, expected to gain traction and drive profitability

Raised C 430 crore via QIP to bolster the balance sheet and support growth initiatives

Proactively managed global headwinds while staying focused on strategic execution

Particulars	FY 2024-2025	FY2023-24
Revenue from operations	12,578	10,373
Other income	50	35>
Total Income	12,628	10,407
COGS	10,047	8,262
Employee Expenses	1211	979
Other expenses	863	739
EBITDA	457	392
EBITDA Margin (%)	3.6%	3.8%
Finance Cost	127	107
Profit after tax	241	203
Profit after tax margin (%)	1.9%	2.0%
Basic EPS	11.44	10.98

Revenue

Revenue from operations for FY25 stood at C 12,578 crore, reflecting a robust 21% growth over C 10,373 crore in FY24. This performance was underpinned by continued traction in both our sourcing and manufacturing business increased wallet share from strategic customers, and expansion into newer markets.

Gross profit for the year stood at C 2,531 crore, translating to a Gross Margin of 20%. The slight year-on-year decline of 23 basis points was primarily driven by the underperformance of the agency business—particularly the Ted Baker operations, which were impacted by the bankruptcy of retail partners.

EBITDA for the year rose to C 457 crore, up from C 392 crore in FY24. The EBITDA margin stood at 3.6%, marginally lower than the previous year?s 3.8%, due to the impact of new verticals and growth initiatives which reported a loss of C 162 crore in FY25. Adjusted for these investments, the underlying operating margin is 5.2%, compared to 4.9% last year underscoring improvement in core profitability and operational leverage.

Other income increased to C 50 crore fromC 35 crore in FY24, primarily due to due to gain on fair valuation of investments recorded by PDS ventures which are carried at fair value through profit or loss.

Expenses

The Cost of Goods Sold (COGS) rose in line with increased business volumes, amounting to C 10,047 crore in FY25 compared to C 8,261 crore in FY24.

Employee benefits expense rose by 24% to C 1,211 crore (FY24: C 979 crore), reflecting investments in new talent across new verticals, leadership roles, and operational hubs to support growth. The increase is also attributable to the impact of minimum wages of workers being increased by the government mainly in Bangladesh.

Finance costs increased to C 127 crores (FY24: C 107 crore), primarily driven by higher utilization of factoring facilities across group entities due to increased transaction volumes and elevated central bank interest rates. Additionally, Company availed a term loan from a UK based bank for the office property, further contributing to the rise in overall finance cost.

Other expenses stood at C 863 crore (FY24: C 739 crore), The increase during the year is primarily driven by the Company?s continued global expansion. Overseas travel and conveyance costs have risen due to increased international operations and customer engagements across regions such as Europe, Turkey, and the US. Royalty expenses have increased in line with higher sales from new brand partnerships governed by royalty agreements. Freight costs have gone up due to a higher share of LDP (Landed Duty Paid) sales, where the Company bears delivery costs until the goods reach the customer?s destination. Additionally, selling and marketing expenses rose due to investments in customer acquisition, sampling, and design support, which are aligned with revenue growth.

Profit before tax (PBT) increased by 16% to C 269 crore (FY24: C 232 crore), while profit after tax (PAT) rose 19% to C 241 crore (FY24: C 203 crore). Basic earnings per share (EPS) improved to C 11.44 from C 10.98 in FY24, reflecting enhanced shareholder value creation.

Summarised balance sheet

Particulars	As at March 31, 2025	As on 31-3-2024
Non- current Assets	1,226	1,111
Current Assets	3,512	2,951
Inventory	483	329
Trade receivables	1,860	1,677
Cash and Bank Balances	737	684
Other current assets	431	261
Total assets	4,738	4,062
Total Equity	1,716	1,246
Non – current liabilities	228	152
Borrowing	119	45
Other Non – current	109	107
liabilities
Current liabilities	2,794	2,664
Borrowing	993	897
Trade Payables	1,507	1,504
Other current labilities	294	263
Total Equity & Liabilities	4,738	4,062

Total assets as of March 31, 2025, stood at C4,738 crore, compared to C 4,062 crore in FY24, a 17% increase driven by growth in both non-current and current asset classes.

Non-Current Assets

Non-current assets grew by 10% to C 1,226 crore (FY24: C 1,111 crore), primarily due to:

Property, Plant & Equipment (PPE) increasing to C 496 crore (FY24 : C 344 crore),mainly due to acquisition of a new commercial building in London to support the Company?s strategic expansion. The property has been capitalized during the year, with renovation work scheduled to commence. Additionally, the Company undertook improvements in its office premises located at Udyog Vihar, Gurugram, held by PDS India, contributing further to the overall increase in PPE.

Intangible assets and goodwill rising to C 176 crore (FY24: C 134 crore), largely driven by investments in digital capabilities and platform development.

Other financial assets including long-term investments increased to C 359 crore, reflecting new strategic allocations and mark-to-market gains.

Current Assets

Current assets rose to C 3,512 crore (FY24: C 2,951 crore), driven by:

Inventory buildup to C 483 crore (FY24: C 329 crore) increase is mainly due to Ted Baker?s wholesale business in Europe. Additionally, higher LDP/DDP sales in PDS Fashions USA and Krayons, where inventory is held until goods are delivered to customers, contributed to the overall rise.

Trade receivables increased to C 1,860 crore (FY24: C 1,677 crore), largely driven by higher revenue across several business units, particularly in the latter part of the year. Additionally, the increase is supported by a healthy ageing profile, with substantial collections received subsequent to year-end, indicating no major credit concerns.

Cash and bank balances stood at C 737 crore (FY24: C 684 crore), of which C 91 crores pertaining to QIP proceeds pending utilisation and C 205 crore maintained as margin money for securing trade and credit lines.

Capital Structure and Liquidity

Total equity (including non-controlling interest) stood at C 1,716 crore, up 38% from C 1,246 crore in FY24. Equity attributable to shareholders rose from C 1,166 crore to C 1,651 crore, driven by net profit accretion and the C 430 crore Qualified Institutional Placement (QIP) concluded during the year.

Borrowings

Total borrowings increased by 18% to C 1,111 crore (FY24: C 943 crore), the increase in borrowings during the year is primarily due to higher utilisation of banking lines facilities to support business operations and working capital needs. This was driven by expanded operations across new and existing entities. Additionally, a term loan was availed from U.K. based bank for the London property for the operations of our largest vertical

Poeticgem. The overall rise reflects the Group?s strategic investments and operational scaling across regions.

Despite higher borrowings, the Company maintained a conservative net debt-to-EBITDA ratio of 0.8x, supported by a strong cash position and disciplined financial management.

Current Liabilities

Trade payables stood flat C 1,504 crore in FY 24 vs 1,507 in FY25

Other current liabilities increase is primarily attributable to higher operational scale across the Group, resulting in increased accruals for expenses, statutory dues, and other obligations payable within the short term. This includes VAT liabilities from expanded sales activities, employee-related payables due to headcount growth, and other routine business accruals aligned with the increased volume of operations.

Shareholder Returns

In line with its balanced capital allocation strategy, the Company declared a total dividend of C 3.35 per share for FY25, including an interim dividend of C 1.65 per share already paid. The full-year payout represents approximately 30% of FY25 PAT, reinforcing PDS?s continued commitment to delivering sustainable returns while reinvesting in growth.

Key financial ratios

Serial No Particulars	FY 2024-2025	FY 2023-2024	Change
1 Interest coverage ratio (x)	3.13	3.11	0.02x
2 Current ratio (x)	1.26	1.11	0.15x
3 Debt equity ratio (x)	0.65	0.76	-0.11x
4 Operating profit margin (%)	3.1%	3.2%	0.00x
5 Net profit margin (%)	1.9%	2.0%	0.00x
6 Return on net worth (%)	14.1%	16.3%	-0.02x
7 Debtors? turnover ratio (x)	6.76	6.22	0.58x
8 Inventory turnover ratio (%)	20.78	25.14	-4.36x
9 Return in capital employed (%)	18.9%	22.1%	-0.03x

1. Interest Coverage Ratio (EBIT including other income / Interest Expense) – 3.13 vs. 3.11

The ratio remained largely stable with a slight increase. While interest expense rose due to higher rates and increased debt utilisation, the impact was offset by relatively stable EBIT performance.

2. Current Ratio (Current Assets / Current Liabilities)

– 1.26 vs. 1.11

The improvement reflects better working capital managementandhighercurrentassetbalances,supported by operational expansion and improved liquidity.

3. Debt-Equity Ratio (Total Borrowings / Total Equity including Non-Controlling Interest) – 0.65 vs. 0.76

The change is due to higher borrowings undertaken to support business growth and investments. Despite the rise, the ratio remains within a comfortable range due to a strong equity base.

4. Operating Profit Margin (%) (Operating Profit / Revenue from Operations) – 3.1% vs. 3.2%

The operating margins were impacted due to increased investments in new verticals.

5. Net Profit Margin (%) (Net Profit Before Minority Interest / Revenue from Operations) – 1.9% vs. 2.0%

The slight decrease is attributable to increased finance & overhead costs and increased investments in new verticals.

6. Return on Net Worth (%) (Profit After Tax Before Minority Interest / Total Equity including Non-Controlling Interest)

– 14.1% vs. 16.3%

The decline is due to increase in investments in new verticals during the year.

7. Debtors? Turnover Ratio (Revenue from Operations / Trade Receivables) – 6.76 vs. 6.22

The improvement in the ratio reflects better collection efficiency.

8. Inventory Turnover Ratio (Cost of Goods Sold / Inventory)

– 20.78 vs. 25.14

The decline is mainly due to increased inventory levels for the Ted Baker wholesale business, which requires maintaining higher stock levels.

9. Return on Capital Employed (ROCE) (EBIT / Equity + Net Debt) – 18.9% vs. 22.1%

The decline results from an increase in capital employed due to strategic investments in new business verticals, including Ted Baker and a new UK property, while EBIT grew at 19%.

The Company remains well-positioned to drive sustainable value through a balanced focus on core strength reinforcement, capital discipline, and future-ready growth initiatives. The medium to long-term outlook is underpinned by a clear strategic roadmap. The Company is reinforcing its core business by stabilizing key customer relationships, enhancing profitability through disciplined cost management, and focusing on margin-accretive accounts.

PDS is accelerating its growth engines by revitalizing verticals through sharper execution, agile go-to-market strategies, and enhanced leadership accountability. Emphasis is being placed on bringing underperforming businesses to profitability, with a structured performance tracking mechanism. Capital efficiency remains a top priority, with a rigorous focus on working capital discipline and cash flow optimization. Initiatives are underway to streamline receivables, optimize inventory cycles, and improve return on capital employed. Where needed, the Company is course-correcting with agility—realigning or exiting underperforming verticals to minimize portfolio drag and reallocating capital towards high-conviction, scalable opportunities.

Risk management framework

The Company has adopted a well- organised, proactive, and dynamic risk management framework designed to protect its operations, assets, and stakeholder interests, while supporting responsible growth and value creation. This framework includes the identification of risks across strategic, operational, financial, and compliance areas, followed by a thorough evaluation of their potential impact on business continuity and performance. Risks are assessed and prioritised based on their probability and severity, enabling the development of focused and efficient mitigation measures. A defined governance structure is in place, with senior management heading the risk management committee to drive effective execution and integration of risk practices across all departments. Their active participation ensures ongoing review and monitoring of risks, promoting a culture of proactive risk awareness and management throughout the organisation.

Technology and infrastructure

The Company is embarking on its digital transformation journey, with a clear focus of enhancing its IT infrastructure to ensure scalability, security and operational efficiency. The Company is investing strategically to reinforce its core systems, widen cloud integration and to automate essential workflows. These initiatives are designed to augment the agility and responsiveness of the Company. Further these undertakings will help in the establishment of a tech-foundation that is future-ready and is able to support seamless collaboration and uninterrupted business operations across global teams.

Organisational structure

The Company adopts an entrepreneurial approach by empowering business heads to independently manage their own profit and loss accounts across multiple regions. This structure comprises numerous legal entities, such as subsidiaries, joint ventures and associate companies. This decentralised model maintains operational autonomy while enhancing customer trust through transparent insights into the business performance.

Human resource management

The Company continues to place a strong emphasis on the development, engagement and well-being of its workforce. PDS limited is resolute on establishing a high-trust and high-performance culture across its global operations. The Company enhances employee experience by implementing initiatives such as internal job rotations, mentorship programmes and improved communication and feedback mechanisms. Learning and leadership development are given priority through structured training delivered through the PDS Learning Academy and executive coaching partnerships. The Company further strengthened its HR functions through digitisation, including the rollout of HRMS systems and new modules aimed at streamlining operations. Engagement levels were elevated through participative surveys and recognising employee contribution and performance with awards. These efforts have helped the Company nurture a motivated, skilled and future-ready workforce.

Internal audit and controls

The company has a robust system of internal controls in place to guarantee asset accountability, reliability of financial and other data and records used in the creation of financial statements and other data.

This internal control framework is supplemented by a thorough program of internal audits, senior management assessments, and documented rules, standards, and procedures.

Internal audit findings are crucial information sources for determining and assessing risks. Business risks are also regularly assessed in order to detect significant threats to achieve our companys goals.

Disclaimer

This document contains forward-looking statements that reflect anticipated future events, as well as the expected financial and operational performance of PDS Limited. These statements are based on certain assumptions and are inherently subject to risks and uncertainties. There is a significant possibility that the assumptions, projections and other forward-looking statements may not materialise as anticipated. Readers are urged to exercise caution and refrain from placing undue reliance on these statements, as various factors could cause actual outcomes and events to differ substantially from those predicted. Hence, this document is accompanied by a disclaimer and is fully subject to the assumptions, qualifications and risk factors discussed in the Management?s Discussion and Analysis section of PDS Limited?s Annual Report for the fiscal year 2024-2025.