Suditi Industries Ltd Directors Report

Dear Shareholders,

The Directors have pleasure in presenting the Thirty Third Annual Report of the Company together with the Audited Balance Sheet as at March 31, 2024 and the Profit and Loss Account for the year ended on that date.

(Rs.in Lakhs)

The Consolidated and Standalone Financial Statements of the Company for the year ended March 31, 2024 have been prepared in accordance with Indian Accounting Standards (IND-AS), the relevant provisions of sections 129 and 133 of Companies Act, 2013 (hereinafter referred to as "the Act"), Regulation 33 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (hereinafter referred to as "SEBI Listing Regulations"), which have been reviewed by the Statutory Auditors.

Standalone Performance:

The total revenue of the Company for F.Y. 2023-24 stood at Rs. 5,964.61 Lakhs. The Company incurred a loss after tax of Rs. 1216.08 Lakhs for F.Y. 2023-24, as compared to loss of Rs. 1069.89 Lakhs in the previous year.

Consolidated Performance:

The total consolidated revenue of the Company for F.Y. 2023-24 stood at Rs. 6770.86 Lakhs. The company incurred a consolidated loss after tax of Rs. 1200.86 Lakhs for F.Y. 2023-24.

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

During the year, there have been no changes in the share capital of the Company. The issued, subscribed and paid-up Equity Share Capital of the Company as on March 31, 2024 was Rs. 26,36,72,910/- (Rupees Twenty Six Crores Thirty Six Lakhs Seventy two Thousand Nine Hundred and Ten Only) divided into 2,63,67,291 (Two Crores Sixty Three Lakhs Sixty Seven Thousand Two Hundred and Ninety-One) Equity Shares of Rs. 10 each. Further, during the year under review and in the previous year, the company has neither granted any options nor issued any shares to any employees under SUDITI ESOP 2011. The Certificate from the Secretarial Auditors of the Company certifying that the Companys Stock Option Plans are being implemented in accordance with the ESOP Regulations and the resolution passed by the Members, would be available for inspection during the meeting in electronic mode.

The company has two subsidiary companies namely M/s. Suditi Design Studio Limited and M/s. Suditi Sports Apparel Limited. Apart from this, the company has entered into a joint venture arrangement named M/s. SAA

& Suditi Retail Pvt Ltd with PAS Lifestyles Pvt. Ltd, a company promoted by celebrity actor Ms. Anushka Sharma and her family. The statement containing the salient feature of the financial statement of a companys subsidiary or subsidiaries and joint venture (AOC-1) is annexed and marked as Annexure I.

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

The list of Directors & KMPs of the company as on March 31, 2024 are as follows:

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

Mr. Raja Gopal Chinraj (DIN: 00158832) was re-appointed as Whole Time Director (ED) & CEO with effect from June 1, 2023 for a further period of 3 years was approved by the shareholders by passing special Resolution through Postal Ballot on December 30, 2022

Mr. Gopalkrishnan, Company Secretary has retired from the services of the company w.e.f. May 31, 2023

Mrs. Shweta Gupta has been appointed as Company Secretary cum compliance officer w.e.f. August 16, 2023.

Mrs. Krina Gaurav Gala (DIN 07040989) has been regularized from the position of Additional Independent woman Non- Executive Director to Director w.e.f September 29, 2023.

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

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

Further in accordance with the provisions of Section 152 of the Companies Act, 2013 the Whole Time Director and CEO of the board Mr. Raja Gopal Chinraj (DIN 00158832) retires by rotation in the forthcoming Annual General Meeting and being eligible offer himself for reappointment.

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

A declaration by an Independent Director(s) that they meet the criteria of independence as provided in subsection (6) of Section 149 of the Companies Act, 2013 has been submitted to the Board every year in the first Board Meeting of the year including for the year 2023-24. An independent director shall hold office for a term up to five consecutive years on the Board of a Company but shall be eligible for reappointment for next five years on passing of a special resolution by the Company and making disclosure of such appointment in the Boards report. In the opinion of the Board, the independent directors fulfill the conditions specified in the Regulations and are independent of the management.

The Directors hereby confirm - i) That in the preparation of the annual accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures; ii) That the Directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit of the Company for that period; iii) That the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; iv) That the Directors have prepared the annual accounts on a ‘going concern basis; v) That the directors, have laid down internal financial controls to be followed by the company and that such internal financial controls are adequate and were operating effectively and;

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

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

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

Particulars of contracts or arrangements with related parties:

The related party transactions undertaken by the company are within the permissible limits of the special resolution passed by the shareholders and as a matter of prudence all the transactions with related parties are also placed before the Audit Committee for its review. An omnibus approval from the Audit Committee was obtained for the related party transactions which are repetitive in nature. All the transactions with related parties entered into during the year under review were in the Ordinary Course of Business and on

Arms Length Basis in accordance with the provisions of the Act, Rules made thereunder and SEBI Listing

Regulations.

The Audit Committee and the Board reviewed all the transactions entered pursuant to the omnibus approvals, on a quarterly basis. Approval of the Members of the Company is also obtained in case any related party transaction exceeds the prescribed limits and as good corporate governance practice, since there may be few transactions that may be carried out in the long-term interest of the Company. The Policy on Related

Party Transactions is available on the Companys website and can be accessed at https://suditi.in.

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

Particulars of Employees:

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

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

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

M/s. Chaturvedi & partners, Chartered Accountants (FRN: 307068E) were appointed as Statutory Auditors of the Company, at the 31^st Annual General Meeting held on September 29, 2022, for a term of 5 (five) consecutive years i.e. to hold office from the conclusion of 31^st Annual General Meeting until the conclusion of 36^th Annual General Meeting of the Company to be held in the financial year 2027.Further, the aforesaid Statutory Auditors have confirmed that they are not disqualified to act as Auditors and are eligible to hold office as Auditors of your Company for financial year 2023-24.

Further, the report of the Statutory Auditors along with the notes to accounts is enclosed with the Financial Statements. The Auditors have issued an unmodified opinion on the Financial Statements for the financial year ended March 31, 2024. The Auditors of the Company have not reported any fraud as specified under Section 143(12) of the Companies Act, 2013.

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

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

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

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

Risk management policy:

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

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

There are no loans/guarantee or security provided during the year under review. Details of loans, guarantees and investments covered under Section 186 of the Companies Act, 2013 form part of the Notes to the financial statements provided in this Annual Report.

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

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

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

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

There is an amount of Rs. 6,17,118/- being unclaimed dividend and 40012 equity shares have been transferred during the year to the Investor Education and Protection Fund as per applicable Rules and reported to the Registrar of Companies, Ministry of Corporate Affairs. Further an amount of Rs. 8.90 Lakhs being unpaid and unclaimed lying in the unpaid dividend account due to be transferred to Investor Education and Protection Fund (IEPF). Pursuant to the provisions of the Investor Education Protection Fund (Uploading of information regarding unpaid and unclaimed amounts lying with companies) Rules, 2012, the Company has already filed the necessary form and uploaded the details of unpaid and unclaimed amounts lying with the Company, as on the date of last AGM, with the Ministry of Corporate Affairs.

The Company confirms that it has paid the Annual Listing Fees to the BSE Ltd (Bombay Stock Exchange

Limited) where the Companys Shares are listed.

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

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

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

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

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

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

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

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

Place: Navi Mumbai

Date: August 14, 2024