Your Board of Directors are pleased to present the 21st Directors'' Report, together with the Audited Standalone
and Consolidated Financial Statements of Sanathan Textiles Limited (“Sanathan Textiles” or “the Company”), for the
Financial Year ended March 31, 2026.

1. FINANCIAL RESULTS:

The summarized results of your Company are given in the table below.

During FY 2025-26 your Company delivered its
highest-ever consolidated revenue of H3,811.18 Crores,
a growth of 27.10% over the previous year, driven
principally by the commissioning and rapid ramp-up
of the Punjab facility (operated through the wholly
owned subsidiary Sanathan Polycot Private Limited)
alongside continued optimal-capacity operation
at Silvassa. Consolidated EBITDA grew 7.90% to
H284.35 crores. Consolidated profit after tax stood at
H77.35 crores, against H160.45 crores in the previous
year, that decline is explained almost entirely by the
higher interest and depreciation that necessarily
accompany a greenfield project. The Company
considers it important to explain precisely why
revenue grew 27.10% while profit declined, because
the two movements have a single, identifiable and
largely mechanical cause. In accordance with Ind AS
16, assets that had until then been carried as capital
work-in-progress were capitalised to property, plant
and equipment upon becoming ready for their
intended use. Capital Work-In-Progress of H1,971.05
crores was capitalised during the year, reducing
the closing balance of capital work-in-progress to
H252.00 crores from H1,586.95 crores, and increasing
net Property, Plant and Equipment to H2,804.36
crores from H930.87 crores.

For more details, refer to the Audited Standalone
and Consolidated Financial Statements, which forms
part of this Annual Report.

2. REVIEW OF BUSINESS OPERATIONS &
FUTURE OUTLOOK:

Company operational outlook

Your Company is one of India''s most integrated
and diversified yarn manufacturer operating across
three verticals: polyester filament yarn, cotton yarn
and yarns for technical textiles and is transitioning
from a predominantly single-location operation
at Silvassa to a multi-location footprint spanning
Silvassa and Punjab. The Silvassa facility continued
to operate at optimal utilisation during the year,
supported by its wide product range, established
automation in warehousing and material handling,
and proximity to India''s western ports for both
domestic and export supply.

The most significant operational development
shaping the outlook is the greenfield polyester
filament yarn facility at Wazirabad, Punjab operated
through your Company''s Wholly Owned Subsidiary,
Sanathan Polycot Private Limited. The facility''s
Continuous Polymerisation line was commissioned
on August 27, 2025 and has been ramped up and
now stabilised to 700 MTPD establishing Punjab as
a dedicated supply hub for the North India textile
ecosystem with materially shorter lead times to
key garment clusters such as Delhi, NCR, Haryana,
Amritsar, Punjab, Ludhiana and Panipat. The facility
is being scaled in phases toward its full polyester
filament yarn potential, which, on completion
of the phase two, will substantially increase the
Company''s aggregate installed capacity and more
than double its polyester filament yarn capacity over
the coming years.

Having largely completed its peak-investment phase,
your Company expects the operating leverage from
higher utilisation across these capacities, together

with the benefits of backward integration and a
progressively cleaner, lower-cost energy mix, to
support margins and cash flows as the new assets
mature. The near-term outlook is further aided
by supportive policy, including the temporary
exemption of raw cotton imports from customs duty
and the Agriculture Infrastructure and Development
Cess and improving trade access for Indian textiles.

Your Directors remain confident in the Company''s
medium-term growth trajectory, while recognising
that outcomes remain subject to raw-material
and energy-cost volatility, global trade and
tariff developments.

3. CHANGE IN THE NATURE OF BUSINESS:

During the financial year under review, there was no
change in the nature of the Company''s business.

4. DIVIDEND AND RETENTION OF PROFITS:

In view of the significant capital being deployed
towards the Company''s ongoing capacity expansion
across its Punjab, Silvassa and Madhya Pradesh
projects, your directors have not recommended any
dividend for the financial year under review. The
Board is of the view that retaining and reinvesting
the profits earned during the year will create greater
long-term value for shareholders by supporting
sustained revenue growth, strengthening the
Company''s manufacturing base and enhancing
operating leverage as the new capacities mature.
Accordingly, the profits for the year have been
ploughed back into the business and retained in
reserves to fund the Company''s growth initiatives.

5. TRANSFER OF AMOUNTS TO INVESTOR
EDUCATION AND PROTECTION FUND:

Since all the Equity Shares of the Company are in
dematerialized form, there have been no instances
of unclaimed shares which requires any transfer that
needs to be done to the Investor Education and
Protection Fund (IEPF).

6. MATERIAL CHANGES AND COMMITMENT
IF ANY AFFECTING THE FINANCIAL
POSITION OF THE COMPANY OCCURRED
AFTER THE END OF THE FINANCIAL YEAR:

There are no material changes or commitments that
can affect the financial position of the Company.

7. DETAILS OF SIGNIFICANT AND MATERIAL
ORDERS PASSED BY THE REGULATORS
OR COURTS OR TRIBUNALS IMPACTING
THE GOING CONCERN STATUS AND
COMPANY’S OPERATIONS IN FUTURE:

There were no significant or material orders passed
during the year that could adversely impact the
Company''s future operations or its status as
a going concern.

8. DIRECTORS:

The Board comprises an optimal balance of
Independent Directors, including a Woman Director,
and Executive Directors, fostering well-rounded and
constructive discussions that translate into meaningful,
strategically aligned decisions. The Executive
Directors bring strong industrial and operational
expertise, while the Independent Directors contribute
diverse experience across industry, banking, finance,
and legal domains. This complementary mix promotes
effective communication and robust governance,
leading to enhanced understanding and improved
decision-making.

A detailed note on the composition of the Board is
provided in the Report of Corporate Governance
forming part of the Annual Report.

Changes During the Year

Mr. Sammir Dattani was appointed as an Executive
Director for a period of five years with effect from
May 26, 2025, by the Board on the recommendation
of the Nomination and Remuneration Committee, as
part of the Company''s strategic succession planning
to strengthen Board oversight and governance. His
appointment was subsequently approved by the
Shareholders through a Special Resolution passed
at the 20th Annual General Meeting (''AGM'') held on
August 04, 2025. At the operational level, in addition
to his responsibilities as an Executive Director, he
looks at the raw material procurement for Polyester
Filament Yarn and Fully Drawn Yarn. Mr. Sammir
Dattani also looks at Information Technology and
Automation functions at Sanathan Textiles. As one
of the spokesperson of Sanathan Textiles Limited,
Mr. Sammir Dattani represents the Company across
industry forums, stakeholder meetings, and public
platforms. His holistic approach and leadership acumen
continue to shape Sanathan Textile''s positioning as
a forward-looking and resilient player in the Indian
textile landscape.

Mrs. Rupal Vora was appointed as an Independent
Director of the Company for an initial term of three
years with effect from March 31, 2023. Upon completion
of her first term on March 31, 2026, her office was due
for re-appointment. Pursuant to the recommendation
of the Nomination and Remuneration Committee and
upon consideration of her performance evaluation
during the said term, as well as her knowledge,
expertise and experience that she brings on the
Board, the Board of Directors, at its meeting held on
February 06, 2026, re-appointed Mrs Rupal Vora as an
Independent Director for a second term of three (3)
consecutive years, commencing from April 01, 2026
up to March 31, 2029. Further, the Company obtained
Shareholders approval vide postal ballot issued on

April 24, 2026 and the results were disseminated to
the Stock Exchanges on June 08, 2026.

Retirement by Rotation

Mr. Sammir Dattani (DIN: 07060573), Executive
Director, liable to retire by rotation, and being eligible,
have offered himself for re-appointment at the 21st
AGM. The Notice convening the 21st AGM forming
part of this Annual Report, includes the proposal for
re-appointment and the requisite disclosures under
Section 102 of the Act, Regulation 36(3) of the SEBI
(Listing Obligations and Disclosure Requirements)
Regulations, 2015 (“SEBI Listing Regulations”) and
Secretarial Standard-2 on General Meetings issued
by the Institute of Company Secretaries of India.

9. DECLARATION FROM INDEPENDENT
DIRECTORS:

All Independent Directors have confirmed their
independence and submitted declarations affirming
that they meet the criteria prescribed under Section
149(6) of the Companies Act, 2013 and Regulation
16(1)(b) of the SEBI Listing Regulations. They have
also confirmed that they are not disqualified from
continuing in their role as Independent Directors.
Furthermore, the Independent Directors have
affirmed their compliance with the Company''s Code
of Business Conduct.

10 FAMILIARIZATION PROGRAMMES:

The Company has an established policy on the
Familiarization Programme for Directors, designed
to facilitate continuous awareness, engagement,
and understanding of their roles, responsibilities,
and the business environment in which the
Company operates. The Board is regularly updated
on amendments, regulatory developments, and
emerging market trends, irrespective of sectoral
relevance. Additionally, all strategic and operational
information pertinent to the Company is appropriately
shared with the Independent Directors.

In line with applicable regulatory requirements, the
Company also maintains updated disclosures on its
website regarding the Familiarization Programmes
conducted for its Directors. The Familiarization
Programme for Independent Directors is available
on the Company''s website at:https://www.sanathan.
com/investor-relations

11. KEY MANAGERIAL PERSONNEL:

The Executive Directors, Chief Financial Officer
and the Company Secretary & Compliance Officer

Board expressed its overall satisfaction with the
evaluation process and the performance of the
Board, its Committees and individual Directors.
Additionally, the Independent Directors met
separately to review the performance of the Board,
without the presence of Executive Directors or
members of the Management.

13. CODE OF CONDUCT BY DIRECTORS,
MANAGEMENT AND SENIOR EMPLOYEES:

The Company has adopted a Code of Conduct for its
Directors and Senior Management to provide clear
guidance on principles of integrity, transparency,
ethical business practices, and standards of
Corporate Governance. The Code is available on the
Company''s website athttps://www.sanathan.com/
investor-relations.

All members of the Board of Directors and Senior
Management have affirmed compliance with the
Code of Conduct, and a declaration to this effect,
signed by the Managing Director, forms part of
the Corporate Governance Report included in
this Annual Report.

Further, the Company has adopted a Code of
Conduct for Prohibition of Insider Trading, aimed
at regulating, monitoring, and reporting trading
activities by insiders and preventing the misuse of
Unpublished Price Sensitive Information. The Code is
also available on the Company''s website athttps://
www.sanathan.com/investor-relations.

The Company has established adequate systems to
track the movement of Unpublished Price Sensitive
Information and regularly conducts awareness
sessions for Directors, Promoters, Key Managerial
Personnel, and designated employees/persons to
ensure robust compliance.

14. NUMBER OF MEETINGS OF THE BOARD:

The Board met a total of five (5) times during the year.
All meetings were duly convened and conducted in
compliance with the applicable provisions of the
Companies Act, 2013 and the Secretarial Standards
issued by the Institute of Company Secretaries
of India (ICSI).

The particulars of Meetings held and attended by each
Director are detailed in the Corporate Governance
Report, which forms part of this Annual Report.

15. COMMITTEES OF BOARD:

The Committees of the Board operate in accordance
with their respective terms of reference, which define
their composition, scope, powers, duties, functions,
and responsibilities. Based on the recommendations,
suggestions, and observations of these Committees,

the Board of Directors takes informed decisions on
the matters placed before it.

As on March 31, 2026, there were Five Board
Committees, namely:

(a) Audit Committee

(b) Nomination and Remuneration Committee

(c) Stakeholders'' Relationship Committee

(d) Corporate Social Responsibility Committee

(e) Risk Management and Sustainability Committee

The Company Secretary acts as the Secretary to the
abovementioned Committees.

During the year, the Board accepted all the
recommendations / inputs made by Committees.

Detailed note on the composition of the Board and
its Committees, including their respective terms
of reference, the number of Committee meetings
held during the financial year 2025-26, and the
attendance of members there at, is provided in the
Report on Corporate Governance, which forms part
of this Annual Report. The composition and terms
of reference of all the Committees of the Board of
Directors are in compliance with the provisions of the
Companies Act, 2013 and the SEBI (Listing Obligations
and Disclosure Requirements) Regulations.

16. DIRECTORS’ RESPONSIBILITY STATEMENT:

Apart from being on the Board and approving
strategic and operational decisions, your Directors
have certain responsibilities as well towards
you, our fellow Members and hence pursuant to
the requirement clause (c) of sub-section (3) of
Section 134 of the Companies Act, 2013, your
Directors confirm that:

a. in the preparation of the annual accounts, the
applicable accounting standards had been
followed along with proper explanation relating
to material departures.

b. the Directors 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 and loss of
the Company for that period.

c. proper and sufficient care of 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.

d. the annual accounts are prepared on a going
concerning basis.

e. internal financial controls to be followed are
laid down by the company and such internal
financial controls are adequate and were
operating effectively and

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

17. CHANGES IN SHARE CAPITAL:

During the financial year under review:

a. The Company has not bought back any of
its securities.

b. The Company has not issued any Sweat
Equity Shares.

c. No Bonus Shares were issued.

d. The Company has not issued any new Stock
Option to the employees.

e. The Company has not issued Equity Shares
with differential rights as to dividend, voting
or otherwise as per Section 43(a)(ii) of the
Companies Act, 2013.

The authorised capital of the Company was
H90,00,00,000 divided into 9,00,00,000 equity
shares of H10/- each. The Issued and Paid-up Share
Capital of the Company as on March 31, 2026 is
H84,40,40,590, comprising 8,44,04,059 Equity
Shares of H10/- each.

18. CREDIT RATING:

During the financial year under review the Company
received following Credit Ratings by ICRA Limited
(''ICRA'') reaffirming the rating:

ICRA has withdrawn the issuer rating assigned to
Sanathan Textiles Limited (STL) at the request of the
Company and in accordance with ICRA''s policy on
withdrawal. The ratings assigned on March 24, 2026
for the bank facilities remain outstanding. A detailed
rationale is provided by ICRA for re-affirming the
rating on the following link:Click here

19. DEPOSITS:

The Company has not accepted any deposit as per
the provisions of Companies Act, 2013 read with the
Companies (Acceptance of Deposit) Rules, 2014.

20. EXTRACT OF ANNUAL RETURN:

Pursuant to Section 134(3)(a) and Section 92(3)
of the Companies Act, 2013 read with Rule 12(1) of
the Companies (Management and Administration)
Rules, 2014, the Annual Return, for the FY 2025-26 is
available on the website of the Company athttps://
www.sanathan.com/investor-relations

21. DETAILS OF SUBSIDIARY/JOINT
VENTURES/ASSOCIATE COMPANIES:

As on March 31, 2026, the Company has only two
Wholly Owned Subsidiaries - Sanathan Polycot
Private Limited and Universal Texturisers Private
Limited of which Sanathan Polycot Private Limited
is an Unlisted Material Subsidiary as per Regulation
24 of the SEBI Listing Regulations. The Company''s
policy on Material Subsidiaries is made available on
the Company''s website athttps://www.sanathan.
com/investor-relations. All the required compliances
pertaining to an Unlisted Material Subsidiary have
been completed as on March 31, 2026 and your
Board is updated on the operational updates of
Sanathan Polycot.

Pursuant to the provisions of Section 129(3) of the
Companies Act, 2013 (“the Act”) read with rules
made thereunder, a report on the performance and
financial position of each of the subsidiary companies
of your Company is included in the Consolidated
Financial Statements presented in Form AOC-
1 attached as Annexure 1 which forms part of this
report and to the Consolidated Financial Statements
of the Company for the reference of the members.

Further the Company does not have any Joint
ventures or Associate Companies during the
period under review.

22. PARTICULARS OF LOANS, GUARANTEES
OR INVESTMENTS UNDER SECTION 186:

The members of the Company in the Annual
General Meeting held on November 25, 2021,
have granted approval to the Board for providing
loan for an amount not exceeding HI,000 Crores
(Rupees One Thousand Crores Only). Further, the
Audit Committee annually reviews the limit and the
Company has not exhausted the said limit as on
the date of this report. The Company has complied

with the provisions of Section 186 of the Companies
Act, 2013 regarding loans, investments made and
guarantees provided during the year under review.
Details have been furnished and form part of the
Company''s Financial Statements.

23. PARTICULARS OF CONTRACTS OR
ARRANGEMENTS WITH RELATED PARTIES:

The Compliance and Finance teams collaboratively
assess related party relationships and transactions,
evaluate their terms and value, by comparing them
with similar third-party transactions. The Audit
Committee grants omnibus approval for all Related
Party Transactions, which are in ordinary course of
business while ensuring they are at arm length and
reviews them periodically during the meetings.

Further, there were no transactions which were
not in the ordinary course of business and not
at arm''s length basis, hence Form AOC-2 is not
annexed to this report. The details of the related
party transactions entered during FY 2025 - 26 are
disclosed in the Notes of Financial Statement, which
form part of this Annual Report.

The Company''s policy on Related Party
Transactions as approved by the Board is hosted on
Company''s website athttps://www.sanathan.com/
investor-relations

24. PARTICULARS OF EMPLOYEES AND
RELATED DISCLOSURES:

The Company continues to foster a performance-
driven and inclusive culture, placing strong emphasis
on employee development, engagement, and
overall well-being. The Board of Directors places on
record its sincere appreciation for the dedication,
professionalism, and commitment demonstrated
by all employees, which has been instrumental
in driving the Company''s sustained performance
and long-term growth. Disclosures with respect
to Section 197(12) of the Act and Rule 5(1) of the
Companies (Appointment & Remuneration of
Managerial Personnel) Rules, 2014, and Details of
employees'' remuneration under Rule 5(2) and 5(3)
of the Companies (Appointment and Remuneration
of Managerial Personnel) Rules, 2014 is provided in
Annexure 2 to this Report.

The Company''s policy on Nomination and
Remuneration as approved by the Board is hosted
on Company''s website athttps://www.sanathan.
com/investor-relations

25. COMPANY’S POLICIES:

The Board of Directors firmly believes that a robust
and transparent policy framework is essential
for sound corporate governance and effective

organizational functioning. The Company has
implemented a comprehensive set of policies
that serve as the foundation for ethical conduct,
regulatory compliance, risk management, and
strategic decision-making. Key policies include:

1. Code of Conduct for Directors and Senior
Management - Establishes the standards of
ethical behaviour and professional integrity
expected from leadership.

2. Insider Trading Policy - Regulates trading in
securities and ensures compliance with SEBI
(Prohibition of Insider Trading) Regulations, 2015

3. Code of Practices and Procedures for Fair
Disclosure of Unpublished Price Sensitive
Information - Reinforces our commitment to
transparency in market communication.

4. Vigil Mechanism / Whistleblower Policy -

Provides a secure and confidential channel for
employees and stakeholders to report concerns
or unethical practices.

5. Policy on Obligations of Directors and
Senior Management - Clarifies the roles,
responsibilities, and obligations of individuals in
key leadership positions.

6. Risk Management Policy - Enables the proactive
identification, assessment, and mitigation of
potential business risks.

7. Nomination and Remuneration Policy -

Ensures that appointments and compensation
structures are merit-based, fair, and aligned
with long-term organizational goals.

8. Policy on Board Diversity - Promotes inclusivity
and diverse representation within the Board.

9. Succession Policy - Facilitates continuity in
leadership through planned and structured
succession planning.

10. Board Evaluation Policy - Supports continuous
improvement through structured evaluation of
the Board''s performance and effectiveness.

11. Corporate Social Responsibility (CSR)
Policy - Guides the Company''s approach to
social impact, sustainability, and community
engagement initiatives.

12. Dividend Distribution Policy - Ensures a
balanced approach to rewarding shareholders
while retaining resources for growth.

13. Related Party Transaction Policy - Establishes
safeguards and transparency in transactions
involving related parties.

14. Archival Policy - Defines guidelines for the
preservation and retrieval of documents
and disclosures.

15. Policy for Determination of Material Events
and Information - Ensures timely and
accurate disclosure in compliance with SEBI
Listing Regulations.

16. Policy on Material Subsidiaries - Governs
the monitoring and oversight of material
subsidiaries to ensure aligned governance.

These policies collectively form the backbone of
the company''s governance ecosystem, ensuring
clarity, consistency, and accountability in all
aspects of corporate functioning. By embedding
these principles into our processes, we strengthen
stakeholder trust and position the Company for
sustainable, long-term growth.

The abovementioned policies are available on the
Company''s website and can be viewed athttps://
www.sanathan.com/investor-relationsand are made
accessible to all stakeholders.

26. RISK MANAGEMENT:

The Company has in place a robust risk management
framework to identify, evaluate, and mitigate
various risks across its operations. The framework
is designed to safeguard the Company''s assets,
ensure regulatory compliance, and support the
achievement of strategic objectives. Key risks
are periodically reviewed by the management
and the Risk Management and Sustainability
Committee, and appropriate mitigation strategies
are implemented to address emerging risks. These
include, but are not limited to, risks related to market
volatility, raw material price fluctuations, regulatory
changes, operational disruptions, environmental
and sustainability factors, information security
threats, and financial liquidity. Considering the
ongoing expansion and diversification initiatives,
the Company continues to strengthen its risk
management practices by:

• Enhancing internal controls and operational
oversight mechanisms

• Improving supply chain resilience and customer
credit monitoring

• Embedding sustainability and ESG-related risks
into strategic decision-making

• Leveraging technology for real-time risk
assessment and mitigation

• Monitoring geopolitical developments that may
affect supply chains, export-import regulations,
energy pricing, and investor sentiment.

The Board of Directors affirms that the Company''s
risk management system is adequate and
commensurate with the size and complexity of its
operations and provides reasonable assurance that
risks are being effectively monitored and managed.

The details of the Committee and its terms of
reference are set out in the Corporate Governance
Report forming part of this Annual Report.

27. CYBER SECURITY:

The Company recognises cyber security as a
strategic priority and a critical component of its
enterprise risk management framework. In view of
the increasing dependence on digital platforms and
data-driven operations, the protection of information
assets, customer and stakeholder data, and the
maintenance of business continuity form an integral
part of the Company''s governance practices.

To oversee and strengthen its cyber risk management
framework, the Company has constituted a
dedicated Cyber Security Committee comprising
members from Senior Management, the Information
Technology function, and the Compliance team. The
Committee is responsible for guiding the Company''s
cyber security strategy, monitoring emerging threats,
ensuring compliance with applicable regulatory
requirements, and driving cyber security awareness
across the organisation.

Key measures undertaken include:

• Implementation of advanced security tools
(firewalls, endpoint protection, intrusion
detection systems)

• Regular internal and third-party audits,
vulnerability assessments, and penetration testing

• Information Security Policy aligned with
ISO 27001, subject to periodic review and
Board oversight.

• Organisation-wide cyber hygiene and
awareness campaigns, phishing simulations,
and training programs

• Deployment of secure backup, disaster recovery,
and business continuity plans

The Cyber Security Committee meets periodically to
monitor threat intelligence, review the effectiveness
of security controls, and assess emerging cyber risks.
The Company continues to invest in strengthening
its digital infrastructure and, during the year

under review, did not report any cyber security
breach. Through a robust framework of preventive,
detective, and responsive measures, the Company
remains committed to maintaining high standards
of cyber governance and safeguarding the interests
of its stakeholders in an increasingly digital and
interconnected environment.

28. CONSERVATION OF ENERGY, TECHNOLOGY
ABSORPTION AND FOREIGN EXCHANGE
EARNINGS AND OUTGO:

The particulars as required under the provisions of
Section 134(3)(m) of the Companies Act, 2013 read
with Rule 8 of the Companies (Accounts) Rules, 2014
in respect of conservation of energy, technology
absorption, foreign exchange earnings and outgo
etc. are furnished in Annexure 3 which forms part
of this Report.

29. VIGIL MECHANISM:

The Company has established a Vigil Mechanism to
enable reporting of genuine concerns or grievances
and to provide adequate safeguards against
victimization of individuals using the mechanism.
Oversight of the Vigil Mechanism rests with the
Audit Committee. The Company remains committed
to upholding the highest standards of ethical, moral,
and legal conduct in all its business operations.

Under the Vigil Mechanism Policy, any Director,
Employee, or Stakeholder who observes unethical
behavior, actual or suspected fraud, or a violation
of the Company''s policies may report the matter
to the Chairman of the Audit Committee or via
email at[email protected]. The detailed
procedure is outlined in the Vigil Mechanism Policy,
which is available on the Company''s website at
https://www.sanathan.com/investor-relations

30. CORPORATE SOCIAL RESPONSIBILITY
(CSR):

Aligned with the Company''s core value and its
commitment to responsible Corporate Citizenship,
your Company actively embraces its social
responsibilities through a variety of initiatives aimed
at creating a positive impact on society. Guided by
the Company''s CSR Policy and its defined focus
areas, our efforts were concentrated on critical
domains such as eradicating hunger, promoting
healthcare, encouraging sports and protecting the
environment. Through well-structured programs, the
Company is dedicated to contributing to societal
well-being, fostering sustainable development, and
supporting social upliftment.

During the year under review, CSR initiatives were
undertaken across the Company''s operational
locations at Silvassa and Punjab, with a continued
focus on community welfare, safety and
disaster preparedness.

Community Safety Infrastructure at the Punjab Unit

FY 2025-26 marked the commissioning of the
Company''s Punjab facility and with it, marked the
Company''s engagement with a new community.
The establishment of a manufacturing facility brings

employment and economic activity while also
creating a responsibility to contribute positively to
the surrounding community. Keeping this in mind, the
Company invested in a dedicated Fire Tender and an
Ambulance at the Punjab site and made a conscious
decision not to reserve them for internal use alone.

Both assets remain available to the surrounding
community and can be mobilised in the event of
a fire, a medical emergency or any other incident
requiring immediate response. In a region where
the nearest emergency infrastructure can be some
distance away, the difference between help arriving
in minutes and help arriving in an hour is not a small
one. The response from the neighbourhood has been
encouraging, with the Company receiving letters of
appreciation from local stakeholders a modest but
meaningful indication that the facility is being seen
as part of the community rather than apart from it.

Fire-Fighting Training

The value of such training is that it does not stay
confined to the shop floor. A participant who has been
taught to assess a fire calmly, use an extinguisher
correctly and evacuate others in an orderly manner
carries that presence of mind home with them. Should
an emergency arise in their own house or in the
neighbourhood, the instinct is to respond rather than
to panic and in this way, the initiative''s benefit extends
outward from the workplace to the community at large.

Cervical Cancer Awareness and Vaccination
Initiative

Cervical cancer remains one of the most prevalent
cancers among women in India despite being largely
preventable through timely awareness, screening and
vaccination. Limited awareness and low screening
coverage continue to be significant barriers to early
prevention and treatment.

Recognising the importance of preventive
healthcare, the Company organised cervical cancer
awareness sessions in Mumbai and facilitated
vaccination initiatives in Kolkata during FY 2025-26.
By combining awareness with access to preventive
healthcare, the initiative sought to encourage
informed decision-making and contribute towards
improving women''s health. The programme also
aligns with national and global efforts to increase
awareness and promote HPV vaccination for the
prevention of cervical cancer.

Food Distribution for Underprivileged
Communities

The country produces enough food. What it
does not consistently do is get that food to the
people who need it.

The UNEP Food Waste Index Report 2024 estimated
India''s household food waste at roughly 78 million
tonnes in 2022 second only to China in absolute
terms while a significant proportion of the population
continues to go without adequate nutrition. Globally,
the same report placed food waste at 1.05 billion
tonnes, close to a fifth of all food available to
consumers, with households accounting for around
60% of it. Hunger, in this context, is less a failure of
agriculture than a failure of logistics and access.

The Company''s food distribution programme
is a direct, if modest, response to that failure.
During FY 2025-26, the Company undertook
food distribution activities for underprivileged
communities. The intent is straightforward: to place
nutrition in the hands of those who would otherwise
go without it, in the communities in and around
which the Company operates.

For a business built on supply chains, the logic
is a familiar one. Availability without access is not
availability at all.

Renovation of K. M. Haji Bachooali ENT Hospital

Quality healthcare depends not only on skilled
medical professionals but also on safe and functional
healthcare infrastructure. During FY 2025-26, the
Company supported renovation works at K. M. Haji
Bachooali ENT Hospital to improve the usability,
safety and overall functionality of the facility.

The project is expected to enhance the hospital''s
ability to serve the surrounding communities that
depend upon it for accessible healthcare services,
thereby contributing to improved healthcare
infrastructure and patient experience.

World Environment Day 2026 -"Every Yarn
Carries a Greener Commitment"

As part of its World Environment Day 2026 initiatives,
the Company organised a Clothes Donation Drive
through which collected garments for redistribution
to underserved rural communities. Jute sling bags
were distributed as tokens of appreciation to
encourage sustainable alternatives.

The Company also collaborated with G South Ward
of the Brihanmumbai Municipal Corporation (BMC)
and the Inner Wheel Club of Bombay Pier Tiara to
create a public art installation along the Mumbai
Coastal Road, complemented by community
awareness programmes promoting environmental
conservation and responsible resource utilisation.

Further, the Company has shared the Annual Report
pertaining to the Corporate Social Responsibility for
the financial year 2025-2026 as per the applicable
provisions of the Companies Act, 2013, the details
of which are mentioned in Annexure 4 which forms
part of this report.

The CSR Policy is available on the website of the
Company and can be viewed athttps://www.
sanathan.com/investor-relations.

31. AWARDS AND RECOGNITIONS
(Safety & Operational Excellence)

At Sanathan, safety is woven into the very fabric
of our operations. Throughout FY 2025-26, our
unwavering commitment to rigorous protocols, swift
emergency response, and community-level disaster
preparedness earned formal recognition from key
government and statutory authorities.

• Sanathan Textiles Ltd Silvassa was awarded
for compliance in Basic Fire and Life Safety
Measures at Technical Conclave on Industrial Fire
Safety in April 2025 organized by Department
of Fire and Emergency Services, DNH at Kala
Kendra, Silvassa.

• Reaffirming our adherence to highest-tier
safety standards, Sanathan Textiles'' Silvassa
Unit received a renewed Award & Certification
for Compliance in Fire and Life Safety Measures
in the month of April 2026 at the subsequent
Industrial Fire Safety Conclave organized by
the DDNH Government Department of Fire and
Emergency Services, Silvassa.

(Emergency Preparedness, Drills & Institutional
Leadership)

Going beyond standard compliance, Sanathan
Textiles actively partners with district and national
disaster management bodies to fortify civil defense
infrastructure and drive community resilience.

• During the year under review, the Sanathan
Fire Tender and Safety Teams participated
in a landmark U/T Level Civil Defense Mock
Drill for emergency preparedness at the Mini-
Collectorate, Khanvel, Silvassa. This historic
exercise; first of its kind conducted nationwide
since 1971 across hundreds of districts focused
on critical crisis scenarios, including air
raids and blackouts.

• A district-level mock drill on "Flood Disaster"
was organized by the DNH Disaster Management
Authority in collaboration with the National
Disaster Response Force (NDRF). leveraging
internal defense expertise, Commander Deepak
(Chief Safety & Security Officer) participated
as a distinguished observer. He provided vital
expert guidance and training to the rescue
team on flood disaster emergency handling
a nd evacua tion exercises, earning a forma l
token of appreciation on behalf of Sanathan
Textiles Limited.

32. AUDITORS AND AUDITORS’ REPORT:

A. STATUTORY AUDITOR

The Members of the Company on the
recommendation of the Board, in the Annual
General Meeting held on November 25, 2021
approved the appointment of M/s. Walker
Chandiok & Co LLP, (ICAI FRN 001076N/
N500013) as the Statutory Auditors of the
Company for a period of five years which is
up to the conclusion of the Annual General
Meeting scheduled on September 11, 2026. The
Reports given by M/s. Walker Chandiok & Co
LLP, Chartered Accountants on the Standalone
and Consolidated Financial Statements of the
Company for FY 2025-26 is forming part of the
Financial Statements, which is made part of this
Annual Report. The Statutory Auditor Report
does not contain any qualification, reservation
or adverse remarks. Further, no frauds have
been reported by the Statutory Auditors during
the Financial Year 2025-26 pursuant to the
provisions of Section 143(12) of the Act.

At its meeting held on August 03, 2026 the
Board of Directors of the Company, after
considering the experience and expertise of
the firm and based on the recommendation
of the Audit Committee, has proposed to the
Members the re-appointment of M/s. Walker
Chandiok & Co LLP, Chartered Accountants
(Firm Registration No. 001076N/N500013),
as the Statutory Auditor of the Company.
The re-appointment is for a second term of
five consecutive years, commencing from the
conclusion of this 21st AGM until the conclusion
of the 26th AGM, at a remuneration as detailed
in the notice of the 21st AGM.

B. SECRETARIAL AUDITOR

The Shareholders of the Company in their
20th Annual General Meeting held on August
04, 2025 appointed M/s. DVD & Associates,
Practising Company Secretaries, a Peer
Reviewed Firm (Firm Registration Number:
I2004MH477200) as Secretarial Auditors of
the Company for a term of five (5) years upto
March 31, 2030. They have also confirmed that
they are not disqualified from continuing as
Secretarial Auditors of the Company in terms of
provisions of the Act & Rules made thereunder
and SEBI (LODR) Regulations.

Pursuant to Section 204 of the Companies Act,
2013, the Secretarial Audit Report in Form MR-3
for the Financial Year 2025-26 forms part of this
Annual Report and is annexed as Annexure 5.

The Secretarial Audit Report for the
Financial Year 2025-26 does not contain any
qualification, reservation, adverse remark or
disclaimer of opinion.

Sanathan Polycot Private Limited ("SPPL") is
a material unlisted subsidiary of the Company,
pursuant to Regulation 16(1)(c) of the Listing
Regulations. A copy of the Secretarial Audit
Report of SPPL is provided in Annexure
6 to this report. It does not contain any
qualification, reservation, adverse remark or
disclaimer of opinion.

C. COST AUDITOR:

The Board, on the recommendation of the Audit
Committee, has appointed M/s. Saroj K Babu & Co.,
Cost Accountant (Firm Registration No. 100591)
as the Cost Auditor of the Company. The
Company has duly prepared and maintained
cost records as prescribed under Section 148(1)
of the Companies Act, 2013. Further, as required
under the Companies Act, 2013, a resolution
seeking members approval for the ratification
of remuneration payable for the FY 2026-27
to the Cost Auditors forms part of the Notice
convening the Annual General Meeting.

D. INTERNAL AUDITOR:

The Board of Directors on the recommendation
of Audit Committee pursuant to section 138 of
the Companies Act, 2013 appointed M/s. Mahajan
& Aibara LLP, Chartered Accountants for
performing Internal Audit of the Company.
Further the Internal Audit Report prepared by
the Internal Auditor was examined by the Audit
Committee and noted by the Board of Directors
on a timely basis.

33. BUSINESS RESPONSIBILITY AND
SUSTAINABILITY REPORT:

The Business Responsibility and Sustainability
Report (BRSR) outlines a company''s environmental,
social, and governance initiatives and practices. It
aims to provide transparency on how businesses
operate responsibly and contribute to sustainable
development. As per SEBI''s circular dated May
10, 2021, the BRSR framework is applicable to the
top 1,000 listed entities by market capitalization.
The BRSR is a new requirement applicable to
the Company from April 1, 2025, in accordance
with Regulation 34(2) (f) of the SEBI Listing
Regulations. The Company is pleased to present its
1st Business Responsibility and Sustainability Report
for the financial year 2025-26 which is a part of
this Annual Report.

34. EMPLOYEE STOCK OPTION SCHEMES:

The Company recognizes the importance of
attracting, retaining, and motivating high-caliber
employees who contribute to the company''s
long-term success. In line with its objective, your
Company had Sanathan Textiles Limited- Employee
Stock Option Plan- 2021 ''ESOP SCHEME 2021''. The
ESOP Scheme 2021 have been duly approved by
the members and post the Initial Public Offer, the
ESOP Scheme has been ratified by the Members
and is fully compliant with the Companies Act, 2013
and the SEBI (Share Based Employee Benefits and
Sweat Equity) Regulations, 2021. Significantly, the
shareholders have also approved the extension
of these benefits to the eligible employees of the
Company''s subsidiary, Sanathan Polycot Private
Limited on June 06, 2026. The disclosure under the
said SEBI Regulations is available on the website of
the Company. The certificate of Secretarial Auditor
confirming compliance of the ESOP Scheme with
the Act and abovementioned SEBI Regulations is
given in Annexure 7 which forms part of this report.

35. OBLIGATION OF COMPANY UNDER THE
SEXUAL HARASSMENT OF WOMEN AT
WORKPLACE (PREVENTION, PROHIBITION
AND REDRESSAL) ACT, 2013 AND
MATERNITY BENEFIT ACT 1961:

Your Company always endeavors to provide a
conductive work environment that is free from
discrimination and harassment, including sexual
harassment. With a zero tolerance policy towards
sexual harassment at workplace, the Company has
adopted a robust policy for prevention of Sexual
Harassment of Women at workplace.

To ensure effective oversight and redressal, the
Company has established an Internal Compliants

Committee (“ICC”) that holds jurisdiction over all its
operational locations, including Silvassa, Punjab, and
the Mumbai Head Office. To facilitate the seamless
reporting of grievances, physical complaint boxes
have been installed at all the Company premises.
Furthermore, the Company proactively conducts
frequent POSH awareness sessions across all
locations to foster a safe, secure, and respectful
working environment for all employees. During
the financial year 2025-26, no cases of sexual
harassment were received.

The Company is also registered on the SHe-Box
portal launched by the Ministry of Women and Child
Development, Government of India to provide an
additional channel for reporting complaints. During
the financial year under review, no complaints were
received, and no complaints were pending. The
Company acknowledges its statutory obligations
under the Maternity Benefit Act, 1961, in line with its
focus on employee welfare. The Company confirms
that all applicable provisions of the Act were duly
complied with during the FY 2025-26.

36. DETAILS IN RESPECT OF ADEQUACY
OF INTERNAL FINANCIAL CONTROLS
WITH REFERENCE TO THE FINANCIAL
STATEMENTS:

The Company has adequate internal financial
controls in place, commensurate with its size and
the nature of its business. The Internal Financial
Controls, with reference to financial statements as
designed and implemented by the Company, are
adequate. During the year under review, no material
or serious observation has been received from the
Statutory Auditors of the Company for inefficiency
or inadequacy of such controls.

37. SECRETARIAL STANDARDS:

The Company has complied with the Secretarial
Standards issued by The Institute of Company
Secretaries of India (ICSI). The Company has
devised proper systems to ensure compliance with
its provisions and follows the same.

38. MANAGEMENT DISCUSSION AND ANALYSIS
REPORT:

Management Discussion and Analysis Report on the
operations of the Company, is provided as a separate
section and forms part of this Annual Report.

39. CORPORATE GOVERNANCE REPORT
AND CERTIFICATE FROM SECRETARIAL
AUDITOR:

Pursuant to Regulation 34 of the SEBI Listing
Regulations, the Corporate Governance Report
for the year ended March 31, 2026 along with a
Certificate from the Secretarial Auditor of the
Company regarding compliance with the conditions
of Corporate Governance as stipulated under
Schedule V of the SEBI Listing Regulations is
provided in a separate section and forms part of
Annual Report.

40. DETAILS OF APPLICATION MADE OR
ANY PROCEEDING PENDING UNDER THE
INSOLVENCY AND BANKRUPTCY CODE,
2016:

During the period under review the Company has not
made any application, and no proceeding is pending
under the Insolvency and Bankruptcy Code, 2016.

41. THE DETAILS OF DIFFERENCE BETWEEN
AMOUNT OF THE VALUATION DONE AT
THE TIME OF ONE TIME SETTLEMENT AND
THE VALUATION DONE WHILE TAKING
LOAN FROM THE BANKS OR FINANCIAL
INSTITUTIONS ALONG WITH THE REASONS
THEREOF:

During the year, there has been no one-time
settlement of Loan and therefore this point is
not applicable.

42. LOAN FROM DIRECTORS OR THEIR
RELATIVES:

During the year under review, there is no loan taken
from the Directors or their relatives by the Company.

43. CHIEF FINANCIAL OFFICER (CFO)
CERTIFICATION:

As required under Regulation 17(8) of the SEBI Listing
Regulations, the CFO of the Company has certified
the accuracy of the Financial Statements, the Cash
Flow Statement and adequacy of Internal Control
Systems for financial reporting for the financial year
ended on March 31, 2026 and the certificate forms
part of the Corporate Governance Report.

44. LISTING FEES:

Your Company has paid the requisite Annual Listing
Fees to National Stock Exchange of India Limited
(Symbol: SANATHAN) and BSE Limited (Scrip Code:
544314), where its securities are listed.

45. APPRECIATION:

The Board of Directors places on record its sincere
appreciation for the unwavering support and
continued cooperation extended by our banking
partners. The Directors also express their heartfelt
gratitude to all stakeholders including our valued
customers, resolute employees, trusted vendors,
esteemed consultants, and respected shareholders,
whose steadfast confidence and contributions
have been instrumental in the Company''s growth
journey. The Board is especially thankful for the

overwhelming response received during the
Company''s Initial Public Offering (IPO), marking a
significant milestone in our corporate evolution. We
remain committed to upholding the trust placed in
us and driving sustainable value for all stakeholders.

FOR AND ON BEHALF OF THE BOARD OF DIRECTORS
FOR SANATHAN TEXTILES LIMITED

S/d

Paresh Dattani

Chairman and Managing Director
Date: August 03, 2026 DIN No.: 00163591

Place: Mumbai

Your Board of Directors is pleased to present the Directors'' Report, together with the Audited Standalone and
Consolidated Financial Statements of Sanathan Textiles Limited (“Sanathan Textiles” or “the Company”), for the
Financial Year ended March 31, 2025.

1. FINANCIAL RESULTS:

The summarized results of your Company are given in the table below.

? in 13L/hc

On a Standalone basis, total Income increased to
H 3,02,649 lakhs in FY 2024-25, compared to
H 2,98,611 lakhs in FY 2023-24. The Profit Before Tax
(PBT) stood at H23,109 lakhs, representing 22.3%
growth over the previous year. On a Consolidated
basis, the Profit After Tax improved by 19.9% year-
on-year, reflecting stronger operating leverage and
disciplined financial management. Despite modest
revenue growth, the Company recorded a meaningful
expansion in profitability due to process efficiencies
and cost containment initiatives.

2. REVIEW OF BUSINESS OPERATIONS &
FUTURE OUTLOOK:

Your Company is India''s most diversified and
integrated yarn manufacturer, offering a diversified
portfolio across Polyester Filament Yarn, Cotton
Yarn, and Yarns for Technical Textiles. With a strong
backward integration model and robust infrastructure,
the Company catered to a wide range of end-use
sectors, including apparel, home textiles, automotive,
furnishings, and industrial applications.

In FY 2024-25, the Company achieved consistent
revenue growth and improved profitability, supported
by operational efficiency, enhanced product mix,
and strong stakeholder relationships. The successful
completion of the Initial Public Offering (IPO)
marked a significant milestone, strengthening the
Company''s capital structure and reinforcing its long¬
term growth vision.

For more details, refer to the Audited Standalone
and Consolidated Financial Statements, which forms
part of this Annual Report.

Green Field Expansion at Punjab

The demand for Polyester Filament Yarn is expected
to grow in the coming years and to cater to the
requirement, Sanathan Textiles through its Wholly
Owned Subsidiary i.e. Sanathan Polycot Private
Limited is expanding its manufacturing capacity at
Punjab which will double the total manufacturing
capacity per annum from 2,23,750 MTPA to 5,70,500
MTPA in a phased manner.

The Green field Expansion in Punjab is a strategically
placed State of the art facility, which will cater to
the North India Textile Market by supporting faster
delivery timelines and better usage of cash flow and
warehousing management for our customers. Since
the expansion at Punjab is a green-field facility, a lot
of automation and usage of technology has been
done, and the infrastructure is designed to support
such automations.

3. CHANGE IN THE NATURE OF BUSINESS:

During the financial year under review, there was no
change in the nature of the Company''s business.

Sanathan Textiles continues to ensure that its
customers get high quality yarn and value-added
yarns like Sanathan Reviro, Sanathan Puro, Born
Dyed, Sanathan Drycool, Sanathan Stretch, S - Flex

and Cationic Dyeable Polyester. Your Company
always ensures that the Yarns required by the End-
use Consumer is brought to reality by keeping an
eye on the changing trends in the industry.

4. DIVIDEND AND RETENTION OF PROFITS:

Considering the ongoing expansion phase of the
Company and in view of the long-term interest of the
stakeholders, the Board believes that retaining the
profits for internal deployment is prudent and hence
wants to retain the earnings. Hence, your Board has
not recommended any dividend for the financial
year ended March 31, 2025.

The Company is confident that the ongoing capacity
expansion will enable it to cater to the growing
market demand, enhance its market share, and
create sustained value for its stakeholders.

5. TRANSFER OF AMOUNTS TO INVESTOR
EDUCATION AND PROTECTION FUND:

The Company got its Equity Shares listed on
December 27, 2024, on the National Stock Exchange
of India Limited and BSE Limited. Prior to the listing,
the Equity Shares were held closely by the Promoters
and Promoter Group. As part of the Initial Public
Offer, the Company raised a total of H 550 Crores for
which the Promoters and the Promoter Group diluted
around 21.42% stake. The Promoters will ensure that
the minimum public shareholding of 25% is maintained
before the timelines as mentioned in the regulation.

All the Equity Shares, either fresh or which were
offered by the Promoters as part of the Offer for
Sale, were in demat form. Further, no funds or Equity
Shares of the Company remain unclaimed and hence
there is no transfer that needs to be done to the
Investor Education and Protection Fund (IEPF).

6. MATERIAL CHANGES AND COMMITMENT IF
ANY AFFECTING THE FINANCIAL POSITION
OF THE COMPANY OCCURRED AFTER THE
ENDS OF THE FINANCIAL YEAR:

There are no material changes or commitments that
can affect the financial position of the Company.

7. DETAILS OF SIGNIFICANT AND MATERIAL
ORDERS PASSED BY THE REGULATORS
OR COURTS OR TRIBUNALS IMPACTING
THE GOING CONCERN STATUS AND
COMPANY’S OPERATIONS IN FUTURE:

With increasing demand for yarns, the Company
continues to expand its capacity and cater to a diverse
range of industries. The functional teams remain
committed to ensuring full compliance with applicable
statutory requirements and this is seen from the fact that
there are no significant or material orders passed during
the year that could adversely impact the Company''s
future operations or its status as a going concern.

8. DIRECTORS:

Your Board has the right mix of Independent
Directors (which includes Woman Director) and
Executive Directors, which blends and supports
discussions which turn into meaningful and
strategically aligning decisions. As the Executive
Directors come with strong Industrial and Operational
Experience, the Independent Directors have the mix
of Industrial, Banking, Financial and Legal Expertise.
All the Independent Directors support effective
communication and governance, which culminates
in better understanding and better decision-making
capabilities. Mr. Dineshkumar Dattani was appointed
as an Executive Director in place of casual vacancy.

Apart from the above, there were no changes at the
Board for the financial year ended on March 31, 2025.

Your directors would like to inform that after the
completion of FY 2024-2025, Mr. Sammir Dattani was
appointed to the Board of Directors with effect from
May 26, 2025, as part of the Company''s strategic
succession planning to strengthen Board oversight
and governance in place of Mr. Dineshkumar Dattani.
The Board recommends his appointment for the
approval of the Members and the copy of the
resolution along with the Explanatory Statement
has been made part of the Notice, forming part of
this Annual Report. Mr. Sammir Dattani played a key
role as a spokesperson during the roadshows held in
connection with the Initial Public Offering, where his
insights and thought leadership were well received by
stakeholders. At the operational level, in addition to
his responsibilities as a Director, Mr. Sammir Dattani
oversees raw material procurement for the Polyester
Filament Yarn division and is actively involved in
automation initiatives and the management of the
Information Technology function.

A detailed note on the composition of the Board is
provided in the Report of Corporate Governance
forming part of the Annual Report.

9. RETIREMENT BY ROTATION:

Mr. Anilkumar Dattani (DIN: 00164175), Director,
liable to retire by rotation, and being eligible, have
offered himself for re-appointment at the 20th AGM.
The Notice convening the 20th AGM forming part
of this Annual Report, includes the proposal for re¬
appointment and the requisite disclosures under
Section 102 of the Act, Regulation 36(3) of the SEBI
(Listing Obligations and Disclosure Requirements)
Regulations, 2015 (“SEBI Listing Regulations”) and
Secretarial Standard-2 on General Meetings issued
by the Institute of Company Secretaries of India.

10. DECLARATION FROM INDEPENDENT
DIRECTORS:

All Independent Directors are Independent and have
furnished respective declaration stating that they

meet the criteria of Independence as laid down under
Section 149(6) of the Act and Regulation 16(1)(b) of
the SEBI Listing Regulations and are not disqualified
from continuing as Independent Directors of
the Company. The Independent Directors have
also confirmed that they have complied with the
Company''s Code of Business Conduct.

11. FAMILIARIZATION PROGRAMMES:

The Company has a defined policy on the
Familiarization Programme for Directors, aimed at
ensuring continuous awareness and engagement.
The Board is regularly apprised of any amendments,
regulatory changes, or emerging market trends,
irrespective of the sectoral relevance. In addition,
all strategic and operational communications
relevant to the Company are appropriately shared
with the Independent Directors. The Company
also maintains updated disclosures on its website
regarding the Familiarization Programmes
conducted for its directors, in line with applicable
regulatory requirements.

The Familiarisation Programme for Independent
Directors is uploaded on the website of the Company,
and is accessible at https://www.sanathan.com/
investor-relations.

12. KEY MANAGERIAL PERSONNEL:

The Executive Directors, Chief Financial Officer
and the Company Secretary & Compliance Officer
constitute the Key Managerial Personnel (KMP) of
the Company as required under the Act.

The list of Key Managerial Personnel as on the date
of this Report is as follows:

13. ANNUAL PERFORMANCE EVALUATION OF
BOARD:

The Board considers that Annual Evaluation of the
Board guides them not only to complete the statutory
obligation but gives a different perspective of the
progress they are doing and the subjects on which

they should improve in their Individual Capacity and
as a Board Member. The skills identified by the Board
are mentioned below and the same were considered
for mapping the Board Evaluation for the financial
year ended on March 31, 2025:

Mr. Devendra Deshpande, a Practicing Company
Secretary is an External Board Evaluator and is also
a Secretarial Auditor of Sanathan Textiles. He carries
an extensive knowledge of supporting and ensuring
Board Management.

As part of the Board Evaluation process, Mr. Devendra
Deshpande ensured that a questionnaire was shared
and then a one-on-one confidential conversation
was conducted, to understand those quantitative
perspectives of the Board, that cannot be measured
in terms of rating. Overall, the Board expressed its
satisfaction on the performance evaluation process
as well as performance of all Directors, Committees
and Board as a whole. The Independent Directors
also meet to discuss the performance of the Board,
in which no Executive Directors or members of the
Management were present.

14. CODE OF CONDUCT BY DIRECTORS,
MANAGEMENT AND SENIOR EMPLOYEES:

The Company has adopted Code of Conduct for the
Directors and Senior Management of the Company
to provide clear guidance on principles such as
integrity, transparency, business ethics and to set up
standards for compliance of Corporate Governance.

A copy of same is available at the website of the
Company at https://www.sanathan.com

All members of the Board of Directors and Senior
Management Personnel had affirmed compliance
with the Code of Conduct and a declaration to this
effect signed by the Managing Director forms part of
this Corporate Governance Report, which forms part
of this Annual Report.

Further, Company has adopted a Code of Conduct
for Prohibition of Insider Trading to regulate, monitor
and report trading by insiders for prevention misuse
of Unpublished Price Sensitive Information. A copy
of same is available at the website of the Company
at https://www.sanathan.com.

The Company has in place the system to trace
the movement of Unpublished Price Sensitive
Information and regular awareness is created for the
Directors, Promoters, Key Managerial Personnel and
designated employees/ persons.

15. NUMBER OF MEETINGS OF THE BOARD:

The Board of Directors used to meet quarterly to
deliberate on the strategy and overall operations
of the Company during its meetings. However, for
the financial year ended March 31, 2025, the Board
met more than often and the reason for frequent
meetings was associated with the Initial Public
Offering. Accordingly, the Board met a total of ten
(10) times during the year. All meetings were duly
convened and conducted in compliance with the
applicable provisions of the Companies Act, 2013
and the Secretarial Standards issued by the Institute
of Company Secretaries of India (ICSI).

The particulars of Meetings held and attended by each
Director are detailed in the Corporate Governance
Report, which forms part of this Annual Report.

16. COMMITTEES OF BOARD:

The Committees of the Board are guided by their
respective terms of reference, which outline their
composition, scope, power, duties, functions and
responsibilities. Basis recommendations, suggestions
and observations made by these Committees, the
Board of Directors take an informed decision on the
matters under their consideration.

As on March 31, 2025, there were Five Board
Committees, namely:

(a) Audit Committee

(b) Nomination and Remuneration Committee

(c) Stakeholders'' Relationship Committee

(d) Corporate Social Responsibility Committee

(e) Risk Management Committee

18. CHANGES IN SHARE CAPITAL:

During the financial year under review:

a. The Company has not bought back any of
its securities.

b. The Company has not issued any Sweat
Equity Shares.

c. No Bonus Shares were issued.

d. The Company has not granted any new Stock
Option to the employees.

e. The Company has not issued Equity Shares
with differential rights as to dividend, voting
or otherwise as per Section 43(a)(ii) of the
Companies Act, 2013.

The Company successfully completed its Initial
Public Offering (IPO) and, on December 24, 2024,
issued and allotted 1,24,61,059 Equity Shares of face
value of H 10 each. After the IPO, the Equity Shares
of the Company were listed on the National Stock
Exchange of India Limited (NSE) and BSE Limited
(BSE) with effect from December 27, 2024.

Pursuant to the IPO, the Paid-up Share Capital of the
Company increased to H 84,40,40,590, comprising
8,44,04,059 equity shares of H10/- each.

19. CREDIT RATING:

During the financial year under review the Company
received following Credit Ratings by ICRA Limited
(''ICRA'') reaffirming the rating while the outlook has
been revised to positive:

Rationale provided by ICRA for reaffirming the
rating

The Credit Rating Agency has assigned a Positive
Outlook to the Sanathan Textiles Group (here
Sanathan Textiles Group means - Sanathan Textiles
Limited and Sanathan Polycot Private Limited)
reflecting its expectations of an improvement in the
Group''s revenues and profit margins in the near term.
This anticipated growth is primarily driven by the
commercialisation of the new manufacturing facility.

Upon the completion of the ongoing expansion
project at Sanathan Polycot Private Limited (SPPL),
the the Sanathan Textiles Group production capacity
is expected to double. This expanded capacity is
expected to enhance the the Sanathan Textiles
Group operating profile through a more diversified
product mix and strategic proximity to both raw
material sources and key consumption markets.

Management further anticipates improved operating
profit margins at the new facility, attributable to
reduced freight expenses, due to closer customer
locations and lower fuel costs using rice husk as
an energy source. The ability of Sanathan Polycot
Private Limited to efficiently and profitably scale up
operations at the expanded facility remains a key
area of focus from a credit rating standpoint.

The Rating Agency has also acknowledged Sanathan
Textiles Group strong and long-standing relationships
with both customers and suppliers. These relationships
are expected to support consistent and repeat
business, thereby enabling optimal utilisation of the
Group''s manufacturing assets.

20. DEPOSITS:

The Company has not accepted any deposit as per
the provisions of Companies Act, 2013 read with the
Companies (Acceptance of Deposit Rules) 2014.

21. EXTRACT OF ANNUAL RETURN:

Pursuant to Section 134(3)(a) and Section 92(3)
of the Companies Act, 2013 read with Rule 12(1) of
the Companies (Management and Administration)
Rules, 2014, the Annual Return, for the FY 2024¬
2025 is available on the website of the Company at
https://www.sanathan.com

22. DETAILS OF SUBSIDIARY/JOINT
VENTURES/ASSOCIATE COMPANIES:

As on March 31, 2025, the Company has only two
Wholly Owned Subsidiaries - Sanathan Polycot
Private Limited and Universal Texturisers Private
Limited of which Sanathan Polycot Private Limited
is an Unlisted Material Subsidiary as per Regulation
24 of the SEBI Listing Regulations. The Company''s
policy on Material Subsidiaries is made available on
the Company''s website at https://www.sanathan.
com.During the year, the Company has nominated
one of its Independent Director named Mr. Khurshed
Thanawalla as an Independent Director of Sanathan
Polycot Private Limited as required under Regulation
24(1) of SEBI Listing Regulations, further all the
required compliances pertaining to an Unlisted
Material Subsidiary have been completed as on
March 31, 2025 and your Board is updated on the
operational updates of Sanathan Polycot.

Pursuant to the provisions of Section 129(3) of the
Companies Act, 2013 (“the Act”) read with rules
made thereunder, a report on the performance
and financial position of each of the subsidiary
companies of your Company is included in the
Consolidated Financial Statements presented in
Form AOC-1 attached as Annexure 1 to this Report
and to the Consolidated Financial Statements of the
Company for the reference of the members.

Further the Company does not have any Joint
ventures or Associate Companies during the
period under review.

23. PARTICULARS OF LOANS, GUARANTEES
OR INVESTMENTS UNDER SECTION 186:

The members of the Company in the Annual
General Meeting held on November 25, 2021, have
granted approval to the Board for providing loan
for an amount not exceeding H1,000 Crore (Rupees
One Thousand Crores Only). Further, the Audit
Committee annually reviews the limit and the
Company has not exhausted the said limit as on
the date of this report. The Company has complied
with the provisions of Section 186 of the Companies
Act, 2013 regarding loans, investments made and
guarantees provided during the year under review.
Details have been furnished and form part of the
Company''s Financial Statements.

24. PARTICULARS OF CONTRACTS OR
ARRANGEMENTS WITH RELATED PARTIES:

The Compliance and Finance teams collaboratively
assess related party relationships and transactions,
evaluate their terms and value, by comparing them
with similar third-party transactions. The Audit
Committee grants omnibus approval for all Related
Party Transactions, which are an ordinary course of
business while ensuring they are at arm length and
reviews them periodically during the meetings.

Further, there were no transactions which were not
in the ordinary course of business and not at arm''s
length basis, hence Form AOC-2 is not annexed
to this report. The details of the related party
transactions entered during FY 2024 - 2025 are
disclosed in the Notes of Financial Statement, which
form part of this Annual Report.

The Company''s policy on Related Party Transactions
as approved by the Board is hosted on Company''s
website and a web link is www.sanathan.com/
investors-relations

25. PARTICULARS OF EMPLOYEES AND
RELATED DISCLOSURES:

The Company continues to foster a performance-
driven and inclusive culture, placing strong emphasis

on employee development, engagement, and
overall well-being. The Board of Directors places on
record its sincere appreciation for the dedication,
professionalism, and commitment demonstrated
by all employees, which has been instrumental
in driving the Company''s sustained performance
and long-term growth. Disclosures with respect to
under Section 197(12) of the Act and Rule 5(1) of
the Companies (Appointment & Remuneration of
Managerial Personnel) Rules, 2014, and Details of
employees'' remuneration under Rule 5(2) & 5(3)
of the Companies (Appointment & Remuneration
of Managerial Personnel) Rules, 2014 is provided in
Annexure 2 to this Report.

The Company''s policy on Nomination and
Remuneration as approved by the Board is hosted on
Company''s website and a web link is www.sanathan.
com/investors-relations

26. COMPANY’S POLICIES:

The Board of Directors firmly believes that a robust
and transparent policy framework is essential
for sound corporate governance and effective
organizational functioning. The Company has
implemented a comprehensive set of policies
that serve as the foundation for ethical conduct,
regulatory compliance, risk management, and
strategic decision-making. Key policies include:

1. Code of Conduct for Directors and Senior
Management - Establishes the standards of
ethical behaviour and professional integrity
expected from leadership.

2. Insider Trading Policy - Regulates trading
in securities and ensures compliance
with SEBI (Prohibition of Insider Trading)
Regulations, 2015.

3. Code of Practices and Procedures for Fair
Disclosure of Unpublished Price Sensitive
Information - Reinforces our commitment to
transparency in market communication.

4. Vigil Mechanism / Whistleblower Policy -

Provides a secure and confidential channel for
employees and stakeholders to report concerns
or unethical practices.

5. Policy on Obligations of Directors and
Senior Management - Clarifies the roles,
responsibilities, and obligations of individuals in
key leadership positions.

6. Risk Management Policy - Enables the proactive
identification, assessment, and mitigation of
potential business risks.

7. Nomination and Remuneration Policy -

Ensures that appointments and compensation

structures are merit-based, fair, and aligned
with long-term organizational goals.

8. Policy on Board Diversity - Promotes inclusivity
and diverse representation within the Board.

9. Succession Policy - Facilitates continuity in
leadership through planned and structured
succession planning.

10. Board Evaluation Policy - Supports continuous
improvement through structured evaluation of
the Board''s performance and effectiveness.

11. Corporate Social Responsibility (CSR)
Policy - Guides the Company''s approach to
social impact, sustainability, and community
engagement initiatives.

12. Dividend Distribution Policy - Ensures a
balanced approach to rewarding shareholders
while retaining resources for growth.

13. Related Party Transaction Policy - Establishes
safeguards and transparency in transactions
involving related parties.

14. Archival Policy - Defines guidelines for the
preservation and retrieval of documents
and disclosures.

15. Policy for Determination of Material Events
and Information - Ensures timely and
accurate disclosure in compliance with SEBI
Listing Regulations.

16. Policy on Material Subsidiaries - Governs
the monitoring and oversight of material
subsidiaries to ensure aligned governance.

These policies collectively form the backbone of
the company''s governance ecosystem, ensuring
clarity, consistency, and accountability in all
aspects of corporate functioning. By embedding
these principles into our processes, we strengthen
stakeholder trust and position the Company for
sustainable, long-term growth.

The abovementioned policies are available on the
Company''s website and can be viewed at https://
www.sanathan.com and are made accessible to
all stakeholders.

As part of our periodic review of archival records
maintained in line with the Company''s Archival
Policy, it was observed that a portion of the
system-generated audit logs relating to FY 2023¬
24 is not currently retrievable. The information
pertains to post-audit system records and has no
bearing on statutory filings or disclosures made
during the period.

The Company has since taken necessary steps to
review and strengthen its data retention protocols to
align with best practices. There has been no impact
on the completeness or accuracy of any regulatory
or financial reporting.

27. RISK MANAGEMENT:

The Company has in place a robust risk management
framework to identify, evaluate, and mitigate
various risks across its operations. The framework
is designed to safeguard the Company''s assets,
ensure regulatory compliance, and support the
achievement of strategic objectives. Key risks are
periodically reviewed by the management and the
Risk Management Committee, and appropriate
mitigation strategies are implemented to address
emerging risks. These include, but are not limited
to, risks related to market volatility, raw material
price fluctuations, regulatory changes, operational
disruptions, environmental and sustainability

factors, information security threats, and financial

liquidity. Considering the ongoing expansion and
diversification initiatives, the Company continues to
strengthen its risk management practices by:

• Enhancing internal controls and operational
oversight mechanisms

• Improving supply chain resilience and customer
credit monitoring

• Embedding sustainability and ESG-related risks
into strategic decision-making

• Leveraging technology for real-time risk

assessment and mitigation

• Monitoring geopolitical developments that may
affect supply chains, export-import regulations,
energy pricing, and investor sentiment.

The Board of Directors affirms that the Company''s
risk management system is adequate and

commensurate with the size and complexity of its
operations and provides reasonable assurance that
risks are being effectively monitored and managed.

The details of the Committee and its terms of
reference are set out in the Corporate Governance
Report forming part of this Annual Report.

28. CYBER SECURITY:

The Company acknowledges cyber security as a
strategic priority and an essential element of its
enterprise risk management. With the growing
reliance on digital systems and data-driven
operations, safeguarding information assets,
protecting customer and stakeholder data, and
ensuring business continuity have become integral
to the Company''s governance practices.

To oversee its cyber risk management framework,
the Company has constituted a dedicated Cyber
Security Committee, comprising members from
Senior Management, Information Technology, and
Compliance teams. The Committee is responsible
for steering the Company''s cyber security strategy,
reviewing threat landscapes, ensuring adherence
to regulatory norms, and driving awareness across
the organisation.

Key measures undertaken include:

• Implementation of advanced security tools
(firewalls, endpoint protection, intrusion
detection systems)

• Regular internal and third-party
audits, vulnerability assessments, and
penetration testing

• Information Security Policy aligned with
ISO 27001, subject to periodic review and
Board oversight.

• Organisation-wide cyber hygiene and
awareness campaigns, phishing simulations,
and training programs

• Deployment of secure backup, disaster recovery,
and business continuity plans

The Cyber Security Committee meets periodically to
monitor threat intelligence, review security controls,
and evaluate emerging risks. The Company continues
to invest in strengthening its digital infrastructure
and has not encountered any security breach during
the year. Through a combination of preventive,
detective, and responsive measures, the Company
is committed to upholding high standards of cyber
governance and safeguarding stakeholder interests
in an increasingly connected environment.

29. CONSERVATION OF ENERGY, TECHNOLOGY
ABSORPTION AND FOREIGN EXCHANGE
EARNINGS AND OUTGO:

Sanathan Textiles is deeply committed to sustainable
manufacturing practices, with energy and resource
conservation at the core of its operational philosophy.
Through the adoption of Zero Liquid Discharge (ZLD)
systems, the Company ensures complete recycling of
wastewater, thereby significantly reducing the water
usage and this aligns strongly with environmental
sustainability by reducing freshwater consumption
and ensuring responsible reuse of treated water.
The adoption of Zero Liquid System will be done at
Punjab as well. The use of Global Recycled Standard
(GRS) certified materials further underscores our
commitment to circular economy principles and
efficient resource utilization. To harness renewable
energy, we have installed rooftop solar panels
with an aggregate capacity of 2.35 MW, reducing

dependence on conventional power sources, to the
extent possible. Complementing these efforts are
our tree plantation drives, which help enhance green
cover, regulate local temperatures, and improve
ecosystem balance.

At the forefront of innovation, Sanathan Textiles
also deploys Dope Dyed technology for coloured
yarns, wherein pigments are added directly into
the polymer melt during yarn production. This
method eliminates the need for traditional dyeing
processes, leading to significant water savings
and lower energy consumption. As environmental
awareness grows, many global brands and conscious
consumers are increasingly advocating for yarns
manufactured through such responsible methods,
further validating Sanathan Textiles efforts toward
low impact textile production.

As part of its ongoing efforts toward backward
integration and process optimization, the
Company successfully commissioned a Solid-
State Polymerisation (SSP) plant to produce
high intrinsic viscosity PET chips required for
Technical Textiles Yarn production. This SSP unit is
equipped with a fully automated direct conveying
system, enabling seamless transfer of hot chips
from the SSP unit to the Technical Textiles line. By
eliminating intermediate stages such as cooling,
bagging, conveying, and drying, this innovation
significantly reduces energy consumption and
enhances operational efficiency. The integration
of SSP not only supports quality consistency in
high-performance yarns but also aligns with the
Company''s commitment to energy conservation and
sustainable manufacturing practices.

This sustainability first approach is further exemplified
by our wholly owned subsidiary, Sanathan Polycot
Private Limited, where the upcoming plant in Punjab
will utilize rice husk, a renewable agricultural by¬
product, as a fuel source for heating processes.
This transition to biomass energy not only reduces
carbon emissions but also promotes clean energy
adoption, reinforcing Sanathan Textiles mission to
lead the industry toward a more energy efficient and
environmentally responsible future.

The particulars as required under the provisions of
Section 134(3)(m) of the Companies Act, 2013 read
with Rule 8 of the Companies (Accounts) Rules, 2014
in respect of conservation of energy, technology
absorption, foreign exchange earnings and outgo
etc. are furnished in Annexure 3 which forms part
of this Report.

30. VIGIL MECHANISM:

The Company has constituted Vigil Mechanism
to report genuine concerns or grievances and to

provide adequate safeguards against victimization
of persons who may use such mechanism and the
oversight of the same is with the Audit Committee
of the Company. The Company is committed to
adhering to the highest standards of ethical, moral,
and legal conduct of business operations. The
Company has adopted Vigil Mechanism policy,
which provides that any Directors, Employees,
Stakeholders who observe any unethical behavior,
actual or suspected, fraud or violation may report
the same to Chairman of the Audit Committee or
e-mail on the email-Id: whistleblower@sanathan.
com. The detailed procedure is provided in the
policy and the same is available on website of the
Company https://www.sanathan.com.

During the financial year under review, there were no
instances of fraud reported to the Audit
Committee or the Board.

31. CORPORATE SOCIAL RESPONSIBILITY
(CSR):

Aligned with the Company''s core value of Good
Corporate Citizenship, your Company actively
embraces its social responsibilities through a
variety of initiatives aimed at creating a positive
impact on society. Guided by the Company''s CSR
Policy and its defined focus areas, our efforts were
concentrated on critical domains such as eradicating
hunger, promoting healthcare, encouraging sports,
preserving culture, and protecting the environment.
Through well-structured programs, the Company
is dedicated to contributing to societal well-being,
fostering sustainable development, and supporting
social upliftment.

Contribution of Fire Tender and Ambulance Unit
- A key support to fight crisis

In alignment with its CSR focus on community welfare
and crisis management, the Company contributed
to the procurement of a fully equipped fire tender.
This initiative is aimed at strengthening emergency
response capabilities in the region surrounding the
Company''s factory at Silvassa and Punjab. The fire
tender has played a critical role in safeguarding life
and property in industrial, residential, and public
areas. Through this contribution, the Company aims
to enhance employee safety, improve public safety
measures, strengthen emergency preparedness
within the factory and its surrounding areas,
and support development of a more robust and
responsive disaster management framework.

Contribution to Eradicating hunger (Annapurna
Program)

The Company focused on eradicating hunger and
supporting underprivileged communities. The
Company undertook food distribution drives aimed
at providing nutritious meals for those in need. These
efforts were directed towards marginalized sections
of society, including daily wage earners, homeless
individuals, and low-income families. Through this
initiative, the Company sought to alleviate food
insecurity and contribute to the well-being of
vulnerable communities.

Contribution to Promoting Healthcare

As part of its CSR initiatives in the healthcare sector,
the Company extended support to Masina Hospital
by contribution of essential medical equipment. The
support included the provision of an ECG machine,
ICCU beds, ventilator, infusion pump, syringe pump,
MGPS line, and patient monitor. This initiative was
undertaken to strengthen the hospital''s critical
care capabilities and enhance its overall healthcare
infrastructure, thereby contributing to improved
medical services for the community.

Contribution to Promoting Education

In alignment with its focus in education, the Company
extended infrastructure support to a school
with the objective of creating a more conducive
learning environment. The assistance included the
development and enhancement of basic facilities to
improve the overall educational infrastructure. This
initiative was aimed at fostering a better academic
atmosphere for students and supporting their
holistic growth and learning outcomes.

Standing with the Brave: A CSR Tribute to Veer
Naris of the Indian Navy

As part of its ongoing Corporate Social Responsibility
(CSR) initiatives, Sanathan Textiles Limited had
undertaken a heartfelt project in support of the Veer
Naris of the Indian Navy. This initiative was aimed
at providing sustained household support to these
courageous women, ensuring financial stability and
dignified living conditions until their children are
independent and capable of earning a livelihood.
This long-term commitment reflects the Company''s
deep respect for the sacrifices made by the families
of our armed forces and its resolve to contribute
meaningfully to their welfare. Accordingly, as part of
the CSR tradition, sports equipment''s to Indian Navy
associated schools, are given to facilitate sports
culture to the extent possible.

Further, the Company has shared the Annual Report
pertaining to the Corporate Social Responsibility for
the financial year 2024-2025 as per the applicable
provisions of the Companies Act, 2013, the details
of which are mentioned in Annexure 4 which forms
part of this report.

The CSR Policy is available on the website of the
Company and can be viewed at www.sanathan.com/
investors-relations.

32. AUDITORS AND AUDITORS’ REPORT:

A. STATUTORY AUDITOR

The Members of the Company on the
recommendation of the Board, in the Annual
General Meeting held on November 25, 2021
approved the appointment of M/s. Walker
Chandiok & Co., LLP, (ICAI FRN 0 0 1 0 7 6 N /
N500013) as the Statutory Auditors of the
Company for a period of five years which is
up to the conclusion of the Annual General
Meeting scheduled to be held on 2026. The
Reports given by M/s. Walker Chandiok & Co.,
LLP, Chartered Accountants on the Standalone
and Consolidated Financial Statements of the
Company for FY 2024-2025 is forming part of
the Financial Statements, which is made part of
this Annual Report. The Statutory Auditor Report
does not contain any qualification, reservation
or adverse remarks. Further, no frauds have
been reported by the Statutory Auditors during
the Financial Year 2024-2025 pursuant to the
provisions of Section 143(12) of the Act.

B. SECRETARIAL AUDITOR

The Board, on the recommendation of the
Audit Committee had appointed M/s. DVD &
Associates, Practising Company Secretaries to
undertake the Secretarial Audit of the Company
for the FY 2024- 2025.

The Report of Secretarial Audit in form MR-3
in accordance with Section 204 of Companies
Act, 2013 and Secretarial Compliance Report
in accordance with Regulation 24A of SEBI
Listing Regulations, for the FY 2024- 2025 is
annexed as Annexure 5 to the Annual Report.
The Secretarial Auditor Report does not contain
any qualification, reservation or adverse remarks
Further as per the recent amendment under SEBI
Listing Regulations pertaining to Appointment of
Secretarial Auditor, M/s DVD and Associates had
given their consent to act as Secretarial Auditors,
accordingly, the Board in the meeting held on May
26, 2025 recommended their appointment for a
team of five years, which is subject to approval
of the members. The resolution pertaining to the
appointment forms part of the Notice convening
the Annual General Meeting.

C. COST AUDITOR:

The Board, on the recommendation of the Audit
Committee, has appointed M/s. Saroj K Babu
& Co, Cost Accountant (Firm Registration No.
100591) as the Cost Auditor of the Company. And
the Company has duly prepared and maintained
cost records as prescribed under Section 148(1)
of the Companies Act, 2013. Further, as required
under the Companies Act, 2013, a resolution
seeking members approval for the ratification
of remuneration payable for the FY 2025-26
to the Cost Auditors forms part of the Notice
convening the Annual General Meeting.

D. INTERNAL AUDITOR:

The Board of Directors on the recommendation
of Audit Committee pursuant to section 138
of the Companies At, 2013 appointed M/s.
Mahajan & Aibara, Chartered Accountants LLP
for performing Internal Audit of the Company.
Further the Internal Audit Report prepared by
the Internal Auditor was examined by the Audit
Committee and noted by the Board of Directors
on a timely basis.

33. BUSINESS RESPONSIBILITY AND
SUSTAINABILITY REPORT:

The Business Responsibility and Sustainability
Report (BRSR) outlines a company''s environmental,
social, and governance initiatives and practices. It
aims to provide transparency on how businesses
operate responsibly and contribute to sustainable
development. As per SEBI''s circular dated May 10,
2021, the BRSR framework is applicable to the top
1,000 listed entities by market capitalization. The
Company was classified among the top 1,000 listed
entities as of December 31, 2024.

The BRSR is a new requirement applicable to
the Company from April 1, 2025, in accordance
with Regulation 34 (2) (f) of the SEBI Listing
Regulations. Hence, the Company will provide the
BRSR in upcoming year. The Company is focused
on integrating responsible and sustainable business
practices and will proactively align with the BRSR
framework in the upcoming reporting period.

34. EMPLOYEE STOCK OPTION SCHEMES:

The Company recognizes the importance of
attracting, retaining, and motivating high-caliber
employees who contribute to the company''s
long-term success. In line with its objective, your
Company had Sanathan Textiles Limited- Employee
Stock Option Plan- 2021 ''ESOP SCHEME 2021''. The
ESOP Scheme 2021 have been duly approved by the
members and post the Initial Public Offer, the ESOP
Scheme has been ratified by the Members and is

fully compliant with the Companies Act, 2013 and
the SEBI (Share Based Employee Benefits and Sweat
Equity) Regulations, 2021. The disclosure under the
said SEBI Regulations is available on the website of
the Company. The certificate of Secretarial Auditor
confirming compliance of the ESOP Scheme with
the Act and abovementioned SEBI Regulations is
given in Annexure 6 which forms part of this report.

35. OBLIGATION OF COMPANY UNDER THE
SEXUAL HARASSMENT OF WOMEN AT
WORKPLACE (PREVENTION, PROHIBITION
AND REDRESSAL) ACT, 2013 AND
MATERNITY BENEFIT ACT 1961:

Your Company always endeavors and provides
conductive work environment that is free from
discrimination and harassment including sexual
harassment. Your Company has zero tolerance towards
sexual harassment at workplace and has adopted
a policy for prevention of Sexual Harassment of
Women at workplace. To facilitate the reporting of
grievances, a physical complaint box has also been
installed at all the Company''s premises. The Company
has set up an Internal Committee under the Sexual
Harassment of Women at Workplace (Prevention,
Prohibition and Redressal) Act, 2013 to address
complaints of sexual harassment at the workplace
and to ensure a safe, secure, and respectful working
environment for all employees.

The Company is also registered on the SHe-Box
portal launched by the Ministry of Women and Child
Development, Government of India to provide an
additional channel for reporting complaints. During
the Financial Year under review, no complaints were
received, and no complaints were pending. The
Company acknowledges its statutory obligations
under the Maternity Benefit Act, 1961, in line with its
focus on employee welfare. The Company confirms
that all applicable provisions of the Act were duly
complied with during the FY 2024-2025.

36. DETAILS IN RESPECT OF ADEQUACY
OF INTERNAL FINANCIAL CONTROLS
WITH REFERENCE TO THE FINANCIAL
STATEMENTS:

The Company has adequate internal financial
controls in place, commensurate with its size and
the nature of its business. The Internal Financial
Controls, with reference to financial statements as
designed and implemented by the Company, are
adequate. During the year under review, no material
or serious observation has been received from the
Statutory Auditors of the Company for inefficiency
or inadequacy of such controls.

37. SECRETARIAL STANDARDS:

The Company has complied with the Secretarial
Standards issued by The Institute of Company
Secretaries of India (ICSI). The Company has devised
proper systems to ensure compliance with its
provisions and follows the same.

38. MANAGEMENT DISCUSSION AND ANALYSIS
REPORT:

Management Discussion and Analysis Report on the
operations of the Company, is provided as a separate
section and forms part of this Annual Report.

39. CORPORATE GOVERNANCE REPORT AND
CERTIFICATE FROM AUDITOR:

Pursuant to Regulation 34 of the SEBI Listing
Regulations, the Corporate Governance Report
for the year ended March 31, 2025 along with a
Certificate from the Secretarial Auditor of the
Company regarding compliance with the conditions
of Corporate Governance as stipulated under
Schedule V of the SEBI Listing Regulations, is
provided in a separate section and forms an part of
Annual Report.

40. DETAILS OF APPLICATION MADE OR
ANY PROCEEDING PENDING UNDER THE
INSOLVENCY AND BANKRUPTCY CODE,
2016:

During the period under review the Company has not
made any application, and no proceeding is pending
under the Insolvency and Bankruptcy Code, 2016.

41. THE DETAILS OF DIFFERENCE BETWEEN
AMOUNT OF THE VALUATION DONE AT
THE TIME OF ONE TIME SETTLEMENT AND
THE VALUATION DONE WHILE TAKING
LOAN FROM THE BANKS OR FINANCIAL
INSTITUTIONS ALONG WITH THE REASONS
THEREOF:

During the year, there has been no one-time
settlement of Loan and therefore this point is
not applicable.

42. LOAN FROM DIRECTORS OR THEIR
RELATIVES:

During the year under review, there is no loan taken
from the Directors or their relatives by the Company.

43. CHIEF FINANCIAL OFFICER (CFO)
CERTIFICATION:

As required under Regulation 17(8) of the SEBI Listing
Regulations, the CFO of the Company has certified
the accuracy of the Financial Statements, the Cash
Flow Statement and adequacy of Internal Control
Systems for financial reporting for the financial year
ended March 31, 2025 and the certificate forms part
of the Corporate Governance Report.

44. LISTING FEES:

Your Company has paid the requisite Annual Listing
Fees to National Stock Exchange of India Limited
(Symbol: SANATHAN) and BSE Limited (Scrip Code:
544314), where its securities are listed.

45. APPRECIATION:

The Board of Directors places on record its sincere
appreciation for the unwavering support and
continued cooperation extended by our banking
partners. The Directors also express their heartfelt
gratitude to all stakeholders including our valued
customers, resolute employees, trusted vendors,
esteemed consultants, and respected shareholders,
whose steadfast confidence and contributions
have been instrumental in the Company''s growth
journey. The Board is especially thankful for the
overwhelming response received during the
Company''s Initial Public Offering (IPO), marking a
significant milestone in our corporate evolution. We
remain committed to upholding the trust placed in
us and driving sustainable value for all stakeholders.

FOR AND ON BEHALF OF THE BOARD OF DIRECTORS
FOR SANATHAN TEXTILES LIMITED

S/d

Paresh Dattani

Date: May 26, 2025 Chairman and Managing Director

Place: Mumbai DIN No.: 00163591