Ladies and Gentlemen,

Your Directors present the 62^nd Annual Report of the Company along with the audited statement of accounts for the year ended 31st March 2026.

The production and income from operation of the current year and previous year are as under:

Due to the accumulated losses, your Directors are not in a position to recommend Dividend in this year.

High input cost and low recovery price in Textile business: Huge increase in Raw material prices - Cotton reached its peak prices which destabilized the entire Textiles supply chain. In addition, the labour, electricity and general administration costs have also increased manifold. This severely affected your company since our customers were not able to absorb the increase in price.

Low selling prices due to high imports from China: There has been very high imports of material at a very low cost which brought the selling prices of Synthetic blended yarns to drastically low price. The government has implemented Quality Control Orders (QCO) against anti dumping of yarns and fabrics from China and other countries. We are positive this move will help over the current year in potentially better selling prices of our yarns.

Decline in Sales/ Demand- Our key selling markets has been very dull as they majority of Apparel manufacturers have sluggishness in export markets. Owing to war situations, the quantities and demand for Finished products has been slower. Due to lack of export orders, most mills have been selling yarns in the domestic market with excess supply. This in turn has affected the supply chain of yarn and fabrics.

Overall the Textile industry has been going through turmoil for the past decade. High raw material prices, high imports of cheap yarns and fabrics, economic downturn and recessions scenarios across major buying markets of Europe, North America etc. has disrupted the total industry resulting in to many textile factories closing their operations due to a very slow and sluggish demand for yarns.

Your company has planned to monetize the Assets, mainly the lands, which are not put in to optimal usage. Accordingly, in Dec 2025 Quarter, the Company revalued the Fixed Assets, especially the lands in Chennai as well as in Arni, and necessary entries were passed in the books of Accounts as per Ind-As, standard accounting practice. To move in this direction, necessary amendments in the objects clause of Memorandum of Association need to be undertaken and the same is placed for approval.

We are hopeful FY 2026-2027 will have a positive outlook as the government has made some policy changes regarding Imports and Anti Dumping duties in certain Textile products. With some stability in raw material pricing and improved export demand, we can expect a much better performance.

5. CURRENT YEAR: The demand for the yarn and price realization at the beginning of the current year are good. Your Directors are doing their best to improve the performance to a reasonable level.

6. DETAILS OF KEY MANAGERIAL PERSONNEL (KMP)

According to Section 203 of the Companies Act, 2013, the following are the Key Managerial Personnel of the Company:

Mr. Balakrishna S - Managing Director

Mr. R. Padmanaban - Joint Managing Director and CFO

Mr. D.Krishnamoorthy - Company Secretary

Mr. R. Padmanahban, Joint Managing Director, who retires by rotation at the ensuing Annual General Meeting and being eligible, offers himself for re-appointment.

The Annual Return of the Company as on March 31, 2026 is available on the Company's website and can be accessed at www.slstindia.com

a) There were Five Board meetings held during the year 2025-26. The details and attendance record of Directors at the Board Meetings are as under.

b) There were Four Audit Committee meetings held during the year 2025-26. The details and attendance record of Directors at the Audit Committee Meetings are as under.

c) There was one Independent Directors meetings held during the year 2025-26. The details and attendance record of Directors at the Independent meetings are as under.

d) There were two Nomination and Remuneration Committee meetings held during the year 2025-26. The details and attendance record of Directors at the Nomination and Remuneration Committee meetings are as under.

e) There was one Stakeholders Relationship Committee Meeting held during the year 2025-26. The details and attendance record of Directors at the Stakeholders Relationship Committee Meeting are as under.

f) Since CSR is not applicable, no CSR Committee meeting held during the year 2025-26.

g) Details of Board and Committee Meetings' Attendance Record of Individual Directors:

In terms of Section 134(5) of the Companies Act, 2013, the Directors state that -

1. In the preparation of Annual Accounts for the year ended 31st March 2026, the applicable accounting standards had been followed along with proper explanation relating to material departures.

2. The Directors had 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 ended 31st March 2026, and of the profit/ loss of the company for that period.

3. The Directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities.

4. The Directors had prepared the annual accounts on a going concern basis.

5. The Directors had laid down Internal Financial Controls to be followed by the company and that such internal financial controls are adequate and were operating effectively.

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

a) The Company has received necessary declaration from each independent director under Section

149(7) of the Companies Act, 2013, that he/ she meets the criteria of independence laid down in Section 149(6) of the Companies Act, 2013 and Regulation 25 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

b) Terms and conditions of appointment of Independent Directors can be viewed at the company Website: www.slstindia.com

The Remuneration Policy was recommended by Nomination and Remuneration Committee at its meeting held on February 11, 2015 and adopted by the Board of Directors at its meeting held on the same day and the policy can be viewed at the company website www.slstindia.com

The Company has not given any Loans, guarantees or Investments covered under Sec 186 of Companies Act 2013.

(a) i) Disclosure of details of Related Parties under employment of the company.

(Rs.in Lakhs)

ii) Borrowings from Directors

(b) Disclosure of particulars of contracts/arrangements entered into by the company with related parties referred to in sub-section (1) of section 188 of the Companies Act, 2013 in Form No. AOC 2 is provided in ANNEXURE - 2.

There are no material changes affecting the financial position of the company which occurred between the end of the financial year of the company to which the financial statements relate and the date of this report.

The information to be disclosed under RULE 8(3) OF COMPANIES (ACCOUNTS), RULES 2014 is given in ANNEXURE - 3.

The Board of Directors framed and adopted a Risk Management Policy at its meeting held on March 31, 2017 and the Risk Management Policy can be viewed at the Company website www.slstindia.com

In terms of Section 135 and Schedule VII of the Companies Act, 2013, the Board of Directors have constituted a Corporate Social Responsibility (CSR) Committee on March 23, 2017. The Board of Directors adopted a CSR Policy, as recommended by the CSR Committee, which is in line with Section 135 of the Companies Act, 2013, which can be viewed at the Company Website: www.slstindia.com. Annexure - 4

As the company has incurred loss in the current and previous years, CSR is not applicable.

BOARD EVALUATION Pursuant to the provisions of the Companies Act, 2013, and Regulation 17 of the SEBI( LODR) Regulations, 2015 the Board has carried out an annual performance evaluation of its own performance, the directors individually as well as the evaluation of the working of its Audit, Nomination & Remuneration and other Committees. The board's performance for the current year was assessed on the basis of participation of directors, quality of information provided, quality of discussion and contribution etc. The overall performance of the Board and Committee's of the Board was found satisfactory. The overall performance of Chairman, Executive Directors and the Nonexecutive Directors of the Company is satisfactory. The review of performance was based on the criteria of performance, knowledge, analysis, quality of decision making etc.

The information to be disclosed under RULE 8(5) OF COMPANIES (ACCOUNTS), RULES 2014 is given in ANNEXURE - 5.

The composition of the Audit Committee is as below:

All the members have wide exposure in the relevant areas.

A Whistle Blower Policy and Vigil Mechanism was adopted by the Board of Directors at its meeting held on March 9, 2015. The policy can be viewed at the company website www.slstindia.com.

The Secretarial Audit Report for the year 2025-26 is provided in ANNEXURE - 6.

There are no qualification made by the Secretarial Auditor.

The required disclosures are provided in ANNEXURE - 7.

(APPOINTMENT AND REMUNERATION OF MANAGERIAL PERSONNEL) RULES, 2014.

None of the employees was in receipt of remuneration in excess of the prescribed limits, under Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014. Hence there is no report under this category.

The company has complied with provisions relating to the constitution of Internal Complaints Committee under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.

The company has in place a system to redress complaints received regarding sexual harassment in line with the requirements of the Sexual Harassment of women at the workplace (Prevention, Prohibition & Redressal) Act, 2013

All employees (permanent, contractual, temporary, apprentices and trainees) are covered under this policy.

The following is a summary of sexual harassment complaints received and disposed off during the year 2025-26.

- No of complaints received - Nil

- No of complaints disposed off. - NA

The Board of Directors thanks Indian Overseas Bank and State Bank of India for their continued assistance and co-operation.

The relationship with labour continues to be cordial. Your Directors place on record their appreciation of the devoted services of the Officers, Members of the Staff and Workers during the year.

Your Company is required to maintain cost records as specified by the Central Government under subsection (1) of section 148 of the Companies Act, 2013 and accordingly such accounts and records are made and maintained,

The Company has appointed M/s.S V M & Associates, Cost Accountants, as Cost Auditor of the Company for the financial year 2025-26.

The enabling resolution for appointment of M/s.S V M & Associates, Cost Accountants, as Cost Auditor of the Company has been placed in the AGM Notice.

M/s. S. Viswanathan LLP, Chartered Accountants, were appointed as Statutory Auditors of the Company to hold office for a term of five years from the conclusion of 61^st Annual General Meeting till the conclusion of the 66^th Annual General Meeting

The Notes on financial statements referred to in the Auditors' Report are self-explanatory and do not call for any further comments. The Auditors' Report does contain some qualification, reservation, remark or disclaimer for which reply has been given in the Directors Report.

The Report of Auditors and Notes forming part of the Accounts are attached along with the Annual Report. Comments on Statutory Auditor's Report:

The Auditors qualified opinion, Management's explanations thereon and Statement of Impact of Audit Qualifications are given in ANNEXURE - 1.

Management Discussion and Analysis Report is part of Directors Report. ANNEXURE-8

In preparation of financial statement the treatment prescribed in all the applicable Accounting Standards are followed and no alternative treatment has been adopted.

Regulation 15 of SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015, does not apply to your company, as your company's equity share capital and net worth is below the threshold limit prescribed under the said Regulation and hence the Report on Corporate Governance is not provided.

Declaration from CEO has been given ANNEXURE - 9

The certificate is not applicable as the provisions of Corporate Governance does not apply to your company.

There are no shares in demat suspense account or unclaimed suspense account.

The company has not raised any fund through public, right or preferential issue of any security in recent time. Hence there is no Report on any deviation/ variation of the use of such funds.

The Directors have devised proper systems to ensure compliance with the provisions of all applicable Secretarial Standards and that such systems are adequate and operating effectively.

The Board of Directors framed and adopted a Related Party Transaction Policy at its meeting held on October 9, 2021 and the Related Party Transaction Policy can be viewed at the Company website www.slstindia.com

This Directors' report is placed in company's website and the same can be viewed at www.slstindia.com

The Company has complied with provisions relating to Maternity Benefit Act, 1961.

Your Directors would like to thank Company' would like to express their gratitude for the co-operation and assistance extended to the Company by its Bankers, Customers, Suppliers, Contractors, Government and Local Authorities, etc. The Directors also wish to thank all its Shareholders for their unstinted support. The Directors would like to sincerely thank and place on record their appreciation of the consistent and dedicated services of the employees at all levels who have immensely contributed to the performance of the Company during the period under review.