డైరెక్టర్ల నివేదిక Lalithaa Jewellery Mart Ltd.

The Board of Directors have great pleasure in presenting the Fortieth Board''s Report of the Company together with the Audited financial Statements for the Financial Year ended 31^st March, 2026.

FINANCIAL RESULTS AND STATE OF COMPANY AFFAIRS:

The Company''s financial performance (standalone and consolidated) for the year ended 31^st March 2026 is summarised below:

(Rs in Millions)

On a consolidated basis, the company''s revenue from operations for the Financial Year 2025-26 stood at Rs. 2,50,239.27 Millions as against Rs 1,68,973.17 Millions in the previous year. The consolidated profit for the Financial Year 2025-26 was Rs 10,098.17 Millions compared to Rs 3,640.41 Millions in the previous financial year.

On a standalone basis, the company''s revenue from operations for the Financial Year 2025-26 was Rs 2,50,390.36 Millions, as against Rs 1,68,974.63 Millions in the previous financial year. The profit after tax for the Financial Year 2025-26 was Rs. 10,087.87 Millions as against Rs. 3,627.85 Millions in the previous financial year.

The significant improvement in the Company''s financial performance during the year was primarily driven by higher revenues from operations, improved operational efficiencies, and effective cost optimisation measures implemented across the business.

INDUSTRY DEVELOPMENTS & BUSINESS OUTLOOK:

Industry Developments:

The global economy continues to expand at a steady but cautious pace, with global Gross Domestic Product (GDP) projected to grow by 3.2% in 2025 and 3.1% in 2026. While this momentum is primarily driven by emerging markets and developing economies navigating a environment of moderating inflation, it faces persistent headwinds from escalating trade distortions, surging shipping costs, and deep geoeconomic fragmentation. These challenges are further compounded by aggressive global tariff structures — vividly illustrated by the United States effectively doubling duties on specific Indian exports to 50% in August 2025—which have injected an element of localized volatility into international trade corridors.

In stark contrast to these global structural challenges, India firmly maintains its position as one of the world''s fastest-growing major economies, with real GDP growth projected at a robust 6.5% for FY 202526 —a powerful trajectory expected to sustain until FY31. This domestic economic outperformance is heavily anchored by an expanding Private Final Consumption Expenditure (PFCE), which has climbed to an estimated Rs. 106,196 billion, alongside healthy gross fixed capital formation and proactive supply chain realignments. Providing a deep underlying tailwind to this growth is India''s unique demographic shift; a rapidly expanding workforce, a growing concentration of young consumers aged 25-34, and a dependency ratio on track to drop to 45% by 2030 are fundamentally elevating household discretionary spending capacity. As urbanization steadily pushes toward the 40% mark by 2030, and the middle- to high-income segments grow to represent roughly 95% of the population by FY31, the addressable consumer base for premium discretionary assets, particularly fine jewellery, is expanding on an unprecedented scale.

The Indian gems and jewellery retail sector continues its definitive structural migration from fragmented, traditional standalone family jewellers toward organized retail chains. Nationally, organized jewellery retail chains have expanded their market share to 37-42% as of FY25, with projections pointing toward a dominant 45-50% market share by FY30. In the affluent South Indian market, organized retail chains are expanding even faster, commanding a 54-59% market share in FY25 and projected to touch 58-63% by FY30.

This rapid shift toward industry formalization has been heavily accelerated by a series of proactive government policies and compliance mandates designed to clean up the sector. At the forefront of this structural change are streamlined Goods and Services Tax (GST) mechanisms, which have effectively leveled the playing field by squeezing out unorganized players who previously thrived on unaccounted cash transactions. Consumer confidence has received a massive boost from the progressive, mandatory rollout of Bureau of Indian Standards (BIS) hallmarking, paired with the unique 6-digit alphanumeric Hallmark Unique Identification (HUID) code implemented in April 2023, which has systematically eliminated the long-standing industry issue of under-caratage. Furthermore, strict identification rules — specifically the mandatory requirement to furnish PAN card details for high-value purchases of Rs. 2 lakh and above—have dramatically enhanced market tracking and transparency. Together, these regulatory interventions have fundamentally reshaped the retail landscape, giving value-driven, trust-conscious consumers every reason to firmly pivot toward fully compliant, organized institutions.

The domestic consumer market is increasingly defined by distinct purchasing segments that reflect a blend of cultural tradition and evolving modern lifestyle aspirations. While traditional Bridal Wear remains the absolute cornerstone of the industry —accounting for 50-55% of the market share by weight with substantial pieces ranging from 30g to 250g in high-purity 22k and 23k gold —it continues to be valued equally for its aesthetic grandeur and its deeply entrenched role as a tangible form of household financial security. However, a parallel behavioral shift is rapidly gaining ground across urban and semiurban markets alike. Daily Wear and Fashion Wear segments now command a combined 45-50% of total market volume, driven by structural tailwinds such as an expanding demographic of independent working women, rising household disposable incomes, and widespread exposure to global design aesthetics. This has triggered an accelerating consumer appetite for lightweight, minimalist, and highly affordable everyday pieces, typically weighing between 5g and 30g, that seamlessly complement contemporary and Western wardrobes.

Capitalizing on these changing generational tastes, organized retail players are strategically shifting their focus toward the fast-growing and higher-margin studded jewellery segment, which features diamonds, platinum, and exotic precious gemstones. Because traditional gold retailing operates in a highly commoditized, low-pricing-power ecosystem, studded collections offer businesses a vital mechanism for structural gross margin enhancement. These modern pieces are finding an incredibly strong resonance among millennial and Gen-Z demographics. By deploying highly flexible and creative product lines utilizing lighter 14k and 18k gold alloy variants, branded jewelers are successfully transforming fine jewellery from an occasional, high-ticket indulgence into an accessible, fashionable extension of daily personal style.

Business Outlook:

The forward-looking outlook for the Indian gems and jewellery retail market remains highly encouraging, characterized by a substantial expansion in market value driven primarily by global macropricing mechanics. The total domestic industry size is projected to climb from Rs. 8,283 billion in FY25 to between Rs. 10,400 and Rs. 10,800 billion in FY26, before targeting a long-term valuation of Rs. 15,100 to Rs. 15,500 billion by FY30. Similarly, the pure gold retail market value is expected to reach Rs. 8,500 to Rs.

9,000 billion in FY26. This anticipated 33% year-on-year surge in the overall industry''s retail value is fundamentally a price-led expansion rather than a volume-driven one, triggered by sharp increases in both domestic and international bullion rates. Amid this valuation boom, organized retail chains continue to capture market share, with national chain penetration expected to rise from the 37-42% bracket in FY25 toward a long-term target of 45-50% by FY30. This structural consolidation is even more dominant in South India, where organized players are consolidating their stronghold from a 54-59% share in FY25 toward an impressive 58-63% by the end of the decade.

However, this value expansion introduces severe operational complexities and supply-side volatilities that jewellers must navigate. In FY26, domestic gold prices breached the historic Rs. 1,00,000 per 10 grams threshold for the first time—propelled by aggressive central bank buying, intensive inflation-hedging, and ongoing geopolitical friction. While these record-high prices elevate retail realizations and lift existing inventory valuations, they have simultaneously triggered a sharp near-term volume demand compression of approximately 13%. Because India remains almost completely dependent on foreign imports for raw gold and rough diamonds, corporate profit margins are highly sensitive to geoeconomic shocks, currency fluctuations, and unexpected shifts in international mining regulations. Managing these capital-intensive lines demands high working capital to maintain diverse store assortments; over-stocking locks up critical liquidity, while under-stocking risks immediate customer attrition. Consequently, successful players are forced to deploy highly optimized inventory turnover cycles, efficient manufacturing processes, and robust hedging mechanisms to protect corporate profitability.

To preserve customer retention in this high-cost environment, organized national and regional chains are executing aggressive multi-tier expansions into Tier-II and Tier-III regional hubs, placing intense competitive pressure on traditional standalone family jewellers. Organized brands are countering this local friction by leaning heavily into multi-channel marketing campaigns —spanning television, high-profile celebrity endorsements, and highly customized digital data analytics — to maximize top-of-mind brand recall. Furthermore, the business landscape for FY26 is being structurally altered by pivotal regulatory updates. The Union Budget for FY 2025-26 rationalized customs tariffs on gold jewellery down to 20% from 25%, following the baseline import duty cuts to 6% enacted in July 2024. New tariff lines under refined HSN codes have also been introduced to clearly differentiate gold imports in bar form from complex alloys or pastes, effectively preventing market distortions and enabling precision auditing. Lastly, the government''s decision to pause new Sovereign Gold Bond (SGB) issuances has structurally rechanneled investment-driven asset demand directly toward liquid Gold Exchange-Traded Funds (ETFs), creating an advantageous shift in consumer buying behavior that benefits formalized retail operators. Regional Outlook & Corporate Positioning of Lalithaa Jewellery Mart Limited

The southern region continues to serve as the primary geographical engine for India''s gold consumption, capturing a dominant 38-43% share of overall national demand. This structural prominence is backed by superior per capita net state domestic products and remarkably high female workforce participation ratios across key economic hubs like Tamil Nadu, Karnataka, Telangana, and Andhra Pradesh. Operating within this lucrative landscape, your company is uniquely positioned to capitalize on the accelerating formalization of the sector and the steady migration of consumers from unorganized to organized retail formats. As of March 2026, the company manages a network of 61 stores across 51 strategic locations. By intentionally placing 74% of its showrooms in Tier-II and Tier-III cities, the brand aligns perfectly with high-growth, price-conscious markets populated by value-seeking consumers who refuse to compromise on strict purity guarantees.

This targeted regional strategy has translated into an exceptional operational performance that clearly sets the company apart from its industry peers. Verified metrics from the Crisil Assessment of global and Indian gems and jewellery market stated that Lalithaa Jewellery consistently achieves top-tier showroom volume optimization, reporting the highest operating revenue per store and the highest Operating EBITDA per store among all major organized competitors from FY23 straight through to the FY26. This volume dominance is beautifully complemented by an efficient capital model. The company leads major organized players in attracting advance customer deposits, a feat driven by highly popular consumer loyalty and purchase enrollment programs like the Jewellery Pre-booking Scheme, Free and Flexi, and Dhana Vandhanam. These structured frameworks secure predictable corporate cash flows and cultivate a deeply loyal customer base. Furthermore, leaning into large-format retailing—including its landmark

100,000 square foot facility in Vijayawada — the company generated an impressive Return on Capital Employed (ROCE) of 25.58% in FY25, marking it as the second-highest among key organized retail competitors and proving the high efficiency of its business model.

In line with its strategic retail expansion objectives, the Company launched a new outlet in Secunderabad, Telangana, during FY 2025-26. Subsequent to the financial year-end, continued growth momentum, the Company further strengthened its market presence by inaugurating three additional outlets in Thanjavur, T. Nagar, Chennai and Porur, Chennai within Tamil Nadu with these strategic additions, the Company''s total retail network stands at 64 showrooms as of the date of this report. To ensure top-notch quality and keep our growing number of stores well-stocked, our central jewellery manufacturing unit in Thirumudivakkam, Chennai has been working at full capacity since it opened in June 2024.

The Board of Directors remains thoroughly confident in the long-term fundamentals of the Indian jewellery retail industry. By combining rigid risk-management practices, continuous design customization, and uncompromising transparency in pricing, your Company is uniquely positioned to successfully navigate near-term metal volatilities and build sustainable, long-term value for all our stakeholders.

DIVIDEND:

Considering the capital requirement for expansion and growth of business operations and to augment working capital requirements, the Board of Directors has decided not to recommend any dividend on the Equity shares for the Financial Year 2025-26.

The company has framed and adopted a dividend distribution policy to bring transparency in the matter of declaration and recommendation of dividends. The Policy sets out the guiding principles and parameters to be considered by the Board of Directors while declaring or recommending dividends, in accordance with the applicable provisions of law. The policy has been displayed on the Company''s website at www.lalithaajewellery.com.

TRANSFER TO RESERVES IN TERMS OF SECTION 134 (3) ffl OF THE COMPANIES ACT, 2013:

During the year the Company has not transferred any amount from the surplus in the Statement of Profit and Loss to the General Reserves. Further no amount is proposed to be transferred to reserves during the year under review.

TRANSFER OF UNCLAIMED DIVIDEND TO INVESTOR EDUCATION AND PROTECTION FUND:

In the absence of any declaration of dividend in the past, the Company does not have any unpaid/unclaimed dividend coming under the purview of Section 124(2) of the Act to be transferred to the Investors Education and Protection Fund ("IEPF") of the Central Government.

MATERIAL CHANGES AND COMMITMENT IF ANY AFFECTING THE FINANCIAL POSITION OF THE COMPANY OCCURRED BETWEEN THE END OF THE FINANCIAL YEAR TO WHICH THESE FINANCIAL STATEMENTS RELATE AND THE DATE OF THE REPORT:

There have been no material changes or commitments affecting the Company''s financial position since the end of the financial year to the date of this report. The following are the significant events that took place during the financial year and post closure of financial year:

MATERIAL EVENTS DURING THE YEAR

Affirmation of Approval of Initial Public Offer (IPO): Taking into account that one year has been elapsed after the shareholders approved the resolution in respect of the proposed Initial Public Offering (IPO) coupled with the need to give effect to recent amendments in SEBI Regulations governing IPOs, the company has obtained fresh approval of shareholders at the Extra-ordinary General Meeting (EGM) of the company held on May 05^th, 2025 reaffirming the resolutions in respect of the proposed IPO.

Approval of Increase in Non-Resident Indian (NRI) holding: In line with the requirements under the Foreign Exchange Management Act, 1999, and the Foreign Exchange Management (Non-debt Instruments) Rules, 2019, the shareholders of the company at the Extra-ordinary General Meeting (EGM) of the company held on May 05^th, 2025 have approved increase in the limit for Non-Resident Indian (NRI) holding in the Company''s equity shares capital from 10% to 24% of the paid-up share capital.

Filing of Draft Red Herring Prospectus (DRHP): During the year under review the Company filed its Draft Red Herring Prospectus (DRHP) on June 6, 2025, with SEBI, the National Stock Exchange of India Limited (NSE), and the BSE Limited (BSE) in connection with its proposed Initial Public Offering (IPO). The proposed IPO comprised Fresh Issue of equity shares aggregating up to Rs. 1,200 Crore (Rs. 12,000 million) and Offer for Sale of equity shares aggregating up to Rs.500 Crore (Rs. 5,000 million) by the Promoter, Mr. M. Kiran Kumar Jain with an aggregate issue size of up to ?1,700 crore, subject to receipt of the requisite regulatory approvals, market conditions and other considerations.

Enhancement of Borrowing Limits: During the 39^th Annual General Meeting of the Company held on September 30, 2025, the shareholders approved proposal to enhance Company''s borrowing limits under Section 180(1)(c) of the Companies Act, 2013, up to an aggregate limit of Rs. 2,000 Crores and also authorised the Board of Directors to create such mortgages, charges, hypothecations and other encumbrances on the whole or substantially the whole of the Company''s movable and/or immovable properties and assets, present and future, as may be necessary to secure the borrowings within the aforesaid limit pursuant to the provisions under Section 180(1)(a) of the Act.

Revision in IPO Offer Size: During the year under review, the Company revised the composition of its proposed Initial Public Offering (IPO), while maintaining the total issue size unchanged at Rs.1,700 crore. Under the newly approved structure, the component allocated for the Fresh Issue has been increased by Rs.50 crore, rising from the initial proposal of Rs.1,200 crore to Rs.1,250 crore. Consequently, the Offer for Sale (OFS) component has been reduced by an equivalent amount, dropping from Rs.500 crore to Rs.450 crore. This revised IPO framework was formally approved by the shareholders at the Extraordinary General Meeting (EGM) of the company held on December 2, 2025.

DETAILS OF MATERIAL EVENTS AFTER END OF THE FINANCIAL YEAR

Subsequent to the close of the financial year, at the Extraordinary General Meeting (EGM) held on May 11, 2026, the shareholders approved the enhancement of the limits for inter-corporate loans, investments, guarantees and securities under Section 186 of the Companies Act, 2013 to an aggregate amount of Rs.

1,000 Crores. The shareholders also approved the enhancement of the Company''s borrowing limits under Section 180(1)(c) of the Act to Rs. 4,000 Crores and, in connection therewith, authorized the Board under Section 180(1)(a) of the Act to create such mortgages, charges and other security interests over the Company''s movable and immovable properties as may be necessary to secure such borrowings.

As part of company''s overseas expansion plans, the Board of Directors of the company, at its meeting held on 10th April 2026, approved an investment in Lalithaa Jewellery (M) SDN. BHD. based at Malaysia through subscription to a fresh issue of shares, upon completion of the allotment, the company will be holding 91% equity stake in this overseas entity.

CHANGE IN THE NATURE OF BUSINESS:

During the year under review, there has been no change in the nature of the business of the Company and the Company continues to engage in the same line of business activities.

INFORMATION ABOUT HOLDING / SUBSIDIARY/ JV/ ASSOCIATE COMPANY:

As of March 31, 2025, the Company has two wholly owned subsidiaries viz., M/s. Asita Jewellery Manufacturing Private Limited & M/s. Centigrade Apparels Private Limited and does not have any associate companies or joint ventures.

The highlights of the subsidiaries'' performance and their contribution to the Company''s overall performance are detailed within this Board''s Report. Furthermore, in compliance with Section 129 (3) of the Companies Act, 2013, read with Rule 5 of the Companies (Accounts) Rules, 2014, a statement outlining the salient features of the financial statements of Subsidiaries in Form No. AOC-1 is attached as Annexure - I to this report. Pursuant to the provisions of Section 136 of the Act, the Company''s financial statements, consolidated financial statements along with relevant documents, and separate audited financial statements of the Company''s subsidiaries are available on the Company''s website at www.lalithaajewellery.com. Interested members can request a copy by writing to the Company Secretary at [email protected]. These documents are also available for inspection by members at the company''s corporate office.

During the reporting period ending March 31, 2026, Wholly- owned subsidiary, Asita Jewellery Manufacturing Private Limited, recorded a turnover of Rs. 39,23,40,762/- and net profit after tax of Rs. 1,10,03,363/-. However, the other Wholly- owned subsidiary, Centigrade Apparels Private Limited, had not recorded any income but incurred a net loss after tax of Rs. 9,21,739/-.

Strategic Overseas Expansion / Global footprint of Lalithaa brand: In a significant strategic move to facilitate its overseas expansion, the Board of Directors of the company, at its meeting held on 10th April 2026, approved an investment in Lalithaa Jewellery (M) SDN. BHD. based at Malaysia through subscription to a fresh issue of shares, resulting in a 91% equity stake. Consequent to this allotment, Lalithaa Jewellery (M) SDN. BHD. will become a subsidiary of Lalithaa Jewellery Mart Limited in accordance with the FEMA (Overseas Investment) Rules, 2022.

The investment is a strategic move to globalize the ''Lalithaa'' brand, starting with the launch of a flagship showroom in Malaysia followed by a phased expansion. Operating through a dedicated foreign subsidiary will ensure compliance with local regulations and localized operational efficiency, which in turn will enhance foreign exchange inflows into India through the repatriation of dividends and royalty. Furthermore, this expansion will promote the export of Indian-designed jewellery and craftsmanship, thereby supporting the ''Make in India'' initiative and strengthening India''s footprint in the international retail jewellery market. Consequent to this transection, M/s. Lalithaa Jewellery (M) SDN. BHD. has become a subsidiary of the Company.

DIRECTORS'' RESPONSIBILITY STATEMENT:

Pursuant to Section 134(5) of the Companies Act, 2013 the Board of Directors, to the best of their knowledge and ability, confirm that for the Financial Year ended March 31, 2026;

a) In the preparation of the Annual Accounts, the applicable Accounting Standards had been followed and there are no material departures;

b) 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 and of the profit of the Company for that period;

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

d) The Directors had prepared the Annual Accounts on a going concern basis;

e) The Directors had laid down internal financial control to be followed by the Company and that such internal financial control was adequate and operating effectively; and

f) 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.

STATUTORY AUDITORS AND REPORT THEREON:

M/s. Suresh Surana & Associates LLP, Chartered Accountants, having Firm Registration No: 121750W/W100010 and office at Apex Towers, 2nd Floor, No.54 (Old No.42), Second Main Road, Raja Annamalai Puram, Chennai-600028, Tamil Nadu, were appointed as the Statutory Auditors of the Company at the 36^th Annual General Meeting of the company held on 30^th September, 2022, for a term of 5 (five) consecutive years from the conclusion of 36^th Annual General meeting (for the financial year 31.03.2022) to till the conclusion of 41^st Annual General Meeting (for the financial year 31.03.2027) of the company. The Auditors have confirmed that they are not disqualified from continuing as the Statutory Auditors of the Company and satisfy the prescribed eligibility criteria.

The Statutory Auditors'' Report for FY 2025-2026 on the Standalone and Consolidated Financial Statement of the Company forms part of this Annual Report. Statutory Auditors M/ s. Suresh Surana & Associates LLP, Chartered Accountants, have expressed their unmodified opinion on the Financial Statements and their reports do not contain any qualifications, reservations, adverse remarks, or disclaimers except the observation on one accounting application namely Jilaba, wherein the audit trail (edit log) feature at the database level was not maintained during the year. The management response in this regard is provided below.

MANAGEMENT RESPONSE TO THE AUDITORS'' OBSERVATION

The Board has considered the observation of the Statutory Auditors relating to the audit trail (edit log) feature in one of the accounting applications viz., Jilaba, used by the Company for maintaining sales and inventory records. The Management has initiated appropriate corrective measures in coordination with the software vendor to implement the requisite audit trail (edit log) functionality and ensure full compliance with the requirements of Rule 11(g) of the Companies (Audit and Auditors) Rules, 2014. The implementation is being actively monitored by the Management and the Audit Committee to expedite its completion. The auditors'' observation is limited to the audit trail functionality of the aforesaid application only.

SECRETARIAL AUDIT:

M/s. V. S. Sowrirajan & Associates, (Unique Identification No. S2004TN077000), Practicing Company Secretaries having office at C-2 Vijayrengaa Apartments, 64, West Adayavalanchan Street, Srirangam, Trichy-620006, were appointed as Secretarial Auditors of the Company for the Financial Year 2025-26. The Secretarial Audit Report for the said financial year in form MR-3 pursuant to the provisions of Section 204 of the Act is annexed as ''Annexure V'' to this report.

The Secretarial Auditors'' Report for the Financial Year 2025-26 does not contain any qualification, reservation or adverse remark except that certain forms/returns under the Act had been filed belatedly. However, the company has filed all applicable forms and returns by paying additional fee wherever applicable and as on the date of this report all the applicable forms/returns are duly filed. The Board has taken note of this and steps are being taken to ensure timely statutory filings.

INTERNAL FINANCIAL CONTROL SYSTEMS AND THEIR ADEQUACY:

The Company has established comprehensive internal control systems that are well-suited to the nature, size, scale, and complexity of its operations. These systems are implemented across all processes, units, and functions. In line with dynamic business requirement of growing size and complexity of the Company''s operations, these systems and procedures are periodically reviewed and updated to ensure its effectiveness.

The Company has implemented a stringent Internal Financial Controls System over financial reporting to ensure that all transactions are authorized, recorded, and reported accurately and promptly. This system provides reasonable assurance regarding the integrity and reliability of the Company''s financial statements.

INTERNAL AUDITOR:

M/s. Sreevathson v Associates, Chartered Accountants (Firm Registration No. 008678S), Internal Auditors of the Company have carried out the Internal Audit for FY 2025-26. The reports and findings of the Internal Auditors are reviewed by the Audit Committee and the Board.

In terms of the provision of section 138(1) of the companies Act, 2013 and Rule 13 of the Companies (Accounts) Rules 2014, Company has re-appointed M/s. Sreevathson v Associates, Chartered Accountants (Firm Registration No. 008678S), having office at No.12, III Floor, Gemini Parson Complex, Kodambakkam Main Road, Nungambakkam, Chennai-600024 Tamil Nadu, as Internal Auditors to carry out internal audit for the financial year 2026-27.

REPORTING OF FRAUDS BY AUDITORS

During the year under review, the Auditors of the Company have not reported any instances of fraud as specified under the second proviso of Section 143(12) of the Act read with Rule 13 of the Companies (Audit and Auditors) Rules, 2014.

RISK MANAGEMENT:

The Company acknowledges that risk is a fundamental aspect of business and is committed to managing risks proactively and efficiently. The Company has established process for continuously assessing risks in both internal and external environments while minimising their impact. This includes regularly conducting risk assessments to identify potential threats and opportunities that could impact the Company''s business. The Company employs a structured approach to risk management, which encompasses risk identification, risk evaluation, risk mitigation, and risk monitoring. The Company incorporates risk mitigation steps in its strategy and operating plans, ensuring that all identified risks are adequately addressed.

The Company''s Risk Management process aims to create value in uncertainty, ensure good governance, meet stakeholder expectations, and enhance resilience and sustainable growth.

The Company has framed a Risk Management Policy and also constituted the Risk Management Committee which has been entrusted with the responsibility of reviewing the risk management process.

The Company periodically reviews and improves the adequacy and effectiveness of its risk management Systems. The Risk Management Policy of the Company is available on the Company''s website at www.lalithaajewellery.com.

VIGIL MECHANISM:

The Company has a robust vigil mechanism through its Whistle Blower Policy approved and adopted by the Board of Directors of the Company in conformation with Section 177(9) of the Act to report concerns about unethical behavior. The Policy also provides adequate protection to all its stakeholders who report unethical practices and irregularities. This Policy is available on the Company''s website at https:// www.lalithaajewellery.com.

CORPORATE SOCIAL RESPONSIBILITY (CSR):

Your company''s CSR initiatives and activities are aligned to the requirements of Section 135 of the Act. In line with the provisions of the Act and the Companies (Corporate Social Responsibility Policy) Rules, 2014, the Company has formed a CSR Committee and framed CSR Policy which is available on the Company''s website.

During the financial year 2025-26, the Company spent Rs. 8,73,50,000 towards Corporate Social Responsibility (CSR") activities, in accordance with the CSR projects approved by the CSR Committee and the Board. The Company''s CSR initiatives are focused on health & hygiene, vocational skills and water stewardship.

The details of the CSR initiatives undertaken by the Company during the FY 2025-26 in the prescribed format are annexed as "Annexure II".

COMPLIANCE OF SECRETARIAL STANDARDS:

During the year, your Company has complied with the Secretarial Standard on Meetings of the Board of Directors (SS-1) and Secretarial Standard on General Meetings (SS-2), issued by the Institute of Company Secretaries of India and approved by the Central Government under Section 118(10) of the Companies Act, 2013.

COST AUDIT / COMPLIANCE:

The provisions under Section 148 of Companies Act 2013 and the Companies (Cost records and audit) Rules, 2014 is not applicable to the Company. Accordingly, the company is not required to maintain cost records as per the Companies (Cost Records and Audit) Amendments Rules, 2014 for the Financial Year 2025-2026.

HUMAN RESOURCES AND INDUSTRIAL RELATIONS:

Employee relations continued to be cordial during the year under review. The Company continued its thrust on Human Resources Development. The Board wishes to place on record its appreciation to all the employees of the Company for their sustained efforts and immense contribution to the performance and growth of the Company during the year. As of March 31, 2026, the Company has a total of 7,059 employees, comprising 5,076 male employees and 1,983 female employees.

DISCLOSURE WITH RESPECT TO THE COMPLIANCE OF THE PROVISIONS RELATING TO THE MATERNITY BENEFIT ACT, 1961

The Company has complied with the applicable provisions of the Maternity Benefit Act, 1961, including the grant of maternity leave, work-from-home options where applicable, and provision of creche facilities as required. The Company remains committed to ensuring a safe and supportive work environment for its women employees.

As of March 31, 2026, the Company has extended maternity benefits to 25 employees, across various branches providing them with statutory leaves and compensation as stipulated under the Maternity Benefit Act, 1961, thereby fostering a supportive and nurturing work environment.

PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS MADE UNDER SECTION 186 OF THE COMPANIES ACT, 2013:

During the year under review, the Company did not provide any loans, guarantees, or security under Section 186 of the Companies Act, 2013.

Subsequent to the close of the financial year, in a significant post-balance sheet event, the Board has approved a strategic overseas investment amounting to Rs.17,11,48,068/- (Rupees Seventeen Crore Eleven Lakh Forty-Eight Thousand Sixty-Eight only) in M/s. Lalithaa Jewellery (M) SDN. BHD. . Upon completion of the transaction, M/s. Lalithaa Jewellery (M) SDN. BHD. will become a subsidiary of the Company, marking a significant step in the Company''s international expansion strategy.

CONTRACTS OR ARRANGEMENTS MADE WITH RELATED PARTIES UNDER SECTION 188(1) OF THE ACT:

During the financial year under review, the Company has not entered into any materially significant related party transactions. All the transactions with related parties during the year were on arm''s length basis and in the ordinary course of the business.

All related party transactions were placed before the Audit Committee for its prior approval and, wherever applicable, were also approved by the Board of Directors and the shareholders in accordance with the provisions of the Companies Act, 2013. The details of such transactions are disclosed in the Notes to the Financial Statements forming part of this Annual Report.

The particulars of contracts or arrangements entered into with related parties, as prescribed under Section 188(1) of the Companies Act, 2013 read with Rule 8(2) of the Companies (Accounts) Rules, 2014, are provided in Form AOC-2, which forms part of this Board Report as Annexure-III.

The policy on materiality of related party transactions and dealing with related party transactions ("RPT Policy") as approved is available on the Company''s website at www.lalithaajewellery.com.

RELATED PARTY TRANSACTIONS - HOLDING OF OFFICE/PLACE OF PROFIT BY MS. BHAVYA KIRAN JAIN& MS. BHAKTHI KIRAN JAIN (RELATIVE OF DIRECTOR) IN THE COMPANY

During the year under review the Company has engaged Ms. Bhavya Kiran Jain and Ms. Bhakthi Kiran Jain, as Executive Management Trainees (consultant) with effect from 01^st April 2026. Ms. Bhavya Kiran Jain and Ms. Bhakthi Kiran Jain are the daughters of Mr. M. Kiran Kumar, (DIN: 01604600), the Chairman and Managing Director and Ms. Hemaa Kiran Kumar, (DIN: 01387588), Whole-time Director of the Company and are accordingly relatives of Directors within the meaning of the Companies Act, 2013.

Pursuant to the applicable provisions of the Companies Act, 2013 the appointment of Ms. Bhavya Kiran Jain and Ms. Bhakthi Kiran Jain to hold an office or place of profit in the Company was approved by the shareholders at the Extra-Ordinary General Meeting held on 31 March 2026.

The appointments were recommended by the Nomination and Remuneration Committee and reviewed by the Audit Committee, and thereafter approved by the Board of Directors after considering their educational background, potential to contribute to the Company''s business, the scope of their proposed responsibilities and the long-term leadership development requirements of the Company. As Executive Management Trainees, they will be associated with strategic projects relating to business growth, innovation, digital initiatives and organizational development under the guidance and supervision of the senior management of the Company.

PARTICULARS OF EMPLOYEES:

Being an unlisted company, the disclosures required under the provisions of Section 197(12) of the Act read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is not applicable to the Company. A Statement pursuant to Section 134 of the Companies Act 2013 and Rule 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014 in respect of the details of remuneration paid to directors during the financial year, are provided in Annexure-IV.

(A) CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE OUTGO:

The information pertaining to conservation of energy, technology absorption, Foreign exchange Earnings and outgo as required under Section 134 (3)(m) of the Companies Act, 2013 read with Rule 8(3) of the Companies (Accounts) Rules, 2014 are as under: -

(B) TECHNOLOGY ABSORPTION:

(C) FOREIGN EXCHANGE EARNINGS AND OUTGO: There is no foreign exchange earnings and outgo during the year under review.

DIRECTORS OR KEY MANAGERIAL PERSONNEL:A. COMPOSITION OF THE BOARD OF DIRECTORS:

The Board of Directors of the Company consists of six directors, including Chairman & Managing Director, two Whole-Time Directors, and three Non-Executive Independent Directors, who bring the right mix of knowledge, skills, and expertise and help the Company in implementing the best Corporate Governance practices. This focus on independent oversight ensures balanced decision-making for the company''s long-term success. The Board of the company comprises of three women directors, reflecting our commitment to diversity and inclusion at the leadership level.

• Mr. M Kiran Kumar Jain, Chairman & Managing Director (DIN: 01604600)

• Mrs. Hemaa Kiran Kumar Jain, Whole-Time Director (DIN: 01387588)

• Mr. P Rajeswaran, Whole-time Director (DIN: 02125793)

• Mr. Poonam Jagdambaprasad Dubey, Independent Director (DIN: 10568497)

• Ms. Vandana Mayur Amrutiya, Independent Director (DIN: 10562737)

• Mr. Nayan Jagdishchandra Rawal, Independent Director (DIN: 00184945)

In accordance with the provisions of Section 152 of the Companies Act, 2013, and the Articles of Association of the Company, Mr. P Rajeswaran, Whole-time Director (DIN: 02125793), the Company, retire by rotation at the ensuing Annual General Meeting. The Board of Directors, on the recommendation of the Nomination and Remuneration Committee, has recommended his reappointment. Details of the Directors retiring by rotation and seeking re-appointment have been furnished in the annexure to the notice of the ensuing Annual General Meeting.

B. KEY MANAGERIAL PERSONNEL:

The Key Managerial Personnel (KMP) of the Company, as per Sections 2(51) and 203 of the Companies Act, 2013, read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, comprise of Mr. M Kiran Kumar Jain, Chairman & Managing Director; Mrs. Hemaa Kiran Kumar Jain, Whole-Time Director; Mr. Ponnaiah Pillai Rajeswaran, Whole-time Director; Ms. Subramaniam Bhama, Chief Financial Officer; and Mr. Jitendra Kumar Pal, Company Secretary and Compliance Officer.

C. CHANGES IN DIRECTOR AND KEY MANAGERIAL PERSONNEL:

During the year under review, there was no change in the composition of the Board of Directors. However, there was a change in the Company Secretary and Compliance Officer of the Company wherein Mr. Jitendra Kumar Pal has been appointed as the Company Secretary and Compliance Officer with effect from October 01, 2025, in the place of Mrs. Jayanti Agarwal who has resigned with effect from September 30, 2025.

MEETINGS OF THE BOARD OF DIRECTORS:

During the Financial Year 2025-2026, 14 (Fourteen) Board meetings were held, the details of attendance of Directors are provided below. The intervening gap between the Meetings was within the period prescribed under the Companies Act, 2013:

Detailed agenda with explanatory notes and all other related information is circulated to the members of the Board in advance of each meeting. Detailed presentations are made to the Board at the meetings covering all major functions and activities. The requisite strategic and material information is made available to the Board to ensure transparent decision making by the Board.

Adequate notice is given to all directors for the meetings of the Board and Committees. Except where consent of directors was received for scheduling meeting at a shorter notice, agenda and detailed notes on agenda were sent at least seven days in advance, and a system exists for seeking and obtaining further information and clarifications on the agenda items before the meeting and for meaningful participation at the meeting by the directors.

GENERAL MEETINGS OF THE COMPANY:

During the Financial Year 2025-2026, the following general meeting were held, the details of attendance of members are provided below:

DECLARATION OF INDEPENDENT DIRECTORS

All the Independent Directors have submitted Declaration of the Independence confirming that they meet the criteria of independence as prescribed under Section 149(6) of the Act read with Rule 6 of the Companies (Appointment and Qualification of Directors) Rules, 2014. Further, they have also affirmed that they have followed the Code for Independent Directors as outlined in Schedule IV to the Act.

COMMITTEES OF THE BOARD

As on March 31, 2026, the company has Six Board level committees:

A) Audit Committee

B) Nomination and Remuneration Committee

C) Stakeholders Relationship Committee

D) Risk Management Committee

E) Corporate Social Responsibility Committee

F) Initial Public Offer Committee

The composition of various Committees of the Board of Directors is available on the website of the Company. The Board is responsible for constituting, assigning, co-opting and fixing the terms of reference of various committees. Details on the role and composition of these committees, including the number of meetings held during the financial year and the related attendance are provided below.

A. AUDIT COMMITTEE

The Audit Committee was constituted at the Board meeting held on 8^th January, 2024 and subsequently reconstituted on 10^th April 2024, pursuant to Section 177 of the Companies Act, 2013. During the Financial Year 2025-26, the Audit Committee met 09 (Nine) times on 6^th June, 2025, 6^th June, 2025, 7^th July, 2025, 3^rd September, 2025, 24^th October, 2025, 3^rd December, 2025, 13^th January,

2026, 12^th February, 2026 and 5^th March, 2026.

The composition of the Committee as on March 31, 2026 and the details of meetings attended by its members during the Financial Year 2025-26 are given below:

All recommendations of Audit Committee during the year under review were accepted by the Board of Directors. The Company Secretary acts as the secretary of the Committee. The role and terms of reference of the Committee are in consonance with the requirements mandated under Section 177 of the Companies Act, 2013 and is made available on the website of the Company at www.lalithaajewellery.com.

B. NOMINATION AND REMUNERATION COMMITTEE

The Nomination and Remuneration Committee was constituted at the meeting of the Board of Directors held on 8^th January, 2024 and subsequently reconstituted on 10^th April 2024 and on 2^nd May 2025. During the Financial Year 2025-26, 3 (Three) meetings of the Nomination and Remuneration Committee was held on 7^th July, 2025, 1^st October, 2025 and 5^th March, 2026.

The composition of the Committee and the details of meetings attended by its members are given below:

The Company Secretary acts as the secretary of the Committee. The role and terms of reference of the Committee are in consonance with the requirements mandated under Section 178 of the Companies Act, 2013 and Listing Regulations and is made available on the website of the Company at www.lalithaajewellery.com.

C. STAKEHOLDERS'' RELATIONSHIP COMMITTEE

The Stakeholders Relationship Committee was constituted by the Board of Directors, at the meeting held on 8^th January, 2024 and subsequently reconstituted on 10^th April, 2024. During the Financial Year 2025-26, 01 (One) meeting of the Stakeholders Relationship Committee was held on 12^th February, 2026.

The composition of the Committee and the details of meetings attended by its members are given below:

The Company Secretary acts as the secretary of the Committee. The role and terms of reference of the Committee are in consonance with the requirements mandated under Section 178 of the Companies Act, 2013 and is made available on the website of the Company at www.lalithaajewellery.com.

D. RISK MANAGEMENT COMMITTEE

The Risk Management Committee was constituted by the Board of Directors, at the meeting held on January 8, 2024 and subsequently reconstituted on 2^nd May 2025. During the Financial Year 20252026, 1 (one) meeting of the Risk Management Committee was held on 12th February, 2026.

The composition of the Committee and the details of meetings attended by its members are given below:

The Company Secretary acts as the secretary of the Committee. The Risk Management policy of the Company is available on the website of the Company at www.lalithaaiewellery.com.

E. CORPORATE SOCIAL RESPONSIBILITY COMMITTEE:

The Corporate Social Responsibility Committee was constituted by the Board of Directors, at the meeting held on September 01, 2014 in terms of Section 135 of the Companies Act, 2013 read with the Companies (Corporate Social Responsibility Policy) Rules, 2014 and Rule 9 of the Companies (Accounts) Rules 2014. During the Financial Year 2025-2026, 03 (Three) meetings of the Corporate Social Responsibility Committee was held on 7^th July, 2025, 3^rd December, 2025, and 13^th January, 2026.

The composition of the Committee and the details of meeting attended by its members are given below:

The Company Secretary acts as the secretary to the Committee. The Corporate Social Responsibility (CSR) policy of the Company is available on its website at https://www.lalithaaiewehery.com. During the year under review, the Company spent ? 8,73,50,000 towards its CSR obligation. Furthermore, an unspent balance of ? 9,59,272 from the preceding financial year (FY 2025-26) will be fully transferred to a fund specified under Schedule VII of the Companies Act, 2013, within the statutory timeline (i.e., on or before September 30, 2026).

F. INITIAL PUBLIC OFFER COMMITTEE (IPO):

In order to oversee matters relating to the proposed Initial Public Offering (IPO), the Board constituted an IPO Committee at its meeting held on 6 November 2023, which was subsequently reconstituted on 2 May 2025. During the financial year 2025-26, the Committee held one meeting on 6 June 2025. The composition of the committee and the attendance details of its members are provided below:

DISCLOSURE AS PER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013:

The Company has adopted zero tolerance for sexual harassment at the workplace and has formulated a policy on prevention, prohibition, and redressal of sexual harassment at the workplace in line with the provisions of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and the rules thereunder for prevention and redressal of complaints of sexual harassment at workplace.

As a part of the policy for Prevention of Sexual Harassment in the organization, the Company has in place an Internal Committee (IC) for prevention and redressal of complaints of sexual harassment of women at work place in accordance with The Sexual Harassment of Women at Workplace (Prevention, Prohibition, and Redressal) Act, 2013 and relevant rules there under.

The following is a summary of sexual harassment complaints received and disposed of during the Financial Year 2025-26:

DEPOSITS:

During the year under review, the Company has not accepted any deposits within the meaning of Section 73 of the Companies Act, 2013 and the Companies (Acceptance of Deposits) Rules, 2014. Further there are no deposits that have been accepted by the Company which are not in compliance with the requirements of Chapter V of the Act.

ADVANCE FROM CUSTOMERS:

The Company collects advances from customers against orders for gold ornaments, with applicable discounts on wastage and making charges. These advances are appropriated towards supply of goods and services within a period of 365 days. As on 31st March 2026, customer advances outstanding stood at Rs. 50,427.50 Million.

SHARE CAPITAL:a. AUTHORIZED SHARE CAPITAL:

The Authorized share capital of the Company as at March 31, 2026 stood at Rs. 2,80,00,00,000 comprising of 56,00,00,000 equity shares of Rs. 5 each. During the year under review, there was no change in the Authorized Share Capital of the Company.

b. ISSUED, SUBSCRIBED & PAID-UP SHARE CAPITAL

The issued, subscribed and paid-up share capital of the company as at March 31, 2026 stood at Rs. 2,49,98,85,780 comprising of 49,99,77,156 equity shares of Rs. 5 each. During the year under review, there was no change in issued, subscribed and paid-up share capital of the Company

c. CONFIRMATIONS:

During the year under review, the Company has not:

(i) Issued any shares, warrants, debentures, bonds, or any other convertible or non-convertible securities

(ii) Issued equity shares with differential rights as to dividend, voting or otherwise.

(iii) Issued any sweat equity shares to its Directors or employees.

(iv) Made any change in voting rights.

(v) Reduced its share capital or bought back shares.

(vi) Changed the capital structure resulting from restructuring.

(vii) Provided any Stock Option Scheme to the employees

(viii) Failed to implement any corporate action.

e. The disclosure pertaining to the explanation for any deviation or variation in connection with certain terms of a public issue, rights issue, preferential issue, etc., is not applicable to the Company.

DEMATERIALISATION OF SHARES:

In accordance with the MCA Notification No. G.S.R. 802(E) dated October 27, 2023, the Company had appointed M/ s MUFG Intime India Private Limited as its Registrar and Share Transfer Agent (RTA). All equity shares of the Company are currently held in dematerialized form, with an ISIN No. INE0K9O01026 assigned to the equity shares. Details of RTA are as under: -

MUFG Intime India Private Limited (formerly known as Link Intime India Private Limited)

CIN: U67190MH1999PTC118368

Address: C-101, 1st Floor, 247 Park, Lal Bahadur Shastri Marg,

Vikhroli (West) Mumbai, Maharashtra- 400083, India SEBI Registration Number of RTA: INR000004058

BORROWINGS:

As of March 31, 2026, the company''s borrowing position stood at Rs. 16,041.36 Millions, comprising both long-term and short-term. The long-term borrowings amounted to Rs. 268.64 Millions, while the shortterm borrowings stood at Rs. 15,772.72 Millions.

During the year under review, there was no alteration to the Memorandum of Association (MoA) and Articles of Association (AoA) of the Company.

ANNUAL RETURN:

Pursuant to the provisions of Section 92(3) and Section 134(3) of the Act read with Rule 12 of the Companies (Management and Administration) Rules, 2014 as amended from time to time, the Annual Return of the Company as on 31^st March, 2026 is available on the Company''s website and can be accessed at www.lalithaaiewellery.com.

SIGNIFICANT OR MATERIAL ORDERS PASSED BY REGULATORS / COURTS:

There are no significant and material orders passed by the regulators or courts or tribunals during the financial year impacting the going concern status and Company''s operations in future.

DETAILS OF APPLICATION MADE OR ANY PROCEEDING PENDING UNDER THE INSOLVENCY AND BANKRUPTCY CODE, 2016 DURING THE YEAR ALONGWITH THEIR STATUS AS AT THE END OF THE FINANCIAL YEAR:

During the year under review, no application or proceeding made by or against the company is pending before any Adjudicating Authority under the Insolvency and Bankruptcy Code, 2016.

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:

The Company has not entered into any One Time Settlement (OTS) with any Bank or Financial Institution during the financial year. Accordingly, no disclosure is required under Rule 8(5)(xii) of the Companies (Accounts) Rules, 2014 in this regard.

RECEIPT OF REMUNERATION OR COMMISSION BY THE MANAGING / WHOLE TIME DIRECTOR FROM ITS HOLDING OR SUBSIDIARY COMPANY

The Company does not have a holding company. During the financial year under review, none of the Managing Director or Whole-time Directors received any remuneration or commission from any of the Company''s subsidiaries. Accordingly, no disclosure is required under Section 197(14) of the Companies Act, 2013 in this regard.

DESIGNATED PERSON RESPONSIBLE FOR FURNISHING INFORMATION ON THE BENEFICIAL INTERESTS IN SHARES OF THE COMPANY:

Pursuant to the applicable provisions of the Companies Act, 2013 and the rules made thereunder, the Board has designated Mr. Jitendra Kumar Pal (Membership No. A15338), Company Secretary of the Company, who was appointed with effect from 1 October 2025, as the person responsible for furnishing and reporting information relating to beneficial interests in the shares of the Company.

REVISION OF FINANCIAL STATEMENT AND OR BOARD''S REPORT:

During the year under review, neither the financial statements nor the Board''s Report were revised under Section 131 of the Companies Act, 2013.

The annual performance evaluation of the Board, its Committees and Individual Directors (including Chairman) was carried out in compliance with the requirements of Section 178 of the Act and in accordance with the Governance Guidelines adopted by the Board.

CREDIT RATING

During the year under review, ICRA Limited, a credit rating agency registered with SEBI had issued a rating of A stable for the long-term loan for both Cash Credit and term loan facilities.

NON-EXECUTIVE DIRECTORS'' COMPENSATION AND DISCLOSURES:

None of the Independent/Non-Executive Directors have any material pecuniary relationship or transactions with the Company, its promoters, directors, senior management or its subsidiaries that in the opinion of the Board may affect the independence of the Independent Directors. During the financial year under review, the Non-Executive Directors were paid sitting fees only for attending meetings of the Board, Shareholders, and Committees. They did not receive any other remuneration, commission, stock options, or benefits from the Company.

ACKNOWLEDGEMENT:

The Directors wish to convey their deep appreciation to all the employees, customers, vendors, investors and consultants/advisors, Bankers of the Company for their sincere and dedicated services as well as their collective contribution to the Company''s performance. The Directors thank the Government of India, Governments of various States in India, Governments of various Countries, and concerned Government departments/Regulatory Authorities for their co-operation. The Directors appreciate and value the contribution made by every Business Partners, member, employee, and their family of the Company.