The Directors hereby present their 79^th Annual Report on the performance of Surat Trade and Mercantile Limited ('the Company') together with the Audited Financial Statements for the Financial Year (FY) ended 31^st March 2025. The Management's Discussion and Analysis Report as required under the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 forms part of this report.

FINANCIAL HIGHLIGHTS

The summarised financial highlights are depicted below:

review of operations

The Company is engaged in commodity trading activities as part of its core business operations. During the year under review, the Company actively participated in the trading of various metals, in particular silver and copper.

Your Company during FY 25, increased the volume of business activities of trading in commodities and deployed additional funds in the related segment in a phased manner after proper evaluation of potential external risk factors, and the overall business scenario.

Commodity trading involves buying and selling goods such as metals, energy, and agricultural products. It can be done through futures contracts on exchanges, allowing traders to speculate on price movements or hedge against them.

The global and domestic commodity markets were subject to significant fluctuations during the year, influenced by factors such as geopolitical events, weather conditions, central bank activities, market sentiments, supply chain disruptions, etc. Owing to its hedging policy, the Company's performance in commodity trading was minimally impacted by these volatile market conditions.

Despite the prevailing adverse scenario, your Company achieved Income from Operations of Rs. 68.64 Crore during FY 25, from the Commodity trading business as compared to Rs. 60.56 Crore in FY 24, an increase of about 13.34%.

Other Income which represents earning from Investments in Mutual Funds, AIF etc., declined in FY 25 at Rs, 14.82 crore as compared to Rs. 19.46 crore earned during FY 24. This was primarily on account of lower returns in financial markets (due to geo-political and trade-related uncertainties, especially in Q4 FY 25), relative to the bull market of FY 24. To reduce volatility and probably increase returns, greater investment allocation will be made to high performance credit AIFs (alternative investment funds) whose performance has remained strong in FY 25.

Dividend

With a view to conserve the resources for future growth, the directors of the Company have decided not to recommend any dividend on equity shares of the Company for the year ended 31^st March 2025.

Transfer to Reserves

Your directors do not propose to transfer any amount to the reserves and decided to retain the entire profit for FY25 in the retained earnings.

industry structure and developments

Indian Economic Overview

India's economy hit a four-year low of 6.5 per cent, lifted by an impressive fourth quarter growth at 7.4%. The Reserve Bank of India had projected 6.5 per cent GDP growth for the fiscal year 2024-25.

Manufacturing sector's share in India's economic growth remained steady in the last decade, moving to 17.3% in FY 24 from 17.2% in FY 14. This steady growth highlights the sector's increasing role in India's economic landscape.

The agriculture sector received a boost through several schemes and incentives, driving a gradual recovery in financial year 2024-25. Increased grassroots-level structural reforms and a focus on deregulation are expected to bolster medium-term growth and competitiveness.

The Government's reforms aimed at boosting manufacturing, enhancing productivity and improving ease of doing business will play a crucial role in ensuring long-term sustainable growth. Within this, private consumption will play an important role.

India has displayed steady and robust economic growth while facing global challenges and geopolitical concerns and it continues to maintain its position as the fastest-growing major economy.

Industry Scenario

Global commodity prices are forecast on average to fall in 2025 and perhaps also in 2026, by many leading commodity forecasters. This applies to metals and minerals too. The reasons include a slowdown in global economic growth, and expanded supply for certain metals. If realized, these declines will end a period of elevated inflation-adjusted commodity prices in the aftermath of the COVID-19 pandemic and Russia's invasion of Ukraine.

Global growth prospects will strengthen if trade tensions ease in a lasting manner implying a more robust outlook for commodity demand.

Opportunities, Challenges, Threats, Risks and Concerns

A 6.5% GDP growth for FY26 is feasible for India despite global headwinds like the twin shocks of geopolitical tensions and trade policy uncertainties.

The economy has been reporting softer consumption in some of the past quarters, however there are many domestic tailwinds such as strong and diversified FDI inflows, low inflation, interest rate reduction and expected further policy rate cuts, and an anticipated good monsoon. Measures in the last budget like rising capital expenditure, tax reduction may raise both rural and urban demand and increase investment, consumption and some push to exports as well. India is also poised to benefit from supply chain realignments.

These factors should increase the market for commodities in India, resulting in better opportunities for your company, irrespective whether prices increase or decrease.

Tensions between Indian and Pakistan escalated following the terrorist attack on 26 tourists in Pahalgam in Jammu and Kashmir in April. Conflict with our neighbour, in addition to unresolved wars in Russia/ Ukraine and the Middle East, pose a risk to the GDP forecast and business conditions.

On April 2, the US imposed a reciprocal tariff of 26% on imports from India. Key sectors such as pharmaceuticals, electronics, semiconductors, and energy were exempted from the duty. The US President later announced a 90 day pause on the tariff implementation until July 9, although a baseline tariff of 10% remains in place.

Initial tariff imposition deadlines, set for April, were pushed back to July after US President said negotiations had begun with various trading partners, including China. To pre-empt a growth slack, the RBI has already lowered the benchmark repo rate - the rate at which it lends to banks - by a cumulative 100 bps to 5.5% since February. Continued low inflation is expected to bring down interest rates further. In the coming times, there exists potential for the Company to expand its commodity activity and profitably trade in gold.

Commodities are inherently volatile and risky assets, however, the Company employs a robust risk management framework to mitigate potential losses arising from price volatility and other market risks during its relatively short trading horizon. This includes hedging, product diversification where possible, etc. The Company's risk management policies and procedures are reviewed and updated periodically to adapt to changing market dynamics. The strong economy is expected to enable good returns going forward in both equity and debt related investment activities of the company.

It may be noted that acute policy uncertainty and deteriorating trade relations between major economies, and in particular involving India, are downside risks to growth and business prospects. If trade tensions escalate further, consumer and business confidence will likely continue to decline, while the tightening of financial conditions may intensify.

Business Outlook

Despite the recently lowered global growth projections, owing to tariff and policy uncertainties presented by the US, and geopolitical concerns involving sanctions, restriction of exports of sensitive goods by certain countries, and potential conflicts, India is still expected to grow around 6.5% in FY 26 by most forecasters, and is expected to remain the fastest growing major economy.

The ongoing uncertainties however are expected to lead to significant volatility in commodity prices. Increasing geopolitical and policy uncertainties, and conflicts may drive up prices of gold and silver, and vice-versa, all else equal. Central banks have been buying gold, but if conditions improve this may not continue resulting in a potential drop in gold prices. Silver still looks relatively cheap compared to gold and could do comparatively better. Citi group and Economic Survey of India forecasts a dip in the gold prices, whereas silver remains in short supply as it finds growing demand in the solar power, electronics and electrification. A Chinese economic recovery could provide additional support for industrial metals, including silver.

The price of Silver has gone up by 18-19% In the calendar year 2024, Even for this year (2025) till June, it has appreciated by 21%. Silver has faced a supply deficit for four consecutive years, driven by tight supply and robust demand. It may create attractive buying opportunities.

The Company remains optimistic about the long-term prospects of commodity trading, despite the inherent volatility, increased demand, potential price increases, or regulatory changes etc. The Company will continue to explore new markets, optimize trading strategies, etc. to enhance its performance in this sector.

India is expected to do well relative to the global economy owing to strong domestic demand, substantial infrastructure development initiatives, a spike in rural demand and effective government policy measures.

Rural consumption is picking up on the back of sustained agricultural growth of 4.6% in the last six years. Private consumption is expected to benefit from tax cuts, and the improving implementation of public investments plans should boost government investment, but export demand

may be constrained by shifts in trade policy and slowing growth.

The higher disposable incomes to the middle class, the rate cuts, the accommodative monetary policy and the enhanced liquidity in the banking system, is expected to boost growth in times of external uncertainties.

The focus of the Budget on longer term development drivers and reforms, anchored around the ambition of 'Viksit Bharat', adds to the confidence in domestic economic resilience.

The government is putting a lot of hard work on free trade agreements (FTAs). The India - UK FTAs concluded recently is historic and we are expecting two more, one with the EU and other with the US. These are very significant as it will help us integrate with global value chains which constitute 70% of global trade.

Share Capital

As on 31^st March 2025, the paid-up share capital of the Company stood at Rs. 2220.64 Lakhs consisting of 22,20,64,440 equity shares of Rs.1 each fully paid up. Out of the above, the Promoters held 15, 20, 04,917 equity shares comprising 68.45% of the equity share capital of the Company. There was neither any change in the share capital of the Company nor was there any change in the shareholding of the Promoter of the Company during the year.

Subsidiary, Joint Venture and Associate Companies

The Company has no subsidiary / joint venture / associates for the financial year ended 31^st March 2025. Accordingly, the requirements pursuant to Section 129(3) of the Companies Act, 2013 read with Rule 5 of the Companies (Accounts) Rules, 2014 is not applicable.

The policy for determining material subsidiaries formulated by the Board of Directors is disclosed on the website of the Company and can be accessed at https://www.stml.in

Internal Control Systems & their adequacy

The Board has adopted policies and procedures for ensuring the orderly and efficient conduct of its business, including adherence to the Company's policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial disclosures.

The certification provided in the CEO and CFO certification section of the Annual Report discusses the adequacy of our Internal Control System and procedures.

Resources and Liquidity

Our principal sources of liquidity are cash and cash equivalents, investments and the cash flow that we generate from our operations. We understand that liquidity in the Balance Sheet has to balance between earning adequate returns and the need to cover financial and business requirements. We continue to be debt-free and maintain adequate liquidity to meet our operational requirements.

There was no outstanding term loan at the beginning or at the end of financial year 2024-25. No fresh Term Loan was availed by the Company during the year. The Company has not availed any working capital facility from Banks during the year.

Directors and Key Managerial Personnel Directors

Re-appointment/appointment of Directors

In accordance with the provisions of Section 152 of the Companies Act, 2013 and the rules made thereunder and the Articles of Association of your Company, Mr. Suhail P. Shah (DIN: 00719002) retires by rotation at the ensuing Annual General Meeting and being eligible, offers himself for re-appointment. Based on the recommendations of the Nomination and Remuneration Committee, the Board recommends the re-appointment of Mr. Suhail P. Shah as Director for your approval.

The Shareholders of the Company at the 76^th AGM held on 13^th September 2022 approved the appointment of Mr. Alok P. Shah (DIN: 00218180) as Managing Director of the Company for a period of 3 years with effect from 1^st July 2022.

Based on the recommendation of the Nomination and Remuneration Committee and subject to approval of the shareholders at the ensuing AGM, the board of directors of the Company at their meeting held on 27^th May 2025 approved the re-appointment of Mr. Alok P. Shah as Managing Director of the Company for a period of 5(five) years with effect from 1^st July 2025.

Cessation

During the year under review, Mr. Ketan Jariwala (DIN: 02095540) ceased to be an Independent Director of the Company on completion of his tenure with effect from 10^th August 2024. The Board places on record its appreciation for her invaluable contribution and guidance during his tenure as an Independent Director.

Necessary Resolutions for the appointment/re-appointment of the aforesaid Directors have been included in the notice convening the ensuing AGM. The Board recommends their appointment/re-appointment.

Brief details as required under Secretarial Standard-2 and under Regulation 36 (3) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 with respect to directors being appointed / re-appointed, are provided as an annexure to the Notice convening the 79^th AGM.

Key Managerial Personnel (KMP)

As on the date of this report, following are the Key Managerial Personnel ("KMPs") of your Company as per Sections 2(51) and 203 of the Act:

1. Mr. Alok P. Shah, Managing Director

2. Mr. Paresh V. Chothani, Wholetime Director

3. Mr. Suhail P. Shah, Wholetime Director

4. Mr. Chandresh S. Punjabi, Chief Financial Officer

5. Ms. Mahek Gaurav Jaju, Company Secretary

During the year under review, there were no changes in the KMP of the Company.

Independent Directors

In terms of Section 149 of the Act, Ms. Kruti Kothari, Mr. Deepak N. Shah and Mr. Manish J. Gandhi are the Independent Directors of the Company.

In terms of Regulation 25(8) of the Listing Regulations, all IDs have confirmed that they are not aware of any circumstances or situation which exists or may be reasonably anticipated that could impact their ability to discharge their duties. The Directors have further confirmed that they are not debarred from holding the office of the director under any SEBI Order or any other such authority. Based upon the declarations received from the IDs, the Board of Directors has confirmed that they meet the criteria of independence as mentioned under Section 149(6) of the Act and Regulation 16(1)(b) of the Listing Regulations and that they are independent of the management.

In the opinion of the Board, there has been no change in the circumstances which may affect their status as IDs of the Company and the Board is satisfied of the integrity, expertise and experience (including proficiency in terms of Section 150(1) of the Act and applicable rules thereunder) of all IDs on the Board.

During the year under review, the Non-Executive Directors of the Company had no pecuniary relationship or transactions with the Company, other than sitting fees and reimbursement of expenses incurred by them for the purpose of attending meetings of the Board/Committees of the Company.

The Appointment and Tenure of the Independent Directors, including code for Independent Directors, are available on the website of the Company, www.stml.in.

Separate Meeting of Independent Directors

In terms of requirements under Schedule IV of the Companies Act, 2013 and Regulation 25 (3) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, a separate meeting of the Independent Directors was held on 11^th February 2025.

The Independent Directors at the meeting, inter alia, reviewed the following:

• Performance of Non-Independent Directors and Board as a whole.

• Performance of the Chairman of the Board, taking into account the views of Executive Directors and Non-Executive Directors.

• Assessed the quality, quantity and timeliness of flow of information between the Company Management and the Board that is necessary for the Board to effectively and reasonably perform their duties.

Familiarization / Orientation program for Independent Directors

In terms of Regulation 25(7) of the Regulations, the Company has adopted a familiarization programme for the Independent Directors to familiarize them with working of the Company, nature of the industry in which the Company operates, business model of the Company, their roles, rights, responsibilities and other relevant details.

These programmes aim to provide insights into the Company to enable the Independent Directors to understand its business in depth and contribute significantly to the Company.

Pursuant to Regulation 46, the details required are available on the website of your Company at 'http://www. stml.in/policies.aspx.

Number of meetings of the Board

During the financial year 2024-25, 5 (five) Board Meetings were held on the following dates 24^th May 2024, 27^th June 2024, 8^th August 2024, 13^th November 2024 and 11^th February 2025. The gap between any two meetings was not more than one hundred twenty days as mandated under the provisions of Section 173 of the Companies Act, 2013 and Regulation 17(2) of the SEBI Regulations.

Committees of the Board

As required under the Companies Act, 2013 and the SEBI Listing Regulations, your Company has constituted various Statutory Committees. As on 31^st March 2025, the Board had four committees: the audit committee, the corporate social responsibility committee, the nomination and remuneration committee and stakeholder's relationship committee. During the year, all recommendations made by the committees were approved by the Board. A detailed note on the composition of the Board and its committees is provided in the Corporate Governance Report.

Composition of the Audit Committee

The Audit Committee comprises of Mr. Deepak N. Shah as its Chairperson, Ms. Kruti Kothari and Mr. Manish J. Gandhi all of whom are Independent Directors as members. More details on the Committee are given in the Report on Corporate Governance.

Board Evaluation

Pursuant to the provisions of the Companies Act 2013 and Regulation 17(10), the Board has devised a policy on evaluation of performance of Board of Directors, Committees and Individual directors. The policy is also in compliance to Regulation 19 read with Schedule II, Part D of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. The Nomination and Remuneration Committee has defined the evaluation criteria for the Performance Evaluation of the Board, its committees and individual Directors.

The performance of the Board was evaluated by the Board after seeking inputs from all the directors on the basis of criteria such as the Board composition and structure, effectiveness of board processes, information and functioning, etc.

The performance assessment of Non-Independent Directors, Board as a whole and the Chairman were evaluated at separate meetings of Independent Directors. The same was also discussed in the meetings of NRC and the Board. Performance evaluation of Independent Directors was done by the entire Board, excluding the Independent Director being evaluated.

The Nomination and Remuneration Committee has established a framework for the evaluation process of performance of the Board, its Committees and Individual Directors and the same was adopted by the Board.

During the period under review, the Board of Directors have carried out the evaluation of the performance of Independent Directors and their independence criteria and the Independent Directors in their meeting held on 11^th February, 2025 have evaluated the performance of the Chairman and Non-Independent Directors and the Board as a whole and also assessed the quality, quantity and timeliness of flow of information between the Board and Company management.

Code of Conduct for Directors and Senior Management

All Board members and Senior Management personnel have affirmed compliance with the Code of Conduct for the year 2024-25. A declaration to this effect signed by the Managing Director of the Company is contained in this Annual Report. The Managing Director and CFO have certified to the Board with regard to the financial statements and other matters as required under regulation 17(8) of the SEBI Listing Regulations, 2015.

Code for Prevention of Insider Trading

Your Company has adopted a Code of Conduct to regulate, monitor and report trading by designated persons and their immediate relatives as per the requirements under the Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations, 2015. This Code of Conduct also includes code for practices and procedures for fair disclosure of unpublished price sensitive information which has been made available on the Company's website at 'http://www.stml.in/policies.aspx.

Procedure for Nomination, Appointment & Remuneration of Directors

The Nomination and Remuneration Committee (NRC) has been mandated to oversee and develop competency requirements for the Board based on the industry requirements and business strategy of the Company. The NRC reviews and evaluates the profiles of potential candidates for appointment of Directors and meets them prior to making recommendations of their nomination to the Board.

Directors are appointed / re-appointed with the approval of the Members for a term in accordance with the provisions of the law and the Articles of Association. The initial appointment of Managing / Wholetime Director is generally for a period of 3-5 years. All Directors other than Independent Directors are liable to retire by rotation unless otherwise specifically provided under the Articles of Association or under any statute. One-third of the Directors who are liable to retire by rotation, retire at every Annual General Meeting and are eligible for reappointment.

Disclosures of the ratio of the remuneration of each director to the median employee's remuneration and other details as required pursuant to Section 197(12) of the Companies Act, 2013 read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 as amended from time to time, are provided as “Annexure C".

None of the directors or Managing Director of the Company received any remuneration or commission from Subsidiary Companies of your Company.

The detail of remuneration paid to the Directors including the Managing Director of the Company is provided in Corporate Governance Report.

Auditors

Statutory auditors

At the 76^th AGM held on 13^th September 2022, the Members approved the re-appointment of M/s Sharp and Tannan Associates, Chartered Accountants (ICAI Firm Registration Number 109983W), as the Statutory Auditors of the Company for a second term of 5 years commencing from the conclusion of the 76^th AGM till the conclusion of the 81^st AGM to be held in the year 2027.

As required under the SEBI Listing Regulations, the Statutory Auditors have also confirmed that they hold a valid certificate issued by the Peer Review Board of the Institute of Chartered Accountants of India. Further, pursuant to Section 139 of the Companies Act, 2013, the Company has obtained certificate from them to the effect that their continued appointment would be in accordance with the conditions prescribed under the Act and the Rules made thereunder, as may be applicable.

The report of M/s Sharp & Tannan Associates, Chartered Accountants (ICAI Registration No. 109983W), the Statutory Auditors of the Company on the financial statements of the Company for the year ended 31^st March 2025 is annexed to the financial statements in terms of the provisions of Section 134(2) of the Companies Act, 2013.

The Statutory Auditor's Report does not contain any qualifications, reservations, adverse remarks or disclaimers. The Statutory Auditors of the Company have not reported any fraud to the Audit Committee of Directors as specified under Section 143(12) of the Act, during the year under review.

The Statutory Auditors were present in the last AGM.

Cost records and cost audit

Consequent to the sale / transfer of assets of Jolwa Manufacturing division in April 2022 and no other manufacturing activity in operation, maintenance of cost records and requirement of cost audit as prescribed under the provisions of Section 148(1) of the Companies Act, 2013 are not applicable for the business activities carried out by the Company for the FY 2024-25.

Annual Secretarial Compliance Report

The Company has undertaken an audit for the Financial Year 2024-25 for all applicable compliances as per Securities and Exchange Board of India Regulations and Circulars/Guidelines issued thereunder. The Annual Secretarial Compliance Report duly signed by Mr. Jigar Vyas Practicing Company Secretary (ICSI Membership No. FCS 8019) has been submitted to the Stock Exchanges within the stipulated time, in compliance with the provisions of the Regulation 24A of SEBI (LODR) Regulations, 2015.

Secretarial Audit

In terms of Section 204 of the Act and Rules made thereunder, Jigar Vyas & Associates, Practicing Company Secretaries (Firm Registration No. S2015GJ307200) were appointed as Secretarial Auditors of the Company to carry out the Secretarial Audit for FY 2024-25. The Secretarial Audit Report of the Company for the Financial Year ended 31 March 2025 in the prescribed form MR-3 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is enclosed as Annexure - "D" to this report. There has been no qualification, reservation, adverse remark or disclaimer given by the Secretarial Auditors in their Report.

Further, in terms of Section 204 of the Act and Regulation 24A of the SEBI Listing Regulations, the Board of Directors has, on the recommendation of the Audit Committee, approved the appointment of Jigar Vyas & Associates, as the Secretarial Auditors of the Company, to hold office for a term of five (5) consecutive years with effect from financial year 2025-26 to financial year 2029-30, subject to approval of the Members of the Company at the ensuing AGM. Accordingly, a resolution seeking Members' approval for appointment of Secretarial Auditors of the Company forms part of the Notice of the 79^th AGM forming part of this Annual Report.

Secretarial Standards

During the year under review, your Company has complied with all the applicable provisions of Secretarial Standard - 1 and Secretarial Standard - 2 issued by the Institute of Company Secretaries of India (as amended).

Internal Auditor

Pursuant to the provisions of Section 138 of the Companies Act, 2013 and Rules made thereunder the Board of Directors of the Company have appointed M/s M/s K. S. Jagirdar & Co., (ICAI Membership No.036904), Chartered Accountants as Internal Auditors of the Company, for the financial year 2024-25.

The Internal Audit department carries out risk-focused audits across all locations, enabling identification of areas where risk management processes may need to be strengthened. Significant audit observations and corrective action plans are presented to the Audit Committee.

The audit committee in consultation with the Internal Auditor formulates the scope, functioning, periodicity and methodology for conducting the internal audit.

Directors' Responsibility Statement

Pursuant to the requirements of Section 134(1)(c) read with Section 134(5) of the Companies Act, 2013 and on the basis of explanation and compliance certificate given by the executives of the Company, and subject to disclosures in the Annual Accounts and also on the basis of discussions with the Statutory Auditors of the Company from time to time, the Board is of the opinion that the Company's internal financial controls were adequate and effective during Financial Year 2024-25.

Accordingly, pursuant to Sections 134(5) of the Act, the Board of Directors, to the best of its knowledge and ability, confirm that:

(a) in the preparation of the annual accounts for the financial year ended 31st March 2025, the applicable accounting standards read with requirements set out under Schedule III to the Act, have been followed and there are no material departures from the same;

(b) they have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the Financial Year and of the loss of the Company for that period;

(c) they have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

(d) they have prepared the Annual Accounts for the Financial Year ended 31st March 2025 on a going concern basis;

(e) they have laid down internal financial controls to be followed by the Company and such internal financial controls are adequate and operating effectively;

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

Corporate Governance Report

Your Company is in compliance with all the applicable provisions of Corporate Governance as stipulated under Chapter IV of the Listing Regulations. The Report on Corporate Governance as stipulated under Schedule V(C) of the Regulations is provided in a separate section as 'Annexure G' and forms part of this Report. The required certificate from a Practicing Company Secretary confirming compliance with the conditions of Corporate Governance as stipulated in the Regulation 34 of the Listing Regulations, is annexed to this Annual Report.

Corporate Social Responsibility (CSR)

In terms of the provisions of Section 135 of the Companies Act, 2013, the Corporate Social Responsibility Committee ("CSR Committee") is in existence to monitor the Corporate Social Responsibility Policy of the Company as approved by the Board and the said policy is available on the official website of the Company i.e., http://www.stml.in/ under the link: http://www.stml.in/policies.aspx.

Consequent to the retirement of Mr. Ketan A. Jariwala as member of the the CSR Committee, Mr. Manish J. Gandhi was inducted as member of the Committee with effect from 8^th August 2024. The present members of the CSR Committee comprise of Mr. Deepak N. Shah as the Chairman, Mr. Paresh V. Chothani and Mr. Manish J. Gandhi as Members. The CSR Committee met on 28^th March 2025 to review the Corporate Social Responsibility Policy.

The Company works primarily towards supporting projects in the areas of protection of national heritage, restoration of historical sites, and promotion of art and culture; environmental sustainability and ecological balance; promoting education etc.

During the year under review, your Company spent Rs. 10.60 Lakhs on CSR activities. The average net profit for the past three financial years was Rs 529.75 Lakhs.

Annual Report on mandatory CSR activities as required under the Companies (Corporate Social Responsibility Policy) Rules, 2014, as amended, is given in 'Annexure A' forms integral part of this Report.

Internal Financial Control System and their Adequacy

Internal Financial Control systems of the Company are commensurate with its size and the nature of its operations. The controls are adequate for ensuring the orderly and efficient conduct of the business, including adherence to the Company's policies, the safeguarding of assets, the prevention and detection of frauds and errors, the accuracy and completeness of accounting records and timely preparation of reliable financial information. The internal audit report is discussed with the Management and members of the Audit Committee to keep a check on the existing systems and take corrective action to further enhance the control measures.

The internal auditors of the Company have in compliance with provisions of Section 177 (4) of the Companies Act, 2013 confirmed to the Audit Committee that the Company has adequate Internal Financial Controls, and the systems of risk management are robust and defensible.

Statutory Auditors of the Company have in their Report dated 27^th May 2025 opined that the Company has, in all material respects adequate internal financial controls over financial reporting and such internal financial controls over financial reporting were operating effectively as at 31^st March 2025.

Material changes and commitments

Except as disclosed elsewhere in the Annual Report, there have been no material changes and commitments which can affect the financial position of the Company that have occurred between the end of the financial year to which the Financial Statements relate and the date of this Report.

Board policies

The details of the policies approved and adopted by the Board as required under the Companies Act, 2013 and Securities and Exchange Board of India (SEBI) regulations are provided in Corporate Governance Report.

Policy on Directors' Appointment and Remuneration

In terms of the provisions of Section 178 of the Companies Act, 2013 read with Regulation 19 of the Regulations, Nomination and Remuneration Committee ('NRC') has formulated a policy relating to appointment and determination of the remuneration for the Directors, Key Managerial Personnel and Senior Management Personnel which has been adopted by the Board of Directors of the Company. The NRC has also developed the criteria for determining the qualifications, positive attributes and independence of Directors and for making payments to the Executive and Non-Executive Directors of the Company.

Your directors affirm that the remuneration paid to the Directors, Key Managerial Personnel, Senior Management Personnel and other employees is as per the Nomination and Remuneration Policy of your Company. The said policy is available on the official website of the Company i.e. 'http://www.stml.in/policies.aspx.

Policy on Prevention, Prohibition and Redressal of Sexual Harassment at Workplace

The Company has adopted a Policy on Prevention, Prohibition and Redressal of Sexual Harassment at workplace in line with the provisions of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 (POSH) and the rules made thereunder. The Company has zero tolerance for sexual harassment at workplace.

The Policy aims to provide protection to employees at workplace and prevent and redress complaints of sexual harassment and for matters connected or incidental thereto, with the objective of providing a safe working environment, where employees feel secure.

Pursuant to Section 21 of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 read with Rule 14 of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Rules, 2013, the Company has constituted Internal Complaints Committee (ICC) where any grievance of sexual harassment at workplace can be reported.

During the year under review, your Directors have not received any complaint of sexual harassment from the IC. Moreover, there were neither any complaint pending at the beginning of the year nor were there any complaints that remained pending as at the end of the year.

The Policy of the "Prevention of Sexual Harassment of Women at Workplace" of the Company is available on the website of the Company at http://www.stml.in/policies.aspx.

Disclosure for compliance with other statutory laws

(a) In compliance with Rule 8(5)(xiii) of the Companies (Accounts) Second Amendment Rules, 2025, the Board hereby confirms that the Company has complied with the provisions relating to the constitution of Internal Complaints Committee (ICC) under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013

Details of the Sexual Harassment complaints during the financial year ended 31^st March 2025 are as under:

(b) The Board hereby confirms that the Company has complied with the applicable provisions of Maternity Benefit Act.

Indian Accounting Standard (Ind AS)/Financial Statements

Your Company follows Indian Accounting Standards (Ind AS) issued by the Ministry of Corporate Affairs in the preparation of its financial statements. Your Company has consistently applied applicable accounting policies during the year under review. Management evaluates all recently issued or revised accounting standards on an ongoing basis. The Company discloses its financial results on a quarterly basis which are subjected to limited review and publishes audited financial results on an annual basis.

The financial statements for the year ended 31 March 2025 have been prepared in accordance with the Indian Accounting Standards ("Ind AS") as required under the provisions of Section 133 of the Companies Act, 2013 read with rules made there under, as amended.

Particulars of Employees and Related Disclosures

Information regarding employees in accordance with the provisions of Rule 5(2) and Rule 5(3) of the companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is given in Annexure- "B" to this Report.

Whistle Blower Policy / Vigil Mechanism

In terms of the provisions of Section 177 of the Companies Act, 2013 and the Regulations, the Company has established an effective mechanism called Vigil Mechanism (Whistle Blower Mechanism). The purpose of this policy is to provide a framework to promote responsible whistle blowing by employees or by any other person who avails such mechanism. It protects employees or any other person who avails such mechanism wishing to raise a concern about serious irregularities, unethical behaviour, actual or suspected fraud within the Company by reporting the same to the Audit Committee.

The functioning of the Whistle Blower Mechanism/Vigil Mechanism existing in the Company is reviewed by the Audit Committee on Annual basis. During the year under review, no compliant has been received and no employee was denied access to the Audit Committee. The Whistle Blower Policy has been posted on the Website of the Company at 'http://www.stml.in.

Reporting of Fraud

During the year under review, the Statutory Auditors, Cost Auditors and Secretarial Auditors have not reported any instance of fraud committed in the Company by its officers or employees to the Audit Committee under Section 143(12) of the Act, details of which need to be mentioned in this Report.

Conservation of Energy, Technology Absorption, Foreign Exchange Earnings and outgo

Your Company during April 2022, disposed of all its assets of its manufacturing division located at Village Jolwa, Taluka Palsana, Dist, Surat and discontinued its business of manufacturing of Polyester Chips and Yarns. The management after considering various options for possible alternate business commenced the new activities of Trading in Commodities and other Commodity related business from 3^rd quarter of FY 23. Therefore, there are no reportable details relating to conservation of energy or technology absorption. There were no foreign exchange earnings or outgo during the year under review.

CEO and CFO certification.

Pursuant to Regulation 17(8) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, Managing Director and CFO Certification forms part of the Annual Report. Managing Director and CFO also provide quarterly certification on financial results, while placing the financial results before the Board in terms of the Listing Regulations.

Health, safety and environment

Your Company believe that organisations' sustainability is directly proportional to the safety, health and environment management. We endeavour to demonstrate environmental and social responsibility at every step.

We are devoted to benefit communities - workforce, public and environment. Our safety, health and environment objectives include complying with all applicable laws relevant to the industry. The Management believes in sharing responsibility throughout the hierarchy in conforming to the existing laws.

The Company obtained necessary approvals from concerned Government Department / Pollution Control Board and all required environment clearances / safety clearances / stipulations are complied with at Plant facilities of the Company.

Industrial Relations / Human Resources

During the year under review, the Company continued to have cordial and peaceful. There were total 26 employees (including Managing / Wholetime Directors) which comprises of 2 Female and 24 Male members as at 31^st March 2025.

Green Initiatives

In commitment to keep in line with the Green Initiatives and going beyond it, the Notice of 78^th Annual General Meeting of the Company including the Annual Report for FY 2024-25 are being sent to all Members whose e-mail addresses are registered with the Company / Depository Participant(s).

Code on Social Security

The Indian Parliament has approved the Code on Social Security, 2020 which would impact the contributions by the company towards Provident Fund and Gratuity. The Ministry of Labour and Employment had released draft rules for the Code on Social Security, 2020 on November 13, 2020, and invited suggestions from stakeholders which are under consideration by the Ministry. The Company will assess the impact and its evaluation once the subject rules are notified.

Risk Management

Your Company periodically assesses the risks in the internal and external environment along with treating the risks and incorporates risk management plans in its strategy, business and operational plans. Your Company recognizes that the risk is an integral part of business and is committed to managing the risks in proactive and efficient manner.

The business plan for the future is devised and approved by the Board, keeping in mind the risk factors which can significantly impact the performance of the particular business. All major financial commitments are subject to scrutiny by the Board and investments are permitted only on being satisfied about its returns or utility to the Company. There are no risks which in the opinion of the Board threaten the existence of the Company.

Insurance

The Company has taken all the necessary steps to insure its properties and insurable interests, as deemed appropriate and also as required under the various legislative enactments.

Public Deposits

There were no outstanding deposits within the meaning of Section 73 and 74 of the Act read with rules made thereunder at the end of FY25 or the previous financial year. Your Company did not accept any deposit during the year under review.

Particulars of Loans, Guarantees and Investments

During the period under review, the Company has not made any loan, guarantee or investment in terms of the provisions of Section 186 of the Companies Act, 2013.

Annual Return

Pursuant to Section 92(3) and 134(3)(a) of the Act and the Companies (Management and Administration) Rules, 2014, the Annual Return for FY 2024-25 will be made available on the website of the Company at https://www. stml.in/pdf/investorrelations/Annual-Return- MGT-24-25. pdf

Agreement(s) binding the Company

As required under Regulation 30A of Listing Regulations, the Company has to report that it has not been informed by any shareholders, promoters, promoter group entities, related parties, directors, KMPs or employees of the Company, who are purported to be parties to any agreements specified in Clause 5A of Paragraph A of Part A of Schedule III of the SEBI Listing Regulations, of having entered into any agreement or have signed any agreement to enter into such agreement to which the Company is not a party as at the end of the financial year. The Company further reports that there are no such agreement of the nature mentioned above that subsists on the date of coming into effect of the SEBI (LODR) (Second Amendment) Regulations, 2023.

Business Responsibility Report

The Business Responsibility Reporting as required by Regulation 34(2) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, is not applicable to your Company for the financial year ended 31^st March 2025.

Key financial ratios

In accordance with the SEBI (Listing Obligations and Disclosure Requirements) (Amendment) Regulations, 2018, the Company is required to give details of significant changes in key sector-specific financial ratios.

Note:

1. Debt-Equity Ratio, Trade Receivable Turnover Ratio, Trade Payable Turnover Ratio, Net Capital Turnover Ratio does not apply to the Company in absence of any Debt, Trade Receivable and Trade Payable.

General Disclosures

Your directors state that during the year under review:

1. Your Company did not issue any equity shares with differential rights as to dividend, voting or otherwise.

2. Your Company did not issue shares (Including sweat equity shares) to employees of your Company under any scheme.

3. No significant or material orders were passed by the Regulators or Courts or Tribunals which impact the going concern status and your Company's operation in future.

4. No application was made, and no proceeding was pending under the Insolvency and Bankruptcy Code, 2016.

5. There has been no change in the nature of business of the Company as on the date of this report.

6. No one time settlement of loan was obtained from the Banks or Financial Institutions.

7. There were no revisions made in the financial statements and Directors' Report of your Company