Sai silks (kalamandir) Limited has received a favourable outcome in the income tax proceedings involving its promoter, with the Commissioner of Income Tax substantially allowing appeals against a significant tax demand.

Appellate Orders Favour Promoter

The Commissioner of Income Tax, through appellate orders dated March 30, 2026, has allowed all appeals filed by Mr. Nagakanaka Durga Prasad Chalavadi, promoter of the company, against the income tax demand raised by the Office of the Deputy Commissioner of Income Tax. The orders have set aside the substantial tax demand that originated from search and seizure proceedings.

Minimal Liability Remains

While the appeals were largely successful, a minor portion amounting to Rs 85.79 lakhs was disallowed on account of documentation-related matters. This has resulted in an estimated tax liability of approximately Rs 50 lakhs, which the promoter will discharge from his personal sources.

No Impact on Company Operations

The company has clarified that this matter pertains solely to the promoter in his personal capacity and has no impact on the company's financial position or operations. No liability arises on the company in this regard.

Key highlights of the resolution:

• Tax proceedings arising from the search and seizure operation now stand concluded
• Company operations remain unaffected
• Financial position of the company unchanged
• All promoter-related tax matters resolved

Regulatory Compliance

This disclosure was made pursuant to Regulation 30 read with Para A of Part A of Schedule III of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. The company had previously disclosed information about these proceedings on April 02, 2025, and has now provided this update following the conclusion of the appellate process.

With the disposal of the appeals, the tax proceedings arising from the search and seizure operation in respect of both the company and its promoter have been concluded, providing clarity on this regulatory matter.

Sai Silks (Kalamandir) Limited has received approval from its Audit Committee and Board of Directors to extend the timeline for utilising its remaining IPO proceeds by six months. The extension, approved on March 29, 2026, moves the deadline from March 31, 2026 to September 30, 2026 for the unutilised balance of Rs. 39.86 crore.

IPO Proceeds Status and Utilisation

The company originally raised Rs. 566.23 crore through its Initial Public Offer as per the Prospectus dated September 23, 2023. The current status of IPO proceeds utilisation as of March 28, 2026 shows significant progress across most objectives:

The company has fully utilised funds allocated for working capital requirements, debt repayment, and general corporate purposes, with remaining balances only in store setup and warehouse development categories.

Retail Footprint Expansion Exceeds Targets

Despite operationalising 25 stores against the originally proposed 30, Sai Silks (Kalamandir) has significantly exceeded its retail space expansion objectives. As of March 28, 2026, the company has added a total retail footprint of 1,82,652 sq. ft., surpassing the originally envisaged area of 1,42,500 sq. ft. by approximately 28%.

This achievement demonstrates the company's efficient space utilisation and strategic site selection, allowing it to exceed planned retail coverage while using fewer store locations. The capital expenditure savings of Rs. 19.19 crore resulted from disciplined capital allocation, efficient project execution, and favourable commercial terms negotiated with vendors and landlords.

Warehouse Development and Future Plans

Regarding warehouse expansion, Rs. 20.67 crore remains unutilised from the original allocation. The company has identified a strategic location at Kanchipuram, Tamil Nadu, with ongoing discussions with property owners. The warehouse establishment involves comprehensive technical, legal, and commercial due diligence processes.

Deployment of Remaining Funds

The unutilised IPO proceeds of Rs. 39.86 crore will be strategically deployed towards:

• Store Expansion: Setting up 4 additional stores in a phased manner, including 3 under the Kalamandir format in Karnataka and 1 under the Varamahalakshmi Silks format in Andhra Pradesh
• Warehouse Development: Establishment of the warehouse facility at Kanchipuram, Tamil Nadu

Regulatory Compliance

The extension pertains only to the timeline for utilisation without any changes to the objects of the issue, therefore not requiring shareholder approval. The company will continue placing quarterly Monitoring Agency Reports along with Statement of Deviation before the Audit Committee and submit them to stock exchanges as per regulatory requirements.

The Board meeting for this approval was conducted on March 29, 2026, from 7:30 PM to 8:30 PM, with the decision reflecting the company's commitment to optimal capital deployment while maintaining regulatory compliance.