Sheela Foam Limited Certifies Fractional Entitlement Compensation Under Composite Scheme of Arrangement

Sheela Foam Limited has filed regulatory disclosures with stock exchanges on May 14, 2026, submitting reports from its Audit Committee and Independent Directors certifying the completion of fractional share compensation under the Composite Scheme of Arrangement. The submission was made in compliance with SEBI Master Circular No. SEBI/HO/CFD/POD-2/P/CIR/2023/93 dated June 20, 2023, within the mandated 7-day timeline following the compensation completion date of May 08, 2026.

Background of the Composite Scheme

The Composite Scheme of Amalgamation involved the merger of Belvedore International Limited, Kanvas Concepts Private Limited, Kurlon Retail Limited, Komfort Universe Products and Services Limited, and Starship Value Chain and Manufacturing Private Limited into Kurlon Enterprise Limited, and further into Sheela Foam Limited. The scheme was approved by the Hon'ble National Company Law Tribunal, Mumbai Bench on September 17, 2025.

Under the scheme, eligible equity shareholders of Kurlon Enterprise Limited as on the record date of January 30, 2026 were allotted equity shares of Sheela Foam Limited on February 03, 2026. The share exchange ratio was set at 52 fully paid-up equity shares of Rs. 5 each of Sheela Foam Limited for every 100 fully paid-up equity shares of Rs. 5 each of Kurlon Enterprise Limited. Pursuant to this, the company allotted a total of 4,88,146 equity shares of Rs. 5 each to eligible shareholders of Kurlon Enterprise Limited, which included 575 equity shares of Rs. 5 each classified as Fractional Shares. The allotted shares rank pari-passu in all respects with the existing fully paid-up equity shares of Sheela Foam Limited.

Treatment of Fractional Shares

In accordance with the provisions of the Scheme and the SEBI Master Circular, the 575 Fractional Shares were allotted directly to the 'Sheela Foam Limited Fractional Shares Trust 2025', managed by Axis Trustee Limited as Trustee. The Fractional Shares were required to be sold in the open market within 90 days from the date of allotment, with net proceeds to be distributed to eligible equity shareholders of Kurlon Enterprise Limited in proportion to their respective fractional entitlements. The shares were sold in the open market at market price on April 22, 2026.

The distribution of sale proceeds, after deduction of applicable expenses, was completed on May 08, 2026. The following table summarises the compensation details:

Parameter: Details Date of Compensation: 08.05.2026 No. of Shares: 575 Sale Proceeds After Expenses: 3,23,837.90 Distribution of Sale Proceeds: 3,07,348.00 Amount Remaining in Account: ₹16,489.90

The amount of ₹16,489.90 remains in the account due to the non-availability or incomplete bank details of certain eligible shareholders. In the event the amount is not claimed by the respective shareholders, it shall be transferred to the Investor Education and Protection Fund (IEPF) or any other funds as specified in accordance with applicable laws and regulations.

Certification by Audit Committee and Independent Directors

The Audit Committee of the Board of Directors of Sheela Foam Limited, at its meeting held on May 14, 2026 in Noida, certified that the company has compensated the eligible equity shareholders by distributing the sale proceeds of the fractional entitlements in accordance with the provisions of the Scheme and the SEBI Master Circular. The report was signed by Audit Committee Chairman Mr. Som Mittal (DIN: 00074842).

The members present at the Audit Committee meeting were:

Som Mittal

Ravindra Dhariwal

Tushaar Gautam

Neeraj Jain

Separately, the Independent Directors of Sheela Foam Limited also issued a report by way of circular resolution on May 14, 2026, certifying the same distribution of proceeds. The report was approved by the following Independent Directors:

Som Mittal

Ravindra Dhariwal

Anil Tandon

Meena Jagtiani

The Independent Directors' report was signed by Mr. Som Mittal in his capacity as Independent Director and Authorised Signatory (DIN: 00074842). Both reports were submitted to BSE Limited and the National Stock Exchange of India Limited as required under the applicable regulatory framework. The disclosure was filed by Company Secretary and Compliance Officer Md. Iquebal Ahmad on May 14, 2026.

Sheela Foam Limited announced its audited standalone and consolidated financial results for the quarter and year ended March 31, 2026. The board, in its meeting held on May 14, 2026, approved the results and recommended a final dividend of ₹1 per equity share, representing 20% of the face value of ₹5 each, for the financial year 2025-26. The dividend payment is subject to shareholder approval at the ensuing Annual General Meeting. The auditors have provided an unmodified opinion on the annual audited standalone and consolidated financial results.

FY26 Financial Performance

Sheela Foam delivered a strong full-year performance, achieving its highest-ever turnover and EBITDA in its history. On a consolidated basis, the company reported a net profit (PAT) of ₹161 cr for FY26, a 78% increase from ₹90 cr in FY25. Total consolidated revenue from operations grew 11% year-on-year to ₹3,821 cr from ₹3,439 cr. Core EBITDA expanded 46% to ₹414 cr from ₹283 cr, with margins improving by 261 bps to 10.8% from 8.2%, supported by incremental sales, integration benefits, improved gross margins, and operating leverage. Consolidated Cash EPS for FY26 stood at ₹35.2. On a standalone basis, net profit for the year stood at ₹130.57 crore, up from ₹92.70 crore in the corresponding period, while standalone revenue from operations increased to ₹2,962.27 crore from ₹2,675.25 crore.

The following table summarizes the consolidated financial performance for FY26 and Q4 FY26:

Particulars: FY25 (₹ cr) FY26 (₹ cr) Variance Q4 FY25 (₹ cr) Q4 FY26 (₹ cr) Variance Revenue 3,439 3,821 11% 850 1,050 24% Core EBITDA 283 414 46% 64 121 90% Core EBITDA % 8.2% 10.8% 261bps 7.5% 11.5% 400bps PAT 90 161 78% 13 92 7x

Q4 FY26 Highlights

The fourth quarter demonstrated particularly strong momentum across both business segments. Revenue grew 24% year-on-year to 10.5B rupees from 8.5B rupees. Q4 EBITDA surged to 1.16B rupees compared to 330M rupees in the same period last year, with EBITDA margin expanding to 11.11% from 3.88% year-on-year. Consolidated net profit for Q4 came in at 912M rupees versus 130M rupees in the year-ago period. Core EBITDA, as reported in the press release, surged 90% to ₹121 cr from ₹64 cr, with margins expanding by 400 bps to 11.5% from 7.5%, supported by higher volumes, improved gross margins, and operating leverage. Cash EPS for the quarter stood at ₹14.2.

The following table presents the key Q4 metrics:

Metric: Q4 FY26 Q4 FY25 Revenue 10.5B rupees 8.5B rupees EBITDA 1.16B rupees 330M rupees EBITDA Margin 11.11% 3.88% Net Profit (PAT) 912M rupees 130M rupees

Segment Performance

The mattress and foam segments both recorded robust volume growth across the full year and the fourth quarter. The following table outlines segment-wise volume growth:

Segment: Q4 FY26 Volume Growth FY26 Volume Growth Mattress 13% YoY 12% YoY Foam 34% YoY 18% YoY

Both Sleepwell and Kurlon brands delivered strong growth during the year, reflecting the benefits of the Kurlon acquisition and its integration with Sheela Foam.

Management Commentary

Commenting on the results, Mr. Rahul Gautam, Chairman & Managing Director, said that fiscal year 2026 has been a year of realising the benefits of the Kurlon acquisition and its integration with Sheela Foam. Both Sleepwell and Kurlon brands delivered strong growth, while the foam segment also recorded commendable momentum. This broad-based performance has translated into healthy growth across both revenue and profitability. He noted that the company has achieved its highest-ever turnover and EBITDA in its history, reflecting the strength of the integrated platform, focused execution, and continued commitment to profitable growth.

Key Consolidated Metrics

The following table summarizes the key consolidated financial metrics for FY26:

Metric: FY26 (₹ in Crores) FY25 (₹ in Crores) Revenue from Operations 3,820.84 3,439.20 Total Income 3,875.11 3,570.12 Total Expenses 3,701.20 3,497.38 Net Profit (PAT) 160.85 90.09 Basic EPS (₹) 14.62 8.18 Cash EPS (₹) 35.2 —

Earnings Conference Call

Following the announcement, the company scheduled an investor/analyst conference call on May 15, 2026, at 04:00 PM IST to discuss the financial results. The call was facilitated by Investec Capital Services (India) Private Ltd and led by Ritesh Shah, Co-Head of Research at Investec India. Senior management, including Chairman & MD Rahul Gautam and Group CFO Amit Kumar Gupta, participated in the call. Participants could join via dial-in numbers +91 22 6280 1245 or +91 22 7115 8146. International toll-free numbers were available for the USA (18667462133), UK (08081011573), Singapore (8001012045), and Hong Kong (8009644448). The transcript is available on the company's website.

Note: FY25 Core EBITDA includes ₹35 cr paid by KCPL (erstwhile owner of KEL) against working capital/inventory due to quality issues, classified under 'other income' in financial statements.

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