The Board of Directors (“Board”) are pleased to present the Seventh Annual Report of Aarti Surfactants Limited
(“ASL” or “Company” or “your Company”) together with Company’s Audited Financial Statements (Standalone and
Consolidated) for the financial year ended March 31, 2025.

1. FINANCIAL PERFORMANCE AND SUMMARY

The Company’s Financial performance for the year ended March 31, 2025, is summarised below:

Your Company remains committed to sustainable
growth, operational excellence, and delivering
long-term value to stakeholders, while continuing to
navigate dynamic market conditions with resilience
and strategic agility.

The state of the Company’s affairs is given in the
Management Discussion and Analysis, which forms
part of this Annual Report.

2. CONSOLIDATED FINANCIAL STATEMENTS

The Board is pleased to present the Consolidated
Financial Statements of the Company, prepared in
accordance with the applicable provisions of the
Companies Act, 2013, including Section 129(3), and
Regulations 33 and 34 of the SEBI (Listing Obligations
and Disclosure Requirements) Regulations, 2015.

The Consolidated Financial Statements have been
drawn up in compliance with the Indian Accounting
Standards (Ind AS) as prescribed under the
Companies Act, 2013, thereby ensuring consistency,
transparency, and comparability in the Company’s
financial reporting.

3. TRANSFER TO RESERVES

The Company has not transferred any amount to the
reserves for the financial year ended March 31, 2025.
The entire profit for the year has been retained in the
Surplus Account of the Statement of Profit and Loss.

4. DIVIDEND

Your Board of Directors recommended a Dividend of
1.00/- (@10%) per share subject to approval of the
Shareholders at the ensuing 7^th AGM, for the year
2024-2025, resulting in a total payout of H 84,58,495
(Rupees Eighty-Four Lakhs Fifty-Eight Thousand Four
Hundred and Ninety-Five only).

The Dividend payout is in accordance with the
Dividend Distribution Policy which is available on the
website of the Company. The Dividend Distribution
Policy, in terms of Regulation 43A of the SEBI
(Listing Obligations and Disclosure Requirements)
Regulations, 2015 is available on the Company’s
website at www.aarti-surfactants.com/policies.htm

5. CAPITAL & FINANCE
Share Capital

Your Company’s Equity Share Capital is as follows:

The Company had issued 8,92,291 equity shares of
face value H 10 each on a rights basis ('Rights Equity
Shares'). In accordance with the terms of issue, H 222
per Rights Equity Share, i.e., 40% of the Issue Price, was
received from the allottees on application, and the
shares were allotted. The Board made the First and
Final call of H 333 per Rights Equity Share (including
a premium of H 327 per share) in January 2024. As
of March 31, 2024, an aggregate amount of H 60.85
lakhs were unpaid on 18,273 partly paid-up Rights
Shares. The Board of Directors, at its meeting held
on June 5, 2024, approved the forfeiture of all 18,273
partly paid-up equity shares of face value H 10 each,
on which the First and Final Call amount was not
received, in accordance with the requirements of
SEBI (Issue of Capital and Disclosure Requirements)
Regulations, 2018. The Company has intimated
both stock exchanges and filed the necessary
forms with the MCA.

The equity shares so allotted rank pari passu with
the existing equity shares of the Company. Except
as stated herein, there was no other change in the
share capital of the Company.

In terms of Regulation 32 of SEBI (Listing Obligations
and Disclosure Requirements) Regulations, 2015,
there was no deviation or variation in utilization of
issue proceeds, received in the form of ‘first and
final call money’ from conversion of 8,74,018 partly
paid-up equity shares into fully paid-up equity
shares of face value H10/- each, during the period
ended March 31, 2024 and same was filed with Stock
Exchanges on May 10, 2024. The said conversion and
utilization of Issue Proceeds was in accordance with
the Letter of Offer dated January 18, 2023 pertaining
to Company’s Rights Issue. The necessary details
with respect to the utilization of issue proceeds is
available on the Company’s website at https://www.
aarti-surfactants.com/material-and-recent-news.

Borrowings and Credit Rating

Total *long-term borrowings of the Holding
Company and its Subsidiary stood at H 2,760.27 as
on March 31, 2025 as against H 4,793.43 lakhs as on
March 31, 2024. Short term borrowings were H 8,112.99
as on March 31, 2025 as against H 4,929.12 lakhs as on
March 31, 2024.

*The long term borrowings includes 0% Non¬
Convertible Redeemable Preference Shares of face
value of H 10/- each.

The Company has not defaulted on payment of any
dues to the financial lenders.

The Company’s borrowing programmes have
received the credit ratings from CARE Ratings
Limited, details of which is given in the Corporate
Governance Report forming part of this Annual
Report and is also available on the website
of the Company.

During FY2024-2025, the Company’s outlay towards
capex was H 1,993.31 lakhs for the standalone and
H 2,023.58 lakhs at the consolidated level.

6. DETAILS OF SUBSIDIARY / ASSOCIATE / JOINT
VENTURE COMPANIES

As on March 31, 2025, the Company has one (1)
wholly-owned subsidiary, namely Aarti HPC Limited.
The subsidiary company is yet to commence
its operations.

The Company does not have any material subsidiary
whose net worth or turnover exceeds 10% of the
consolidated net worth or turnover, respectively,
of the Company in the immediately preceding
accounting year. The Policy on Determining Material
Subsidiaries has been formulated and is available
on the Company’s website at https://www.aarti-
surfactants.com/policies.htm.

In accordance with Section 129(3) of the Companies
Act, 2013, the Company has prepared Consolidated
Financial Statements of the Company and its
subsidiary in compliance with the applicable
accounting standards, which forms part of
this Annual Report.

Pursuant to Section 129(3) of the Companies Act, 2013
read with Rule 5 of the Companies (Accounts) Rules,
2014, the salient features of the financial statements
of the subsidiary in the prescribed format AOC-1 are
annexed to this Report as ‘Annexure A’ and form an
integral part thereof.

Further, in compliance with Section 136 of the
Companies Act, 2013, the Annual Report, Audited
Financial Statements, and other related documents
have been made available on the Company’s
website at www.aarti-surfactants.com/disclosures-
regulation-46. These documents are available for
inspection during business hours until the date of
the forthcoming AGM at the Company’s Registered
Office and also in electronic form. Members who
wish to inspect the same may write to the Company
Secretary at investors@aarti-surfactants.com.

It may further be noted that the Company does
not have any associate company, joint venture, or
holding company relationship.

7. PARTICULARS OF LOANS, GUARANTEES AND
INVESTMENTS

The details of loans, guarantees, and investments
made by the Company, as required under Section
186 of the Companies Act, 2013 and Schedule V
of the SEBI (Listing Obligations and Disclosure
Requirements) Regulations, 2015, are disclosed in
the notes to the financial statements forming part
of this Annual Report.

8. MANAGEMENT DISCUSSION AND ANALYSIS

A report on the Management Discussion and
Analysis for the year under review, as stipulated
under Regulation 34 of the SEBI (Listing Obligations
and Disclosure Requirements) Regulations, 2015, is
presented in a separate section forming an integral
part of this Annual Report.

9. DIRECTORS & KEY MANAGERIAL
PERSONNEL (KMP)

Your Company actively seeks to adopt global
best practices for an effective functioning of the
Board and believes in having a truly diverse Board

whose wisdom and strength can be leveraged for
creating greater stakeholder value, protection of
their interests and better corporate governance. The
Company’s Board comprises eminent persons with
proven competence and integrity, who bring in vast
experience and expertise, strategic guidance and
leadership qualities.

The Board of Directors (“Board”) of the Company is
carefully structured to achieve an optimal balance,
consisting of Executive and Non-Executive Directors,
including an Independent Woman Director.
This composition adheres strictly to the current
provisions of the Companies Act, 2013 and the SEBI
(Listing Obligations and Disclosure Requirements)
Regulations, 2015 ensuring compliance with
governance standards.

In accordance with the prevailing provisions of
the Section 149 of the Companies Act, 2013 read
with Regulation 17 of the SEBI (Listing Obligations
and Disclosure Requirements) Regulations, 2015,
as amended from time to time, as on March
31, 2025, the Board of Directors, comprises of
Six Directors (with Two Executive Directors, Two
Non-Executive Non- Independent Directors and Two
Independent Directors).

The Board is proactive in providing strategic
guidance and fulfills its fiduciary responsibilities
with a steadfast commitment to safeguarding the
interests of the Company and its stakeholders.

Additionally, all Directors of the Company have
confirmed that there are no disqualifications against
them for appointment as directors, in accordance
with Section 164 of the Companies Act, 2013.

Independent Directors

The Company has received requisite declarations
from all the Independent Directors of the
Company confirming that they meet the criteria
of independence prescribed under Section 149(6)
of the Companies Act, 2013 read with Rule 5 of
the Companies (Appointment and Qualification
of Directors) Rules, 2014 and Regulation 16(1)(b)
of the SEBI (Listing Obligations and Disclosure
Requirements) Regulations, 2015. The Independent
Directors have also confirmed that they are not
aware of any circumstance or situation that exists
or may be reasonably anticipated that could impair
or impact their ability to discharge their duties with
an objective independent judgment and without
any external influence. These declarations include
confirmations that they are not barred from holding
the office of director by any SEBI order or any other

authoritative body. In the opinion of the Board,
all the Independent Directors satisfy the criteria
of independence as defined under the Act, rules
framed thereunder and the SEBI (Listing Obligations
and Disclosure Requirements) Regulations, 2015,
and that they are independent of the Management
of the Company. Furthermore, they have affirmed
their adherence to the Code of Conduct outlined in
Schedule IV of the Companies Act, 2013.

In the opinion of the Board, all Independent
Directors (including those appointed during the
year) possess requisite qualifications, experience,
expertise, proficiency and hold high standards of
integrity for the purpose of Rule 8(5)(iii)(a) of the
Companies (Accounts) Rules, 2014. In terms of the
requirements under the SEBI (Listing Obligations
and Disclosure Requirements) Regulations, 2015,
the Board has identified list of key skills, expertise
and core competencies of the Board, including the
Independent Directors, details of which are provided
as part of the Corporate Governance Report.

As required under Rule 6 of the Companies
(Appointment and Qualification of Directors) Rules,
2014, all the Independent Directors (including those
re-appointed during the year) have registered
themselves with the Independent Directors
Databank and also completed the online proficiency
test conducted by the Indian Institute of Corporate
Affairs, wherever required.

Independent Directors’ Review Meeting

Separate meetings of the Independent Directors
were convened to assess the performance of
Non-Independent Directors and the effectiveness of
the Board and its committees collectively. During this
session, a comprehensive questionnaire designed
to probe various aspects of Board operations was
distributed among the Directors. The evaluation
criteria for Independent Directors encompassed their
level of engagement in meetings, interpersonal skills,
understanding of the business and its subsidiaries,
capacity for independent judgment, expertise, and
adherence to the compliance framework.

Changes in Directors and Key Managerial
Personnel

I. Appointment / Re-appointment of Directors

In terms of the Company’s Policy on Nomination
and Remuneration Committee (“NRC Policy”),
the Board at its meeting held on April 22,
2024, based on the recommendation of
Nomination and Remuneration Committee and

evaluation of the balance of skills, knowledge,
experience and expertise on the Board and
that of the respective Director, approved
and recommended to the members the
following matter relating to re-appointment
of Independent Director, who is not liable to
retire by rotation:

l) Re-appointment of Mrs. Misha B. Gala
(DIN: 08523865) as an Independent
Director for a second term of five years
with effect from August 20, 2024 upto
August 19, 2029, based on the positive
outcome of her performance evaluation
and contributions during her first term as
Independent Director.

Subsequently, the Members approved the
aforesaid re-appointment vide special
resolution at the 6^th Annual General Meeting
(agm) of the Company held on August 14, 2024.

The Board at its meeting held on August 05, 2025,
based on the recommendation of Nomination
and Remuneration Committee, approved the
below matters subject to approval of Members
at the 7^th Annual General Meeting:

1) Appointment of Mr. Parimal H. Desai
(DIN:00009272), as a Non-Executive
Director of the Company who has attained
the age of 75 years, with effect from
October 01, 2025.

2) Appointment of Mrs. Nisha B. Shah
(DIN:10049176), as an Independent Director
of the Company for a period of three (3)
years with effect from October 01, 2025.

Directors Retiring by Rotation

In line with Section 152 of the Companies
Act, 2013 the Companies (Management &
Administration) Rules, 2014, and the Articles of
Association of the Company, Mr. Santosh M.
Kakade (DIN: 08505234), an Executive Director, is
liable to retire by rotation at the ensuing Annual
General Meeting. Mr. Kakade, being eligible, has
offered himself for re-appointment. The Board
of Directors recommends his re-appointment,
acknowledging his invaluable contributions to
the board and the Company at large.

Pursuant to Regulation 36 of the SEBI (Listing
Obligations and Disclosure Requirements)
Regulations, 2015 read with Secretarial

Standard-2 on General Meetings, a brief profile
of the Directors proposed to be appointed /
re-appointed is made available, as a part of
the Notice convening 7^th AGM.

II. Key Managerial Personnel

As of the date of this report, the Key Managerial
Personnel of the Company, in accordance with
the provisions of Section 2(51) and Section 203
of the Companies Act 2013, include Mr. Nikhil
P. Desai, serving as Chief Executive Officer &
Managing Director, Mr. Nitesh H. Medh as Chief
Financial Officer and Mrs. Priyanka A. Chaurasia
as Company Secretary & Compliance Officer.

Familiarisation Programme for Independent
Directors / Non-Executive Directors

The Members of the Board of the Company
are afforded many opportunities to familiarise
themselves with the Company, its Management
and its operations. The Directors are provided
with all the documents to enable them to have a
better understanding of the Company, its various
operations and the industry in which it operates.

All the Independent Directors of the Company are
made aware of their roles and responsibilities at the
time of their appointment through a formal letter of
appointment, which also stipulates various terms
and conditions of their engagement.

Executive Directors provide an overview of the
operations and familiarize the new Non-Executive
Directors on matters related to the Company’s
values and commitments. They are also introduced
to the organization structure, constitution of various
committees, board procedures, risk management
strategies, etc.

Pursuant to Regulation 25(7) of the SEBI (Listing
Obligations and Disclosure Requirements)
Regulations, 2015, the Company imparted various
familiarisation programmes for its Directors
including periodic review of Investments of the
Company at Finance Investment Committee
Meetings, Regulatory updates, Industry Outlook,
Business Strategy at the Board Meetings and
changes with respect to the Companies Act,
Taxation and other matters, SEBI (Listing Obligations
and Disclosure Requirements) Regulations, 2015,
Framework for Related Party Transactions, etc. at the
Audit Committee Meetings, Economic Environment &
Global Scenario, Frontier Risks, Business Entity Risks,
etc. at the Risk Management Committee Meetings,
Products Launch and their Showcase etc. The

details as required under Regulation 46 of the SEBI
(Listing Obligations and Disclosure Requirements)
Regulations, 2015 are available on the website of your
Company at https://www.aarti-surfactants.com/
independent-directors.htm.

Meetings of Board & Committees

The details of the Board of Directors and
Committees along with their composition, number
of meetings held and attendance at the meetings
during the FY2024-2025 are provided in the
Corporate Governance Report which forms part of
this Annual Report. The intervening gap between
the Board/Committee’s Meetings was within the
period prescribed under the Companies Act, 2013
and the SEBI (Listing Obligations and Disclosure
Requirements) Regulations, 2015.

Directors’ Responsibility Statement

Pursuant to the provisions of Section 134(3)(c) and
134(5) of the Companies Act, 2013 the Directors, to
the best of their knowledge and ability, confirm that
for the year ended March 31, 2025 that;

a) in the preparation of the annual financial
statements for the year ended March 31, 2025,
the applicable accounting standards have been
followed and there are no material departures;

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 profit 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 on a
going concern basis;

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

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

10. ANNUAL PERFORMANCE EVALUATION

The Company has a structured assessment
process, wherein the Nomination and Remuneration
Committee of the Company has laid down the
criteria of performance evaluation of the Board,
its Committees and the Directors, including the
Chairman. The evaluations are carried out in a
confidential manner and each member of the
Board provides his/her feedback by rating based
on various metrics. Feedback is collected through a
structured questionnaire.

Under the two layers evaluation process,
Independent Directors evaluate the performance of
the Board of Directors, Non-independent Directors
and the Chairman of the Company. Later the Board
of Directors evaluate performance of the Board
itself, its Committees and the Board members.

The performance evaluation during the year
highlighted an overall better rating in areas such
as Board procedure, participation, and leadership.
The Board demonstrated strong independence and
integrity, with full participation in the evaluation
process. Improvements were noted in Board
Committees, particularly in risk management and
ESG compliance, with effective communication
between executive and non-executive members.
Suggestions for further enhancement included
a focus on emerging risks (digital, cyber, and
geopolitical), more frequent formal communication
regarding budget impacts, and additional training
sessions to keep Directors updated on industry
developments. The Board and Management are
committed to implementing these measures to
enhance governance effectiveness in the current
financial year.

11. AUDIT COMMITTEE

The details of the composition of the Audit
Committee, their terms of reference, meetings held,
etc. are provided in the Corporate Governance
Report, which forms part of this Report. During
the year, there were no cases where the Board
had not accepted any recommendation of the
Audit Committee.

12. AUDITORS

Statutory Auditor and their Report

Pursuant to the provisions of Section 139 of the
Companies Act, 2013, the Members at the 1^st Annual
General Meeting (“AGM”) of the Company held
on October 21, 2019, appointed Gokhale & Sathe,

Chartered Accountants (Firm Registration No.
103264W) as the Statutory Auditors of the Company
for a term of five (5) years. Accordingly, their first
term concluded at the 6^th AGM.

Based on the recommendation of the Audit
Committee, the Board of Directors, at its meeting
held on April 22, 2024, approved the re-appointment
of Gokhale & Sathe, Chartered Accountants (Firm
Registration No. 103264W) as the Statutory Auditors
of the Company for a second term of five (5) years,
commencing from the conclusion of the 6^th AGM up
to the conclusion of the 11^th AGM to be held in the year
2029. The said re-appointment was subsequently
approved by the Members at the 6^th AGM held on
August 14, 2024.

Gokhale & Sathe have consented to act as
Statutory Auditors and confirmed their eligibility for
re-appointment in terms of Section 141 and other
applicable provisions of the Companies Act, 2013. The
Audit Committee and the Board recommended their
re-appointment after reviewing their performance
during the first term, and considering factors such
as independence, industry experience, professional
expertise, and the quality of audit. The Audit
Committee periodically reviews the independence
of the Statutory Auditors through quarterly
affirmations, monitoring of non-audit services, and
internal checks and balances designed to mitigate
any potential conflict of interest.

The Auditor’s Report on the financial statements of
the Company for the financial year ended March
31, 2025 forms part of the Annual Report. The said
report was issued by the Statutory Auditors with
an unmodified opinion and does not contain any
qualifications, reservations or adverse remarks.

During the year under review, the Auditors have
not reported any fraud under Section 143(12) of the
Companies Act, 2013 and therefore disclosure of
details under Section 134(3)(ca) of the Companies
Act, 2013 is not applicable.

Cost Auditor and their Report

In terms of Section 148 of the Act read with the
Companies (Cost Records and Audit) Rules,
2014, the Company is required to maintain cost
accounting records and have them audited every
year. Accordingly, the Board at its meeting held on
May 12, 2025, based on the recommendation of the
Audit Committee, appointed M/s. PHS & Associates,
Cost Accountant (firm registration no.: 101038), as
the Cost Auditor of the Company to conduct audit
of the cost records for the financial year ending

March 31, 2025. A remuneration of H 1,00,000/-
(Rupees One Lakh only) plus applicable taxes and
out of pocket expenses, has been fixed for the Cost
Auditor, subject to the ratification of such fees by
the Members at the 7^th AGM. Accordingly, the matter
relating to ratification of the remuneration payable
to the Cost Auditor for the financial year ending
March 31, 2025 forms part of the Notice of the 7^th
AGM. The Company has received requisite consent
and certificate of eligibility from PHS & Associates.

During the year under review, the Cost Auditor has
not reported any fraud under Section 143(12) of the
Companies Act, 2013 and therefore disclosure of
details under Section 134(3)(ca) of the Companies
Act, 2013 is not applicable.

The Company has maintained cost records as
specified under section 148(1) of the Act.

Secretarial Auditor and their Report

Pursuant to the provisions of Section 204 of the
Companies Act, 2013 and rules made thereunder,
the Company had appointed CS Sunil M. Dedhia
(COP No. 2031), Proprietor of Sunil M. Dedhia & Co.,
Company Secretary in Practice to undertake the
Secretarial Audit of the Company.

Pursuant to provisions of Section 204(1) of the
Companies Act, 2013 and Regulation 24A of the SEBI
(Listing Obligations and Disclosure Requirements)
Regulations, 2015, the Secretarial Audit Report for
the Financial Year ended March 31, 2025 issued
by CS Sunil M. Dedhia (COP No. 2031), of Sunil M.
Dedhia & Co. Company Secretary in Practice and
the Secretarial Auditor of the Company is annexed
as ‘Annexure B’ and forms an integral part of this
Report. During the year under review, the Secretarial
Auditor had not reported any fraud under Section
143(12) of the Act.

There is no qualification, reservation or adverse
remark or disclaimer made by the Auditor
in their report.

Pursuant to the amendments to the SEBI (Listing
Obligations and Disclosure Requirements)
Regulations, 2015, the Board, on the recommendation
of the Audit Committee, has approved and
recommended to the Members the appointment
of M/s. Parikh & Associates (Firm’s Registration
no: P1988MH009800) (PR No. 6556/2025), as the
Secretarial Auditor of the Company, for a period of
five consecutive years commencing from April 1,
2025 to March 31, 2030.

Brief details as required under the SEBI (Listing
Obligations and Disclosure Requirements)
Regulations, 2015, are provided in the Notice of
7^th AGM. The Directors recommend the same for
approval by the Members.

13. STRATEGIC RISK MANAGEMENT

Managing risk is not just a compliance requirement, it
is a strategic priority that underpins our governance
and long-term sustainability. A well-defined
framework enables us to identify potential threats,
implement effective controls, and ensure operational
continuity. By fostering a culture of risk awareness
across all levels, we strengthen our ability to deliver
consistent value to our stakeholders.

We are committed to leveraging technology
to enhance risk responsiveness and process
efficiency. Through the continuous review of
business operations, adoption of modern digital
tools, and process digitization—with strong internal
controls—we ensure smooth integration with our
customers, consumers, and stakeholders, thereby
improving agility and resilience. The Company
has implemented a comprehensive cybersecurity
strategy based on the principles of Identify, Protect,
Detect, Respond, and Recover. These measures are
designed to safeguard digital assets and data from
evolving cyber threats and security breaches.

To oversee and strengthen our risk management
practices, the Company has constituted a dedicated
Risk Management Committee. The Committee
supports the Board by evaluating the effectiveness
of risk management systems and ensuring
alignment with regulatory requirements, including
those specified under the SEBI (Listing Obligations
and Disclosure Requirements) Regulations, 2015.
Details regarding the composition, roles, and
meeting attendance of the Committee are provided
in the Corporate Governance Report.

In terms of the applicable provisions of the SEBI
(Listing Obligations and Disclosure Requirements)
Regulations, 2015, your Board has adopted a
Risk Management Policy, which is available on
the Company’s website at https://www.aarti-
surfactants.com/policies.htm.

14. INTERNAL FINANCIAL CONTROLS WITH
REFERENCE TO THE FINANCIAL STATEMENTS

The Company has established a robust system of
internal financial controls commensurate with its
size and the nature of its operations. These controls

are designed to provide reasonable assurance
regarding the accuracy and reliability of financial
and operational information, compliance with
applicable accounting standards and statutory
requirements, safeguarding of assets against
unauthorized use or disposition, proper authorization
of transactions, and adherence to corporate policies
and procedures.

The Internal Auditor prepares an annual audit
plan in consultation with the Management and
the Audit Committee, prioritizing audit activities
based on the criticality of system and process
gaps. Reviews are conducted on an ongoing basis
under a comprehensive risk-based audit plan,
which is approved by the Audit Committee at the
beginning of each financial year. The Internal Audit
team reports to the Management and the Audit
Committee on compliance with internal controls,
efficiency and effectiveness of operations, and
key process risks.

The Audit Committee meets on a quarterly basis to
review Internal Audit reports, monitor implementation
of action plans for significant audit findings, and
ensure adherence to the approved audit plan.

The Statutory Auditors’ Report on Internal Financial
Controls, as required under Clause (i) of sub-section
3 of Section 143 of the Companies Act, 2013, forms
part of the Independent Auditors’ Report annexed to
this Annual Report.

15. RELATED PARTY TRANSACTIONS

The Company has a Policy on Materiality of Related
Party Transactions and dealing with Related
Party Transactions which is uploaded on the
Company’s website at https://www.aarti-
surfactants.com/policies.htm.

All the transactions with the related parties carried
out during the FY 2024-2025 are in ordinary course
of business and on an arm’s length basis. There are
no materially significant related party transactions
made by the Company with Promoters, Directors,
Key Managerial Personnel or their relatives which
may have potential conflict of interest with the
Company at large.

The related party transactions are approved by the
Audit Committee. Omnibus approval is obtained for
the transactions that are foreseen and repetitive in
nature. A statement of related party transactions
is presented before the Audit Committee on a
quarterly basis, specifying the nature, value and
terms and conditions of transactions. The details

of related party transactions are provided in the
accompanying financial statements.

In terms of Regulation 23 of the SEBI (Listing
Obligations and Disclosure Requirements)
Regulations, 2015, the Company submits details of
related party transactions on a consolidated basis
as per the specified format to stock exchanges on a
half yearly basis.

Particulars of contracts or arrangements made
with related parties

During the year under review, there were no
transactions for which consent of the Board was
required to be taken in terms of Section 188(l)
of the Companies Act, 2013 and accordingly, no
disclosure is required in respect of the related
party transactions in Form AOC-2 under Section
134(3)(h) of the Companies Act, 2013 and rules
framed thereunder. Further, there were no material
related party transactions in terms of the SEBI
(Listing Obligations and Disclosure Requirements)
Regulations, 2015 requiring approval of the Members.

16. VIGIL MECHANISM / WHISTLE BLOWER
POLICY

Pursuant to Section 177 of the Companies Act, 2013
and Regulation 22 of the SEBI (Listing Obligations
and Disclosure Requirements) Regulations, 2015,
the Company has established a Vigil Mechanism,
also referred to as the Whistle-Blower Policy. This
mechanism provides a secure and confidential
platform for employees, directors, and stakeholders
to report genuine concerns relating to unethical
behaviour, actual or suspected fraud, violation of the
Company’s Code of Conduct, leak or suspected leak
of Unpublished Price Sensitive Information (UPSI),
bribery, corruption, or any other form of misconduct,
without fear of retaliation or victimization.

The policy lays down procedures for addressing
such disclosures and ensures that all matters are
investigated in a fair and objective manner. Adequate
safeguards are in place to protect whistle-blowers
against unfair treatment or disciplinary action.
Further, employees and stakeholders have direct
access to the Chairman of the Audit Committee for
reporting concerns.

The Audit Committee periodically reviews the
functioning of the Vigil Mechanism to ensure its
effectiveness and alignment with best corporate
governance practices. It is also responsible for
monitoring complaints received and ensuring
appropriate action is taken for their resolution.

During the financial year under review, no
complaints or disclosures were received under the
Vigil Mechanism, reaffirming the Company’s strong
commitment to ethical conduct, transparency, and
accountability in all its operations.

The Vigil Mechanism / Whistle-Blower Policy is
available on the Company’s website at https://
www.aarti-surfactants.com/policies.htm.

17. NOMINATION AND REMUNERATION COMMITTEE

Your Company has constituted a Nomination and
Remuneration Committee (nrc) of the Board, which
performs its functions in accordance with the provisions
of the Companies Act, 2013, the SEBI (Listing Obligations
and Disclosure Requirements) Regulations, 2015, and
such other responsibilities as may be entrusted by
the Board from time to time. The composition of the
Committee, details of meetings held, and attendance
of Members are provided in the Corporate Governance
Report forming part of this Annual Report.

The Company has formulated a comprehensive
Nomination and Remuneration Policy in accordance
with the provisions of Section 178 of the Companies Act,
2013 and Regulation 19 of the SEBI (Listing Obligations
and Disclosure Requirements) Regulations, 2015.
The Policy outlines the criteria for appointment
and qualification of Directors, Key Managerial
Personnel (kmp), and Senior Management, as well
as their remuneration structure, evaluation, and
succession planning. The policy is available on the
Company’s website at https://www.aartisurfactants.
com/policies.htm.

In addition, the Committee has formulated a
separate Policy on Board Diversity, which is also
available on the Company’s website at the same link.

18. AARTI SURFACTANTS LIMITED EMPLOYEE
STOCK OPTION PLAN 2024 (‘ESOP
2024’/’’Plan’)

Your Company has implemented the Aarti
Surfactants Limited Employee Stock Option Plan
2024 (‘ESOP 2024’/’’Plan’), which is administered by
the Nomination and Remuneration Committee. The
Plan provides for the grant of stock options to eligible
employees, in compliance with the provisions of the
SEBI (Share Based Employee Benefits and Sweat
Equity) Regulations, 2021.

Your Company has received a certificate from CS
Sunil M. Dedhia (COP No. 2031), of Sunil M. Dedhia
& Co. Company Secretary in Practice that ESOP
2024 has been implemented in accordance with

the provisions of the SEBI (Share Based Employee
Benefits and Sweat Equity) Regulations, 2021 and the
resolution passed by the Shareholders. Any request
for inspection of the said Certificate may please be
sent to investors@aarti-surfactants.com.

19. PARTICULARS OF EMPLOYEES AND RELATED
DISCLOSURES

The information required under Section 197(12) of
the Companies Act, 2013 read with Rule 5(1) of the
Companies (Appointment and Remuneration of
Managerial Personnel) Rules, 2014 forms part of this
Report and annexed as ‘Annexure C’.

As per first proviso to Section 136(1) of the Act and
second proviso of Rule 5(2) of the Companies
(Appointment and Remuneration of Managerial
Personnel) Rules, 2014, the report and financial
statements are being sent to the members of the
Company excluding the statement of particulars of
employees under Rule 5(2) to ensure confidentiality
and compliance with applicable provisions. These
documents are available for inspection during
business hours until the date of the forthcoming
AGM at the Company’s Registered Office and also
in electronic form. Members who wish to inspect
the same may write to the Company Secretary at
investors@aarti-surfactants.com.

20. MATERIAL DEVELOPMENTS IN HUMAN
RESOURCES / INDUSTRIAL RELATIONS FRONT,
INCLUDING NUMBER OF PEOPLE EMPLOYED

The Company firmly believes that employees are its
most valuable asset and a key source of competitive
advantage. In line with this philosophy, we continue
to strengthen our employee engagement practices
aimed at fostering a culture of trust, collaboration,
and inclusiveness. Our engagement initiatives
are designed to create a sense of belonging
and shared purpose while enhancing the overall
employee experience.

We actively invest in capability building through
structured training and leadership development
programs, ensuring that employees are
well-prepared to meet evolving business
challenges. Continuous communication and
feedback mechanisms provide employees with
opportunities to participate in decision-making
processes, thereby reinforcing a culture of openness
and transparency. Furthermore, our wellness and
work-life balance programs support holistic
growth and help employees align their professional
aspirations with personal well-being.

Through these initiatives, the Company seeks
to nurture a motivated, committed, and future-
ready workforce, recognizing that organizational
growth is directly linked to the growth and
engagement of its people.

Recognition and Reward

Our employees play a pivotal role in the Company’s
sustained success. By nurturing talent, fostering
innovation, and appropriately recognizing
contributions, we encourage our people to deliver
their best. We remain committed to creating a
culture of safety, well-being, and engagement
through various structured initiatives:

a) National Safety Day and Week includes a series
of activities such as lighting the ceremonial
lamp (deep prajwalan), displaying banners,
pinning safety badges, awarding the best
department for housekeeping and safety
norms etc, making safety pledges, and
explaining the National Safety Day theme.
These activities underscore our commitment to
safety and create a sense of community and
shared responsibility.

b) Competitions related to safety, including safety
belt wearing contests, poster, slogan, poem,
and essay contests, quizzes and safety skid
competitions. These competitions not only
engage employees but also raise awareness
about safety practices and encourage
proactive safety measures.

c) Our on-job safety training sessions cover crucial
topics such as the use of personal protective
equipment (ppe), emergency evacuation
procedures, material handling, electrical safety,
housekeeping, and basic firefighting. These
training sessions equip our employees with the
necessary skills and knowledge to maintain a
safe working environment.

d) Engaged workforce is the most productive source
for the organisation in their success, delivering
the best of their abilities with greater sense of
belongingness and commitment at their jobs.
We at ASL believe every small step contributes
value to employees’ Work-Life-Balance.
Celebrating employees’ special moments
(Birthdays/ Anniversary/ Regional Festivals),
extending support to foster intellectual
growth through various Learning and
Development initiatives to nurture conviviality
and happiness culture at workplace.

Through these comprehensive initiatives, we
aim to create a workplace where employees feel
recognized, valued, and motivated to contribute to
our collective success. By investing in our employees
and fostering a positive work environment, we
ensure that ASL remains a dynamic, innovative, and
successful organization.

As on March 31, 2025, the Company had 374
permanent employees on the rolls.

21. CORPORATE GOVERNANCE

Your Company believes that effective leadership,
robust policies, processes and systems and a rich
legacy of values form the hallmark of our best
corporate governance framework. The Board, in
conjunction with the management, sets values of
your Company and drives the Company’s business
with these principles. These ethics and values are
reflected in Company’s culture, business practices,
disclosure policies and relationship with its
stakeholders. These ethics and values is practiced
by Company, which is at par with best international
standards and good corporate conduct.

Pursuant to Regulation 34 of the SEBI (Listing
Obligations and Disclosure Requirements)
Regulations, 2015, a Report on Corporate Governance
is annexed hereto forming part of this report. The
requisite certificate from M/s Gokhale & Sathe,
Chartered Accountants is attached to the Report on
Corporate Governance.

22. ENVIRONMENT HEALTH AND SAFETY

At Aarti Surfactants Limited, we accord the highest
priority to Environment, Health, and Safety (ehs)
across all operations. We are committed to
regulatory compliance, sustainable practices, and
the well-being of our workforce, stakeholders, and
the communities in which we operate.

During the year, we strengthened our EHS framework
through regular risk assessments, hazard identification,
and mitigation measures. Comprehensive training
programs were conducted to instill a culture of safety,
while investments in advanced technologies and state-
of-the-art equipment further enhanced workplace
safety and environmental stewardship.

Our proactive approach includes periodic audits,
robust emergency preparedness plans, and
continuous improvement initiatives driven by
performance metrics and stakeholder feedback.
By focusing on employee well-being, minimizing

environmental impact, and fostering transparency,
the Company remains committed to upholding
the highest standards of EHS and industry¬
leading practices.

23. SUSTAINABILITY

At ASL, sustainability is central to our corporate
strategy and operational philosophy. We are
committed to advancing sustainable practices
across our value chain through innovation,
responsible sourcing, and resource efficiency. Our
approach goes beyond regulatory compliance,
focusing on reducing environmental impact while
creating long-term value for stakeholders.

Key initiatives include optimizing manufacturing
processes to lower energy consumption
and emissions, implementing robust waste
management protocols, and promoting circular
economy principles through strategic partnerships.
By embedding sustainability into our business model,
we enhance operational resilience and reinforce our
position as a responsible corporate citizen.

Guided by a long-term vision, we remain
committed to transparency and accountability in
our sustainability journey, recognizing that today’s
actions shape tomorrow’s opportunities. Together
with our stakeholders, we aim to drive positive
change and set new benchmarks for sustainability
within the specialty surfactants industry.

24. BUSINESS RESPONSIBILITY & SUSTAINABILITY
REPORTING (BRSR)

The SEBI (Listing Obligations and Disclosure
Requirements) Regulations, 2015, stipulate that the
top 1000 listed companies by market capitalization
must include a Business Responsibility &
Sustainability Report (BRSR) in their Annual Report.
This requirement aims to enhance transparency
and accountability regarding the environmental,
social and governance (ESG) practices of these
companies. However, your Company is not ranked
amongst the top 1000 listed entities for the fiscal year
2024-2025. Consequently, we are not required to
include the BRSR in our Annual Report for this period.

25. THE SEXUAL HARASSMENT OF WOMEN AT
WORKPLACE (PREVENTION, PROHIBITION
AND REDRESSAL) ACT, 2013

The Company believes that every woman
employee should have the opportunity to work in an
environment free from any conduct which can be

considered as Sexual Harassment. The Company
has Zero Tolerance towards sexual harassment
at the workplace.

The Company is committed to treating every
employee with dignity and respect. The Company
has formulated a policy on ‘Protection of Women’s
Rights at Workplace’ as per the provisions of
‘The Sexual Harassment of Women at Workplace
(Prevention, Prohibition & Redressal) Act, 2013 and
Rules, 2013’ (POSH Act and rules). This Policy is
available on the website of the Company at www.
aarti-surfactants.com/policies.htm. The POSH Policy
is gender inclusive and the framework ensures
complete anonymity and confidentiality.

This policy, supported by an Internal Complaint
Committee, is structured in accordance with Section
4 of The Sexual Harassment of Women at Workplace
(Prevention, Prohibition and Redressal) Act, 2013. It
underscores our proactive stance in addressing and
mitigating issues of sexual harassment, ensuring a
safe and supportive atmosphere for all employees.

Reflective of the efficacy of these measures, it is
noteworthy that during the year under review, there
were no cases filed pursuant to the Sexual Harassment
of Women at Workplace Act, 2013. This underscores
our ongoing commitment to maintaining a respectful
and secure work environment.

During the year, the Company organised
sensitization and awareness programs vide
inductions for new joiners, e-learning modules for all
employees, trainees, associates including sending
emailers etc. to sensitise all employees to conduct
themselves in a professional manner.

26. COMPLIANCE UNDER MATERNITY BENEFIT
ACT, 1961

Your Company has complied with the applicable
provisions of the Maternity Benefit Act, 1961. All
eligible women employees have been extended the
benefits as prescribed under the Act. The Company
remains committed to supporting working mothers
and promoting a gender inclusive workspace.

27. CORPORATE SOCIAL RESPONSIBILITY

The Company has constituted a Corporate Social
Responsibility (csr) Committee in terms of the
requirements of Section 135 of the Companies Act, 2013
read with the rules made thereunder. The composition,
detailed terms of reference of the CSR Committee,
attendance at its meetings and other details have

been provided in the Corporate Governance Report.
The primary role of this committee is to approve
the CSR activities to be undertaken, allocate the
necessary expenditure and oversee the execution and
effectiveness of these initiatives.

The Board of Directors, along with the CSR Committee,
actively reviews and monitors the CSR activities
implemented by the Company. During the year under
review, our CSR initiatives were executed in accordance
with the annual action plan previously approved by the
Board. These activities, which are distinctly separate
from our normal business operations, focus on pivotal
and relevant areas such as livelihood and financial
inclusion, animal welfare, agriculture, community
development, education, and healthcare. Our aim
is to continue focusing on these areas to achieve
meaningful and positive outcomes that contribute
to the Sustainable Development Goals.

Your Company’s CSR philosophy is anchored on this
core purpose of making a difference to the lives of
all its stakeholders to help them achieve their full
potential. Your Company believes that economic
value and social value are inter-linked, and it has
a commitment towards the inter-dependent
ecosystem consisting of various stakeholders.

Furthermore, our CSR policy outlines the guidelines
and processes for undertaking CSR activities and
the same is available on the Company’s website at
www.aarti-surfactants.com/policies.htm ensuring
transparency and accessibility in how we approach
our social responsibilities.

The disclosures required to be given under Section
135 of the Act read with Rule 8(1) of the Companies
(Corporate Social Responsibility Policy) Rules,
2014 are given in ‘Annexure D’ forming part of
this Board Report.

28. ENERGY CONSERVATION, TECHNOLOGY
ABSORPTION AND FOREIGN EXCHANGE
EARNINGS AND OUTGO

The particulars relating to conservation of energy,
technology absorption, and 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 provided
in ‘Annexure E’ forming part of this Board’s Report.

29. SECRETARIAL STANDARDS

The applicable Secretarial Standards, i.e. SS-1 and
SS-2, relating to ‘Meetings of the Board of Directors’
and ‘General Meetings’ respectively issued by
the Institute of Company Secretaries of India and
notified by the Ministry of Corporate Affairs, have
been duly complied by your Company.

30. DETAILS OF DEPOSITS

During the year under review, your Company has
neither invited nor accepted any deposits from
the public falling within the ambit of Section 73 of
the Companies Act, 2013 and the rules framed
thereunder. The requisite return with respect to
amount(s) not considered as deposits has been
filed with Registrar of Companies.

31. SIGNIFICANT AND MATERIAL ORDERS PASSED
BY THE REGULATORS

During the year under review, no significant or
material orders were passed by Regulators, Courts, or
Tribunals which could impact the Company’s going
concern status or its future operations. However,
Members’ attention is invited to the Statement on
Contingent Liabilities and Commitments appearing
in the Notes to the financial statements.

32. ANNUAL RETURN

Pursuant to Section 92(3) read with Section 134(3)(a)
of the Act, the Annual Return as on March 31, 2025 is
available on the Company’s website at https://www.
aarti-surfactants.com/annual-return.htm.

33. TRANSFER TO INVESTOR EDUCATION AND
PROTECTION FUND (IEPF)

There is no amount due, to be transferred to
the IEPF account.

34. COMPLIANCE MANAGEMENT SYSTEM

In pursuit of strengthening our governance
framework and ensuring a proactive approach
to regulatory adherence, the Company has a
Compliance Management Tool as part of its
enterprise-wide risk management initiative.

This digital tool is designed to systematize and
streamline compliance tracking across all applicable
laws, regulations, and industry mandates. It enables
real-time monitoring, timely alerts, and seamless
documentation, significantly reducing the chances
of inadvertent non-compliance.

By automating compliance processes and
integrating accountability at various levels, the tool
acts as a strategic enabler in:

• Curtailing regulatory risks,

• Enhancing transparency and audit-readiness,

• Enabling prompt response to statutory changes,

• Promoting a culture of responsibility and control.

This initiative reflects the Company’s commitment to
institutionalizing compliance, minimizing exposure
to penalties or reputational damage, and upholding
the highest standards of corporate governance.

35. STATUTORY INFORMATION AND OTHER
DISCLOSURES

Neither the CEO & Managing Director nor the
Executive Director received any remuneration or
commission from the subsidiary of your Company.

Your Directors state that no disclosure or reporting
is required in respect of the following items as there
were no transactions / events on these items during
the year under review:

1) Issue of equity shares with differential rights as
to dividend, voting or otherwise.

2) Issue of Shares (including Sweat Equity
Shares) to employees of the Company
under any Scheme.

3) Voting rights which are not directly exercised
by the employees in respect of shares for the
subscription / purchase of which loan was
given by the Company (as there is no scheme
pursuant to which such persons can beneficially
hold shares as envisaged under section 67(3)
(c) of the Companies Act, 2013).

4) There are no material changes and
commitments affecting the financial position of
your Company, which have occurred between
the end of FY25 and the date of this report.

5) There has been no change in the nature of
business of your Company.

6) There was no application made and proceeding
initiated / pending by any Financial and/or
Operational Creditors against your Company
under the Insolvency and Bankruptcy Code, 2016.

7) The Company has not made any one-time
settlement for loans taken from the Banks or
Financial Institutions, and hence the 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 is not applicable.

8) There was no revision of financial statements
and Board’s Report of your Company during
the year under review.

36. ACKNOWLEDGEMENT

The Board of Directors places on record its sincere
appreciation for the dedicated services rendered
by the employees of the Company at all levels and
the constructive cooperation extended by them.
Your Directors would like to express their grateful
appreciation for the assistance and support by all
Shareholders, Government Authorities, Auditors,
Financial Institutions, Customers, Employees,
Suppliers, other business associates and various
other stakeholders.

By order of the Board of Directors

Mulesh M. Savla

Chairman

Mumbai / August 05, 2025 DIN: 07474847