The Board of Directors ("Board") are pleased to present the Eighth Annual Report of Aarti Surfactants Limited ("ASL" or
"Company" or "your Company") together with Audited Financial Statements (Standalone and Consolidated) for the
financial year ended March 31, 2026.

1. FINANCIAL PERFORMANCE AND SUMMARY

The Company's Financial performance for the year ended March 31, 2026, is summarised below:

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, 2026.

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 Re. 1.00/- (@10%) per share subject to approval
of the Shareholders at the ensuing 8th Annual
General Meeting ("AGM"), for the year 2025-2026,
resulting in a total payout of H 84,70,905 (Rupees
Eighty-Four Lakhs Seventy Thousand Nine Hundred
and 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 athttps://www.aarti-surfactants.
com/policies.htm

5. SHARE CAPITAL

Your Company's Equity Share Capital as on March 31, 2026, stood as follows:

During the year 2025-2026, there was no change
in the authorised share capital of the Company.
However, the Company allotted 6,500 equity shares
of face value of f10 each, aggregating to f65,000/-
(Rupees Sixty-Five Thousand Only), pursuant to the
terms of the Aarti Surfactants Limited Employee
Stock Option Plan, 2024 ('ESOP 2024'/'Plan').

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

6. Credit Rating

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.

7. DETAILS OF SUBSIDIARY / ASSOCIATE / JOINT
VENTURE COMPANIES

As on March 31, 2026, the Company has one (l) wholly
owned subsidiary, named as 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 athttps://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 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 forms
an integral part of this report.

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 athttps://www.aarti-surfactants.com/
financial-information.htmThese documents are
also available at the Company's Registered Office
for inspection during business hours until the date
of the forthcoming AGM and 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.

8. PARTICULARS OF LOANS, GUARANTEES AND
INVESTMENTS

Particulars of loans given, investments made,
guarantees given and securities provided during
the year under review and as covered under
the provisions of Section 186 of the Companies
Act, 2013 have been disclosed in the notes to the
standalone financial statements forming part of
the Annual Report.

9. 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.

10. DIRECTORS & KEY MANAGERIAL PERSONNELS
(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 appropriately constituted to ensure an optimal
balance of Executive and Non-Executive Directors,
including Independent Woman Director(s). The
composition of the Board is in accordance with
the applicable provisions of the Companies
Act, 2013 and the SEBI (Listing Obligations and
Disclosure Requirements) Regulations, 2015, thereby
ensuring adherence to the prescribed corporate
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,
2026, the Board of Directors, comprises of Eight
Directors (with Two Executive Directors, Three Non¬
Executive Non-Independent Directors and Three
Independent Directors).

The Board is committed to providing effective
strategic guidance and discharging its fiduciary
responsibilities with due diligence, while
safeguarding the long-term interests of the
Company and its stakeholders. Further, all the
Directors of the Company have confirmed that
they are not disqualified from being appointed or
continuing as Directors under 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

The Independent Directors held separate meeting
to review and assess the performance of the Non¬
Independent Directors and the overall functioning of
the Board and its Committees.

Changes in Directors and Key Managerial
Personnel

I. Appointment / Re-appointment of Directors

Pursuant to the Company's Policy on Nomination
and Remuneration Committee ("NRC Policy"),
the Board, at its meeting held on August 5,
2025, based on the recommendation of the
Nomination and Remuneration Committee
and after evaluating the balance of skills,

knowledge, experience and expertise available
on the Board, as well as the qualifications,
experience and expertise of the respective
Directors, approved and recommended to the
Members the following matter relating to the
appointment of Director(s):

a) 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.

b) 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.

Subsequently, the Members approved the
aforesaid appointments by way of Special
Resolution at the 7th Annual General Meeting of
the Company held on September 23, 2025.

Further, subsequent to the close of the financial
year ended March 31, 2026, based on the
recommendations of the Nomination and
Remuneration Committee, the Board, at its
Meeting held on August 22, 2026, approved and
recommended the following appointments/
re-appointments for consideration and
approval of the Members at the 8th Annual
General Meeting of the Company to be held on
September 29, 2026:

a) Re-appointment of Mr. Nikhil P. Desai (DIN:
01660649) as CEO & Managing Director of
the Company, for a period of 5 (Five) years
with effect from August 20, 2027.

b) Re-appointment of Mr. Santosh M. Kakade
(DIN: 08505234) as an Executive Director of
the Company, for a period of 5 (Five) years
with effect from August 20, 2027.

c) Appointment of Prof. Vandana B. Patravale

(DIN: 09200693), as Non-Executive

Independent Director of the Company for
a period of 5 (Five) years with effect from
August 22, 2026.

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.
Dattatray Sidram Galpalli (DIN: 01853463),

Non-Executive Director, is liable to retire
by rotation at the ensuing Annual General
Meeting. Mr. Galpalli, 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 provided, as a part of the Notice
convening 8th AGM of the Company.

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 CEO & Managing Director,
Mr. Nitesh H. Medh as Chief Financial Officer
and Mrs. Priyanka A. Chaurasia as Company
Secretary & Compliance Officer.

Familiarisation Programme

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 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 the
Company athttps://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 FY 2025-2026 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 Section 134(5) of the Companies Act, 2013, the
Directors, to the best of their knowledge and belief
and based on the information and explanations
available to them, confirm that, for the financial year
ended March 31, 2026:

a) in the preparation of the annual financial
statements for the year ended March 31, 2026,
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.

11. ANNUAL BOARD 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.

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.

Under the fast-changing regulatory regime,
business scenario and Industry trend, an annual
performance evaluation process aims to improve
the effectiveness of the Board, its committee's and
the individual members.

With a specific focus on functioning of the Board,
Individual Roles & Responsibilities; the criterion
of assessment includes; Board Composition,
governance procedures, managing conflict of
interest, contribution to Company's long-term
strategy, flow of information on key strategic
matters, investment / Capex, opportunities, quality
of discussions at the meeting, leadership, succession
planning, adequacy of risk management measures
and overall value creation to all the stakeholders.

Rating given by the individual member against each
criterion of assessment is kept strictly confidential
and the abstract / summary is presented to the
Independent Directors and the Board of Directors
along with the suggestions from the members
for deliberation/ discussion on improvements
wherever required.

The Board of Directors expressed their satisfaction
with the outcome of evaluation and the process
followed thereof.

12. 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.

13. AUDITORS

Statutory Auditor and their Report

In accordance with the provisions of Section 139 of
the Companies Act, 2013, the members at the 6th
Annual General Meeting held on August 14, 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 6th AGM and continuing
until the conclusion of the 11th AGM to be held
in the year 2029.

There are no qualifications, reservations or adverse
remarks or disclaimer made by the Auditor in their
report. The Auditor's Report is enclosed with the
financial statements forming part of this Annual
Report. The Auditors of the Company have not
reported any instances of fraud committed against
the Company by its officers or employees as specified
under Section 143(12) of the Companies Act, 2013.

Cost Auditor and their Report

In terms of the Section 148 of the Companies Act,
2013 read with the Companies (Cost Record and
Audit) Rules, 2014, the Company is required to
maintain cost accounting records and have them
audited every year.

The Board on the recommendation of the Audit
Committee has appointed PHS & Associates, Cost
Accountant (Firm Registration No. 101038) as Cost
Auditor of the Company for FY 2026-2027 under
Section 148 and all other applicable provisions of
the Act. Shareholder's approval is being sought
for ratification of the Remuneration proposed to
be paid to PHS & Associates, Cost Auditor of the
Company in respect of Cost Audit for the financial
year ending March 31, 2027, as mentioned in the
Notice convening the Annual General Meeting.

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 Parikh & Associates, Practicing
Company Secretaries (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.

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, 2026, issued by
Parikh & Associates, Practicing Company Secretaries
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 Companies Act, 2013.

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

14. 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.

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 athttps://www.aarti-
surfactants.com/policies.htm.

15. 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.

16. 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 athttps://www.aarti-surfactants.
com/policies.htm

All the transactions with the related parties carried
out during the FY 2025-2026 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 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(1)
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.

17. 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, re-affirming 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 athttps://
www.aarti-surfactants.com/policies.htm.

18. 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.aarti-surfactants.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.

19. 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 was administered by the
Nomination and Remuneration Committee. The Plan
provided 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 Parikh
& Associates, Practicing Company Secretaries,
confirming 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. Members desirous of inspecting the
said certificate may send their request toinvestors^
aarti-surfactants.com.

20. 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
Companies Act, 2013 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 Annual General Meeting at the
Company's Registered Office and in electronic
form. Members who wish to inspect the same may
write to the Company Secretary atinvestors@aarti-
surfactants.com.

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

The Company considers its employees to be
its most valuable asset and a key source of
competitive advantage. During the year, the
Company continued to strengthen its employee
engagement practices with a focus on fostering
a culture of trust, collaboration, inclusiveness
and shared purpose. The Company invested in
capability building through structured training
and leadership development programmes to
equip employees to address evolving business
requirements, while regular communication and
feedback mechanisms encouraged openness,
transparency and participation. The Company also
remained focused on employee safety, well-being
and work-life balance through various initiatives. The
Company further promoted employee engagement
by celebrating birthdays, work anniversaries and
regional festivals and supporting professional
and intellectual growth through Learning and
Development initiatives. These efforts are aimed
at building a motivated, capable and future-ready
workforce while strengthening employees' sense of
belonging and commitment to the organisation.

As on March 31, 2026, the Company had more
than 350 employees.

22. CORPORATE GOVERNANCE

Your Company believes that effective leadership,
robust policies, processes and systems, coupled
with a rich legacy of values, form the cornerstone
of a strong corporate governance framework.
The Board, in conjunction with the management,
establishes and upholds the Company's values
and guides the Company's business in accordance
with these principles. These ethics and values are
embedded in the Company's culture, business
practices, disclosure policies and relationships with
its stakeholders. The Company is committed to
upholding these principles in line with the highest
international standards of corporate governance
and responsible business conduct.

Pursuant to Regulation 34 of the SEBI (Listing
Obligations and Disclosure Requirements)
Regulations, 2015, the Report on Corporate
Governance is annexed hereto and forms an
integral part of this Report. The requisite certificate
issued by Parikh & Associates, Practicing Company
Secretaries, in accordance with Schedule V of the SEBI
(Listing Obligations and Disclosure Requirements)

Regulations, 2015, is also annexed to the Report on
Corporate Governance.

23. ENVIRONMENT HEALTH AND SAFETY

At Aarti Surfactants Limited, Environment, Health
and Safety (EHS) remains a key priority across
all our operations. The Company is committed
to maintaining high standards of regulatory
compliance, environmental responsibility and
workplace safety, while safeguarding the well-being
of its employees, stakeholders and the communities
in which it operates.

During the year, the Company continued to
strengthen its EHS framework through systematic
risk assessments, hazard identification and
implementation of appropriate mitigation measures.
Regular training and awareness programmes were
conducted to promote a strong safety culture, while
continued investments in technology, equipment
and safety systems supported safer and more
efficient operations.

The Company also undertook periodic EHS audits,
strengthened emergency preparedness and
response mechanisms, and pursued continuous
improvement through monitoring of key
performance indicators and stakeholder feedback.
Through these initiatives, ASL remains focused
on enhancing employee well-being, reducing
environmental impact and fostering a culture of
accountability, safety and responsible operations.

24. SUSTAINABILITY

At ASL, sustainability is an integral part of our
corporate strategy and operational philosophy.
We are committed to embedding sustainable
practices across our value chain through
innovation, responsible sourcing and efficient
resource utilisation. Our approach extends beyond
regulatory compliance, with a focus on minimising
environmental impact, strengthening operational
resilience and creating long-term value for
all stakeholders.

Our key initiatives include optimising manufacturing
processes to improve energy efficiency and reduce
emissions, strengthening waste management
practices, and advancing circular economy
principles through strategic partnerships. By
integrating sustainability into our business
operations, we seek to enhance resource efficiency
while reinforcing our commitment to responsible
and resilient business practices.

With a long-term perspective, ASL remains
committed to transparency, accountability and
continuous improvement in its sustainability
journey. We recognise that responsible actions
taken today can create lasting value for the future,
and we continue to work collaboratively with our
stakeholders to drive positive change and contribute
to higher sustainability standards in the specialty
surfactants industry.

25. 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, the Company is not ranked
amongst the top 1000 listed entities for the fiscal year
2025-2026. Consequently, we are not required to
include the BRSR in our Annual Report for this period.

26. 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'. This Policy is available on the website
of the Company athttps://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 conducted
sensitization and awareness programmes for all
employees, apprentices and trainees, including
through periodic email communications, to promote
awareness and encourage professional conduct
in the workplace.

27. 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.

28. CORPORATE SOCIAL RESPONSIBILITY

Your 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, 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. The 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
athttps://www.aarti-surfactants.com/policies.htm
ensuring transparency and accessibility in how we
approach our social responsibilities.

The disclosures required under Section 135 of the
Companies Act, 2013, read with Rule 8(1) of the
Companies (Corporate Social Responsibility Policy)
Rules, 2014, are provided in 'Annexure D', which
forms an integral part of this Board's Report.

29. 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.

30. 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.

31. 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.

32. 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.

33. ANNUAL RETURN

Pursuant to Section 92(3) read with Section 134(3)
(a) of the Companies Act, 2013, the Annual Return
as on March 31, 2026 is available on the Company's
website athttps://www.aarti-surfactants.com/
annual-return.htm.

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

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

35. 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.

36. 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 director's 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 the Company, which have occurred between
the end of FY26 and the date of this report.

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

6) There was no application made and proceeding
initiated / pending by any Financial and/or

Operational Creditors against the 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 the Company during the
year under review.

37. 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 22, 2026 DIN:07474847